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Wide World Of PiMBEEB
by Andy Hoffman, Miles Franklin:
Sometimes, I get so caught up in “the battle,” I don’t even realize what day it is. Thus, I yesterday (Friday) wrote “OPEC, like the London Gold Pool, is proving Cartels always fail” for Monday’s newsletter, not even realizing Monday was Memorial Day; and thus, that Miles Franklin was closed. Consequently, we decided to “double dip” Friday’s newsletter, with the equally MUST READ “how cryptocurrency will cause the end of Central banks – and with them, the gold Cartel.
I wanted to get something out this weekend as well; but I have to tell you, I’m feeling a bit burnt out – given that amidst said “battle,” which in my 15 years in the sector has never been so intense; not to mention, while fighting the bronchitis/pneumonia which is nearly gone, but still present; I haven’t missed a single day of writing all year. That said, when the war is inevitably won – against a heinous Cartel, intent on delaying the inevitable collapse of history’s largest, most destructive fiat Ponzi scheme – my writing needs will dramatically decline. As at that point, everyone will know what I, and most of you, have known for some time now.
Since yesterday morning’s article, not only has the amount of PiMBEEB, or Precious Metal bullish, everything-else-bearish news flow been enormous, but the breadth has been, for lack of a better word, breathtaking. Thus, instead of focusing on one major theme; particularly on this holiday weekend – when frankly, I’m not exactly in a “writing mood”; I’m going to pen this as a “sequel” to March’s “PiMBEEB-a-looza.” After which, you’ll no doubt realize, in crystal clear fashion, why I have never, in my 15 years in the Precious Metal space, been so bullish regarding the near, and long-term, prospects for physical gold and silver price appreciation.
Thus, in “list format” – in no particular order – I present today’s “wide world of PiMBEEB,” Memorial Day weekend edition…
When seeing Zero Hedge’s “U.S. mortgage rates tumble to six-month lows” article yesterday, I considered writing a dedicated article titled “six-month lows,” given just how many indicators have done the same thing – like the trade deficit, retail sales, and durable goods orders, to name but a few. Hmmm – what was it that occurred six months ago? Oh yeah, the Election, when the fraudulent “Trump-flation” meme was created to rationalize the most egregious market manipulation in global history – which in turn, has created asset bubbles so large, the only possible outcome is catastrophe. Which again, Zero Hedge put into perfect perspective yesterday, via its self-evident article, “stocks surge for seventh straight day, as U.S. macroeconomic data hits 15-month lows.”
Speaking of plunging retail sales, get ready for one of the ugliest “retail Armageddon” statistics imaginable. Incredibly, whilst the government still purports retail job growth – particularly, “waiters and bartenders” despite the U.S. restaurant index having plunged to 2008-crisis lows; amidst the aforementioned, unprecedented retail Armageddon; a whopping 80% of all new U.S. store openings this year have been by one chain – which is…drum roll please…Dollar General.
Whilst on the topic of government data manipulation, consider the fact that in Obama’s last year in office, the single largest contributor to GDP “growth” was a broad category that the BEA, or Bureau of Economic Analysis, categorized as “healthcare.” Which, no matter how you define it, produces ZERO actual output; and given the increasing level of government healthcare management, generally speaking, acts as a net drain on growth. Well, now that Obama is gone, the BEA has apparently changed the “plug” category in its calculation of “GDP”; which, no matter who is President, is no longer allowed, under any circumstance, to be negative. Thus, despite all the belated March data publications since the BEA’s initial 1Q GDP estimate of + 0.8% suggesting a negative revision, they “magically” revise it from + 0.8% to + 1.2%, due to the “new category” of…wait for it..non-profit organizations! Yes, non-profit organizations, which have never before been prominently featured in GDP calculations, were all of a sudden the biggest reason why the U.S. economy avoided contraction in the first quarter. I mean, do I really need to say more?
Following last week’s revelation that 25% of all American adults can’t pay their monthly bills; whilst a whopping 44% have less than $400 in cash savings; we learned that 70% of all Millennial’s have less than $1,000 of savings. To that end, given the nation’s historically ugly demographic trends; record-high home prices (and rents); four-decade low labor participation rate; and burgeoning Great Depression; exactly how is the housing market not going to crash? This, as the Michigan consumer confidence survey reported that respondents have not been more bearish about housing market conditions since…drum roll please…the peak of the (until now) biggest housing bubble in U.S. history, in 2007.
Fun fact, regarding the aforementioned most egregious, government-fostered asset bubble in U.S. history. Which is, that while the absolute level of U.S. durable goods orders is unchanged since May 2013, the “Dow Jones Propaganda Average” has “risen” 5,000 points. I mean, what could possibly go wrong?
Fun fact #2, from the biggest (taxpayer-funded) bailout recipient in global history, Bank of America. Which, according to its “proprietary analysis,” believes UK, Emerging Market, U.S., and Pacific Rim equities to be the world’s most “overbought” assets; whilst conversely, the most “oversold” are gold and government bonds. To that end, if bonds trading near all-time highs – heck, European junk bond yields are now lower than those in the stock market – are considered “oversold,” I can’t comprehend what overbought would look like.
On the topic of parabolically rising, comically unpayable debt, the State of Connecticut is experiencing an explosion in default risk premiums. I mean, if states whose financial prosperity are so integrally tied to Wall Street are amidst major financial crises (New Jersey is in the same boat), think how States not boosted by unprecedented government market manipulation are doing.
On the domestic political front, the Trump Administration is fighting a losing battle to “repeal and replace” Obamacare; a dead-in-the-water budget proposal; a fiscal stimulus prayer that hasn’t even been proposed; an historic debt ceiling fiasco mere months away; and everyone from Democrat opposition, to Republican “allies,” and a rapidly expanding “Liberal coalition” bent on usurping his power, and office.
Overseas, Trump’s flouting of the G7 climate change proposals; as he again attacked the “bad” Germans for having the gall to sell so many cars in America; have not improved America rapidly dying global leadership status any. This, as a third Aircraft carrier was deployed to Korea; two Chinese fighter jets attempted to intercept a U.S. surveillance craft, purposely antagonizing China by flying over disputed South China Sea waters; and oh yeah, a second, if less dramatic, Syrian bombing.
Global criticism of the renewed OPEC “production cut” intensified – to the point that, in its aftermath, prices again plunged below the U.S. government-led “oil PPT’s” now 18-month “line in the sand” at $50/bbl. Remember, the oil production industry has more debt attached to it than any other, by far. Thus, if this “last ditch effort” to support prices amidst the worst energy glut in history fails, not only will it spell the end of OPEC, but financial doom for hundreds, if not thousands, of corporations – as well as dozens of nations.
