My last piece was quite long and involved, some liked it and “got it”, others not so much. The breaking of confidence was the point I was trying to get to. I intend to try again with this writing but from a different viewpoint. Today, rather than continuing to hammer away at the fraud, collusion, and upside down logic of global politics, economics and finance, let’s look at a real world case. I received a rather long note from a reader earlier this week who was visiting of all places …Zimbabwe! I did not ask “why” he was visiting and can only imagine, but in light of where “we are going” it is fortuitous for us to have a pair of boots on the ground! The following is “the heart” of what he wrote. Please read this twice so it really sets in, I will comment afterward and hopefully this exercise will “make you think”.
…First Hand from Zimbabwe;
“Yes, they try to sell you their funny colored money with lots of zeros on it ROFL. They seem offended when you decline their offers. I told the guy I bought some off of ebay, and got the “deer in headlights” look back. I just moved on.
Anyway, met a guy who was friendly so started chatting.
This is first hand from someone who grew up here, born here, lived through the hyperinflation, had a real job, parents, house, savings, etc. I just asked him things point blank: what happened and what did you do during that period just to see what reality was.
His parents were pretty well off, brits of course, retired (or very close) for a normal Zimbabwean. Considerable savings. Not a mil USD (equivalent) but up there ($250K-$500K’ish I think in hard savings).
He said: “They went from set for life here in Zim to not being able to afford a loaf of bread in 2 days.” (these were his exact words, not mine, not a paraphrase, the exact statement, I remember it clear as day, and this was only 2 hrs ago).
The first question of course I followed with was: Um, why they didn’t buy gold? And here you have the story:
He said his parents were very conservative and placed complete trust in the system and the gov. It would never even occur to them to do something like that, and he said they said it would be way way too risky to do something like that (not because it was illegal or anything, but because gold was viewed as risky, asset wise!).
He said he might (!!) do gold next time. His first response was he’ll buy a few barrels of oil and keep them in his back yard to sell/barter LOL. Seriously. But he said, yeah, gold would be worth doing next time. I honestly don’t think that this option had occurred to him yet even to this very day, until I asked him this question. That’s just the feeling I got, as he had to pause like he was thinking about do the head nod (thinking, thinking….) what I just said before he answered.
So even now, if it happened AGAIN, the people would not necessarily turn to gold (wow, wow, and wow!). They would all instead INSTANTLY convert everything (it seemed he was indicating) into dollars to be safe! (another wow, wow, and wow)!
I told him the USD was likely on it’s way towards hyper’ing also. He seemed quite (totally) surprised. He said, he thought the EUR was headed that way, but not the USD. It seems that Zimbabwe feels the dollar is now, and always, solid as a rock.“
First, please remember this was a conversation with just one person so it is by no means even a “sampling”. It was however a conversation with someone “who had something …and lost it all”. The story is important in my opinion for several reasons I will touch on.
“Mathematically”, the U.S. dollar is headed for the inferno of hyperinflation. There is no argument on this point from anyone with intelligence. Even Harry Dent and Martin Armstrong the most staunch “deflationists” around admit the final chapter is that of wildly high gold prices (which means a breakdown of confidence in the dollar). The difference between “them and us” is “how” we get there? I believe we have already been witnessing the “squeeze” and run into the dollar as a “safe haven”, they see it as a continuing and future event.
The absolute most important thing to take from our reader’s comments is this line He said: “They went from set for life here in Zim to not being able to afford a loaf of bread in 2 days.” Yes I know, something in your gut is telling you “but we aren’t Zimbabwe”, the U.S. is far more sophisticated, has the greatest military in the world and of course the “it can never happen here” syndrome is chirping in the back of your mind. Let me say this, “NO, we are not Zimbabwe, what a shame!”. I might have lost or confused you here and I’ll get to this in a moment.
“Banana Republicland” (debt to GDP ratios of 100% or more) is now occupied by a large percentage of the world’s sovereign nations. The U.S. has more than a 100% debt to GDP ratio just using “funded” or on books debt. The ratio goes ballistic and out of control when you add in “guarantees and future obligations”. After researching the Zimbabwe situation, their debt to GDP number was not greater than Japan’s currently and approximately (180%) equal to that of Greece …with Italy slightly behind. My point is this, the debt to GDP ratio in the U.S. when everything is included is some God awful number, maybe 500% or even multiples more! I have news for you, we are already Zimbabwe on STEROIDS! Before commenting further, I will refute the obvious, “but the U.S. has the strongest military in the world …probably yes, but we are stretched out with many various “scopes” targeted at us. The days of “forcing” the dollar on the rest of the world are waning very quickly! World War 3 will be our main concern should the U.S. try to “force” dollar dominance. All you need to do is look around, the ROW is and has been angered by our “forcing” the use of dollars. They have been reacting by doing trade to the EXCLUSION of the dollar. The days where our military could foist the dollar on the world are over!
I mentioned above, “it is a shame we are NOT Zimbabwe”, can you guess why? Because the U.S. still “has” (or believes it does) mass wealth. Yes we have really split into the have’s and have nots as the middle class has been attacked and fallen into the have not category but …our living standard is far advanced from Zimbabwe’s in general. We have more to lose. In other words, “it is better to have never had than to fall from grace”. Zimbabweans lost their savings, on average their “fall” in living standards is miniscule to an event like that happening in the U.S.. Not to mention the unrest and riots we will see when people who were previously “entitled” …wake up to nothing! As an analogy, their fall was off the bottom rung, ours from a skyscraper! A very timely side note, while writing this article, the Zimbabwe dollar will officially “go away”
I also found it curious that this person had not “figured out” gold and to this day still has a feeling of “risk” when it comes to the metal. Stepping back for a moment, why do you suppose invading forces ALWAYS steal their captor’s gold rather than the currency and the plates to make the currency? Please don’t tell me I am living in Roman times, or the Middle Ages, or Napoleonic times. I am not even living in WW I or II times, as recently as the last several years, Iraqi, Ukrainian, Greek and Libyan gold has ALL been pilfered! Ask yourself this question, if the U.S. was invaded, would our conquerors steal our dollars or break into our vaults in search of gold (maybe to a very bad and empty surprise?)?
Please think this through for yourself, can we in the U.S. and the West in general wake up to closed markets and panic conditions? Do you really believe paper currency will become more valuable (for more than a week or two) if the debt markets and derivatives are closed with no bids? Do you really believe gold and silver will be “offered” in any fashion except maybe for something you have as barter? I still cannot get over the deflationists argument the dollar will strengthen in this scenario. The killer question of course is this, where exactly should (can) we store all of these valuable notes and digits “safely”? I suspect there will be a run on wheel barrows and those old “Radio Flyer” wagons will actually again have a function beyond their antique value!
Regards, Bill Holter
Bill, you connect the dots unlike most. Hence your following. Your knowledge culminated in the Holter/Sinclair collaboration. If that isn’t proof positive about your skill sets I don’t know what is. When ‘Mr. Gold’ himself comes a knocking, there is a reason. Congratulations.
In 1980 Rhodesia became the Republic of Zimbabwe and the Rhodesian dollar became the Zimbabwe dollar. At that moment in time, the Z$ was in fact worth more than the US$. Fast forward to the hyperinflation in Zimbabwe in the mid 2000s. Zim’s largest fiat currency was a $100 Trillion Zim note. It had a 6 month expiry on it, a redundancy that virtually no one, even today, understands. I carry in my wallet one of these $100T Z. notes. I show it to almost everyone. Here is the question that nearly everyone asks me: How much is that worth? Of course the correct answer to that question is: It’s worth whatever BTUs you can extract from it. I get a ‘deer in headlights’ look from most. Sadly, today most people are completely ignorant of all things, financial and otherwise (think health for example). They are of course well versed on things like ‘shopping’ and other similar mindless drivel (think non-stop sports, the modern day equivalent to Rome’s ‘Bread & Circuses’). As Ayn Rand once reminded us: “One can ignore reality but one can not ignore the consequences of ignoring reality.” Rand’s said reality is about to take a gigantic bite out of the asses of the ignorant masses. As Maximus says in the opening scenes of Gladiator, “At my signal, unleash Hell.” Not only is Zimbabwe likely to become our monetary model, but the horrors in Iraq/Syria/Ukraine/Libya/GAZA et al are most assuredly coming to a neighbourhood near [all of us]. I do not believe that we go to heaven or hell upon our death. Rather, I believe that we make them here on earth. As Gandhi once said, “Be the change you wish to see in the world.” To that end, the question we all need to ask ourselves: What change are each and everyone of us working towards? Godspeed.
Thank you Bill, for the 2X4 to the side of head article! But I’m afraid there are those like the guy in the article, who just won’t “get it”.
Here are some background economic stats as to the state of the global economy, that refutes the MSM fairy tale;
The Baltic Dry Index (BDI) average since the start of the year sits at 618.00 This morning it’s at 627.00 chopping sideways at the same very low level.
The China Containerized Freight Index (CCFI) which is considered the second most important shipping indicator after the BDI, is down 41% since January for routes from Asia to North/Sout America and Europe.
The Cass/INTTRA Ocean Freight Index which tracks US containerized ocean export activity, is still in a major downtrend since March 2011.
The China Rail Freight Volume Y/Y % is down 17%.
The Commodities Tracking Index (DBC) which is an all inclusive commodity system, has averaged 17.92 since the start of the year and today sits at 17.68 chopping sideways still at a very low level.
The global economy has tanked. Up until six months ago it was sputtering along on ever increasing amounts of debt. The debt party is over. The music has stopped and everyone is looking for a chair. Only there are none, except for a silver and gold throne. If you are not already there, then its almost too late.
it is unraveling before our eyes.
Three years ago I ordered Zimbabwe trillion dollar notes from Ebay and gave them out in Christmas cards. I even gave them out to my grandson’s doctors with a can of popcorn. I even put each note in a protective plastic holder as each note was in mint shape.
I put a personalized note in each Christmas card that I wanted to make each individual a trillionaire and I hoped if they made it to Zimbabwe that they could live like kings and queens.
Some of my relatives actually thought they could be among the super rich in Zimbabwe. I finally told them they probably couldn’t buy a loaf of bread with the note.
It was a fun experience, but I don’t think one single individual learned from the experience that paper money can become worthless very quickly.
I also don’t think that approx. 97% to 99% of Americans are going to learn the lesson until it is too late.
If you haven’t taken Jim Sinclair’s advice and GOTS (get out of their system), you’ll probably experience real life Zimbabwe soon!
you have a twisted but VERY GOOD sense of humor Farrell!
yes, I think I was born twisted!
Bill, awesome article. Love the way you thread things together. Have a good weekend!
thanks Doug U2.
Great thinking article! You guys also got me thinking about how do we come out the other side. As in how do we use the gold/cash if we get to that crazy $XX,XXX per ounce gold. Turning it into other assets, which ones and at what point. I have somewhat of an idea.
Would make for an interesting “what if” article coming out the other side…if one was into speculating for entertainment. LOL
thanks David, I’ve done a couple like this before and will surely do again.
What is your take on our power grid – does it go down or cut you off if you can not pay. Will anyone be running it?
a very big vulnerability.
Americans are deficient in economic history–among other subjects.
They’ve probably familiar with the Great Depression, if only because their grandparents imparted some knowledge over a five minute span.
You’re speaking to the choir Bill, and we appreciate you imparting your knowledge.
Most Americans should have changed their spending and investing habits years ago, but that’s water under the bridge. They can’t fully grasp the forthcoming changes they’ll be forced to endure.
I sympathize with the Founders.
our Founding Fathers weep.
Music is like opinions. It is very varied.
I do not like some of the music some enjoy as most have no interest in my opinion.
That leaves me with this question.
Will those that are important to me that refuse to listen survive what is coming without blaming me for not grabbing them by the neck until they listened?
At what point do you stop your warnings and just let things fall where they may?
I have now just changed my approach.
Now I tell them the following…
Did your TV tell you this week that Russia has announced it will increase it’s gold hoard by 40%
Did your TV tell you that the world is preparing to return to a gold backed system in the very near future?
Are you aware that the Comex was in a delivery deficit of 5.29 tons last month?
Did you know that European banks have been threatened if they do not pass bail in legislation by the end of summer.
Talk about deer in the headlight stares.
don’t worry Mike, they will be banging your door down asking “what do we do now”?
Put a fresh coat of white wash on the out house after reading the above.
The Great Tripartite Corporate Treaty
Composed of three parts;
What is it? Who wrote it? What’s it for?
Nobody knows except those who want it.
It’s introduction is surreptitious. It’s contents are being concealed and are unknown to the voting public. The particulars are being withheld and any disclosure is open to prosecution.
The word “TRADE” is copiously used throughout any description of the the so-called “treaty”. One thing we can be very sure of is, IT’S NOT ABOUT TRADE.
It’s about transferring democratic national sovereignty to dictatorial corporate international sovereignty. It’s about the western signatories against the east. This is nothing more than a corporate global power grab. The “New World Order” marching under the banners of multi-national conglomerate corporations. Who are only interested in preserving their wealthy owners privileged positions. Thoughts?
TISA = Trade In Services Agreement
TTIP = Transatlantic Trade and Investment Partnership
TPP = Trans-Pacific Partnership
we have to pass them …to see what’s in them!
This time around, at least Nancy is on the right side!
I too suspect that hidden deep within the bowels of the trade agreement is a last ditch effort for the west to maintain control over world trade.
Hi Bill, great stuff keep it coming! What I can’t get over is what you write is common sense! I don’t mean to demean you in any way because I hold you in high esteem having read your stuff for years now. What is it that people can’t get their heads around that currency is a medium of exchange and not wealth! Currency is only money if someone decides to take it in exchange for something tangible! Wealth is stuff not paper or numbers on a bank statement. What is it that people don’t understand? I suppose being born under a paper system, most people don’t question it. Goodonya Bill, you and Andy will be proven correct in the not too distant future but sad that most people will never even have read your excellent work. Regards kev
thanks Kevin, it will be a horror show when we are proven correct.
Hi Bill….If the banks and all markets remain closed and don’t open one Sunday evening, imo there could be these events in succession:
1) first – a bank bail-in to make the TBTF banks solvent or so they cannot fail.
2) second – after the above is done, a reverse split in the U.S. dollar – for every $1,000 old dollars, you get one new dollar (this is the currency reset)….so all cash is called into the banks….and a new-only digital dollar is hatched and below Fed Gov’t mandates the following to be in synch with the dollar reset:
– all U.S. Treasury Debt just shrunk by 3 zero’s which deflates the bond bubble.
– all other debt: State, City-Municipal, corporate bonds, mortgage loans, auto loans, college loans, ALL loans…lose 3 zeros.
In this plan, The Fed Gov’t and their agents do not choose hyper-inflation but the opposite.
All this is off the tsble if:
a) WW3 – American Exceptionalism at its best!!!!
b) SDR plan is hatched by the IMF
I may be nuts but I have to consider the diabolical U.S. Gov’t. YOUR THOUGHTS….
ANYTHING is possible.
The continuous actions of repression and manipulation in all markets, tells me the Fed Gov’t and all their central banking & financial agents (domestic & foreign) are totally against any change (or reset) but actually want MORE domination and control. Can the BRICS force a change and break their financial hegemony & power via Financial War OR does the Western Financial System have debt implosion triggered by internal and/or external events….because the West won’t do anything voluntarily, it will be forced.
Bill, a prophet’s words –
“This hour in history needs a dedicated circle of transformed nonconformists. Our planet teeters on the brink of annihilation; dangerous passions of pride, hatred, and selfishness are enthroned in our lives; and men do reverence before false gods of nationalism and materialism.
The saving of our world from pending doom will come, not through the complacent adjustment of the conforming majority, but through the creative maladjustment of a nonconforming minority”.
-Martin Luther King
Thanks again Bill for this eye opener. I have noticed recently that some of the usual ‘gold haters’ are conceding that gold will probably rise to $5000+ per ounce. But they are quick to still minimize its real worth, i.e., the dollar and gold will simply become a zero-sum game, that is, if the dollar loses half its value, gold will be worth twice as many dollars. Wow, what simple minded thinking.
Bill another excellent article! really, really makes you sit up and think!
the one thing that I did get out of this was, “How do you stop being a target if you actually do own some gold”
Seeing as we are dealing with the worlds worst Sociopaths! – Is it possible that you could do a weekly segment on this?
For example here in Australia, they will repatriate the gold from you if they need it! Oh and no funds to you the owner, because your doing you bit for the good old “Mother land”, dont you know old Chap!
So my question is just how do you store it and actually hold onto it in times of Strive?
Don’t be shocked if the Fed fiat clowns create a fiasco, today (on FOMC Wednesday), as I think they’ll likely announce a date for a rate hike for September or sooner.
If they do, its intentional. Ask yourself, WHY? Most assume “they” (and who are the real “they/PTB”?) desperately want to try and save the global, monetary/financial system in it’s present form.
“Most *wrongly* assume…”
ps. The Fed’s apparent “mistake” will be very intentional in it’s design and purpose.
sorry for no posts, I have been locked out since last week.
this came in from my close missionary buddie from Italy, he has been there for 37 yrs.
4:04 AM (11 hours ago)
to me, Allen
Al, I spent the evening eating with an industrialist. I feel like Forest gump. This man is a close friend to Frizz Phillips. He heads phillips corp of the whole world. He is also one of top ten men of the Bildeburgs. He visited Stephano’s mansion here a number of times and just hung out. Stephano is one of the most informed men I have ever heard. Also his first cousin is one of the heads of the world inter poll. Now we talked the whole evening. This guy is every where. What he told me can’t be shared on line but it is heavy. Some things you know. I will share in Sept. if there is one. I only wish I could share but we are talking of a world holocaust and the details aren’t out there yet for the public…luv Clark
sorry for no posts, I have been locked out since last week.
Bill….please get a message board where you are now like this one.