Last night I was moored in a tiny pocket in a part of Georgian Bay called
Port Rawson Bay in about 10 feet of crystal-clear fresh water, with huge
pines and cedars around the shoreline and rocks jutting 40 feet out of the
water but without a cell phone or Internet signal, and that was scary.
(Almost as scary as the legions of mosquitoes that blanketed the mesh screens
that separated us from them, thanks to hockey socks stuffed into holes in the
canvas and citronella candles that the little bastards detest.)
It was unusual at first but after about three hours with the brightest
full moon illuminating the water with a glorious and almost haunting sheen, I
decided to dig up my old iPod, where I had stored a bunch of audiobooks. I
sat and sipped a fine pinot and listened to "When Money Dies" by
Adam Fergusson, written in 1975, which provided an incredible account of the
Weimar hyperinflation of 1921-1923.
I had read it twice before but last evening, with no distractions other than
the mournful loons calling each other, I came across a passage that I want to
share with you:
"What really broke Germany was the constant taking of the soft
political option in respect of money. The take-off point therefore was not a
financial but a moral one; and the political excuse was despicable, for no
imaginable political circumstances could have been more unsuited to the
imposition of a new financial order than those pertaining in November 1923,
when inflation was no longer an option. The rentenmark was itself hardly more
than an expedient then and could scarcely have been introduced successfully
had not the mark lost its entire meaning. Stability came only when the abyss
had been plumbed, when the credible mark could fall no more, when everything
that four years of financial cowardice, wrong-headedness, and mismanagement
had been fashioned to avoid had in fact taken place, when the inconceivable
had ineluctably arrived."
Think about the "constant taking of the soft political option in
respect of money" and "financial cowardice, wrong-headedness, and
mismanagement."
Here is a magnificent book written 40 years ago about the abuse of fiscal
power that sent extremely wealthy families into ruin and despair because of
the blatant destruction of "currency," and those sentences above
describe exactly what we have been living since 2001.
When you are in the northern part of the southern part of Canada, where
Mother Nature truly runs the show, you are humbled. If you have even a minor
breakdown (which I did), you are immediately instilled with terror: You have
no one to call; you have nowhere to go; and you have nothing to bail you out.
You are at the mercy of the weather and your own ingenuity and whatever
courage you can summon.
No light, no heat, spoiled food, and bugs everywhere, but the very
experience of finding a way by rigging a battery from the port engine to the
systems engine so you can get the lights on and rowing to shore in a kayak to
build a fire so you can fry up the big pike you caught using the spoiled food
as bait -- well, it is at once as humbling as it is important.
We have all been through a nightmare since 2011 and after reading Bob
Moriarty's assault on GATA the other night --
http://321gold.com/editorials/moriarty/moriarty072715.html
-- I was immediately overwhelmed with the concept of the term "grave
dancing." I don't know Bob well but I think I can call him a friend and
as much as I was a tad taken aback by his piece, what hit me was the
inaccuracy of his premise.
For me GATA is not nor has it ever been a stock picking Internet site; it
is not a market-timing tout sheet; it is not a financial blog.
GATA is, at least for me, a beacon -- and a wonderfully simple,
uncompromised, independent light that began to shine on one thing and one
thing alone: the constant taking of the soft political option in respect of
money.
On this point GATA is undeniably on the money.
Further, has anyone in the financial blogosphere been more emphatic than
GATA's Bill Murphy and Chris Powell in highlighting financial cowardice,
wrong-headedness, and mismanagement as they pertain to the way central
bankers and their political bum-boys have "managed" things since
1998? Multiple bubbles, flagrant violations of the rule of law, bailouts,
bail-ins, TARPS, QEs, ZIRPs, and massive manipulations in all financial
markets, all intended to protect the upper tenth of 1 percent of society from
one thing: accountability.
So when I forgot to check the three marine batteries in the boat and had a
power failure the other night, I could not get down on one knee and beg the
Georgian Bay Congress for a "rescue package." I had to get in the
dinghy, row to shore, build a fire, cook that bony pike, get eaten by
mosquitoes that could be superstars in the Calgary Stampede, row the food
back to the boat, and feed the family. It's called accountability, and the
price was paid.
I just wish the Pest Protection Team could have saved my tender flesh from
the onslaught of mosquitoes just as the other PPT stick-saves the
billionaires from even a 10 percent haircut on their precious portfolio of
NASDAQ start-ups.
I have no charts to provide tonight; I have no "actionable
ideas," to use the old stock-flogging phrase of one of the big retailers
a few years back. I have no doubt that in terms of time, we are at a major
bottom in the precious metals markets. But as you have seen, if you are early
in this game, it is just the same as wrong because at the end of all
parabolic moves (up or down), when they go vertical (think Shanghai), you are
near the end of the move.
Shanghai completed a vertical up move in June; had you shorted it in
March, you had bleeding eye sockets by May. If you had the U.S. Treasury
meeting your margin call and survived the drawdown, you are now up.
Gold and silver are now meeting all the parameters of a vertical down
move, but that is only in terms of the X axis, time. The Y axis is price, and
since we don't have the U.S. Treasury as our sugar daddy, we have to
trade only in the cash market and cannot use leverage. Eye sockets that bleed
are no fun, especially when your eyes were taken out eight months ago and the
blood bank won't even let you back in the building.
One last point: When you think of the cretins who are managing markets
these days, all you have to do is look at this:
http://www.gata.org/files/BallangerIllustrati...-08-06-2015.jpg
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Michael Ballanger is a market analyst based in Toronto who specializes
in mining. He writes frequently for GATA Chairman Bill Murphy's
LeMetropoleCafe.com
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