• Gold: 1,387.70 -1.61
  • Silver: 15.39 -0.04
  • Euro: 1.129 -0.000
  • USDX: 96.63 -0.487
  • Oil: 57.17 2.74

Game On

Well, it appears to be "game on" for the final round of the financial crisis that commenced five years ago. All the world's Central banks achieved in the past five years - via unprecedented money printing, market manipulation, and propaganda - was exploding debt, inflation, political tensions, and unemployment. And now that governments' own balance sheets have been decimated by this futile cause, there is no remaining "safety net." Currencies worldwide are collapsing, like Argentine Peso and Venezuelan Bolivar - while "fragile five" currencies, like the Brazilian Real, South Africa Rand, and Turkish Lira, have started their own, likely terminal declines.

Huge, earth-shattering announcements

Huge, earth-shattering announcements in the past week; as finally, the word of official PM price suppression is spreading the world round. It was inevitable to happen, as the disparity between record physical gold and silver demand and plunging paper prices had to "give" at some point.

Silver: "line in the sand" at $20/oz…

It won't be long before talk of "tapering" - which was but a mirage to start with - will turn to that of increasing QE; and now that global PHYSICAL demand is really starting to take off, it's only a matter of time before reality re-enters the PM markets. Gold has now fought through four straight days of identical attacks, while silver has staunchly held the line above its seven-month "line in the sand" at $20/oz…

The VERY KEY ROUND NUMBER of 3.0%

Yesterday afternoon, a "miraculously strong" 30-year bond auction pushed the benchmark 10-year Treasury yield below the VERY KEY ROUND NUMBER of 3.0%. Never mind the FACT that the Fed monetizes at least 70% of all new issuance, or that only a lunatic would dramatically increase purchases of high duration bonds when a "very strong" NFP report was anticipated the following morning. OF COURSE it was the Fed's fear of surging rates that caused it to step in and "turbo QE" rates back down, just as it was forced to do on September 6th. On that day, yet another "weaker than anticipated" NFP report was fabricated to help them out, as was the case today.

The desperation is mounting

The desperation is mounting, as this "fat finger" caused gold to fall $13 in ONE SECOND at 10:15 AM; not un-coincidentally, as it was up 1.0% just after the 10:00 AM KEY ATTACK TIME. With the December contract bordering on default - as at least 275,000 ounces have stood for delivery but not seen gold leave the registered inventory category - and the "commercials" at their most bullish positioning ever, something appears ready to give. Germany only received 37 measly tonnes of the 300 it is supposed to receive over a seven-year period in 2013; and as it turns out, the gold received wasn't even their original gold.

The end is nigh

Today, King World posted an article showing gold and silver prices at their most oversold levels in HISTORY; i.e, well below the lows in both 2008 and even 1980. I wrote about it this morning, so please check the Miles Franklin blog later today. As for the markets, they opened the year with a PM surge, whilst interest rates remained near their highs and stocks plunged. The walls could close around TPTB at any time; and perhaps the 400,000 ounces or so of gold scheduled to leave the COMEX registered inventories of just 494,000 this week will be the catalyst. Or perhaps not; but either way, the end is nigh on a PAPER shorting scheme that has created record PHYSICAL demand - which likely, will be dramatically higher in 2014, whilst the mining industry starts to see equally dramatic production declines.

Ending the year in style

Looks like the Cartel is ending the year in style; starting with perhaps the 30th straight "Sunday Night Sentiment" attack; followed by the 143rd 2:15 attack in the past 158 days. And oh yeah, the only news this morning, the Housing Index, was much worse than expected.

The odds of a physical issue are only growing

Yesterday, I did an Audio Blog with Harvey Organ (to be published tomorrow), who is in fact alarmed by the drain of gold inventory at the COMEX and LBMA (in the latter case, via redemptions of GLD). When the December COMEX contract closes on Tuesday, we may well have no more than one or two hundred thousand registered ounces left. February was an even bigger delivery month than December this year (which typically has been the biggest); and thus, the odds of a physical issue are only growing - particularly with gold and silver still trading below their respective costs of production.

SOMETHING'S gotta give soon - and WILL!

Per my Friday article, http://blog.milesfranklin.com/proof-of-the-tapering-mirage, it appears the Fed has been MASSIVELY lying about the amount of tapering all along; to the tune of roughly $45 BILLION per month! Not only that, they entirely discarded the 6.5% "unemployment rate" threshold for raising rates; instead, stating they'd maintain exceptionally low rates "well past a drop below 6.5%." And even if they weren't LYING all along about the amount of QE, a $10 billion/month "taper" is immaterial in a program that will STILL print $900 billion in 2014 - causing the Fed's balance sheet to surge from $4 trillion today (owning 1/3 of all Treasuries, and 1/2 of all MBS's) to nearly $5 trillion by year-end.

PHYSICAL Buying Reaction - Worldwide

How can I possibly summarize the Fed's pathetic "taper" of $10 billion/month; whilst lowering its "unemployment rate" threshold, and essentially promising ZIRP until at least 2017? I know, a veritable money-print-a-thon. Please read my new article tomorrow, as following yesterday's "pre-FOMC" commentary, I did the equivalent of a "post-Mortem" this afternoon.