Category Archives: economy and money

American economy collapse

Posted on by
6

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.

Metal buying strategy

Posted on by
4

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.

Gold and silver getting scarce

Posted on by
17

Essentially, things are moving more slowly than I expected them to, but they are following the predicted pattern. The spot prices are completely fixed due to the fact that most “metal” being traded exists on paper only, but physical metal is getting scarce, especially since the central banks mopped up majority of it. Having in mind that only a small fraction of the population actually has physical metal, and the majority didn’t wake up and smell the coffee yet, you can imagine what will happen when the majority tries to convert their paper savings into gold and silver, only to find out that there isn’t any on the market.

In Germany, a small “gold rush” in the order of magnitude of 200 people daily per retail store was sufficient to completely exhaust the amount of metal available for sale.

Manipulated markets and war

Posted on by
2

How can you tell a certain commodity market is being manipulated? It’s when supply is restricted, demand is enormous, and the prices are not rising. It means someone, usually the huge buyers, is influencing the markets by complicated and marginally legal means in order to keep the prices affordable for themselves. In my opinion, that’s what we have been seeing in the precious metals market in the last few months. The central banks and other big players have been buying unprecedented quantities, including the future production, and the prices have been dropping. I have a pretty good idea how some of it is being done, and even I am quite shocked at the amount of fuckery involved.

Also, we are approaching the upper limit of my prediction, because 3 months ago I said I expect the thing to blow up in the time interval of 15 days to 3 months. This was based on the expectation that the American stock market is in a hugely unstable bubble, that the central banks and other buyers will quickly exhaust the physical metal supply and this will in turn collapse the unbacked paper market, which worked thus far only because the bluff hadn’t been called. In the mean time, the fed has been printing money like crazy, and it’s been going into the American stock market, basically trying to prop it up in order to stabilize the house of cards. Also, overnight borrowing by the banks is huge, which indicates serious liquidity issues. In essence, the visible metal prices seem to invalidate my prognosis, but I think it’s just a matter of time before this house of card collapses, and I’m actually not in a great hurry to revise my time estimates, I think we’re still on the same schedule. I’ve seen very similar patterns in 2007. Marketplace was behaving contrary to the underlying realities seemingly disproving them, until it went poof.

I’m still buying silver with all the money I can spare each month, and I still recommend it to others. If the banks are buying metal instead of paper, contrary to their long-standing custom, it means paper is going to shit. Already, bets are being made on gold exceeding $4000 by summer of 2021. Some people say someone is betting high and will probably lose money. I say somebody is betting on a certain thing in a marketplace of asshats. A major constraint on my prognosis is that this time the financial collapse will be so big, it might cause the major players to pre-empt it with a nuclear war, seeing it as a preferable option. In fact, that’s what I’ve been warning about for years already; American intentional aggravation of the geopolitical situation makes no sense in any other context. Also, America is in the overture phase of a very nasty civil war for the last 3 years, with Obama-appointed people in the intelligence agencies acting as some sort of an insurgency that is trying to negate the results of the presidential elections, sabotage the executive branch of government, and, most importantly, control the media in order to propagandize their own populace. They actually revoked a law that used to prohibit that, so that everything would be legal.

When a significant part of a nation is refusing to accept the election results, using all kinds of excuses, that’s when you know the democratic system collapsed and the country descended into banana-republic stage. The level of political discourse in America is something I am used to seeing in African shitholes, but not in serious countries. It’s basically all at the point where the sides are so far apart in fundamental issues, they can no longer be said to belong to the same civilization, let alone nation. When this war gets hot, it’s going to be worse than Bosnia and Rwanda.

Fog of war

Posted on by
3

Some generals consider only unilateral action, whereas war consists of a continuous interaction of opposites … no strategy ever survives the first engagement with the enemy.

— Carl von Clausewitz

I like Von Clausewitz and his elegant formulations of complex realities, for instance, how a well made plan isn’t likely to fail just because the “fog of war” happens to obscure your vision and you see only chaos, gossip and misinformation. You have to trust that you made a good soufflé, put it in the oven and wait for it to rise. Changing the recipe, checking before time and second-guessing yourself are of no use.

That’s how I see the current situation. I trust that I had read the situation well, that I made all the right moves that were possible for me in the given circumstances, and there’s really no point in bouncing off walls like a ping-pong ball. The situation where you wait for the outcome, and the reality apparently contradicts your assessment and actions is not only not new to me, but I saw it in a movie “The Big Short”, about the 2008 collapse of the real-estate mortgage market and the guy who saw it coming, bet everything on the collapse, and the market kept rising, at which point he thought, “what if the entire market is so inherently broken and controlled, that they can do this indefinitely, or at least long enough for me to run out of money?”

The answer is, of course, that there is only so much you can do. The soufflé is in the oven, and it’s either going to rise, or it’s not. There’s not a damn thing you can do about it at that point, as Benjamin Sisko’s father would say.