If we see gold replacing the dollar as the world’s reserve currency, this will be accompanied by a collapse of confidence in the current financial system and panic buying in gold. This will create a move in gold, as Sinclair says, “That will light your hair on fire.” –King World News, Russell – Gold Threatening Dollar’s Reserve Currency Status
Even former insiders are espousing their disagreement with America’s fascist, unconstitutional foreign and domestic policies, including former Federal Reserve governor Kevin Warsh, who publicly spoke on Thursday of the catastrophic ramifications of rampant government financial market intervention. – Andy Hoffman, The End of the Gold & Silver Supply
Please be sure and read John Williams’ comments on the coming hyperinflation in today’s daily. Williams is not some hack. You should at the very least, check out his views. Personally, I would not consider trying to understand the current economic conditions without his excellent data. You can subscribe to his newsletter at www.shadowstats.com.
Yesterday, I discussed the Jim Sinclair interview in the daily. Here are Bill Holter’s comments on the topic:
Jim Sinclair did an interview yesterday with Ellis Martin http://www.jsmineset.com/2012/01/30/the-impending-undeclared-default-of-5-major-us-banks/
The subject of the interview is nothing new, as we were already aware that the big banks are broke. What IS news is that Mr. Sinclair believes that THIS week is “when” it happens. Well…not the bankruptcies of course but a “decision” by the ISDA (International Swaps and Derivatives Assoc.) will make regarding the “non default” or “trigger” of Greek debt.
This has been written and talked about for months on end; the 5 largest banks in the US have written 97% of the CDS (credit default swaps) on the planet. Think about this for a moment; were one default to occur, that would lead to many defaults occurring at the same time, and we would have another AIG situation. However, this time it would be “AIG cubed, times 5″! The banking system would then be …”officially” bankrupt rather than bankrupt for all intents and purposes. It is this decision by the ISDA that Mr. Sinclair believes will be made this week that will (and has already) lead to more massive QE money printing to liquefy the system, in the hopes of putting enough cushion in ahead of time for whatever reaction comes about.
He is talking about 10 or more “MF Globals” in the near future, where sovereign debt was purchased, then hedged, yet the “hedges” have been made worthless because ISDA refuses to “admit” that default occurred.
THIS really is a big problem! Someone, somewhere is broke. Will it be the “writers” of the insurance? Or the “buyers”? Well, let me clear this up for you, IT DOESN’T MATTER! This is like saying you went to an orgy with 20 people and 1 of them had AIDS. Does it really matter who it was? Actually, this is a great metaphor for Europe at present; no bank trusts any other bank and thus interbank lending has basically ceased to exist. Then, going one step further, if the European banks don’t trust each other, why would any other non-European bank trust them?
“Someone is broke” is a fact, and because the global financial system truly is “global,” this means they (thus “we”) are ALL broke! Period, end of story! Which leads us back to broken record time. Nothing paper has the true value as is perceived today. Either they allow bankruptcies to occur as Mother Nature demands or they print Trillions more dollars and throw it on top of the already raging bonfire. We know which choice will be made; TPTB will not ever admit defeat nor give up “power” willingly; they will print until the cows come home and the currencies approach zero.
What we do not know is how long investors will leave their heads buried in the sand. Do they wake up and panic, or continue their oblivious ways while $1,000 is not enough to purchase a McDonalds Happy Meal?
I have believed all along that a panic will happen first, then and only then we will get a revaluation of the currencies. Can we go down the Weimar road for 2,3, 4 more years? Yes but I still believe that the “structure” and leverage of the current system makes an “accident” along the way very, very likely.
Again though, does it really matter? Matter how? How you will prepare and protect yourself? With “precious metals everything,” of course! No, no matter how this plays out, in a currency/debt crisis such as this, REAL MONEY is your best safe haven.
Whether it is this week, as Mr. Sinclair says, or 6 months from now, “they” will have to decide what road we will take. Deny everything, admit to nothing and print…or call reality for what it is and let bankruptcies roll around the planet like atom bombs. It doesn’t matter “when or how.” What really matters is what you have done and are doing to prepare for it!
I would like to draw attention to Ranting Andy Hoffman’s Monday Rant, The End of the Gold & Silver Supply. Here is a small excerpt:
I sold ALL my mining stocks last year for these reasons, but particularly my fear that SUPPLY will not be available in the very near future. Moreover, I am increasingly cognizant of the antagonistic forces seeking to deprive me of my “life, liberty, and pursuit of happiness,” and each day such forces become stronger and more malignant. The most important aspect of PM “investing” is to SURVIVE the oncoming financial tsunami intact, and if it entails hyperinflation, ONLY PHYSICAL gold and silver will save you. Aside from the myriad risks of owning mining stocks during an economic collapse – including failure of your brokerage or theft of your account – you risk selling them into a hyper-inflating dollar market with ZERO physical metal to buy. Such a scenario would be tragically ironic for long-time PM bulls – “goldbugs,” so to speak – and maddening to the point of mental breakdown.
Also, here are a few recent comments from futurist, Gerald Celente posted in the King World News article, Celente – War, Bank Runs, Riots & Gold Going Mainstream:
You can see what’s happened to gold prices and how they’ve spiked up. There’s no way out and it’s not only the Federal Reserve, it’s also the European Monetary Union. Look at the games they are playing. We just saw, at the end of 2011, the ECB giving away some $600 billion in loans to banks at virtually no interest rate so they could buy up the bonds of Italy, Spain, Portugal, Greece and Ireland. Nobody wants to touch these bonds.”
“Look at what’s going on all over the world, there’s no way out of this. What they are doing by keeping interest rates low, through 2014, my God, this should be headline news, the raping of the American public. So this is a collapse in the making, right in front of everyone and gold prices and silver prices don’t lie, they’re reflecting it.”
When asked if Jim Sinclair’s statements that mainstream companies like GE, tech companies and others would enter the gold market, if this was a new trend, Celente responded, “I believe so. I believe a lot of people are going to move into gold. It’s going to go mainstream and it’s going to continue to go mainstream as you see more bank runs and riots….