When gold finally breaks out of the Banks’ grip you won’t be able to chart its moves fast enough. It is being smothered by a blanket of undeliverable derivatives, and the realization and reckoning of this overhang will be nothing short of spectacular, a sort of 2008 in reverse. -“Jesse” of Jesse’s Cafe Americain in an email exchange
I wasn’t going to write a general New Year’s post but Bill “Midas” Murphy emailed me wondering why I was quiet. The truth is I was spending this morning hunting down a new pair of tennis shoes because New Balance redesigned the model I’ve been using for the past three years and it no longer works for me. It’s very distressing.
I’m not getting excited about the metals until gold really starts to move – as in shoots up into the mid-1000’s. China/India/Russia combined imported over 3,000 tonnes in 2015. Global production was likely around 2400-2500 tonnes. How are the sellers of this gold making deliveries? Hemingway said that you broke slowly then suddenly. The same dynamic will apply to the initial spike up in gold. Gold is being inexorably held down by fraudulent paper derivatives.
I believe the inability of the banks to fulfill the $800 gold prophecies of Wall Street and newsletter charlatans is because the elitists are slowly losing control of their ability to cap gold with paper. I also am confident that we will wake up one day this year and discover that the price of gold has suddenly spiked up a lot higher. Slowly, then suddenly. People not on that ride will be left in bewilderment, wondering “what happened?”
I don’t see how the global financial system will get even halfway through 2016 without a major destructive earthquake. Oil alone has to be causing derivatives problems that, for now, are being contained and hidden from sight.
I assume you saw the big drop in auto sales for December yesterday. The number was way below Wall St. estimates. Wall St estimates in general are substantially above where economic data will start coming in this year, telling us that expectations “baked into the cake” are way too high.
Housing is going to follow auto sales down the rabbit hole to hell. Over the last three years the banks have been stuffing middle America with subprime quality mortgage, auto and student loan debt. The mortgage products used to inflate the primary housing bubble have been reconstituted, repackaged, re-branded and re-stuffed into a large body of homebuyers who will not be able to afford them before long.
In fact, a significant portion of the mortgage market that was filled by Countrywide and Wash Mutual back in the primary housing bubble is now being filled by Fannie Mae, Freddie Mac and the FHA – i.e. the Taxpayer – with their 0-3% down payment mortgages being made available to people with sub-600 credit scores and, in many cases, to people with no credit scores or income accountability. Old wine, new bottle. At some point the space into which this junk can be stuffed runs out. It has likely already run out.
I’ve asserted since 2003 – when I started to get my mind around what was happening in this country to our financial, economic and political system – that eventually the U.S. would incite a world war. One of the primary motivations would be to cover up what the Fed/Govt has done not only with the U.S. gold, but also with the foreign custodial gold. Let’s face it, the ONLY reason the Fed did not honor Germany’s repatriation request is because the Fed did not have the gold in its possession to send it back. What’s so hard to figure out about that? At some point I expect to see the NATO bond fractured. When that happens and Germany splits from U.S. and gravitates toward Russia, it will demand the return of its gold. What then? That is how wars start.
Perhaps the greatest show on earth is watching these buffoons that society has labelled “Federal Reserve Officials” attempt to make a mockery of our collective intelligence threatening us with higher interest rates and extolling the virtues of the economic recovery. What recovery? Every single non-Government economic report is showing that economic activity has dropped down to or below the level of economic activity that was occurring during the 2008-2009 time period. Some metrics are worse.
How about the Baltic Dry Index? It’s at an all-time low. Everyone wants to blame that on China. But guess what? Europe and the U.S. are China’s #1 and #2 export destinations. The only reason the Baltic Dry Index has plunged like this is because import orders from the EU and the U.S. have plunged. Put the BDI in the context of the collapsing price of oil, and it represents two primary metrics of global economic activity, the U.S. economy being the 2nd largest economic engine of the world. Fed Reserve official John Williams looks like an absolute idiot when he asserts that the U.S. economy is “in very good shape.” Where do they get these people – The Salvation Army School of Economics?
It’s hard to not get really depressed when you see and understand the truth. And the problem is, once you see the truth, you can’t un-see it. My resolve is to have as much fun as I can, while I can. This gigantic Ponzi-bubble otherwise known as the United States could pop at any time and there will be nothing to prevent that inevitability. Then it will be impossible to have any fun.