- We all know what caused the 2008 banking crisis killing
Lehman and others. It was reckless lending, too low interest rates, loosy-goosy
credit for consumers and most of all, instigation of derivatives by greedy
bankers hungry to make billions on the quick. Now that central banks have
bailed them out of their insolvency and replenished minimum capital standards
by stealing TARP funds from taxpayers, we find the next LARGER MESS looming
on the horizon. Governments grasping for tax income will be grubbing, and
taking all at a new furious pace. Consumers that are able will simply drop-out
of the system and down-size.
- If you thought Lehman was fun get ready to see new price
controls and acceleration of existing capital controls, with inflation that
will knock your socks off. We have at least two to five more years of crash
and burn in the financial markets before a new base is found. Then, toxic
trade policies and old grudges open the door to a new World War, which
obviously no one can afford. This is simply historical fact and not any
wild forecasting by me although some may consider me crazy.
- Many of the very large global banks will be nationalized and
some will fold into insolvency or merger. Roughly 90% of the derivatives
and real estate toxic paper trash remains hidden on banker balance sheets.
Not only was the problem never fixed, they've been piling on more bad loans-paper
at a furious pace. The Banker's Motto is "Steal while you can.
You never know when the party ends."
- Credit is the life blood of any positive economy. Yet,
lending to commercial companies is almost non-existent. Further, the administration
is piling on new and higher costs in health care, payroll taxes, benefit
costs and SS withholding, crippling the only real source of new jobs and
employment-small business. There is no strong, positive engine of
growth on the horizon except precious metals and commodities trading and
- What few have noticed is the current inability of banks,
bankers and investment banks to make any income.In a depression,
income becomes paramount. Banks' ability to earn money is diminishing on
all fronts; credit cards, corporate loans, investment banking, commercial
banking, real estate, and of course consumer loans for toys and stupid
junk that composes 70% of the entire USA consumer spending economy. If
Paulson and Bernanke had not conspired to give bankers TARP and other stolen
billions, the big banks would now be insolvent.
- Banks are stuck with earning a puny 1-3% on the stolen
TARP funds they have invested in US Government paper. When the
bond market tanks, that stolen cash is toast and so it will be with their
3% earnings. How fitting is that? Paybacks!
- The losses are so beyond comprehension they simply cannot
be measured due to derivatives and credit default swaps. Yes, the swaps
are allegedly insured but the counter-parties simply have no hope of paying
what they owe. They will be overwhelmed and the scary fall-out can only
be broadly considered and not even estimated. For now, it's all hiding
in the back rooms of banks. If the mark-to-market they are insolvent.
- American commercial and residential real estate is wrecked
for two decades. Property ownership, banks, credit unions, title companies,
loans, lender loan ownership and ability to pay are all simply destroyed.
- Corporate insiders, CEO'S, presidents, and other officers
have been selling gobs of stock at a rate we last heard of as 1600 to 1.
That's 1600 shares sold for each one purchased. Mr. Ballmer, chief
honcho at Microsoft is dumping well over $1 billion as we speakthat
is only one example. Others are selling entire companies, some taking a
lifetime to build, in order to cash out and run with the money.
- These people know exactly what is coming. Insurance companies
thrive and live on earnings from investments they make using policy holders'
cash. If commercial real estate sinks some more, as we think it will, it's adios
income for the insurers. Further, policy holders, having paid into
whole life, will cash them out to live; taking capital out of the insurance
companies' till. This further removes insurance company balance sheet cash.
- The next big government taking will be to steal the pension
pools of national and international corporations.This is the last remaining
honeypot for government theft and has already been practiced in South
- Those companies that are smart and can see it coming
are off-shoring piles of assets, cash and investment paper to keep it away
from the takers. How this can work out, lord only knows.
- Individuals holding pensions and government paper will
wake-up one morning to find its all been seized and piled into 30-year USA bonds,
which are sinking like the Titanic. There will be no buyers and no
exits for those assets. The owners could get totally wiped out. We strongly
suggest you plan accordingly while being very careful. Old rules will not
apply any longer. Bonds stink and they are getting stinky-er.
- The real estate industry is such a tangled web of messes, the
government plan (in our view) is to gather all the bad loan paper into
Fannie and Freddie over the next 2-3 years. Congress gave them an open
check book to buy as much garbage as possible. At the appropriate moment,
the F&F's will be forced into bankruptcy and presto, all the bad stuff
- If this is true, we wonder, where does this leave the
banks and home owners'? Do the banks get paid twice? No surprise to us
if this happens. Would the homeowners be free and clearinteresting dilemma?
Who owns the properties? Who owns the loans? How would you like to be in
the title insurance business guaranteeing all the suspect properties?
- The 4th quarter sales period for larger retailers, department
stores and big box stores is when they make theirentire year. One
bad 4th quarter can take them down. We hope they have at least a decent
quarter and can remain in business. Some of them after the January,
2011 returns and mark-downs will be filing bankruptcy.We forecast only
a minimum of Xmas spending by Americans as a final result. By February,
we'll see who's headed to the BK courts. Sales are mildly stronger but
profits are toast on these give-aways.
- We got the news today that the massive A&P grocery
chain intends to file bankruptcy as early as Monday, December 13, 2010.
- If the Congress fails to pass the Bush tax cut extensions
before Christmas 2010, we forecast the later January, 2011 broader market
selling cycle will occur before the end of December to reduce taxes.
- QE2 Presents Our Largest Global Disaster.
- We said years ago after the derivative mess and negative
housing news came to light that Bernanke would have only one chance; and that
is to print phony money and paper. This is exactly what he is doing
and will continue to do until the financial system implodes.
- Keep in mind the USA is the worst culprit originating
digital cash and paper. China and Japan have had enough.
They are sellers not buyers and further, they are beginning to produce
the same problems in their own currencies and bonds. Japan's central
banker said yesterday he plans to overwhelm their system with QE2 that
could make Chopper Ben's paper dump appear to be play-school. Not too smart
to say it.
- System weaknesses we see are (1) A Chinese real
estate bubble is popping and taking down their stock markets. Fallout from
this will cause a chain reaction moving into other markets in Europe, Asia
and North and South America. It doesn't take a genius to figure out
where this race to the bottom goes next. (2) First we get capital controls,
price controls and then inflation. This produces some real economic
pain and struggle. (3)However, the last phase is the really bad one-hyperinflation!
- The first inflation phase is followed by hyperinflation
and then a banking-system collapse. It's not the end of the world
as life goes on; but for millions of spoiled American brats; they will
simply not be able to cope. They're headed for major denial, and all kinds
of social problems. It's too bad it's come to this as created by a bunch
of greedy bankers and One-Worlder's. It's not nice to say but
we wish them the worst and no mercy.They have literally destroyed
our entire economic world for decades.
- In the 1919-1923 European hyperinflation following WW
I, hundreds of bankers and politicians were simply assassinated. (Read
the book "When Money Dies" by Adam Fergusson). Could this
possibly come again? We hope not but keep in mind Americans own millions
of guns. When these people get very angry after being totally cleaned out,
you tell me what happens next?
- Most of these problems have been caused and created by
the US Federal Reserve. This is a private banker enterprise not the US
Government. We suggest that before all this is over, that bunch of snakes
will be eliminated for good-one way or another. Never, until recently,
since the birth of this gang in 1913, have there been so many responsible,
authoritative calls and demands to first investigate them and second, shut
them down for good. Its unfortunate the Federal Reserve born in 1913 could
not have been still-born.
- My beloved country and those throughout the world can
manage to pass through this huge economic trauma. Our largest concern is
for the freedom and liberty of America. Who will be in charge after
this ends? What will be the fallout? Can we simply return to a strict U.S.
Constitution and Bill of Rights? Or, will we be stuck with something much
different? What happens to the dollar? What happens to other currencies?
- One way or the other, I believe Americans will fight
and struggle for what is fair and correct. Those that choose another path
will pay the price. I am a non-violent journalist, a reporter, an analyst,
a trader, and a market forecaster. I am a student of economic history and
somewhat rely upon the past to forecast our present. I just wish it could
be different. Buckle-up for a rough ride, use common sense and you'll be
able to manage this adventure.
- The next fall rally in gold and silver should commence
near December 13. From the signals we see, this rally could be absolutely
outstanding. Try your best to own physical gold and silver and
trade the shares of the related companies. The next larger-faster
phase of commodities trading can continue for another 7 years based
upon previous historical cycles.
- Now, more than ever, it is important to take the immediate
necessary precautions to protect yourself and your families and friends.
Traders and investors should be buying precious metals and select shares
right now. In our Trader Tracks Newsletter we have a great list of trading
and investing ideas for you.
- Meanwhile, you can never go wrong buying physical precious
metals and holding them for security. We've had a constant run of nearly
ten years with gold rising 15% per year so this remains a good trade. In
the last twelve months, gold has rallied over 34% and is going ever faster.
- Important news this past week was the February, 2011
Gold Futures breaking through $1424.50. The second event was the March,
2011 Silver Futures breaking through hard resistance at $30.18. Yes, we
have corrected but technically I can tell what's next.
- This past week I have re-worked my gold and silver figures
for next year. I am more than pleased with the answers and intend to use
those new forecasts for our traders. The year of 2011 in our view is going
to be an absolute barn-burning rally for precious metals.
- It's not going to stop any time soon. In fact, we predict
those annual percentages will rise even more and this offers a chance,
arriving only once in 25 years on the historical cycles.