The mid-March lift off for PMs appears to be taking place but be prepared for the pattern to shake you hard. The bigger prediction that should matter is the coming of warmer weather and the unrest that comes with it in these countries in crisis. 50% and greater youth unemployment in the peripheral countries of Greece, Spain, Portugal, Italy, Bulgaria etc......leave a lot of potential trouble developing on a Continent in shambles. Where will the next eruption come from? That IS the problem. Putting out fires has been confined to Greece but simultaneous meltdowns across the peripherals now come into play. Banking contagion may accelerate with the precedent set in Cyprus by trying to raid the depositors.
Even if Cyprus ends this crisis by closing a deal with the EU, the damage has been inflicted. IF the solution is to close the banks in question and make the "small" depositors insured "whole", it still leaves CONfidence mortally wounded AND the big money destroyed........Big money all over Europe is exiting and will continue to exit their deposits. Many of them did not get the big money by being stupid. Fool me once shame on you.....Fool me twice....Shame on ME!!
Analogies continue to crop up to the late 70's and early 80's period. I listen to many pundits on CNBS and Bloomberg comparing this situation and its potential resolution to that time period. I am here to tell you there is NO comparison. We had virtually no debt compared to now. We had the preeminent manufacturing country in the world. Our demographics were in much better shape. Our personal debt was miniscule. People saved and had savings to survive for months if they lost their jobs. Severe stagflation marked that period and if we entered that now, we would collapse. There is no room in budgets to withstand it. If we have to raise interest rates to stop stagflation this tiime.....then the entire system collapses with just a couple of percent. Its all mathematics. Its trouble folks. Big trouble. We had the rule of law then. We had a balance between the haves and have nots. We had regulatory bodies that had some restraint on the corporatocracy. But eventually through a carefully orchestrated program, the public was dumbed down by repetitive cliche phrases like trickle down and free market capitalism........the rest is history. Greed and "want" won.
Joe sent these notes he found from Sinclair's conference:
1 – When asked about keeping gold outside the US – he answered almost all his Gold is outside of the US – its in Africa..
2 – Markets revalue ccys on a daily basis & this will continue for the dollar. In his view there will not be a official devaluation, they'll just continue to cheapen quietly as they have over the past decade..
3 – He definitely follows some sort of cycles, and certain numbers are significant (this is out of my wheelhouse but I took note anyway) He believes Gold to 3100-3300 is a minimum & will occur between 2015-2017.. He believes the ccy crisis/end game will all play out by 2020-2021.. At that point gold will have settled in @ 4500 or so & we'll have to move on w/ our life..
4 – He doesn't love the CAD, but if you must hold ccy exposure in your portfolio he'd prefer a resource ccy like the loonie..
5 – He doesn't believe that Silver has monetary characteristics, and therefore wont maintain its price rise, although gold will. .He doesn't believe is Silver monetization
6 – Current financial system is like Sodom & Gamorrah (but less fun) – However, don't extrapolate into perpetuity – Things change/cycles change/ and things will be different in the future –
7 – Ponzi schemes can work! – If they are accepted by the public..
8 – Silver could hit 100 in a speculative frenzy, but he doesn't believe it would stay there.
9 – You wont be able to break the Dow due to the enormous liquidity..Buy pullbacks, it will be going higher… Its overbot & could have a sharp pullback short term, but its a buy.
10 – For the youth – if you want a job in the future, become a geologist, a good one..
11 – He doesn't buy these FDIC insured Gold CDs.. Like any other insurance, you have counterparty risk.. Buy the physical
12 – Doesn't like the Perth Mint – Cost of moving from unallocated to allocated is way too high
13 – Gold Co's in the 1950s were yielding 15-20% – they were utilities.. He believes they should be/will be again..
14 – He's bullish gold stx – hugely undervalued, beaten down – Buy whats cheap, not whats dear..
15 – Central planners actually believe they can pull this off & land this plane.. They believe the economy will recover to bail us out, & they'll simply let the securities they've bot mature… Bernanke is a academic, so he doesn't understand how the real world works.. He believes he's right w/ all of this QE..
16 – Bernanke did save our a$$ after Lehamn.. If he didn't act as he did, we'd all be living in a cave as it would have been a absolute catastrophy.. The error has been to continue it this long
17 – No exit to QE – No end in sight because there is not a true recovery..
18 – Bonds wont fall, yields wont rise because Ben can buy them unlimited & he will..
19 – Someone asked why Sprott doesn't go to the Comex for his 2b in Silver & break the manipulation – Sinclair said he wont do it, because "he's a gentleman" He wont "break the playing board" – there is a ethical code amongst these giant players.. He wont break an exchange, because the entire system would then be against you.. Nobody will do this.. They/We wont get this, we wont get instant satisfaction like that.
20 – End of this crisis will come in 2021 – Move on to something else like education or real estate.. Become a doctor or lawyer, or plumber – develop a trade.