The Coming Economic Collapse, Currency Induced Cost Push Inflation/Hyperinflation, Weimar Germany, Euro Collapse,
Zimbabwe Hyperinflation, Survival in Economic Collapse, World Economic Collapse, Dollar Collapse,
What Would Happen If the Economy Collapsed,The Coming Economic Depression.
Gold and Silver Will Protect Your Wealth.
UPDATE: The US Dollar continues to plummet reaching its nadir at 74.685 right this minute. This is going to have some disastrous consequences on global markets if this continues.
Dear readers,
I told you to start buying Silver... when it was $12-$15.00 an Ounce... Did you listen?
I told you to buy Gold, when it was less then $900.00 per Ounce...Did you listen?
I told you to BTFD (buy the freaking dips) and accumulate as much Gold &Silver as you could afford...Did you listen?
I told you to fill your pantry and freezer and rotate... Did you listen?
I told you to buy Non-Hybrid seeds and fertilizer...Did you listen?
I told you that the FED would print money to Infinity and beyond, destroying the Dollar...Did you listen?
I told you that creating money out of thin air...causes inflation, leading up to massive inflation, and quite possibly hyperinflation...Did you listen?
The clock is ticking...will you listen now? or will you follow the rest of the Sheeplez to the slaughterhouse?
Submitted by Tyler Durden on 04/14/2011 16:10 -0400
Silver is now trading at $42.10: the highest price since 1981, and ever closer to the all time Hunt Brother high, which is now just over $8 away. At this rate, and if Bolivia indeed nationalizes its silver mines, we give it a month for a new all time notional high in the metal.
Submitted by Tyler Durden on 04/14/2011 14:05 -0400
Two weeks ago the precious metals space was closely following the fate of Sumitomo's San Cristobal mine, where a long strike had paralyzed work at the world's third largest producer of silver and sixth-largest producer of zinc. While the strike was eventually resolved with concession to the domestic workers, a far more troubling report from Bolivian daily La-Razon states that Bolivia's president Evo Morales is now planning on expropriating zinc, silver and tin mines sold off by previous governments. Bloomberg reports that "Morales will announce a decree May 1 to “dismantle the privatization model,” said Nicolas Fernandez, a spokesman for state mining company Corp. Minera de Bolivia, known as Comibol. "The government is recovering all the privatized companies,” Fernandez said today in a telephone interview from La Paz. “When the decision is taken, Comibol will be ready to manage these mines.”" Among the contracts to be affected are those with Glencore International AG, Pan American Silver Corp., and most importantly, Coeur d’Alene Mines Corp., which is operator of the San Bartolome mine: the world's largest pure silver mine. Notably San Bartolome and Sumitomo's San Cristobal "account for about 83% of the nearly 1.1M tons of fine silver Bolivia produced in 2009, according to Mining Ministry data" according to The Gold Report. If indeed this news is proven true, and we will know for sure in 16 days, looks for the price of silver to spike considering about 1.33 million kilograms of silver was produced in Bolivia 2009, according to the U.S. Geological Survey: an amount which will likely fall off a cliff following the utter chaos that is unexpected nationalization.
Submitted by Tyler Durden on 04/14/2011 17:49 -0400
As anyone who has been following the VIX, US CDS (which is quite interesting as the US catastrophe trade appears to have become selling CDS to fund gold purchases in euros: more on that eventually), or stock markets in general has grown to appreciate all too well, no matter the amount of perceived risks, the market continues to shrug off any bad news: after all, the Bernanke put means that the greater the systemic shock, the higher the likelihood that the Fed will get involved yet again and push up all risk assets. However, the same can not be said about the dollar. The currency which in 2011 has traded like anything but the world's reserve currency is less than 1 point away from 2009 lows. But that could be just the beginning. Citi's head of FX has released a not warning about the potential coming avalanche to the greenback should debt ceiling negotiations hit a snag: "what we are looking at here is very much the tail risk event that the debt ceiling negotiations unexpectedly hit an impasse. The question is what the impact would be on USD." Englander's summary observations: 1) The USD will be in big trouble if investors get the sense that the debt ceiling negotiations have gone beyond the expected choreography into a zone where there is perceived risk to US credit; 2) More broadly, we think FX markets are increasing the attention they pay to fiscal sustainability relative to monetary policy; 3) The FX response may be non-linear so G10 countries may have a false sense of security in seeing little FX response to deterioration so far. Then again, perhaps a major step down in the dollar is precisely what the Fed wants...
Our recent discussion of whether deflation or hyperinflation will lay waste to the economy elicited hundreds of responses. Two of particular interest are featured below. The first, from blogger Charles Hugh Smith, explains why it may be impossible to know with any certainty which of the two forces will prevail. The second, the thoughts of a Wyoming rancher, suggests that in a crisis, we may discover that our need for protein trumps concerns over gold, silver, Treasury paper and the dollar.
Submitted by Tyler Durden on 04/14/2011 15:43 -0400
Michael Burry's ironic plight against pervasive lemming groupthink (such as the one gripping the nation currently) has been well documented in Michael Lewis' "The Big Short." It is thus not surprising that the topic of his speech to the Vanderbilt University (of which he is an alum) Chancellor's Lecture series is the current flawed conventional thought paradigm: that of central planning, of quantitative easing and of dollar debasement by the Fed, which are far more dangerous than anything experienced during the credit bubble as when the current regime finally fails, and it will fail, there will be nobody to bail out the US. From Burry's speech: "I am worried about a future of a nation that refuses to acknowledge the true causes for the crisis. A historic opportunity was lost. America has instead chosen its poison as its cure... Today I expect the US government to attempt to continue easy money policies into the next presidential term, past the foreclosure crisis, and past the corporate and public refinancing humps that are forthcoming. Junk bonds incredibly are again at all time highs. Quantitative Easing seems to be working for now. Buit this is an invalid validation of what America is doing. This is in fact a Pyrrhic gamble. As we continue to debase our currency, Bernanke says he is not printing money, again I disagree. As it stands I get an email from the Fed saying we bought another X billion in Treasurys. I don't know - that's pretty clear to me. In fact this program QE2 its scope and breadth raises the severe question of the Treasury's needs. The government's borrowing of money for the purposes of injecting cash into society, bailing out banks, brokers and consumers, is a short-sighted easy decoision for a population that has not yet learned that short-sighted, easy strategies are the route to long-term ruin. We never quite achieved the catharsis necessary to stoke the reevaluation of our wants, need, and feers. Importantly, the toxic twins: fiat currency and an activist Fed remain firmly entrenched, even more so with the financial reforms last year." Burry's practical advice: open a bank account in Canada.
Submitted by Tyler Durden on 04/14/2011 15:14 -0400
The 2s10s30s butterfly - ES correlation trade proves its mettle once again. After hitting a low of 162 bps at the same time as the market dropped, the butterfly spread has jumped aggressively on the very successful 30 Year auction, with stock lagging substantially. Not for long though. As the market just demonstrated when it woke up to this divergence, ES ramped rapidly higher on no news but merely a substantial divergence from this latest carry trade (correlating better with stock than FX carry ever since the GC-IOER carry collapsed). Any time this trade diverges by 5 bps or roughly 10 ES point, the correct trade here is to put on a compression between the two, at least until banks, with the Fed's help, succeed in regaining control of general collateral rates. In the meantime, for those with a more macro focus, as Credit Trader points out: "flatteners, flatteners, flatteners."
Submitted by Tyler Durden on 04/14/2011 15:02 -0400
Lately everyone and their kitchen sink is coming up with one after another grandiloquent deficit cutting plan, one more unbelievable than the next. At this point nobody believes that either administration can cut $4 million let alone $4 trillion, which seems to be the bogey targeted by both the Obama and the Ryan budget proposals. Too bad no one can explain just how we get from point A to point B. But the show must go on until America finally depletes the good will of the once-reserve currency which now has become a bigger funding currency than the Yen, and pulls the plug. Until then, here is a comparison of the two most recent plan proposed to get America from its current deplorable state, which for those paying attention is located some $27 billion dollars away from the official debt ceiling following today's $13 billion auction. Courtesy of Reuters, we present a compare and contrast of the Obama and the Ryan plans. Feel free to heckle at will.
Posted: Apr 14 2011 By: Jim Sinclair Post Edited: April 14, 2011 at 5:33 pm
Filed under: In The News
Jim Sinclair’s Commentary
Every day the fundamental reasons behind the price of gold firm up. It has become almost boring to report the new problems the dollar faces each day.
$1650 is coming fast. Alf and Martin are looking quite right in their gold price objectives.
Thanks for the heads up from CIGA Ursel.
Dollar Status News out this morning from China shouldn’t surprise any of our FutureMoneyTrends.com subscribers. The BRICS (Brazil, Russia, India, China, & South Africa) came out with a statement calling for a revamped global monetary system that relies less on the U.S. dollar. Meeting on the Chinese island of Hainan, the group agreed to establish mutual credit lines denominated in their local currencies, NOT in U.S. dollars. They also stated that the current financial crisis had exposed the inadequacies of the current monetary order (code word for dollar). The BRICS are very concerned right now about the inevitable dollar devaluation due to out of control spending and deficits in Washington. They also were frustrated with the advantages and privileges that the U.S. has controlling the reserve currency, calling for a new "broad-based international reserve currency system providing stability and certainty" in an official statement. These statements all come out just after congress and the President agreed to spend and borrow more for fiscal year 2011 then they did in 2010. If congress is to follow through on what they passed to avert a government shutdown (shutdown in name only), then the U.S. will need to borrow at least another trillion in order to get us to October. Of course the debt ceiling is currently by law set at 14.3 trillion which it’s at now, so we are headed to at least 15.3 trillion within the next 6 months. Amazing isn’t it, the first trillion took 204 years and the next one is projected to take 6 months. So the BRICS are starting to do transactions in their own currencies, pushing for a new reserve currency, and importing record amounts of gold and silver. Yet, more than likely we will have to suffer through more gold bubble talk from the main stream media, when in reality they should be talking about the mother of all bubbles, the dollar bubble.
Mandatory Spending Doing a comparison of the year 2000 Vs. 2010, we can see that the national narrative and assessment of our current fiscal condition is fatally flawed. Lets look at the changes we have seen in the last 10 years. In the year 2000, 49.3% of Americans had jobs, we also had about the same number of non-working adults as we did children. In 2010, 45.4% of Americans had jobs, 66.8% of men had jobs (the lowest on RECORD), and the non-working adult population grew 27 million, while children under 18 grew by just 3 million. Why note non-working adults and children? Because with 77 million baby boomers, this change in demographics matters big time! Public school education costs tax payers around $10,000 a year, however a baby boomer entering their retirement years (social security & medicare) costs around $25,000 a year. Now it is important to note that the Federal Government picks up the tab for the retirees and educating a child is shared. What we are trying to point out is that when it comes to how much we are going to have to spend and borrow in order to keep up with entitlements, we have barely scratched the surface. In the year 2000, our fiscal budget was 1.8 trillion, with 197 billion going towards medicare and 232 billion going towards entitlements. By 2010, our budget nearly doubled to 3.4 trillion, medicare spending went up 128% to 451 billion, and entitlement spending went up 140% to 558 billion. Now, the first baby boomer didn’t turn 65 until this year, so all of these spending increases were done before this huge wave of baby boomers began to enroll in these programs. In the last 2 years, our government has already been spending so much that just 2 years ago when President Obama took office, Medicaid spending has gone up by 50%, and as a percentage of the economy, government has gone from 35% to 44%. The advocates for taxing the rich simply don’t understand economics nor our demographics. FutureMoneyTrends.com believes we will see significant changes either to our currency status or our entitlement programs in the next 5 years. If it’s a currency crisis first, then by default the entitlement changes will happen. So which one will happen first? Well, let’s just say at this point changes to the largest voting blocks retiree benefits is politically impossible.
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