THE FINAL ROUND, OF FINANCE’S MOST MOMENTOUS HEAVYWEIGHT BATTLE
by Andy Hoffman, Miles Franklin
Congratulations to Europe! The numbers are in; and following a year of relentless ECB jawboning; an historic “NIRP” implementation, and the commencement of a suicidal, €1.2 trillion QE program – yielding a 20% plunge in the world’s second largest currency (which according to Mario Draghi is a good thing); Eurozone first quarter GDP rose by a whopping 0.4%. That is, if you believe a word these lying governments say; particularly as many, like the U.S., now include illegal, non-tax generating “businesses” in their GDP calculations, like drug dealing and prostitution.
Incredibly, the MSM is touting this result as “strong” – whilst the U.S.’s 0.2% result, announced last week, is universally understood to be horrible. Just to demonstrate how different these cultures are – as well as the political goals of the monsters running them – the Eurozone result, following seemingly years of borderline recession, is propagandized as “success”; whilst here in the States, the Wall Street, Washington, and MSM “lie machines” admit the result is poor, but blame it on “the weather” – notwithstanding the fact that not only was this winter’s weather better than average – and flight cancellations below average – but entirely ignoring the “seasonal adjustments” that exist to account for this extremely predictable issue. Of course, the fact that non-weather sensitive measures were down, too – like corporate capital spending, year-over-year revenue comparisons, and online retail sales – are conveniently ignored; just as the fact that despite the so-called “great” Euro GDP number, the most important nation in Europe – Germany – was well below expectations, barely above zero.
Ironically, French GDP growth “surged” to 0.6%, outpacing nearly the entire continent – despite consistently having the weakest PMI results, connoting outright contraction. Greece, of course, contracted, and apparently the Eurozone is now preparing for the inevitable “Grexit” we essentially guaranteed. Heck, following this week’s dramatic Conservative victory in Great Britain – following its own, horrific 0.3% GDP growth result last week – the momentum behind the UK’s “Brexit” movement has dramatically increased. This is why the pound surged this week, as the isolationist movement that, ironically, started in Scotland before spreading to Spain, Italy, and France, is taking center stage. If the UK exits the Eurozone, it will dramatically weaken what remains of European trade; let alone, if when Europe is simultaneously blind-sided by the massive daisy chain of Greek-related debt defaults. To wit, the Guardian wrote yesterday that “some Eurozone banks are just as likely to fail as they were before the 2008 crisis.” To which I reply – no, they are in far worse shape than in 2008; as are the institutions, like the ECB, mandated with “bailing them out” – and the individuals who will be inevitably forced to bail them in.
By the way, Spain, too, outperformed the continental average – comically, as its housing market remains barely off its all-time low. Not to mention, as only one in ten new jobs are of the full-time variety; which, by the way, is exactly what is occurring here in the States, explaining why – “job creation” notwithstanding – the average American is getting poorer each day. Other than the “1%,” of course, who directly benefit from unfettered Fed money printing.
In fact, the “breadwinner” jobs David Stockman discusses so often have become so scarce here in the States, that part-time jobs at McDonalds are now, statistically speaking, more difficult to obtain than acceptance to an Ivy League school.
Perhaps that’s why this morning’s U.S. retail sales numbers – at a much lower than expected ZERO; depicts a nation, drowning in debt of all kinds, with nothing leftover to spend no matter how low rates go – or how high the PPT gooses the “Dow Jones Propaganda Average.” In other words, “pushing on a string” in its purest form; as printing money no longer simply results in “diminishing economic returns,” but destroys everything in its path.
Consider, for instance, the “tectonic market shifts” that have caused interest rates – both here and overseas – to surge in recent weeks, despite across-the-board horrible economic data; such as today’s Euro GDP, U.S. retail sales, U.S. import/export price data, the downgrading of Chicago’s credit rating to junk status – and oh yeah, the lowest Chinese capital spending growth in 15 years. In the big scheme of things, the recent, modest rise in mortgage rates would be inconsequential in a healthy economy. However, in one addicted to record low rates, even a tiny increase like last week’s has major, negative ramifications – as depicted by this morning’s news that mortgage applications plunged by 4% last week alone.
Which brings me to today’s principal topic – i.e., the momentous “heavyweight battle” between the forces of economic evil (i.e., Central bankers and their “partners” on Wall Street and in Washington) and those of “Economic Mother Nature”; the latter of whom is undefeated after not just centuries, but a millennia of drawn out, fight to the death cage matches. Not that I haven’t written – and spoken of – this topic hundreds of times before. However, in light of said “tectonic shifts” – i.e, the dramatic, seemingly un-catalyzed, global interest rate surge in the face of an across-the-board collapse of worldwide economic activity, it occurs to me “the big one” has commenced – to be resolved far sooner than most can imagine. In other words, the 15th round; after which, I have no doubt the supposed “underdog” Economic Mother Nature is deemed by propagandists to be will come out victorious. Unfortunately, the entire world will suffer for years from the ramifications of this war – which is why it’s so imperative to protect yourself before they set in.
For years, I have discussed – and both mathematically and graphically proven – how financial markets are blatantly manipulated. Moreover, that such manipulation has not only become more pervasive – in terms of the amount of markets affected; but intense, in terms of both scope and frequency. To that end, long-time readers are aware that circa 2005, I sat at my desk and muttered my “manipulation mantra” of “each day worse than the last” – which sadly, has never been truer. And care of the powers of compounding, ten years of manipulation acceleration has produced a financial system not only permanently broken; but for the time being, completely devoid of price discovery. Of course, there’s a big difference between “price discovery” in fraudulent paper markets like stocks and bonds – which are just as apt to be destroyed by hyper-inflation as a deflationary crash – as physical market like Precious Metals and crude oil; which in time, must submit to “Economic Mother Nature’s” laws.
The reason I bring this up today – in featuring it as a primary article topic – is the incredulity that even I, one of the world’s leading “manipulation experts,” am experiencing in watching 1) the aforementioned interest rate surge, representing the seemingly all-powerful “powers that be’s” worst imaginable nightmare; and 2) their blatantly obvious attempts to quell it via an all-out “buying assault” of stocks and sovereign bonds – such as yesterday’s prototypical “dead ringer” algorithm on the Dow, and miraculous upside reversal of the Treasury bond market, just as it threatened – for the second time in four trading days – to collapse. In recent weeks, Zero Hedge wrote of the “mysterious seller” that has relentlessly pushed Treasury yields higher for two months – which I have speculated, rightly or wrongly, to be the Chinese, based on recent TIC (Treasury International Capital) reports indicating a reduction in their Treasury holdings. However, there’s no “mystery” in who was buying last Thursday and yesterday; as we assure you, not only did QE never end, but it’s never run hotter than now. In other words, the only difference between QE3 and today’s interventions is that QE3 was done overtly (in actuality, at rates far greater than purported), while today it’s done covertly.
And of course, the relentless capping of gold and silver – which, by the way, took a serious blow this (Wednesday) morning, as both metals just surged past the Cartel’s relentless, multi-month “lines in the sand” at $1,200/oz and $17/oz, respectively, like a “hot knife through butter.”
In my view, last year’s global currency collapse – followed by this year’s commodity meltdowns, economic implosion, and Precious Metals resilience are tell-tale signs that history’s most momentous financial “heavyweight bout” is in its final round; with the so-called “champ” – the “King Dollar” – on the ropes, being relentlessly pounded in the head and body by said “Economic Mother Nature.” Most Miles Franklin Blog readers already know how this will end; and for those still undecided, we salute you for coming to the best source of economic truth around – and implore you to make your decision ASAP. And for those “choosing wisely,” we hope you’ll give Miles Franklin a call at 800-822-8080, and “give us a chance” to earn your business.