Wednesday, December 21, 2011
There's a lot of blather out there these days concerning numbers, predictions, truisms. Gold 1400. Gold 1100. Gold 650. Gold 5000. Gold 10,000. Gold is not a safety play. Gold is the only safe haven. Gold is an inflation hedge. Gold is a deflation play. Plenty o' cash on corporate balance sheets. Corporations are drowning in debt. The Fed must print more. The Fed's printing is the root cause of this mess. We need tax cuts. We need to raise taxes. BLAH BLAH BLAH.
Tune it all out. Because there are only two Major Forces at play here that dwarf everything else:
1) There is currently a massive effort to service a massive debt. This effort involves massive printing of new debt to pay interest on old debt, and to purchase rolled over debt, and central bank purchases of bad debt (with new cash funded by new debt). As long as the Servicing of Debt continues a major DEFLATIONARY FORCE will grip the world markets,which will gyrate wildly as banks alternately sell assets to service debt and then pour cash infusions into risk markets.
2) The servicing of such massive debt is impossible. It will end. When it does a HYPER INFLATIONARY COLLAPSE will commence. Currencies will collapse. Markets will collapse. Gold will soar.
Don't time this. It is impossible. It's an idiot's game. Prepare for it. That's all you can do.