Total Pageviews

Monday, April 1, 2024



Nobody knows when a crash is coming.  A lot of people see it coming.  But if it's 5 years away you look like a fool waiting for it while everyone else is cashing in on the precrash mania.

Because without the mania there wouldn't be a crash.

And manias can go on and on and on.

Right now, however, we are in an unprecedented period where rates were kept at ZERO year after year so that everything from Governments to Real Estate to Companies were funded with DEBT issued at or near ZERO.

This wan't because there was no  inflation.  It was because globalization was a heavily deflationary force that kept the inflation of the massive money printing/debt regiem in check.

Now globalization has reversed.  Hot war in Europe and the Middle East , nascent trade war, East vs West cold war that could morph into hot war over Taiwan or Poland or Iran or wherever, at any moment has crushed the old supply lines, regarding commodity inputs, labor, and international cooperation, so that the inflationary forces of money printing/debt are now being pressured mightily by higher rates.

And the wars themselves are highly infaltionary.

And the central banks only control short term rates.  So they will start to cut short rates as the burden of underwater bonds start to impact Governments, Real Estate, Corporations, and especially the BANKS that own alot of the debt.  Most of the banks, including the central banks are dead broke if they had to mark all their bonds to market.

They don't.

But as the bonds mature they do have to either realize the losses or try to refinance at much higher rates - or both.

And even if the Fed cuts short rates, it doesn't mean the long rates will follow.

That's the catch.  That's when the Fed loses control. And that's inevitable with debt load of this size.

This debt problem is imminent.  Just because we've been able to keep it under control so far doesn't mean we'll never discover the breaking point.  TWO TRILLION dollars of corporate debt finaced at Zero comes due over the next two years.  The Commercial - and multi family home  - Real Estate business is dead broke. And the every central bank is carrying massive balance sheets comprised of underwater debt.,  The US Fed still has 8 trillion dollars of it (despite supposed QT).  Other central banks are in the same boat. 

And all the commercial banks - even the big ones - are in the same boat.

There is no out.  There is no soft landing.  There is no  way to resolve this except hyper inflation or default - or both.

Evey Central banker knows this.  That's why central banks are buying gold.

And in the Eastern governments are heavily encouraging their citizens to buy gold - because they know when the debt crash comes gold will get you through it.  They're not worried about people using gold to evade taxes because if you evade taxes there they'll just kill you.  Even if you're rich.

Here in the West Governemnts won't do that because they need money to stay in the local currencies - Dollar or Euro so they can keep control of the Tax structure.  Here if everyone had gold and stopped spending so much on useless crap the goverment tax collecting would implode,  And here they can't even prosecute rich people for avoiding taxes because they own the legistlators and have already put in so many loopholes they don't pay much tax anyway.  If Government lost any revenue from the middle class it would be a disater.  Or even more of a disaster.

So here it's up to you to figure this out and buy gold on your own initiative.

Before it's too late.

No comments:

Post a Comment