It’s Sunday night at McCarron Airport in Las Vegas; and first and foremost, I want to make sure readers understand the mechanics of the Miles Franklin Blog’s new format. Each morning, we distribute articles from David Schectman, Bill Holter, and myself in a single e-newsletter. However, all articles are posted as they are written; so please, continue refreshing our website throughout the day – as new articles may appear at any time.
I’m very tired from a long, productive weekend at the International Living conference, but wanted to pen some thoughts given my very late arrival in Denver (how ‘bout those Broncos?). A potential “government shutdown” looms like a full moon on a clear night; but unfortunately, the financial “skies” couldn’t be darker. I will write of the ramifications of such an event tomorrow; although, as I wrote on Friday, it’s hard to believe even our MORONIC, TRAITOROUS Congress could be SUIDCIDAL enough to shut down government when it’s not only the nation’s largest employer, but supplies 55% of the population with life-saving entitlements. That is, until HYPERINFLATION destroys the dollar’s value entirely; and thus, the ability of Food Stamps, Disability, Social Security, and Medicaid payments to spend.
This partisan, nation-destroying WAR has never been more violent – with the lives of millions of Americans at stake, in this psychotic game of political Russian Roulette. And thus, it should be no surprise that Treasury default risk is being priced at an ALL-TIME HIGH; as is, by the way, crude oil prices given the time of year.
By the way, I hope those with money in the Panamanian banking system are “enjoying” the spontaneous four-day BANK HOLIDAY announced by the government out of nowhere. And for those holding money in “banks’ the world round; don’t be surprised if you’re next. Funny how here at the International Living Conference, representatives of Panama have not a clue this is happening; yet, they claim Panama is a “safe haven” from “banana republic” policies.
Finally, as I prepare to take off for home, here is some commentary from the great European analyst Egon von Greyerz – of the TRUE state of the global economy…
Public and private debt is now 30% higher, in relation to GDP, than it was in 2007, and leveraged loans have jumped to 45% of total loans — that’s 10% higher than before the 2008 collapse began. Also, interbank credit to emerging markets is at the highest level on record. So there is a massive debt buildup in Asia, Latin America, and in the Middle East.
But in spite of the total buildup in debt around the world, the problems in Europe continue. Spanish bank lending to financials is down 30% in the last 2 years. In my view, we are not far from a major financial crisis in Spain. The Spanish banks are still valuing their assets at fantasy numbers, and they have not taken the massive losses on their property portfolios.
The situation in most European countries is similar. All European loans are declining at record rates now, and loans to the private sector have dropped 16 months in a row. The latest drop is the biggest since 1999, when the euro was created.
So, Brussels is clearly worried about the state of the eurozone banks. They are now hiring investment banks to advise on potential rescues. They are also hiring hundreds of support staff. I assume the investment banks they are hiring are the same ones that would have collapsed in 2008 without the rescue from central banks.
Well, at least these investment banks have experience in a near-bankruptcy. So, Eric, clearly there are problems in many European countries, and I could see bailouts in the not-too-distant future not only in Spain but also in Greece and Italy.
As I mentioned previously on KWN, there are major problems in the US and the Japanese economies. But together with what’s happening in Europe, we know there is no chance of ending QE. The Fed will need to print not just to save the US economy but also the European and the Japanese economies because everything is interconnected.
–King World News, September 28, 2013
…and lo and behold, John Hathaway – one of the world’s most respected mining analysts – is already corroborating my recent prediction that WORLDWIDE gold and silver production could fall as much as 15%-25% in the next two to three years…
I spent 3 days in Denver at the Denver Gold Show this week, and then 2 days last week at the Precious Metals Summit. So I have a pretty good sense of what is going on in the industry. There are a couple of newsworthy items to report: One is that this industry (gold mining) is very gun-shy about building new mines.
We will see some divestitures and some stretches of capex. But the bottom line here is that whatever anybody thinks that global mine supply is going to be 2 or 3 years out, you can haircut that by a big number. I don’t know whether it’s 15% or 20%, but it’s a huge number. This will further constrain the already tight supply/demand situation.
–King World News, September 27, 2013
If this occurs – and I’m VERY confident it will – we will see the “perfect storm” of exploding PM demand and collapsing production; which frankly, would represent a veritable “once in a lifetime” event in the investment world. I – and Miles Franklin’s President, Andy Schectman – have for years noted that shortages will end your ability to PROTECT assets from the inevitable HYPERINFLATION that follows all fiat currency regimes. And if said shortage occurs due to a crisis – which it likely will; you may NEVER get another chance to own REAL MONEY.