Source: Miles Franklin
Following up on the theme of this week’s lowest market volatility in decades; due solely to the all-out commandeering of financial markets that cannot, and will not, last forever; consider the “dead ringer” algorithms I highlighted yesterday morning, of Wednesday’s “Dow Jones Propaganda Average,” and Thursday’s Shanghai Composite.
Here’s Thursday’s “trading” of the Dow, and Friday’s of the Shanghai – which frankly, is difficult to discern from the prior day’s “action.” I mean, how much more obvious can it be? Particularly, considering that this occurs nearly every day; and that conversely, I have NEVER seen it in gold or silver, in the, as of this month, 15 years I have been observing them.
And a few more fun facts, following up this week’s epic articles Monday and Tuesday, proving that the only reason “stock markets” are up is relentless Central bank buying of the largest capitalization stocks – both overt, and covert. Starting with that fact that, just ten of the companies in the S&P 500 account for half of 2017’s gains; and better yet, in the past 10 weeks, the five “FAANG” stocks – Facebook, Amazon, Apple, Netflix, and Google – have gained a cumulative $260 billion in market capitalization (this, despite Amazon and Apple reporting weak earnings); whilst the other 495 stocks in the S&P 500 have lost…wait for it…that same $260 billion! Per the title of my four interest-rate-predicting articles of the past four years, “Nuff’ Said!”
As for the day’s news, it’s equally “calm” – but only due to the Central-bank-induced haze that has washed over “markets,” leaving them incapable of responding to the real, unprecedented dangers that threaten to destroy them each day; as has already occurred in the vast majority of global commodity and currency markets. To wit, “Goldman Mario” Draghi’s speech yesterday, when he espoused that the ECB’s monetary policy – of three years of NIRP, and nearly two of hyper-inflationary QE, has been “successful.” And yet, “the time hasn’t come yet” to end it. Better yet, in prototypically delusional, self-aggrandizing Central banker mode – akin to “Bernanke the Hero”; “Maestro” Greenspan; and the “Committee that saved the world, of Greenspan, Robert Rubin, and Larry Summers; Draghi “humbly” espoused “it’s not my job to be a hero, but to follow our mandate – of (my comment, LOL) price stability.” Yes, “price stability,” of a currency that just last month, touched a fresh 14 year-low – amidst a bankrupt economic union, experiencing the most dramatic political and social chaos since its inception.
Meanwhile, the Chinese yield curve inverted for the first time ever yesterday, signaling imminent recession despite the 6.5% GDP “growth” they purport. Meanwhile, in the United States of Fraud, Lies, and Propaganda, while our historically dysfunctional government debates fabricated Russian espionage claims, the economy is completely falling apart – from auto sales; to bank lending; to the still operating, but soon-to-implode Obamacare monstrosity.
Heck, it was a “double-whammy” day for Obama’s failed legacies yesterday – on a day when he received $3.2 million for giving one speech, in which he patronized Americans by claiming “you get the politicians you deserve.” For one, Aetna, entirely left the Obamacare Exchanges, ensuring massive premium increases for all Americans next year. And better yet, the Obama Administration’s brilliant scheme of tying student loan payments to Treasury yields started to backfire – as of this summer, all government-owned student loans will reprice their interest rates nearly a point higher. This, in an environment where student loan defaults are already skyrocketing to record-high levels. Oh, and did I mention that Puerto Rico filed for bankruptcy last week? and thus, the past five years’ Obama-sanctioned policies of having Wall Street load it up with still more debt have spectacularly failed – resulting in this “territory” putting U.S. citizens on the hook for Puerto Rico’s $70 billion of debt?
Which is exactly why, in yesterday’s “maybe they just don’t want to buy them,” I suggested that, although not here yet, the first signs of the long-dormant “bond vigilantes” returning are being witnessed. Yes, the Fed continues to covertly monetize Treasuries whenever pressure on them grows too strong – such as, when the Chinese, Russians, and Saudis were massive sellers last year. However, when you’re trying to convince investors of a “strengthening” economy – to the point that you actually raise rates three-quarters of a point to “prove” it, damn the economic consequences; rates are going to rise, if not modestly. Which, for a government that as of last month, was for the first time spending more than $500 billion annually on interest payments alone, makes an enormous impact on budget deficits; and thus, future debt issuance requirements. This, as rates remain near, for all intents and purposes, the lowest levels in the nation’s 240-year history, with nowhere to go but up. Unless, of course, “history’s most overdue financial crisis” causes one last knee-jerk rate plunge – aided by heightened QE, of course; before the resulting debt conflagration ultimately yields hyperinflation fears; and with it, the surging interest rates bond vigilantes always bring.
Read More Here: It’s All About Reality-Physical PM Style | Miles Franklin