I finished my article, “I Really Don’t Understand Gold,” asking the question “What will you do?” Assuming that I am correct that a massive short squeeze in precious metals has started (if you disagree, please point out where my logic is wrong), we should see several events occur. First, we will probably see a week or two (maybe not in succession) where gold trades up $200-$300 bringing us back to the $1,700-$1,900 level. What will you do?
Will you wipe your brow, breathe a sigh of relief and call your broker or coin dealer and sell? Will you be “relieved” that you could get out of your “trade” at break even or “maximum profit?” Will you swear never to do anything as “stupid” as chasing gold and leaving the “safety” of your FDIC “insured” dollar account? Or, will you get out of more dollars for ounces. Or, will you do nothing?
Let’s go another step further, let’s assume (as I do) that this happens and we get news of an exchange failure or default on a Friday afternoon. Monday morning we have chaos and some exchange doesn’t even open. We look at other exchanges and see that gold is $2,500 bid, or $4,000 bid or even higher with little to no volume because there are virtually no offers. What would you do in this situation? Would you call a cash dealer and sell, sell, sell followed by doing a “happy dance” because you “scored” and SCORED BIG? Or would you call this cash dealer to see if he had any morsels available for sale…or would you do nothing?
Again, I believe that this “scenario” is a virtual lock and the only thing in question is “when.” However, the “when” part has recently come into focus with very little “fog” obscuring its arrival as supply has now become a real concern. So, back to “What will you do?” I would tell you that once this happens it will not happen in a vacuum. Market dislocations will be seen everywhere from stock markets to bond markets, banks and real estate closings. In other words, gold going higher will not be a “nirvana” event where the bulls clean up, retire and move to the South of France where waiters keep your pina coladas topped off and your bucket of steamed lobsters full. No, when the paper markets for precious metals default, society itself will be shaken, stirred and dumped upside down. Confidence will break or will be breaking everywhere in every market, every currency and every banking system.
I cannot tell you what to do under this circumstance because I don’t know what you have already done. I can only tell you what I plan to do and hopefully will be able to do. An explosion in the price of gold (in reality an implosion in the value of the dollar) will not get me to do a “happy dance” (except for maybe 5 seconds until I whack myself across the back of the head to get my butt in gear). Hopefully, and God willing, I will calmly go to the gas station with my cars to fill them up. Then it will be off to the grocery store to purchase some fresh items that will maybe last a week or so, I will also top off on whatever dry and canned goods that are needed. In other words, I will be making last minute and final preparations…for a future and unspecified time period of hibernation.
If I had to guess, the length of time it will take to go from the current “normal” to something resembling a sci-fi movie will take two weeks or less. The clearing of checks, use of ATM cards and credit cards will go early in this 2 week time frame. Goods on shelves will probably only last 5 days, 7 at most but it depends on how long it takes for the masses to recognize what is happening. Do you live in a city (not a good idea) or out in the country (better)?
Sorry, I have digressed…but I hope you get the point to my writing this piece. An explosion in the dollar price of gold will not be a “good thing.” On the contrary, it will be the signal that “game over” has arrived and with it many consequences that only so few have even contemplated much less prepared for. It would be a good idea to make a plan now while “normal” exists because making decisions in the midst of chaos will make you prone to mistakes and bad decisions.
Bill,
I believe you are 100% correct again.
For several years now I have believed that the “Winter Season” is coming and it might last a while.
It feels like we are really close, but just like you, I don’t have the arrival time either.
Time to get your provisions stored up to ensure long term survival. It won’t be pleasant, but those that have the proper provisions (including guns and ammo) can make it.
When winter arrives I have selected family members moving in with me so someone can be awake 24/7 to warn off those that did not make provisions.
I suggest others make plans as well.
Bill,
Additionally it is a great idea to have a well dug and supplied by solar panels just like the ranchers do in the middle of nowhere so their cattle can have continious water (no electricity needed).
In my area cost is approximately $5,000 for a turn key job. You will have water whether you have electricity or not.
Works just as well for people and you can not survive without it.
Bill,
Nothing – Just like you including the “topping-off” of my supply of emergency food, water and fuel.
Great piece, but will anyone believe?
B.
no, they will look at you and think you are stark raving nuts!
I have written a novel about how an intentional community prepares for the chaos ahead, including establishing businesses rooted in credit instead of debt and creating a new form of money backed by real silver hidden in a cave. Just out on Kindle, The Silver Bell could be considered dystopian except that it is full of hope and leans a little bit toward utopian. Yes they bone up on LENR, store food, create off grid power, etc. but there needs to be a way to pull society through (unless you want to sit in a hole full of food with a shotgun). The Silver Bell tried to imagine such a path.
Reality: Coming soon to a life near you, i.e., your own; and it won’t be pretty, and there won’t be any recovery from this. In this new world survival of the fittest will once again be the rule of the day. All that will count will be your degree of preparation and your degree of fitness. Of course with we humans our mental fitness is our best survival tool and those of us with minds governed by reason and logic / those of us who can, “read the hand writing on the wall” will have a leg up. But all that aside, even preparation won’t insure survival, and those of us who do survive we will pine for the past when there was cake and icecream. I fear a new dark ages in human history is at hand.
I read, and find it amusing, that the governement retirees in Detroit are worried about their pensions. The whole pension system world wide (Greece to the United States) is no different, it’s all, “a house of cards.” The, “money” is gone. It’s nothing short of amazing how blind the people of this country are with regards to what is transpiring…
I agree with Don Paul on two things: it is that bad, and people are blind. As to the dog eat dog part, he could be right there too, but I have hope for transformation to a new way of doing. Imagine DEBT JUBILEE and then imagine what we could do with all the tools and empty factories and land and rainfall we have at our disposal. I guess I am saying we can overthrow the Oligarchy that is strangling us, by going around them and embracing productivity, instead of debt which is inherently rooted in death and life insurance. Most people think it was banks that formed the Fed. It was Met Live and Aetna, etc. who needed a uniform currency and a place to put a mountain of cash and get a steady return. The debt based system they created was bound to fail. We will play into the hands of the next “smart oppressor” if we go it alone and watch out for number one. The masses will eat us alive if they swallow the lies that those of us who prepared are somehow at fault. FDR called us gold hoarders and confiscated gold with nary a whisper of dissent. We must expose the lies about banks gambling and the interlocking world order of the uber-rich. We must replace debt with credit.
you mean replace debt with equity.
I am using the word credit intentionally as in capital or goods provided to an enterprise with shared risk and shared reward. Seed provided to a farmer for a share of harvest. If the crop fails there is no share. And no equity gained in the land either. As you know debt is based on a fixed return that is not commensurate with productivity and is designed to enslave. To take the farm. Credit is based on the knowledge that 3 out of 4 crops will succeed and the return capital (seed in this case)should be high enough to cover the 4th year but not so high as to put the farmer under. We need some non-equity based credit in the system to allow the farmer to keep his land and still be productive.
It’s all fine and dandy to assume these scenarios, but this is going to trigger war, and a whole lot of it at that. Being that we’re currently “aligned” by our paid for government with the Israeli Rothschild banking bastards and their minions at the Bank of International Settlements, and the Russians and Chinese have been pulling away from them toward a gold standard, we stand against 2 huge nuclear armed countries… and the psychos in Isreal aren’t likely to remain calm and carry on. They have nukes too, and are likely to use them once the world starts closing in on the people ultimately responsible for this mess. I would bet they are of the mindset that if they are going out, they’ll take us with them.