82_28 wrote:So if all these dudes know something's coming, knew something was coming, like the guy in the CNBC clip, why didn't any of them do a damned thing to stop this or issue these warnings earlier? That Seattle guy in there, seems to be floating the terms that the right wing fringe was going on about 20 years ago. He's not presented as some kook, whereas roll back the clock 10 years he would have been a kook. Did this guy believe the shit he says now 10 years ago? If not, why? And why is he calm about it now? His mannerisms are like he's just taking this all in stride. I wanna know why...
he said: "it's time to play ping-pong... it's time to make money."
then reset.
*
"Teach them to think. Work against the government." – Wittgenstein.
Soros Speaks Submitted by Tyler Durden on 04/08/2011 17:31 -0400
Unlike the last time a bunch of men gathered at Bretton Woods to determine the monetary fate of the world and set the stage for globalization, this time around the prevailing activity was a casting call for the role of the new Emperor Palpatine. Yet despite that (or maybe because of) George Soros appeared in full Open Society regalia and spoke to Bloomberg TV about how importing foreign asset collateral (also known as exporting debt) through "globalization" is still the name of the game. And obviously while the Hungarian billionaire would not discuss the true purpose for his presence in Bretton Woods, he did have some words of caution for China bulls: "while the big banks under direct central control are in fact refusing to lend, there is a shadow banking system that is growing out of control. There is a real danger there of wage price inflation because prices have gone up, particularly real estate prices have gone up because there was a real estate boom." But to those concerned about the key issue at play, namely the future of the reserve monetary system, some could interpret the following statement by Soros, as a tacit agreement that the end of the dollar is fast approaching: "cautionary words for the dollar: "There's a big question whether the U.S. dollar should be the main reserve currency and in fact it no longer is because it maybe accounts for two-thirds of the monetary reserves. The euro is an alternative and there's a lot of diversification into other currencies and even more into commodities. Not only gold, but actually oil is now an asset class for investors. That has put some upward pressure on the commodities." Of course what actually is decided in B-W will be made clear over the next year or so, once the decision makers have already placed their bets accordingly and pull the rug from under the market.
On stimulus vs. austerity and whether U.S. debt impacts the world:
"If you have a growing economy, you can tolerate a higher level of debt. And if you have too much debt and you have a recession, you get into what they called debt check. This is the big issue. "
"I am afraid it is overshadowed by political considerations. You have a financial crisis in Europe. There is the pressure of Spain and Portugal and so on. But debt is a different problem. Those countries are part of the European bloc and they are not in a position to issue their own currency. We can issue our own currency. In fact, the dollar is quite strong. It is really a matter of political judgment. That is where you have different opinions.”
"There is very a strong push to tighten the budget as a way to reduce government spending. It's a resistance to any kind of tax increase and tightening, particularly the budget of the states. The [U.S.] states cannot issue their own currency. They are in a similar situation to Spain and Portugal. There is a danger that by pushing this too far, you could abort the very fragile economic recovery that you are currently enjoying and push the economy once again into a slowdown or a recession."
"I rather fear these political forces will push it into a recession. In my opinion, the country could actually absorb some more debt in order to get the economy going.”
On the ECB vs. the Fed - who is doing it right?:
"Two different directives govern the European Central bank and the U.S. Federal Reserve. In the case of Europe, it's a one-sided directive. Their only job is to prevent inflation, and in the case of the U.S., it is more balanced, to maintain employment and financial stability."
On whether the U.S. dollar is still a safe asset:
"There's a big question whether the U.S. dollar should be the main reserve currency and in fact it no longer is because it maybe accounts for two-thirds of the monetary reserves. The euro is an alternative and there's a lot of diversification into other currencies and even more into commodities. Not only gold, but actually oil is now an asset class for investors. That has put some upward pressure on the commodities."
On whether the sovereign debt crisis has diminished euro's chances of becoming a reserve currency:
"The euro is under a cloud, but that is exactly because there are some inflationary pressures from the price of commodities, particularly now oil and also food prices have risen. That is what has induced the European Central Bank to raise interest rates at a time which is, in my opinion, quite inappropriate…It is not appropriate in current circumstances when you have a number of countries that are suffering from too much debt and high interest rates that they have to pay."
On China's economy:
"China has really stimulated its economy full force very successfully and now it is trying to rein in the rate of growth, and is exercising very strong constraints on the banking system. But because of that constraint, and because of the big demand for money, a shadow banking system has arisen and is growing very rapidly. So while the big banks under direct central control are in fact refusing to lend, there is a shadow banking system that is growing out of control. There is a real danger there of wage price inflation because prices have gone up, particularly real estate prices have gone up because there was a real estate boom."
"Therefore, wage demands have risen, and we now have 20%, 30% wage increases. The Chinese government has made a mistake not allowing its currency to appreciate, which would have controlled the price of inflation. Instead of that, we now have this wage pressure, which is a little bit out of their control."
On the Chinese economic approach and whether they did something right:
"[The Chinese] were the major beneficiaries of globalization. They were the big winners in the financial crash because their economy was largely isolated because they have capital controls on their currency. They have a two-tiered currency system, whereas the rest of the world allows free movement for capital, and you had a runaway expansion of credit and leverage which then resulted in the financial crash, and China was largely immune. So, they benefited tremendously."
"Their system, which really stands in contrast to the international system, international capitalism with free movement of capital, and then there is a system where the state controls the economy. That system actually has performed significantly better than the international system. So now it is beginning to be imitated by others, but I think it is a tremendous mistake, because that was just one particular set of circumstances when it worked better. They had an advantage because they were the only ones that were controlling capital flows. So as a result, they not only control their own currency, they effectively controlled the world currency system. Now other countries, defensively, are beginning to follow them. For instance, Brazil just doubled the surcharge on capital inflows. That is not good for Brazil, and it is not good for the global economy."
barracuda wrote:It's the other way around. Gold backed dollars at a higher valuation would cause a massive flight to foreign currencies, Zimbabwe-style.
Funny you mention Zimbabwe...
Gold For Bread - Zimbabwe MDC activist Sam Chakaipa returns to his village in Zimbabwe to find his friends and neighbours starving. As the Zimbabwean dollar becomes ever weaker, gold has become the currency of choice.
Okay, I watched the video. Jesus, what a mess. But let's examine what is going on there:
A Zimbabwean can work all day at the river to pan out 0.1 grams of gold, for which he can buy a loaf of bread. Check my math on this:
0.1 grams = 0.00352739619 ounces
0.0035 x $1400/oz = $4.9
This is not far from the cost of a loaf of bread where I live. So what is happening there is that a day's work of unskilled hard labor has become worth about five dollars.
The most dangerous traps are the ones you set for yourself. - Phillip Marlowe
barracuda wrote:It's the other way around. Gold backed dollars at a higher valuation would cause a massive flight to foreign currencies, Zimbabwe-style.
Funny you mention Zimbabwe...
Gold For Bread - Zimbabwe MDC activist Sam Chakaipa returns to his village in Zimbabwe to find his friends and neighbours starving. As the Zimbabwean dollar becomes ever weaker, gold has become the currency of choice.
Okay, I watched the video. Jesus, what a mess. But let's examine what is going on there:
A Zimbabwean can work all day at the river to pan out 0.1 grams of gold, for which he can buy a loaf of bread. Check my math on this:
0.1 grams = 0.00352739619 ounces
0.0035 x $1400/oz = $4.9
This is not far from the cost of a loaf of bread where I live. So what is happening there is that a day's work of unskilled hard labor has become worth about five dollars.
hm. i don't know, b.
this is from 2005
The cost of buying groceries in Zimbabwe increased almost tenfold in 2005, according to the country's independent Consumer Council.
Its report found that the price of a loaf of bread rose by 1,157% throughout the year to 44,000 Zimbabwean dollars (55 US cents; 32p). Milk rose 1,718%.
Well kid, I'm not disputing the fact that the Zim dollar is pretty much completely worthless. It most certainly is. And the price of bread is high, because access to grain is limited by the total lack of agricultural production there, as the video demonstrates. But not too high, when purchased in a reliable currency, whether US dollars, or gold, or euros, or whatever. Zimbabweans have turned to accepting foreign currencies a long time ago. But if it's worth it to work all day for five bucks, something else is going on there. I think it's safe to say they're pretty much fucked. In any case, my calcs seem to at least bear out that at this point in time, the market value of gold in Zimbabwe is not far from the market value here. At worst, if you wanna price Zimbabwean loaves of bread as worth only a dollar, the value of gold is some five times lower than it should be against the $1400/oz exchange value available to anyone - that is, you ought to be able to buy nearly five one-dollar loaves for the 0.1 grams. But I'd say the price is just about fair, considering the attendant issues of grain aquisition and production in that country.
But again, 0.1 grams of gold will only buy you one good loaf of bread in No Cal. Two at the most, really.
The most dangerous traps are the ones you set for yourself. - Phillip Marlowe
Well Mr.Fish, at least we have you down as conceding that if a currency depreciates, the barbarous metals do retain value. Post WW1 Germany aside, Argentina would provide another modern example for what people do (hoard metals).
fyi, here are the top commodity gainers for the first quarter this year-
Cotton is king. I'd look at corn and wheat/grains too.
82_28- Your story about silver 'show-offs' is somewhat informative. I'm thinking maybe we have entered the very beginnings of the mania phase. The mania phase can last a few years and is the stage where the masses enter in, and when big gains are made. Its the stage when the shoe shine guy is giving advice to buy a particular stock. If one thinks in traditional terms, silver is quite frothy and overdue for a pullback. It could drop 15-20% easy. Given the circumstances, it could also gain that much. It is operating outside any technical analysis and one would traditionally say it is overbought. Short term, at these levels it is risky. Long term though, I think one would be okay. It all depends on one's perspective and time horizon.
2012 i share your view on that. i'm starting to se random people talking about it, and a guy who i occasionally work with got my number and has been calling me for advice, because i told him to buy silver when it was under 20 and he now seems to think i'm some sort of oracle. also, the price has started going up a little tooooo fast, not unlike dot com stocks in their hey day.
i think we could be at the beginnings of an upward parabolic curve on it where the price goes up to 100 or more but will then crash back to 25 or thereabouts. but i could be totally wrong. given the historical gold to silver price ratio, silver should still be a lot higher, given the current price of gold.
of course the truly big question is what is driving the price up right now? is it joe sixpacks trying to capitalize, i.e. the new huge crop of home computer e-trader amateurs, or is itgovernments and banks kike those who have driven up the price of gold?
"He who wounds the ecosphere literally wounds God" -- Philip K. Dick
Nordic wrote:2012 i share your view on that. i'm starting to se random people talking about it, and a guy who i occasionally work with got my number and has been calling me for advice, because i told him to buy silver when it was under 20 and he now seems to think i'm some sort of oracle. also, the price has started going up a little tooooo fast, not unlike dot com stocks in their hey day.
i think we could be at the beginnings of an upward parabolic curve on it where the price goes up to 100 or more but will then crash back to 25 or thereabouts. but i could be totally wrong. given the historical gold to silver price ratio, silver should still be a lot higher, given the current price of gold.
of course the truly big question is what is driving the price up right now? is it joe sixpacks trying to capitalize, i.e. the new huge crop of home computer e-trader amateurs, or is itgovernments and banks kike those who have driven up the price of gold?
But you ARE an oracle! I generally never give financial advice. I don't blame you for being cagy. I don't want that responsibility.
Okay, I think I found something RI worthy on this very subject ...
Google Labs Books Ngram Viewer- What's all this do? When you enter phrases into the Google Books Ngram Viewer, it displays a graph showing how those phrases have occurred in a corpus of books (e.g., "British English", "English Fiction", "French") over the selected years. If you're going to use this data for an academic publication, please cite: Jean-Baptiste Michel*, Yuan Kui Shen, Aviva Presser Aiden, Adrian Veres, Matthew K. Gray, William Brockman, The Google Books Team, Joseph P. Pickett, Dale Hoiberg, Dan Clancy, Peter Norvig, Jon Orwant, Steven Pinker, Martin A. Nowak, and Erez Lieberman Aiden*. Quantitative Analysis of Culture Using Millions of Digitized Books. Science (Published online ahead of print: 12/16/2010)
---
if we see this bliping up in the next few years (as books about PMs will inevitably start to be written to capitalize on this trend) it will be confirmed. The chart only gets as recent as 2008, but you have to think this graph is about to skyrocket. Noteworthy is the fact that we don't talk/write about PMs as much as in the past. Also see a big spike in the Depression era.
This is from Kevin over at cryptogon.com, some of it is rather technical but it shows a very strong downward push on the dollar. and I will leave out the chart, the link is here:http://cryptogon.com/?p=21696
U.S. Dollar April 10th, 2011
WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
My U.S. Dollar Index analysis from 22 March remains in play. Here’s an update.
I expect a sucker bounce to occur sometime between the current level and 74.170, but that should be pretty short lived; days, not weeks. Tactical longside plays would be for actively managing pros only. For longer term bears, any bounce should just be a speed bump. The ascending line of the (broken down) bearish triangle is now a hard overhead resistance.
Ok, so what happens if 74.170 breaks down?
A move below 74.170 sets up a re-test of 70.792 and a period of global financial panic. The analogy would be a driver taking a corner on an icy road too fast. Below 74.170, there would be an “Oh shit” moment as traction is lost and the car careens toward the cliff (70.792). The central banks will work together in an attempt to regain control.
My guess is that the breakdown of the monster bearish triangle (see chart) is a strong enough pattern to take out that hard pivot at 74.170, but I’m less sure about what will happen with 70.792.
You should know by now that I’m not one of these Chicken Little fast crash snake handlers that are predicting The End every five minutes, but I’d like everyone reading to know that 70.792 is a big deal. If the slide continues and 70.792 breaks down, that would represent an extremely serious emergency and probably the end of the current global financial system.
70.792 is a door to the unknown, so trying to guess what’s beyond it is pretty silly. But since a handful of you pay me to guess about things like this, I’ll try.
I’d say that capital controls, some kind of IMF SDR (Special Drawing Rights) ‘Global Reserve’ confetti bucks, and a global financial crisis management organization, like the IMF on steroids are possible. At a minimum, states will try unilateral capital controls in an attempt to prevent their currencies from disorderly appreciation vs. the toxic dollar. I wouldn’t be surprised if it comes to pass that secret contingency planning has been under way for this.
Let it suffice to say that below 70.792, the system will be very different and not in a good way. But let’s get down below 74.170 before spending too much time on trying to figure out what’s behind door # 70.792.
Kevin is a very astute individual whose blog I have been reading since 2002, (at least, I lost my first computer hard drive so I can't go that far back to get the dates), but I remember when he was living in Portland, and told everyone to get out of the states. He since moved to New Zeland (2003), and has a small farm there. He has always been ahead of the curve, and when he calls something like this to watch out for, WATCH OUT!
What I don't know is how to play the catastrophe? Profit, or Survival? Preferable BOTH!
yeah i'm pretty impressed with kevin's analysis in the past. he really called the silver thing when it broke through the "resistance" level around 34 and predicyed it would just go up from there, which it did. i don't even know what all this chart-reading stuff means, but he sure seems to get it.
living in some seriously interesting times, that's for sure.
"He who wounds the ecosphere literally wounds God" -- Philip K. Dick
Nordic wrote:yeah i'm pretty impressed with kevin's analysis in the past. he really called the silver thing when it broke through the "resistance" level around 34 and predicyed it would just go up from there, which it did. i don't even know what all this chart-reading stuff means, but he sure seems to get it.
living in some seriously interesting times, that's for sure.
Yeah, he seems to be able to see the trends developing. He get's way too technical for me sometimes, but I can follow the general ideas. He is not as much a ham as Max Keiser (maxkeiser.com), a terrific entertainment economist! Good info and good fun! Kevin is more serious, so when he talks.......I listen!
• Medicare, Medicaid and Social Security now account for 44% of total federal spending and are steadily rising. • Previous Congresses (and Administrations) have relied on the assumption that we can grow our way out of this onerous debt burden. • Unless entitlements are substantially reformed, the U.S. will likely default on its debt; not in conventional ways, but via inflation, currency devaluation and low to negative real interest rates.
That adorable skunk, Pepé Le Pew, is one of my wife Sue’s favorite cartoon characters. There’s something affable, even romantic about him as he seeks to woo his female companions with a French accent and promises of a skunk bungalow and bedrooms full of little Pepés in future years. It’s easy to love a skunk – but only on the silver screen, and if in real life – at a considerable distance. I think of Congress that way. Every two or six years, they dress up in full makeup, pretending to be the change, vowing to correct what hasn’t been corrected, promising discipline as opposed to profligate overspending and undertaxation, and striving to balance the budget when all others have failed. Oooh Pepé – Mon Chéri! But don’t believe them – hold your nose instead! Oh, I kid the Congress. Perhaps they don’t have black and white stripes with bushy tails. Perhaps there’s just a stink bomb that the Congressional sergeant-at-arms sets off every time they convene and the gavel falls to signify the beginning of the “people’s business.” Perhaps. But, in all cases, citizens of America – hold your noses. You ain’t smelled nothin’ yet.
I speak, of course, to the budget deficit and Washington’s inability to recognize the intractable: 75% of the budget is non-discretionary and entitlement based. Without attacking entitlements – Medicare, Medicaid and Social Security – we are smelling $1 trillion deficits as far as the nose can sniff. Once dominated by defense spending, these three categories now account for 44% of total Federal spending and are steadily rising. As Chart 1 points out, after defense and interest payments on the national debt are excluded, remaining discretionary expenses for education, infrastructure, agriculture and housing constitute at most 25% of the 2011 fiscal year federal spending budget of $4 trillion. You could eliminate it all and still wind up with a deficit of nearly $700 billion! So come on you stinkers; enough of the Pepé Le Pew romance and promises. Entitlement spending is where the money is and you need to reform it.
Even then, the situation is almost beyond repair. Check out the Treasury’s and Health and Human Services’ own data for the net present value of entitlement liabilities shown in Chart 2.
The above four multi-trillion-dollar liability balls are staggering in their implications. Remember first of all that the nearly $65 trillion of entitlement liabilities shown above are not some estimate of future spending. They are the discounted net present value of current spending should it continue at the projected demographic rate (importantly – it is much higher than the annual CPI + 1% used as a discounter because demand for healthcare rises much faster than inflation.) And while some Honorable Congressional Le Pews would counter that Medicaid is appropriated annually and therefore requires no discounted reserve, those words would surely count as “sweet nothings,” believable only to those whom they romance every several years at the polls. The incredible reality is that the $9.1 trillion federal debt that constitutes the next-to-tiniest ball in our chart is nothing compared to unfunded Medicaid and Medicare. It is like comparing Pluto to Saturn and Jupiter. The former (the $9.1 trillion current Treasury debt) does not even merit planetary status in our solar system of discounted future liabilities. It’s really just a large asteroid.
Look at it another way and our dire situation becomes equally revealing. Suppose that the $65 trillion of entitlement liabilities were fully funded in a “lockbox,” much like Social Security is falsely imagined to be. Just suppose. And say the cost of that funding (Treasury debt) was the same CPI + 1% that was used to produce the above discounted present value in the first place. Actually, that’s not a bad guesstimate for the average yield of all Treasury debt. If so, then the interest expense on the $75 trillion total debt would equal $2.6 trillion, quite close to the current level of entitlement spending for Social Security, Medicare and Medicaid. What do we pay now in interest? About $250 billion. Our annual “lockbox” tab would rise by $2.35 trillion and our deficit would be close to 15% of GDP! The simple conclusion would be this: Unless you want to drastically reduce entitlement spending or heaven forbid raise taxes, then Pepé, you’ve got a stinker of a problem.
Previous Congresses (and Administrations) have relied on the assumption that we can grow our way out of this onerous debt burden. Perhaps we could, if it was only $9.1 trillion, as shown in Chart 2. That would be 65% of GDP and well within reasonable ranges for sovereign debt burdens. But that is not the reality. As others, such as Pete Peterson of the Blackstone Group and Mary Meeker, have shown much better and for far longer than I, the true but unrecorded debt of the U.S. Treasury is not $9.1 trillion or even $11-12 trillion when Agency and Student Loan liabilities are thrown in, but $65 trillion more! This country appears to have an off-balance-sheet, unrecorded debt burden of close to 500% of GDP! We are out-Greeking the Greeks, dear reader.
If so, and if the USA were a corporation, then it would probably have a negative net worth of $35-40 trillion once our “assets” were properly accounted for, as pointed out by Mary Meeker and endorsed by luminaries such as Paul Volcker and Michael Bloomberg in a recent piece titled “USA Inc.” However approximate and subjective that number is, no lender would lend to such a corporation. Because if that company had a printing press much like the U.S. with an official “reserve currency” seal of approval affixed to every dollar bill, that lender/saver would have to know that the only way out of the dilemma, absent very large entitlement cuts, is to default in one (or a combination) of four ways: 1) outright via contractual abrogation – surely unthinkable, 2) surreptitiously via accelerating and unexpectedly higher inflation – likely but not significant in its impact, 3) deceptively via a declining dollar– currently taking place right in front of our noses, and 4) stealthily via policy rates and Treasury yields far below historical levels – paying savers less on their money and hoping they won’t complain.
If I were sitting before Congress – at a safe olfactory distance – and giving testimony on our current debt crisis, I would pithily say something like this:
“I sit before you as a representative of a $1.2 trillion money manager, historically bond oriented, that has been selling Treasuries because they have little value within the context of a $75 trillion total debt burden.
Unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies – inflation, currency devaluation and low to negative real interest rates. Our clients, who represent unions, cities, U.S. and global pension funds, foundations, as well as Main Street citizens, do not want to be shortchanged or have their pockets picked. It is incumbent, therefore, in order to preserve the integrity of the U.S. Treasury market along with its favorable global interest rates, and to promote a stable U.S. economy, that entitlement spending be reduced, and that future liabilities be addressed in terms of healthcare and Social Security cost containment. You must attack entitlements and make ‘debt’ a four-letter word.”
Thank you, and like Pepé Le Pew, why don’t you try changing your stripes or at least pretend you’re a French-speaking cat. The odor in these chambers is all too familiar and a skunk needs all the help it can get.
Exclusive: Bill Gross Is Now Short US Debt, Hikes Cash To $73 Billion, An All Time Record Submitted by Tyler Durden on 04/10/2011 14:41 -0400
A month ago, Zero Hedge first reported that Bill Gross had taken the stunning decision to bring his Treasury exposure from 12% to 0%: a move which many interpreted as just business, and not personal: after all Pimco had previously telegraphed its disgust with US paper, and was merely mitigating its exposure. This time, in another Zero Hedge first, we discover that it is no longer business for Bill - it has now become personal (and with an attendant cost of carry). In March, Pimco's flagship Total Return Fund (TRF) has now taken an active short position in US government debt: -3% on a Market Value basis (or $7.1 billion), and a whopping -18% on a Duration Weighted Exposure basis. And confirming just what PIMCO thinks of US-related paper is the fact that the world's largest "bond" fund now has cash, at a stunning $73 billion, or 31% of all assets, as its largest asset class on both a relative and absolute basis. We repeat: cash is more than PIMCO's holdings of Treasurys and Mortgage securities ($66 billion) combined. To paraphrase: in March PIMCO was dumping everything related to US rates (see chart below). This is the first net short position that PIMCO has had in Government-related debt since the Great Financial Crisis of 2008, and going positive in February of 2009 only after it became clear that the Fed would commence monetizing US debt one month later. This is the closest that Gross has come to making a political statement and is now without doubt putting his money where his mouth is. The only event that could possibly derail Gross' thinking is a huge market crash forcing a rush to Treasury safety. Alas, as has been made all too clear recently, US debt is no longer the safe haven it once was. Which begs the question: when will the TRF break out a "gold" asset holdings line item.
And another side effect of the firm's scramble away from debt and into cash is that the effective duration of TRF is now down to 3.6: only the second lowest since the 3.38 posted in December of 2008... when the world was on the verge of ending.
That Bill Gross is willing to risk a surge in redemptions (after all who would be wiling to pay PIMCO to manage a third of their assets in the form of supposedly devaluating cash) in order to make a statement about the credibility of the US government, and specifically the viability of its IOUs, is easily the only thing that the US government has to consider when evaluating the prospects for funding trillions and trillions of US deficits at "acceptable" rates in the absence of further quantitative easing by the Chairman.
If Gross is indeed right, something very wicked this way comes.
The system has failed. It failed the day that Lehman Brothers was flushed.
There is a financial condition of an ocean of liquidity making the broken remains of a failed financial system in the Western world opaque.
There is no future failure coming. What is coming is a mass realization that exposes the fact there is no functioning system under all this liquidity. It is a sharp contraction in confidence that lies down the road. Realize this and know that there is one more step you need to make.
Having the largest pile of gold and silver without considering one more step might make you a modern Midas.
There is more to insurance than simply financial. Shortages of goods and services will occur because of currency induced cost push inflation resulting in dislocations of the organization and compensation in the distribution functions. That means there could be ample food in the system but little available on the shelf of your local market.
Because of the ill-understood world shaping changes in the Middle East, the impact of "Peak Oil" on price has been sharply accelerated. Public utilities considered now as a human right will prove themselves to be privileges. Expectation of power on a constant basis will become a hollow expectation.
If you do not have the experience of living in India and Africa in the 80s, you have no idea of how to live in a Western World experiencing long term currency induced cost push inflation. Self reliance will become as important as your holdings in gold. To have a huge pile of gold but remain totally dependent on the infrastructure of the Western World system is a serious mistake. You would have substantial capital but lack goods and services to buy. You will be able to afford much, but much will be either in short supply or illegal.
You know more about what is occurring than 99% of investors
You are the 1% that knows the SYSTEM HAS FAILED. You are the 1% that knows the system failed the minute Lehman Brothers was flushed. You are the 1% not looking for some failure in the future but know there is no system below the flood of liquidity. You are the 1% that has been exposed to the concept of currency induced cost push. You are the 1% that can understand the future.
Please be that 1% that is not seduced by your profits and fails to take the last step to the best degree they can.
Submitted by Tyler Durden on 04/10/2011 19:36 -0400
One word (well technically two) can describe what is going on in the electronic pre-market arena right now: inflationary hysteria. Gold is at a new record, wheat is surging, corn is at highest since 2008, crude at a new 30 month high, silver is at $41.10 - a new fresh post Hunt high, beans surging, etc, etc, etc. Essentially everything is bid, following news first reported on Zero Hedge that PIMCO is betting the farm that either inflation is about to go parabolic and force bondholders to dump everything, or that the Fed will have no choice but to pursue another round of QE, sending gold to $2,000 and unleashing the Weimar endgame.
Silver is now even higher, at 41.60. That's just too fast. Weird.
Monday could be interesting.
"He who wounds the ecosphere literally wounds God" -- Philip K. Dick
