It's Going To Implode: Buy Physical Gold - NOW

Gordon_Gekko's picture

For previous articles by the author go to: Gordon Gekko's Blog

 

Evidence seems to be mounting that we are headed towards some sort of implosion in the paper Gold market, and perhaps the currency/bond markets in general. Let’s take a look:

Jacksonville, FL based EverBank – a bank with approximately $8 billion in assets and 1800 employees according to the company website – recently sent this notice to customers (courtesy of Warren Bevan):

"Non-FDIC Insured Metals Select Changes" -

 

Section 6.3.7. General Terms: We have added language clarifying our right to close your account. We may close your Metals Select Account at anytime upon reasonable notice to you. If we believe that it is necessary to close your account immediately in order to limit losses by you or us [GG: We really don’t give a s**t about you; it’s us that we care about], we may close your account prior to providing notice to you. Notice from us to one of you is notice to all of you [GG: the nerve of these people!]. If we close your account, we reserve the right to convert your Precious Metals to U.S. dollars and tender the balance to you by mail [GG: I am willing to bet my entire Gold stash that when you receive these "converted" dollars, they will be nowhere near the market price of physical. What did you think that whole "limit losses" thing meant?] .

If you have a "Non FDIC Insured Metals Select" account with these people, you can pretty much say goodbye to any chances of ever seeing your metal. This is a clear sign that the (already tight) availability of physical metal at the manipulated Comex futures paper price is in danger of vanishing altogether. Think about it. What is the scenario in which they avoid catastrophic losses while at the same time sending you the US dollar value of the metal? When the official or Comex price has fully decoupled from the physical price. Expect to see more such notices from banks offering Metals "Investments".  

Citibank recently issued this notice to its checking account (remember the type of account where you thought you could withdraw your money whenever you wanted? Well, not anymore) customers (via Market Ticker):

Withdrawal Notice:

 

We reserve the right to require seven (7) days advance notice before permitting a withdrawal from all checking, savings and money market accounts. We currently do not exercise this right and have not exercised it in the past.

 

Hmm…let me see. Why would a bank need to impose withdrawal restrictions? Has this kind of a thing happened before somewhere? Could it be because of the danger of a bank run/capital flight from the United States?  Why would Citibank fear bank runs? Why would money flee the US banking system/US? Could it be because the entire US banking system and the US Government is INSOLVENT and people - fearing a collapse in the dollar’s value (in terms of real goods i.e. for all you Prechterites out there) - rush to withdraw money convert it into real goods such as precious metals? You tell me. Also, could they maybe increase this notice period from seven to whatever the hell they want whenever they want? What will you do then? Even if you don’t buy Gold with it, withdrawing your cash from America’s insolvent banks is a very wise strategy at this point.

One of Mish’s readers Construction Insider recently sent him this little nugget:

Hi Mish

I work in the construction business and something has been creeping to the forefront of my attention for the past few weeks and now it seems to be moving full steam ahead.

 

Banks are forcing developers/builders (especially smaller ones) to give up their properties (unsold homes and lots).

 

Banks say the reason is that the properties in question are no longer performing assets. I am sure there are some loans out there that are not performing and the owners are going under. I am equally sure that there are plenty of developers that are still selling homes - just not at the pace originally planned on the pro formas.

 

Having inside information on one of these scenarios that happened today, I cannot help but wonder what is really going on? The bank told a small developer/builder I work for that they were taking back his ongoing subdivision.

 

He is selling houses and updated pro formas would indicate that the current sales pace would exhaust all remaining lots within 33 months. Yet the bank stated they would only give him until April 15 to find alternative financing. The bank is also willing to let him buy the subdivision at a 33% discount to what is currently owed.

 

If he is unable to obtain this backing, the bank will let him walk away without penalty or consequence so they can write it off.

 

I have been on the phone trying to put some of these pieces together. It seems there are many banks doing the same thing. However, there is apparently no interest [or ability - Mish] from anyone wanting to pick up land/lots at 30% - 50% discounts to today's prices.

 

Another interesting point is that the banks all state that they must have these situations written off or taken care of by the end of Q2.

Looks to me like DaBoyz are calling in the loans while the currency still has some value. Does the government plan some type of overt currency devaluation or expect the dollar to collapse on the currency markets of its own sorry weight? The cracks are already appearing in the Bond market. Foreigners are increasingly fleeing the Treasury auctions. The only thing keeping them going is manufactured "deflation" fears from time-to-time. A recent 30 year auction (10th February, 2010 to be precise) practically failed. This is what Mr. Denninger had to say about it:

Bad.  Actually, let's go worse than bad and call it what it is - by any definition this is just one step off from "Failed."

 

The more-worrying factor here is that we've got this "mystery" direct buyers out here again taking nearly 25% of the offered amount (who is bidding for that undisclosed?) and another 11% taken down by The Fed for the SOMA account.

 

Yet even with this Treasury had to pay up to get it to go and the bid-to-cover was anemic at best.

 

Given the Primary Dealer system we have in this country, any BTC under 2.0 is an effective fail.  To get an auction that behaves in this sort of fashion, complete with mystery direct bidders and heavy SOMA (Fed) participation, yet Treasury has to pay up in the form of a significantly higher coupon is not a good sign at all.

And this is what happened on 23rd February, 2010 for a 4-week $37 billion Treasury Bill auction (Per Graham Summers):

There are times in life when one witnesses something so outside the scope of normal experience, that at first you don’t see it.

 

Captain Cook’s diaries tell us that upon first seeing his ships offshore in Australia, the aborigines expressed “neither surprise nor concern.” Cook notes that it was not until he and his men approached the shore in smaller, more familiar vessels that the villagers reacted, arming themselves as “the sight of men in small boats was comprehensible to them: it meant invasion.”

 

Well, I had a similar experience during yesterday’s bond auction.

 

Roughly, 27% of the auction took place at the highest rate. This means nearly one third of the demand from competitive bidders (those who care about yield) came at the HIGHEST yield that was accepted. In plain terms, this alone tells you that investors want higher yields from Treasuries since nearly a full third of the debt issuance took place at the highest REQUIRED yield.

Of the competitive bids (meaning those bids coming from folks who care about yield), roughly 70% went to Primary Dealers (investors who HAVE to buy the debt and who usually turn around and try to sell it afterwards). To put this number into perspective here is the percentage of competitive purchases made by Primary Dealers in the last four 4-week Treasury issuances:

 

 

...yesterday’s auction featured MORE buys from Primary Dealers than almost any of those occurring in 2010. Remember, Primary Dealers HAVE to buy Treasuries. So to see them buying a high percentage of Treasuries at debt auctions means that few investors who can pick and choose what to buy are actually looking to buy US debt.

 

Of the remaining competitive buys (about $8.86 billion), only 32% came from Direct Bidders or those who bought debt directly from the Treasury: orders that can easily be tracked. The other 68% ($5.9 billion) came from Indirect Bidders: folks who we cannot track.

 

Even more bizarre, only $5.9 billion in Indirect Bidder competitive buys were ACTUALLY OFFERED. So we had a 100% acceptance rate for Indirect Bidder competitive buys.

Let’s put this in perspective:

 

 

This means that the Treasury took up EVERY single cent of competitive bids coming from indirect buyers. Remember, indirect buyers are usually assumed to be foreign governments (even the Treasury website admits this).

 

If this was the case yesterday, then foreign governments barely bought much of anything in yesterday’s auction (only 19% of total debt issued). Moreover, it implies that Primary Dealers (those having to buy) had to gorge on the auction to make up for the fact that few if any foreign governments are interested in buying our debt anymore (including even short-term debt).

So basically the demand from the indirects (i.e. foreigners) for US Debt is drying up and the Treasury is taking all of whatever miniscule amounts they are offering. As if that was not enough, we had another similar auction on 9th Match, 2010 (via zerohedge):

Two weeks after the indirect hit ratio in the 4 week auction came at a record 100%, today it was once again at almost at the all time possible high, with Indirect Bids of just $6.744 billion taking down $6.683 billion, resulting in a 99.1% hit ratio. The chart of the recent Indirect hit ratio in recent 4 week bill auctions is attached:

What’s more, the yield doubled from two weeks ago. What we are witnessing here, in my opinion, is the beginning moves of a complete and total repudiation of the US Bond market, and indeed, all dollar denominated paper financial assets.

 

Jim Sinclair recently had two gentlemen from Poland and Russia speak up at his Toronto meeting. This is what they had to say (in Jim’s words):
Dear Extended Family,
 
I believe the most important event at our Toronto CIGA meeting was the testimony of two attendees.
 
Two men spoke independently. One is a Canadian resident from Russia and the other from Poland.

Both said the same thing, "All the signs that preceded our inflation of more than 100% per year are here now in the West."

What more do you need to know?

Regards, 
Jim

Any unbiased observer who knows how to put two and two together will be able to tell that something very fishy is going on. The urgency with which trillions in debt is being shoved down the market's throat at the worst possible time for the US Economy has the distinct smell of the government trying to extract every last bit of money from those stupid enough to buy the bonds before it all blows up. Rest assured, a huge chunk of this money is being funneled to the insiders who are most likely covertly using it up to buy real assets for themselves while keeping the crowds distracted with the stock market circus.
 
The bond market is the backbone of the US Ponzi Finance system. When it goes – and the day is not far in my opinion - the whole enchilada will come crashing down. Any type of financial asset that has a counterparty – which is pretty much all the paper assets in the world – bonds, futures, any and all derivatives and yes, even the paper currency – will crash. What will they crash against? Yes, that’s right - Gold. All the world’s capital – trillions, perhaps quadrillions of it - will come rushing into the very tiny physical (NOT paper) Gold market. Remember, the world’s real physical capital – real assets such as land, oil-refineries, mines, infrastructure, etc. will not vanish, only it will be re-priced in terms of Gold and its ownership transferred to those who hold it. Since everything stays on this planet, it is a zero-sum game and the winner will be Gold. In other words, an ounce of physical Gold will command a lot more in real purchasing power than it does today. Just like a national currency is a claim on goods and assets within that country, Gold will be a claim on global goods and assets worldwide.
 
Paper Gold Will FAIL
 
Today what you think of the price of Gold is nothing but the price of paper Gold. "What is the difference between the two? We are still getting the metal at the price we see on the COMEX, are we not?", you may ask. Sure, but the key word is still. Even today you have to pay "premium" to the futures price to get physical ranging from about $50 for some coins to about $10 for bars. When it all blows, these “premiums” will skyrocket and the price of physical WILL decouple from the official paper price (this is what the guys at EverBank are scared s--tless about), as we already witnessed in 2008 – and this is the good scenario. Indeed, we may have a situation where there is no physical available at any paper price. 
 
1. The GLD ETF
 
The problems with the GLD ETF are too numerous to enlist here but why bother when they have already mentioned 'em all in their prospectus! It is simply another Wall Street scam designed to rip off the retail investor and rest assured, when the SHTF, you will be the last in line since the insiders need somebody to hold the bag in order for them to get bailed out. YOU will be the one left holding the bag. Unless you have a direct line to Ben Bernanke, I suggest you get the hell out of any paper ETF’s such as GLD, SLV, etc. Remember AIG? It’s all good until it isn’t.
 
2. The Gold Futures Market
 
The futures market is nothing but a tool for the dollar managers (US Government/Fed/Bullion banks) to manage/control the price of Gold. Any rational observer with an iota of brain who has watched the gold market for any reasonable length of time can tell that the price is intentionally driven down during the Comex trading hours. If you don’t believe this, either you’re in denial or worse – collusion - and IT WILL end up costing you big time. Given the massive, concentrated and long-term (the entire past decade - they haven't been net-long - not once - during that time period) nature of their short positions, it really isn’t that hard to deduce that the banks do not nearly have enough metal to cover their shorts and that the sole intention of the massive short position is to control the price. Whenever the price rises (or threatens to rise) the big bullion banks ala JP Morgan create massive naked shorts introducing fake supply of Gold in the market, thus driving the price down. “But the price has been rising for the past decade, hasn’t it? So how can you say they are driving it down?”, many people ask. Well, the constraint on the bullion banks has been the availability of the physical metal. If the metal is not available, the fraud of the paper market is exposed and they lose their price managing ability. So they allow the price rise to a level at which there are some weak hands willing to sell and then they hold it there till all the sellers have been exhausted (I am assuming the Fed has already sold all the US Gold during the past decade). So strong are Gold’s fundamentals that despite the massive rigging, all they have been able to do is slow its rise. The weak hands who sell the physical metal at every price rise have helped them in this endeavor. But soon, as the bond market implodes, they will run out of sellers. Treat the availability of real metal at today's paper price a gift and buy as much as you can.

To those who think that the Comex shorts will be crushed one day and the price of paper Gold will do a moonshot, to them I will say that you are dreaming. The Comex shorts will be crushed, but not in their own casino! If and when a majority of paper Gold longs demand delivery a force majure (who do you think the US Government will side with?) will be declared with cash settlements and/or offers of equally worthless GLD shares (don’t tell me you didn’t know about this). By some accounts, this is already happening. What will happen to the paper price then? That’s right – it will utterly collapse even as the physical’s price is rocketing. Paper gold holders will dump it all to buy the physical – which, unfortunately – will most likely not be available at all. Yes, yours truly has been trading the paper [Gold] markets himself, but only with the objective of converting the paper profits onto the metal. Having said that, in light of the sum total of the recent developments mentioned in this update I think it is too risky to be trading right now and one should just sit 100% in physical Gold and some currency for day-to-day needs. 

Additionally, there is increasing evidence that the Europeans have withdrawn support from Wall Street’s paper Gold market (COMEX and the LBMA, which also operates on a fractional reserve basis as documented here) and are in favor of setting up a physical only Gold market (this is quite a long story - for details, I suggest you go through FOFOA’s blog). Jim Willie had this to say in a recent piece (he’s been accurate on many things so far, so I at least pay attention when he has something to say): 
Fast approaching is the event of GAME OVER for London, a condition that has already reached critical level, according to a key reliable source of information with London connections and direct experience with its market events. How long can a major metals exchange sell contracts but have miniscule supply of gold in their vaulted possession? The paper gold market and the physical gold bullion market have finally separated in a practical manner, meaning actual gold has almost no role anymore in London paper contract settlement. The absence of gold in London requires extraordinary tactics to settle contracts and to obtain gold bullion. Red tape procedures delay delivery for individuals, and bribes accompany gold delivery demands as standard practice. The London Bullion Market Assn has almost zero gold, its supply having been drained in high volumes since early December, a process currently in acceleration. The opportunity to convert fiat money into precious metal at prices considered reasonable is also vanishing. The London gold banker said,
 
"There is going on a lot more than meets the eye. The physical system is actually consolidating bigtime and is organizing itself with lightning speed, totally hidden from pretty much anyone, even the so-called insiders. The paper precious metal market and the physical precious metal market have defacto disconnected. The paper and physical gold markets currently operate in parallel universes. The outflow of physical metal from bank vaults is happening at a mind bending pace."
Wall Street and the US Dollar are being increasingly marginalized at the global level with China having instructed its companies to renege on Wall Street’s derivative contracts last year; Russia, Middle-East and China setting up their regional currency blocs; Germany calling for an end to the CDS casino and the recent exclusion of Wall Street banks from European Government bond market. For obvious reasons, none of this is getting much play in the lapdog US media.
 
Physical Gold in your personal possession is the only thing that will survive the coming financial Armageddon. What we are witnessing right now is nothing but the calm before the storm. Keen observers are hearing rumblings beneath the ground signaling an imminent volcanic eruption. Once it blows it will be too late to take action. Trading paper markets for paper gains is like picking up pennies in front of the steamroller. It’s time to stop trading and just buy the physical metal. The window of opportunity to convert your casino chips (fiat money) into real money, i.e. Gold, is getting smaller by the hour. He who panics first, panics best.
 
GET. GOLD. NOW.


Disclaimer: Nothing in this commentary should be construed as investment advice or guidance or any recommendation to buy or sell any financial instrument. It is not intended as investment advice or guidance, nor is it offerred as such. It is solely the opinion of the writer, who is NOT an investment counselor/professional. All content of this commentary is solely an expression of his personal interests and is posted as free-of-charge commentary and is subject to error and change without notice. Please do your own due diligence before investing in ANYTHING. The presence of link to a website does not indicate approval or endorsement of that website or any services, products or opinions that may be offerred by them. 

 

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velobabe's picture

no i bought $20,000 worth of junior miner stocks not in africa, south america and canada, in spring 08. boom, penny stocks by fall 08. they are so thinly traded i heard so very difficult for share price to raise. never buy into miner stocks.

truont's picture

If GG's predictions are correct, then all gold mines risk being nationalized for the "greater good" or "national security" or "economic stability" or whatever.  Nationalization=syndicate theft.

tmosley's picture

Own foreign miners, and spread out as much as possible.  I like Canada and China myself, but I own some in Oz, and other places.  I only own one domestic miner, and it will be the first thing I sell if I smell anything fishy.

Commander Cody's picture

Baldy:

I think you answered your own question.  Everything truly tied (not paper gold) to the value of physical gold will follow the price.

Anonymous's picture

"Or, once everything tanks, will the Gold Stocks be the "last man standing", whilst the flood to physical gold reaches biblical proportions, and the miners reap the whirlwind of huge share price increases on the back of the physical explosion?

Thoughts?"

Pretty much the way I see it playing out.

THE DORK OF CORK's picture

Good piece GG - I may decide to blow the rest of my paper on a long holiday in France and Italy and enjoy whats left of civilisation while it is still civilised.

 

Species8472's picture

So, any PRACTICAL advise on how to own and store physical gold, in my personal possession? Out here in the boonies of upstate NY there is no local "gold store", only a stock broker in the village. Do folks actualy ship the stuff UPS or US mail??

Should i bury it out back? I guess safe deposit boxes are NG?

But, I think it would be better to own a farm.

 

35Pete's picture

Bank of Folgers. Develop your gold thumb and learn about midnight gardening. 

A Nanny Moose's picture

First 2 rules of Fight Club...

augmister's picture

 

No safe deposit boxes!  I expect bank runs and even if you can get to the bank, that will be the least likely "safe" place to be.  The Feds might outlaw physical gold like they did in the 30's and get to your box before you do.  

You need to find a creative nook someone on your property, to hide stash that you can defend, if required.  Purchase and know how to safely use a hand gun or shotgun.  (Being in NY, that means a long gun for you.)   Buy that first and use your soon to be worthless cash.  You will also need to have some cash on hand, in anticipation of bank closings...a la bank "holidays" from the 1930's.   You are right to be thinking about growing some of your own food.   Just do it!  It is easy to have a big yielding garden but you must plan for preserving your bounty over the winter months.  (Solar food dryer...google it)  Get into survival mode.  Even if we don't get into a total meltdown, nothing here will hurt.   If we do, you get to survive a little longer than your friends and family.

 

Real Estate Geek's picture

You need to find a creative nook

 

Right!  In the joint, when we needed to get our shanks out to the yard, we'd "keister" them.  Just sayin . . . "

;-

boatman's picture

get with united precious metal refiners in albany.

great prices on 10 oz jewelry 9999  gold bars.

 

i'm in florida, you can drive there,lucky!

Anton LaVey's picture

There are gold sellers that will ship through UPS or US mail, yes.

Bury it out back: not necessarily.

Owning a farm could also be interesting.

perchprism's picture

 

I buy from American Gold Eagle.  Reasonable prices.  They make money, but aren't nearly as bad as Gold Line, for example.

Put the stash into a coffee can and bury it.  Nobody will ever find it. 

I probably have more silver than I need, and not enough gold, but I'm satisfied. 

dark pools of soros's picture

I just bought a gold bar today..  I was just in silver but what they hell.. add some color to the pile!

Shameful's picture

The two places I have bought from are APMEX and Tulving. Both are good, and if you are looking at big buys Tulving is the place for you, fast and great prices. Do some research and read some reviews the info for dealers is out here and go with reputable companies.

As for hiding a good safe is great. But even without an estate it is possible to hide. Think about where you would hide a silver dollar or roll of silver dollars where a thief would not look or would miss it. And for the love of God do not tell people where you are stashing your gold!

A farm might be nice but I happen to be in the camp that thinks Uncle Sugar and his Local Underlings will seize land via outrageous property taxes. Having a farm might be nice but if you got to move in a hurry you can carry your gold with you.

Mad Max's picture

Uncle Sugar and his Local Underlings will seize land via outrageous property taxes

Very pessimistic, though not necessarily unrealistic.  Seems like an absolute guarantee for civil war and famine though.  Farming requires so much expertise and there is very little of it left.  Look at the sad history of Rhodesia/Zimbabwe for the natural outcome of land grabs.

A Nanny Moose's picture

"Farming requires so much expertise."

Currently, perhaps. Plants did in fact grow on their own before we got here

Anonymous's picture

Clearly you have never farmed. Clearly you have never
worked tractors over 45hp, gang-plows, cultivators, mower
conditioners, balers, combine harvesters, drillers and
every other kind of mechanized piece of equipment to farm
on a scale that can provide ALL the food for a family,
let alone a community. What do you think, that we will
have 302 million hunter-gatherers? Hell 40% are too fat
to hunt or gather without a 4 Wheeler!

Quite bluntly, you have no clue given the ignorance of such
a statement. Where will you get all your seed products,
your fertilizer, lime, herbicides etc?

Real farming requires a mind-boggling level of expertise
and ability plow, plant and harvest at optimal times to
insure an adequate harvest. Oh and you will need around
a minimum of $100k to just buy enough equipment, seed,
fertilizer, diesel and spare parts to even begin farming on a bare level to provide ALL the food for just a few families.

While this entire thread has been a good review of one
possible (and very sad) fall along a chaos continuum,
farming expertise AND the land, will be one of the most valuable assets. Since only 3% of our population are
farmers providing most of our foods, expertise to step
in for pissed off farmers will be very limited. This is
not the Depression when 37% of the population farmed.
Best not to complain about farmers with your mouth full,
let alone when you do not have enough to eat.

TheGoodDoctor's picture

Where you getting that gas?

Seer's picture

Unfortunately that would the be hunter-gatherer era.  Not possible with the numbers of people today (one reason why TPTB see the train wreck dead ahead- their food system is collapsing).

trav7777's picture

Never, ever underestimate the stupidity of the people in power.

Everything they believe is bullshit.

I mean, look at the liberal agenda or the "conservative" one, for that matter...look at the things these talking idiots say.  Look at what they believe.  They exist in a state of cognitively dissonanced delusion.

Some "economist" will say that they should tax land more to get more stimulus or something.  This is actually how Rome ended up paving the way to the feudal dark ages...raise those taxes, debase the currency.  The lesser-wealthed had to sell themselves into serfdom to be protected from the land taxes.  The policies of the empire destroyed all the weaker hands until you ended up with massive feudal duchies.

It's very clear when you argue with a liberal or conservative that you get an internally irreconcilable DOGMA.  They believe things with every fiber which are very obviously and provably bullshit.  Gun control or military policy, Patriot Act, Deficits don't matter, and on and on

nuinut's picture

"They exist in a state of cognitively dissonanced delusion."

Succinct.


Shameful's picture

Completely agree, will lead to unrest in the farmers and future starvation. But here is my rational. You will have a mass of hunger people in the cities, the vast majority. The farmers will not want to sell them food because we will have price controls or simply the people will not be able to afford the market rate for food. The gov has options. It can let the majority starve, leading to mass unrest. It can seize the crops and probably the land while they are at it. OR they can pass special taxes on the land to make it not a taking under the Constitution so it would be legal to seize the land and the crops for "back taxes" and not qualify as a taking since they failed to pay taxes.

Now with our looter government which is willing to burn the house to stay warm I know that they will do the most politically expedient thing that will also line their pockets. You will never lose betting on that, it's like betting on whether the sun will rise or not, it's a certainty, assuming there is a collapse.

velobabe's picture

whoa this is the most informative thread i have read, thanks. thanks for opening up how, where and can ideas. i was going to buy a bar but now think coins make more sense. shameful, you seem to be down with our rights and wonder what you think about our vulnerabilities owning a winery and having the federal government alcohol licensing and powerful scrutiny they have over us. they know the combinations of our locks and can make a random visit 24/7. they could just shut us down and take all contents. could they? phuck yes probably, wineries would be the first so give all the wine to the military. it's a tough business to be in run by the feds.

Not For Reuse's picture

Keep your best bottles behind the others. Keep buying great wine. There are far fewer fluid ounces of burgundy than troy ounces of gold, and that ratio will never change.

Shameful's picture

I honestly don't know much about the winery biz and have not researched it. I looked into farming because of family and my parents thought about buying a parcel of land.

My get tells me that they would not seize it but they might price control you or control your distribution. If things do start going bad they will do their damnedest to keep booze flowing to keep at least some of the people distracted. So I think you would have business but like I said my instruct is they might try to force you into a price control scheme or possibly sell directly to them for distribution. The problem is with a totally criminal government there is not much you can do. They can even effectively nullify Constitutional clauses with cunning use of laws, like my example of property/farms taken by taking instead of an outright taking. Or it might end up a odd situation where you can bride the inspector to keep some of it aside or not sell at price controls. And I see price and wage controls in the future. We saw it in the 70s and the 30s I see no reason why they will not try it again.

When you have a load of crooks and looters running the show the process is for them to consolidate property and assets among themselves and the politically connected and away from the true owners and the producers. Owning real producing assets will get harder and harder in the US because taxes will go up and all levels of the Gov, Fed, State, Local. All get more viscous with their taxes and fees as they scramble to get money to keep their beaks wet. As a business person if you are doing well you might want to move a portion of your wealth overseas and possibly look at what are the steps to establish a getaway if things get to hot for you. I'm not saying run for the hills, but can't hurt to know what the lay of the land is, and having assets overseas would be nice if you got robbed here.

velobabe's picture

thanks shame. i do have a lot of US$, don't know what to do. i asked my cousin about his swiss bank account and he said after 20 yrs @ banking institution he received the “madoff” (he called it) to come and get his millions and take them home. so he told me the privacy laws are killing us with a little ¢'s. i went all cash in fall 08, phuck that sucks money is huge cause it only comes in $100 bills. i heard their is a reason that the gov stopped $500.bills, lot easier to hoard less bulk.

Mad Max's picture

The other problem with holding physical cash is that anyone who has more than a couple hundred in cash at home is basically presumed to be a drug dealer or other heinous criminal, so if the police can find any reason to get into your house, it will all be confiscated and you will experience the farcical theft game referred to as forfeiture hearings.  Obviously save all your bank transaction receipts to try and prove lawful ownership in case of this eventuality.

On the other hand, if you don't have cash at home, you are totally screwed whenever the ATMs stop working and we have that sexy sounding "bank holiday."

Damned if you do, damned if you don't, etc.

Cow's picture

"anyone who has more than a couple hundred in cash at home is basically presumed to be a drug dealer or other heinous criminal"  Look that is not true.  If you don't know what you are talking about, don't.

Seer's picture

You're not understanding the discussion here...

It's a future tense thing.  And, consider:

People are currently being primed to believe that folks are hauling off lots of cash.  There will be social pressures/stigmas (thanks to a misguided "populist" campaign) such that people will demand that those "hoarding" money are committing acts against the welfare of the people.  Lots of plausibility here.  We all pretty much feel that way about the BIG boys; they will escape, but the residual resentment will be programmed in for future control of regular folks...

We've come to this point because of social associations.  Unless you're the Mountain Man*, social grouping is the only thing that's going to save your butt in the future.  * Nothing against these folks, my hat is off to them, but it's just not a viable solution for more than just a few of them.

Ivan the Russian's picture

Bang on! Social grouping is exactly what people would gravitate towards, whether it be along racial; religious or political grounds, and with that would come the scapegoats and the militia tyrants.

Ivan the Russian's picture

Bang on! Social grouping is exactly what people would gravitate towards, whether it be along racial; religious or political grounds, and with that would come the scapegoats and the militia tyrants.

Cow's picture

I understand the discussion perfectly

Shameful's picture

Cash will rot in the long term.  We should have deflation but the Fed Reserve will fight it with every fiber of their being.  If he has to Zimbabwe Ben will drop it out of helicopters to get inflation.

If you have big money and are in the winery biz maybe look at NZ?  I know they have some winery stuff there and you can effectively buy a way into the country.  NZ might now be perfect but it will likely be better then a lot of places even though I hear they still have a bit of a property bubble. But in truth I think the US will end up with 3rd world status, a banana republic with nukes.  I cannot accurately project what people will do when they wake up paupers but odds are we will at the very least see an increase of crime here, and additional corruption on all levels of government.  I know I'm looking at exits because this will not be the land of opportunity soon and will not return to being hte land of opportunity till we get the oligarchs off of us.

I would definitely get out of cash and own tangible things though.  If it is foreign property/land/assets or coins.  I think we going into a time where a lot of people will lose fortunes and those who can preserve them will end up ahead of the game. Those who hoard cash will get killed.  Look at the lose of purchasing power of the past decade, it's not likely to get any better with all money printing and there is a big risk of a downside of paper money rapidly losing value, especially if the world rejects the dollars reserve status.

nuinut's picture

Wineries here in NZ going bust; too much capacity, too little demand.

Contracts not being renewed. Only the big players looking OK at this time.

Maybe get in cheap on distressed assets currently if you got the bucks.

Most here live in a bubble full of green shoots though, so they wouldn't know a good offer if it bit them on the ass. 

delacroix's picture

supplement your production, with grape juice, and table grapes, maybe research raisin production. put together a backup solar power system. get a pot belly stove. electric golf cart, and lots of tools.  don't worry about the government, it can't take care of itself, but you can. if they make a move, you will be limited, in your options.be smart, better to give up 30% of your stuff, than to have 70% taken.

Seer's picture

Cash will rot in the long term.

The Loonie (and some others?) are soon to be plasticized...

Four options for one's life:

1) Work for the empire;

2) Farm, and be subject to the dictates of the empire (but at least you're assured of food, plus, it's a morally good labor- remember that the meek shall inherit the earth);

3) Be a renegade/survivalist type (a life on the run);

4) Be one of the swarms in cities, hoping that food comes.

Anonymous's picture

"The farmers will not want to sell them food because we will have price controls or simply the people will not be able to afford the market rate for food."

This played out in Weimar Germany. Many farmers simply said "Piss off, we don't need your worthless paper money, we're self-sufficient here." In response to the growing rebellion among farmers, the government passed anti-hoarding laws that forced farmers to sell their crops and livestock at controlled prices, or face confiscation and jail.

Mad Max's picture

Shameful, the scenario you lay out is horrible, yet plausible since variations of it have played out many times in recent and older history.  Disturbing.

I would however agree 100% with Hulk on every aspect, and I would add that the armored vehicles you refer to are surprisingly vulnerable to people who have various common items, all of them perfectly legal at present, and know a thing or two.  And I would further add that a lot of the 20-somethings in rural areas did a stint in the military, especially in infantry or armor.

Further, it doesn't require any war for this to be a calamity.  All it requires is for the farmers to stop producing at maximum levels and instead focus on feeding themselves and trying to keep their farms.  That alone could starve much of the population.

Finally, I highly recommend Tom Baugh's book Starving the Monkeys.

Shameful's picture

History repeats itself because we are people, and as humanity we really don't change much "This time is different, I mean it!"

I have no doubt that these vehicles have vulnerabilities to cunning individuals. The Styker vehicle has the armered cage on it because people in the field found that RPGs did naughty things to them IIRC.

The problem with destroying the vehicles is a pile of dead troops and burning ruined armored vehicles makes for great propaganda for the city dwellers. This "conflict" would be a war for hearts and minds as much as anything else, and the property owners are on the wrong end of the stick.

Doubtlessly the farmers would not produce or lower production, and this would tip the hunger scales. I think history might end up laughing at us. Much of America is fat or obese, and many on diets. Fate may deliver us a harsh diet, and perhaps those in the future will find it humorous that the fattest nation in Earth's history could endure a food crisis.

Hulk's picture

I wouldn't be surprised by your scenario Shameful, but I don't think the government could handle a war that large.Not only are the farmers
well armed themselves, but the surrounding communities they service
are also well armed and often loyal...
And even though the locals may not have money, they can and do barter. We currently barter with our poor customers. (one cooks for us, for instance)

And the current attitude of the Farmers is already very pissed off,
especially the under a thousand acres type farmer...
Extremely pissed off actually...

Shameful's picture

No offense but what will farmers do against Striker combat vehicles and attack helicopters? And of course the media will film it and cast the farmers who are protecting what is theirs as the villains "See those evil farmers are trying to hoard that food so you and your children can't eat!"

Seizing farms and crops would require less forces then trying to suppress the cities, no way they could keep the cities quite without food and they would melt down. And like I said I expect it through taxation first, so those who do not hand it over will be criminals in the eyes of the court as well as having public opinion against them. After all the fat unprepared masses will not want ot be deprived of food. Further spin can be made of "Well we are only going after the big farmers" and have the taxes on plots over 20 acres. Most city dwellers will marvel at how big 20 acres is and not realize how small it really is for a farm. Remember to feed these cities we need an elaborate supply and distribution system. A city dweller would be in now way able to negotiate with a rural farmer directly without a transport system and so barter would largely be off the table without having to pass through intermediaries.

Also by the Gov seizing the food and farmland they become the arbiter of who eats and who starves. I'm in no way wanting this to happen, I'm disgusted by what I know the Gov is capable of. I have distant relations who are rural fruit farmers who have even refused gov handouts because they want to make it on their own. But in the end the Gov will do what is good for the Gov and will change laws to make it legal, or at least give it the air of legitimacy.

Anonymous's picture

I think you have that assbackwards. Trying to seize the farms (at least in the South) would be a mistake of such epic proportions, you cannot imagine. If you've never been, take a stroll through a southern gun show and see what the locals are arming themselves with. Anyone who's never been will most likely be shocked. And with regards to taking over the land, unless the govt is willing to risk the lives of many thousands of soldiers, many of whom will most likely be less than thrilled at the prospect of killing their own friends and families, the success of any such action would be marginal.

PenGun's picture

 Well the Afghan poppy farmers mine their fields, kill Marines and all kinds of terrible things.

 

 Farmers aroung here all have scoped 30-06s ... some are very good with them.

Anonymous's picture

And when you approach those farmers with 30.06 rifles to trade for food, don't bring your TD Ameritrade statement showing 1,000 shares of GLD.

Stock up on your basics first: water, food, first aid and weapons. Then buy your gold and silver (I still think brass and lead will outperform).

Hulk's picture

I just don't think they will have the resources to pull it off.
Too much is overseas, permanetly.The country will need to
confiscate gold, like the Nazis did, to field an army..
Which presents yet another problem
And I don't know a single Marine who would fire on his own people.
(BTW, in your scenario, which I would not disregard, a Military coup
would become a distinct possibility)
Certainly there would be no defense against a direct air attack...
But it was essentially farmers that beat the British, appalachian farmers. They may be called on one more time!

You are correct though, government are capable of ruthless behaviour, always have been...