For the past eight months, I’ve been reading the seven-book, 3,400 page Stephen King masterpiece, the Dark Tower; which has been so good, I penned an article about it back in March – when I just started reading. The Dark Tower is a Tolkien-like saga of “the Gunslinger”; a loner, who for centuries seeks the Dark Tower at the center of the universe. The Tower guides and controls thousands of worlds – in my view, an allegory for god; and is under attack by evil forces seeking to destroy it. The Gunslinger – Roland of Gilead – and a small band of powerful, determined rebels seek to protect it; and will happily die for their cause. They would rather do so than live in slavery to those seeking to usurp the Tower; a point that be rendered moot if it is in fact destroyed, all but ending life as they have known it.
I’m now 86% done with Book Seven – when reading on my Kindle, this is how I judge how far I’ve gone; and frankly, I’m starting to empathize with Roland and his friends. Not just due to the dozens of hours I’ve spent following his journey, but because I feel like I’ve undergone a similar, equally important voyage over the past eleven-plus years. My ultimate goal is PROTECTING the wealth of loved ones, colleagues, and readers; but my “quest” is surviving the end of the Federal Reserve’s credibility – and for that matter, ALL central banks. Only when that occurs will “the Tower” be saved; enabling the global economy to rise from the ashes amidst an equitable, self-sustaining financial system based on the “once and future monetary kings” – PHYSICAL gold and silver.
Bill Holter writes often of the credibility necessary to maintain a fiat-based regime. With credibility comes confidence; and without it, the Ponzi scheme behind the printing presses goes up in smoke – immediately. Somehow, the J.P. Morgan and his cronies managed to install a privately-run entity as America’s primary source of power – ironically, EXACTLY 100 years ago; and as Michael Pento so eloquently puts, it has literally destroyed the nation…
Isn’t it amazing that we gave an unelected entity this much power — the power to destroy the currency, and the middle class of this great nation.
–King World News, September 18, 2013
An entire century of currency destruction; and only America’s “luck” that two World Wars weakened Europe enough to cede it the “reserve currency” have enabled financial survival amidst such virulent INFLATION. Americans have been relentlessly suffocated by Federal Reserve printing presses; while unfortunately for the world’s other 6.7 billion denizens, “non-reserve” currencies have imported said inflation at much greater rates. This is why the global cost of living is at an all-time high; as is unemployment, and in many places – social unrest. I wrote of this horrific “feedback loop” two months ago; and since then, we have seen social unrest, food riots, and/or civil war in Turkey, Brazil, and Egypt – among others. The “FRAGILE FIVE” alone host more than a quarter of the world’s population; and in the past two years, have experienced currency collapses of more than 30%. And now that the Fed’s MONEY PRINTING policy is starting to be recognized as the “QE to Infinity” it is you ain’t seen nothing yet.
To wit; despite the universally moronic, self-serving, MSM-parroted expectations of Fed “tapering,” the Money Printer-in-Chief yet again elected to continue with QE ad infinitum. Goldman Sachs had it wrong; JP Morgan had it wrong; and in the words of CNBC Bob Pisani, “Here at the NYSE, we were all dumbfounded.” Frankly, it’s difficult to discern how much of their cognitive dissonance was brainwashed by the most aggressive financial PROPAGANDA scheme in global history; and how much from the simple fact that the large majority of humans are too dumb to think for themselves, or too scared of a change in the status quo to look REALITY in the eye.
For the past three months – i.e., since the FOMC suicidally stated it “might” taper QE if economic data improved – I have been screaming otherwise; and lo and behold, little old Andy Hoffman of Miles Franklin was right yet again. Tragically, the only reason the Fed felt cocky enough to make such a stupid statement was the fact that at the time, they had been able to “turboQE” rates down to record lows – just before the aforementioned GLOBAL CURRENCY COLLAPSE commenced. Unfortunately, it simply didn’t understand why rates had remained so low – and what the ramifications would be if they rose; let alone, if they took their foot off the gas pedal for even a single second – per the below, prescient comment from Deutsche Bank…
The path of tapering will be tough because every time the market thinks they are going to taper, yields will likely rise and conditions will tighten.
–Zero Hedge, September 19, 2013
I still believe the odds of QE5 by year-end are very high; particularly if the Fed’s gambit fails to quell the bond vigilantes’ fear of HYPERINFLATION. I rarely “take a bow” for my prognostications; but given the ENTIRE financial world has fought me on this topic all summer, I’d like to share some of the emails I received this morning…
Many of us know you have been correct, or should I say maybe 2% knows what is really going on.
Once again, you were right! No taper. Good call, Andy.
Another nice call, my man. You nailed it as usual. Thanks for protecting us out here.
You hit the nail on the head—again. If it were not for you and a few others giving us the truth, we would be sooo far up a creek with no paddle.
You predicted QE5 before the end of the year, and it is looking good!
Of course, whether the Fed “tapers” its MONEY PRINTING matters not; as “tapering” simply means reducing the rate of growth, NOT halting the presses. And for something already growing exponentially, it’s already impossible to reverse course meaningfully; let alone, entirely. The gargantuan amounts of debt built up in the quest to “kick the can” a bit further can NEVER be repaid; and the Fed can NEVER unwind its balance sheet without giving the global economy – and its own balance sheet – a fatal heart attack. And thus, it will simply resort to the path chosen by each of the prior 599 Central banks managing a fiat currency; i.e., HYPERINFLATION…
The initial market “reaction” – that is, what the PPT, Fed, and ESF algorithms were programmed to purport; were record stock prices, plunging bond yields, and an imploding dollar – that is, relative to other worthless trash like the Euro, Yen, and even the Rupee and Rand. Ironically, the Fed’s MONEY PRINTING is what caused these currencies to implode in the first place; and thus, I reckon it won’t be long before the next phase of the global currency contagion commences. As I have written countless times in recent weeks, equity prices are immaterial in the early stages of hyperinflation; and if you don’t believe me, just ask the Japanese and Venezuelans.
As for PMs, they of course soared; not to mention, the world’s most important commodity – crude oil – which surged nearly 3%, to $108.50/bbl. Regarding the former, the past three weeks’ relentless PAPER attacks were purely motivated by inside knowledge of the impending “surprise” FOMC decision. If gold was still at $1,430/oz. when the FOMC announcement was made, it would likely be pushing through $1,500/oz. this morning; en route to not only surging through the $1,550/oz. level where it stood before April’s “ALTERNATIVE CURRENCIES DESTRUCTION” – you know, when “tapering” first became a household word; let alone the 2012 year-end level of $1,670/oz. In my view, if gold manages to actually close the year above last year’s close, it will be the Cartel’s greatest-ever defeat; which likely, would foster an early 2014 price explosion rivaling that of January 1980. Oh, and for the record, the FOMC decision was clearly leaked to the usual Wall Street suspects; as not only did gold rise sharply into it, but spiked $10/oz. two full minutes before it was published.
Anyhow, the Fed not only maintained its current, maniacal pace of MONEY PRINTING indefinitely, but reduced both its 2013 and 2014 GDP forecasts. And thus, the “reflation” bubble will continue to be blown larger; that is, unless the “bond vigilantes” decide to call the Fed on its HYPERINFLATION game and swamp them with supply. And yet again, the President’s actions are completely opposite to his statements; as when “uber-dove” Janet Yellen is installed as the next Fed Chairman, the final chapter in the nation’s – and worlds – road to destruction will be sealed…
We have got to turn the page on this kind of bubble-and-bust mentality that helped to create this mess in the first place, we have got to build a housing system that’s durable and fair and rewards responsibility for generations to come.
– Barack Obama, August 6, 2013
In the big picture, yesterday’s Fed announcement is of little consequence. That is, the road to HYPERINFLATION was paved on August 15th, 1971 when the worldwide gold standard was abandoned; and since, we have simply seen the typical progression of a Ponzi scheme en route to its inevitable collapse. However, the Fed’s “no taper” decision was certainly important in that it went a long way to proving what us “shadow worlders” knew already; that is, the point of “DIMINISHING RETURNS” on incremental debt was reached long ago; and thus, an already collapsing global economy will only worsen dramatically in the coming months and years. And in a dying empire like the U.S. – where its manufacturing sector was long ago permanently exported overseas, the financial situation – and national standard of living – has the furthest to fall.
In my view, this year’s unprecedented Cartel attacks have made PHYSICAL gold and silver cheaper – relative to the global supply of “money” – than at any time in human history; and yesterday’s FOMC announcement dramatically delineates the path toward the “end of the Fed’s credibility, and the beginning of the END GAME. I believe – as Jim Sinclair does – that the upcoming surge to new highs is just the “tip of the iceberg”; en route to not only the re-establishment of REAL MONEY to its rightful place in the worldwide economy, but an extremely dangerous “transition period” in which few will financially survive. Thus, I cannot implore you enough to PROTECT yourself and your family from what’s coming – AS SOON AS POSSIBLE!
Very nice article Andy. I have only one question, regarding hyperinflation. For that to happen, wouldn’t money velocity, which is currently at a multi-decadal low, need to pick up tremendously? How can that happen if all the fiat-wealth ends up in the hands of the maniupulors, and the middle class and poor are wiped out? For THEM it feels like hyperinflation, as soon as you lose your job and run out of fiat funds your personal hyperinflation is already reality. Thanks for all you do. x
Yes, but velocity can explode overnight; and it will, I assure you. And it’s not just the bankers that own dollars, but the ENTIRE world – such as the Chinese.
Hi Andy, thanks a lot. That’s true, of course, but the reason why I ask is rather because all the governments around the world are practically as broke as the US, they all print their own currencies (be it pounds, Euro, Swissy, Yen, etc) and they all profit from the current practices. They all kinda hold hostage each other (by holding large amount of foeign securities/bonds), any one could pull the financial kill trigger by simply selling all/huge amounts of bonds/securities denominated in another country etc. But they don’t, or at least they do it relatively slowly/orderly so far, so they would not crash the respective bond markets and currencies. I just don’t see really what will stop CBs from loading up more and more debt and just pretend that AOK (what we’ve had for 5 years now since the onset of the great crisis in 80/09 and start of QE (in Japan for much longer). As long as the herd/sheeple are kept in this current trance of mis-believe and trust not much will change in the near future, unfortunately. In regards to PM, this might only change if there is a true shortage of physical (rumours go there is) and some major entities default on physical delivery (e.g. COMEX or LBMA). Till then, S.O.BS. IMHO. Thanks again for all, x
They are not “profiting” from anything, but simply saying so via accounting chicanery. True CASH FLOW is not increasing, while DEBT is exploding and will continue to do so until the fiat Ponzi scheme blows up.
The jig is up as soon as the tiny amount of PHYSICAL gold is drained away – and given the 78% drop in COMEX registered inventories since April, that time is nearing soon.
True that, by “profiting” I really mean continue their current procedures, and clinging on to their current power(s), but it’s all built on a house of paper (cards). If governments had to live/operate on their own cashflow only (mainly their various tax incomes), it’d be game over at once. x
Hi Andy, I presently have 625 oz in my silver stack. Various Eagles, Maples, and assorted rounds. My question is and I know that it’s impossible to answer but how much is enough? My frustration lies in the feeling that in order for silver to go up to and pass the dollar price that I paid the economy and dollar has to crash and there goes my municipal pension and 403b accounts along with the stock market and possibly society in general. It seems you want he dollar to crash so sound money can once again be the foundation of our system but if and when that happens it spells a painful world for the vast majority of Americans that through no fault of their own will suffer greatly.
There is no “right” amount; just what makes you feel comfortable. For me, I have nearly all of my liquid net worth in physical gold and silver.
And yes, when the Cartel is broken, the REALITY of a dying global economy will hit us full force. That is why we PROTECT ourselves with PMs.
I have a few questions for you:
Since the entire world has been on a dollar based fiat system for 42 yrs,can’t this manipulation continue for decades?
Obviously all fiat currencies are being destroyed,and obviously marginal utility within middle-class incomes is waning along with paper dollar influence globally,but if no single nation or group of nations has the courage to repudiate the status quo as its been since the end of WWII,what would be the big deal if the Fed has a $50 trillion balance sheet?Why not just monetize all debt everywhere?Nobody seems to mind,and most people are just clueless on basic finance and their unwitting role in it anyway.
CASE IN POINT: Why would Germany accept a 7 year timeline to get such a small sum of gold back?Why would they clearly sacrifice their own best interest when they can see that the current system is breaking down.And what happens when the next crisis occurs and they don’t get 1 tonnes?It’s sheer insanity!!Furthermore,the destruction of the Western middle class doesn’t seem to matter.After all,for the time being,the Fed has cleverly engineered capital,competition,and labor out of the free market.The fact that the markets moved simply because Larry Summers withdrew his name from running the Fed is disgusting,truly disgusting.
I also believe that regardless of the century,the least amount of investment one should ever have in PMs is 50%,for as long as man tries to manipulate the science of economics,one must protect themselves always.
Sorry for the novel,but I’m as passionate about PMs as anybody you will ever meet.
NOT if the PHYSICAL supply runs out! That’s the big difference between PAPER markets like stocks, bonds, and the COMEX and REAL markets like gold and silver. Heck, even the PAPER markets can be hyper-inflated away – which is exactly what is starting to happen in many nations already.
Germany had no choice but to “take it” – as the game would have ended for the ENTIRE WEST if they pushed back. But ultimately, they and all other PHYSICAL owners will rush to get the little remaining supply.
I’m not sure I understand about hyperinflation/deflation thing. if TPTB decide they want to purchase assets cheaper, couldn’t the government call in it’s loans which would cause deflation? If so, what would happen first, velocity (hyperinflation) or (bankruptcy) deflation?
If the government DEFAULTED on its loans – as you suggest – the dollar would COLLAPSE as foreigners would sell it down to its true value of ZERO. Then the U.S. government couldn’t do ANYTHING.