-- Published: Friday, 21 March 2014 | Print | Disqus
By Andrew Hoffman
At the Miles Franklin Blog, we take our job of educating, commentating and at times “hand holding” seriously. Thus, when confronted with stressful weeks such as this, we feel compelled to work harder, to make sure the TRUTH is told and hopefully, empower you to make logical investment decisions. And when it comes to protecting your assets from ruthless “elites” bent on destroying you, this task can be daunting, as they are constantly on the attack, both financially and through the media. And thus, as the saying goes, “Thank god it’s Friday.”
This week, TPTB was bent on subduing burgeoning Precious Metals momentum – and seemingly imminent “golden crosses” of both metals – amidst an environment of economic and equity market weakness. Moreover, they aimed to “prove” the Ukrainian crisis is a “non-event,” and that Janet Yellen is “hawkish” enough to garner credibility but not too hawkish, of course, to harm the centerpiece of its perception management scheme; i.e., the stock market.
As for the Ukraine, history tells us such events are in fact very important – and potentially, cataclysmic. In fact, this week’s expanded Western sanctions – culminating with Angela Merkel declaring the end of the G8 this morning – are a very ominous sign, in our view. Throw in the fact that yesterday, the Ukraine announced Cyprus-like “bail-ins” on bank depositors, and it should be abundantly clear why you must own at least some precious metals.
Regarding “Whirlybird Janet,” I think it’s pretty clear – to the objective observer – that her comments were far more dovish than anticipated. Not that it matters, of course; given her horrific track record of economic forecasting, and the pervasive lies the Fed routinely perpetrates – such as $16 trillion of secret loans in 2008-10, tens of billions of “off balance sheet” swaps with insolvent European banks from 2008-13 and last, but not least, dramatically higher monetization than officially reported. Not to mention, the giant pink elephant in the room – depicting why the bank-owned Fed can NEVER stop printing money.
Speaking of blatant lies, I won’t even go into the fact that Fitch maintained the U.S.’ bogus “triple-A” investment rating this morning – simultaneous with the GAO’s dissemination that the U.S. budget deficit was NOT the $680 billion initially reported; but instead, closer to $1.0 trillion. Just like today’s article’s primary topic, I see nary a peep from the MSM about this lie, following endless months of “deficit reduction” rhetoric endlessly emitted by the Obama Administration and its Wall Street partners. Sadly, one doesn’t need to be a rocket scientist to see through such lies; but instead, a basic, sentient being, given that at this time a year ago, the national debt (excluding “off balance sheet” items and “unfunded liabilities,” of course) was $16.6 trillion, compared to nearly $17.6 trillion today. By the way, do you remember when S&P stripped the U.S. of its triple-A rating in August 2011 – in essence, stating its finances were out of control? Well take a guess what the national debt was then; i.e., just two-and-a-half years ago…yep, $14.2 trillion! Of course, now that S&P has been sued by the U.S. government, the rating agencies’ collective views of the United States have suddenly become more favorable.
Yes, our world has been 100% commandeered by the interests of “the 1%” – who destroy our lives with imperialism, inflation and draconian decrees. And thus, even when potentially cataclysmic news emerges, like a potential cold war, or massive international Treasury bond sales – led by the world’s largest holder, who recently stated that the accumulation of foreign exchange reserves is no longer in its best interests – the MSM stands idly and says nothing. Or, for that matter, this morning’s news that Putin is on the verge of signing an historic “anti-petro dollar” sales agreement with China, aimed at permanently usurping the dollar as the world’s reserve currency. Conversely, the MSM simply publishes TPTB’s key propaganda “talking points” – such as “low inflation,” U.S. “exceptionalism” and of course, the relentless “recovery” in which nothing actually recovers.
Consequently, it shouldn’t surprise anyone that essentially ZERO discussion of a massively PM-bullish news item has been heard anywhere in the public discourse. Instead, one must find it on the Miles Franklin Blog and the handful of “shadow world” organizations dedicated to truth. And that news, of course, is the Indian government already starting to back off its insane anti-gold importation policies, which will likely yield dramatically higher physical PM buying in 2014 and beyond.
As we discussed in December’s “Upcoming Indian Catastrophe” – and countless other articles over the past 14 months – the Indian economy has been destroyed by massive inflation, care of a Western-influenced Central bank that has printed money with impunity, contrary to the desire of the vast majority of Rupee-hating, gold and silver loving Indians. Consequently, the Rupee plunged to an all-time low in August – accompanied by record Rupee gold prices. In typical government fashion, the Reserve Bank of India actually blamed gold and silver purchases for its exploding trade deficits; and thus, while it massively intervened in the currency markets to support the Rupee, it spent the first eight months of 2013 instituting draconian gold import restrictions, and raising gold and silver import tariffs – for the few institutions still permitted to do so – from 2% in January to 10% in August.
Such short-sighted policy was overwhelmed within months by a burgeoning black market, which caused actual gold imports to surge – and physical premiums to surge to as much as $300/oz. Consequently, angry Indians summarily dismissed the ruling “Congress Party” in December’s regional elections, setting the stage for the pro-gold BJP party to have its candidate, Narendra Modri, win the Prime Ministerial election this coming May.
And thus, lo and behold, we started to hear rumblings last month of the Congress party altering its stance on Precious Metals restrictions, using the comical excuse that the budget deficit has subsequently declined; when in fact, it’s barely budged lower – for the most part, due to a temporary Rupee stabilization following the massive, aforementioned currency market intervention, and a general calming of emerging market currencies this Fall. However, as you can see, the Rupee still sits near its all-time low; and with global food prices surging, and the Ukrainian crisis jumpstarting a new emerging market currency crisis, how long will it be before the Rupee – and other “Fragile Five” currencies – achieve new all-time lows?
Anyhow, amidst the relentless propaganda of how the Indian gold and silver import restrictions would cause a massive reduction in physical demand – particularly from mainstream “gurus” like Jim Rogers – it turns out that such restrictions actually spurred increased demand – for both metals. Due to the aforementioned black market activity, we’ll never know the true amount of Indian PM imports. However, simply based on the published data, you can see that Indian gold imports were not far from the 2010 and 2011 record levels – which, by the way, translate to roughly one-third of total global production. Moreover, despite the identical 10% import duty on silver, the fact that it’s “cheaper” than gold caused many Indians to flock to it; and consequently, 2013 silver imports – amounting to roughly a quarter of global production – shattered the previous record level, set in 2008, by more than 20%. Makes one wonder how the PAPER prices could have fallen by a third, doesn’t it?
SRS Rocco Report
Taking the numbers a step further, here are the published Chinese gold import figures – which only include shipments received through Hong Kong and U.S. Mint Silver Eagle sales. As you can see, 2013 Chinese gold demand was double the previous, record-setting level of 2012 – and by the way, January 2014 was the strongest single month EVER. No Chinese silver figures are published, but we assume they, too, were very strong; and as for U.S. Mint silver Eagle sales, not only did 2013 break the previous record – set in 2011 – but 2014 has started at a much stronger pace, despite admitted Mint rationing!
Clearly, the message here is that – in the face of historic PAPER shorting – global physical demand shattered records across the board last year. And the way things are looking, 2014 will likely put 2013 to shame – particularly if a “black swan” event like the Ukraine spins out of control. That said, we don’t own gold and silver due to Ukraine – remember, the aforementioned PM buying occurred long before it became an issue; as ultimately, Central banks like the Fed will destroy their currencies irrespective – potentially, much sooner than most could imagine.
To that end, the fact that India – historically, the world’s largest gold and silver importer – is on the verge of removing draconian decrees that have slowed the pace of imports, is massively PM-bullish, in our view. The fact that the MSM is, as usual, ignoring it, should be of no concern; as they are always the last to understand reality – particularly which of the highly opaque, massively manipulated PM market. Thankfully, you are armed with such knowledge before the masses; and thus, have the ability to PROTECT yourself with real assets, at, for all intents and purposes, “government subsidized” prices.
Remember, the majority of the world’s citizens – particularly those residing in the Eastern Hemisphere, whose cultures are essentially unfamiliar to the West – think of Precious Metals as money, NOT fiat currencies. As the end game of the global fiat currency Ponzi scheme approaches, their buying will only accelerate, until eventually the West figures things out, too – for most, after it’s already too late.
As always, we encourage you to call Miles Franklin with any questions you might have. We promise, you will be happy you did so!
Andrew C. Hoffman, CFA
Miles Franklin Ltd.
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-- Published: Friday, 21 March 2014 | E-Mail | Print | Source: GoldSeek.com