A Crash Warning Has Been Issued For The Economy; Buy Gold And Silver!
- The world is heading towards a global economic, financial and monetary meltdown. I believe the Illuminist banksters will QE to infinity ie. hyperinflation is coming. All fiat currencies are going down the toilet bowl of currency debasement! (emphasis mine)
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A Crash Warning Has Been Issued For The Economy; Buy Gold and Silver!
by Jeff Nielson, http://www.bullionbullscanada.com/
Jeff Nielson: Regular readers of my work know that I have been outlining (and warning people about) two potential economic scenarios; as the West’s terminally-ill economies lurch towards their final collapse. These hollowed-out, debt-saturated economies would (will) either crash under the weight of their own insolvency; or our governments will create a hyperinflation death-spiral — in a last desperate attempt to avoid that bankruptcy event.
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While both paths represent utter, economic suicide; the road to ruin is much different in these two scenarios. This has severely limited the investment options and strategies for any prudent investor. Forced not only to “play defense” with our investing but to prepare for two more-or-less opposite events has made precious metals the one asset class which can protect investors from either of these fates.
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I’ve explained on multiple occasions in the past why precious metals will outperform other asset classes in both a debt-default crash or hyperinflation-spiral scenario. The purpose of this piece is not to repeat that analysis, but rather to point out that as of this moment the “crash” scenario has become not only the most likely scenario, but an imminent event.
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For those who have been paying attention recently as the West plummets deeper into Depression and the global economy teeters; the news that came out today was enough to send shivers down one’s spine. On a single day we hear that Europe’s interest rates have descended closer to the zero-percent graveyard already occupied by Japan and the U.S.; China has slashed its own interest rates again; and the (ridiculously inflated) U.S. “ISM” service sector measurement has reached its lowest level in 2 ½ years.
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Each of these news items has dire implications, and so I’ll spend a moment dissecting each of them. As I have detailed in past commentaries, any fiat-currency produced at zero cost (i.e. with interest rates set at 0%) is worthless as a basic tautology of logic and arithmetic. There can be no possible debate or equivocation here. Just as with the yen and the USD, the euro now lurches much closer to the same worthless status.
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Meanwhile we see China, the growth-engine of the 21st century global economy, again lowering its own interest rates. With China’s 1-year deposit rate on the renminbi now set at 3%, while the 1-year lending rate is now at 6%; China’s interest rates are still sane (unlike the West) – and it’s own paper is not (yet) officially worthless. However, China’s latest cut in its interest rates signals another deeply disturbing aspect to the economic carnage created by the reckless/greedy/incompetent Western banking cabal.
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What most other economic commentators still totally fail to grasp is that the terminal, economic death-spiral in which virtually all Western economies are now trapped bears absolutely no resemblance to any other deflationary collapse in the limited experience of these pseudo-experts. In a “normal” deflationary episode, by definition the value of the currency in circulation rises. This makes that currency an effective “safe haven”.
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Similarly, in previous deflationary episodes when our economies were still solvent, bonds also represented a safe haven: loaning money to the most reliable debtors, sovereign governments. Neither of these parameters exists today.
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As Western economies accelerate toward their debt-default crash (i.e. bonds going to zero), we see inflation raging all around us (i.e. currencies going to zero). “Official” numbers on inflation have become such absurd lies that they are now entirely irrelevant numbers. In the real world, inflation is now a double-digit plague in virtually every economy – and cutting interest rates stokes that inflation still further. Worse, because inflation (by definition) is the destruction of our purchasing power; such crippling inflation causes the collapse of these hollowed-out economies to accelerate. Thus we have a world where inflation and insolvency can and are simultaneously worsening.
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While Europe and China are stoking the inflationary side of this economic nightmare with their interest rate cuts, simultaneously we get more terrible news out of the world’s great, economic black-hole: the U.S. economy. While absurd statistical lies have transformed the U.S.’s Greater Depression into an “economic recovery” for the past 3 years, the short-term benefits of this propaganda campaign come at a terrible price.
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Deluded Americans who should have spent the last three years bolstering non-existent savings and paying down their extravagant debts have instead done the opposite: they have stopped saving, while once again piling on more debt which they have no hope of servicing over even the medium term.
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As usual, our greatest condemnation must be reserved for the mainstream media, a corporate propaganda machine which is entirely owned by a handful of Oligarchs. To protect the paper-empire of the felonious banking cabal, we have been fed an endless diet of “don’t worry, be happy” tripe from the shameless shills employed by these Oligarchs.
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