Quote from Eddie George, Governor Bank of England in 1999, when BoE dropped 400 tones of Gold, 50% of the BoE’s gold on the market:
“We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K.”
“I warn you that politicians of both parties will oppose the restoration of gold, although they may outwardly seemingly favor it. Unless you are willing to surrender your children and your country to galloping inflation, war and slavery, then this cause demands your support. For if human liberty is to survive in America, we must win the battle to restore honest money.“
Howard Buffett, 1948
By Greg Hunter’s USAWatchdog.com
Money manager and economist Michael Pento warns to keep your eyes on the Fed. It will be responsible for the next market crash coming this year or next. Just look what happened after the most recent Fed meeting last week. Pento says, “After the June FOMC meeting, the Fed talking about tapering sent stock prices skidding. . . . When they actually announce they are tapering, and when they actually announce a date for tapering that, I believe, will be in August at Jackson Hole, the market will sell off absolutely.”
More debt and lower growth? A very bad formula!
Bill Holter’s Commentary
The Fed is now careening from wall to wall like an out of control bobsled…
Powell Just Launched $2 Trillion In “Heat-Seeking Missiles”: Zoltan Explains How The Fed Started The Next Repo Crisis
June 21, 2021
Last week, amid the fire and brimstone surrounding the market’s shocked response to the Fed’s unexpected hawkish pivot, we noted that there were two tangible, if less noted changes: the Fed adjusted the two key “administered” rates, raising both the IOER and RRP rates by 5 basis points (as correctly predicted by Bank of America, JPMorgan, Wrightson, Deutsche Bank and Wells Fargo while Citi, Oxford Economics, Jefferies, Credit Suisse, Standard Chartered, BMO were wrong in predicting no rate change), in an effort to push the Effective Fed Funds rate higher and away from its imminent rendezvous with 0%.
What does this mean? As Curvature Securities repo guru, Scott Skyrm wrote last week, “clearly the Fed intends to move overnight rates above zero and drain the RRP facility of cash.” Unfortunately, the end result would be precisely the opposite of what the Fed had wanted to achieve.
Imagine what the world will look like once velocity finally turns up?
By Greg Hunter’s USAWatchdog.com (Saturday Night Post)
Renowned geopolitical and financial cycle expert Charles Nenner made a huge call at the end of January 2020. Nenner said, “I am more worried about the market going down 40% than making 5% more on the upside.” The market topped a few weeks later (2% higher) and then plunged 38% for the next several weeks. Spot on call. Nenner also said he was “more worried about domestic civil unrest than war in a foreign land.” We had Antifa and BLM rioting, looting and burning in Portland, Minneapolis, Chicago, New York and many other cities for most of 2020. This was, yet, another spot on call. What’s Nenner seeing now? Nenner says, “ I have a chart going back to the 1900’s, and if you connect all the tops, the tops of 1929, top in the 1960’s, 1987, . . . we are up to the trend line again. It seems very, very unusual to break a trend line that dates back for 100 years. So, risk is very high. . . .We are totally out of the market. . . .We have been out for three or four weeks. . . .We have the same thing as before. People are more afraid to miss 4% on the upside than 50% on the downside. That’s human nature.”
How low can the market go from here? Nenner says, “20,000 or lower is my call.” I asked Nenner, “You think the market could get cut in half?” Nenner replied, “Yes.”
Dismal Dave with some visual financial extremes.
Great recent article Shan! I would only mention, the Fed really has zero choices available to them as raising rates or suspending QE will implode the most swollen debt structure in all of history.
Are We At The Inception Of An Inflationary Depression?
June 17, 2021
Many people (myself included) have come to believe that the study of economics is a worthless endeavor. Nothing seems to follow the rules.
How often have we seen the laws of supply and demand thwarted by manipulation governmental stockpiles such as gold, or by misuse of the futures markets, or changing margin requirements, or by legal directives (eg: FDR’s ban on private ownership of gold)
But that is not the fault of this discipline.
It is the interference from outside parties, such as the Fed and government, that makes a mockery of economics.
The best analogy I can give is orbital satellites.
They circle the Earth continually, but eventually fall back to Earth. Yes, they can be kept in orbit utilizing boosters. An occasional jet push will keep them on track. But when fuel runs out, they will always fall, as dictated by physics.
So it is with today’s markets.
Capitalism is nothing more than a sine wave. You economic trajectories above and below the mean. Good times and bad times. Furthermore, its the bad times that create profit opportunities in the next upturn. That’s the beauty of capitalism.
Nowdays, what central banks and governments attempt to do is flatten out the wave. Yet the harder they try to prevent a down wave, the greater the eventual downturn. They are inadvertently turning a sine wave into a tidal wave and that always ends in a megadisaster. It’s basic physics. They are just postponing the inevitable.
So why do it?
In one simple word: politics. The aspirations of the “NON WORKING CLASS”…..politicians. Looking for reelection.
And who pays for all this fenagaling?
CIGA Wolfgang Rech
Stated a different way Wolfgang, TPTB are not allowing business failure to occur which has has always been a basic tenet of capitalism. Without the cleansing of failed debt…it is no longer capitalism.
JB sends us a true weekend funny!
We already heard St. Louis Fed Chairman Bullard speak this morning regarding the unsustainability of all the bubbles.
Froth in the market is clearly evident and must be contained.
Below, Michael Barry warns of a massive crash in most markets.
So, my next question is “where will all this money go”?
Give you 3 guesses and the first 2 don’t count.
G O L D
CIGA Wolfgang Rech
If and only if you can find sellers of real metal for fiat at that point Wolfgang.
The paradox of the Dollar. (with its reserve status).
The weaker the fundamentals of the country, the stronger it gets (or at least maintaining its footing).
Everyone wants and needs lower interest rates:
-the Fed to ease the funding of our national debt
-home buyers and refinancers need lower mortgages for bigger houses
-car buyers need lower loan payments
-corporations to take out loans for stock buybacks to give the illusion of greater earnings per share
-the bond market, especially Muni’s, to ease the burden of funding requirements to keep the economic and political machine in tact
-the stock market for greater leverage (margin) in this speculative environment
I’m sure you can think of many more reasons.
The common denominator in all these needs is a troubling financial environment requiring massive supportive measures.
Surely you would think a flight from the Dollar is of paramount importance in protecting your wealth. After all, who wants to keep their money in a country whose prognosis appears bleak, both financially and socially.
Except for a few central banks like China and Russia, the money flows keep coming and the optimism remains unbridled. Go figure.
Most analysts appear to accept the reality of the Dollar on life support. Yet the game goes on. Like musical chairs. Perhaps a “Black Hand” of government is dealing from the bottom of the deck. You never know. If something doesn’t ring true, run!
CIGA Wolfgang Rech
Until it doesn’t Wolfgang!
Yet gold and silver markets portray the Fed can hike rates and control inflation? With 135% debt to GDP…this is a pipe dream!