I am on vacation this week so I will be making this short. Rather than doing in-depth research I will just make some comments on some current events and headlines.
First of all, our economy is so “strong” that in just 6 months our illustrious federal government has run a $1.1 TRILLION deficit. I believe that this is proof positive that the real government is the Fed. Tracking as it is towards $2.2 Trillion (and likely MUCH higher) just imagine what our economy would look like without all this fake “money” being sent into the economy. Let’s also keep in mind that there are PLENTY of off-balance sheet items that are not included in that number. I would also point out that mainstream media sources are pointing out that according to the Fed website that they reduced their balance sheet by $100 Billion. I believe that this shows there must be 2 sets of books. If not, where did the $500 Billion that the banks got come from? A piggy bank?
In the meantime, it appears that the regular guy and gal are continuing to see their standard of living fall as real wages have declined for 24 straight months now. Tupperware and many other companies are considering shutting their doors for good.
Wal Mart is abandoning Chicago after spending billions to set up stores. Whole Foods is closing its flagship store in San Francisco due to high theft rates and “hostile visitors”. I believe the hostile visitors are likely the thousands of homeless and drug addicts that litter the streets there. Could it be the soft on crime DAs are a LARGE part of this problem plaguing our major cities? In Baltimore the Mayor has a citywide curfew as “ALL HELL BREAKS LOOSE”. I am guessing this is what you get when a population sees little hope of getting ahead and the consequences of doing things that are less than honorable is mild- if any at all- this is how it goes.
If anyone is thinking that this is just happening here the IMF cut its GLOBAL GDP outlook and warns of “heavy downside risks” due to the banking crisis- which in my opinion is FAR from over. It is amazing how a few trillion here and there can mask some serious problems- for a while. Don’t go to sleep on this one!
There is NO PRICE DISCOVERY for anything. This means that the PRICE of whatever you may be invested in is totally detached from any VALUE that you may be receiving. Price is what you pay- value is what you get. Artificially propped up assets (mainly stocks and bonds) will likely surprise to the downside (BIG) and those assets being artificially suppressed (mainly gold and silver) will likely explode higher. As I pointed out last week the level of manipulation is off the charts as the price is spiking and crashing numerous times during each day. I believe this is creating a LARGE amount of energy that could lead to a MAJOR spike. I believe that one day the prices will rise relentlessly and won’t come down for a long time- if ever in US dollar terms. As I have written- with each dollar, yen, euro, etc. conjured up out of nowhere the VALUE of anything real goes up. The “money” conjured up out of nowhere creates NOTHING but more fake “money” chasing real goods. (INFLATION).
Be ready for rising inflation, possibly higher rates and lower bond prices and MANY companies that were marginally profitable before to succumb to their massive debts. Again, I have to ask WHAT IS THE VALUE OF A PROMISE THAT CANNOT OR WILL NOT BE KEPT?
Be Prepared!
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