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Fed Transparency Revealed By Mr Goldman Sachs Himself

April 8, 2015

Tuesday morning, and it’s “one of those days” when I’m going to have to jam pack information into my article, as there are simply too many topics worth attention; starting with flat out validation of my the premise of my “126,000 job lie” article – a mere 48 hours after penning it. To wit, recall that in last year’s “island of lies,” I discussed how objective, empirical data like retail sales, durable goods, factory orders, and construction spending have been plunging for some time – whilst subjective, “adjusted” reports like NFP employment; and arbitrary, fabricated “diffusion indices” are not only statistically insignificant, but completely detached with economic reality.

Even so, some, like the Chicago PMI, are currently in freefall – whilst others, like the PMI Services Index, purport a “mythical services boom.” Worse yet, within such indices, data can be completely and utterly contradictory; such as yesterday, when said PMI Services Index surged from 57.1 in February to a seven-month high 59.2 in March – whilst its “business outlook” sub-component plunged to an eight-month low. Meanwhile, the “employment” sub-component rose from 52.7 to 54.0, a mere day after the BLS reported a catastrophic March employment report; not to mention, as the Fed’s “Labor Market Conditions Index” simultaneously plunged from 4.0 in February to -0.3 in March.

Taking the lunacy a step further, the ISM Non-Manufacturing Index was also published simultaneously – featuring its highest “employment” sub-component in five months, but lowest “business activity” in 12 months. Topping it off was the again, simultaneously published Gallup Consumer Spending survey, revealing the lowest U.S. consumer spending in three years! And I haven’t even gotten to said validation of my data fraud claim, which was also published simultaneously. I.e., when none other than the Fed itself admitted the data procured from the BLS for its “Philly Fed Index” is flawed; and thus, will be indefinitely discontinued.

Of course, given that last week was an ugly one for equities – with the likelihood of getting worse yesterday morning, given the horrifying NFP report when markets were closed Friday, the PPT immediately raced into action. Thus, “Dow Jones Propaganda Average” futures – which had been down roughly 130 points from the second the NFP report was published Friday morning until the open of trading Monday, not only were positive minutes later, but recovered the 130 point loss minutes before such reports were published! Meanwhile, Precious Metals – which couldn’t be effectively “Sunday Night Sentiment‘ed” due to said NFP report, were not only capped at the traditional “2:15 AM” EST “key attack time,” but again at the 12:00 PM EST “cap of last resort; followed by the ubiquitous “8:00 PM algo” last night, and again at 2:15 AM this morning, for the 413th time in the past 472 trading days.

To that end, the President of the fraudulent, but soon-to-be-usurped LBMA (the London equivalent of the COMEX), “praised Central bank gold lending for providing liquidity to the market”; asserting, no less, “it is vital that it is not diminished, but strengthened to make sure markets remain fair and effective.” I mean, just how big a lie can be told?   And if gold lending was so “fair and effective,” how come Central banks aren’t required to report it? You know, by actually reducing the gold on their balance sheets when it’s effectively controlled by someone else; – so as to avoid the world’s oldest accounting fraud – “double-counting?”

Of course, the lapdog MSM jumped on the “deformation” bandwagon as well – with Bloomberg taking the honors of one of the all-time moronic headlines, that “record gasoline output will curb the biggest U.S. oil glut in 85 years.” Yes, it a desperate, pitiful attempt to curb attention from the terrifying ramifications of 85-year highs in U.S. crude inventory – much less, two days after the Iranian nuclear agreement made it likely supply will increase further – Bloomberg suggests one should be bullish about energy because increased refining activity, purely due to seasonal factors, will convert the massive crude oil inventories to gasoline. In other words, the ultimate “borrowing from Peter to pay Paul” – as this will simply cause gasoline supplies to surge. To that end – let alone, as the PPT relentlessly buys every stock in sight – it’s no wonder that, according to high profile portfolio manager Jim Paulsen, “Never, since 1900, have investors been this persistently bullish; equities this massively overvalued; or markets so dramatically decoupled from economic productivity.” Of course, the $64,000 question is how long can this catastrophic game be played, before “Economic Mother Nature” runs roughshod over it?

Meanwhile in Europe, we’re just two days from Greece’s still unfunded €450 million debt obligation to the IMF – and a week before an additional €2.4 billion is due. As the European Union desperately tries to convince Alexis Tsipras to forsake his campaign promises – to end the “austerity” destroying his nation by defaulting on its debt – his “Alternative Finance Minister” claimed Germany should pay Greece…drum roll please… a whopping €280 billion of reparations for Nazi war crimes – depicting just how dysfunctional the situation has become. Honestly, it couldn’t be more succinctly stated than James Turk did in this interview; in which, moreover, he suggests the possibility of a catastrophic “bail-in” of Greek depositors over its April 10th-13th four day holiday weekend. At this point, nothing would surprise me, particularly given my unwavering belief that “Grexit” is guaranteed.

To that end, the cumulative “whistling past the graveyard” of European investors has reached epic proportions – as clearly, the horrific political, economic, and social ramifications of such an event would be catastrophic. We have exhaustively discussed this topic for months; and clearly, “something’s gotta give” soon. Not just in Greece, but essentially all of Europe; where, with each passing day, more and more citizens – and politicians – are rebelling against the fraudulent, repressive, economically devastating monetary union.

To that end, it’s all but certain the “anti-austerity” (read, anti-Euro, pro-default) Podemos party will take power in Spain this December – potentially, whilst the Catalonian secession movement takes its next step forward. Meanwhile, Marine Le Pen of the anti-Euro “National Front” party is the front-runner to win France’s 2017 Presidential election; while in Italy, a real-life version of the great Robin Williams movie “Man of the Year” is taking place before our eyes – as Beppe Grillo, the “Jon Stewart of Italy,” has become the leader of Italy’s most powerful political party. His “Five Star Movement” now holds 25% of all Italian Parliamentary seats, and is growing more powerful with each passing day. Grillo has been as vocal about Italy leaving the Euro as any political leader in all of Europe; and in fact, just yesterday published an article discussing his plan to do so. I’m not sure how much more obvious it could be that Europe is on the verge of implosion; and yet, and yet, and yet, “whatever it takes” ECB QE has the German DAX stock Index at an all-time high. Whether due to hyperinflation expectations or covert PPT support, this won’t end well – as discussed in yesterdays “how will (rigged) markets react to QE failure?”

Which brings me to today’s principal topic – ironically, the day before the supposed “minutes” of the uber-dovish March 18th FOMC meeting will be published. And I say “supposed,” due to my long-standing belief such “minutes” are fabricated after the fact, to meet the “market’s needs” at the time of publication. Nowhere was this more obvious than on February 18th, when “minutes” of the January 28th FOMC meeting were published – depicting a decidedly more dovish economic view than that of the original policy statement. To that end, I suspect the same will occur tomorrow; although frankly, it will be difficult to “out-dove” the “most unequivocally dovish FOMC statement in memory.”

Anyhow, simultaneous with publication of the aforementioned economic drivel yesterday morning, the nation’s second most powerful banker – Bill Dudley, President of the New York Fed – delivered the ultimate dose of verbal diarrhea. Dudley, for those not aware, was Goldman Sachs’ Chief Economist for two decades before being appointed head of the “department in charge of buying and selling government securities.” A noted inflation dove (who isn’t these days?), Dudley’s job – when not overtly and covertly manipulating financial markets – is to reassure investors that rate hikes will never actually happen, while at the same time pretending the Fed is “vigilant” and “diligent” in its assessment of monetary and economic factors.

And given how such “economic factors” couldn’t be uglier, he’s clearly leaning toward the “Yellen Reversal” I have predicted for six months; i.e “the inevitable admission that not only is the economy not ‘recovering,’ but weakening to the point that ‘downside risks’ to the Fed’s perennial overstated economic forecast now exceed those to the upside; and thus, ‘additional easing measures’ are being considered.”

In other words, whilst starting his speech with the boilerplate…

  • “Fed will begin rate hikes of labor market continues to improve”
  • “Fed will hike if reasonably confident inflation will rise to 2% goal”

He then transitions to the “how could we have known?” world of…

  • “Surprise recent weakness reflects mostly temporary factors, including a harsh winter”

…before moving into the hyper-dovish arena of…

  • “Fed expects path of policy tightening to be ‘relatively shallow’
  • “Fed expects to see wage growth, but soft March jobs data sows caution”
  • “Drop in oil industry will exert ‘meaningful drag’ on economic activity (HUH? Didn’t Janet Yellen just claim falling oil prices were a “net positive” for the economy?)
  • “Low Oil, high dollar pose risks to U.S. outlook” (didn’t I say that in January, and the White House last month?)
  • “Timing of rate hikes uncertain due to risks to economy”

But don’t worry, all’s not lost; as in the ambiguous “medium-term,” the inflation the Fed so desperately wants – as opposed to the massive inflation real people actually experience – will return in the future, enabling said mythical rate hikes to occur (which, if they actually occurred, would not only destroy the economy and derivatives market, but the Fed’s $4.5 trillion fixed income balance sheet)…

  • “Fed confident it has the tools to effectively tighten policy.”

In other words, the Fed has become so transparent, their script is nearly verbatim with what I’ve said it would be. And trust me, if I’m aware of this, the world’s political and financial power bases are as well; which is exactly why the demand for real money – and fear of fiat currency – will grow exponentially, as the world’s largest Ponzi scheme approaches its inevitable end. To that end, let’s end today’s article with “bonus coverage” – from ultra-, uber-, mega-dove Narayana Kocherlakota, President of the Minneapolis Federal Reserve. Read the quotes he just gave this morning, and decide where your hard-earned funds should be invested; or better yet, saved

  • “Fed should defer first rate hike to second half of 2016
  • “U.S. needs three more years like 2014 to get back to full employment
  • “Inflation likely below 2% until 2018, or later
  • “Fed can be both late and slow to raise rates” (is this guy a Keynesian cartoon character, or what?)
  • “2% Fed Funds rate by end of 2017 ‘appropriate’
  • “Financial stability risks not material”
  • “Fed should be extraordinarily patient about reducing accommodation”
  • “There is even a theoretical argument to be made for making (QE) asset purchases now”


Courtesy of Courtesy of

Andrew ("Andy") Hoffman, CFA joined Miles Franklin, one of America's oldest, largest bullion dealers, as Media Director in October 2011. For a decade, he was a US-based buy-side and sell-side analyst, most notably as an II-ranked oil service analyst at Salomon Smith Barney from 1999 through 2005. Since 2002, his focus has been entirely on precious metals, and since 2006 has written free missives regarding gold, silver and macroeconomics. Prior to joining the company he spent five years working as an investor relations officer or consultant to numerous junior mining companies.

The naturally occurring gold-silver alloy is called electrum.
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