Yuan Devaluation, Obamacare, and Cyber-Attacks, Oh My!
Another geopolitical “hell week” is over, as the world holds its breath in advance of the not only the most important election in history, but the most. And nowhere is this more evident than the action of maniacally managed “last to go” markets like the “Dow Jones Propaganda Average,” paper Precious Metals, and the newest editions to the “too important to decline” rig job, crude oil and Deutsche Bank stock.
Today was a perfect case and point; as, following another overnight Yuan devaluation – to its lowest level in six years – markets started the day as they did when the Yuan was devalued last year; with stocks, commodities, and currencies plunging, whilst Precious Metals surged. Only today, care of a prototypical “dead ringer” algorithm, the Dow was rescued from the PPT’s “pre-election line in the sand” of 18,000, whilst oil and DB stock “miraculously” recovered early losses, and PMs gains were capped. In fact, the Cartel has been so blatant in its gold capping – despite having decidedly failed to push it below its (rising) 200 DMA of $1,266/oz – they have actually employed the 12:00 PM “cap of last resort” in each of the past nine days! This, amidst a relentless environment of political, economic, and monetary “PM bullish, everything-else-bearish” headlines.
Unfortunately, the rest of the world’s markets aren’t faring so well – such as “Dr. Copper,” the commodity world’s best gauge of economic activity, which is rapidly approaching its post 2009 low. And oh yeah,currencies, from the Yuan, to the Euro, to the Pound. To that end, the dollar index, at 98.6, is on the verge of a major “triple top breakout,” which started forming when the Fed “tapered” QE in 2014 (official QE, as opposed to the covert support utilized since); portending a massive drop in global purchasing power, just as the global economy is hitting its weakest level in decades. To that end, note the chart below; specifically, how the dollar index bottomed in April 2008 at 72, before surging at the onset of the greatest financial crisis in eight decades. Today, it sits at 99, up 38% from its low; and yet, despite maniacal, round-the clock price suppression, gold is trading at $1,265/oz, up 27% from its April 2008 level of $925/oz.
To that end, recall that just after I wrote “the upcoming, cataclysmic, financial big bang to end all big bangs” last August – 24 hours before the topic of the article, a major Yuan devaluation prediction, occurred; I penned “the only thing more potentially cataclysmic than a significant Yuan devaluation” – in which, I warned of the ensuing carnage if the Fed were dumb enough to attempt to “save face” by raising rates, even by a mere quarter point. Well, they most certainly were dumb enough; and like the Yuan devaluation, the impact was devastating to global financial markets, worldwide economic activity, and hundreds of fiat currencies, as the dollar subsequently soared. And yet, despite all the rhetoric of how a “strong dollar” and “rising rates” are anathema to Precious Metals, gold and silver surged during both crises.
Well, this time around the Chinese economy is much worse than last summer; the U.S. economy is barely “expanding”; and the dollar is already on the cusp of a “triple top breakout” that could launch it back to its turn-of-the-century highs. Which again, will have nothing to do with U.S. economic, military, or political strength, and everything to do with the “reserve currency’s” superior liquidity. Moreover, every major Central bank is in aggressive easing mode; with the BOJ, ECB, and BOE actively engaged in QE; and the former two, negative interest rate policies. Furthermore, U.S. corporate earnings, down six straight quarters and desperate for a weaker dollar, would be utterly obliterated by such a reckless action; and oh yeah, if Jim Rickards is right that a “Shanghai Accord,” – of which, Central banks pledged, at the February G-20 meeting to weaken the dollar – such a blatant act by the Fed would be an egregious violation.
In other words, a U.S. breach of yet another international agreement, consistent with the theme of my October 3rd article, “mark this date, global war has arrived.” In other words, if the Fed is psychotic enough to attempt a December rate hike – which would mark one for the year, compared to the four they predicted in January – the ramifications, politically, economically, and monetarily, would be catastrophic, particularly when the Chinese “retaliate” with a far more dramatic devaluation than last year’s 6%. And this time around, neither the Fed nor the PBOC – nor any Central bank, for that matter – will have the power to stop it. Which again, leads me back to the “conspiracy theory” that the system is being intentionally destroyed – as if such a blantantly destructive act as a Fed rate hike actually occurs; or fining Deutsche Bank $14 billion when the U.S. government knows it’s on the brink of bankruptcy; or threatening Russia with Cyber War, based on “Trumped up” hacking charges; it’s difficult to characterize what’s occuring otherwise.
Regarding today’s topic, so many potentially devastating political, economic, and monetary events are on the horizon, it’s becoming hard to fathom; many of which, are integrally tied to history’s most important; and likely, inflectionary, election. As if Trump wins, the immediate impact will be a veritable “BrExit times ten”; whilst if Clinton wins, the road to hyperinflation and World War III will be all but set in stone.
Amongst them, the three named in today’s title, starting with the Yuan devaluation that has been accelerating all month – to the tune of nearly 2% since it was accepted into the IMF’s Strategic Currency basket on October 1st, to a fresh six year low of 6.77/dollar – which just happened to coincide with a $250 billion PBOC infusion into China’s rapidly imploding economic bubble. Subsequently, the Yuan is now a mere 1% from the post-2008 crisis peg level of 6.83/dollar – which, when broken, will be an event I assure you the Fed, PPT, Exchange Stabilization Fund, and gold Cartel will not be able to “paper over.” As quite clearly, it will symbolize the commencement of the thermonuclear phase of the “final currency war.”
Next, we have the explosive collapse of Obamacare – timed perfectly with the election, as all 2017 rates will be available when next year’s enrollment period commences November 1st. We’ve been reading all year of likely increases in the 50%-plus range, particularly when incorporating premium, deductible,and co-pay escalations. And now, as the official numbers are coming it, it couldn’t be more devastating – here in Colorado, and elsewhere. Which only makes the concept of the Fed raising rates, amidst the type of “bad inflation” like exploding healthcare and rent costs that is already annihilating the economy – not to mention, as gasoline prices are goosed by the biggest “production cut” hoax in OPEC’s long, sorry history; that much more ridiculous. Metaphorically, like throwing a lighted match into munitions depot. And the scariest part of all, is that Hillary Clinton wants to expand Obamacare further, to the point that more people are covered – guaranteeing not only dramatically poorer medical care, but the European-like tax rates I have long warned of, as we officially morph into the Socialist States of America. Secondary note – CASH OUT OF YOUR IRAs BEFORE IT’S TOO LATE!
Last but not least, we have the political carnage said election is causing. Which, given all the fraud that has surfaced, and the subsequent effectiveness of Trump’s “rigged” message, is unlikely to be accepted by the majority should Clinton win. Either way, America’s credibility as a “first world” nation is being questioned the world round, which will only fuel fears of holding American assets in the coming years. Moreover, the accelerated incursion into Iraq, and potential for a major “hot war” with Russia – based on, of all things, unsubstantiated accusations of Russian hacking – could in and of itself, catalyze a global financial panic, particularly in light of the other, aforementioned “black swan” threats. Frankly, chills ran down my spine when “coincidentally,” a massive, three-wave cyber-attack of major U.S. websites occurred yesterday, given the likelihood that “whoever” is sending that message may well have much larger plans in the coming weeks. Let alone, as Joe Biden was just on TV last week warning of a major U.S. “retaliatory” Cyber-Attack against Russia.
In summation, the three topics described today – plus the “bonus” topic of a potential Fed rate hike – are each, in and of themselves, capable of bringing the global financial system down, and/or catalyzing economic, monetary, or even military war, and the violent political and/or social revolutions that would ensue. Thus, more than ever before, the time is NOW to protect yourself financially, with the only asset class that has proven its ability to do so throughout history…PRECIOUS METALS!