Ares
23rd November 2015, 08:58 AM
Can you Feel it?
We’re now getting headline after headline of tension: tension between superpowers, tension in economic data, and tension in the markets. Since the financial crisis, for the last 7 years, the Fed has been a regular “MacGyver”, holding the global financial ponzi together with crazy glue and baling wire. They’ve pulled off some big stick saves, but it seems that gravity and inertia have finally caught up with them.
For over the weekend, the very nervous American and world markets received this surprise announcement:
Advanced Notice of a Meeting under Expedited Procedures
Yes, they’ve called a surprise, unscheduled meeting at the Federal Reserve, which is making the markets very, very queasy. What’s the purpose of the meeting? Well, it appears they’ve given us the low-down on what will be discussed:
Matter(s) Considered
1. Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.
So,out of ‘left field’ comes a meeting, which is announced just 1 business day beforehand. This is highly unusual, and more than a bit troubling. Apparently, this is being done under rule 26lb.7, and such a tremendously good job has been done of breaking that rule down at BrotherJohnF’s newest video here(which I urge you to watch), that I won’t rehash it.
John brings up some great points: the last time this rule was invoked seems to be about 13 years ago…just before the Iraq War. Not the first, war either(which was bad enough)…but the second, even more disastrous Iraq war(Operation “Iraqi Freedom”), which ‘officially’ lasted nearly 9 years, and cost the US several trillion(Chinese-borrowed) dollars!
At that time, John shows that just before that conflict broke out(and the US economy was going ‘belly-up’ like a dead goldfish), the entire market was waiting for the Fed to raise rates…but they didn’t. They acted opposite of what everyone expected, and lowered them from 2% down to 1%. This move is what helped catapult the overbought Dow Jones and US housing market into an all-out gargantuan bubble, which eventually popped in 2008.
The Implications
Now, many have written about how the Fed has been caught in a trap of their own making, and I completely agree with that. After all, keeping interest rates at virtually zero for a grand total of 7 years is economic suicide, and is utterly detrimental to the middle class, and the tens of millions of citizens living on a fixed income.
The Fed though, really had no other good choice, as the other option was to let the entire financial system implode in the last financial crisis. They’ve desperately tried to buoy the US dollar, and managed it through key buzzwords, several rounds of QE, and several more rounds of Operation Twist.
By dancing the monetary “hokey pokey”, while reciting their incantations at regular Fed meetings, they(and their primary dealer banks), have managed to both levitate the world’s key equity markets, and tamp down interest rates. The problem is that they’ve tried to keep the US dollar in a bound range…but the US dollar is now reaching heights that have begun to undercut the actual economy, when compared to the world’s other major currencies.
This very moment, the greenback is reaching 100 on the USD index, and if it breaks through that psychological resistance, it will break it hard!
This is problematic for the US/UK bankster class, because global trade has already been cliff-diving since the summer months. Here’s a shot(via zerohedge (http://www.zerohedge.com/news/2015-11-21/global-trade-just-snapped-container-freight-rates-plummet-70-3-weeks)) of the shipping scene, the Baltic Dry Index:
http://thewealthwatchman.com/wp-content/uploads/2015/11/Knifes-edge-2.jpg
As you can see, 2015 has been one of the worst years on record to be in the maritime freight industry. We are looking at all-time lows in that index, and other similar sea-shipping indices, which all say the same thing.
Furthermore, if you look at the ‘bellweather’ of global financial health, base metal prices(particularly copper), the already disturbing picture becomes a bit frightening. This zerohedge shot also shows how eerie things are looking on that scene.
http://thewealthwatchman.com/wp-content/uploads/2015/11/knifes-edge-3.jpg
The US economic indicators are in the toilet. Consumers are not confident, our manufacturing sector is petering out, and now this announcement comes.
It’s obvious what is happening, but here is the great dilemma for the Fed:
They want and need to raise rates…desperately, but they know:
That raising rates would absolutely cut the entrails out of the already dying global economic scene…
That raising rates would mean the Dow Jones would instantly shave off thousands of points…
That raising rates would unleash currency & bond market turbulence…
That raising rates would mean the fading house market would turn into a 2008 rehash overnight…
In short, they know…
That raising rates means that the multi-trillion, 7 year year narrative of a robust, global economic recovery….immediately ends.
When that occurs, it’s a whole new ballgame. Markets will experience downdrafts you wouldn’t believe, as confidence and faith was always the only other thing sustaining the narrative. Black Monday(several months ago) will seem like a tender, dear old friend, compared to the scale of what will be unleashed.
As badly as they’d like to assure markets that interest rates will finally normalize, even a hint of a whisper in that general direction, and the fragile eggshell we call the world financial system…is cracked into a million pieces.
Understand me, I’m not saying that the Fed won’t raise rates…they might(if a controlled demolition of the system is their gameplan), but rather, I’m saying that doing so even a quarter of one percent could WRECK the entire world. The Fed knows it too.
Right now, the base metals are tip-toeing around the volcano’s edge, particularly copper.
http://thewealthwatchman.com/wp-content/uploads/2015/11/Knifes-edge-5.jpg
Just another small misstep and it can most easily return to the low’s of 2008.
But what about silver and gold? What is happening with them right now, and how might this Fed meeting make those paper markets react?
What Does it Mean for Silver and Gold?
Well, I’ve already made a clarion call last week, indicating that I believe the banksters could very well mean to trip the longs at the “strong price support” at $14. This thing is literally sitting on a landmine right now, and could trigger it any moment.
Gold is the same way, currently hovering UNDER key ‘support'(which was previously $1,080’ish) in the low $1,070’s.
This Fed Meeting could be just the ‘kicker’ needed to send both arch-enemies of the banksters to fresh, 6 year lows. Now, I know that many respected folks in the silver community have said the COT’s look fantastic, and they do, but there have been times in which they’ve looked good before, but the enemy wasn’t nearly done with them yet. Silver could easily pop here, or it could easily revisit the $12’s for a brief time, and gold could kiss $1000, or even flirt with 3 digit figures for a ‘one night stand’.
Remember, the banks have utter control over price. It’s their great weapon. I recall last spring and summer, many saying that “$14 silver, and $1080 gold would never fall, the price support was just too strong”.
Brother, if you’re going to survive this, and remain unphased while doing so, you must repeat the mantra:
“There is NO SUCH THING as ‘strong price support'”, and you must believe it with all your heart. If you do that, and you understand that the 1 billion ounce silver deficit since the bull market began, means that we cannot lose the war….but we may lose many price battles, before the war is won.
Take heart knowing that the further the enemy tanks go into lower price territory, the more overstretched and thinned out their silver reinforcements become. The lower they take price, the sooner we win the war. That’s what it’s always been about.
The banksters at the Fed are currently panicking about the economy, and soon they’ll be panicking about silver again too.
Conclusion
From global economic collapse, to US and Japanese interference in the China-contested Spratly islands, to the furious Russian/Syrian offensive on the US puppet ISIS, to this new Fed meeting: the world is virtually sitting on a knife’s edge right this very moment.
I caution all of my readers and shield brothers: do not make the mistake of assuming you know:
1)What the Fed Board will actually do. I know that normally, in this fragile environment, sane people wouldn’t dream of raising rates, but the banksters are not sane people. They are literal psychopaths, who’ve caused untold destruction in our world for the last several centuries. They’ve even caused whole World Wars before, and wouldn’t hesitate to do something very destructive if they thought it furthered their agenda right now.
Or…
2)How markets, especially precious metals, will react in the short term.
The only thing that seems fairly certain is that the Fed does intend to start moving interest rates again. I don’t believe they’d go through the trouble of calling a special, emergency meeting, if they simply intended to keep rates unchanged. After all, why do that? Why couldn’t such an announcement wait a few more weeks til the next scheduled meeting?
They seem likely to finally make a move into a particular direction, even if the move is just a ‘feignt’. Please remember that no matter what they choose, there is no good path forward.
If they raise rates, they kill the economy. If they lower rates(into literally sub-zero territory) from .25%, they will enact a dollar and bond-market panic, as everyone realizes how tenuous the fiscal situation finally is.
The cause of the meeting behind the scenes now just doesn’t matter anymore. Whether it’s Glencore or Deutsche Bank trouble(and it could be), or whether it’s something else, the Fed has now signaled the passengers aboard this flight…that there is a mechanical problem with the plane.
There’s no way the passengers don’t panic now.
If gold and silver cave into this…I believe it will be enormously short-lived. I intend on buying aggressively again under $14 if I can.
Lastly though, with everything going on, geopolitically, economically, and otherwise, the thing occupying the Watchman’s mind today is, without question, this surprise Fed meeting, and this eerie image from the “New Year’s” issue of the Economist at 2015’s beginning…
http://thewealthwatchman.com/wp-content/uploads/2015/11/Knifes-edge-4.jpg
http://thewealthwatchman.com/the-fed-mafia-panics-as-the-world-dances-on-a-knifes-edge/
We’re now getting headline after headline of tension: tension between superpowers, tension in economic data, and tension in the markets. Since the financial crisis, for the last 7 years, the Fed has been a regular “MacGyver”, holding the global financial ponzi together with crazy glue and baling wire. They’ve pulled off some big stick saves, but it seems that gravity and inertia have finally caught up with them.
For over the weekend, the very nervous American and world markets received this surprise announcement:
Advanced Notice of a Meeting under Expedited Procedures
Yes, they’ve called a surprise, unscheduled meeting at the Federal Reserve, which is making the markets very, very queasy. What’s the purpose of the meeting? Well, it appears they’ve given us the low-down on what will be discussed:
Matter(s) Considered
1. Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.
So,out of ‘left field’ comes a meeting, which is announced just 1 business day beforehand. This is highly unusual, and more than a bit troubling. Apparently, this is being done under rule 26lb.7, and such a tremendously good job has been done of breaking that rule down at BrotherJohnF’s newest video here(which I urge you to watch), that I won’t rehash it.
John brings up some great points: the last time this rule was invoked seems to be about 13 years ago…just before the Iraq War. Not the first, war either(which was bad enough)…but the second, even more disastrous Iraq war(Operation “Iraqi Freedom”), which ‘officially’ lasted nearly 9 years, and cost the US several trillion(Chinese-borrowed) dollars!
At that time, John shows that just before that conflict broke out(and the US economy was going ‘belly-up’ like a dead goldfish), the entire market was waiting for the Fed to raise rates…but they didn’t. They acted opposite of what everyone expected, and lowered them from 2% down to 1%. This move is what helped catapult the overbought Dow Jones and US housing market into an all-out gargantuan bubble, which eventually popped in 2008.
The Implications
Now, many have written about how the Fed has been caught in a trap of their own making, and I completely agree with that. After all, keeping interest rates at virtually zero for a grand total of 7 years is economic suicide, and is utterly detrimental to the middle class, and the tens of millions of citizens living on a fixed income.
The Fed though, really had no other good choice, as the other option was to let the entire financial system implode in the last financial crisis. They’ve desperately tried to buoy the US dollar, and managed it through key buzzwords, several rounds of QE, and several more rounds of Operation Twist.
By dancing the monetary “hokey pokey”, while reciting their incantations at regular Fed meetings, they(and their primary dealer banks), have managed to both levitate the world’s key equity markets, and tamp down interest rates. The problem is that they’ve tried to keep the US dollar in a bound range…but the US dollar is now reaching heights that have begun to undercut the actual economy, when compared to the world’s other major currencies.
This very moment, the greenback is reaching 100 on the USD index, and if it breaks through that psychological resistance, it will break it hard!
This is problematic for the US/UK bankster class, because global trade has already been cliff-diving since the summer months. Here’s a shot(via zerohedge (http://www.zerohedge.com/news/2015-11-21/global-trade-just-snapped-container-freight-rates-plummet-70-3-weeks)) of the shipping scene, the Baltic Dry Index:
http://thewealthwatchman.com/wp-content/uploads/2015/11/Knifes-edge-2.jpg
As you can see, 2015 has been one of the worst years on record to be in the maritime freight industry. We are looking at all-time lows in that index, and other similar sea-shipping indices, which all say the same thing.
Furthermore, if you look at the ‘bellweather’ of global financial health, base metal prices(particularly copper), the already disturbing picture becomes a bit frightening. This zerohedge shot also shows how eerie things are looking on that scene.
http://thewealthwatchman.com/wp-content/uploads/2015/11/knifes-edge-3.jpg
The US economic indicators are in the toilet. Consumers are not confident, our manufacturing sector is petering out, and now this announcement comes.
It’s obvious what is happening, but here is the great dilemma for the Fed:
They want and need to raise rates…desperately, but they know:
That raising rates would absolutely cut the entrails out of the already dying global economic scene…
That raising rates would mean the Dow Jones would instantly shave off thousands of points…
That raising rates would unleash currency & bond market turbulence…
That raising rates would mean the fading house market would turn into a 2008 rehash overnight…
In short, they know…
That raising rates means that the multi-trillion, 7 year year narrative of a robust, global economic recovery….immediately ends.
When that occurs, it’s a whole new ballgame. Markets will experience downdrafts you wouldn’t believe, as confidence and faith was always the only other thing sustaining the narrative. Black Monday(several months ago) will seem like a tender, dear old friend, compared to the scale of what will be unleashed.
As badly as they’d like to assure markets that interest rates will finally normalize, even a hint of a whisper in that general direction, and the fragile eggshell we call the world financial system…is cracked into a million pieces.
Understand me, I’m not saying that the Fed won’t raise rates…they might(if a controlled demolition of the system is their gameplan), but rather, I’m saying that doing so even a quarter of one percent could WRECK the entire world. The Fed knows it too.
Right now, the base metals are tip-toeing around the volcano’s edge, particularly copper.
http://thewealthwatchman.com/wp-content/uploads/2015/11/Knifes-edge-5.jpg
Just another small misstep and it can most easily return to the low’s of 2008.
But what about silver and gold? What is happening with them right now, and how might this Fed meeting make those paper markets react?
What Does it Mean for Silver and Gold?
Well, I’ve already made a clarion call last week, indicating that I believe the banksters could very well mean to trip the longs at the “strong price support” at $14. This thing is literally sitting on a landmine right now, and could trigger it any moment.
Gold is the same way, currently hovering UNDER key ‘support'(which was previously $1,080’ish) in the low $1,070’s.
This Fed Meeting could be just the ‘kicker’ needed to send both arch-enemies of the banksters to fresh, 6 year lows. Now, I know that many respected folks in the silver community have said the COT’s look fantastic, and they do, but there have been times in which they’ve looked good before, but the enemy wasn’t nearly done with them yet. Silver could easily pop here, or it could easily revisit the $12’s for a brief time, and gold could kiss $1000, or even flirt with 3 digit figures for a ‘one night stand’.
Remember, the banks have utter control over price. It’s their great weapon. I recall last spring and summer, many saying that “$14 silver, and $1080 gold would never fall, the price support was just too strong”.
Brother, if you’re going to survive this, and remain unphased while doing so, you must repeat the mantra:
“There is NO SUCH THING as ‘strong price support'”, and you must believe it with all your heart. If you do that, and you understand that the 1 billion ounce silver deficit since the bull market began, means that we cannot lose the war….but we may lose many price battles, before the war is won.
Take heart knowing that the further the enemy tanks go into lower price territory, the more overstretched and thinned out their silver reinforcements become. The lower they take price, the sooner we win the war. That’s what it’s always been about.
The banksters at the Fed are currently panicking about the economy, and soon they’ll be panicking about silver again too.
Conclusion
From global economic collapse, to US and Japanese interference in the China-contested Spratly islands, to the furious Russian/Syrian offensive on the US puppet ISIS, to this new Fed meeting: the world is virtually sitting on a knife’s edge right this very moment.
I caution all of my readers and shield brothers: do not make the mistake of assuming you know:
1)What the Fed Board will actually do. I know that normally, in this fragile environment, sane people wouldn’t dream of raising rates, but the banksters are not sane people. They are literal psychopaths, who’ve caused untold destruction in our world for the last several centuries. They’ve even caused whole World Wars before, and wouldn’t hesitate to do something very destructive if they thought it furthered their agenda right now.
Or…
2)How markets, especially precious metals, will react in the short term.
The only thing that seems fairly certain is that the Fed does intend to start moving interest rates again. I don’t believe they’d go through the trouble of calling a special, emergency meeting, if they simply intended to keep rates unchanged. After all, why do that? Why couldn’t such an announcement wait a few more weeks til the next scheduled meeting?
They seem likely to finally make a move into a particular direction, even if the move is just a ‘feignt’. Please remember that no matter what they choose, there is no good path forward.
If they raise rates, they kill the economy. If they lower rates(into literally sub-zero territory) from .25%, they will enact a dollar and bond-market panic, as everyone realizes how tenuous the fiscal situation finally is.
The cause of the meeting behind the scenes now just doesn’t matter anymore. Whether it’s Glencore or Deutsche Bank trouble(and it could be), or whether it’s something else, the Fed has now signaled the passengers aboard this flight…that there is a mechanical problem with the plane.
There’s no way the passengers don’t panic now.
If gold and silver cave into this…I believe it will be enormously short-lived. I intend on buying aggressively again under $14 if I can.
Lastly though, with everything going on, geopolitically, economically, and otherwise, the thing occupying the Watchman’s mind today is, without question, this surprise Fed meeting, and this eerie image from the “New Year’s” issue of the Economist at 2015’s beginning…
http://thewealthwatchman.com/wp-content/uploads/2015/11/Knifes-edge-4.jpg
http://thewealthwatchman.com/the-fed-mafia-panics-as-the-world-dances-on-a-knifes-edge/