Perhaps it’s not an adage, but when defined as a “proverb or short statement expressing a general truth,” I’m not sure there’s a better way of describing what I wrote last year about the typical U.S. government decision. That is, EVERYTHING they do ends up being “WORST FOR AMERICA, BUT BEST FOR PRECIOUS METALS.”
Like fate – or as Stephen King calls it, ka – it’s almost as if Congress and the President are pre-determined to make wrong decisions. Of course, amidst the terminal phase of a dying fiat currency regime, such decisions are typically unavoidable. As I wrote yesterday, at some point “big government” passes the point of no return; after which, it MUST grow exponentially larger – consuming ALL of the legitimate economy – until it implodes of its own weight.
Thus, while “theoretically” best for the nation, last night’s decision to “shut down” the government arguing about a law that was already passed – and deemed Constitutional by a Republican-dominated Supreme Court – can only have CATASTROPHIC circumstances. The economy is already in disarray – as I will be writing of later this morning; and thus, furloughing ONE MILLION workers will only make things vastly worse. Moreover, confidence in the dollar – down sharply this morning – and the Treasury market will be shaken to its core, particularly if the shutdown becomes cantankerous and lasts for any material amount of time. And oh yeah, the debt ceiling debate must go on simultaneously, as a SHUT DOWN government will run out of money on October 17th!
Meanwhile, REAL MONEY sits inertly on the sidelines, gaining “intrinsic value” with each passing minute. The Central banks of both Italy and France admitted so much yesterday; and with the former’s government on the verge of collapse itself, methinks demand to PROTECT one’s assets with gold and silver may increase a tad in the coming weeks and months.
TPTB can fight REALITY all they want; by supporting the Dow or capping PAPER gold with the 86th visit from the 2:15 AM algorithm in the past 96 days. However, worldwide PHYSICAL demand will continue to rise, while PHYSICAL supply will continue to plunge. Sooner or later, this “perfect storm” of fundamental factors will yet again re-assert itself – as it has for 5,000 years of human history. Will it be this month? I guess we’ll know soon.