The Biggest Bubble Of All

It’s late Friday afternoon, from the airport I have written more articles from than all the others combined (aside from Denver) – McCarran, in Las Vegas.  It’s been a very long week – including an extremely successful Q&A Rap Session in Phoenix, in which 150 people attended; an excellent meeting with a rare group of truth-seeking individuals here in Vegas; and oh yeah, the Fed validating all I have ever said, with a statement so dovish, even I was taken aback.

Yes, the Cartel did everything in its power to suppress PM prices before, during and after Whirlybird Janet’s statement; let alone, the ECB’s “hyperinflation launch” a week ago; and the BOJ insisting it will “one-up” Mario Draghi if necessary.   However, that doesn’t change the fact that the dollar-priced gold and silver “bear markets” are OVER, joining the 180 or so currencies in which Precious Metal bull markets have been raging for the past two years.  In fact, if not for maddeningly blatant Cartel efforts, silver would have closed above $16.25/today for the first time in nine months.  But no matter, on Monday – or Tuesday the latest – silver will validate gold’s “golden cross” of a month ago, when its own 50 DMA crosses above its 200 DMA.  Which when it occurs, will not only add to the burgeoning cadre of bullish fundamental investors, but technical analysts as well.  Which is quite the powerful achievement, as the Cartel’s raison d’etre is painting charts to generate negative commentary, trigger “sell stops,” and reinforce a negative feedback loop of paper PM naked shorting selling.

That said, the “pink elephant in the room” – of surging demand, plunging supply, vanishing inventories, and exploding money printing – is getting “pink-er” and “elephant-er” with each passing day; inevitably, to be noticed by everyone in the room, regardless of how willfully or ignorantly blind they are.  And the funny thing about short-term market manipulation is that it only makes long-term charts more powerful – as despite the relentless propaganda of PMs being “overbought”; on a monthly basis, they have never been more “oversold.”

From just the past 24 hours alone, I could list a dozen individual stories of just how rapidly – at an increasing rate, no less – the global economy is deteriorating.  But suffice to say, this chart, depicting global economic bellwether Caterpillar reporting its 39^th straight year-over-year revenue decline – is as representative as it gets.  And frankly, I have neither the time, nor desire, to go through the litany of similar items.

The point, of course, is that the “biggest short squeeze in history” – of stocks, commodities, and even high yield bonds – has been 100% catalyzed by Central bank money printing, and historic market manipulation.  I mean, even I have never seen six “dead ringer” algorithms in a row on the “Dow Jones Propaganda Average.”  All, as not a shred of good news has emerged, other than some of the most desperate Central bank manipulative efforts ever – much less, the Chinese President claiming he will make “pre-emptive policy changes to spur growth.”  I.e., money printing and market manipulation, to create bubbles so egregious, even the dot-com bubble’s ghost must be blushing.

Don’t believe me?  Well here’s a chart of major Central bank easing actions in the past six weeks alone!

The problem is, all such efforts have done is kick the can a few more inches, at the expense of all remaining Central bank credibility – as evidenced by the Euro and Yen surging following their hyperinflationary announcements, as Janet Yellen – issuer of the world’s most overvalued currency – “launched the final currency war into hyperspace” with Wednesday’s “unexpectedly” dovish statement.  Yes, even unexpected by me!

That said, of all I absorbed this week, the point that stuck out most was just how complacent the financial world has become – as exemplified by Zero Hedge’s headline today that the Fed “sparked the QE trade, causing stocks, bonds, and gold to soar.”  In other words, investors have become so brainwashed by Central bank actions – particularly, when coupled with coincident market manipulations – they have lost all sense of financial market reality, and the laws of “Economic Mother Nature.”

Which really hit home when, at my Vegas meeting, someone asked why they shouldn’t own “stocks and bonds” instead of gold – as from the dawn of time, “stocks and bonds” have had a highly negative correlation.  In other words, the reason to own bonds (in freely-traded markets) is because the economic outlook is BAD; whilst conversely, the reason to own stocks is because the economic outlook is GOOD.  Which is why it’s so insane to believe both should rise simultaneously, unless one (or in this case, both) is being artificially supported.  To that end, how anyone can support a President claiming anyone saying the economy is weak is “peddling fiction,” whilst the Federal Reserve (let’s face it, a government institution) has held interest rates at ZERO for eight years.  Or how anyone can consider bonds – again, assuming freely-traded markets – to be “good values” at all-time low interest rates; let alone, in Europe, where nearly $8 trillion of sovereign bonds trade at negative yields!  Or my god, how NO ONE – from the MSM to Wall Street “analysts,” can even comment on the “helicopter money” proposals in the lasts UK budget!

But I digress; and if so, I’m sorry, as after having slept an average of four hours on each of the past three nights, including four flights in three days, it’s not easy to be 100% coherent.  However, the key point here is that the only difference between the financial market hell of a month ago, and the “heaven” of today (FYI, PMs rose in both environments), is an historic market manipulation that, yet again, has put everyone to sleep, and turned off whatever remaining market-related brain cells were still awake, for roughly 99% of the financial world.  In other words, the bubble in complacency has never been larger – at a time when it should be fixated on fear.  Which I assure you, it most certainly will; likely, far sooner than most can imagine.Similar Posts:

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