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.
Tune into CNBC or click onto any of the dozens of mainstream
financial news sites, and you’ll find an endless array of opinions on
the latest wiggle in equity, bond and commodities markets. As often as
not, you'll find those opinions nestled side by side with authoritative
analysis on the outlook for the economy, complete with the author’s
carefully studied judgment on the best way forward. Lost in all the
noise, however, is any recognition that the US monetary system – and by
extension, that of much of the developed world – may very well be on
the verge of collapse. Falling back on metaphor, while the world’s many
financial experts and economists sit around arguing about the direction
of the ship of state, most are missing the point that the ship has
already hit an iceberg and is taking on water fast. Yet if you were to
raise your hand to ask 99% of the financial intelligentsia whether we
might be on the verge of a failure of the dollar-based world monetary
system, the response would be thinly veiled derision. Because, as we
all know, such a thing is unimaginable!
Think again.
We are sick and tired of speculating what Benny and the Inkjets will
decide tomorrow. The truth is nobody knows, probably not even Benny
(unlike that other guy who got a haircut at the Marriner Eccles building
today and who speaks in tongues). So here is a quick and dirty cheat
sheet from SocGen giving the probability to each of the six possible
options that the FOMC can pick out of Bernanke's magic hat. With over
four hours from open until the "Rien ne Vas Plus" is called, compulsive
gamblers should be able to put some good money down on the trifecta.
Following up his earlier note laying out expectations (translated as: "you better or else") for the outcome of the FOMC meeting tomorrow,
Goldman's chief economist Jan Hatzius produces another 'concerning'
research note tonight providing just enough evidence for a growing
downside risk to the firm's 2% GDP growth estimate for 2012. We assume
the failure of the market to hold onto dramatic losses (easier to
justify more easing) or dramatic gains (can't disappoint a Pavlovian
public waiting for the FOMC bell to ring) in the last few days prompted
the 'nudge' from the policy-makers-elect. It appears weak stocks, a
strengthening dollar, and the European crisis were not what the doctor
ordered.
One
of the recurring themes on Zero Hedge in the past several months has
been the continued mockery of the seemingly global conventional idiocy
that China can bail out the world, when it itself is on the verge of a
huge credit bubble popping and requiring the rescue of China itself by
the rest of the global pyramid scheme (which however will be far too
busy monetizing its own debt by then). Why, we vividly recall this
quote from July 4, "So
let's get this straight: a country which has 10% of its GDP in the
form of bad debt, is somehow expected to be credible enough to buy not
only Greek debt, but the EURUSD each and every day? Mmmmk. In the
meantime, Dagong downgrades the US to junk status in 5, 4, 3..." Well,
Dagong did since downgrade the US (as did S&P), although not to junk
just yet, and somehow the world still continues to labor under the
illusion that China (whose shadow banking system we also covered most
recently here),
is somehow healthy because it is far better than Europe (and the US)
in hiding the true severity of its problems. Naturally, as long as that
persists, the global ponzi will always have the benefit of pulling out
a "white knight" whenever needed, regardless of just how ludicrous
such an presumption has become. Today, famous China bear Jim Chanos
appeared on Bloomberg TV and recapped his thesis which summarizes the
bulk of these points, further extrapolating based on the Andy Lees
analysis posted yesterday which estimates what a true economic growth
rate is when one factors for bad debt and loss severities. His
conclusion: "If we assume that China will grow total credit this year
between 30% to 40% of GDP, and half of that debt will go bad, that is
15% to 20%. Say the recoveries on that are 50%. That means that China, on an after write off basis, may not be growing at all. It may be having to simply write off some of this stuff in the future so its 9% growth may be zero." And this stagnant, overlevered behemoth is somehow supposed to be... the world's white knight?
After Greece realized that it is not America, which can pretend it
will do an infinite does of austerity... just not today... and not
tomorrow...and really everything will be back-end loaded to some point 9
year from now (when it is some "other administration's problem") and
the IMF made it clear that cuts have to happen immediately if not
sooner, the country has released a statement that in exchange for
getting the latest round of Troika funding (which it needs desperately:
recall that it has another €2 billion debt paydown this Friday),
it will front-load some of those mythical austerity measures that
otherwise would have never really occurred. Which means that strikes
(most notably by the tax collectors), riots and all around fun is about
to become the prime time TV highlight from Syntagma square all over
again, as tens of thousands of more government workers are fired or
furloughed, or just generally lose their pension benefits, courtesy of
living in an insolvent country. In the meantime, the European banks can
pretend the contagion from a Greek fall out will be contained and the
Fed's infinite swap lines will mask any and all completely unexpected
black swans. Best of luck with that.
LBMA campaigns for gold to be Tier 1 asset for banks under Basel III Posted on 20 September 2011 European central banks have become net buyers of gold for the
first time in more than two decades, a significant sign that the role of
precious metals in currency markets is not only being reassessed but
actually changing, reported The Financial Times, while there also is a
campaign afoot to include gold as a Tier 1 bank asset with the Basel
Committee on Banking Supervision. This week the London Bullion Market Association is meeting in
Montreal, the biggest gold industry conference of the year. China,
Mexico, Russia, South Korea and Thailand central banks are also net
buyers of the yellow metal. Tier 1 gold However, the Basel III initiative is highly significant too
because it would trigger a far wider use of gold within the banking
system, not quite a return to the gold standard but the next best thing
as far as demand for the yellow metal is concerned. Presently Tier 1 assets include government bonds such as Greek
bonds and a widening of Tier 1 to include precious metals is seen as a
way of shoring up confidence in the banking sector with assets that do
not require official rating because there is zero counter-party risk.
Media keeps focus on Europe while the US financial system hides from comment.
America’s debt woe is worse than Greece’s By Laurence J. Kotlikoff, Special to CNN September 20, 2011 — Updated 1043 GMT (1843 HKT) Boston, Massachussetts (CNN) — Our government is utterly broke.
There are signs everywhere one looks. Social Security can no longer
afford to send us our annual benefit statements. The House can no longer
afford its congressional pages. The Pentagon can no longer afford the
pension and health care benefits of retired service members. NASA is no
longer planning a manned mission to Mars. We’re broke for a reason. We’ve spent six decades accumulating a
huge official debt (U.S. Treasury bills and bonds) and vastly larger
unofficial debts to pay for Social Security, Medicare, and Medicaid
benefits to today’s and tomorrow’s 100 million-plus retirees. The government’s total indebtedness — its fiscal gap — now stands
at $211 trillion, by my arithmetic. The fiscal gap is the difference,
measured in present value, between all projected future spending
obligations — including our huge defense expenditures and massive
entitlement programs, as well as making interest and principal payments
on the official debt — and all projected future taxes. The data underlying this figure come straight from the horse’s
mouth — the Congressional Budget Office. The CBO’s June 22 Alternative
Fiscal Scenario presents nothing less than a Greek tragedy. It’s
actually worse than the Greek tragedy now playing in Athens. Our fiscal
gap is 14 times our GDP. Greece’s fiscal gap is 12 times its GDP,
according to Professor Bernd Raffelhüschen of the University of
Freiburg.
Gold Miners Becoming Land Bank Cash Machines CIGA Eric
The miners will do a lot better than this in time. Soon the public
will come to realize the miners as land bank cash machines. While the
gold train has clearly left the station, it’s hesistant on the tracks in
recent weeks has booted even more passengers. Many investors will jump on the gold train late and close to the
final destination, thereby, ensuring their place as the ultimate bag
holders of the great secular bull. The gold shares are picking up steam
in September, but few notice with so many screaming for a top. Watch
dividends rise and history repeat with little media coverage and
fanfare. S&P Gold (Formerly Precious Metals Mining)*
Headline: Hecla Introduces Silver-Linked Dividend Policy COEUR D’ALENE, Idaho–(BUSINESS WIRE)– Hecla Mining Company
(“Hecla”)(NYSE:HL) is very pleased to announce that its Board of
Directors has adopted a common stock dividend policy that links dividend
payments to Hecla’s average quarterly realized silver price in the
preceding quarter. The initial quarterly dividend under the policy is expected to be
$0.03 per share of common stock ($0.12 per year), if Hecla’s average
realized silver price for the third quarter is $40.00 per ounce. All
dividends, including those in the third quarter, would increase or
decrease by $0.01 per share ($0.04 annually) for each $5.00 per ounce
incremental increase or decrease in the average realized silver price in
the preceding quarter. Subject to Board approval, it is expected that
the initial quarterly dividend under this policy will be declared and
payable before the end of the fourth quarter and will be based on
average realized silver prices during the third quarter 2011. The table
below provides an overview of the new dividend policy. Source: finance.yahoo.com More…
Following up his earlier note laying out expectations (translated as: "you better or else") for the outcome of the FOMC meeting tomorrow,
Goldman's chief economist Jan Hatzius produces another 'concerning'
research note tonight providing just enough evidence for a growing
downside risk to the firm's 2% GDP growth estimate for 2012. We assume
the failure of the market to hold onto dramatic losses (easier to
justify more easing) or dramatic gains (can't disappoint a Pavlovian
public waiting for the FOMC bell to ring) in the last few days prompted
the 'nudge' from the policy-makers-elect. It appears weak stocks, a
strengthening dollar, and the European crisis were not what the doctor
ordered.
One
of the recurring themes on Zero Hedge in the past several months has
been the continued mockery of the seemingly global conventional idiocy
that China can bail out the world, when it itself is on the verge of a
huge credit bubble popping and requiring the rescue of China itself by
the rest of the global pyramid scheme (which however will be far too
busy monetizing its own debt by then). Why, we vividly recall this
quote from July 4, "So
let's get this straight: a country which has 10% of its GDP in the
form of bad debt, is somehow expected to be credible enough to buy not
only Greek debt, but the EURUSD each and every day? Mmmmk. In the
meantime, Dagong downgrades the US to junk status in 5, 4, 3..." Well,
Dagong did since downgrade the US (as did S&P), although not to junk
just yet, and somehow the world still continues to labor under the
illusion that China (whose shadow banking system we also covered most
recently here),
is somehow healthy because it is far better than Europe (and the US)
in hiding the true severity of its problems. Naturally, as long as that
persists, the global ponzi will always have the benefit of pulling out
a "white knight" whenever needed, regardless of just how ludicrous
such an presumption has become. Today, famous China bear Jim Chanos
appeared on Bloomberg TV and recapped his thesis which summarizes the
bulk of these points, further extrapolating based on the Andy Lees
analysis posted yesterday which estimates what a true economic growth
rate is when one factors for bad debt and loss severities. His
conclusion: "If we assume that China will grow total credit this year
between 30% to 40% of GDP, and half of that debt will go bad, that is
15% to 20%. Say the recoveries on that are 50%. That means that China, on an after write off basis, may not be growing at all. It may be having to simply write off some of this stuff in the future so its 9% growth may be zero." And this stagnant, overlevered behemoth is somehow supposed to be... the world's white knight?
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