How Will (Rigged) Markets React to QE Failure?
During the 1970s and 80s, the New York Post, despite its long, storied history, had devolved into a laughingstock tabloid – barely differentiated from the National Enquirer. Over the years, it gradually clawed its way to respectability against entrenched competitors like the Daily News and Newsday – the latter of which, my father worked at for 25 years. The New York Times, of course, remained the “gold standard” of journalism throughout that period, as it had been for since its inception in 1851.
Frankly, the sole reason the Post’s survival was its spectacular sports section, which I still read online for commentary on my beloved Mets (opening day today!), Rangers, and Giants. However, from an actual news standpoint, it’s improved as well; ironically, as the Times has dramatically devolved, de-emphasizing economic truth seekers like Gretchen Morgensen in favor of propagandists like Paul Krugman. Essentially, the Times has become the mainstream equivalent of cheerleaders like the Wall Street Journal in the financial arena, and CNBC on the airwaves; whilst the Post, be it due to Rupert Murdoch’s anti-Democrat stance or otherwise – has ironically become one of the few bright lights financial journalism.
I’m not aware of the paper’s entire cadre of reporters, but have been fond of Jon Crudele’s work for some time. In the aftermath of the 2008 crisis, he was extremely critical of the criminal banks that brought the world to its knees; and in recent years, has focused on the fraud that is the NFP employment report – as I have, in articles ranging from 2013?s “new economic paradigm“; to 2014?s “island of lies” and “all economic data are lies“; and last month’s “employment, American style.” In November 2013, Crudele rose to national recognition – at least, in the alternative media world – in exposing the facts behind the rigging of the October 2012 NFP report; “conveniently,” released mere days before Obama was re-elected. Essentially, Crudele found a Census department “whistleblower” – named Julius Buckmon – who came forward and admitted his department was charged with falsifying the surveys backing the October 2012 report, revealing the economic data corruption the Miles Franklin Blog has discussed for years.
“It was a phone conversation – I forget the exact words – but it was like, ‘Go ahead and fabricate it’ to make it what it was.”
Not that Wall Street, Washington, or the rest of the dumbed down and/or corrupted MSM could care less what a New York Post reporter had to say; or, for that matter, any “anti-recovery” commentary, so long as the PPT/Fed/ESF/Cartel were able to maintain the veneer of such with unprecedented money printing and market manipulation schemes. However, Crudele’s expose was out there for the entire world to see; and with each “jobs Friday” since, not only has such data dramatically deteriorated in credibility, but more and more global commentators have figured it out. In other words, the Fed’s “recovery” propaganda scheme is running long in the tooth; not just due to the fact that there clearly isn’t – or ever was – one, but because more and more people realize the data purporting such is cooked.
To that end, Crudele’s latest article – written just before last Friday’s horrifying NFP report – takes the discussion of how comically absurd the report’s genesis is to a new level; essentially, bringing to light the vampire that is the most archaic, corrupt, statistically unreliable economic data series in the world – which sadly, is rivalled only by the U.S. GDP and CPI reports. Basically, NFP employment is principally predicated on “randomly selected” household survey data – which is promptly “adjusted” by myriad algorithms based on government-assumed business formation, seasonality, and other factors. Worse yet, according to Crudele, recent NFP reports – like Friday’s March reading, for instance – weren’t even completed according to statistical protocol; making them, for all intents and purposes – worthless.
“As you probably already know, the Federal Reserve is among the many organizations and companies that carefully monitor the unemployment rate and make important decisions based on that number. So it’s a big nuisance if this figure is unreliable. But that’s exactly what it is – unreliable to the point of being nearly useless at best and fraudulent at worst.”
And the scariest part of all is that, rigging and all, the numbers – outside the comical “headline U-3 unemployment rate” that receives the lion’s share of media attention – couldn’t be uglier, or more transparent. Such as, for instance, the essentially record low labor participation rate; relentlessly falling real wages; declining employment in all age categories but 55+; poor job quality, such as the recent (until last month) “waiters and bartenders” surge; and of course, surging “birth/death” jobs whilst small business formation is at a record low, and termination at a record high.
By now, you are well aware that Friday’s March NFP report was not just bad, but beyond horrible. So much so, that in yesterday’s “126,000 job lie,” I postulated that numbers that bad – given the BLS’s ability to publish essentially “any number it wants,” could only have been part of a conscious “policy decision.” Clearly, the across-the-board economic data collapse – not just here, but everywhere – to 2008 crisis levels can no longer be avoided by pretending the labor market is strong. Moreover, the surging dollar (not due to U.S. economic strength, but a flight to liquidity as the global economy collapses) is causing horrific damage to U.S. corporate earnings, which are now projected to decline in 2015; to the point that the White House itself issued a veiled warning of such just days before the March FOMC meeting – which “coincidentally,” was the most dovish in Whirlybird Janet’s tenure. Not that the Miles Franklin Blog didn’t warn of this long before the White House; but then again, what do we know?
Let’s face it, said “126,000 jobs” were published for one reason, and one reason only. Which was, to prime the market for the Fed – which issued its “most unequivocally dovish statement in memory” just six weeks ago – for the “Yellen Reversal” we have predicted since QE3 supposedly ended last Fall. In other words, the inevitable admission that not only is the economy not “recovering,” but weakening to the point that “downside” risks to the Fed’s perennial overstated economic forecast now exceed those to the upside; and thus, “additional easing measures” are being considered. Irrespective, if the PPT even modestly loses control of the “Dow Jones Propaganda Average” – to the tune of, for instance, a modest 15% “plunge” – you can bet the Fed’s monetary cavalry will race in to “save the day” with NIRP, QE4, and who knows what other hyperinflationary policies. Remember, the only thing the Fed actually cares about is the stock market – via its misguided, comprised (by its Wall Street and Washington masters’) view that in goosing equities to historically bubblicious valuations, it can somehow create the elusive “wealth effect recovery” that thus far, has only occurred amidst the “1%” directly benefitting from its printing presses.
That said, today’s article provocatively suggests the rarity of a Miles Franklin Blog“prediction” of how markets will react – which, if that were the case, would be contrary to everything we are and believe. To wit, we are not financial advisors or traders, but “long-term wealth protectors”; and given our insistence that paper markets of all kinds are rigged, we certainly wouldn’t deign to guess which way stock, sovereign bonds, or even paper PM prices will move in the short-tem – whilst maintaining, of course, that in the long-term, physical gold and silver prices will outperform essentially all asset classes, whilst the real returns of overvalued paper assets are destined to be subpar at best, and catastrophic at worst. No, what I am suggesting here relates more to the expanding global perception of Fed failure – setting the stage for increased market intervention, as the aforementioned “manipulation operatives” are forced to fight the “unstoppable tsunami of reality” that much more forcefully – and overtly.
Frankly, one would have to be either blind, or heavily incentivized as such, to ignore the reality of not only the collapsing U.S. (and global) economy, but the dramatically dovish leaning of the Yellen Federal Reserve, even if it pretends to be “hawkish” by replacing “considerable time” with “patient,” and “patient” with, well, unadulterated Fedspeak gibberish. For the myriad reasons cited above, it is clearly on the verge of said “Yellen Reversal”; which would not only validate our long-standing view that QE has decidedly failed, but corroborate the miserable results of Japan’s Abenomics; the ECB’s “whatever it takes” QE; the PBOC’s expanding shadow banking “bailout”; and 23 other Central bank rate cuts (several, tonegative territory) in the first quarter of 2015 alone – as the “final currency war” we predicted more than two years ago goes nuclear. To which, we simply ask, how will “markets” react?
Yes, we know markets are all rigged, but that doesn’t mean the chinks in the manipulators’ armor aren’t showing more with each passing day. First the collapse of commodities and currencies; followed by a total loss of control of sovereign debt markets, which have surged to 5,000 year highs as the global investment community “front runs” the inevitable QE to Infinity that will take nearly all Western yields to zero (aside from basket cases like Greece) before hyperinflation inevitably “comes to town.” Global manipulation efforts have not yet lost control of “last to go” markets like the major Western equity indices and paper gold and silver; but clearly, the recent volatility surge indicates such “control” is on the verge of being lost – given record high valuations amidst the worst economic fundamentals of our lifetimes. Throw in the expanding preponderance of potential “black swan” events – like Greece, the Ukraine, and Yemen; and clearly, TPTB’s best laid manipulation plans are in dire straits, enroute to inevitably being overrun by said “unstoppable tsunami of reality.”
So how will (rigged) “markets” react to the increasingly obvious, indisputable evidence of not only the hopeless, irreversible economic collapse engulfing the planet; but widespread recognition that Central banks – despite their cumulative arrogance and bluster – have not only failed to revive the global economy, but made it exponentially worse? Let alone, as the financial community increasingly, inevitably, realizes its only hope for long-term survival rests on a massive, unprecedented debt default – permanently destroying the house of cards fiat currency regimes Central bank actions are predicted on?
To which, our only firm conviction is that real losses in manipulated, historically overvalued financial assets will likely be unprecedented, even compared to 1929 or 2008, irrespective of what nominal returns turn out to be; as currencies collapse and hyperinflation works its way across the world’s doomed fiat currencies – which is to say, all of them. As for the only real money the world has ever known – at a time when not only is demand surging, but production peaking – we’ll let you judge what their relative performance will be, particularly from historically suppressed prices well below the cost of not only long-term industry viability, but short-term variable production costs. And for those choosing to act on such instincts, please be aware that amidst the “worst precious metals sentiment in two decades,” desperate bullion dealers are again deploying the same, suicidal sales tactics as those that took Tulving down a year ago – and with it, millions of investors’ funds. This is why we implore you to do your due diligence regarding who you plan to do business with – and why Miles Franklin, in business 26 years with an A+ Better Business Bureau rating and not a single registered complaint since opening its doors in 1989, should be your “go to” Precious Metals dealer.
Courtesy: Andrew Hoffman
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Central Banks , Debt Markets , Economic Collapse , FOMC Meeting , Global Economy , Gold and Silver Prices , Market Manipulation , NFP Report , Precious Metals , Rigged Markets , Unemployment Rate
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