As we are nearing the end of the first week of 2021, I am pretty sure that the hope many have had that the calendar change may bring some real change is being dashed. Last weeks first-time unemployment claims were again over 750,000. Still over 20 million people are still collecting some form of unemployment.
In my opinion, regardless of who sits in the White House or who has control of congress we are far beyond being able to grow our way out of our debts. Having said that, the fact that it appears that the democrats control all three branches of government and the courts appear to be compromised, we are likely to see our demise hastened by even more ridiculous spending that we can’t afford.
While I am no fan of either party and my opinion is that there is only one party pretending to be two and keeping us all at odds with each other so we don’t see our real problem- THEM, I think a divided government would likely have bought us a little more time. It appears that the radicals may be emboldened to take us to spending that is unprecedented in the history of the world. If they get their way, we are likely awfully close to the end of our monetary line. I just saw an article on Zerohedge that ANOTHER $750 Billion stimulus package- in addition to the recently passed $900 Billion pork bill- may be passed in the next month! This has to be seriously damaging to our standing internationally.
I can’t imagine what the images seen yesterday across the globe of the US Capitol being overrun must have done to our image overseas either. I can’t imagine that those scenes inspired confidence in our ability to be a strong cohesive group but instead may have conjured up images of a divided and weak country that may be ripe for attack on many fronts.
For the first time in US history more “money” was conjured up out of nowhere in 2020 to pay our current bills than taxes that were collected. We are entering BRM (Banana Republic Mode).
Not only are we accelerating our descent into debt but we are also seeing the manipulation of “markets” in unprecedented numbers to keep as many people as clueless as possible.
Take Wednesdays disgraceful antics in Washington DC. In a normal market this type of action would see gold spiking higher and markets getting hit hard. Real markets don’t like uncertainty and gold thrives in that environment. Yesterday, the exact opposite is what took place.
It doesn’t matter that the country appears to be irreconcilably divided or that our economy is in freefall the “markets” get managed higher. I believe this will continue until it doesn’t. The problem arises when it doesn’t. There will likely be little warning and as everyone is headed for the exits they could easily be blocked. It is also likely that those in charge and their buddies will be safely on the sidelines, profits in hand, as the sheep get sheared for the third time in 20 years.
I have been doing this a long time and the one thing you learn is that you have to learn from your mistakes and not make the same mistakes again. It is stunning to me that so many have already forgotten the booms and busts of (1995-2000 boom, 2000-2002 BUST) (2003-2007 Boom, 2008-2009 BUST) 2010-?, Bust on the way). This bust may look different than the last two because it could actually see a bubble bigger than anyone can imagine before the expected implosion on itself- most likely caused by the massive debts being built up to keep many zombie companies alive and also propping up faltering companies that haven’t quite reached zombie level yet but are on the way. It appears to me that we are already in an inflationary depression. The “printing” of money has many fooled that all is well but if that support were ever to be withdrawn the effects would be so devastating many would likely literally die.
If support were pulled stocks would collapse, bond yields would spike uncontrollably higher leading to more stock collapse and crashing real estate prices. The main reason many would likely actually die is that a freeze up of credit would bring the “just in time” supply chain to a grinding halt causing shortages of just about everything. We already see difficulty in getting some goods right now.
The Fed and other central banks will likely never go that route BUT at some point when enough people realize what they are up to (many are gradually getting the picture) the “money” necessary to keep this propped up will be so great that the “money” will likely be deemed worth a LOT less or even worthless.
I have been talking about this for years and it has taken a LONG time to play out but many people are now seeing the writing on the wall.
What the central banks allow us to know is terrifying enough but I am pretty sure that we are only seeing the tip of the iceberg. A saying I often use is “In my business I can’t use the word guarantee often. However, I can guarantee one thing- what the central banks are really up to- we won’t know until its too late”.
All I believe I can do is hope for the best but plan for the worst. I have extra food, metals, water purification, cash on hand and have recently added means of protecting what we have worked so hard for over the years.
I also believe that this lockdown in 2020 has shown the danger of debt. If your means of paying it off dries up because of lack of business or government decreed shutdown- debt is deadly to your financial future. I would do my best to eliminate all debt possible.
I also believe that the games being played by the central banks can also lead to great opportunities for those who are prepared for it.
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