Monday, July 23, 2012

THE BOTTOM LINE

IS THE LINE. That line. The line that Ben Bernanke studied and saw many times during his academic years while he researched the Great Depression. His entire life was geared to be here in this position to captain the World's economic ship. THIS IS THE GLOBAL FINANCIAL CRISIS! This is a financial system collapse built on a House of Cards of Leverage that defies the ability of 99% of peeps to even begin to grasp.....at least in some simple mathematical equation. Its the ultimate Ponzi. It is such an incredible stretch of economic principles that no one really fully understands the implications of its reach. Essentially, the formation of the Bretton Woods agreement gave the puppet masters the ability to use the Reserve Currency of the dollar to run the power of the U.S. and the G7 into the 21st Century by playing a Madoff scam on the resource rich developing nation. In exchange for a printable fiat currency that was backed by air and the threat of an iron fist.......the scheme took the precious resources and cheap labor until it could no longer hide the math and the obvious internal structural collapse that had developed within its own borders. You and I have been participants......witting and unwitting.....but nonetheless........participants. That makes all of you Madoff family members. Now we have reached and interesting point in the game. This is the part where everyone at the table is looking around at the other players wondering which one is going to blink first. Its analogous to the scene where the camera pans under the table in the movie and each person at the table has a pistol in their hand or on their thigh aimed towards someone else at the table just twitching to pull the trigger as tension builds to a climax. We are there and this game is going to explode.

Ben knows this and has so much more information than we do. Ben has one last BIG card to play if he wishes to and that is the QE of all QEs. It most likely will not work and he knows that but it can give us an extension of our rendezvous with destiny. Ben will not decide destiny....he will only arrange our meeting. Maybe Ben is oblivious or ignorant of what he is doing, but I don't buy that analysis of him. I think he knows the outcome and he knows how this plays out. Ben cannot fix the fiscal and structural deficits built by horrific monetary and political policy. He cannot fix our demographics. He can no longer shield us from dwindling resources. These issues will have to be faced eventually. We will most likely have to be reintroduced to these market variables out of necessity rather than choice. Pay attention to what I tell you now. NO ONE can tell you THE answer to how this will play out. Just take some simple precautions. AFTER you have taken the steps that you feel are adequate over the next few months then you can "rest". At least for awhile. If the cycles are right the convulsions of years of evil will begin and hopefully we will meet on the other side saying "that wasn't so bad".....at least that's my plan.


from ZH

32 comments:

  1. Hello Kli and everyone,
    I have been reading but not trading since I mostly lost my trading money last spring.
    A few notes on The crops this year:
    My family have been custom harvesters since the 1930's. We harvest 40,000+ acres a year. I am also a meteorologist (although my occupation is otherwise now). The winter crops (mainly wheat and barley) have been ready about 3 weeks early all this season. This is everything from Texas to southern Montana. The Canadian crops are not early, they should be ready in about a month. Winter wheat has been down about 10% this year. Mainly due to heat and drought. Not much has been lost from hail. These crops have all been within normal deviation of yield. Fall crops (mostly corn) look really bad. These crops are never completely wiped out. A few crops with moisture have survived. Irrigated corn (circles) will be fine. (Although these farmers are not receiving a price windfall as it has cost more to water their crops this year and yields will be down). Many farmers are hoarding seed for next year. Cattle ranches are selling cattle because they can't feed them. In a free market, this would cause cattle prices to drop in the short run and then shoot up over the winter. Meat will be getting expensive. Ag prices are just as manipulated as other commodities. (On the date prices are set for crop insurance, prices always seem to drop). The commodity cost of products like cereal are a small percent (in the 10% range). The biggest cost for most Ag is oil. The drought we are having is reasonably cyclical, usually about a 30 year cycle. In an oversimplified model, drought does more to cause heat than the other way around. Bare ground heats up more than ground with plant life. Texas and Oklahoma drought is making temps higher in the rest of the Midwest. The drought we have (as everyone sees) is widespread. Even Michigan is having corn crop failures now.

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    1. Thanx Ken and Please continue to make comments as this progresses......In my area the cattle are grass and hay fed and the drought has destroyed any winter hay stores....also the farmers that have hay are feeding to the cattle now and hoping that late summer rain brings fall grass........if not then further liquidations will occur

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  2. Another note: Increased federal regulations over the last few years have been a bitch. New reg cost this year alone have required a one time expense of almost a full years profits. Annualized, these new cost reduce profits significantly. The fed listens to required public input, and then ignore it. Some legislation has been "fixed" for the better prior to congress voting, only to have the original problems reinserted before publish date. Regulations that are currently under consideration are so bad that they will cause food shortages if implemented.

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  3. Ken thanks for bringing up your last point regarding "regulations" I have noticed that the Fed's have taken a keen interest in Small Organic Farmers and placed so much regulation on them to the point it's not worth it. Get most of my input from talkomg to local farmers running organic farmstands. Case in point raw milk.

    Dont understand the logic, if there is any, is it protecting the food chain or Turf control via the Feds on behalf of the large farm corps.

    Curious

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    1. It's big ag paying out big change to govt. officials, congress critters and such...they are taking us down an ugly path where monsanto seeds will be the only ones you can get....these guys are truly evil....

      http://www.alternet.org/food/156195/the_%27monsanto_rider%27%3A_are_biotech_companies_about_to_gain_immunity_from_federal_law/

      http://www.naturalnews.com/035000_Amish_farmers_raw_milk_feds.html

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    2. Guess as always its about the money.....

      Another reason to pick up a few puts on Whole Foods

      http://www.naturalnews.com/036584_Whole_Foods_organic_produce_China.html

      Lets see in China they cant make dry wall right and their track record on environmental stewardship is less then stellar, heheheheh can you imagine the process on how the grow their "Organic" produce!

      Whole Foods are just another bunch of greedy bastards exploiting the mind numbed plebes!!!

      Jeez, we are just plain stupid as a society..........

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  4. Here is a positive article about silver. I am still suspicious though that silver could fall further--$25'ish/ounce?? But, maybe there will be a disconnect between silver stocks and the actual price of silver.

    http://finance.yahoo.com/news/silver-stocks-look-rebound-silver-122000917.html

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  5. Regarding KLI's blog post... Ben's book Essays on the Great Depression clearly spells out what he has planned.

    He is absolutely convinced that the Fed ended the first Great Depression. One of his biggest complaints about the Great Depression was wages. He wanted wages to lose purchasing power back then and he wants it again now. QE's don't cause Ben any concern. $9 a gallon gas...$5 loafs of bread... none of this bothers Ben. But here lies the big problem. Back then we had WW2 to save us.

    What do we have now? War with China? China is very quietly gobbling up small islands in southeast Asia much like the Japanese did. Unfortunately, most American media outlets haven't been reporting this. China has been putting up cities almost overnight and claiming these islands to be theirs:
    China formally establishes city in Spratlys
    Right now, they are just testing the waters by stealing islands from the Philippines and Vietnam.

    I get this strange feeling that we'll eventually see history repeat itself. Look at all the uproar over the Romney-Bain outsourcing. It's becoming increasingly popular to bash China for all our problems.

    So we've got both sides planting the seeds for conflict. Will it lead to war? I'm not sure. But it wouldn't shock me.

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    1. just imagine if China and Russia decide they want parity with the U.S. because THEY feel threatened by the 800 military bases that the U.S. has in over 125 countries.....just imagine "possible" triggers....say maybe a "resource" turf battle......over oil...or "rare earths" or nat gas or water or food.......etc. "control" and "power" go hand in hand.....we are in a war of sorts everyday.....as Jack said in a Few Good Men......You can't handle the truth.....at least I know I can't handle it......It is all so evil and so clouded with distortion and moral hazards that only a sociopath could accept it........gl all

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  6. It wouldn't shock me either Jay. Remember, they also think the earth is overpopulated. So I guess a world war will help with the environment/natural resources (sarc). But it helps them place more controls on the sheeple even while killing off millions.

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  7. China would be hurting without their good investment fortune of 1 trillion in Treasury holdings...its been a whopper of a good investment for them...they are not whining now...

    capital outflows might be leaving China now and heading to US...

    The dollar could be making big move higher for years to come even with QE...we are the prettiest of the ugly right now...

    china without the US consumer is dead....

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    1. i could be wrong chuck but the days of the dollar as the reserve currency is coming rapidly to an end.....its effectively a ponzi scheme to steal the world's resources from a country that is in moral and structural decline.......maybe we hold it together a couple of years but I doubt even that.......

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    2. Kli,

      Look how long England has held on with their currency, I can't think of anything they make outside of Fire industry..

      Think of it as dollars can be traded for oil wells, real estate, bonds that pay interest, natural gas companies, gold miners etc...you have to buy it in dollars so it's in the interest of China to keep accumulating...the dollar has been going down for 100 years.. the euro-would you buy it, the renambi-it has no true float and if they opened it up would we see the true beast emerging in China...deflation etc...

      what really bothers me is now that china is pushing citizens to buy gold, the gold cartel loves fresh meat....the dollar could rise keeping the govt happy but the citizens who invested in gold could get creamed with dollar strength..

      my .03 cents...as the dollar rose today...

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    3. Here is an article.

      Basically, this author feels that the US dollar is losing influence, but doesn't see the Chinese remnimbi becoming the reserve currency anytime soon. What concerns me is that much of the US economy is consumer driven. If the US consumer gradually buys less, then the US will be trading less with other countries. As thus, the influence of the USA as a Trading Partner shrinks. Will a tipping point eventually be reached, and the US reserve currency status be lost??

      http://seekingalpha.com/article/475381-reserve-currency-china-sun-rises-u-s-sun-sets

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    4. very simply a strong dollar will destroy the ability for the U.S. to compete with the behemoths.....we cannot use our counterfeit currency to continue to purchase cheap energy and goods forever.......it won't continue for long

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  8. Nice late day stick save by the FED!

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  9. Earnings bad all around... UGLY :)

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  10. Nice +4% on AUQ today. PPP, SSRI, HL, GG, GFI, GDX & GDXJ all up today. I don't put anything past them tho.

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  11. AAPL is rotten tonight. One would think Tomorrow would be a bad day for stocks. So that must mean higher stocks to come Tomorrow.. I'm just wondering how long gold can hold in this range that seems to have been going on for ever. Guess everything will hold right here until after the elections in November. USD/EUR getting interesting I'm looking to go long if 1.20 can hold then the fireworks will start. Also nice to see we have another Meteorologist here on the blog posting...
    Matt

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  12. Hi Kli
    Don't know if you saw this already, but apparently there has been a gold futures trading scam in China at the cost of 59.62 billion dollars. That's a lot of gold that's not there. Loco London.
    http://www.brotherjohnf.com/

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  13. Came across this site looking for some more info lot of interesting stuff.....

    http://farmwars.info/?p=4897

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  14. http://www.zerohedge.com/news/gold-and-silver-levitate-day-printing-nears

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  15. http://seekingalpha.com/article/691901-measuring-the-acquisition-prospects-of-junior-gold-miners?source=yahoo

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  16. USDA=ORGANIC. To be an organic grower you must dance tothe USDA tune pay the fees etc. Organic in no way means sustainable. Large organic farms are self regulated and are audited by bookeeping where records of purchases substanicate whether or not a farmer complied. Like eveything else the FED does it is a give away to big corporations.

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  17. If a person wants clean food try a CSA. Community Supported Agriculture....

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  18. PM and miners pretty strong and the market weak. The way it is supposed to be ;)

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  19. Just when I thought I'd seen it all....

    Mega-Bank Creator Sandy Weill Reverses Course, Says Break ‘Em Up

    Too late buddy, the Devil already has a place reserved for you in the 4th circle of hell.

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    1. only fulfilling the next step in the plan...essentially they will split off the dead assets into the bad bank half onto the backs of the unwitting public and reset for the next forty year run with a healthy IB

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  20. Yea, too fuuny. Now he has seen the light. All the rats feeding on each other. The banker brotherhood falling apart!

    GDM trying to make a big break out. Might be a head fake.

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  21. squeeze on pm-miner shorts......yipee!

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  22. Joe's PPP looks like its on a rocket ship path

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  23. Biotech has a decent day. NKTR has retraced about 50% off its recent high, with a big red candle day yesterday (flush?). Finally a green day today, so maybe it will consolidate here.

    My concern for the market is that we could have a big selloff. Perhaps 1250 on the S&P before Ben announces anything significant.

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