Written by Jeff Nielson Friday, 24 January 2014 14:43
Part I of this series ended with some rather ominous questions. Most of those questions tied-in to the chart below, and what it signified in both practical and statistical terms:
Here readers see a picture which is markedly different from the parameters we know to exist with (for example) precious metals. With gold and silver; we have two commodities where production is (now) falling, and inventories are (already) near-zero. It’s easily understandable why these commodities are already at a crisis-point in terms of basic supply/demand analysis.
It is much less-easy to understand why the chart above also represents a looming crisis. This is due in large part to the obvious/unequivocal importance of food production. Because food (self) sufficiency is a key policy objective of almost every nation; their reactions to the food-crisis looming ahead of us have coloured this data – and thus (somewhat) hidden the underlying problems.
It’s also important to point out another premise of simple logic. Because food-production (and sufficiency) will always remain a top priority; in the attempts to ward-off a near-term food catastrophe we could (will) see our governments simply trigger a different form of economic cataclysm – hyperinflation – which will also lead to mass hunger/starvation, but simply in a less-direct route.
Here it is necessary to itemize the causal links in this (inevitable) chain. To do so; we start by simply looking at the current trend which the chart above indicates unequivocally: the ratio of inventories to supply/demand is falling – and at a rapid rate. While this does not appear close to any crisis-point (at present); we can understand that the continuation of this trend will (at some point) take us to parameters which will look very similar to what we see in precious metals today.
So how/why does this trend represent an immediate – and enormous – problem? This is where it is necessary to add all of the additional, necessary economic/financial context to make the answer to this question self-evident. In the most general terms; what is the root problem leading to inventory-destruction in all commodity markets (especially precious metals)?
Written by Jeff Nielson Monday, 20 January 2014 17:12
There must certainly be times when regular (and objective) readers ask themselves if it is not me who is “living in fantasy-land” rather than – as alleged again and again in these commentaries – the drones of the mainstream media. There was an example today of an item from Bloomberg (and the “statistic” it contained) which might create such doubts in readers’ minds.
Wholesale prices in the U.S. climbed in December for the first time in three months to cap the smallest annual increase in five years, showing companies face little pressure to charge more… [emphasis mine]
Where is the “hyperinflation” which I (and John Williams, and others) insist is already ‘in the pipes’ of the global monetary/financial system? While readers have seen a chart (on numerous occasions) showing U.S. money-printing in an exponential spiral – a near-vertical line, to be precise – we see wholesale prices actually moving in the opposite direction.
How is this possible? Or, put another way, who is telling the truth? To answer these questions; let me ask an additional and more specific question. Why do precious metals prices not reveal the hyperinflationary pressures which are alleged to exist? Regular readers and knowledgeable precious metals investors would have no difficulty answering that question in a convincing manner: price-suppression.
Over recent years; readers have been supplied with overwhelming evidence of price-suppression/manipulation in precious metals markets, and in a variety of different forms:
1) Bullion-leasing fraud
2) Regulatory malfeasance
3) Falsified data/statistics
4) Outrageous ratios of paper to bullion in markets
5) The collapse of global inventories of gold and silver
Overlaid on top of this; we have the daily price-action in these markets: endless, repetitive examples of vertical lines, as prices “gap” lower (and sometimes) higher in these large, global futures markets. Here readers need to know the history (and math) behind these futures markets.
Why do we even allow these fantasy-markets, where the paper traded by the banker-gamblers of the 21st century exceeds the actual commodities they are trading by fantastic ratios, in the case of bullion, ratios of greater than 100-to-1? Because these very same banker-gamblers assured our governments and (supposed) regulators that these futures markets would bring much greater “liquidity”, and thus near-perfect “price discovery”.
Translation? Futures markets should never gap higher or lower, with the rare exceptions of truly momentous events which can/could cause legitimate surges or plunges in price. The daily trading of the bankers themselves is empirical proof that these markets are being constantly manipulated. The outrageous/indefensible Pied Piper trading algorithms which these banksters use is the “smoking gun” which provides the unequivocal means to perpetrate such market crime.
Thus do we have my broader answer (and rebuttal) to the original questions. Wholesale prices (and the commodities prices which underpin them) do not reveal the enormous hyperinflationary pressures created by the money-printing of our central banks because of the constant price-suppression of the One Bank – across virtually all commodity markets – which depresses the prices which should be indicating those pressures.
Fortunately, there is equally compelling evidence to support my allegation that the same price-manipulation we see on a daily basis in precious metals markets extends across the entire spectrum of commodities. Once again; it is the daily trading of the banksters themselves which provides us with absolutely conclusive evidence.