We’ve reached the point where the global experiment with our current flawed economic and monetary models are drawing to a close. The fetishistic worship of central banks, bankers, and banking is over.
Once the illusion of central bank control is fully lost, the financial markets will implode in a deflationary wave that has been held at bay for far too long. Asset prices will collapse, companies will fail, and millions of jobs will be lost. People will re-discover that partying too hard for too long earns a massive hangover.
Boris Johnson said last week London would begin the formal process for leaving the EU-block early next year by triggering Article 50 of the Lisbon Treaty under which London can leave the EU after a two-year negotiations period. But the United Kingdom has a great deal of work to do before it can leave the European Union, Foreign Secretary Johnson says.
Johnson also talked about immigrants, reiterating that Britain must regain control of immigration through the split form the EU.
We look at the geology of earthquakes in order to understand economics and finance. In the second half Max interviews Pierre Jovanovic, author of the upcoming book, The History of John Law, about the matter of Madame Christine Lagarde and about the current economic crisis in the tourism industry of France.
All things considered, the trading action doesn’t look terrible.
Silver started to catch a bid towards the end of our show and gold has been in a tight range. The cartel hasn’t been able to do much of anything with gold, today, other than keep a lid on it. Miners, on the other hand – sheesh. That’s partly speculators giving up the ghost and fresh shorting. I’m sure you saw AG (First Majestic) yesterday.
That looked like AG was outright being targeted by the cartel to use AG as a sentiment trigger. The “silver signal” as expressed through silver miners was loud and clear, yesterday…and today.
But again, all things considered, while it doesn’t feel like it, I don’t see today’s moves as proof we’re going down next week. That silver is catching a bid now is an example of those strong hands, picking up the cartel-induced bargain, and the buying is happening at a technical point that one would expect to serve as a trigger for paper traders. Those mega-strong paper longs are visible, in the market, TODAY.
They were VERY visible in the Asian-London-pre-FOMC session, as I was documented. That accumulation pattern was the footprints of pros, and they were taking on the cartel in advance of the FOMC release. That too, is different from typical patterns, previous years. “Our camp” is winning this war.
It just doesn’t feel that way.I think there’s a very strong probability that next week, given the lousy performance that Hillary will produce, precious metals will catch a reasonably strong bid and silver WILL get back over $20, within 48 hours after the debate.
We’ll see……. But I’d give this 70% odds, as far as scenarios go. I know Hillary is going to bomb. That much is clear! It’s also very clear how the markets will respond to that! What isn’t clear is what the PTB will do to manage expectations.
DOC’S GOLD & SILVER MARKET UPDATE:
Gold bullion sales remained strong across the industry this week.
The US Mint sold 18,000 1 oz Gold Eagle coins, bringing monthly Gold Eagle sales to 53,000 coins, and year to date sales to 661,000 oz.
Retail silver demand remains steady, picking up Friday as silver dipped back to $19.50. SD Bullion’s 10 oz Silver RCM Bar Flash Sale drained wholesale inventories of the Mint’s flagship silver bar, but outside of that product, wholesale inventories and premiums remained steady throughout the industry.
Sales of 2016 Silver Eagles reported by the US Mint came in weak again at 305,000 coins this week, bringing September sales to 1,255,000, and year to date Silver Eagles sales to 30,155,500.
The US Mint released the 30th Anniversary 2016 Silver Eagle Proof Friday, with special 30th anniversary text along the rim of the coin, a first for the mint.
The Silver Eagle proofs are expected to sell out quickly due to the unique feature.
Just for the sake of argument, let’s ask: what if we’re in a Depression but don’t know it? How could we possibly be in a Depression and not know it, you ask? Well, there are several ways we could be in a Depression and not know it:
1. The official statistics for “growth” (GDP), inflation, unemployment, and household income/ wealth have been engineered to mask the reality
2. The top 5% of households that dominate government, Corporate America, finance, the Deep State and the media have been doing extraordinarily well during the past eight years of stock market bubble (oops, I mean boom) and “recovery,” and so they report that the economy is doing splendidly because they’ve done splendidly.
I have explained exactly how official metrics are engineered to reflect a rosy picture that is far from reality:
In the September Tax Justice Network podcast, the Taxcast: How a conman can devastate the lives of thousands of ordinary people, aided and abetted by the offshore industry – with banks, law firms and accountants all happy to look the other way and not ask questions. Plus, we discuss: the latest leak from the Bahamas, #BahamasLeaks; and Apple’s 13 billion euro underpaid tax bill: a defining moment in the battle between the low/no-tax world big corporations would like to see and democratic, accountable governance in the public interest. (more…)
Savings Guarantee? U.N. Warns Next Financial Crisis Seems Imminent
“There remains a risk of deflationary spirals in which capital flight, currency devaluations and collapsing asset prices would stymie growth and shrink government revenues. As capital begins to flow out, there is now a real danger of entering a third phase of the financial crisis …”
UN Conference on Trade and Development’s Annual Report (UNCTAD), September 22, 2016
Image from “Extraordinary Popular Delusions and the Madness of Crowds” by Charles Mackay – Wikipedia
This hard hitting critique in the UN Conference on Trade and Development’s Annual Report, released this week, is suggesting that the ‘third leg of the world’s intractable depression is yet to come.’
“Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out,” said the annual report of the UN Conference on Trade and Development (UNCTAD).
But what does these grand, scary predictions really mean for us? Bankruptcy? Economic collapse? Apocalypse now? End of the world as we know it? Read full story…
We haven’t seen too many hardcore Democrats come out in support of Trump. This should be expected since that would be a far more genuine and significant gesture than neocon Republicans rallying around the neocon candidate. As such, I find it very interesting that in the last 24 hours I’ve come across two separate opinion pieces by lifelong players in the Democratic Party who now support Trump.
We warn hipsters, “Don’t let the hippie man keep you down.” As the intergenerational baton is passed to a bigger voting bloc called ‘Millennial’, we look at the economic consequences to all the Ponzi and pyramid schemes which worked well for the Boomers. Max interviews Wolf Richter about the real numbers behind US income data and Germany’s export plunge. They also discuss whether or not Deutsche Bank can survive these days of major fines.
In an economy based on borrowing, i.e. credit a.k.a. debt, loan defaults and deleveraging (reducing leverage and debt loads) matter. Consider this chart of total credit in the U.S. Note that the relatively tiny decline in total credit in 2008 caused by subprime mortgage defaults (a.k.a. deleveraging) very nearly collapsed not just the U.S. financial system but the entire global financial system.
Every credit boom is followed by a credit bust, as uncreditworthy borrowers and highly leveraged speculators inevitably default.