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We are seeing too much “Let’s
Pretend” and fictional dancing around the economic Mulberry Bush. If some
very important people cannot drag themselves out of a 50 year-old dead and
dying paradigm, this world is going to get very ugly very fast. We say they
don’t and further, it’s politically expedient not too.
Congress people, parliamentarians, economic morons, academic communists,
dudes and dudettes continue their silly dance as if life goes on and all is
well. They are stuck in the past while whistling past the fiscal graveyard.
Nobody has the nerve to stand-up and tell the truth. Nobody has the
backbone to tell the truth and face reality. There are a few in our
industry but far too few.
The heat’s going up on the frog in the boiling water while we wish and
hope that somehow we all don’t boil alive and can blunder through. People
lack the nerve to turn-off the heat and jump from the pot. It’s just too
comfy to pretend the old game prevails while smarter people clearly see the
ugly, boiling, steamy ending. Think of a high powered pressure cooker
heated to its stove-top-maximum-extreme. Think about what happens when you
take the lid off without first relieving the pressure. That is what I see
coming in these markets.
In the initial stages, we’ll get the usual trading moves and dead cat
bounces. However, eventually, the bottom falls out and there is nothing for
support but air.
This is when a huge rip-roaring crash arrives. It could be in June or
July, it could be this fall or, next year. There are so many convoluted
games in play, so much manipulation, that no one can say for certain. What
I see for certain is that it simply cannot last and the old games are all
played out-game, set, match.
History books are full of stories about similar idiocy and the dramatic
aftermath. Change is quite difficult and the status quo easier to manage.
If we do not collectively gird for economic war and get busy with realistic
objectives there is no hope for a good ending. I suggest the one I see
coming is beyond tears.
We are often correct on our shorter term forecasts and longer range
predictions. Here are some more for all of us to ponder. You can disagree
if you wish but I prefer to call it as it is and try to deal with reality
and not wish and hope for a silly, long ago, 1950’s result or outcome.
Do not get mad at me for saying these things and for heavens sake leave
politics, religion, race, culture and all the rest of the politically
correct baggage out of this discussion. I am merely giving my opinion as to
what I observe and see happening, and forecasting the outcome. Think of me
more as news reporter and not some opinionated idiot; although some prefer
that latter title.
Global corporations, central banks and the US Federal Reserve have been
engaged in currency and bond manipulation to their advantage for decades.
They have ruined the US Dollar with inflation and stolen literally
trillions of dollars. This will continue until the system is entirely broken
and there is nothing left to steal.
Our illustrious Treasury Secretary is running the world-over right now
feverishly scrambling to get major, economic powerhouse nations on the right
crisis reaction page.>
If just one of them goes the wrong way with an untoward move in the
middle of a major crisis, the whole mess caves-in with terrible
consequences. We suggest Timmy’s games work for the most part but we can
count on one country finance guy or gal to step in it and implode the whole
movie. It may not be this year but its coming. This is way too complicated
for Timmy to control. There is a Black Swan out there and he is flying our
way. Right behind him are a flock of his buddies soon to make some very
naughty deposits on system finance.
Our latest and most serious financial conflagration is the crashing Euro
and Euroland dissension. Most particularly, the European PIIGS nations are
squealing the loudest and falling down first.
The provided bailout is not a bailout for squealing PIIGS but for
crooked bankers on both sides of the pond trying to get their money back
from all their previous bad loans still lingering in this bankrupt Club Med
neighborhood.
We got word this past week the New York big boy banks have 81% of their
Tier One Capital at stake in European debts. They must get it back or, go
back to the well at the US Congress for a TARP II cover. Fat chance on that
one politically.
Those bankers could care less about the Sheeple and Piigs. They want
their loaned bread back or, they go under water on bank capitalization
requirements. This mess then requires a TARP II for Europe to cover
the crooks in New York City. Sound like Lehman familiar? Hence, this is a
scam to repay those old loans using the IMF, World Bank, and central banks
throughout the world taking taxpayer cash to cover bankers’ loans through
the back door. This game is just a repeat of the US TARP I with new
European players.
Global bond markets are 70 times larger than the collective stock
markets and today, are in major mayhem and disarray. Previous US presidents
have expressed great annoyance about the bond traders controlling the
world. Sorry Prez; the guys with the money get the control. Right now their
bond markets are going out of control with way too much supply and lots of
bad credits.
The US is printing and dumping currency, bonds, notes, bills on other
nations at a furious pace as they are broke and need the money right now.
The interest on our debts is flat out wild. Finally, we are to the point
where buyers of this trash are saying enough is enough. Yields have to go
up to persuade them to buy more and in many cases there are not ANY buyers.
When those yields rise to the extent others notice too much, a whole new
and heightened level of fear begins.
Bad news lending day has arrived between European and USA banks. The
Libor rate is way up signaling they do not like each other and do trust one
another to pay back interbank borrowings. Once before during the Lehman
event, Europe’s banks told their employees to not do business with New
York out of repayment fears. We are in the same pickle again.
This is the key to Crash City. When all this trashy paper cannot be
off-loaded and when the circle-jerk game of pass-the-paper between the
Federal Reserve and US Treasury comes to a screeching halt; we are
finished. They’ve already been up to these tricks trying to hide that news.
Now its out in the open as both the fear levels and reflective VIX Index
are flashing red lights.
This is all one big confidence game. When confidence wanes, worries
appear. When confidence is lost we at the end of the road. We can see the
road’s end but the time of arrival is as yet uncertain. Just when we think
they cannot go on any longer, another detour is found and another Federal Reserve-Treasury
scam appears to extend the party.
The current administration in Washington is worse than the last one and
most of these people in all branches of the government are completely out
of touch or clueless. Decisions are being made on facts of pure political
gain for votes not the well-being of the United States and its taxpayers.
While this has been standard procedure for years, its much gotten worse of
late.
Now we are beginning to see things, that are in our view, are
border-line treasonous that completely disregard the safety and future of
all Americans. This is going to get very nasty very quickly.
We have zero confidence in even a pivotal election change this fall. The
new bunch won’t be any different than the old bunch. Their only collective
answer is to throw more money at any and all problems, scarf-up the votes
and to hell with the Sheeple. We say these people are literally selling out
America for personal gain.
This week it was obvious with rising VIX and precious metals markets’
that our financial earth was trembling. The smarter guys and gals are not
buying the PIIGs bailout game story and voted with their sell buttons.
Little Timmy has been around the trading game for years. The word out of
New York is he made all the “Save The Markets” S&P buy and
sell decisions used to prop the main stock markets as a really keen member
of the Plunge Protection Team. Since he smashed precious metals and propped
mainstream stocks so well, he got promoted. Nice job Tim.
Timmy was the Federal Reserve Governor Of New York and close to the Wall
Street trading action. Now that he is Treasury Secretary, he is the Fire
Chief In Charge of our “Save The Global Economic
System Fire Department.” Sure doesn’t give me much comfort but
obviously, this kind of work takes someone with weasel-like cunning, which
he has so assiduously provided before.
His great companion and helper Chopper Ben Bernanke has certainly done
his part. Problem for these guys is who becomes the fall guy on D-Day
(Destruction Day?) We think Benny gets the blame despite his recent
rhetoric learned so well from Mr. Alan (Obfuscation) Greenspan.
What Can We Do?
Most of us unless we are independently wealthy and can just disappear,
have to keep working, striving and saving. I keep searching for ideas and
reading books to discover new solutions. Unless you just leave your
country, which for most of us is not a good idea, we have to shun the
system. We can do this to the extent we can by staying out of debt,
live on less, trade and invest in hard assets like gold and silver and
hunker down for the storm .
My suggestion is to take care of yourself and your family and friends
and do not ask anything of anybody, particularly any government entity for
special support or services. While we cannot simply drop out of society,
although some will, think through your situation to consider, security,
provisions, trades, and investments.
We do not expect society and the system to totally breakdown but simply
be struck with plenty of disruptions including price and capital controls,
inflation, higher taxes, more job layoffs, and possibility of utility
stoppages (bad weather) and bank closures for a few days. If you move
through each day on credit cards (not cash) you are very vulnerable.
Traders and investors should be buying precious metals and select
shares right now. In our newsletter we have a great list of trading
and investing ideas for you. Meanwhile, you can never go wrong buying
physical precious metals and holding them for security. We’ve had a
constant run of nearly ten years in gold rising 15% per year so this
remains a good trade. In the last twelve months, gold rallied over 34% and
is going ever faster.
It’s not going to stop any time soon. In fact, we predict those annual
percentages will rise even more and this offers us a fine opportunity
arriving only once in 25 years on the historical cycles. Good trading! -Traderrog
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