Category Archives: Financial Markets

BREXIT Destroys The Gold/Silver Manipulation Cartel

Just a quick note on this referendum as we are in the final minutes of the voting. My sister’s friend is in the army.  They came over for dinner tonight and he was asking about the vote and what my thoughts were. I then returned the question and he had said that 90% of the lads in his camp, which are in the hundreds, were all voting to leave. Their reasoning, in a British army camp of lads aged between 18 and 35, was because they don’t believe they should be getting webbed up in wars that we shouldn’t be fighting. He said they pretty much all can agree on the fact that the wars are dictated by Washington, via Brussels, and what they say goes and its not something they support.  These were his words and I have to agree.  – A British friend of the Shadow of Truth

The elitists had a lot to lose if the BREXIT referendum succeeded.   Just like AP declared Hillary the nominee did BEFORE the Calif primary, the WSJ sent out an online article yesterday afternoon saying the REMAIN vote had won.  But this last-gasp attempt to rig the vote failed.

The elitist narrative said that BREXIT would take down the British economy.  The details of this were never explained but NWO’er, George Soros, warned as much last weekend. This was just another scare tactic used to cover up the fact that a BREXIT would undermine considerably the western elitist holy grail of a one world, one Government system.

The Ruling Body of the EU is the European Council, often described as the supreme political authority.  Its members are not elected.  It’s the fortress of totalitarian political control the western elitists have been methodically imposing on Europe, the UK and the U.S for several decades.  If anything, the BREXIT victory represents a last gasp attempt to preserve democracy and Rule Of Law.

At the root of every political upheaval is indeed are hidden economic issues.  The BREXIT should undermine the effort of the western elitists to impose the TPP Treaty, which is designed to advance the confiscation of individual self-determination.  But more significantly is the issue of gold and silver:

The day that QE2 was announced by the Fed. That day, that morning, they were just beating the living daylights out of gold. People on the site were like “oh boy, this is going to be terrible”. I said NO, this is what the banks do. They try to reset the price as low as they can before the news because they know they are trapped. – Craig Hemke, Shadow of Truth

This is exactly what has transpired over the past week leading up to the BREXIT vote. Same game, different scenario. Craig went on to say “Ahead of what they knew was going to be gold bullish regardless of the outcome.” [BREXIT vote]

Since the end of 2014, there have been several notable indicators signalling a high degree of stress between the fraudulent paper bullion market used by the Central Banks to suppress the price of gold/silver and the available supply of physical metal to deliver into the paper claims.

One such indicator that is now stretched to an extreme is the Comex, where the amount of paper silver contracts issued represents over one billion ounces of silver.  This is more than seven times the total amount of physical silver reported to be sitting in Comex vaults.  It’s 45 times more than the amount of “registered” (available to be delivered) silver on the Comex.   It’s 25% more than the annual global production of silver.

Likely, the most significant collateral damage inflicted on the NWO’ers by BREXIT is that it will destroy the ability of the western Central Banks to manipulate the price of gold and silver.   The Shadow of Truth hosted Craig “Turd Ferguson” Hemke of TFMetalsReport.com to discuss this overlooked significance of the BREXIT victory (Part 1 followed by Part 2):

Part 2:

BREXIT Means Much Higher Gold/Silver Prices

The elitists’ bid to rig the BREXIT referendum failed.  Notwithstanding a continuous flow of propaganda sponsored by the elitist-controlled mainstream media showing that the Remain vote win, the public’s voice in England prevailed.

As I suggested yesterday, the BREXIT pandemonium deflected the public’s attention from the collapsing western economies.   The most prominent sign of this is the Fed’s unwillingness to raise interest rates just one-quarter of one percent.  Today’s durable goods report showed a 2.2% plunge in durable goods orders during May.  A drop of .5% was expected.  This 17 months in a row of year over year declines in “core” durable goods orders. Freight shipments represent the “pulse” of an economic system.  The Cass Truck Transportation Index is in a literal free-fall.

The boost in the U.S. dollar vs. most global currencies will undermine any uptick in export activity that was preliminarily reported for June.  The alleged 4.9% unemployment rate shoved down our throats by the Government and Janet Yellen is belied by the fact that the percentage of working-age people in the U.S. is at its lowest point since the late 1970’s, a time when most households were still one-income in nature.

Perhaps most at stake for the elitists is the paper war on gold and silver that intensified when the metals threatened to go parabolic in 2011.  But there is evidence that the paper rigging scheme is failing.  To the extent that a BREXIT event undermines the euro, one of the collateral consequences for the elitists is that it will hasten the conversion of fiat currencies into physical metal.

But there’s a problem.   The most glaring evidence of this problem is the catastrophic issuance of Comex paper silver claims on a shrinking pile of physical silver in Comex vaults.   Since January 20th there’s been a stunning decline in reported Comex silver inventory.

Currently, the amount of paper silver contracts issued on the Comex represents over one billion ounces of silver. This is more than seven times the total amount of physical silver reported to be sitting in Comex vaults. It’s 45 times more than the amount of “registered” (available to be delivered) silver on the Comex.  It’s 25% more than the annual global production of silver.

I discuss this issue in the latest issue of the Mining Stock Journal, which was released yesterday (Thursday).   I present another junior mining stock idea that has still not been discovered by the mainstream mining stock analysts and purveyors of research.  You can access the MSJ here:   Mining Stock Journal.   New subscribers will receive a copy of all of the back-issues plus a discount link for the Short Seller’s Journal.

BREXIT And The Escalation Toward War With Russia

Today’s episode of the Shadow of Truth’s Market Update series covers the use of the BREXIT referendum as a point of deflecting the public’s attention away from much more serious issues engulfing the U.S. and the world. It’s a distraction away from the collapsing global economy, the corrupt U.S. political system and the escalation of U.S. military belligerence toward Russia and China, both of whom are working to remove the U.S. as the global reserve currency in order to flatten the global economic and financial “playing field.”

BREXIT Is Being Used To Deflect From The Economic Collapse

I actually could care less about BREXIT.   I have yet to encounter any valid analysis on why the issue matters at all.  What is valid is that the BREXIT theatrical show is being used to deflect scrutiny of the continuous economic reports  showing that the U.S. economy is collapsing.

The Chicago Fed National Activity index released today plunged to -.51 against Wall Street’s expectation of a .11 gain.  Last months data-point was revised lower to barely positive.  The way that this index is calculated, it takes a lot to move the needle.  A drop from a revised lower .05 to -.51 reflects heavy contraction in economic activity across a broad (85 indicators) spectrum of the economy.  The 3-month moving average declined from -.25 – which was revised lower from the original .22 reported – to -.36.

New home sales reported today – for whatever the data series is worth – indicated an 11% plunge from the previously reported number for April, which of course was revised lower. May’s print was down 6% from the revision.  Ironically,  yesterday the National Association of Realtor’s Chief Economic Clown was extolling the virtues of new home construction and sales activity.  Oops.

I suggested yesterday that existing home sales report was highly overstated by the seasonal adjustments imposed on the data collected.  The Census Bureau, which prepares the new homes sales data series, has admitted in the past its estimation and adjustment models tend to overstate sales when actual sales are in a downtrend.  Ergo, the incessant downward revisions of previous reports.  Same with existing home sales, as the NAR uses the same statistical modelling package as the Census Bureau.  The NAR’s report yesterday contained a significant downward revision for April’s report, not coincidentally.

To be sure, there are still some hot pockets of housing activity around the country.  But most of the large economic areas are experiencing falling demand, falling prices and rising inventory, especially in the upper price segment of the market.  The collapse of the current housing bubble will be even more spectacular than the last bubble collapse.

The U.S. economy is collapsing.  In the “inside out” world of U.S. financial media Orwellian propaganda, today’s jobless claims number is being used to substantiate a “tight labor market.”  That’s a complete fairy tale.  The reason jobless claims are historically low right now is that the number of workers as a percentage of the workforce who qualify to apply for benefits when they get fired is at a historical low.  This fact is substantiated by the historically low labor participation rate and the percentage of the workforce that is now part-time.   Part-timers do no qualify for company healthcare or unemployment insurance.  It’s that simple. the  I would question the data if jobless claims were high.

So the entire financial world is focused on what is largely an irrelevant  referendum  on whether or not the UK will remain in the EU.   Meanwhile, the rug is being pulled out from under the entire western economy, including and especially the U.S. economy.

More On Housing – 2008 All Over Again

This commentary is from a subscriber to my Short Seller’s Journal:

The 3% down loans seem to have brought in a lot of first time buyers into the market. I live in the east bay area of California, which is more affordable than San Francisco, or the South Bay area but still painfully expensive nonetheless. Rents are now the same as a mortgage payment on a home in the exurbs.  So a lot of people seem to be buying for this reason. They only look at the monthly payments but overlook the fact that when financial markets seize up and the music stops, you could be left holding the bag on a hugely upside down mortgage and can’t get out of a 30 year commitment by selling.

A friend of mine, who is a borderline novice in financial matters, just bought a home. He has meager savings and has jumped on the 3% down bandwagon. This is the guy who until I told him to pay off his credit card balances because of the usurious interest rate, had no clue the damage they were doing to his finances.   He was making minimum payments on them because he wanted to build up his savings –  I explained to him how by earning 0.01% interest and paying out 18-24%, his savings were getting depleted every month.

The Bottom line is people who are not too financially savvy are being lured into the housing market by the banks. I don’t know how long this 3% crap has been going on, but it seems that Banks are desperate and looking for newer segments of people to swindle.

Everyone has probably seen the report on NYC high end real estate posted in Zerohedge – LINK.  While the suburbs in Denver are still hot because of the huge influx of people moving here from California,  I’m seeing the same price cuts and inventory build-up  in Denver that is described in the ZH piece.  I get listings on just one central Denver zip code. Yesterday alone i received two price changes of 5% on listings over $850k.The inventory in that price segment is bulging.  Over the weekend I was hit with more than 20 new listings and price cuts all across the price spectrum.  I have received six more today – 1 new listing and five price reductions.

Now that the NAR is begging the Government to give debt-bloated college graduates even more debt to buy a crappy starter home, I can smell the desperation to keep the housing market’s “gerbil” running on the wheel.  But the gerbil is like a meth-addict that has been overdosed for too long with near-zero interest rates and recklessly lascivious Government mortgage subsidies.  Like the gerbil, the housing market is about to seize up and re-collapse.  It will be an event that is much more horrific than what occurred in 2008.

The mining stocks are one economic convulsion away from from more than doubling in value.  –  “Hal,” long-time friend/colleague

June Existing Home Sales Report: More NAR Promtional Propaganda

It’s happening here too, NE Florida. Lots of inventory in higher priced areas (around $400k), lesser expensive areas are selling but at much reduced frequency. Lots of for sale signs out there and they’ve not come down. I see price reductions now, and still no traffic for sales. It looks exactly what I witnessed 7 years ago!  – reader comment – note:  a colleague of mine who lives on west coast of FLA said the same thing about his area
While the NAR was pleased to report a gain in May over April for its statistically brewed annualized home sales rate for May, it also revised lower its original “guesstimate” for April sales.  In other words, existing home sales are occurring at a slower rate than originally reported.  I would bet that in July when June’s number is reported that the NAR will revise lower May’s report.

The data is distorted due to the “seasonally adjusted annualized rate” calculation.  In theory, existing home sales should be higher than May last year because, with lower interest rates (manipulated by the Fed) and easier access to Government subsidized mortgages (FNM, FRE, FHA, VHA, USDA), the monetary and fiscal policy implementors running the U.S. have made it as easy for someone to buy a home now as it was during the big bubble.  I would argue that the “increase” in reported home sales is fully attributable to “seasonal adjustments”  which become exaggerated when the number is converted into an annualized rate.

Interestingly, the first-time buyer segment of the market took big dip from April.  I have suspected based on my observations of the Denver market that the largest component of homebuyers are investor/flippers.  The data confirm this.  First time buyers were said to be 30% of the buyers in May, down from 32% in April.  Historically, first-time buyers are typically 40-50% of the buying.
Also interestingly, the inventory of homes increased. I would suggest, based in inferences from the data, this is flippers/investors listing their homes.  I have noticed recently signs posted on busy boulevards around Denver that say “Wholesale fix-up homes available.”  This suggests to me that “investors” are scooping up homes ahead of flippers and looking to flip them into flippers.  This is how the peak of the bubble in 2006-2008 looked.
Finally, and perhaps most disconcerting, is the fact that the NAR is now pushing policy proposals which would make it easier for student loan borrowers to take down a Government-sponsored mortgage to buy a home. Nothing like piling more Taxpayer funded mortgage debt on top of an unmanageable amount of taxpayer funded student loan debt in order to let newly minted college-degree’d bartenders and waitresses buy a home…

Fox News Goes Full Retard On Gold

We’re very bullish on gold, which is the anti–paper money, of course, and is underowned by investors around the world. – Paul Singer, Elliot Management Corp

I keep Fox Business channel on because it has the best tv “ticker scroll” for monitoring basic market activities.  Also, some of the women on the show are easy on the eyes.  Liz Claman is not one of those.

I came in from getting lunch and saw this tag-line on Claman’s afternoon show:  “Gold Losing Glitter.”   I turned up the volume to hear her explaining to the idiots who might actually listen to the garbage broadcast on the show that gold was getting hit today because investors no longer felt a need to use gold as a hedge against the BREXIT vote now that the polls show that BREXIT is currently out of favor with the chippies in England.

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Considering that gold is up about 20% since mid-December, vs. 1.9% for the S&P 500, it’s safe to assume the reasons that gold is being accumulated stretch a lot further and deeper than Claman’s idiotic explanation.

In fact, Prime Minister Cameron announced a referendum date for a vote on the issue of whether England shall remain in the EU, or not, on February 22 this year. Only 5% of gold’s 20% price appreciation since it bottomed in December has occurred since that date.

I dare say it’s a bit pre-mature to announce that gold is  losing its glitter, especially in connection with the British EU referendum.  The truth is that gold is being accumulated by smart money as a hedge against the idiocy of fiat currency-based monetary systems controlled by corrupt Government’s and Central Banks.   It’s as simple as this:

Paper money eventually returns to its intrinsic value:   zero.  – Voltaire

The Economy Is Tanking – Inflation/Obamacare Attacking The Middle Class

The economic reports continue to show an overall rate of deterioration in economic activity down to levels – in general – comparable with the 2008-2010 period.  Freight transportation activity is part of the “nerve center” of the economic system.   The latest data from Cass shows a rapid decline in both freight shipments and expenditures that began in mid-2014:

UntitledAlthough shipments ticked up from April to May 1.3% – attributable to seasonality –  year over year shipments for May dropped nearly 6%:Untitled

As you can see, expenditures plunged 10.1% year over year.  North American freight shipments reflect all economic activity at all levels of the economic system across a broad spectrum of industries.

Retail sales reports going back to December 2014 are signalling economic stress at the household level:   “During normal economic times, annual real growth in Retail Sales at or below 2.0% signals an imminent recession. That signal basically has been in play from December 2014, based on industrial production, retail sales and other indicators), suggesting a deepening, broad economic downturn” (John Williams, Shadowstats.com)

This financial stress at the household level is beginning to show up in credit delinquencies and defaults.  Last Tuesday Synchrony Financial reported an unexpected spike in its credit card charge-off rates:  Rising Credit Card Defaults.   As I’ve detailed in prior posts, auto loan delinquencies and defaults are beginning to accelerate.  I’ve covered a couple of credit and credit-related companies in my Short Seller’s Journal , one of which is down 18% since I featured it on March 20th. This is a remarkable fact given that the S&P 500 is up 1.5% in the same time-frame.   When the stock market rolls over, this stock will drop at least 50%.

Although the latest retail sales report last week showed a small gain month over month, the unexpected gain was fueled almost entirely by the rise in gasoline prices.   The Government CPI report does not show much inflation, because the Government goes out of its way to not measure inflation.

The Government’s methodologies used to hide real inflation have been dissected ad nauseum by this blog and many others over the years.  Instead, I wanted to share a write-up a friend and colleague of mine sent me which elegantly describes the truth about inflation and Obamacare and the affect both are having on the average American household:

There’s a huge disconnect between the Government CPI report and true inflation. May wholesale gas prices were flat while the Commerce Dept reported that May gasoline sales for retail sales purposes went up 2.1%. Implies 2% usage higher which might tie in with how, with lower gas prices earlier this year there was the shift to the lower mileage bigger vehicles, or could be more driving.

However, April gas prices according to CPI were up 8.1% but wholesale prices were up more like 14% in April. So the CPI price increase is 57% of the futures price increase. Apply the “lower inflation” to revenues driven by inflation and that’s how GDP gets overstated.

There a lot of moving pieces in the data charade. CPI is reported later this week (June 16th) and it will be interesting to see whats reported for gas. I looked at this a few years ago and found stark inconsistencies between the price level used by the Government in its CPI index vs wholesale gas prices, which are futures based.

The other issue is in food. This is where the CPI index substitution comes into play that John Williams (Shadowstats.com) talks about. My own index includes “outside skirt steak” which is approaching $20 a pound, where I used to pay $5-7 a pound a few years back. So we actually bought/substituted rib eyes at 10 bucks a pound. From an inflation perspective, if that got into the counting, I reduced my inflation by 50% (we later bought hamburger meat at Sams for 2.79 a pound so in the month we cut out our personal CPI on meat by 85%-although we moved to lower quality products). Another issue was cereal–which I used to buy regularly at Walmart early this year at $2.50 a box and it’s now $3.30 a box (32% price inflation).

So, what’s the point?

The point is that there is getting to be some serious inflation in food and somehow its not showing up in the Govt data. In addition, with all the variability with sales and type of stores and how the GDP, Jobs or CPI surveys are created–less than scientific, the government can drive whatever reporting outcome it wants and it’s virtually impossible for anybody to follow.

Regardless of how gasoline pricing is showing up for various Govt reports, between the higher cost of gas and food, and lower earnings in general, people are getting more and more stretched especially as healthcare, education and housing costs go much higher.

This latest retail sales report did confirm home improvement is now declining (big ticket items and durable goods), which had been one of the few bright spots in retail. I am also guessing that there is a shift in overall spending to necessities. The huge increases in Healthcare premiums is pretty significant for a family along with co-pays and deductibles. Practically speaking the middle class is getting attacked. There are not enough ultra-high income earners who can carry the economy.

The S&P 500 made another failed run at an all-time high earlier this month.  If the Fed was not aggressively preventing any down-side momentum from gripping the stock market, there would like be a stock market crash.

The U.S. financial and economic system is inching toward an abyss that is much deeper and darker than the abyss into which it plunged in 2008.

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Can Gold Hit $1500 By The End Of September?

Gold was taken down $19 from the close of Friday’s post-Comex Globex trading, when it closed at $1301, to $1281 40 minutes into Comex floor trading on Monday, June 20. The apparent catalyst was the polls which surfaced over the weekend that showed the public sentiment in England had shifted heavily in favor of remaining in the EU.

It’s all Kabuki theatre because, at the end of the day, if it looks like the elitist will not get the outcome they want in Thursday’s vote, they’ll rig the outcome to make sure they do get it. Nothing happens by accident and it’s no coincidence that the pro-euro MP was given a dirt nap last week and the polls all of sudden shifted to reflect No-BREXIT outcome.

But gold began to rise steadily during the day, which means that there plenty of other catalysts besides the BREXIT issue which drove the price of gold higher since May 22. At the same time the stock market sold off steadily from its high of the day 30 minutes into the NYSE open. This market action is bullish for gold and quite bearish for stocks.

The big question in everyone’s mind is, “where would the price of gold be without the heavy intervention exerted on the market by the Comex paper gold Ponzi scheme?

Future Money Trends (LINK) invited me on their weekly show to discuss BREXIT, NIRP, negative 10-year German bunds and the precious metals market – LINK:

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BREXIT Denied: Mission Accomplished

In this installment of the Shadow of Truth’s Market Update, we discuss the actions taken by the western elitists to rig the outcome of the BREXIT vote on Thursday (June 23), the response by the markets to the new expectation that BREXIT will be denied and the significance of anti-U.S. sentiment growing around the world.