The earthquake in Zagreb was quite disruptive locally, but overall, merely a local distraction of no wider consequence.
The COVID-19 is quite nasty, especially if you had the worst symptoms, as I did, but overall, it’s a minor thing blown out of all proportions by governments in love of dictatorial behavior, and panicked snowflakes using social media to virtue-signal about how terrible it is that people actually die.
The panic regarding COVID-19 is much worse, and will eventually kill much more people than the virus, because all that virtue signalling about value of human life broke the economy and that when that starts bearing fruit, you’ll wish you had the SARS.
All the noise about quarantine and the virus is too loud to hear a more dangerous noise:
Money printer go brrr, makes more money than ever. You be so rich, with all those zeroes on paper. You’ll be able to wipe your arse forever when you run out of all that toilet paper you stacked.
I was thinking about the current rise of gold and silver prices and trying to figure out an apparent cause, when I looked at a 2 year graph and stumbled upon this interesting thing:
There seems to be a 6 month cycle of sudden rises and subsequent slow drops, like teeth on a saw blade, and the “blade” has a 20° incline, approximately. This means that the current events have very little to do with the pattern, as tempting it may be for one to grasp at them, looking for explanations. I don’t have an explanation for the 6 months cycle, but if I had to guess, it might have something to do with financial cycles I’m not aware of.
The banks worldwide are preparing the legal framework for the bail-in, which means they will basically prevent their bankruptcy by adding a portion or totality of all customer funds to their balance sheet.
In plain language, the Cyprus solution set a precedent. There are several ways a bank can handle bankruptcy. It can be bought by a larger bank (bank depositors win, larger bank absorbs the cost), it can be fixed by the state using tax money (bank depositors win, tax payers lose), it can simply go bankrupt (bank depositors lose everything), or, as it happened in Cyprus, the bank can add a portion of all deposits to its own balance sheet and fix itself (bank depositors lose a third or more of their money, but the state is happy because it doesn’t have to spend tax money on fixing a broke bank, and the bank is happy because it doesn’t have to try and find a bigger bank crazy enough to pour money into a pit of doom).
In even plainer language, the banks are all in serious shit, massive bankruptcies of major players are on the horizon, and they intend to screw you over. If you have significant amounts of money in the bank, take it out and convert everything you don’t need for monthly expenses into gold bullion, because when this shitstorm strikes, anybody close will not be smelling like roses.
This also puts a different light on their recent attempts to discourage the use of cash. It’s certainly not because of “money laundering and financing terrorism”, it’s actually because if you have cash with you, they can’t steal it. If it’s on their account, they control your access to your money. If you have cash, they don’t control anything. Also, that’s the reason why the state wants you to have everything on your bank account: if it’s there, the banks can steal it and the state doesn’t have to use tax money to fix the banks, and they can also create huge amounts of digital money out of thin air without anyone actually knowing the amount of money in circulation. Makes inflation much easier and cheaper for them. So, essentially, if you own gold you must be a terrorist. 🙂
Oh yeah, I almost forgot. Allow me to remind you what gold did in the last 12 months:
Yes, that’s the all time high. In plain language, if you bought a Krugerrand in 2005, it cost you around 300 EUR. Today you would pay around 1500 EUR. Either gold appreciated 5 fold in 15 years, or Euro was diluted to shit in 15 years. You tell me. In any case, if you kept your money in the bank, you can now wipe your arse with it. If you kept it in form of Krugerrands, you can now buy five times more euros. To me it doesn’t matter much because I was dirt poor 15 years ago, had neither money nor gold so yeah.
What I need to point out is that the primary factor in all my assessments about gold, silver and so on is the state of the American economy. Let me put it in very clear terms. American economy is clinically dead and on life support, and we’re waiting for something to happen that will make it apparent to all, and then all hell will break loose.
What’s currently going on there is the endgame of the fallacious thinking that stock market is the true indicator of the state of the economy. It is not, because this indicator has been gamed for decades. Basically, it’s all smoke and mirrors, or to be exact, an artifact produced by firing competent people who “cost company money” because they are doing research and development, and taking huge low-interest loans (after using up cash reserves) to buy back own stock, which of course raises the stock price into the sky, but the actual value of the company decreases because it has less cash reserves, more debt and less competent people to do the actual work. This policy became the best way for companies to quickly enrich the shareholders and is the reason why the managers who do it receive such stellar bonuses. Unfortunately, as a result of this practice the whole American economy now consists of pencil pushers and “financial experts”, while the actual work is done elsewhere.
So, everybody who points out their stock market to prove that American economy is doing great is selling you bullshit. All of that money basically enriches a very thin layer of people while the actual companies are empoverished at an exponential rate, and it’s contageous because when one company starts doing it the others have to follow in order to stay competitive. And since the stock market valuation is used as one of the legs of the currency backing (along with the mortgages and gold reserves), this means that all those huge amounts of money printed have no actual backing, because the stock prices were inflated by financial trickery and not an actual rise in fundamentals.
Boeing is a good example: it achieved great stock prices by firing thousands of engineers, to the point where it is now in serious shit because, guess what, its plane was engineered poorly. Also, its liabilities are several billions greater than its assets. Will it be the bankruptcy of Boeing or some other fortune 500 company that starts the avalanche, doesn’t really matter, because they are all profoundly fucked and it’s only a matter of time before this bubble pops, and when it pops, it’s the end for America, because there can be no recovery from this, because it’s the entire structure that’s rotten: the society, the economy, the politics, and the young people who should pull this off are snowflakes who spend their time trying to figure out their gender.
Gold and silver are getting out of the slump again, so that’s good.
I’ve been buying silver like crazy for the last, what, six months or so, and I think I’m at the point where I’m good if the prices suddenly explode; I have enough of an amplifier to actually matter. When I felt I don’t have enough silver, I went for it full throttle, but now I’m slowing down and adding physical gold to my monthly purchase strategy. Still buying silver, just not as heavily.
So far, gold proved to be a better investment than silver, but that’s expected. My predictions were always that gold is going to outperform silver up to the point where it reaches peak price and almost zero availability. Then, silver is going to rise to match and stop somewhere around scarcity equillibrium. That means I had to buy silver while it’s cheap, because it would not create enough of an amplifier if I went for it after the price had already climbed; also, there is so little metal actually available on the market, I might find myself in a situation where I want to buy, only to find myself facing empty shelves, and nobody selling. That’s the trick with this game: you must anticipate and buy when nobody thinks it’s a good idea, because when everybody thinks it’s a good idea, that train had already left the station. And when everybody goes completely crazy about it going vertical forever and people on the street start talking about silver being a no-brainer, it is probably a good time to start carefully heading toward the exit. Which brings us to the current state of the stock market. I’ve seen all this before, somewhere around 2007.
