- I have warned persistently of a coming global currency crisis triggered by the collapse of the USD. All fiat currencies will be under assault. The snakes will take the whole world down with them and thereafter introduce their One World Currency and Global Central Bank (BIS? with IMF as global treasury department?).
- There is a worldwide bond bubble. 10 year US treasury yield is at 2.5% and 30 year bond yield is at 3.53%. Real inflation as reported by www.shadowstats.com is at 4+%. Why would anyone continue putting money into bonds after such a massive rally? It is all about herd instinct/behavior. When the flight out of bonds and into commodities come, it will be spectacular. Such moves will stoke inflation and possibly hyper-inflation worldwide. The parabolic price rise in gold and silver is still ahead of us. Don’t be the last sheep out of the bond door into gold.
Decoupling Now, Currency Crisis Soon
NIA believes that the decoupling we have been predicting of precious metals from the Dow Jones has now officially taken place. A year ago we would consistently see precious metals and stock market prices rise and fall in parallel. We have now seen the Dow Jones decline by 6.1% from its high on August 9th, along with both gold and silver rising by about 3.3% during this same time period….. We expect silver to significantly outperform gold in the months to come.
One year ago, almost all mainstream economists on CNBC were calling for either a “U” or a “V” shaped economic recovery. NIA said that prices were rising only due to inflation and there would be no economic recovery. NIA went into detail about how destructive government programs like the homebuyers tax credit were helping to artificially boost economic numbers, but as soon as these programs were over, economic activity would collapse to new lows. NIA was right. Now that the government has ended its homebuyers tax credit, we just saw sales of previously owned homes decline in July by 25.5% from one year ago, to their lowest level in a decade. We also saw new home sales in July based on the signing of new contracts decline by 32.4% from one year ago.
The government will report their second estimate of second quarter GDP on Friday and we will likely see a revision from growth of 2.4% down to growth of less than 2%. Keep in mind, the White House budget is projecting a GDP growth rate of 5.58% over the next five years (along with permanently low interest rates) in order to get the budget deficit down to $752 billion in 2015. With a sharp contraction in GDP likely coming in the third quarter, NIA continues to believe that the Federal Reserve will unleash the mother of all quantitative easing this fall, along with a huge push by Congress for a new stimulus plan.
U.S. mutual funds currently have about $10.5 trillion in assets, with $2.5 trillion being in bonds and $4.6 trillion being in equities. Although the amount of money invested in equities is still far greater than bonds, asset inflows into bonds have outpaced equities for 30 consecutive months. During these 30 months, $559 billion were invested into bond funds while $209.4 billion were pulled out of equity funds. It is a real shame that most retiring baby boomers who are looking for safety, are actually investing their savings into the riskiest assets of all…… When this bond bubble begins to burst, prices of commodities will explode to the upside like nothing you have ever seen before.
NIA believes that there is a risk of the bond bubble beginning to burst as early as this fall. Smart money is now loading up on commodities. In the week ended August 17th, net long holdings in futures for 20 commodities rose 2.6% to 1.18 million contracts, with the biggest rises coming in agricultural commodities like wheat and corn. Commodity assets under management gained by about $8 billion in July to over $300 billion.
The World Gold Council just announced today that gold demand surged in the second quarter of 2010 to 1,050.3 metric tons, up 36% from one year ago. This rise in demand came mostly from rising investment demand, with gold demand for backing ETFs climbing 414% and retail investment demand rising by 29%.
Because the rest of the world still likes to follow and emulate the U.S., it might be Americans who initiate the upcoming stampede out of bonds, U.S. dollars and other dollar-denominated assets, and into precious metals. For the time being, the average American is still more likely to be a seller of gold. Recycling of gold increased 35% last quarter to 496 metric tons. Once Americans become educated about how gold isn’t expensive and is still trading for only 1/2 of its all time high adjusted to the CPI and 1/4 of its all time high adjusted to the real rate of price inflation, and that by recycling gold they are actually trading real money for fiat paper money, this recycling supply will diminish and the world will face a major gold shortage. The world already has a major silver shortage that will become apparent to all very soon.
NIA’s co-founders still receive phone calls on a daily basis from non-NIA member friends asking for us to invest in Real Estate “short sales” and other foreclosure deals. By year 2012, NIA guarantees nobody is going to want to touch Real Estate and all of your friends will be calling you about the latest Krugerrand that they bought. Although NIA doesn’t project hyperinflation to occur until the years 2014-2015, there is a serious risk of hyperinflation occurring any day now. Hedge funds need to be where the momentum is and as soon as the momentum turns against the dollar, we could see the bond bubble burst and the currency crisis begin instantaneously.
- The wholesale change in attitude by central banks toward gold has started. It has begun in Russia and Asia. Only the western Illuminist central bank cartel is still driving the price of gold down. They have a hidden agenda and aren’t that dumb. Their goal is to collapse all fiat currencies and ‘persuade’ the world to accept their One World Currency and Global Central Bank. When this One World Currency is introduced, I am 90% sure they will back it with hard assets like gold and commodities: oil, wheat…etc.
- What the western Illuminist cabal has done is: sell the gold belonging to the sheeple, thus depressing the price and quietly buy them up. This is simply the transferring of public wealth into private Illuminati hands. Do not be taken for a ride. Gold and silver are the real currencies of these Illuminists. You don’t seriously believe they are deceived by their own fiat currencies toilet paper machinations do you? When they are ready to pull the plug, you will see the sheeple holding the bag of useless fiat currencies and the Illuminati holding the gold. Remember the golden rule: He who has the gold makes the rules!
Bank of Korea `Under Pressure’ to Boost Gold Holdings, Shinhan’s Oh Says
The Bank of Korea, which has shunned adding gold to foreign-exchange reserves, is “under pressure” to consider purchases as the global economy worsens and the price advances, Shinhan BNP Paribas Asset Management Co. said.
“Given that central banks in India, Russia and China have bought gold for defense, the Bank of Korea can’t help but feel under pressure to consider purchases for diversification,” said Oh Kyu Chan, Seoul-based head of the overseas fund of funds team at Shinhan BNP, which operates Korea’s biggest gold fund. Kang Sung Kyung, a senior official at the bank’s reserve-management department, had no comment today on plans for gold purchases.
Gold is trading close to a record as signs the global recovery is sputtering prompt investors to seek to preserve their wealth. Gold “offers little value” and “isn’t the trend,” Lee Eung Baek said last year when he was head of the bank’s reserve-management unit. The Bank of Korea’s holdings rank 56th worldwide, according to the World Gold Council.
“The global economy is taking a turn for the worse,” Oh said yesterday in an interview. “The declining values of the dollar and the euro, coupled with an economic downturn, mean the Bank of Korea should find other alternatives to invest. There are not many options,” Oh said, without forecasting gold prices.
South Korea’s foreign-exchange reserves — the world’s sixth-largest after China, Japan, Russia, Taiwan and India — rose to a record $286 billion in July. The Asian nation holds 14.4 metric tons of gold, equivalent to about 0.03 percent of total reserves, according to figures from the Bank of Korea.
The World Gold Council, a producer-funded lobby group, estimates that as of June 2010, South Korea’s gold holdings were the smallest in percentage terms of any of the top 100 holders apart from Hong Kong’s and Canada’s.
Bank Rossii, Russia’s central bank, said on Aug. 20 that it added 500,000 ounces last month, increasing its stockpile to 23.3 million ounces. That followed last year’s purchases by India, Mauritius and Sri Lanka. China, the world’s biggest gold producer, said on Aug. 3 it will relax bullion-trading rules.
- The hidden financial war between the US snakes and the EU snakes over world domination is laying the groundwork for the fulfilment of this prophecy: (the harlot is US and 10 horn beast is EU)
Revelation 17:16 (New King James Version)
16 And the ten horns which you saw on[a] the beast, these will hate the harlot, make her desolate and naked, eat her flesh and burn her with fire.
- The Illuminist system is Darwinian. It is based on survivor of the fittest and the weakest has to die to make way for the strong. It is duplicitous and exalts fear, power and control. Distrust is inbuilt. They only trust someone when they have something bad on him that they can use to blackmail him. This is the reason why only evil, compromised, mentally weak, psychologically narcissistic and probably insane people are elected. Amongst the favourite dirt are homosexuality and lesbianism. Good people seldom make it because they cannot be blackmailed and manipulated.
- Something has to give soon and the whole house of cards comes tumbling down. Snakes are waiting for this chaos to begin. I encourage all to read the entire article by Webster Tarpley:
China Buys Euros as Fear of World Depression Grows
The US Treasury has just announced that China’s official holdings of U.S. Treasury securities declined by about $30 billion between April and May of this year, from about $900 billion to some $868 billion. According to the US authorities, this means that Chinese holdings of US government paper are now at the lowest level in the past year. A 2% to 3% decline in a month does not qualify as massive dumping, but simply means that China is in the process of diversification. It is also very likely that China has more U.S. Treasury bonds than this official count would indicate, quite possibly through proxy purchases via Hong Kong and other places.
With the sales of existing homes in the United States falling by 27% this morning, together with disastrous statistics regarding unemployment and foreclosures, it ought to be obvious that the US economy is in depression. Even experts interviewed on CNBC are beginning to wake up to this obvious fact.
World Bond Bubble
On August 24, the Treasury’s two-year note reached its highest price in recorded history, meaning that the yield was at a record low. The entire world is piling into short-term U.S. Treasury paper, and many buyers cannot get enough. This makes a mockery out of the right wing reactionary refrain that the US equals Greece and soon will be unable to borrow. If, according to the crackpot Austrian theory, markets know things that individual humans cannot know, then surely the market is signaling a great desire for Treasury bills and Treasury notes at the short end. The main reason for this demand is of course fear and panic – coming from the growing awareness that the world is indeed experiencing the second wave of a world economic depression of colossal proportions.
There is now a large-scale international bond bubble involving, among others, US treasuries and German Bunds. Since the flash crash of May 6, many investors have fled the stock markets entirely. It is still too soon to sound the alarm on deflation ahead, but deflation has now appeared over the horizon as a concrete possibility – partly because so many major financial players are now convinced that deflation is the wave of the future. If this were to come about, it would mean a depression looking much more like 1929-1933 than the relatively more mild situation we have experienced over the last two years. The depression may be taking a turn toward something far more excruciating for the masses of the population. One by-product of that would be vastly decreased popular gullibility for the anti-government recipes of the libertarian Austrian school, which are tailored for those who have money, and which have very little appeal to people who are unemployed, homeless, and starving.
Also on August 24, the Japanese yen hit a 15-year high compared to the dollar, and a nine-year high compared to the euro. This kind of currency championship is a Pyrrhic victory which nobody wants, since it means the Japanese exports are in the process of being strangled. This is true currency chaos and world depression at the same time, pointing once again towards the urgent need to restore the fixed rate system of Bretton Woods, which was destroyed 39 years ago this month by Nixon and Kissinger, urged on by Milton Friedman and other snake oil economists.
For the past year, the main thrust of the London and New York financial centers has been the effort to export the Depression into Europe by means of a speculative attack on the government bonds of Greece, Spain, Portugal, and some other countries, all designed to provoke a panicked flight out of the euro, which would in turn allow the Anglo-Americans to loot and asset strip the accumulated wealth of the old continent. This was not a market event, but it orchestrated strategic attack, inspired by such figures as Soros, Einhorn, and Paulson. During July and the first half of August, it became apparent that this Blitzkrieg as originally planned had failed to reach its objectives. But the Anglo-Americans, one-trick ponies as always, maybe persisting in the assault.
China Blocks US-UK Attack On Euro
The Anglo-American hedge fund attack, as we have documented here, employed credit default swaps as the primary weapon against Greek, Portuguese, and Spanish government bonds. The failure of London and New York to induce a panic flight out of the euro during the May-June timeframe was partly results of the German self-defense measures, involving bans on naked credit default swaps and bans on naked shorting of German equities. In addition to this, Chinese support for the euro has played a decisive role.
There is every indication that the Chinese made a decision not to allow the destruction of the euro during the late spring and early summer. That decision was technical, commercial, and political at the same time. The technical part was the China sought to re-balance the basket of currencies it uses to maintain the international stability of the renminbi. As the euro looms larger in Chinese trade, purchases of euros and Eurobonds are in order. It is also worth pointing out that the Chinese have not delivered on their promise to radically raise the international value of the renminbi, as hysterically demanded by Tiny Tim Geithner and others.
The commercial and political sides of Chinese support for the euro were reflected in the June visit of the Chinese vice prime minister to Greece, notably to the port of Piraeus. This Chinese envoy signed more than a dozen important economic cooperation deals, including shipping and shipbuilding, telecom, and container ports. The deputy Greek finance minister, Theodoros Pangalos, was quoted as saying: “The Chinese want a gateway into Europe. They are not like these Wall Street [blankety-blanks], pushing financial investments on paper. The Chinese deal in real things, in merchandise. And they will help the real economy in Greece.”1 The emphasis on the production of tangible physical commodities by the Chinese, in contrast to Wall Street’s reliance on a mass of toxic and kited derivatives, points to the real basis of Chinese economic ascendancy. If the Chinese are wise, they will not go overboard with short-term greed, but rather be ready for generous concessions to the Greek labor movement, so as to get the unions on their side. In any case, these euro-denominated Greek purchases are one obvious reason why Beijing is holding fewer greenbacks and more euros.
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