What Did We Miss?!

November 26, 2014

This past Thursday I was speaking with John Embry regarding the massive 80 ton sale of gold futures the day before in a tight 15 minute window.  We talked about how egregious the suppression has become and the "scorched Earth" policy employed over the last couple of months.  We both agreed this can only mean we are getting closer to something big (and very bad) happening very soon.  The fact there is now no longer even any effort to "hide" the suppressive actions, wreaks of desperation. We both see this as a major "tell" and the further down the rabbit-hole the markets are pushed, the closer we are to the system outright breaking. John and I over the years have agreed on so much and disagreed on so little, we seem to be "brothers from two different mothers".  Often times he will write something or vice versa and the other then needs to do a little bit of a re write so it doesn't come across as plagiarized.  I tell you this because when we spoke last Thursday, we almost simultaneously said "I'm going to write Happy Thanksgiving this week because this is probably the very last 'normal' one of our lifetimes."

Earnestly, I wish you all a Happy Thanksgiving and hope you understand what the holiday is really about.  Yes, hanging out with family, eating a great meal followed by a few beers and watching football is what it has morphed into, I am not saying this is a bad thing.  What I am saying is we all should be thankful for what we have and "have had".  We (I am speaking as an American) have collectively lived the best lives of any humans during any time period in the history of the planet. 

Put simply, we have lived the American dream with the highest standard of living ever in history.  This is changing and unless you are small subset of even the "1%", your standard of living has begun to slip.

Throughout history, many empires have risen and then declined.  Each of these empires "shared" several things in common.  Most used "debt" as a means toward growth and used it more feverishly to hide decline. Generally speaking, debt was "good", it was so good that it became over used.  Another commonality amongst empires has been the debasement of their currency.  If you study history you will see this as a common theme back to and even before the Roman Empire.  Lastly, empires typically begin decline once their military becomes too widely used and "spread thin" so to speak.  There are others (including a deceived or unaware public) but these three are the biggies.

There is no denying the U.S. is now afflicted from all three of these directions.  We have too much debt, we have blatantly debased our currency, and our military has been used to bully and abuse ...quite simply over used.  Our standard of living is already falling no matter what "statistics" or propaganda is employed to hide this fact.  This will only get worse until something breaks.  The only questions in my mind are "when, how fast and how severe"? 

John and I discussed these three and almost agreed entirely with only one caveat.  If asked several years ago whether we could have made it to Thanksgiving, 2014, with a financial system still intact ...both of us would have given a very low if not almost zero percent chance.  What did we miss?  We missed the fact that "government" (ALL Western governments) were willing to bankrupt themselves to prolong the game.  In essence, we underestimated their stupidity (and greed to retain power at any all costs)!

As to the three questions, (when, how fast and how severe?), we both believe the word "soon" is too broad and should be replaced with "on any given day".  How fast?  When this thing goes, there is a good chance that because of leverage and computerization, the word "overnight" may apply.  If not, a couple of weeks at the very most.  The only area we even slightly disagree about is "how severe?"  John still has hope that any financial calamity will not erase the rule of law.  He believes what is coming will be worse than anything mankind has ever seen from a financial standpoint but there is a chance we don't slip into anarchy.  I disagree, I personally (and very painfully) believe anarchy is almost a given where it becomes every man (woman) for himself.  Again, speaking as an American (John is Canadian), I see this country more divided than any time since the civil war.  Today, it is not just one issue, it is many but this is not really the problem.  The problem as I see it is we no longer have a "backbone".  We as a nation have become "dependent" on so many things.  We no longer farm, hunt, fish or live off the land in any way...why would we when going to Walmart is easier?  I'll stop before I go off on a tangent...

I write this Monday evening before the Ferguson grand jury decision is out.  If as suspected the verdict is not to indict, it is "almost" planned that riots will ensue.  Strike that, riots ARE planned.  It does not matter to me whether someone is white, black, Hispanic, red, green or blue and certainly would never advocate someone needlessly being "murdered" ...especially by the police.  My opinion, (which doesn't really matter) is that this was not a murder, rather it was self-defense against a very big person who had just robbed a store and was aggressive with its owner.  Right, wrong or whatever, if there is no indictment there will be rioting, the Ferguson police have even supposedly suggested "if you don't own a gun, go buy one".

What was my point to the above paragraph?  Mainly to point out what we in my opinion will be seeing everywhere.  As you know, I am convinced the financial system will come down.  This will take many lives with it.  There will be unrest and looting for a reason no more complicated than hunger.  It pains me to write this during Thanksgiving week but I did not choose the timing.  We can only hope and pray real justice is served and once announced there is no rioting.  As a suggestion, if this situation does blow up and into violence, please watch and listen, then think ...what if this were to be my city or town?  I urge you to do this because a broken financial system will surely bring with it something resembling Ferguson.  Again, I am sorry to bring this message to you right before Thanksgiving.

I wish everyone a Happy and blessed Thanksgiving whoever your God may be!  Regards,  Bill Holter

Bill Holter writes and is partnered with Jim Sinclair at the newly formed Holter/Sinclair collaboration. Prior, he wrote for Miles Franklin from 2012-15. Bill worked as a retail stockbroker for 23 years, including 12 as a branch manager at A.G. Edwards. He left Wall Street in late 2006 to avoid potential liabilities related to management of paper assets. In retirement he and his family moved to Costa Rica where he lived until 2011 when he moved back to the United States. Bill was a well-known contributor to the Gold Anti-Trust Action Committee (GATA) commentaries from 2007-present.

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