first majestic silver

The Re-Emergence Of Real Money

December 17, 2014

keep thinking back to the story I related several weeks back; of how, with not a shred of knowledge of the character or intelligence of George W. Bush, I voted for him in the 2000 Presidential election – out of “fear” that the oilfield service stocks I analyzed, marketed and advised of would decline.  Yes, my dislike of Al Gore and Joe Lieberman factored into the equation as well.  And yes, living in New York, it mattered not who I voted for, as New York always votes Democrat.  That said, my decision was entirely selfish – and as it turned out, completely misguided.  And for the record, since then, in every subsequent election, my “methodology” has been entirely devoted to voting out incumbents.  In other words, I voted for Kerry to get Bush out in 2004; Obama (whom I also knew not a whit about) to get McCain’s “neo-cons” out in 2008; and in 2012, Gary Johnson – solely out of dislike for Obama and Romney.

Anyhow, my point in renewing this topic is the incredible popular uprising that has engulfed the world in recent months – from Scotland, to Catalonia, to Switzerland, and this week, Japan and Greece.  Whilst the “official” catalysts of these “revenges of the people” vary, there’s not a shred of doubt that the common denominator is the economic ruin caused by Central bank money printing.  Heck, here in the “United States of Superiority,” I read this weekend that the median household income of 81% of the nation’s counties peaked 15 years ago – i.e., when the Fed’s printing presses were set to “hyper-drive”; and better yet, 10% peaked in the early 1970s – “coincidentally,” when the gold standard was abandoned.

Thus far, only the Catalonian vote was successful – and trust us, we’ll be hearing more about the Catalan secession movement in 2015.  Moreover, only history’s most aggressive market manipulation and propaganda campaign – which the Miles Franklin Blog has written and spoken of ad nauseum – prevented a far closer result in Switzerland.  Which, by the way, we haven’t heard the last of either – as the worse Europe’s economy gets, the greater the pressure will become on the doomed Euro/Franc peg that Lady Macbeth Jordan of the SNB so desperately defended.  Meanwhile, three critical December Greek votes (the first of which is this Wednesday) may well catalyze the collapse of the European Union; and in our view, there is nothing TPTB can do to alter its outcome.  But more on that at year-end, when the final vote is tabulated.

As for Japan, Shinzo Abe’s Liberal Democratic Party, as anticipated, won a “landslide” victory in yesterday’s snap elections.  And thus, one can only wonder what Japanese citizens were thinking.  To wit, the laundry list of Japanese economic devastation described in Thursday’s Audio blog couldn’t have been uglier – and unlike the Swiss, it’s difficult to believe the Japanese actually believed a vote supporting Abe would prevent a catastrophic equity market decline.  After all, Japan’s “retirement colony” has, for all intents and purposes, been withdrawing from equities for some time; and unlike Switzerland, where the stock market sits near a record high, the Nikkei – “Abenomics rally” et al – remains 56% below the high achieved 25 years ago.

That said, there’s little doubt the same “stock market fear-mongering” that characterized the Swiss referendum propaganda efforts – and to a lesser extent, the oil patch’s pre-2000 election lobbying – played at least a minor role.  Or, at the least, suggesting that without Abenomics, Japan’s near zero interest rates would increase, devastating bond portfolios and the government’s perilous (read hopeless) debt situation.  Frankly, it’s quite difficult to gauge just how different Japan’s culture is from ours, so I don’t want to read too much into the “average Japanese’s” mindset.  However, in voting decidedly for the malignant economic cancer that is Abenomics, clearly the Japanese zeitgeist, at least from a financial standpoint, is difficult to discern from the political hopelessness of mid-1930s Germany – amidst which, Adolf Hitler rose to power.  In other words, expect anything from Japan in the coming years – as not only financially, but psychologically it is “coming off the rails.”  To that end, following this weekend’s vote, I more than ever believe the “land of the setting sun” to be the first “first world” nation to experience 21st century hyper-inflation.

Speaking of Audio blogs, few were less important than “crashing oil prices and currencies, America’s death knell.”  Taped just eleven days ago, oil prices were more than $10/bbl. higher at the time – and far higher for lesser blends like Bakken shale and Canadian heavy.  Moreover, the global currency contagion we detailed in September’s “single most Precious Metal bullish factor imaginable” has dramatically expanded since – although you’d never know it in reading the commentary of the soon-to-be-completely-ignored MSM.  Care of the “strong dollar” resulting, ironically, from the collapse of the only industry that has generated positive GDP and employment growth since America broke in 2008, currencies the world round are in freefall; which is probably why, as we discussed yesterday, the Cartel-orchestrated precious metals “bear market” is OVER.

As for oil – which despite every imaginable algorithm-goosing trick, has plunged below Friday’s closing level to $56.50/bbl. as I write Monday morning, likely enroute to the $40/bbl. range hinted at this weekend by the UAE oil minister.  Essentially, Saudi Arabia and other OPEC heavies have declared WAR on the world’s high cost oil production – which care of maniacal Central bank money printing, has become a bubble at least as large as the mid-2000s real estate bubble.  And thus, we couldn’t be more serious about our view that “shale oil 2015 = subprime mortgages 2008.”

Whilst the Cartel desperately attempts to cap precious metal prices, support the “Dow Jones Propaganda Average,” and prevent Treasury yields from crashing ahead of the FOMC’s pathetic meeting on Wednesday, global stock markets are crashing, currencies imploding, yields plummeting, and energy-related credit spreads exploding.  Frankly, the fact that even Wall Street is even “debating” whether the Fed will substitute “considerable time” with “patient” in its meaningless policy statement is beyond even our comprehension – as with each passing day, the carnage the global energy collapse is causing becomes more and more terrifying.

This past week alone, TPTB’s attempts to prevent all-out panic from enveloping the Western world – via relentless market manipulation – have been utterly mind-blowing.  Clearly, they are failing miserably, although they still have kept the time bomb that are precious metals in check.  Last week, we penned “desperation tutorial” to describe Wednesday’s historically blatant suppression efforts – which in our view, were far more desperate on Thursday and Friday.  In other words, as the Cartel’s urgency has multiplied, so has its ultimately suicidal manipulations.

“Sunday night Sentiment” raid, for example – i.e., the 77th in the past 78 weeks – was “one for the ages”; so much so, I actually penned “supplemental Cartel manipulation proof” whilst my wife was cooking Sunday night dinner and my Broncos playing the Chargers for the AFC West championship.  And following the 347th “2:15 AM” raid of the past 395 trading days, and another at the COMEX open, they actually have gold and silver prices lower than at Friday’s (heavily manipulated) close, despite the aforementioned additional plunges in oil, equity markets; and yes, Treasury yields – which are freefalling anew, despite the Fed’s best efforts to prevent universal recognition of the “most damning proof yet of QE failure.”

Oh, by the way, this morning’s “bullish” economic news was just as comical as last week’s eight-year high (LOL) in consumer sentiment – as “industrial production” was slightly better than expectations due to the same subprime auto financing bubble we described in detail last week.  Meanwhile, the Empire State Manufacturing Index not only “missed” expectations of +12 by a mile – in plunging to minus 4 instead – but the highly propagandized NAHB Housing Index “unexpectedly” declined as well.  In other words, the economic freefall that commenced months ago is accelerating; and if last week’s historic plunge in the Baker Hughes rig count is any indication, the aforementioned one-third of S&P 500 capital expenditures that energy companies represent is already gone.  Thus, with just two days until the ill-fated FOMC meeting, we simply cannot imagine the manipulative hoops they’ll try to jump through to “stabilize” collapsing worldwide financial markets.  And again, we can’t emphasize enough – as I watch WTI crude hit $56.40/bbl. – that no matter how “omniscient” they’d like to be, U.S. market manipulators will NOT be to prevent the “unstoppable tsunami of reality,” particularly as relates to things they have ZERO control over, like plunging oil demand and Greek snap elections.

Which brings us, finally, to today’s extremely important principal topic – of the worldwide “re-emergence of real money” that sooner or later will destroy all the Federal Reserve and its Central bank cronies have fought so hard to create – whether by “the pen” or “sword.”  To wit, last week’s “Golden Age” article in the New York Times – which in featuring Paul Krugman as its lead economic commentator is undoubtedly the Cartel’s head MSM cheerleader.  However, even the Times realizes the global “monetary zeitgeist” is changing – as evidenced by record physical demand that cannot be denied and expanding calls to repatriate gold assets in nations as diverse as Germany, Switzerland, Holland, Belgium and Austria.

Frankly, the Cartel’s relentless attempts to propagandize gold as “barbarous” are getting downright comical – as given the aforementioned, inexorable trends, it won’t be long before the majority of the world’s population is touched by “gold (and silver) fever.”  Again, as noted in yesterday’s article, gold is at or nearing all-time highs in dozens of currencies.  And thus, interest in its time-immemorial ability to preserve wealth against Central bank printing presses is clearly on the rise – in an environment of extremely tight supply, exploding demand and collapsing manipulation schemes.  Hey, it happened to the London Gold Pool in spectacular fashion in 1968; and thus, when it inevitably happens to the “New York Gold Pool” – likely, in 2015 – we expect it will be far less “unexpected” than TPTB’s historical propaganda scheme would have you believe.

Here at the Miles Franklin Blog, we can only warn you to take action before the “jig is up.”  As when it is, today’s once-in-a-lifetime opportunity to protect yourself – at Cartel-subsidized prices, no less – will be long gone, perhaps forever.  Miles Franklin itself will eventually be gone too – as will the entire global bullion industry, once supply is no longer to be had.  Fortunately, those that have “stacked up” beforehand will have the means to “bridge the gap” to the next monetary system.  Moreover, our Brink’s storage program in Montreal will likely live on as well, enabling those seeking sanctuary for their metals – as myself and Miles Franklins’ principals have – to sleep soundly.

For those wise enough to consider such actions, we hope you’ll give us a call at 800-822-8080 and give us a chance to earn your business.  After 25 years of industry leading service – with an A+ Better Business Bureau rating, and not a single registered complaint since opening our doors in 1990 – we believe we’ve earned that right.  And through this blog, which David Schectman started writing before even Bill Holter and I considered precious metals, we hopefully have convinced you of the reality of a world gone mad on a crash course with financial infamy


Courtesy of www.milesfranklin.

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.

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