Thursday, July 18, 2013

DETROIT!

Detroit.......collateral damage
The face of Nature's Law. The face of Malinvestment and what it means for us and our country. What giving trillions to Western mega-banks and not allowing the cleansing of a ponzi system creates or perhaps more accurately.....does NOT create....JOBS. It remains to be seen if the strategy of printing money will result in a resurgence of the Western economy in the face of broken balance sheets in consumer debt, sovereign debt, unfunded socialized mandates, and corrupt governments. Will we find the answer to filling the the black hole of derivatives......over 1.5 Quadrillion. Can a fiat ponzi debt/leverage designed to maintain the Western dominance continue beyond the end of the 120 Year Grand Supercycle? These subjects cannot be addressed publicly. They cannot be spoken above a whisper in civilized circles. These questions are akin to the highest level of national security clearance and on a "need to know" basis only. 

How can we move on financially and economically in a system that has NO transparency? We have a banking system that allows 5 Banks to control 40% of our GDP and NO ONE can know what their balance sheets really look like. Imagine trying to calculate the impact of another economic downturn facing these obstacles yet we are told repeatedly that these monoliths have passed a stringent set of stress tests. A sovereign country just had its banking system collapse virtually without warning and the depositors were not even handed an IOU for their deposits over 100K....they were handed worthless bank stock instead.....unlikely to ever be redeemed for anything. 

What do you do? Maybe you should invest in the stock market. After all Ben Bernanke and CNBS tell you that its safe out. Ben and CNBS repeatedly told you and Congress that there was no housing bubble in 2006 and 2007. They told you that recession was not in the cards repeatedly in 2007 while the country was melting down right under your feet. The market slid into oblivion  throughout 2008 while they told you constantly there was NO crisis, but by 2010 they had NO problem stating REPEATEDLY that they had turned around the economy from the economic CRISIS and the EDGE OF THE ABYSS...... So now you are to believe that we are in no danger either even though many metrics are screaming that something is happening world wide while Ben says that we are going to be able to slow the printing press soon.

Mathematics says differently and nature does obey the laws of mathematics just as Detroit eventually had to obey the laws of mathematics. Believe Ben or believe your lyin' eyes? Its always YOUR choice.  Ben has told you something else and that is gold is a barbarous relic that he has no idea why anyone would want to own it in a "modern fiat economy". So don't buy it...... You can make your own determination on the meaning of "it".

from Jim:


My Dear Extended Family,    

On the fundamental view, I have directed you to Global European Anticipation Bulletin. I find no other source with which I agree more than GEAB. The following demands our consideration.

The GEAB site is  

GEAB shockingly says, "Historians will certainly consider the 2008 crisis as a warning shot before that of 2013. All of the world's regions won't be a can be summarized as the following affected the same way but all will suffer. According to LEAP/ E2020 the stages of this second crisis  as follows:

-end 2013, financial impact: collapse of financial markets especially in the US and Japan. Banks can no longer be saved by the states and BAIL-Ins are put in place;

-end 2013 / 2014 spreading to the real economy: The financial impasse causes / reveals a major world recession and the reduction of international trade;

-2014, social impact: The economic deterioration causes unemployment to explode, in the United States the dollar's decline lowers the standard of living, riots mushroom everywhere;

-2014 political crisis: the governments of the most affected countries are under fire for their handling of the crisis, forced resignations and early elections are expected, if not coups;

-2014-2015, international management of the crisis: together Euroland and the BRICS impose a new international monetary system and lay down the basis of new global governance;

-2015: The least affected regions have exited the crisis definitively;

-2018: It will take the United States, the United Kingdom and Japan five years to purge themselves of the crisis with, ultimately, a greatly reduced standard of living and a considerable loss of global influence (resulting from their refusal to participate in the re-casting of global governance on new bases)."

I agree totally with the steps. My timing on the final step is more 2020 than 2018 with the USA, GB and Japan taking seven years to purge the criminals that have gotten us to this point via OTC derivative frauds.

I will take this discussion further this weekend, as this is enough for you to chew on today.

Print this article out and post it to your bulletin board for constant reference.

The Chairman of the Federal Reserve has by good chance selected the exact right date to retire. I pity the next victim to serve.

Gold is for savings. Fiat currency is for transactions only.

Sincerely,
Jim




30 comments:

  1. just an amazing set of facts as opposed to the manipulated stats we see almost daily now

    http://www.zerohedge.com/node/476588

    ReplyDelete
  2. Please watch the video on Silver update.... Detroit municipal worker retirees will be destroyed by the coming pension cuts and this is a must listen to. Its coming to MANY retirees all over this country. It may apply to you so this is why we stack PMs

    ReplyDelete
  3. Great post Kli and the Silver Update was terrific.

    I remember what my mother went through with the Kodak bankruptcy. Health insurance lost, but at least the pensions are being paid so far.

    We had an employee lose her health insurance recently (husband died). Initially it was thought his company would let her stay on their plan, but she's being kicked off. My partners & I had a meeting to see how we could help. It was amazing how cruel the meeting went. The world crumbles around them, yet they just don't see it.

    ReplyDelete
  4. Doctrader - with a Muni BK there no backup, at least with business with an approved pension plan they file BK the pension funds normally go to PGBC and PGBC continues paying benefits (There are upper limits for those receiving larger amounts).

    ReplyDelete
  5. Detroit is a perfect example of what happens when unions and corruption run a town. Chicago ain't that far behind.

    ReplyDelete
    Replies
    1. you left out the biggest component jay.......bankers

      Delete
  6. "you need a real recovery plan"...too bad no one saw that 6-7 yrs. ago. Of course they will be allowed to give 10% or less...bankers + politicians = disaster. We know contract law has already been demolished...Hadn't known they could opt out of Soc. Sec. Silver hit 61.8% fib, let's hope it's bottomed.

    ReplyDelete
    Replies
    1. they were avoiding outright depression 8 years ago by the secret derivative/leverage ponzi......essentially creating a false recovery by monetization as Bernanke is now by outright printing. They saved themselves but left the rest of the peeps to die by slow starvation.

      This is a must read today and I believe we are on the cusp weeks ...or maybe a few months before the PMs explode
      http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/19_Maguire_-_LBMA_Now_Staring_At_Another_Gordon_Brown_Abyss.html

      Delete
  7. KLI:

    I just read the "Jim" addition to your blog post. Is an economic collapse really this near?

    What kind of currency will we use when the collapse happens? Will we be bartering? Will we become a 3rd world country?

    ReplyDelete
  8. we will pay a heavy price for our excesses jay.....the manner of our payback can range from outright political and economic destruction to civil/world war.......my best scenario is we have a long period of decline in OUR standard of living relative to many other regions of the world. You can already see this occurring as we drop precipitously in world rankings such as education and health care.....this will be a drop across the board. It is a classic empire in decline.

    ReplyDelete
    Replies
    1. and yes jay i think we are within a year of breakdown

      Delete
  9. I think our situation in America will mirror that of the decline of the British Empire following WW2, especially in the 60s and 70s, as things were at their worst. Do a quick search and read up on it, there are many parallels. Things turned around eventually in the 80s leading up to now, as Great Britain is once again in deep trouble.

    The bottom line is that life will go on, better for some, but worse for most. It pays to be among the aware, recognize the signs, and prepare as much as possible. I just don't agree with people like Sinclair and their fear-mongering. And he continues tie specific dates and events together, after having his ass handed to him repeatedly with his recent gold predictions.

    I know you reference him often Kli, but with all due respect, he has a credibility problem in my opinion, along with many other gurus who have been getting it wrong for years now following the 2008 collapse.

    ReplyDelete
    Replies
    1. KLI: You seem to describe drastic changes to civilization/cultures.

      while

      Budfox: You seem to describe a calm and orderly descent.

      Delete
    2. Yes budfox sinclair does have the problem of "talking his book"....but that doesn't mean that his overall macro outlook is not correct. Timing of course is off and he has warned on the paper game too and leverage as very dangerous. I do agree with him on the dangers of what this monetization is doing. I believe and still do believe that the malinvestment and insane leverage of the bankers will doom us even worse than the British empire. I can also tell you that the Brits were in very bad shape as a society for a couple of decades in the 50s and 60s as they canabolized their empire. I really don't have any insight on how bad it will get but if you look at what is happening to our constitution and the soft marshall law we are already in and then look at how many conflicts and wars are raging and the euro collapse then I would be foolish to say we are just going to have a nice long recession like the 70s.... So I will prepare but hope for the best case scenario. I don't lose any sleep because I cannot control what these psychopaths will do. gl to all

      Delete
    3. also Sinclair gives the best advice... GOTS Get Out of The System now.... maybe that is fear mongering but if you are in Red's "camp" budfox then you need to understand that is exactly what Red has been saying for years......AND buy ALPO ....

      Delete
  10. Correct Jay, "calm and orderly" being somewhat relative of course. It will be different say, in Chicago or LA, then Seattle or Portland. Some areas of the country are powder kegs and I believe we will see massive civil unrest there. But it will not be outright anarchy nationwide. We will slowly lose our standard of living and civil liberties/freedoms over a period of time. The boiling frog analogy comes to mind. But then again, who knows what the elites have planned for us. For the worst case scenario, I'm more in line with some of Red's predictions. I just hope it never comes to that.

    ReplyDelete
  11. how many of the bonds are backed stopped

    what is the pay out as in Detroit


    ReplyDelete
    Replies
    1. Detroit is the first test case. The pensions are the fly in the ointment and there will be blood......lots of blood. The ramifications of unwinding the retired fireman from his 60K/yr + health benefits will be full of moral hazards. That fireman has debt. He has mortgage payments...car payments etc. Welcome to hell. There are tens of thousands of pensioners from Detroit living around the US like in Florida etc. This will be a long term ongoing train wreck and like most so far it will be covered up as much as possible....but there will be more coming soon

      Delete
    2. You are correct KLI - it is pensioners that will be harmed most severely. My understanding is many of the bonds are insured so holders will continue to get their periodic payments and eventually the bond amount. Of course, I expect those bonds will become illiquid.

      Delete
  12. Budfox,wish I saw your soft landing. However, we are already too far down this road. My personal friends are actually doing well with the markets at alltime highs. But Detroit is just the beginning; Chicago looks pretty grim and Calif. would be in a helluva mess if it weren't for tech and Hollywood. Have just read The Road to Serfdom; amazing that he wrote that around 1942 (had trouble finding a publisher; finally published by the U. Of Chicago in 1944). Recommend to all; he is crystal clear about predicting this mess and has been reviled by the Marxists/Keynsians of course. Google (or better yet DuckDuckGo) Coxley's army as well. This is not the first time in our history we've had reactions to financial malfeasance. I might not have objected to the "bail outs" if Glass-Steagall had been put back in place and the real criminals had been prosecuted. But good luck with that ever happening. Am still astounded when I visit NY; living large is an understatement.

    ReplyDelete
    Replies
    1. sister - it is not just Chicago. My understanding that Houston and Miami are technically bankrupt and Philadelphia may also be bankrupt. LA is almost bankrupt (if not there already). The cities of New York are playing pension lotto as they borrow pension fund money to cover expenses... It is going to get worse - a lot worse before it gets better.

      Delete
    2. “Another way to be prepared is to think negatively. Yes, I'm a great optimist. but, when trying to make a decision, I often think of the worst case scenario.I call it 'the eaten by wolves factor.' If I do something, what's the most terrible thing that could happen? Would I be eaten by wolves? One thing that makes it possible to be an optimist, is if you have a contingency plan for when all hell breaks loose. There are a lot of things I don't worry about, because I have a plan in place if they do.”
      ― Randy Pausch, The Last Lecture

      Delete
    3. that book is worth a read by everyone..passed it along to many friends...

      Delete
  13. watch the new vid above on the crash.....its worth it to compare to now.

    ReplyDelete
  14. Fed now reviewing allowing banks to trade in physical commodity markets: http://www.businessinsider.com/the-fed-says-reviewing-physical-commodities-2013-7#ixzz2Zd53hmbR What might this mean for the PMs, oil, food, etc.? Further proof of desperate times and too little/too late?

    ReplyDelete
  15. Some comments:

    I did listen to the Financial Sense Radio Show. Nothing really new except one of their commodity experts felt that Gold could rise to 1325 (perhaps even this week), but then fall to 1150 range. Thus possible shorting opportunity. The show implied that they are going to have a 1 hour show on Gold next week, if so, I will listen to it and write a summary.

    I think it is important to listen to Jim Sinclair's warnings even though his timing has been off. How can anyone accurately time what is going on?? The Detroit situation should heighten everyone's concern. If other large municipalities fail (and I believe they will), this will only give more reason for the Feds to take over all pension plans (both public & private). Those people without adequate pensions (the majority), will have no problem with supporting the view of taking pensions away from wealthier people.

    Unless war or natural disaster, the Fed has no choice but to push stock prices higher, in hopes to strengthen/fix the economy via a wealth-type effect. My concern is that Americans have become a highly DEPENDENT people, and we are screwed if this falls apart badly.

    ReplyDelete
  16. I have no problem with taking away fat ass pensions from the public sector.

    In fact, I think we should get rid of public sector pensions altogether. People that choose that profession should do so for the love of helping the public... not because it'll make them rich.

    I don't even get a pension at my private sector job. Yet my mailman will be living high on the hog with MY tax dollars when retirement hits.

    ReplyDelete
  17. Jay,

    I think the difficulty here is how do we define and then separate the "fat ass" pensions from those "normal" pensions that are legitimately earned. My concern is that all pensions, 401K's, Profit-sharing plans (private or public) will all get grouped together.

    Any pockets of significant money may be targeted for confiscation/government control This is why many of the super rich have expatriated already. Other with significant holdings may be following Jim Sinclair's advice and move their money out of the country--to Singapore no less. An individual must actually travel to Singapore to do this.

    ReplyDelete
  18. We are sinking into the abyss while most still believe the music will play on......by the time they try to find a chair, there will be NONE. I find those that believe they can time this foolhardy. If you are not prepared now then you are probably NOT going to. If you find that to be fear-mongering then I suggest you are myopic.....its happening now and right in front of you....gl

    ReplyDelete
  19. Jay- I understand that Postal Service Pensions have been underfunded as well...money has been used for other purposes just like the Soc.Sec."fund." Federal workers will not escape unharmed. In the meantime, gold/silver had a big gap up in Singapore.

    ReplyDelete