Beware What You Wish For…As You’re About To Get It
The trading day just ended on what may be the penultimate week of “normalcy” for generations to come. Frankly, I have never been more scared, as the certainty of my views has never been more powerful. They are that nothing – not Central banks, governments, nor any “supreme manipulative power” – will be able to stop the unstoppable tsunami of political, economic and monetary reality that has already engulfed large swaths of the “emerging” world; and currently is heading for the “developed” world full bore, like a runaway train down an icy mountain, loaded with nuclear explosives.
To that end, today’s topic is as “philosophical” as anything I’ve penned, which I believe is appropriate given the circumstances – as it’s one thing to speak of what will be, and another to experience it firsthand. This is exactly what I think everyone reading this blog is about to live through – as a new, terrifying “normality” replaces what we have known throughout the entire post-War era.
Economically, we are unquestionably – on a worldwide basis – living amidst the weakest conditions since the Great Depression. Which sadly, is not only plunging steeply downhill, at a rapidly accelerating rate, but features the triple-barreled terminal dangers of historic oversupply; unprecedented, parabolically-rising debt; and relentlessly hyper-inflating currencies. And oh yeah, 7.4 billion people fighting to survive in a world of rapidly declining employment opportunities; rising inflation; and non-existent savings. Frankly, I’m exhausted with documenting the countless economic “horrible headlines” each day – like the Cass Freight Index plunging to nearly its 2009 financial crisis low – so I’m going to take a pass for a day. Other than to say, that today’s reality-exposing crude oil plunge – based on news that my vehement prediction of NO DEAL at next Tuesday’s Algiers producer meeting will in fact be the case – may well be the straw that breaks the financial markets’ backs.
In the event oil inevitably – and perhaps, imminently – crashes below $40/bbl; and potentially $30/bbl; the wave of defaults will be at least as devastating as the 2008 subprime mortgage crisis. As that time, not only corporations, but sovereign governments themselves will collapse in the case of the already unstable Middle East, potentially catalyzing World War III. Let alone, “other” modern-day lending catastrophes like “subprime” student and auto-loans, high-end real estate, and countless corporations that borrowed cheap Central bank “money” to buy back shares at historically overvalued prices. And oh yeah, I’d be remiss if I neglected to note that the New York Fed, today, dramatically reduced it’s (soon-to-be-further-slashed) 4Q GDP “growth” estimate to…wait for it…1.2%!
Politically, the hell that is about to rain down on the world will be no less devastating than the worst instances of 20th century authoritarianism – and in some cases, 19th century and earlier. Former “first world” nations will no longer enjoy such privilege, yielding massive declines in the standard of living – that frankly, could never be imagined a few years back, even at the bottom of the 2008 financial crisis; or, for that matter, the immediate aftermath of 9/11. Japan will literally plunge from the first world to the third; “commodity currency” nations will experience hyperinflation; and Europe will become a neo-feudal hell – potentially, far sooner than most can imagine, given that Deutsche Bank of Germany and Bank Monte Paschi of Italy are literally on the verge of collapse. Which, if one or both go, will be the equivalent of a nuclear financial explosion.
And yet, the US’s decline will be the most spectacular. Not because its standard of living will be the world’s lowest – as likely it will remain amongst the highest. However, the scope of its decline will be the largest, given that the US standard of living – like its PPT-supported financial markets – is more “overvalued” than any other, relative to its true equilibrium level. In other words, as the dollar’s “reserve status” dissipates, Americans will be forced to accept the reality that not only are they broke, but their “money” is worth far less than they thought. And oh yeah, the world will no longer “subsidize” its undeserved largesse, so we will be forced to dramatically downsize our lives. And since the average American already has no savings, it will result in a dramatic expansion of the Nanny State; and in turn, exploding authoritarianism, and equally virulent monetary inflation.
In other words, beware of what you wish for – as even if you have been wise enough to protect your financial well-being with Precious Metals, or any other asset deemed to have “safe haven” status,” the positives associates with financial salvation may well be offset, or even overwhelmed by, the negatives associated with a world of 7.4 billion people gone mad. To wit, there is no precedent for a “debt jubilee” this massive – which frankly, makes the October 2nd expiration of the 2016 “jubilee year” that much more interesting, and terrifying. Or, for that matter, a global fiat currency collapse, in which all 7.4 billion people will be negatively affected – politically, economically, and/or socially. And I do mean all.
That said, my principal role in the alternative media – aside from my job as Marketing Director of one of America’s oldest, most trusted bullion dealers – is to warn you of the financial ramifications of what’s coming. Which, after 27 years in the business world, I can only be confident in physical Precious Metals to provide. Yes, I own a small amount of Bitcoin, as long-time readers know well – but given its limited track record, it is still just a speculation; as opposed to gold, silver, and to a lesser extent, platinum, which I know will protect me. And trust me, now that even MSM propaganda rags like the Wall Street Journal and New York Times are actively lambasting Central banks – shortly, to be followed by CNBC – it’s only a matter of time before everyone realizes the system is not only rigged, but collapsing. And thus, that physical Precious Metals provide the best chance of financial survival.
Before I go to get some well-deserved rest, in anticipation what may well be a turning point in financial history – I figured I’d list chronologically the events most likely to catalyze the “Big One,” in the next two weeks alone…which sadly, represents a mere fraction of the potentially negative catalysts out there, many of which haven’t yet surfaced.
- September 24th – Obama’s decision to sign or veto JASTA, the Justice for Sponsors of Terrorism Act
- September 26th – First Trump/Clinton debate
- September 27th – Algiers Oil producer meeting
- September 30th – End of US fiscal year – will there be a fiscal 2017 budget?
- October 1st – Chinese Yuan inclusion in SDR currency basket – will they announce increased gold reserves?
- October 2nd – End of the biblical “jubilee year”
- October 7th – September NFP Report
- October 8th – Deadline for Italian Parliament setting the date for this Fall’s Constitutional Reform Referendum
- ???? – Deutsche Bank, Monte Paschi, Greek “bailout” discussions
Reading this “list of terror,” you can see why I’m so scared of what’s coming – potentially, as imminently as it is inevitable. This is why I more vehemently than ever, advise you to PROTECT YOURSELF…and DO IT NOW!
Andrew ("Andy") Hoffman, CFA joined Miles Franklin, one of America's oldest, largest bullion dealers, as Media Director in October 2011. For a decade, he was a US-based buy-side and sell-side analyst, most notably as an II-ranked oil service analyst at Salomon Smith Barney from 1999 through 2005. Since 2002, his focus has been entirely on precious metals, and since 2006 has written free missives regarding gold, silver and macroeconomics. Prior to joining the company he spent five years working as an investor relations officer or consultant to numerous junior mining companies.