What's the old adage about how "first they laugh at you, then they criticize you", that whole thing? Well, ten years on, all of our talk about The End of The Great Keynesian Experiment is seemingly playing out before your eyes. I hope you prepared accordingly.
Every Sunday, MrsF and I record and watch the US program called "60 Minutes". When I heard that Fed Goon Kashandkari was going to be on last evening, I was prepared for the usual BS. And that's basically what it was...until we got to this:
"There is An Infinite Amount Of Cash At The Federal Reserve. We Will Do Whatever We Need To Make Sure There Is Enough Cash In The Banking System." - Neel Kashkari (Federal Reserve Bank): >>Translation<<: We Are Going To Obliterate The Purchasing Power Of Your Currency. pic.twitter.com/qaMFfOI70b— Ben Rickert (@Ben__Rickert) March 23, 2020
When I heard it, I immediately looked at MrsF and asked, "did you catch that"? What a blatant and bald-faced (pun intended) admission! "AN INFINITE AMOUNT OF CASH!"
So there you go.
And now today we have this....truly QE∞: https://www.marketwatch.com/story/fed-announces-unlimited-qe-and-sets-up...
Understand this...Yes, there is a corporate bond and commercial paper market that needs some bids. And yes, there are some municipal markets that need some bids, too. But this is 95% about direct debt monetization.
The US Congress is trying to put together a $2T "stimulus package". As I've told you for weeks, that won't be nearly enough. Combine that reality with the startling drop in tax revenue receipts that is about to hit ALL levels of government, and you get a US 2020 fiscal deficit that might reach $5TRILLION or more. How will that possibly be funded? They might even try that silly "platinum coin" idea at some point! But it doesn't matter HOW they attempt to rationalize and justify it, the debt/deficit is going to explode and the only source of funding is.....MASSIVE "INFINITE" FED CASH CREATION. Plain and simple.
So what does this mean for us? Well, to begin with, maybe not that much. The dollar price of gold and silver is still determined by the trading of futures contracts that are no more related to the actual physical metal than the trading of baseball cards. While this remains the pricing scheme, you can be assured that The Banks, the Central Banks and the BIS will do the very best to smash rallies and contain "price". I mean, look at today! "Gold" is only up 2% on the news.
We've warned and advised for the past several years that ONLY a physical market disruption can cause the run on confidence that will destroy The Bullion Banks and their criminal, fraudulent pricing scheme. That collapse in confidence and run on physical is coming....but it's impossible to say when. Could it already have begun? Maybe. The Mints are out of silver and not producing more coins for at least a few weeks. Reports out of Switzerland show that up to 75% of that country's refineries are temporarily shutting down.
Almost half of World’s gold bar production will stop this week: https://t.co/OZAtv3I0fn— willem middelkoop (@wmiddelkoop) March 22, 2020
So look, we can continue to talk about price and levels and moving averages and all the rest. There will still be time for all that. However, for today, you need to understand that The End of The Great Keynesian Experiment is truly upon us. The Banks have finally shown their hands and they are openly admitting their strategy. Fiat currency can be created from nothing to service accumulated debts in a desperate attempt to keep the economic plates spinning. However, ONLY GOLD AND SILVER ARE MONEY. They have been for millennia and they shall be globally-recognized as such again in the months and years ahead.
Be situationally aware. Care for your family. Wash your hands. And prepare accordingly.
p.s. Now more that ever, you need objective and honest analysis. At TFMR, we provide a morning update and evening podcast every day. We are your financial eyes and ears so that you can focus on the other items that demand your attention on a daily basis. Join us. The community here is like no other. And it's all available for just 40¢/day.