Signs… that what I have been writing about for years may be on our doorstep at this time.
For those who still doubt that all markets are being manipulated even though the banks have paid billions in fines for manipulating LIBOR, currencies, interest rates, and gold and silver just maybe a criminal indictment of 3 traders as JP Morgan might give you a clue as to what has been happening. By the way, the attorney representing at least one defendant is none other than the person who shut down an investigation at the CFTC a number of years ago regarding said manipulation of the gold and silver markets.
In addition, the banks along with many others, are conspiring to keep the stock and bond markets elevated for as long as possible. One telling sign is that the stock markets have lost all connection with the underlying economy. Markets are rising (not by much by the way- year over year) and the economic data is falling off of a cliff.
Despite trillions being “printed” in dollars, yen, euros, yuan, etc. the economic numbers have been falling for the past year, are indeed picking up speed to the downside and even massive intervention has not stopped it. That same intervention has not actually led to a scorching rally in stocks but have just prevented them from collapse and done just enough to maintain the narrative of the “greatest economy of all time!” Have you noticed that every time the “market” pulls back the China talks are always going well and a deal is near? That is called jawboning the market higher. Then China speaks and the rally fails!
Just a few observations:
- Trade is collapsing across the globe.
- German manufacturing PMI clocked in at 41.4 (under 50 is contracting) a 123-month low
- German manufacturing output was 42.7 an 86- month low. This is happening while the ECB is doing QE and Mario Draghi (Head of ECB) suggesting MMT (modern monetary theory- nothing “modern” about it- it is conjuring up money and giving it out) and negative interest rates have been deployed to stimulate further. WORKING???
- Car sales have collapsed in China and India and are struggling everywhere else. In India it is reported that a million jobs have been lost just in the auto industry. 1
- Here in the USA GM must be loving this work stoppage because it will give them a chance to clear out the glut of inventory that they are having a hard time moving also.
- While stock buybacks are giving a lift to the markets, insider selling has reached a 20-year high. This hardly bodes well for future returns in my opinion. Those in the know appear to be hitting the exits while they are still available. 2
- The Bank of International Settlements warned last weekend about an imminent financial crisis (The BIS is the central bank of central banks.) This MAY be because of a liquidity crisis that is taking place where the Fed is providing $75 billion MINIMUM per day to keep the banks afloat. (REPOS) So far, many days have been oversubscribed (banks asking for more money than was offered and, as I write this shows no sign of abating.) This only happened one other time- 2008.
- Warren Buffett, Paul Singer and many other well-known investors are raising cash. In Buffett’s case $122 billion. If he were bullish about the stock markets would he have that kind of capital sitting? Probably not. I believe he is getting ready to pounce when the opportunity shows up.
- Central banks and sovereign nations continue to buy and repatriate gold in record amounts.
- Russia and Iran have set up a payment system outside of the US SWIFT payment system and now can do bilateral trade with no fear of sanctions. 2
- Japan’s Central Bank’s balance sheet in April was $574 TRILLION yen. Higher now. Economy is stuck in the mud, the Nikkei stock index with all of the manipulation has an average annual return of 1.5% in the past 4 years. (BOOMING???)
I have been utterly amazed that when I bring up the REPOS being done by the Fed to prop up the banks that hardly anyone is aware of it! Many have told me they haven’t heard a thing about it and many are intelligent people that generally follow what is happening.
Many on the financial game shows may mention it but it never really gets explained because there is a lack of understanding and it appears to get buried. Of course, any bad news usually DOES get buried- otherwise HOW could it always be “time to buy!” stocks?
For those of you who have 401ks and investment accounts that have the traditional (artificially inflated) assets in your portfolio are you comfortable that “those in the know” are dumping those very assets right now? Has anyone mentioned it may be a good idea to reduce your exposure to these assets at least for a while? Has anyone mentioned raising cash for future opportunities or buying some gold, silver or miners as assets that will likely move in the opposite direction? My opinion is that it will move HARD in the opposite direction when all the manipulation stops.
So what will stop the manipulation? When trust is lost in either central banks, the currency the conjure up out of thin air or regulatory oversight puts an end to it. Given our current state of affairs it likely won’t be #3 anytime soon but having to provide over $75 billion per day minimum to the banks at least until October 10, 2019 the cat may be getting ready to jump out of the bag.
By the way, each day so far, the banks have needed more than was anticipated. Just Tuesday it was $105 billion (75 billion overnight and 30 billion at 14 days). If I may ask- WHAT HAPPENS ON October 11th.???
Another possibly ominous sign is that October 11th. is a Friday. I have said all along if anything big is going to happen it is likely it will be a Friday afternoon. I am not predicting anything here- just bringing up a point that you may want to keep in mind.
It is obvious that central banks, hedge funds, billionaires and countries around the world are preparing for SOMETHING. My guess is an end to the faux rally that we have seen as the economies are drastically slowing down and the MASSIVE debts built up over the past 10 years to pretend “all is well” are finally large enough to either crush the underlying economy with debt payments or expose the enormity of how much faux cash has to be injected to continue the illusion.
Whether this takes place in the next few days, weeks, months or years I would suggest being as early as possible but not a minute late.
1-Michael Snyder Economic Collapse Blog
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