Well, this time is indeed very different. This is not Jan., 2015. The world is waking up to the fact that a brand new, multi-headed hydra solvency crisis is upon us. – Eric Dubin, The News Doctors (link below)
One of the idiots from Wall Street that CNBC likes to roll out was on scratching his head over the behavior of the stock market. He asserted that it was nothing more than panic because “the real economy is doing well.”
I’m wondering what data he’s using to draw that conclusion. Nearly every report that has been released for the last few months, other than the highly manipulated/fabricated Government employment report, is showing that economic activity is collapsing to levels last observed in 2008.
The Baltric Dry Index has collapsed to all-time lows. Freight and goods transportation indices area showing a collapse in demand in the wholesale and retail distribution system. This shows a collapse in consumer spending. Based on unadjusted, unannualized numbers, existing home sales plunged 20% from Q3 to Q4. Auto sales are quickly rolling over. Energy debt is blowing a hole in bank balance sheets across the country. Auto finance paper is next.
These are black swans. They’re black swans because no one seems to see them. If they the market sees them then it is not acknowledging them. The current sell-off in the stock market is not remotely close to an acknowledgement of these black swans.
The S&P 500 is at its most overvalued in history by several metrics. It’s dropped roughly 10% from its all-time high and a spectrum of people from money managers to Congressmen are calling on the Fed to “do something.” No one seemed to be bothered by the fact that the stock market never should have been enabled by the Fed to go parabolic over the last 5 years, becoming more dislocated from the underlying fundamentals than at any time in history.
Then there’s gold. Gold has been pushed inexorably lower by western Central Banks in order to facilitate bad monetary policy decisions. But gold is the ultimate hedge against corrupt Central Banks and Governments. Physical gold inventories at the bullion bank controlled gold exchanges in the west are quickly disappearing, as is silver now too. GLD does not count because it’s always been a roach motel largely of paper gold.
This disappearance of physical gold is another black swan that is neither recognized nor acknowledged by the market, except by a few “conspiracy theory riddled” gold bugs. But the third leg of the gold bull market that began in 2000/2001 is stealthily taking off. Eric “The News Doctors” Dubin has written a worthwhile analysis of what is unfolding: Stealth Gold Bull Market Continues; Real-Time Analysis.
Someone from Australia emailed me a report showing that the Perth Mint had temporarily suspended gold sales last night/yesterday. Physical gold is indeed disappearing. Soon it will be harder to get at the retail level unless the buyer is willing to pay a hefty premium over spot. I’m going to start converting as much paper currency as I can into silver – the original and first monetary metal – because it will soon become hard to get as well.