Monday, October 3, 2011

Plan B

We know the Treasurie is going into debt head long, and we know that means the Federal Reserve is issuing just as many dollars, but the real question is, why are these dollars no being thrown from helicopters.  I know, I know, it sounds ridiculous to think, but this is, after all, Ben Bernanke's solution to a liquidity crunch; they are his words.

He did say in a very famous speech he made right before he became Fed Chairman that if there was a liquidity problem he would "throw dollars from helicopters".  He has been doing it ever sense the Fall of '08, proverbially of course as no dollars have made it onto Main Street.  The real question now is, why is he not throwing dollars at Walled Street like he has since that great Fall?

It looks like the whole financial sector is set to fail, and all the while, corporations like Nordstrom, and Lulumon hold onto their moving averages.  How is it that these corporations can stay solvent when the banks that loan them their money can go out of business?  The answer is somewhat obvious, but my question is, why have these banks put themselves in this situation?

It seems to me that either this was an orchestrated effort to ruin the status quo now, which means the game is up, or these institutions are completely inept.  It is likely a combination of both; let me explain:  Likely, the oilgarchs decided that they needed to enact chaos now so to rebuild the system in their desired image.  The main point of revolution has to do with oil production.  The former swing producer was the House of Saud and their production peaked over a year ago.  Russia is now the swing producer and they peaked in 1989, so that should tell you how much oil they will produce over the next decades.  The North Sea's production fell by 25% the second quarter, which means oil is drying up everywhere.  There will be no growth when oil production has peaked, so the oilgarchs threw in the town.

Now the system will leverage itself off of precious metals dramatically.  The value of fiat will be made to depend on where equities are needed.  Equities are needed to be at certain levels to return pensions.  The status quo will be held onto until the wheels fall off; yet this could be the wheels falling off.  My recommendation is to let go off the status quo, and grab precious metals.  It is the only thing you can rely on.

3 comments:

  1. Great posts lately.
    So, I seem to be the only platinum fan in the world now and I'm beginning to lose hope. Will it get back to recent highs anytime soon or will it be a while before I see $1900/ounce again? Did I miss the boat and the ship has sailed?

    Thanks,

    JM

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  2. Is there anybody out there!!?? Where ya gone Lennon??!

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