Wednesday morning, and it could be a doozy today, at least it appears that way before the PPT shows up for work. Yesterday’s “good news” that Silvio Berlusconi will “eventually” resign as PM of Italy is suddenly no longer “good news”, it appears.
Now how could that possibly be? When I went to college, and elementary school, for that matter, I was told that exploding debt, civil unrest, and Presidential resignation was decidedly “bad news,” not so subtle hints that stock markets should FALL.
Then again, in the “good old days,” markets were moved by INVESTORS, not GOVERNMENT COMPUTERS and HFT TRADING PROGRAMS. There was no “President’s Working Group on Capital Markets”, “Gold Cartel”, “Quantitative Easing”, “Exchange Stabilization Fund”, or even a “European Central Bank”, or “European Union.” The “International Monetary Fund” focused on aiding third world nations, NOT “first-world banks”, and the Federal Reserve had not yet hired “Maestro” Greenspan to ramp up its printing press.
We have now moved into financial “DEFCON 1,” per one of my favorite childhood moves, War Games. The time during which “extend and pretend” can survive is nearing its end, as the lethal “weapons of mass financial destruction” are launched and heading our way. At the moment they are pointed at Europe, but in today’s virtual world, Europe and America are tied at the hip, particularly as the U.S. dollar is the root cause of Europe’s economic destruction.
The key point of this RANT is the ONLY difference between August’s dire market conditions and today is PERCEPTION that things are improving due to the greatest stock market goosing, gold attacking spree in the history of mankind, surpassing even that of even late 2008, in my opinion. Central bank monetary inflation is dramatically worse today than even then, and will only get worse in 2012.
Since the Gold Cartel launched OPERATION PM ANNIHILATION just MINUTES after the Labor Day holiday in early September, every “horrible headline” that pushed markets to the edge of the abyss in August has grown dramatically more dire, in the U.S., Europe, Japan, and elsewhere.
For example, remember those glorious days of August when the U.S. debt-ceiling debacle threatened to shut the U.S. government down, yielding a default on its debt and a, god forbid, double-A credit rating? Yes, it was terrifying when the U.S. debt reached $14.292, wasn’t it?
Here we are three months later, and that terrifying $14.292 debt ceiling has not only been breached, but the NEW debt ceiling of $15.192 trillion is about to be breached as well! The August plan was to add another $1.2 trillion to the revised $15.192 trillion debt ceiling by November 23rd (enough to get through next year’s elections, by ridiculously optimistic government projections), CONTINGENT on agreeing to an equal amount of savings by a bipartisan “super committee.”
No matter that the $1.2 trillion of cuts were always to be back-end loaded over the next decade, as opposed to the new $1.2 trillion of debt to be incurred NEXT YEAR, or that people much smarter than Congressman, such as Jim Willie, believe next year’s deficit will be closer to $2.0 trillion than $1.2 trillion.
However, it DOES matter that the deadline is just TWO WEEKS AWAY, and essentially ZERO PROGRESS has been made by this committee, which once again is more focused on political posturing than progress.
Gee, I wonder what will happen to global markets when we approach that deadline in two weeks, the DAY BEFORE THANKSGIVING.
Once again, I wasn’t planning on writing this morning, after having penned “D-DAY ANNIVERSARY” yesterday afternoon (for release today) regarding today’s one-year anniversary of the fateful date when the Gold Cartel first saw FEAR in its eyes, and consequently stepped up its suppression tactics to its own version of “DEFCON 1.” However, the list of “horrible headlines” has grown incredibly long, and I felt the need to organize them to make sure readers understand the NEED to take ANY AND ALL actions to PROTECT THEMSELVES from the coming period of economic and market disruption.
The “Super committee” fiasco, in and of itself, should be cause for market collapse and, consequently, heightened Central Bank printing press activity. But that’s “tomorrow’s news”, as its climax is a whopping two weeks away (what we now consider “long-term”).
In the near-term, as in NOW, we are dealing with the total financial collapse of Greece, which will only WORSEN each day from the political instability resulting from Prime Minister Papandreou’s resignation….
Moreover, in Italy, one of the world’s most highly indebted nations, pure CHAOS is breaking out, with the same political drama as in Greece likely to wreak havoc on financial markets worldwide. Both nations have egomaniacal Prime Ministers bent on retaining POWER against the will of the people, and even in their respective leaderships’ death throes, are fighting hard to create post-resignation political battlefields.
Per the graphic below, Italy’s financial burdens are essentially equal to BRITAIN and FRANCE, the traditional European powerhouses, and next in line to COLLAPSE once Italy fails. Italy IS failing NOW, and WILL collapse no later than 2012, bringing those two European “leaders” into the crosshairs next.
And speaking of France, hot off the press this morning…
Readers, there are simply too many holes in the Italian dyke ALONE, and each day, each hour, more leaks spring up, starting with the literal COLLAPSE of Italian sovereign bonds DESPITE ECB intervention EVERY DAY for the past month.
But what’s this, they no longer plan to intervene?
Europeans, you can thank your Central Bank for the next surge in inflation, circa NOW, thanks to this failed undertaking…
….just as the Japanese can thank theirs….
….and the U.S. theirs….
Perhaps the ECB should have studied MATH 101 regarding the chances of “saving” Italy by buying its toxic bonds…
…or researched what happens to market LEVERAGE when such artificialsupport fails…
…or opened their eyes long enough to see Europeans FLEEING the banking system out of fear of the IMMINENT Greek, Italian, and other PIFIG defaults…
Heck, even if the ECB “market planners” simply listened to their OWN LEADERS, I’d be impressed at this point.
Sorry, Europe will NOT be saved by printed money, definitely not from the ECB…
…and CERTAINLY not from China, where an inverted yield curve is intimating exactly what I have been pontificating for some time now, that China not only is NOT IMMUNE to the Western problems, but will suffer greatly as its economic activity dramatically declines.
Of course, China still owns $3.2 TRILLION of U.S. dollar reserves, which will depreciate in value at an accelerating rate throughout 2012.
Gee, I wonder what they will do with those dollars…
Over here in the land of “all’s well”, we are just warming up for the MAIN EVENT, the rush OUT OF U.S. dollars when the world’s focus shifts from Europe’s unsolvable problems to America’s. In Star Trek parlance, Europeans are Borg drones while America is the Borg queen that controls them. The system may be able to survive with a few cancerous drones, but when too many are infected, and the contagion reaches the queen, it is GAME OVER for the system, a system built on the WORTHLESS, UNBACKED U.S. DOLLAR.
America not only has the largest debt in the history of mankind, growing at a near EXPONENTIAL rate, but is fraught with FRAUD and CORRUPTION, both on a systemic level…
…and a company-specific basis.
How about that, JP Morgan may not have MF Globals “lost” money after all?
The U.S. real estate implosion is JUST GETTING STARTED…
…and its economy is a house of cards built to the heights of the Tower of Babel…
…with COUNTLESS, intermingled land mines ready to explode at any moment.
Throw in the potential for any number of BLACK SWAN events in an increasingly unstable world, and you can see why I write so tirelessly of the need to PROTECT YOURSELF!
My prescription for financial SURVIVAL includes PHYSICAL GOLD and SILVER, FOOD, ENERGY SOURCES, and OTHER LIFE NECESSITIES. For those leaning toward purchases of Precious Metals, please listen to this interview with Bix Weir, who understands too well that PHYSICAL gold and silver are NOT investments, but MONEY! PAPER gold and silver cannot fulfill this role, nor can mining stocks or ANY other financial asset.
And finally, a reminder that Atlas Shrugged, Part I is now available on DVD at the below website. This book is the most impactful I’ve ever read, and the movie trailer looks awesome!
PROTECT YOURSELF, and do it NOW!