Bill Holter

They'll Call It "The G-20 Massacre!"

November 11, 2014

Very "quietly" the world's 20 largest economies will meet in Brisbane, Australia later this coming week.  I use the word "quietly" because here in the U.S. almost no mention of the upcoming meeting has been made.  I even searched for news on the event and almost could find none.  Strange?  Well yes and no, quite strange because it surely is big news especially with all that has been going on but not strange because here in the U.S. we must keep a happy face on things which very well may not be the outcome this time around.  I wasn't sure how I was going to write this piece but I guess it's just easiest to tell you what I think the result will be and then explain why.

In my opinion, once this meeting is over next Sunday all hell could break loose financially.  I say this because much has already been put into place ahead of time and it is my expectation the U.S. and her dollar will at a minimum be taken off of "the top shelf" or at least be pushed back from the front.  Let me put forth some of the many available dots and see if they can't be connected.

First, if you remember last year's summit, President Obama was not pictured in the center as the U.S. has always been at nearly all meetings such as these traditionally.  If I recall, I believe I commented that he was positioned on one of the ends and I took it as "not a very good sign" at the time.  This time around, President Obama will arrive as a "neutered" force after the Democrats lost total control of Congress.  This fact is not lost on the world, they now know President Obama has no collateral nor clout left and will be the lamest duck president in history.  One could argue this point but he has lost Congress while having the lowest public approval rating of any U.S. president.   

We also know that China has been making business deals, setting up renminbi currency hubs, and either preparing for or actually doing trade in local currencies or their own all over the world.  The Chinese have been forming these deals WITHOUT the use of dollars.  Russia, who for the last 5-6 months have been the focus of "Western sanctions" have also been active in doing trade deals, particularly with China.  If you recall, Russia achieved their "Holy Grail" gas deal earlier this year with China worth an estimated $400 billion.  Mr. Putin announced this past Friday a 2nd deal with China which will further intertwine the two nations in trade.  Please also remember that Russia has recently made moves on Arctic energy reserves while U.S. "majors" such as Exxon/Mobil will not be able to participate in unless they break Mr. Obama's sanction rules.  Are the sanctions "good" for American business?

Before the upcoming G-20 summit there will also be two other meetings scheduled early this week, APEC (Asia Pacific Economic Coordination) and also a BRICS meeting.  President Xi of China released a statement this past Sunday regarding the upcoming APEC meeting by saying "China wants to live in harmony with all its neighbors."  Please understand that this is not just a "flowery" comment, it is the way China thinks and does business.  The world understands this and also understands how the U.S. has been doing business for years.  The BRICS "pre G-20 meeting" has already announced goals including the launch of new BRICS bank, its funding and also the restructuring of IMF quotas.

I would like to speak of "the timing setup" before going any further. There will be these two pre meetings and then the G-20 meeting itself... and also another piece of breaking news which I find VERY curious!  It has been announced out of London that UBS has agreed to a fine for ...wait for it ...wait for it..."manipulating the prices of gold and silver!!!"   

First off, we have been told every single day for over 15 years that we are wacked out, tin foil hat wearing conspiracy freaks forever even uttering such nonsense, now we find out it was true...all along ...and we are not so crazy after all!  Secondly, other banks are reported also to follow UBS in 'fessing up so it was a "conspiracy," only it wasn't "theory," it was FACT!  (I wonder what ole' Martin Armstrong, Doug Casey and all the other apologists will have to say about this?).  I plan to speak about this more, later in the week.

I'll bet you thought I was done with "timing" since the above paragraph was so long?  No, there is more.  I would like to add in several other "aligned stars."  We now know that GOFO forward rates are now more backward than any time in the last 10 years, the Shanghai physical silver inventory is nearly depleted, mints all over the world have gone "back order" and last but not least, December COMEX silver is currently contracted to deliver nearly 10 ounces of silver for every registered (available for delivery) ounce they say they have!  One other little tidbit will be next Monday the 17th, Hong Kong and Shanghai plan on "linking" their exchanges, curious timing?

 OK, so that's the back ground leading up to the G-20 meeting which concludes next Sunday.  Just looking at the two "pre" meetings alone can give you a flavor as to what will be discussed and very possibly agreed upon.  The U.S., no matter what the outcome will certainly lose clout.  The possibility however does exist and the stars are currently aligned for the U.S. to be isolated, berated and punished.  In my opinion, China will not allow a sledge hammer financial blow to the U.S. and will probably allow at least some "grace" in its exit from "reserve currency status."  China has spent years positioning herself.  The BRICS and APEC have made deals, set up settlement infrastructure and now will begin "funding."  The U.S. on the other hand has spent the last five years adding another $8+ trillion to her balance sheet while the Federal Reserve levered itself up to nearly 80 to 1 while quadrupling its balance sheet.  We fiddled while China methodically positioned herself and the world to move away from the dollar.

Could this be it?  Could it really be "over" for the American fiat experiment?  Will the world tell a politically neutered president of the biggest bankrupt nation in history what the rules are rather than being dictated to as has always been the case in our lifetimes?  Will China quietly assume the role of "fair arbiter" of international disputes?  Will China assume the role as the center of the financial world?  Will China assume the role as the chief financier of trade?  Will power really shift from New York/London to Shanghai/Beijing?  I think at this point it is a given, the only question is "how, how fast, and when?"  The conditions now exist for the answer to be "overnight and after next weekend".  Our (western) world is about to change, maybe even violently in overnight fashion, do not be taken by surprise because by now it should not be! 

Catalon-Astrophe

November 10, 2014

Real money advocates have endured mental and financial torture since TPTB's manipulations passed the "point of no return" three years ago. However, we have never been more correct in our forecasts or views. Indeed, the political, economic and social environment of the "good old days" of the 2011 debt crisis are barely recognizable; although listening to relentless "recovery" propaganda, you'd think America had recaptured its "golden ages" of yore. Ironically, not a single other major economy even purports to be expanding, let alone enjoying a material recovery. And thus, the dichotomy between the reality of the global economy and fraudulence of commandeered financial markets.

We're told QE is "ending," despite ZIRP continuing for a "considerable time" whilst interest payments continue to be "re-invested" in the Treasury and Mortgage-backed bond markets. Moreover, essentially all other major Central banks are dramatically overtly increasing QE, supported whole-heartedly by the Fed, the OECD and the IMF. Heck, we were just told the Iraqi War is over; yet 3Q GDP surged due to government defense spending - whilst our Nobel Peace Prize winning President, whom weeks ago promised no new "boots on the ground" ordered just that this weekend.

As for said recovery, "island of lies" economic data claims it is occurring, but reality speaks otherwise - in volumes. We're told explosive growth is "just around the corner," yet industrial commodity prices are crashing - like iron ore down 60% from its 2011 high. Conversely, corporate layoffs are surging as connoted by last week's Challenger job cuts report; retail sales are sagging, per McDonalds celebrating 12 straight months of contracting revenues; and subsidized student and auto loans are exploding as people desperately seek "income" to pay their bills. Which, by the way, we're told are "deflating," whilst surging food prices - from beef, to chicken, shrimp, and milk, scream otherwise. Not to mention, healthcare, insurance, rent, electricity and nearly everything we "need versus want" to live. And care of "shrink-flation," many such costs are hidden from view - like reduced food package sizes and increased bank and airline fees.

To wit, "median nightmare" described how the average American family faces an annual funding deficit; as validated by today's news that the average "millennial" - i.e., the nation's largest demographic - has an annual savings rate of negative 2%. This damning article says it all of what QE and irreversible secular decline has done to the Middle Class - who voted with their feet last week, in validating record low Congressional approval ratings by voting out as many incumbents as possible. And as for America at large, what part of record debt doesn't scream depression?

We're also told financial markets are not manipulated, whilst major banks are caught in the act; as UBS was this weekend in the "sacrosanct" gold market and seven others in the foreign exchange pits. Meanwhile, corporate investment is crashing; yet, care of ZIRP, the PPT and a scarce investment opportunities, an incredible 11% of U.S. market capitalization has been "bought back" in the past three years - at record valuations, no less. Volatility has been so destroyed by the "Greenspan/Bernanke/Yellen Put" - i.e., the PPT - that "portfolio insurance" has never been cheaper, despite said historically weak economic activity and unprecedented valuations. And yet, all one has to do to realize what's really happening is to see what is "anticipated" - as cyclical stocks are plunging, whilst "defensive" stocks are soaring.

We're also told precious metals are unloved, despite massive withdrawals from the GLD ETF, the COMEX futures market and the Shanghai exchange; let alone, as the U.S. Mint sells out of silver Eagles amidst an historic demand surge. Meanwhile, the head of the China Gold Association says, "Gold is money par excellence in all circumstances, to be used to support the renminbi becoming an international currency, as the very material basis for modern fiat currencies." And no less than the paragon of money printing himself, "Maestro" Greenspan, candidly reveals "gold is by all evidence, a premier currency. No fiat currency, including the dollar, can match it." And yet, we're told to fear it will crash, despite trading well below its cost of production. The "consensus" expects the Fed Funds rate to end next year at 1.0% - and yet, as rates sit near record lows, we're told to fear "higher rates."

For that matter, we've for months been told that no more than two-fifths of Catalans favored secession, despite a series of 2013 polls suggesting 55% or more. We're also told the loss of 25% of Spain's tax revenues could never happen, as Catalan secession would never be allowed. And yet, 2.3 million Catalans voted yesterday, with a whopping 81% favoring secession. Such a "Catalan-astrophe" - as Zero Hedge deemed it - could dramatically alter the European political and economic order; as not only will a potential Catalan secession cast a black cloud over an already recession-racked Spain for the foreseeable future, but it may empower other "fringe" movements to decidedly strike against mainstream dogma. Venice, Italy immediately comes to mind; but more importantly, Switzerland, which just three weeks from now will hold its potentially historic gold referendum. By the way, the Swiss Franc hit a two-year high against the Euro this morning of 0.830; as clearly, speculation is rising that a "yes" vote will cause it to blow through the 0.833 ceiling infamously pegged on September 6^th, 2011.

Speaking of market "expectations," Friday's eye-opening precious metals rally certainly got the attention of TPTB. Another punk NFP report confirmed expanding economic uncertainty; and when combined with fears of the potentially destabilizing effects of the aforementioned referendums - and countless other factors - it was imperative that every manner of manipulation was utilized to "stabilize" the situation. Amidst the chaos, the 10-year Treasury yield plunged back to 2.3%, whilst European stocks plunged. But lo and behold, perhaps the 10^th straight "dead ringer" algorithm saved the "Dow Jones Propaganda Average," replete with blatantly transparent "hail mary" rally to turn it positive in the day's final minutes.

As for gold, it closed Friday's "Access Market" at $1,179/oz., putting the fear of god into Cartel tape-painters that the two-year support level of $1,183/oz. might be recaptured; thus, causing black box momentum traders to start buying and MSM commentary to question if "the bottom" had passed. Thus, the 73^rd " Sunday Night Sentiment" raid of the past 74 weeks; followed by the fifth 12:30 AM EST raid of the past six trading days; and attack after attack as this morning progressed, despite not a shred of news to explain it - other than the Cartel's time-honored mantra that "all great PM days must be followed by horrible ones." As for the Dow, yet another "dead ringer" algorithm, and accompanying "new Hail Mary" for the 10-year Treasury yield.
 

 

To that end, today's financial, geopolitical and economic trends are more bullish than at any time since the turn of the century; at a time when PM sentiment, valuations, and mining economics are at generational lows. Heck, even the "bad guys" are signaling as much, for what it's worth - as the last two times COMEX gold and silver "commercials" had such small short positions were the bottoms in June 2013 and December 2013, respectively. Again, for what it's worth.

PROTECT YOURSELF, and do it NOW!

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Andy Hoffman joins Kerry Lutz of the Financial Survival Network to discuss gold and silver, the Swiss Referendum, plunging oil prices, currencies collapsing around the world, record physical PM demand and China gold imports in October.  To listen to the interview, please click below.  

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