The Sum Of All Economic Fears

Just Wednesday, I wrote how “horrible headlines are going parabolic, as Economic Mother Nature nears all-out victory.”  As clearly, “the powers that be’s” best efforts to mask the “worst economy of our lifetimes” with unprecedented money printing, market manipulation, and propaganda are not only falling flat on their face, but making matters worse with each passing day.  Just like the movie Fargo, when a simply kidnapping morphed into a grizzly scene of mass murder.

On Friday, France’s version of 9/11 occurred; only this time, the alleged perpetrators – assuming their confession is genuine – are ISIS, a group of radical Muslim nationalists spawned by America’s “shoot first, ask questions later” reaction to its own 9/11.  To wit, despite George Bush admitting Saddam Hussein played no part in America’s worst-ever terrorist attack; and that Iraq did not have “weapons of mass destruction”; we still have “boots on the ground” in the Middle East 14 years later – in a futile, humiliating campaign in which more than 10,000 allied troops have been killed, the vast majority American.   Not to mention, 100,000+ injured; and countless tens of thousands negatively impacted, like the families of said troops.  Throw in the estimated 500,000+ Iraqis killed in combat, terrorist attacks, and the “collateral damage” of a destroyed nation-state in the 12 years since Bush declared “mission accomplished”; and oh yeah, the $2 trillion the war has cost – plus an estimated $4 trillion to be paid in veterans’ benefits in the coming decades; and a decimated Iraqi culture, which will cost at least as much to rebuild; and you can see why “someone” might be mad at those deemed responsible.  I of course don’t condone this weekend’s actions one iota – as they were as despicable, and cowardly, as any in our lifetimes.  However, they don’t surprise me in the least; that is, assuming the official story, like 9/11, is the correct one.

More on the Paris attacks a moment, but I’m not going to turn this post into a political commentary.  My focus, as always, is on the economic and financial ramifications.  Which, per last month’s “the pinnacle of monetary lunacy?  You ain’t seen nothing yet,” will unquestionably involve an exponential expansion of the historic money printing orgy that is rapidly destroying the world – benefiting an increasingly shrinking “1%” at the expense of all others.  Thus, when my friend John Rubino wrote this weekend that “brutal news is pouring in from pretty much everywhere,” I realized that in just a few short days, said parabolic growth in horrible headlines has already morphed into the only growth function with a steeper slope; i.e., hyperbolic.  In other words, the worst-case economics scenario is clearly within view.  Which, if – or should I say, when – the Syrian-based “ISIS crisis” mutates into a global battleground, would represent the “sum of all economic fears,” from the standpoint of those trying to earn a living; support their families; and protect their life’s savings from the ravages of Central-bank generated (hyper)inflation.

I didn’t think it was possible that a dumbed-down nation obsessed with “bread and circuses” like UFC fighting could actually shift their attention from Ronda Rousey’s Buster Douglas-like defeat to something real.  However, what occurred in France surely did the trick.  And the global ramifications will unquestionably be as terrifying; particularly in Europe, where the inevitable unraveling of the ill-begotten, ill-fated economic union may well be the least of its problems.  This weekend, Michael Pento wrote of how “radical policies are about to be implemented, as chaos erupts and depression engulfs the world”; and I couldn’t agree more, per what I espoused in Thursday’s Audioblog, “yes, the sky is falling.”

“I don’t like to ‘predict’ anything, but I’m quite sure that a decade from now, the Europe as we know it today won’t even be recognizable.  If the Euro currency survives that long, “whatever it takes” policies irrespective, I would be shocked.  But more importantly, as I first predicted in 2011’s ‘unprecedented,’ the massive political, economic, and social crosscurrents we are witnessing today will cause the European trade bloc to break up, in favor of Depression Era isolationist, protectionist, nationalist movements – most likely of the extreme socialist persuasion.”

Clearly, the “migrant crisis” resulting from the Syrian civil war – which in many ways, can be traced to the “allied” invasion of Iraq a decade earlier – is not only here to stay; but likely, will shape European political and social policies for years, if not decades, to come.  Including, with a very high likelihood, destabilizing terrorism and wars – which we can only pray don’t morph into World War III, which none other than the Pope described it as this weekend.  But don’t worry, all’s well; as Friday morning, mere hours before the Paris attacks, Barack Obama claimed “I don’t think ISIS is gaining strength…as…we have contained them.”  Seriously, you can’t make this stuff up.

To the contrary, as my good friend Michael Krieger of Liberty Blitzkrieg espoused this weekend, political and economic nationalism movements – in the UK, Greece, Portugal, and Catalonia, to name a few – will now become the norm rather than the exception.  And now that the Paris attacks have “changed everything,” the dangers of civilian violence, draconian government decrees, and war have hyperbolically increased – particularly in the migrant crisis epicenters of Germany and France.  To wit, Angela Merkel’s violently opposed goal of allowing a million migrant Muslim’s into Germany has immediately gone DOA.  Whilst in France, imploding President Francois Hollande is taking full advantage of his “9/11 moment” to inflame nationalist passions – as France heads toward its inevitable destiny with an “America-like” military reaction to its worst terrorist attack since the French Revolution.

Of course, it’s unlikely that anything Hollande does will enable him to stave off the radical National Front party’s bid for the Presidency in 2017.  As clearly, the attack will only strengthen it further – as evidenced by its leader, Marine Le Pen’s comments this weekend, of France’s need to “re-arm” itself; permanently control its borders; revoke Islamic passports; and “eradicate” radical Islam.  In other words, a socialist nightmare of a nation is about to become a political battleground as well – which unquestionably, will “finish off” France’s inevitable, decade-long race towards bankruptcy.  Which is why they’ll be one of the ECB’s most vocal proponents for NIRP and QE “to infinity” – starting, of course, with the potentially explosive, or should I say hyper-inflationary, meeting on December 3^rd, just 2½ weeks away.  Which is why, as loudly as possible, I’m reiterating my “urgent cry to Europeans” – first uttered ten months ago – to PROTECT your life’s savings as soon as possible, with the only assets proven to have done so throughout time immemorial; i.e., physical gold and silver.  Which, I might add, became significantly scarcer this weekend, when a whopping 38% of the COMEX’s Hong Kong-stored gold was withdrawn this weekend; at 21 tonnes, more than four times the New York COMEX’ entire “registered” inventory of available-for-delivery metal.

That said, the Miles Franklin’s focus, as always, is on the economic and financial ramifications of political events – which clearly, will be, per the title of today’s article, as terrifying as could be imagined.  And given that this weekend also featured Japan “unexpectedly” entering its fifth recession since 2008 – with 3Q GDP growth of negative 0.8% versus expectations of negative 0.2%, whilst 2Q “growth” was revised from negative 0.2% to negative 0.7% – the “final currency war” I first warned of nearly three years ago will most likely, too, go hyperbolic in the coming months.  Throw in the utter collapse of global exports – and this horrifying chart of the U.S. inventory-to-sales ratio – and it becomes painfully apparent that I wasn’t speaking “hyperbolically” in declaring the “worst global economy of our lifetimes.”

Then, of course, there’s the complete decimation of the world’s largest source of corporate, municipal, and sovereign revenues; i.e., the commodity crash I first warned of in September 2014 – and vehemently re-iterated last week, just before the CRB Commodity Index breached the 40-year low of 185 it had “dead cat bounced” from (with “oil PPT” help) on Friday.  And looking at base metal prices freefalling as I write Monday morning, my guess is that even said “oil PPT’s” best efforts to portray a Syrian conflict as “oil bullish” will be difficult to sell, unless the powers that be are actually stupid enough to escalate the conflict toward “World War III” status.  At which point, all political, economic, and financial “bets” will be off, as global hyper-inflation will become as imminent as it is inevitable – validating my worst fears from October 2014’s “crashing oil prices portend unspeakable horrors.”  Which, I might add, is exactly what Europe’s “migrant crisis” is, and exactly what the world’s reaction to the Paris attacks will be.

As for early “market reactions,” you simply cannot make this stuff up.  Following Japan’s horrific GDP report, global stock futures mysteriously “surged” – supposedly on the expectation of further QE, despite the fact that interest rates barely changed!  Throw in across-the-board collapsing commodity prices – even oil is down, within reach of new seven year lows – and it becomes painfully obvious just how hard global “PPT mechanisms” – both West and East – are working to “mask” the French news; most egregiously in France itself, where French stocks are actually higher!  Throw in the Cartel’s 120^th “Sunday Night Sentiment” capping of the past 126 weekends; 550^th “2:15 AM” raid of the past 627 trading days (at exactly the “key round number of $1,100/oz); and of course, the ubiquitous COMEX-opening attack that has now occurred essentially every day since gold and silver had the gall to exceed their 200 day moving averages on the morning of the October 28^th FOMC meeting – and you can see just how terrified said “powers that be” have become, in their unwinnable war against “Economic Mother Nature.”

Of course, with each passing day, said manipulations become more and more transparent to the world’s 7.3 billion denizens; particularly in light of the aforementioned vanishing act of physical PM inventories, amidst record high global demand.  Not to mention, the historically anomalistic behavior of rigged stock indices – like the S&P 500, for example, whose “breadth” (advancers versus decliners) has entered “sixth sigma” territory, as the ten largest stocks have now advanced as much this year as the bottom 490 have declined!  In fact; in light of the recent collapse of countless “market darling” stocks; plunging venture capital valuations; the worst corporate earnings plunge since 2009; and heck, this morning’s “take-under” of Starwood Lodging by Marriott Hotels; it couldn’t be clearer that underlying the PPT’s maniacal index future buying, 2015’s version of the late 90’s “internet bubble” is bursting as we speak.  To that end, I recommend reading this fantastic article about “VC” – i.e., venture capital – stocks’ unfolding collapse, which couldn’t spell out the situation better.  Not to mention, its citing of one of the industry’s great retail analysts – and realists – Howard Davidowitz; who, when asked why retail earnings and equities are in freefall (like Wal-Mart, Macy’s, Nordstrom’s, and JC Penney, to name a few), he answered simply “it’s not rocket science.  The customers don’t have the  money!”

“Sum of all economic fears” notwithstanding, I cannot wait until the “minutes” of said October 28^th FOMC meeting are published.  You know, when they supposedly pondered “raising rates” despite a collapsing economy – due to imaginary “labor market improvements”; expectations of rising inflation in the “medium-term”; and of course, the anticipation of a reversal of the “transitory” declines in oil and import prices – which have since plunged to new multi-year lows.  As I have noted for years, said “minutes” are nothing of the sort – but instead, fabricated statements based on what is occurring in the world when they are published.  In other words, giving them yet another opportunity to jawbone and manipulate markets.  And if the developing “sum of all economic fears” is as visible to them as it is to the rest of the world, it would be difficult to believe they wouldn’t start “dialing back” such propaganda in a hurry – particularly if said “PPT efforts” prove unsuccessful in the wake of the worst Western terrorist attack since 9/11.

And by the way, note that the IMF “green-lighted” the Chinese Yuan to join its pathetic “strategic currency basket” this weekend.  Which, as I said back in May – when most others were claiming it would be an “end all” for the Cartel – is a complete non-event for both gold and the global monetary order.  Sure, it’s a nice public relations moment for China, and propaganda event for its Communist Party – with as much sincerity as a politician giving a baby a lollipop.  Yes, the Chinese long-term plan is to dominate global trade and money.  However, in the short – and “medium” term – they are far more focused on preventing history’s largest economic bubble from collapsing (which it will do anyway, no matter what monetary alchemy they attempt), which includes devaluing the Yuan as much as possible.  And as for their aims in the gold market, I’d bet anything they will simply continue to acquire it (and silver) as quietly as possible, until there’s no more to be acquired.  At which point, if you haven’t already acquired your personal stash, it will already be too late.

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