Today is the Shadow of Truth’s 100th show. We cover our favorite topics: Ponzi scheme U.S.A., gold market manipulation and the fraud underlying the stock market. In addition, we discuss a development that Rory has uncovered concerning the IMF’s SDR and the gradual removal of the dollar as the world’s reserve currency. You read Rory’s analysis here: Global De-Dollarization and here: SDR vs the Dollar. In the meantime, we hope you enjoy this “anniversary” episode of the Shadow of Truth:
As gold reaches for higher prices and gains more attention, the propagandists are flooding the news outlets with articles on the virtues of investing in the stock market and the evils of precious metals – Silver/devil. The Ponzi must continue at all costs. The U.S. dollar, at present the worlds reserve currency, is a corrupt, blood-soaked instrument of debt. The privately owned Federal Reserve, who gets it’s marching orders from the Treasury Secretary, is working overtime to destroy the value of the dollar, enabling the elitists to use it as wealth confiscation tool. We find ourselves in the end game for this currency. How long can the end game continue? As long as it suits the corrupt banking cabal and corrupt politicians. Once these two groups of criminals have themselves positioned properly outside the U.S. dollar, the plug will be pulled. Until then, gather as much gold and silver as your budget will allow.
The Shadow of Truth presents a “Market Update” in which we discuss the extreme fraud and deception that has engulfed the stock market – see below for our audio discussion:
The governments in my view, with their agents the Federal Reserve and other central banks and with the treasury department, they will do anything not to let asset prices go down…If the stock markets go down, I’m convinced all the central banks will buy stocks. All of them. – Mark Faber on CNBC
The S&P 500 has clawed back nearly 80% of its 250 plunge that occurred at the beginning of 2016. The pervasive “muscle reaction” of mainstream investors is to behave as if the nascent bear market in stocks is already over and we’re headed to 30k on the Dow. This tendency is epitomized by Cramer’s latest “c’mon on back in, the water is fine and stocks are cheap” declaration about a week ago. This graphic below exemplifies the current mainstream financial media narrative (sourced from Twitter with SoT edits) click to enlarge image:
This graph shows the number of stocks in the Russell 2000 index which have gained 50% for more in the last month of trading since October. As you can see, up until the current bear market dead-cat bounce, the market is “hot” when 20-30 stocks move up 50% in a month. In the current market nearly 80 stocks have moved up in the last month. This graph shows the omnipresent footprints of both the Plunge Protection Team and HFT trading. It’s gotten to the point at which every time the stock market seems ready to sell-off hard, some sort of “invisible hand” comes in and scoops up stocks, driving the market back up.
The other highly fraudulent aspect of this market is the way earnings are reported. Companies now report GAAP and “non-GAAP” earnings. The difference between the two presentation methods can be summed up as, “somewhat fake earnings” and “mostly fake earnings.”
In 2015, 20 of the 30 companies in the Dow Jones Industrial index reported non-GAAP earnings. For 18 of these 20, non-GAAP EPS was higher than GAAP. On average, non-GAAP earnings were 31% higher than GAAP for these 20 companies. In 2014, non-GAAP was 12% higher than GAAP for the non-GAAP reporting companies (FACTSET.COM) This illustrates the degree to which companies are now going to disguise and/or fabricate their earnings.
As if to throw gasoline of the fire of fraud and deception which has engulfed our financial system, most large corporations are now borrowing money in order to buy back their shares. This benefits no one except the insiders who receive huge stock-laden compensation packages and then turnaround and sell their stock into the company’s buyback program. At its root, this is nothing more than a massive transfer of wealth from shareholders to insiders. Why not just ask the shareholders to get out their checkbooks and send insiders a personal check instead?
Here’s an idea for reform, which of course will never happen: prohibit insiders from selling shares whenever a company has a shareholder buyback program in place. But don’t hold your breath waiting for that to happen….
The admission that the economy is so weak that it needs more QE is going to destroy the narrative that the U.S. economy is in great shape and it’s no longer going to be the safe haven for capital around the world…it’s going to prick the bubble in the dollar…and people are going to realize that we’ve never recovered from anything, the economy is sicker than ever, the Fed’s going to make it even sicker with more of its toxic monetary policy, the dollar’s going to tank and the price of gold is going to skyrocket – and people need to prepare for that now. – Peter Schiff on the Shadow of Truth
When Mt. Vesuvius blew, no one knew when it would happen or how big the eruption would be. Everyone knew a volcanic event was going to occur and yet, the magnitude of the event caught a lot of people by surprise. The eruption destroyed two Roman cities and several surrounding settlements. It killed an estimated 16,000 people. The question is, how come more people didn’t leave the area surrounding Vesuvius when they knew that something was going happen at some point?
The United States financial system – including the viability of the U.S. dollar – is analogous to the eruption of Mt. Vesuvius. A lot of people know something is wrong – evidenced by the growing support for the Trump candidacy – and yet 99.5% of the population is ignoring the warning signs of a systemic eruption of unknown magnitude. It’s an event that draws closer with each passing day.
The warning signals of the coming financial markets collapse are in full view. The warning signal from the junk bond market, triggered by but not limited to the collapsing energy sector, is beginning to spread into and infect the rest of the financial markets like an uncontrollable virus. If you are an investor or a professional money manager, what more of a warning do you need that this:
That chart resembles a giant tsunami that has coiled offshore and is getting ready to slam into the the nearby beach. Only in this case millions of people remain on the “beach” to watch the horror show unfold without leaving for safer ground. It’s as if everyone knows a catastrophe is about to occur and yet most remain embalmed with the hope that it can’t really happen.
The willingness of people to park their paper in financial assets like bonds is simply a function of their lack of understanding of the problems that exist and their false confidence in Central Banks. – Peter Schiff
The systemic causes of the financial crisis that hit in 2008 – and which was really a de facto financial system collapse – were never properly treated. Rather, they were medicated by heavy doses of money printing and free money, the latter which is otherwise known as ZIRP. The moral hazards of this monetary policy have fomented in impending systemic eruption which will be the financial market’s equivalent of the historic Mt. Vesuvius volcanic blast. The timing of this is just as unpredictable as the consequences.
The Shadow of Truth hosted a conversation with Peter Schiff to discuss to discuss the impending financial market eruption and the inevitable dollar crisis, which will ultimately rip apart the U.S. financial and economic system: