Posted on 10/16/2009 2:55:32 PM PDT by Kartographer
Trade wars could break out. Overexposed banks might collapse. And that's just for starters
(Excerpt) Read more at businessweek.com ...
Between the inflation fears and the deflation fears, a body doesn’t know what to do.
If banks folded as a result, and all of our money is worthless, what happens to our cars if we have loans, our homes, and so on?
Riots, mass chaos, societal collapse.
Just give me a ring when the trials for the democrats begin.
Buy junk silver now. Lots of it!
Junk silver, food, and ammo!! Amen.
I do have at least a dozen silver dollars—late ‘50’s - early ‘60’s.
Welcome to the new world order.
/johnny
I always find the pathologies surrounding the Dollar amusing.
Oh no! American products will become more competitive globally.
Obviously that is a disaster in the making.
Yeah?
The dollar is too high— the dollar is too low. We are always on the verge of total catastrophe. I love the “trade deficit” concerns which are utter fabrications.
I wish I could go galt :(
If the dollar collapse, US won’t be able to buy ANYTHING from overseas, as they would cost way too much, but exports will still be good
Applying past circumstances to the here and now doesn’t work. this is different.
Fool’s Gold
Dear....,
I’m sure you’ve seen all the hyperbole and hysteria about this feeble gold market rally. The market manipulators on Wall Street have bought themselves another bubble.
With all the hullabaloo, you would think gold had breached $2000 an ounce. Yes, gold is at a record high. YAWN. But remember that gold first hit $1011 an ounce in March 2008. This new record-breaking run only sees gold $50 above its previous high.
We’ve had 18 months of endless Wall Street spin. They say hyper-inflation is coming. They claim the Fed is printing money like it is going out of style. They have pulled off the biggest manipulation in commodities, since $150 a barrel oil blew up in their faces.
Yet gold has only been able to break to a lousy $50 high. And it’s taken them billions of dollars — and 18 months of non-stop spin — to do it. How the mighty have fallen. I remember the day when their spin could really set a market on fire, no more.
I hope they enjoy party while it lasts. Because this bubble is about to burst.
Gold is in vast over supply. New supplies roll in like never before. For the first time in history, scrap gold production exceeds total global mine output – and mine production is near an all-time high. Yet serious buyers are nowhere to be found.
As you know – as everyone knows gold is an investment for inflation. But not only is there no inflation. Prices are plunging. We are in the biggest deflation of modern global history.
Every major economy in the world is seeing negative CPI. The most recent U.S. CPI report was down 1.5%, year on year. Ireland’s CPI was down 6.5%. EU CPI was down 0.7%.
Japan, world’s second largest economy, saw CPI fall 2.4%. A record-breaking drop, in a nation that has been racked by deflation for over a decade. Malaysia CPI dropped 2.4%.
China is supposedly the red-hot economy that will pull the world out of the depression. Yet China’s CPI plunged a whopping 1.8% year over year. And you have to be out of your mind to belive the communists party growth figures. Their stimulus programs have sputtered. Their economy keeps slipping deeper into a depression. Just like everyone else.
That is why industrial production the world over keeps crashing. Down 19% in Japan. Down 18% in Italy. 17% in Germany. 15% in Canada. 13% in France and Russia. 11% in the U.S. and 10% in Brazil. DOWN DOWN DOWN not up.
Ain’t it amazing what the freaking Wall Street gold spin doctors keep forgetting to tell you?
The gold addicts are hanging their hats on the coming much ballyhooed hyper-inflation. We’re smack dab in the middle of the biggest deflation of modern times. Yet the cries of $2000 gold are heard everywhere. They are thrown about like it is a foregone conclusion. A guaranteed event. Because they say hyper inflation is just around the corner..... what bull!
People who buy into this crap are about to suffer very nasty withdrawal symptoms. They are going to lose serious amounts of their hard-earned cash. Nothing new when you buy into another Wall Street bubble.
A whole new groups of suckers are jumping into this gold disaster with both feet. A few years ago, the vast majority of them believed Wall Street’s b.s. about real estate. You know, real estate will always go up, because they aren’t making any more of the stuff. Those people got burned bad. They got burned in stocks as well. You remember invest for the long haul.
Now they will get burned in the latest bubble market. Gold. The yellow metal will turn into the biggest loser trade of the year.
Gold is not poised to break to significant new highs. It may get pushed to $1100 or so. Then gold should plunge at least $300. This will start a multi-year wipeout, that takes gold to under $200 an ounce. The masses will eventually figure it out: the Wall Street bubble machine duped them again. Too late.
Gold is doomed to a humungous crash. In fact, its biggest ever. The masses have already lost huge amounts of their wealth in the failed bubbles in stocks, real estate, oil and commodities. You would think they would learn by now.
But they are terrified of going broke. So they are desperate for a rally. Any kind of rally, that they can cash in on. That is whats driving this mass insanity in gold you are seeing.
People are desperate for cash. That’s what happens in a depression. Cash becomes king. I pity these people. All they are doing is buying into another wipeout that is conceived and engineered by Wall Street.
Be smart here. The world’s largest seller of gold is Wall Street. The largest holders of gold are the world’s central banks. The last thing they need is gold hysteria to interfere with their desperate stimulus packages...or their borrowing operations...or their US dollar and US government debt holdings. So they will soon spray cold water on these gold dogs in heat.
That talk of a dollar collapse? The height of absurdity. The dollar is not going to collapse anytime soon. Just the opposite. It will rebound from this recent minor sell-off party. (Remember, the bankers throw a party like this every year or so.)
The world will sort out who the next big loser economy will be. The dollar will rise in value, not fall.
Don’t get me wrong. The U.S. economy is a disaster. Only one thing is holding things together. Paper mache illusions, brought on by the stimulus programs. These programs are fading fast. Its only spit and shit that are holding together EVERY economy.
Stimulus programs are the order of the day for everyone. Europe has a trillion-dollar stimulus program. So does the UK. So do China and Japan. They desperately want to cover up the biggest economic wipeout in history.
A deflationary wipeout, I hasten to add. Not inflation. This is the worst news ever for gold, which is an inflation hedge. This deflation, this global depression, will crush gold prices. It will wipe out another group of people, who can least afford it.
You heard of banks that are too big to fail. That ain’t shit compared to the U.S. dollar. Or U.S. government debt. They are truly too big to fail. If that happens, the world will be thrust into a modern day dark age.
Believe me, the powers that be damn well know this. Like it or not they are attached by the hip, like Siamese twins, to the US dollar and US government debt. If the dollar wipes out they wipe out. In fact, it’s worse. They must buy every dollar of debt the US government sells. Otherwise, they wipe out first.
This is why the US government keeps issuing the most debt in world history — yet each debt sale is met by eager buyers the world over who keep scooping it all up and claimer for more. With each passing auction, U.S. interest rates go lower and lower.
Look at the chart below. It shows you how interest rates have plunged. Reflecting the eager buyers bidding rates lower. These record-breaking amounts of US government debt met with massive buying drive interest rates lower and lower each month.
http://www.shadowstats.com/alternate_data
In fact the interest rate on the 6-month T-bill is just 0.21%. A tiny fraction of one percent. Suppose government really was going to monetize the debt or print money, to cover its massive borrowing. (Like the gold b.s. artists want you to believe.) This interest rate would be doing a moon shot. Instead, it is plunging to all-time record breaking lows. Lower even than during the last Great Depression of the 1930s.
Folks, we are in global depression/deflation. Gold will become worthless. In the unlikely event that the dollar wipes out, you don’t want gold. The commodities you want to own are bullets, food and a self sufficient refuge in the countryside, far away from the angry, penniless, starving masses.
But don’t fear. That is not in the cards right now!
The nations of the world know one hard fact: the global financial system’s only hope to survive this depression is for the dollar to survive, as the world’s one reserve currency; and for the U.S. to keep borrowing (not printing) the cash it needs to stimulate.
Do you see? These asshole dead-broke banks aren’t too big to fail in fact if the truth be known they have already failed. All they are waiting for is a decent burial. The U.S. dollar and T-bill markets are too big to fail. AND THEY WILL NOT FAIL!
Talk about putting your money where your mouth. As we speak, China, Japan, the Philippines, Singapore, Malaysia, and South Korea (to name a few) are taking coordinated steps to stabilize the dollar. Their intervention will work.
They aren’t alone. Central banks the world over are buying and holding dollars. In quantities never seen before. They are buying U.S. government debt like it’s going out of style. This is true from Saudi Arabia to Beijing to Brussels.
You can see this in the chart below. It shows you how interest rates on 3-month T-bills have plunged to nearly zero as a result of massive buying. The lowest rates in history: http://www.shadowstats.com/alternate_data
Why are they doing this? Bottom line, they have no choice. They are trapped. As I showed you earlier, where the dollar goes — where massive U.S. government debt goes — they go.
Like it or not, the fate of the world is tied to the U.S. dollar — and to the U.S. government’s ability to borrow every dime it wants. You now know the true meaning of too big to fail.
Two things spell the death knell for gold. First and foremost, massive global deflation. Prices are dropping everywhere. They will keep doing so for a decade or more.
This will bring gold to under $200 an ounce...oil to under $10 a barrel...corn to under a dollar a bushel...and a luxury car to under $10,000. That $1.5 million mansion could plunge to $100,000 or less.
So do not make the mistake the born-again gold bugs are making. Don’t get stuck on inflation hysteria. It ain’t gonna happen. Governments of the world couldn’t inflate if they wanted to. And they are too scared to even try.
The second myth from the Wall Street bubble factory, that is driving this gold rally: the lie that the U.S. government will turn on the printing presses, and inflate like never before. Again, absolutely false.
U.S. money supply is not growing. It’s plunging. So is global money supply. World-wide money supply is falling at a record pace.
See the three newly updated charts below. They show you M3 (U.S. Total money supply), is dropping like a rock...global liquidity, (the world’s money supply) is about to go negative...and credit outstanding (the grease that lubricates the world economy), is still plunging the world over.
As I’ve told you before, in the modern global financial system, money is not created on the printing presses. It is created when banks issue loans. That’s when we get inflation. Debt creation is money creation. Debt default is money and wealth destruction. You know this phenomenon as a depression. You bet your ass we are in one.
Several years ago, the world took off on its biggest money-creating binge ever. This brought on hyper-inflation in financial assets. Real estate and stocks soared to the moon. So did oil and commodities overall.
But now the opposite is taking place. Debt is being destroyed – in the greatest amount ever. That means money is being destroyed – and money supply is plunging. In record amounts, the numbers prove it. That is deflationary.
All our lives we watched inflation. We saw money supply increase. Especially with the derivatives insanity of 2004 to 2008. A period you know as the housing bubble.
Now look at the blue line on the chart below. A death plunge in total money supply. It can only happen in a rip-your-ass-off depression. That little blue line says it all. http://www.shadowstats.com/alternate_data
This is why housing prices are crashing. Why prices of everything under the sun are falling. Money supply, and inflation, are turning negative.
Don’t buy into this gold rally...or the myth that the U.S. government is turning on the printing presses. Our government is successfully auctioning off massive amounts of debt. But it is not, will not and can not print money to cover that debt.
Instead, other central banks are tripping over themselves in the rush to buy that debt. So are governments and major players the world over. They fight among each other to lock in U.S. interest rates that are near zero, and keep falling lower and lower.
All this doesn’t add money to the system. Its sucks money out like never seen before. The big pig at the trough is the US government. It keeps sucking up every dollar that is not nailed down. Which is why every other borrower is left sucking hind tit. Why everyone else can’t find any money.
The smartest traders on the planet know what the safest financial instrument in the world is: the sovereign debt of the U.S. Government. They also know commercial debt and individual debt (like mortgage and credit card debt) is a fool’s game. It will soon be worthless.
Look what happened to GM secured bonds. It’s now toilet paper. GM is still in business, but investors the world over got screwed to the wall. The GM debt wipeout will occur over and over again as bossiness that are deemed to big to fail do exactly that..
Their ain’t no freaking money. See the chart below. The latest data on global liquidity. It shows you that, despite the green shoots wet dream, things become dicier by the day. It shows you the wipeout keeps spreading.
That yellow line on the chart shows you the gold price. Soon it will stop its death defying moon shot — and meet the black line at the bottom of the chart. And you could make a fortune if your smart enough to be waiting their charging them a big fat exit the burning theater tax. http://www.shadowstats.com/alternate_data
This next chart below shows you available credit. It gives you the latest data from the US Treasury Department. You can see that credit has gone heavily negative. There ain’t no freaking money to beg, borrow or steal.
In every category of loans, the death plunge continues. Real estate credit is the black line one the chart. You can see the huge mortgage bailout failed: real estate credit is plunging again.
Consumer credit, the blue line, makes up 70% of the US economy. It is about to fall off the chart. Commercial paper is the thick red line: it continues its nose dive.
Credit card debt, the yellow line, is falling off the page. A Master Card/Visa/American Express horror show.
Bank loans — the green line — still screams wipeout. Even though the bankers have gotten trillions in bailouts...and given themselves hundreds of billions in bonus checks.
Last and not least is commercial industrial loans, the dotted purple line. During derivatives mania, they had a field day. Up 22%. A massive number. Now it’s in a race with consumer loans and credit card debt to see who can wipe out faster.
Dear subscriber, ask yourself this question. Where is the damn recovery? Bank stocks have doubled, tripled in price or more since March – yet the banks are more broke than ever. How can annyone explain this?
Bottom line is, no way in hell can they justify the stock price appreciation..... A bubble! Now you know why we are shorting the shit out of these dead-broke, insolvent, dead-man-walking, poster-child-for-sleaze institutions — and loving every second of it!
I don’t give a rats ass how long it takes for their date with destiny. As far as I am concerned, the higher they go, the bigger the coming wreck will be. And the more our ETF trades could make for us.
If you have any doubt about how much trouble the banker whores are in, feast your eyes on the credit chart below. http://www.shadowstats.com/alternate_data
Let me sum up. Only two things in this world are too big to fail. (Sure isn’t the mega-banks.) One, the U.S. dollar. Two, U.S. government debt. They are the only financial assets I can assure you will not wipe out, in the current apocalypse.
China’s wealth is held in dollars. So is Japan’s wealth, Europe’s wealth, Russia’s wealth, Arab oil wealth, the world’s wealth. Like it or not, they are stuck in dollars. They can talk all the bullshit they want. But actions speak louder than words. And they keep supporting the dollar. They keep buying record amounts of US government debt. Even though interest rates have plunged to record lows, and keep falling further. That says it all.
Say they go off half cocked. Say they try to get out of dollars or U.S. government debt. They don’t just wipe out the dollar. They wipe out themselves. They wipe out their economies. Their currencies. Their debt.
So they have no choice. They are more committed to holding dollars than the US Federal Reserve is.
It’s like boarding an airplane at Heathrow Airport in London. You are taking a transatlantic flight to JFK in New York. Half-way across the Atlantic, the plane enters the worst god-awful storm you ever saw. Lightning. Thunder. Hurricane-like winds that toss the plane about. Wind shear that is ripping it apart like a rag doll in a Doberman Pincer’s jaws.
You don’t want to be on the airplane. You want out right now. But you have no choice. You’re there. Like it or not, you are committed to the bitter end. You must fasten your seat belt and ride it out. Jumping out of the plane with a parachute you dont have anyway means sure death.
Every central bank the world over is in that situation. They have no choice. The dollar’s fate is their fate. They must loan the US government every dollar it demands.
Same with major global businesses. They hold dollars. They buy and hold U.S. government debt. Not just millions or billions. But trillions of dollars worth. Just like every government in the world. They can’t sell. They can’t get out.
In fact, they must keep buying U.S. debt. Otherwise, the dollar really falls. (Not the seasonal hiccups.) They wipe out. To continue my airplane analogy, they can’t run the plane out of fuel. If they do, they plunge to their watery death.
Maybe ten or twenty years from now, this depression will hit bottom. It will end. Then, perhaps, they can do something different. For now they are committed. That will hold true for a decade or more.
Two major headlines will hit the financial markets soon. One, the imminent wipeout in the U.S. stock market. Two, the biggest plunge in gold prices ever. Not $2000 gold, like Wall Street says. But $200 gold.
In view of that fantastic opportunity, I’ve put together another Nick’s Picks in gold. That should make us 100% allocated in our select ETF shorts, in the soon-to-be-worthless yellow metal. In fact, I have a new instrument to add to our bag of tricks.
I will post this trade with in 24 hours on the Insiders Website. I will email and send you an SMS message, when the reco is available.
Folks, when everyone else is selling, I want to buy. When they are buying, I want to sell. Damn I want to sell gold!
I have just one thing to say to the bubble blowers of Wall Street. Thank you, thank you, thank you, you scumbags!
If they weren’t pulling all these cons, I wouldn’t have these great markets to short. I would have to go back to washing dishes.
Yes I love this. Because in this criminal’s mind, I believe with every fiber of my being that it means we could get an even bigger payday.
Nick Guarino DwX (Dishwasher Extraordinaire)
Kottura LTD 2135A Des Laurentides Blvd #217 Laval, QC. Canada H7M4M2
PS: Look at the U.S. unemployment rate in the chart below. As you can see, it is soaring. The true rate is now over 20% on its way to 25%. You see why these gold and stock market trades have turned me on like no others? They would have you believe this is a recovery... this is some sick shit! http://www.shadowstats.com/alternate_data
Someone’s trying a little too hard.
Debt is good in a collapse. if anything your pay would increase but the bank gets paid back in increasingly worthless FR notes.
Banks and FDIC would suffer and burn.
China will be history.
Tag lines can be a friend. ; )
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