When truth matters …confidence will break.

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Published : February 02nd, 2018
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Category : Opinions and Analysis

With the four page Congressional memo slated to come out today, our topic will be “confidence”. Confidence and all that goes with it stands to sustain a huge body blow! But first, we need to discuss a topic I have written about several times in the past that took a very strange turn yesterday …Harry Dent.

For years he has scared (tried) hard money advocates by forecasting a collapse in gold to $700 and possibly even $250. I have written several times breaking his “Dented logic”, most recently here . Yesterday he took a very strange turn and published a story predicting higher prices. To be fair, in this latest article he is calling for $25-$50 higher gold prices and suggests it is your opportunity to “take your ‘money’ and run”. I would ask Mr. Dent, if gold is such a risky asset as he claims, does it really make sense to try and time it for an extra 2-4%?

But here is the problem, at the very same time he published the above article where he claims gold has been rising as “he predicted”, he has been running this ad for a months …!

Bitcoin vs. Gold: Which Will Protect You From The Upcoming Crisis?

So which is it? I hate to call someone a huckster but Harry Dent is talking out of both sides of his mouth now. Enough said…
As for “confidence”, while we don’t yet know exactly what is in the four page memo, confidence will take a hit. Speculating, rather than Donald Trump colluding with the Russians to throw (steal) the election, it looks like an attempted coup took place (and still is) to steal the election by Hillary and company. The saddest thing of all will be the revelations that our investigative and justice agencies are not impartial and have not been for quite some time.

The scary thing for “us” is that a rogue FBI, coupled with a compromised justice department is a one-two punch able to “end” anyone’s life as they knew it without notice. Another scary thought and one just now becoming visible is how foreigners might react? We have previously seen the dollar and our debt being sold, now the herd is exiting stocks. Foreigners are looking at already poor U.S. finances and most probably wondering whether the books are cooked in line with a crooked legal system?

You see, the U.S. in the past attracted capital from all over the world because it was THE “safest” place. Explaining, the U.S. was viewed as having a real and true rule of law. We were seen as being “fair” or just when it came to any disputes. Over time, this has obviously changed. Today’s memo has the ability to scare foreigners as far away from U.S. jurisdiction as possible. Interestingly, it is China’s new financial infrastructure waiting in the wings to attract flight capital from the West.

Don’t get me wrong, the books are also cooked in China and a break in confidence in the U.S. will affect confidence everywhere. One can come to this conclusion because whatever is in the 4 page memo will bring up more questions than it gives answers. More questions will lead to even more questions like tugging on a woven thread. I have no doubt whatsoever these questions will lead all the way back to Obama himself and most probably the Bush administration also.
We currently live in THE most financially levered period in history. Assets of all sorts have been levitated and supported by credit (except for gold and silver which have financially suppressed with use of credit). Credit flows for many reasons, most important of all being “confidence”. Confidence in getting paid back. Confidence your borrower will perform as to contract. Think of it this way, if you lent to a friend, what would go through your mind if you picked up the morning paper (like the old days) and read your neighbor has been accused of and hard evidence surfaced of robbing a bank, bribing cops and judges, molesting little children on the side and even murder?

Obviously the first thought would be your lent money is toast and you’ll never see it again. In this instance there is not much you can do to get your money back but it is different when looking at it systemically in supposed “liquid markets”. Foreigners, and even American citizens will react by trying to exit the system any way they can. In other words, EVERYTHING with perceived connection to the rogue entity will be sold …and the rogue entity is represented by DOLLARS! I would be remiss if I did not mention the “exit window” is already quite small, a flip in the algo herd will break the wall down trying to get out. This will be seen when markets can no longer open nor function…

Going further down the rabbit hole, GLOBAL panic will ensue because the dollar affects and is used in virtually all financial systems. It will be like a bunch of gamblers who borrowed money just to get into the game, only to find out the chips are counterfeit, the game is rigged by the crooked casino and you won’t get paid even if you win because the casino is broke!

“Mood” is going to change and probably quite rapidly. Some will be shocked. For some it will be disbelief. Others will be very angry. The “anger” will come from both sides, anger that it happened and also anger it was discovered and made public. If I am correct, markets will be taking back all sorts of previous “wealth” and the wealth effect will move in reverse. It is the recipe if I ever saw one for violence unlike anything we have ever seen in the U.S. with the exception of the Civil War …and I would not rule that out either!

Be on guard for rapidly changing events because “leverage” creates speed. Leverage “forces” action via margin calls …and our global financial system is one giant margin call waiting to happen! Some have said they are stocking up on beer and popcorn waiting for this event. A loss of control of the entire system will even strike fear in the hearts of those on the sidelines who believe they are prepared. Truth will finally matter in a very ugly way!

Standing a nervous watch,
Bill Holter
Holter-Sinclair collaboration

Data and Statistics for these countries : China | Georgia | All
Gold and Silver Prices for these countries : China | Georgia | All
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Andrew Hoffman was a buy-side and sell-side analyst in the United States (including six years as an II-ranked oilfield service analyst at Salomon Smith Barney), but since 2002 his focus has been entirely in the metals markets, principally gold and silver. He recently worked as a consultant to junior mining companies, head of Corporate Development, and VP of Investor Relations for different mining ventures, and is now the Director of Marketing for Miles Franklin, a U.S.-based bullion dealer.
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