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The Dark Years Are Here
And readers say Zero Hedge is pessimistic. Don't read this if you don't want to break out of your MSM-induced happiness daze. Compliments of Matterhorn Asset Management. Snippet:
All the money committed so far has only achieved two things: Firstly it has created some short term hope which together with totally illusionary sightings of green shoots have generated a small stock market correction (which we forecast in our January Newsletter) and some belief that the crisis is ending. Secondly, all the funds printed so far to save the system have gone to Wall Street but has done nothing whatsoever for the real economy. And what is the government doing about it. They are doing the only thing they know which is to print more money.
This is total lunacy! How can any intelligent person believe that printed pieces of paper can solve an economic catastrophe?
If that were the case we could all go home and write out pieces of paper or use Monopoly money to spend in the shops or repay our debts.
h/t Mark
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I saw a report on Zimbabwe where people where panning for really tiny amounts of gold, but which were actually sufficient to buy bread etc.
That's pretty persuasive. Remember, if you're making furniture, no one may want it, but the rich will always want gold.
I had read about that as well.
Further evidence that when TSHTF we go back to our roots for a currency.
this article might be as bearish as cnbc is bullish.
my guess: we end up somewhere around the middle.
I give up. Shoot me now.
Interesting--I haven't seen a single person write about the big nasty mess that gold-mining makes of the landscape.
If you have 10K burning a hole in your pocket, buy a few acres in the country and raise sheep and potatoes.
I agree. If there is a doomsday scenario sheep and potato will be more handy than gold. And how come there are more facilities to buy GOLD from than to sell it ? How come you always get to sell it at spot price or less while you always have to pay a premium over spot when buying ?
How come you pay a commission to your broker when you buy shares?
If the US inflates, so will the world.
Common inflationist rants make the mistake of calculating inflation in relative terms (relative to other currencies).
But parallel inflation is a far more subtle, and volatile beast.
Ignore the difference at your peril....
lemon trees. grow a couple of acres of lemon trees.
Scurvy.
lol
and viagra, when TSHTF, this will hands down be the best commodity for bartering
Outside of armageddon bartering, I could see value in holding gold in that it would (and should) become the basis of the new currency that would result from a mass fiat collapse. Distrust in paper would require it.
History and the monetary properties of gold are on its side here. Assuming complete collapse of the system, you be better off having enough supplies to last until the new currency's creation before you start dumping all your dollars for just gold.
Excellent Op Ed on the Fed
http://www.bloomberg.com/apps/news?pid=20601039&sid=ajShAlQzKQkM
"Dethrone King Bernanke and Court to Keep Recovery:"
"Right now, thousands of pages are being typed in hundreds of summer houses in an effort to blame Greenspan or Bernanke, or perhaps their colleagues at the Treasury Department, another imperial institution.
The trouble is not Bernanke or Greenspan or even their respective courts. The trouble is that the throne exists in the first place."
Egon von Greyerz
Maybe you should google this person with regards to "Uno plc" and "Land of Leather".
http://somefantastic.net/marvin/extra/movie-depressed.wav
--- Marvin the Paranoid Android
Fiat money has been around for centuries. It was not just invented in the 1900s. But whoever controls the fiat money can never resist the temptation to create more and more of it. So it has always blown up and currency has reverted back to gold.
Gold is not magic. But it is valuable in small quantities, durable and divisible. So it usually wins out as the currency of choice when the fiat currencies blow up.
Especially when you have Fed Governors like this:
Janet Yellen Channels Ronald Reagan: "Deficit's Don't Matter"
http://jessescrossroadscafe.blogspot.com/2009/07/janet-yellen-channels-r...
Everything is going to Zero, except unemployment, which goes to a 100 %.
Time to scoop up some S&P Futures again.
Gold is a very tricky investment now I think. If it goes back to 650, you lose about 43%, and to make a profit of 43% it needs to be around 1400, so the risk is greater than the reward. And its very difficult to predict gold prices.
Stocks are "more easy" and give better rewards if your right with you "gut feeling"
If the queen had balls she'd be the king,,,,what the hell is that about?
1. who the heck is matterhorn asset mgmt anyway? 2. Its easy to sell fear when you are a precious metals broker....what ever happened to critical views of ZH commenters...step it up people
Blah, blah, blah.
Sure the world sucks and its unfair. The market, however, is up, up, up every single day. As we speak, Q's nearing new highs for the day.
Read stuff like Matterhorn, and lose, or trade the market and make some money.
For myself, I think gold is not the point. I may think that corned beef hash and toilet paper are good stores of value, but it doesn't really matter. The point is that the shit is going to hit the fan. July 2007 is but a fond memory of the first leg of the crash. We've been crashing bigger and harder ever since. We have the end of the fiscal year coming Sept 30th. Foreigners are not buying our bonds, they are through with accepting wild promises from the addled money junkies we've become. The administration has gone all-out to save the parasites from the consequences of their folly, showering them with trillions of dollars of government largesse, bending and breaking the rules, giving them virtually everything they want. When it comes to the welfare of the people, however, the response is far different. Instead of largesse, we get the bill for the bailout, reductions in services, and further depletions of an already tattered infrastructure.
Without drastic changes, party over by mid-October. What we get in the wake of that demise remains to be seen, but I'd rather be prepared and if it doesn't come to pass, I have some excess to go donate to the local food bank, etc.
A gold backed currency is not the answer. You would need to abolish fractional reserve lending as well and that would lead to a problem of needing saved gold in order to fund investment.
Modern currencies are nothing more that standardised IOUs. The problem we are in is that more IOUs have been written than can ever be paid off. The answer is to
- abolish the Fed as lender of last resort
- let the market set overnight rates
- abolish FDIC safety net for savings accounts keeping it for checking accounts
- split checking accounts and bill payment into utility banks which aren't allowed to make bets with other peoples money
- make banks execs personally liable if a bank becomes insolvent
My theory: The US and UK will hit the wall as paper surmises. There will be a meeting of the G8 (9.10.11..?) immediately to resolve crisis. OUTCOME: US will lose world reserve currency status. The world will adopt a basket of currencies. Debts of nations will be wiped clean (aka. we will hit reset). The big problem over the last fifty years has been the US having world currency status. Want to start a war? Easy, print more money. Want to buy off politicians, open up a casino on Wall Street and sooth the masses with easy credit? Easy, print more money. Want to build a massive military complex for no valid reason except line corporate pockets ala Halliburton? Easy, print more money. This will all come to an end. Having controls on currency works wonders. Ask Canadians who were threatened with a credit downgrade in the '90s. Cuts were deep and painful. All countries have dealt with this except the USA with its print-money-for-free card. There is no paying back this global debt. Countries will rebuild from scratch. The checks and balances on currencies will come from not having one currency in control. No one country will be able to run amok without the other status currencies keeping it in check. I think this is the best outcome.
as is often the case, those in the midst of the problem fail to see precisely what the problem is. In this instance our government, partially through denial, either doesn't see the extent to which we are in trouble or if they recognize it (i.e. Ron Paul) they can do little about it because of the way the system works.
Bernanke doesn't seem to think there's a problem with the actions that he's taken but if he were outside the problem perhaps his analysis would be different, who knows, but I always maintain that regardless as to whether they can extract the liquidity the Fed intervention itself has caused distortions in the market, so no pain, no gain.
It's all so messed up now who knows what the end result will be, but what ever the end brings it will not be good, and the sooner everyone recognizes this the sooner one can prepare.
me : Hello, I would like to buy some gold for your price of $950 an ounce.
them: Great! Here is your shiny piece of embossed paper signifying that you are the proud owner of 10 ounces of gold.
me: Umm.. can't you just give it to me?
them: What you want to be carrying that heavy stuff around for....you want shiny paper and somewhere in the world someone has it in a vault that is safe in case you need it..
me: What if I want it now?
them: well, you are gonna have wait. I already borrowed it to myself so i can sell more shiny embossed paper.
Poorly written and jumping to conclusions without any proper analysis.
He and Gerald Celente must be great friends... you get the same feeling in the pit of your stomach after reading both of them... hope they are very wrong... but I think many of us know that something is still very wrong with the world despite the what the administration and MSM says. I'm stocked on gold and foreign bank accounts... just need the guns and ammo I guess.
The Dark Days. Very well done Tyler and all I can say is you all better prepare if this comes to pass. And if not, at least you were ready.
Than there is this idiot Hermann who does an interview with Bloomberg and advises we are coiling towards 3%GDP growth and ready to explode. Just insane. You should watch it and would appreciate your comments.
We are whistling past the grave yard.
Well done!
Apocalypse Now- What do the world's central banks (the owners of which are the wealthiest in the world) and the majority of the remaining wealthy people have in common right now? The answer is that they all own gold.
They would be more than happy to non-physically loan you their gold or sell you paper certificates saying you have a claim to the $ value of the gold but can't take physical delivery.
What is the highest returning asset class in the last 8 years?
What you got?
I found this discussion about gold as a store of value nonsense.
If the rule of law breaks down then I see people falling into one of two camps:
1) People with the bigger gun will take what they want
2) The pacifists among us will barter with each other exchanging life's necessities. Naturally I'm referring to things that keep us alive and/or provide some utility.
Why do people hold onto this allusion that gold has value. A Honus Wagner baseball card once traded for over half a million dollars.... I think everyone knows where I'm going with this!
Do the girls on "Established Men Dating Service" Sugar Daddy like gold? Just noticed the new ad.
This article is pretty much metalhead garbage. You can not cook, eat, screw or easily protect gold.
If we truly get the aforementioned collapse I will be hanging with my consensual community, thriving in a gift economy and waiting for the metalheads to come offering gold bricks for the fruit off my tomato plants. I will give them some for free and send them dragging their useless paperweights back to their compound.
Wow, the goldbugs at Matterhorn are pessimistic on the dollar and government bonds! WHO WOULD HAVE THUNK????????
And what are you - a paperbug?
I absolutely agree. We have achieved nothing. We are heading to a new central planning era
In the end it's all about risk taking not avoiding - if you want to make a profit you have to take risks. If you hedge against all of it is a cero sum game, just think of playing always the same amount on red and black on a roulette table. Banks should be able to go bust as any other business, because the next time it's not the banks but the countries that go bust with them ; cfr. Iceland.
Risk taking is also luck. A "real" producing company has to take risks when deciding which products to sell/develop/market etc. If it goes wrong their risk assessment was wrong and the company goes bust and no one cares. Why should we care in the case of banks? Because of the savers who deposited their money there? I don't think so because then we should also care about the pension plan savers who invested in the shares of such banks, but nobody does.
I am really getting tired of hearing about VaR, Sharpe, stress tests and regulators taking business decisions. We are on the way to serfdom and we are creating a central planning monster of new creation. Guys, the USSR has not gone for such a long time- what happened to the collective memory?
Let people take risks again, if it goes wrong it goes wrong. Full stop. Let risk assessment and luck/chance/chaos decide who lives and who dies. We do not need a central authority to decide who is worthwhile living and who is better dead. What we are trying to do now is to force the models we have developed and that have been proved wrong to function. Now we will have a regulator who will act as a rational investor, i.e. what the crowd did not manage to produce we will now put in the hands of very few. Who guarantees that those people have the right criteria and are always rationale, do not act politically or will not manipulate markets? What about corruption?
We are now paying trillions of any currency for what? So that some banks survive because otherwise the “system” would break down. Who defines the system and why is it important to us. Systems evolve, are alive and develop. Why would we want to keep a certain status quo? Let the world its evolution. It is well known in genetics that reducing the diversity and controlling the system will lead to more problems. Our trillions didn’t even help to let people who got into mortgages that they couldn’t pay in their houses. They had to go, but the trillions are still lost. Wouldn’t it have been better to pay in 2005 or so 500 million for social housing programs giving away flats for free so that those people had a roof above their heads? Bubbles wouldn’t have grown as much as they did and perhaps we wouldn’t have had a financial crisis? I would say that this would have solved only part of the problem. As long as there is a bunch of people saying how the economy has to go, how much surplus you create, how interest rates are fixed and decide what is the adequate price of money, how much one currency costs for exchange of another and who is too big to fail, we will not prevent future crisis.
If we let the economy, the financial system, etc. evolve as it was a living organism without too much intervention from the outside it will evolve to a better state in order to survive and to be better adapted as in biological evolution. If we mess around we will only provoke greater tail events, more black swans. Just think about all the experiments mankind did and where in order to solve one problem it created an even bigger one (to stay in Australia, think about cane toads in Australia). In order to avoid further cane toad syndromes, we should retreat not advance. We should focus on who really needs protection and just protect those helpless and not everyone. The often cited grandmother being sold Lehman structured notes is not worth protecting at the cost of suffocating any possibility of evolution in the system. If there are leaner ways to protect her then do it otherwise leave it. You don’t hand out machine guns to any granny just in case she is robbed, not even if she lives in a dangerous area or often frequents such areas. You might increase police presence in such areas but you will not create a 1984 state.
Let common sense take over again. The current hysteria is nothing else then the other side of the coin. First we had the irrational investor now we have the irrational regulator/legislator. And this makes it only worse. The next 1 in 100,000,000,000 years event is just around the corner and nobody will be able to explain how two such events could have occurred in such a short time if it is statistically impossible.
The more freedom we give the “system” the more we will benefit. It will grow stable and create new niches and from such niches new ones will evolve – just like zooming into a fractal. There will be crisis and big ones, but they will not be caused by us, but by bad luck and until the end of time no one will be able to control chance. Even if you trough a coin a million times, the distribution of its outcomes will not be normal, although close. It just depends on your scale for the graph.
http://kollerro.blogspot.com/2009/07/new-central-planning-era.html
wow , so many posts i can hardly believe it
the us is the worlds biggest holder of gold for a very simple reason
Don't be FOOLED by MATTERHORN,
they want to drive the price of GOLD upwards.
This was extremely poorly written compared to what you usually post. He hand-waves past every piece of important information without giving any solid facts. Reads like a freshman year intro economics report. You can (and usually do) do better, Tyler.
The reason the gold standard went is the same reason the Federal Reserve was set up - namely so that the people who really control, or rather want to control, everything can pull the wool over everybody's eyes. Just ask yourself ( and then do some decent research, enough say to satisfy an inquisitive lawyer or a real scientist) who actually owns the Fed - it certainly is not who most people think. Then ask where does the money go - the recent sleight of hand involving $3 trillion is a modest example of the magic being performed under our very noses. It is truly breathtaking how stupid they assume people are and for that matter how stupidly we behave in allowing it.
Looks like I'm late to the party - but boy, looks like "the barbarous relic" is alive and kicking and THE most popular subject in town, and as a goldbug (as opposed to "paperbug" like the rest of the stupid f--king world) I am happy that many are bears i.e. would be buyers. This gold bull will run for a while y'all can be sure of that.
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