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Latest Treasury, Fed, & BIS Reports Confirm: All Twisted Paths Lead To Gold

Latest Treasury, Fed, & BIS Reports Confirm: All Twisted Paths Lead To Gold

Authored by Matthew Piepenberg via GoldSwitzerland.com,

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This article was originally published by Zero Hedge

Latest Treasury, Fed, & BIS Reports Confirm: All Twisted Paths Lead To Gold

Authored by Matthew Piepenberg via GoldSwitzerland.com,

The facts keep piling up, and recent BIS, Treasury and Fed reports confirm that all twisted paths lead to gold.

In a recent article, I posed the rhetorical question of when will policy makers finally stop lying and allow honest facts and natural market forces to return?

Lying is the New Normal

Unfortunately, as we examine the two latest working papers from the Fed/Treasury Dept cabal and the Bank of International Settlements, each confirms that lies are officially the new normal.

Over the years, we’ve tracked popularized delusions masquerading as policy with evidence rather than awe, addressing such topics as the open fictions of CPI inflation reporting and its “transitory” myth to the latest sample of double-speak spewing out of the Fed or White House.

Frankly, these well-masked fibs happen so frequently we never run out of material, including Biden assuring us earlier—and once again last week– of an “independent Fed.”

He’s trying a bit too hard to convince us, no?

History (Debt) Repeating Itself

History’s patterns confirm that the more a system implodes under the weight of its own self-inflicted extravagance (typically fatal debt piles driven by years of war, wealth disparity, currency debasement and political/financial corruption), the powers-that be resort to increasingly autocratic controls, distractions and automatic lying.

The list of such examples, from ancient Rome, 18th century France, and 20th century Europe to 21st century America are long and diverse, and whether it be a Commodus, Romanov, Batista, Biden, Franco or Bourbon at the helm of a sinking ship, the end game for bloated leaders reigning over bloated debt always ends the same: More lies, more controls, less liberty, less truth and less free markets.

Seem familiar?

As promised above, however, rather than just rant about this, it’s critical to simply show you. As I learned in law school, facts, alas, are far more important than accusations.

Toward that end, let’s look at the facts.

The Latest Joint-Lie from the Treasury Department & Fed

Earlier this month, the Fed and Treasury Department came up with a report to discuss, well, “recent disruptions” …

The first thing worth noting are the various “authors” to this piece of fiction, which confirm the now open marriage between the so-called “independent” Fed and the U.S. Treasury Dept.

If sticking former Fed Chair, Janet Yellen, at the helm of the Treasury Department (or former ECB head, Mario Draghi, in the Prime Minister’s seat in Italy) was not proof enough of central banks’ increasingly centralized control over national policy, this latest evidence from the Treasury and Fed ought to help quash that debate.

In the report above, we are calmly told, inter alia, that the U.S. Treasury market remains “the deepest and most liquid market in the world,” despite the ignored fact that most of that liquidity comes from the Fed itself.

Over 55% of the Treasury bonds issued since last February were not bought by the “open market” but, ironically, by private banks which misname themselves as a “Federal Open Market Committee” …

The ironies (and omissions) do abound.

But even the authors to this propaganda piece could not ignore the fact that this so-called “most liquid market in the world” saw a few hiccups in recent years (i.e., September of 2019, March of 2020) …

Translated Confessions of a Fake Taper

The cabal’s deliberately confusing response (and solution), however, is quite telling, and confirms exactly what we’ve been forecasting all along, namely: More QE by another name.

Specifically, these foxes guarding our monetary hen house have decided to regulate “collateral markets and Money Market Funds into buying a lot more UST T-Bills” by establishing “Standing Repo Facilities for domestic and foreign investors” which are being expanded from “Primary Dealers” to now “other Depository Institutions going forward” to “finance growing US deficits” by making more loans “via these repo facilities (SRF and FIMA).”

Huh?

Folks, what all this gibberish boils down to is quite simple and of extreme importance.

In plain speak, the Fed and Treasury Department have just confessed (in language no one was ever intended to understand) that they are completely faking a Fed taper and injecting trillions more bogus liquidity into the bond market via extreme (i.e., desperate) T-Bill support.

Again, this is simply QE by another name. Period. Full stop.

The Fed is cutting down on long-term debt issuance and turning its liquidity-thirsty eyes toward supporting the T-Bill/ money markets pool for more backdoor liquidity to prop up an otherwise dying Treasury market.

Again, this proves that the Fed is no longer independent, but the near exclusive (and rotten) wind beneath the wings of Uncle Sam’s bloated bar tab.

Or stated more simply: The “independent” Fed is subsidizing a blatantly dependent America.

Biden Doubles Down on the Double-Speak

Of course, as evidence of increasingly Fed-centralized control over our national economy now becomes embarrassingly obvious (yet deliberately hidden in “market speak’), it was imperative to roll out Biden from his nap-time and compel him to say the exact opposite.

In other words: Cue the spin-selling.

No shocker there…

 Just 2 days after the foregoing and joint Fed/Treasury “report” went public, the U.S. President, talking points in extra-large font on his prompt-reader), announced that he is “committed to the independence of the Fed to monitor inflation and combat it.”   

That’s rich.

First, it’s now obvious that the Fed is anything but independent. They might as well share the same office space as the Treasury Dept.

Second, the way the Fed “monitors” (aka: lies about) inflation has been an open joke for years.

Inflation, as accurately measured by the 1980’s CPI scale, is not at the already embarrassing 6% reported today, but more honestly at 15%.

Ouch.

When compared against a current (and artificially suppressed) 1.6% yield on the 10-Year UST, that means the most important bond in the global economy is offering you a real yield of negative 13.4%.

Think about that for a moment…

Thirdly, the Fed is not about “combating” inflation, but rather encouraging more of the same to inflate away debt via negative real rates, as we’ve warned all year.

And boy are they getting a nice dose of negative real rates now…

In short, if Biden or other political puppets spoke plain truth as opposed to optic spin, his words would translate as follows:

 “We are committed to unfettered dependence on the Fed to subsidize our debt and lie about inflation while encouraging more of the same.”

Yellen—The Queen of Lies

Meanwhile, Yellen chirps in during that same week promising to never allow a repeat of the 1970’s inflation level.

Again, nice words; but when using the same CPI scale to measure inflation that was used in the 1970’s, the U.S. is already experiencing 1970’s like inflation.

Recently, of course, Yellen openly blamed all our inflation problems on COVID rather than her own reflection.

Again, the ironies do abound.

Now, on to more acronyms and more, well, lies from above…

Enter More BS from the IBS as to CBDC

As if the spin coming out of DC was not enough to upset one’s appetite for candor, the Bank of International Settlements (BIS) has been busy telegraphing its own move toward more globalized central controls under the guise of a Central Bank Digital Currency, or “CBDC.”

In a recent working paper, the BIS literally produced a graph whereby it foresees central banks issuing CBDC as legal tender issued directly to consumers.

Read that last line again.

And here’s the BIS’s own graph (or skunk in the woodpile) to prove we’re not making this crazy up:

This literally confirms that despite Yellen, Biden and Powell’s recent promises to “combat” inflation (which they hitherto denied even existed), the BIS is now anchoring a new (i.e., more fiat) digital currency system which will send inflation to the moon—not to mention control and monitor the way consumers receive, use and spend “money.”

Of course, this is quite convenient to the centralized power brokers. In one CBDC “swoop,” they can now create inflation while controlling consumers at the same time.

Welcome to the twisted new normal.

Thus, when it comes to the banking elite, it’s far safer to watch what they’re doing rather than trust what they’re saying.

As we’ve warned for months, the banking/political cabal want more not less inflation.

Why?

Because that’s what all historically debt-soaked and failed regimes have wanted and done for centuries—inflate their way out the debt-hole they alone dug.

All Twisted Roads Lead to Gold

Needless to say, more liquidity, and more inflation, joined by more rate repression, truth destruction and currency debasement means gold’s recent bump north is just the beginning of the ride up and to the right for this “barbourins relic.”

As we’ve said with consistent conviction and hard facts, not to mention spot-on inflation reporting, gold’s golden era has yet to even begin.

As global currencies fall deeper toward the ocean floor in a sea of excess liquidity, gold, like an historically faithful cork, makes its way to the surface to get the final word.

In short: It’s not that gold is getting stronger, it’s just that the currency in your wallet, bank and portfolio is getting weaker.

Tyler Durden
Wed, 11/24/2021 – 06:30







Author: Tyler Durden

Economics

Bullish Island Reversal

You can blame Omicron or elevated valuations or call it a
Fed taper tantrum. Bottom line, the market was overbought entering the
seasonally weak beginning…

You can blame Omicron or elevated valuations or call it a
Fed taper tantrum. Bottom line, the market was overbought entering the
seasonally weak beginning of December. In a year with big gains early December
tax-loss selling, some profit taking and yearend portfolio restructuring is not
surprising.

All of the above and some geopolitical worries likely
conspired collectively to cause the recent selloff. But today’s action in DJIA
(the oldest reliable benchmark we know) as shown in the chart above created a
bullish island reversal. DJIA also bounced off the uptrend line from the June
and September lows right near the 200-day moving average and above support at 33700.
Today’s rally also closed the island gap near 35600, which is also around support/resistance
at the August high. And to top it off there was a new MACD Buy crossover and
histogram confirmation.

So, technically speaking the market likely found some solid
support here and is poised to rally to continuing new highs into yearend on the
still super accommodative monetary policy and rather robust economic and
corporate readings.

Our outlook remains bullish for the remainder of 2021 and as
long as the proverbial stuff doesn’t hit the fan, new highs are likely before
yearend and we would not be surprised to see the S&P 500 encroach upon the
big round number of 5000. 2022 will likely be a different case and we will
address that thoroughly in our 2022 Annual Forecast to subscribers next week.




Author: Author

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Economics

When Idiocy Becomes Hardwired

When Idiocy Becomes Hardwired

Authored by Jeff Thomas via InternationalMan.com,

At this point, virtually all of us over the age of forty…

When Idiocy Becomes Hardwired

Authored by Jeff Thomas via InternationalMan.com,

At this point, virtually all of us over the age of forty have encountered enough “snowflakes” (those Millennials who have a meltdown if anything they say or believe is challenged) to understand that, increasingly, young people are being systemically coddled to the point that they cannot cope with their “reality” being questioned.

The post-war baby boomers were the first “spoiled” generation, with tens of millions of children raised under the concept that, “I don’t want my children to have to experience the hardships that I faced growing up.”

Those jurisdictions that prospered most (the EU, US, Canada, etc.) were, not coincidentally, the ones where this form of childrearing became most prevalent.

The net result was the ’60s generation – young adults who could be praised for their idealism in pursuing the peace movement, the civil rights movement, and equal rights for women. But those same young adults were spoiled to the degree that many felt that it made perfect sense that they should attend expensive colleges but spend much of their study time pursuing sex, drugs, and rock and roll.

Flunking out or dropping out was not seen as a major issue and very few of them felt any particular guilt about having squandered their parents’ life savings in the process.

The boomer generation then became the yuppies as they hit middle age, and not surprisingly, many coddled their own children even more than they themselves had been coddled.

As a result of ever-greater indulgence with each new generation of children, tens of millions of Millennials now display the result of parents doing all they can to remove every possible hardship from their children’s experience, no matter how small.

Many in their generation never had to do chores, have a paper route, or get good grades in order to be given an exceptional reward, such as a cell phone. They grew to adulthood without any understanding of cause and effect, effort and reward.

Theoretically, the outcome was to be a generation that was free from troubles, free from stress, who would have only happy thoughts. The trouble with this ideal was that, by the time they reached adulthood, many of the critical life’s lessons had been missing from their upbringing.

In the years during which their brains were biologically expanding and developing, they had been hardwired to expect continued indulgence throughout their lives. Any thought that they had was treated as valid, even if it was insupportable in logic.

And, today, we’re witnessing the fruits of this upbringing. Tens of millions of Millennials have never learned the concept of humility. They’re often unable to cope with their thoughts and perceptions being questioned and, in fact, often cannot think outside of themselves to understand the thoughts and perceptions of others.

They tend to be offended extremely easily and, worse, don’t know what to do when this occurs. They have such a high perception of their own self-importance that they can’t cope with being confronted, regardless of the validity of the other person’s reasoning. How they feel is far more important than logic or fact.

Hypersensitive vulnerability is a major consequence, but a greater casualty is Truth. Truth has gone from being fundamental to being something “optional” – subjective or relative and of lesser importance than someone being offended or hurt.

Of course, it would be easy to simply fob these young adults off as emotional mutants – spiteful narcissists – who cannot survive school without the school’s provision of safe spaces, cookies, puppies, and hug sessions.

Previous generations of students (my own included) were often intimidated when presented with course books that had titles like Elements of Calculus and Analytic Geometry. But such books had their purpose. They were part of what had to be dealt with in order to be prepared for the adult world of ever-expanding technology.

In addition, it was expected that any student be prepared to learn (at university, if he had not already done so at home), to consider all points of view, including those less palatable. In debating classes, he’d be expected to take any side of any argument and argue it as best he could.

In large measure, these requirements have disappeared from institutions of higher learning, and in their place, colleges provide colouring books, Play-Doh, and cry closets.

At the same time as a generation of “snowflakes” is being created, the same jurisdictions that are most prominently creating them (the above-mentioned EU, US, Canada, etc.) are facing, not just a generation of young adults who have a meltdown when challenged in some small way. They’re facing an international economic and political meltdown of epic proportions.

Several generations of business and political leaders have created the greatest “kick the can” bubble that the world has ever witnessed.

We can’t pinpoint the day on which this bubble will pop, but it would appear that we may now be quite close, as those who have been kicking the can have been running out of the means to continue.

The approach of a crisis is doubly concerning, as, historically, whenever generations of older people destroy their economy from within, it invariably falls to the younger generation to dig the country out of the resultant rubble.

Never in history has a crisis of such great proportions loomed and yet, never in history has the unfortunate generation that will inherit the damage been so unequivocally incapable of coping with that damage.

As unpleasant as it may be to accept, there’s no solution for idiocy. Any society that has hardwired a generation of its children to be unable to cope will find that that generation will be a lost one.

It will, in fact, be the following generation – the one that has grown up during the aftermath of the collapse – that will, of necessity, develop the skills needed to cope with an actual recovery.

So, does that mean that the world will be in chaos for more than a generation before the next batch of people can be raised to cope?

Well, no. Actually, that’s already happening. In Europe, where the Millennial trend exists, western Europeans have been growing up coddled and incapable, whilst eastern Europeans, who have experienced war and hardship, are growing up to be quite capable of handling whatever hardships come their way. Likewise, in Asia, the percentage of young people who are being raised to understand that they must soon shoulder the responsibility of the future is quite high.

And elsewhere in the world – outside the sphere of the EU, US, Canada, etc. – the same is largely true.

As has been forever true throughout history, civilisation does not come to a halt. It’s a “movable feast” that merely changes geographic locations from one era to another.

Always, as one star burns out, another takes its place. What’s of paramount importance is to read the tea leaves – to see the future coming and adjust for it.

*  *  *

Polls suggest that a majority of Millennials now favor socialism. And a growing number favor outright communism. Sometime this year, Millennials are expected to surpass Baby Boomers as the nation’s largest living adult generation. This is one of the reasons Bernie Sanders and other socialists are soaring in popularity. And when the next crisis hits, the situation will likely reach a tipping point. That’s exactly why Doug Casey and his team just released this urgent video outlining exactly what’s going to happen… and how you can protect yourself and even profit from the situation. Click here to watch it now.

Tyler Durden
Tue, 12/07/2021 – 17:25

Author: Tyler Durden

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Economics

Omicron Study Scare Stuns ‘Face-Ripping’ FOMO Short-Squeeze

Omicron Study Scare Stuns ‘Face-Ripping’ FOMO Short-Squeeze

Everything was awesome today…

UNTIL…

Headlines from a South African…

Omicron Study Scare Stuns ‘Face-Ripping’ FOMO Short-Squeeze

Everything was awesome today…

UNTIL…

Headlines from a South African study hit, suggesting a 40-fold reduction in neutralization capacity of the Pfizer vaccine vs Omicron... which suggest hospitals will get overwhelmed (due to its hyper-transmissibility) but it is notably less severe (especially for healthy people)…

Omicron’s ability to evade vaccine and infection-induced immunity is “robust but not complete,” said the research head of a laboratory at the Africa Health Research Institute in South Africa.

…and that sent stocks lower late in the day (although still a good day overall)…

And slammed ‘recovery’ stocks relative to ‘stay at home’ stocks…

But then again… it wouldn’t be the US equity market if a last minute total buying-panic didn’t send the Nasdaq up 100 points in 4 minutes…

*  *  *

As we detailed earlier…A China RRR cut? Omicron anxiety easing? Whatever it was, bubble markets exploded higher today…

Source: Bloomberg

But before we all get excited about “what the market is saying”, let’s bear in mind that today also saw the USA, USA, USA suffer its biggest decline in worker productivity since Q2 1960 (yeah 61 years ago!!!)…

Source: Bloomberg

Which is perfect because today saw unprofitable tech company’s best 2-day swing since April 2020 (+13.5%)…

Source: Bloomberg

Today’s melt-up from the moment the US cash markets opened (until around the European close) was impressive to say the least but also note that stonks were bid as China opened… and as Europe opened…

This is The Dow’s best 2 days since Nov 2020! Nasdaq surged 3% today – its biggest daily gain since March. Bear in mind that roughly 66% of the Nasdaq is in a bear market with losses of over 20%, while 35% of the Nasdaq is down over 50%!

The surge in the majors pushed The Dow (and only The Dow) up to unchanged, very briefly, from the Omicron emergence cliff after Thanksgiving. However, everything seemed to run out of momentum at that point…

Nasdaq and The Dow exploded above their 50DMAs, the S&P extended its gains well above its 50DMA. The Dow ripped up to its 100-/200-DMA but couldn’t extend the gains…

The 2-day ‘face-ripping’ short-squeeze off yesterday’s opening lows is the largest swing since March…

Source: Bloomberg

‘Recovery’ stocks notably outperformed today relative to ‘Stay at Home’ stocks as Omicron anxiety fades. They are now well above Omicron emergence levels and starting to erase the European lockdown anxiety losses…

Source: Bloomberg

‘Retail Favorites’ had their biggest day since Jan 2021…

Source: Bloomberg

Treasury yields were higher on the day with the short-end underperforming (2Y +6bps, 30Y +3bps), but as the chart below shows, the selling was all in the US session again…

Source: Bloomberg

The 10Y Yield was higher again but did not breach 1.50%, retracing the move post-Powell hawkish hearing…

Source: Bloomberg

The yield curve flattened notably today (2s30s) as the short-end priced in rate-hikes and long-end priced in policy mistakes…

Source: Bloomberg

The dollar ended lower on the day but again traded in a narrow range…

Source: Bloomberg

WTI topped $73 today, extending the gains from the last couple of days. However, oil prices remain well down from pre-Omicron levels…

And as oil prices ripped higher, so did US Breakeven inflation rates, but remain well down from pre-Omicron anxiety levels…

Source: Bloomberg

Crypto was mixed today with Bitcoin higher (tagging $52k) and Ethereum lower (after topping $4400)…

Source: Bloomberg

Gold ended modestly higher today but still below $1800 and well below pre-Omicron levels….

Finally, despite the equity market soaring unrelentlessly the last couple of days, STIRs have shifted considerably more hawkishly now pricing in 2 rate-hikes by September and a 75% chance of a rate-hike by May 2022 – there is no way the stock market is ready for that…

Source: Bloomberg

And Powell is not about to jawbone that back down.

Tyler Durden
Tue, 12/07/2021 – 16:01





Author: Tyler Durden

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