There are many out there warning that the problems in overnight funding are not only not going away but may cause some serious problems towards the end of this year. Because of all the attention being paid to this issue it is possible that it will pass with nothing more than a whimper as a few trillion dollars are thrown at the problem to pretend it doesn’t exist. We’ll see shortly. Daniel Ammerman put out a great piece where he laid out the Federal Reserve and Treasury Department actions showing that over 70% of deficit spending since September has been purchased by “money” printed up out of nowhere. In other words, to keep the rates low the government and Fed are conspiring to issue and buy any debt that is not being sold to others. This allows the illusion of normalcy as the country sinks deeper and deeper into debt and financial disarray. By the way the debt rose over $400 billion in about 10 weeks!
This is the exact scenario that has led to disaster in places like Venezuela, Brazil, Argentina, Zimbabwe and yes, even here in the USA- just not in our memory because it happened hundreds of years ago. In printing continentals to pay for the revolutionary war the excess printing devalued the continental to near zero. The same issue surfaced during the Civil War. Here we are, supposedly in peacetime and are going down this path. In my opinion, this is a strong clue that all is not well and the greatest economy of all time is one of the biggest debt scams of all time.
I got quite the laugh when Fed chairman Powell said that economic policy is mildly accommodative. Mildly accommodative?? $ 3 trillion to the banks in a few weeks? Up to $100 billion in repos every day? $45 billion in longer loans twice per week, $60 billion per month in treasury note buying? Sounds a bit more than mild to me.
In the meantime, as the mainstream media is herding the sheep into the stock market- which may have another run in it- or it may not- the wealthy, the banks, countries and central banks are all buying gold at drastically reduced prices- held down with the same type of unlimited “printing” that allows propping up of stocks, bonds and real estate with free “money”. With gold and silver the seemingly unlimited “printing” is of paper contracts that allow the illusion of large sales (I just wrote about one instance 2 weeks ago where the entire mining supply of silver for the year was sold in 2 hours on the COMEX) that knock the price down and allow the major players to buy at a discount. It also allows them to short the asset and profit that way also. The final point here is that these trades are generally done when trading is at its thinnest and is done with market orders- pretty much ensuring the price crunch. 1
Peter Schiff just reported that central banks have broken last year’s all-time record for gold sales in 2019. Again I have to ask- if you could hit a button and get virtually unlimited purchasing power- why in the world would you buy ANY gold- let alone hundreds of tons? What do they know that you don’t?
By the way, hedge funds, countries and major banks are all in on this too.
Might they know that the jig is almost up? Is it that the numbers are becoming exponentially higher and they may no longer be able to hide the true state of our debt and economy? Could it be the rot in assets is so bad it could threaten the quadrillion to multi- quadrillion (whoever heard of this number before but it is a thousand trillions) derivative market that may just be too big to save? The answers may be coming shortly.
I would suggest everyone to go to Kitco.com and look at the homepage. You will notice there are 5 precious metals quoted. Gold, Silver, Platinum, Palladium and Rhodium. What is so important here is that 4 of those metals (Gold, Silver, Platinum and Palladium) are traded on the futures market. (Virtually unlimited printing of paper contracts) This allows the powers that be to use paper to manipulate the price of an actual asset. 2 This is the exact opposite of what an investor should expect. If you were to buy an ETF that tracks an index it would rise or fall with the price of the index it tracks- not the other way around.
The reason this is important is that gold, silver and platinum are being held down. While palladium is traded on a futures market there is a physical shortage of the metal and it currently is trading at DOUBLE the price of platinum. Historically, palladium is the cheaper cousin of platinum and was used as a substitute to platinum in catalytic converters because of its lower price. The idea here is that when a physical shortage shows up the price can rise substantially no matter how much pressure is put on.
More importantly, Rhodium is the ONLY metal listed without a futures market to trade in. Historically, it has been less precious than gold, platinum and palladium but at this time trades at over $6000.00 PER OUNCE. My observation is that this is the ONLY non-manipulated FAIR PRICE listed on the Kitco homepage. This suggests to me that the true value of gold could be north of $10,000.00 per ounce right now. Could that be what the central banks know?
Silver should be multiples higher. I have opined in many articles that silver may be the most undervalued asset on the planet.
This information- the fact that it appears UNLIMITED money creation is at the door, the appearance that the debt markets may be signaling problems which could undermine the current rigging of the system could create the perfect storm for asset prices to reset. Those assets being artificially inflated could collapse while those being suppressed could explode higher- particularly when you see what an unencumbered price like that of Rhodium is signaling right now.
It is anyone’s guess what the end of 2019 might bring. Personally, I am far more worried about maintaining the value of my assets rather than trying to chase what appears to be a limited upside in most paper assets these days. Buyer Beware!
Financial Advisor, Raymond James Financial Services, Inc.
2642 Route 940
Pocono Summit, Pa 18346
- Multiple civil awards to investors harmed by gold market manipulation- Charges filed under RICO statute reported by all major media including Bloomberg
- This has been disclosed on King World News and by Ted Butler on the Miles Franklin website.
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