The Biggest Debt Write-Down In Human History

Michael Victory's picture

via TVR:

In case they didn’t cover it in your weekly programming, the biggest debt write-down in human history occured on 3.9.12.

SDA Announces a Credit Event Has Occurred

No need to worry, the ISDA, IMF, ECB, US Fed, Euro Zone Leaders and every other Frankenstein group have everything under control. Don’t worry that they changed their minds more times than your wife changes shoes before coming to this “solution.” This time they’re sure. Sure this is going to be a huge benefit to the Greek people. Sure the triggering of CDS’ in no threat to financial institutions and sure overall payouts will be around the $3.2B in net outstanding CDS contracts linked to Greece. And sure the exact level of payouts will be determined on March 19. I am sure not one of these sureties is accurate.

The biggest debt writedown in history, will be followed-up with additional bailout funds being given to the money masters, I mean the poor people of Greece. It’s for the children. IMF head, Christine Lagarde wants to contribute $36.4B from the IMF to the $169B upcoming bailout. Ms. Lagarde says this will be needed to avoid a disorderly default that could be destabilizing. I guess skyrocketing suicide rates and pleas from Greek parents to give their children up for adoption is considered stable. Their oppression reeks of their greed and disgrace.

The restructuring will shave $138B off Greece’s $487B debt. Non-elected Minister Lucas Papademos called the deal a “historic success”. He continued, “For the first time, Greece is not adding debt but taking debt off the backs of its citizens.” You’ll have to forgive Papademon, like his friends, he often confuses the words debt and money. I’m sure he meant that they would be taking money off the backs of its citizens. Forget about the upcoming madness with Spain, Portugal, France and finally the US. Do you really think the “net” 3.2B CDS Greek exposure is the true liability? I’ll help you with the answer. If they sold a couple hundred billion in fictitious insurance and immediately took the proceeds and levered them, say a 100x and dumped it on themselves, proclaiming, “It’s raining!”, do you think they will be able to cover the insurance claims now? I guess we’ll find out if chopping off the head of a zombie bank can really kill them.

Institutions Will Not Enter the Gold Market in Force

Worth their weight in paper – It is my belief that financial institutions will not play a large role in this gold bull market until it is too late. I want to clarify that I am not referring to central banks or Sovereign Wealth Funds that are already some of the biggest players in this bull market, especially those in the East, like China. Rather, I am referring to the investment banks, securities firms, mutual fund and insurance companies.

Comments like those made by Warren Buffet in this year’s annual letter to Berkshire Hathaway shareholders are indicative of the feelings of many money managers and executives in the financial sector. Warren stated gold is an asset that is “forever unproductive” and that “it [gold] will never produce anything.” The common belief is that gold is not an investment, but a speculation. This is because money managers don’t understand gold or how to value it. More on how to value gold later.

Gold doesn’t pay a dividend and doesn’t generate easy transaction or administrative costs. Many investment managers I work with don’t even consider gold an asset. The whole system is built so that each component works together – they facilitate deals, offer services and issue and sell paper for profit. It’s a symbiotic relationship between all groups that will not be broken. Gold is not part of their business model. It is for this reason that I believe institutions will not be large players in the gold market and will ultimately be severely impacted by the dollar collapse. The coming currency collapse will destroy the entire financial system. They are a ship of fools sailing off a cliff.

The Manipulation of Markets Will Only Increase Until They Don’t

We have reached the point where manipulation (aka policies) by governments and government sponsored entities need to continuously increase to keep the debt-based monetary system from collapsing. Similar to the fictitious interest rates in the US Bond Markets, the gold and silver manipulations must continue until the last. No matter how you choose to store savings, you should understand the manipulations will continue until they cannot any longer. If you can understand how this will end, you will not only be able to handle the short-term volatility, but will see it as a gift.

Like a thief in the night, the financial system’s ship of fools will find their gold has been removed and they’ve thrown their silver away.

How to Value Gold 

I believe James Turk has the best way to value gold. Keep in mind using this formula assumes that 5,000 years of history is not wrong and in fact gold is still money. I tend to put more faith in 5,000 years of human behavior than digits on my computer. James determines “fair value” by dividing Central Bank Foreign Exchange Reserves by Central Bank Gold Reserves. Using this calculation, the “fair value” of gold is over $11,000/oz and rising. How high’s the water Mama? $1,700 and rising.

Gold Oil Ratio (GOR)

Last week I mentioned that the price of oil was dropping versus gold, as I would expect in either a hyperinflationary or hyperdeflationary depression that coincides with a financial collapse. In 2005, the GOR was 6.6 barrels of oil/oz of gold. Today, the price of oil has dropped to about 16 barrels/oz. That means I can buy almost 2 ½ times the amount of oil for the same amount of gold. The historical norm is between 15-20 barrels/oz – so we are around the historical average now. I know about peak oil and peak everything theories. Whether peak oil is true or not, it’s going to feel like peak oil if your savings is in USDs.

Rising Taxes

With budget deficits running completely out of control, new and existing taxes are going to be levied on the public. We have new taxes for ObamaCare and the potential for the Bush tax cuts to expire in 2013. All told, 41 separate tax provisions are set to expire this year, ranging from personal to estate taxes. In addition, there has been a 2013 proposal that could reduce the tax benefit of employee deferrals into a qualified retirement plan for certain high income individuals. We’re talking 401Ks and the like. The proposal would tax deferrals at a rate that is the difference between the employee’s tax rate for ordinary income and 28%. It is unclear whether this proposal will gain traction, but what is clear is the direction of future taxation to support ever growing debts.

No matter how high existing taxes go or how many new taxes are implemented; there is no way to cover the shortfalls. John Williams of SGS noted that even if the US were to tax 100% of all wages and corporate profits, they could still not cover the bill. Unfortunately, this won’t stop them from trying. The whole debate about who should pay what, is a perfect example of how the conversation is being directed. We are following their script without ever questioning why. How in the world are we ever going to pay them what they demand if they keep taking it out at a faster rate? Catherine Austin Fitts put it best by saying, “A negative economy is like having a hole in the milk bucket; it’s time we fixed the hole and filled up the bucket!” I’m not just talking about a little waste. I’m referring to the outright theft by those with access and power.

There’s a Hole in the Bucket

There are many holes in the bucket. A few examples include:

1) Federal housing programs like the FHA and HUD – Time Magazine exposed a scandal at the FHA where real estate speculators used the program to make huge profits at the expense of the poor. Builders pocket millions of profits from mortgage loans that far exceeded the cost of construction. These programs allow the government to write bank checks to those involved in the contracts. In the 1980’s it was disclosed that senior HUD staff used their positions for personal gain and when they left their positions they used inside contacts to win subsidies and new contracts. In 1981 Sam Pierce became Secretary of HUD under Ronald Reagan. After leaving his office, the US Office of the Independent Counsel and US Congress investigated mismanagement and abuse stemming from political favoritism. Through the 1990s many of Pierce’s closest aides were charged and convicted of felonies for inappropriate expenditures, but Pierce himself was not charged. HUD provides about $8B a year to public housing authorities (PHAs).

In 2006, The Miami Herald ran a series exposing the following examples of fraud and corruption:

• The PHA gave developers and nonprofit groups with political connections millions of dollars to build affordable housing, but they ended up building shoddy houses or no houses at all.

• HUD gave the PHA $35 million to tear down dilapidated public housing and replace it with new affordable housing. Six years later, half the money was gone and only three houses had been built.

• Instead of selling new houses to low-income buyers, the PHA allowed developers to make sales to wealthy investors who then “flipped” them for a profit.

2) Medicare and Medicaid – Theft in these two federal health programs range well into the 100’s of billions annually. Malcolm Sparrow of Harvard University, a top specialist in health care fraud thinks it’s likely that between $200-500B/year is lost to fraud (theft) between these two programs.

3) Food Stamps – $1.7B/year lost to fraud

4) School Lunches – $1.4B/year lost to fraud

5) Supplemental Social Security – $4.6B/year lost to fraud

6) Unemployment Insurance – $4B/year lost to fraud

7) Temporary Assistance for Needy Families – $1.7B/year lost to fraud

And if we wanted to get belligerent, we could mention the Wachovia money laundering scam using funds from the Mexican (CIA) drug cartel. To be fair to Wachovia, they were fined 1/3rd of a cent for each dollar laundered.

The hole gets bigger yet. We’ve got to pay for their military. And I mean “their” military. The American people are not asking to drop more bombs, they are being told. It’s a complicated agenda that we wouldn’t understand, so they have to choose for us. It’s for our own good of course. If it wasn’t already clear, they like to give you a second serving. In June 2011, The White House told Congress and America why it didn’t need their approval for military action in Libya. It was because it wasn’t a war – they should just say it’s because “we say so”.

General Smedley Butler, two-time recipient of the Congressional Medal of Honor put it best: “War is just a racket. A racket is best described, I believe, as something that is not what it seems to the majority of people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few at the expense of the masses.”

The US taxpayer is funding global military operations in a big way. We have over 700 military bases in 130 different countries. The reported military budget for the US is $700B/year. More than the top 14 countries (excluding the US) combined. Including off-the-books war costs, the annual US military spending is estimated to be about $1.25T. To add insult to injury, Secretary of Defense Donald Rumsfeld publicly stated on September 10, 2001 that “According to some estimates we cannot track $2.3 trillion in transactions.”

There’s a hole in the bucket and it’s getting bigger. It’s a massive gaping hole of fraud and abuse, waste of hard-earned tax dollars, corporate exploitation, criminal-predatory lending and governmental tyranny. Deceit masked in thousand page bills. There’s a hole in the bucket and we need to fix it.


Market Thoughts 

Walking a Tightrope

Think of the market as a man walking on a tightrope with each arm tied to a team of horses. On one arm are the natural forces of deflation, on the other are the unholy forces of central bank intervention. The horses pull harder with each passing day, making it ever more difficult for the man to balance himself. As he wobbles with volatility, the crowd wonders which team of horses will succumb. Some betting on hyperinflation, others on hyperdeflation. All seeming to understand the man must fall eventually. Given the collapse in inevitable, CBs will ensure it’s not a deflationary collapse. They’ve already stated this and back-stopping banking deposits alone will require full-speed printing (FDIC is broke too). Collapse due to a deflationary spiral is a certainty, while printing is more profitable for those in control and postpones the day of reckoning the longest, if they can just keep their team of horses in equilibrium with the
deflationary horses. In the meantime, holding a portion of your portfolio in cash is a prudent option. Of course the amount you hold in cash depends on your situation. I am extremely bearish on the U$D and still hold over 20% in cash. I accept the 10% annual hit from inflation – it is the cost of protecting my PMs and it may allow me to take advantage of buying opportunities should the man, I mean market, wobble violently.

Unlimited Dollar Swaps

On the interventionist team, the US Fed is supplying an unlimited amount of dollars to the world via the dollar swap agreements. On Nov. 30, 2011, the world’s G6 central banks (the Federal Reserve, the Bank of England, the Bank of Japan, the European Central Bank [ECB], the Swiss National Bank, and the Bank of Canada) announced “coordinated actions to enhance their capacity to provide liquidity support to the global financial system”. Under this agreement, The US Fed will offer unlimited amounts of US dollars to other central banks at the US dollar overnight index swap rate (OIS) plus 50 basis points (about 1%). These freshly printed dollars are being lent to the CBs respective banks, so that withdrawals and debt payments can be met. These swaps are, and will continue to be offered with no limitation until at least Feb 1, 2013.

Near-Term Market Movements

The US trade gap for December widened to a record $52.5B. More importantly, we have the Greek CDS’ and incredible debt financing to deal with this month. You know what we need to solve this nagging issue of insolvency? More credit! Or debt, or money, or whatever they call that digital and paper shit they are so good at creating. The “pushers” will probably make you ask nicely, but not too worry, the doctor’s here and he’s got his syringe ready. The new injection will have its desired affect – junky affect. I’m expecting a continued downward movement in the world’s stock markets through the end of March and into early April. Any attempts at rallying will be met with new fears over the expanding debt tsunami. It’ll be plenty choppy – the risk is on the downside. I wouldn’t be caught shorting stocks, but I consider any allocation risky. PMs and commodities will move much higher beginning in April. $2000 gold and $50 silver by July.


God Bless,

~David Freedom

Click for the supplemental editorial audio.

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sasebo's picture

Just what we need ------- another useless asshole.

SmoothCoolSmoke's picture

I’m expecting a continued downward movement in the world’s stock markets through the end of March and into early April. Any attempts at rallying will be met with new fears over the expanding debt tsunami. It’ll be plenty choppy – the risk is on the downside. I wouldn’t be caught shorting stocks

...doesn't sound very sure of himself.


Jstanley011's picture

"Given the collapse in inevitable, CBs will ensure it’s not a deflationary collapse. They’ve already stated this and back-stopping banking deposits alone will require full-speed printing (FDIC is broke too). Collapse due to a deflationary spiral is a certainty, while printing is more profitable for those in control and postpones the day of reckoning the longest, if they can just keep their team of horses in equilibrium with the
deflationary horses."

The argument for deflation winning out -- when and if the "Goldilocks" equilibrium cannot be maintained -- is that printing to cover falling activity in the real economy would cause inflation of a magnitude that, finally, the central banks could not abide. That is, with their heads remaining attached to their shoulders. I.e., deflation will be forced upon them.

It could be wrong, of course. We'll see...

Rynak's picture

Good point.... but something which you do not consider in your post, is "out of control": Even if consequences of further massprinting at some point in time would be against their interests.... is it safe to say that this "realization" will not be "too late".... and that a situation cannot occur, where no matter if they massprint or do not massprint, nothing can prevent a catastrophe anymore, and the only choice of decision makers are the existing currents and short term considerations?

"Debt" is not merely an aspect of fiat money.... similiar effects can happen, if you pile up a mountain of consequences without triggering them right away.... and then, they do get triggered..... AND: "Kick the can" is best at creating just that scenario.

To rephrase a line of yours: When you constantly prefer the near-term over the long-term, the long-term will be forced upon you, when the current becomes what was once the long-term.

GeneH3's picture

This is a good post; but PLEASE, people, poor English and writing errors detract from the message. Learn the difference between affect and effect. And a spell checker will not identify the error when you mistakenly use "in" when you meant to write "is."

One thing that sets ZH apart is the rapid pace at which quality commentary appears. But let us not be in such a hurry that we fail to proofread and have someone else read an article before posting it.

Other common errors:
-- we're vs.were vs. where
-- there vs. they're vs. their
-- your vs. you're
-- And the one that grates on me the most: failure to use the objective case following a preposition. You don't say "for George and I." You say "for George and me." You wouldn't say "for I." Adding another person doesn't change the rule. Some seem to believe that such erroneous usage is sophisticated; but it merely implies that the speaker lacks a proper education in the language -- and, perhaps in other matters.

Take care to preserve your iintellectual mage if it matters to you.

JamesBond's picture

you must never read anything posted by Reggie!


Rynak's picture

or the tylers.... they sometimes have typos and stuff in the opening sentence of articles. Looks kinda annoying, but i'll gladly take some formal defects, for superior quality of the content. Plus, me not caring that much about formalities when writing, it would be kinda hypocritical to for me to complain about grammar.

ihedgemyhedges's picture

Just look at your last sentence there dufus............why don't YOU run a spellcheck while posting here about ANOTHER poster's need to check his own work???????????

Transformer's picture

I have a friend like you.  Always about grammar and spelling.  The message is just too scary.

DFreedom's picture


I appreciate your feedback.  I admit I should have spent more time proofreading the article.  Any errors are the result of working on my notes at 2am and focusing on making an audio.  My iinellectual mage (check your spelling) does matter to me.  I assure you my grammatical mistakes are not due to lack of formal education – I paid plenty to get my post-graduate papers.      

Bansters-in-my- feces's picture


And some wonder why the USA is so disliked.

Bear's picture

We need all of these troops since we have handed out money to all 130 countries' central banks ... we will need them to carry all the cash back to the US

jwoop66's picture

Yeah, I'm pro military, but that is fucking insane.  Bring 'em home!

espirit's picture

... and put them to work where? Mickey D's?

supermaxedout's picture
Who Has Said What About the Creation of the Money Supply by the Private Banks


cifo's picture

You can read all kinds of quotes, all day long, on Wise Clock. Check it out here:

Stuck on Zero's picture

Fiat currency is the ultimate socialist monetary scheme.  The theory is that everyone can get more out of it than they put into it.

TrulyStupid's picture

It's socialism for the rich, free enterprise (bankruptcy) for the poor.

Rynak's picture

If it were about me, the words capitalism, free market, market, economy, socialism, fascism, communism, taxes and government should all be banned from usage, thus forcing people to explain what they actually mean.....

....would result in some very interesting worldview-shaking discoveries

ATM's picture

It is the ultimate authoritarian scheme whereby those who control the printing can steal what wealth that any individual has dared to accumulate.

Obadiah's picture

You know bedhead I am kinda seeing it play out over a longer-term plan too.  For six years since awakening I thought she's gonna blow any second.  I am getting so tierd of the gloom and doom that we all know should have allready happened... but I think Satan's one world currency schedule is a few years away.  A one world curency IS his plan and I see that happening in 3 years or less.  That will work for 3.5 years while he smoozes and amazes the masses into believeing he IS the Christ.  Then she (the one world sys) blows up and THEN the true Christ shows.  So that's my best guess at a timeline.

Just don't forget people.  The False christ comes 1st at the 6th trump.  You cant be fooled by Satan if he shows up AFTER the true Christ shows... well du?

When you see someone saying he is Christ and he has amazing powers run from him... he is the fake and the fake comes first.

Want to learn about how this game has been played since 2000 BC try this Korean War Vet peaching on for size


Obadiah's picture

er I meant pReaching... not peaching cause that sounds like something I should be doing with the wife. ; )  hummm???

my puppy for prez's picture

Some important things have to happen before then:  Damascus must be layed to ruin (possible very soon);  the Temple in Jerusalem must be rebuilt,  from which the anti-Christ will rule;  the Zionist agenda and actions, which ARE global domination, will be the tipping point into a catachlysmic world war. 

espirit's picture

What do you think, will people simply reject the system?  Will they opt out of governments, will they defy the banks, will they willingly have their electricity and water cut off to prevent them falling under the control of a new global currency? 

The more capable and creative people will if not interred.  We have the means and the knowledge.

Google "gasifier".  During petroleum shortages in WWII, millions of gasifier units (homemade and commercial), were produced and effectively provided the fuel for transportation, farming, and stationary engines, etc.  Many were still in use until the 1970's, when peak cheap fuels squeezed them out.

Think I'm going to live in a cave or teepee? Not unless the govt insists by force. 

apberusdisvet's picture

While even most experts/analysts envision a new reserve currency that is comprised of a basket of commodities including gold, the ultimate problem is that all nations will have to expose their true gold holdings to audit/assay.  For many reasons as ZHers know too well, this can never be allowed to happen.  I surmise that the actual reality is that most of the world's bullion is already in Rothschild vaults, and what is on the books worldwide is the same 10,000 tonnes that has been leased, swapped, hypothecated with an unbelievable amount of counterparties.  At some point China would say that "we'll show you ours if you show us yours".  China will have the real stuff; Western nations wil have paper and tungsten.

Rynak's picture

Awesome post. Between pm-trolls and pm-addicts who think that setting any wealth-transaction with physical metals (as opposed to basically ETFs).... people rarely talk about an actual commodity/metals BACKED currency, instead of a metals currency..... and all the problems that come with that (mainly, transparency of actual holdings, and "who" verifies it).

Element's picture

Well, at least its all fixed now.

non_anon's picture

Oh boy, All in the Family, Archie Bunker tells it like it was yesterday and today

SHRAGS's picture

War a waste?  Is that the whole point?

Cult of Criminality's picture

"The Biggest Debt Write-Down In Human History"

So far .... ;>)

falak pema's picture

Exactly; the Oligarchy won't admit what is evident : That the true write down of risk assets has already occurred in reality but HAS NOT BEEN MARKED TO MARKET, as the QE/LTRO can kicking avoids its official recognition in first world (USA/EZone/UK/Jap). 

If we add to this the MAJOR trend of the REAL economy, the energy crunch conundrum which is now lurking around the corner, as the fight for net exportable oil/gas production hottens up between BRIC (CHINDIA) and First world, all the indicators show that the present levels of energy consumption in a HUGE SUBURBIA TYPE model of USA is unsustainable. THe US economy is in the BULLS EYE of the coming energy crunch. Per capita, US primary energy consumption is double that of E zone, if we use the 98 Quadrillion BTU number and compare it to E zone. USA has less mass transport and huge increases in cost/mile projected for per capita Day to day distance coverage for essential living. This is going to be an economic killer for the coming years in US economy, inspite of frackgas and shale production scenarios. The dependency on foreign oil is truly there; as domestic increase in the best of scenarios only adds marginally to current depletion rates from existing wells, and it costs much more with lower <<EROI yields. The whole economy is built on cheap energy model. Even Europe is overstretched in Energy import terms which contributes to its ever increasing balance of trade hole, in spite of more reliance for some on Nuclear component, like France, or on Renewables like Germany who are going whole hog towards this alternative. Huge risk there as its a bet of reaching grid parity in five to ten years; with Nuclear and Fossils alternatives. 

Add to the coming financial scenario meltdown this primary energy strangulation noose and you get a feel for what the next decade means to first world economies. The noose will tighten and a paradigm will have to emerge in a Sisyphian world of harsh adjustment; I would advise people to read : Of MIce and MEn and Grapes of Wrath by Steinbeck.

DoChenRollingBearing's picture

It is always smart to have 5% - 10% (or more of your liquid wealth) in physical gold in your own possession.  So many LIES ot there...

The Navigator's picture

But........Herr Obama said we were only in a ditch and, and he was getting us out of it, into fields of green shoots


Keep on stacking and stocking, gold and/or silver - both are very very pretty and useful.

lolmao500's picture

Don't you worry, people in the western countries (US-Canada) are still blaming the Greek people for 100% of this.

non_anon's picture







toadold's picture

Und so should I keep buying der small increments of physical PM and having to pay der larger premium but be having der stuff on hand or should I be saving der declining value money in der attempt to save premium cost with der larger purchase? Das silver looking to be a good buy but der gold is so pretty?......Damn I've been reading to much about the German reaction to the EURO.

gdogus erectus's picture

David!  Shhhh, I'm not done stacking over here.

DavosSherman's picture





"They are a ship of fools sailing off a cliff."

+1 !!

ddtuttle's picture

Highly Mixed Metaphor.

Actually, we have driven the car off the cliff we just have hit the water yet.

Dead Canary's picture

I believe a "cliff" in a river is called a "waterfall". Don't quote me on that.

Non Passaran's picture

Well done!
Sir, you are the canary in the gold mine!

Amagnonx's picture

No, they are the 800lb canary on the ship of fools sailing up shit creek with an elephant for a paddle .. apparently metaphors never get old. they just get twisted beyond recognition.


The tail risk for investment in PM's is this - the use of force, combined with the release of an international currency that is 'backed' by CB gold reserves.  It would be a lie, a giant lie, but the risk seems real. If they bring in 'gold backed' SDR's - this is unlikely to have a positive effect on PM's.


The problem with rejecting the new gold backed SDR's are several;


1. People will be offered the chance to trade worthless currencies for the new SDR's - so they could 'apparently' retain some value from savings made worthless.

2. The established systems will be using the new currency - banks, governments and so on.


What do you think, will people simply reject the system?  Will they opt out of governments, will they defy the banks, will they willingly have their electricity and water cut off to prevent them falling under the control of a new global currency?  Probably not.

Im a buyer of PM's - I'm not paying any tax, Ive got nothing in the bank - but I dont like this risk much.

PMakoi's picture

Yes, this should be a concern to physical PM owners, and why diversification is still absolutely (IMO) necessary.  The Banking powers are completely vested in the fractional reserve model.  They have proven over and over to be in charge of the Media and Political arenas.  Anyone that thinks the police/military will not do the bidding of TPTB is sorely mistaken.  There may be some grumbling by some security force personnel, but by and large, they will realize which side their bread is buttered on.  If ordered to take your stuff, they will.  If ordered to jail you, they will. 


 The SDR is the up and coming World trade money model. The problem, created by the investment community themselves via derivatives, is that there is now far too much paper representing far too little real hard value assets.  Count on the holders of GLD, IAU, or SGOL to make claim to "equal" footing to "real physical" in any new monetary conversion scheme.  Count on the Nation Central Banks to do exactly what the ECB has done with the Greek Bonds.  They will claim their "paper gold" 1:1 exchange.  Everyone else takes a haircut.  And likely, any private gold owners wishing to convert their physical will face special taxation on their "gain"!


Diversification still makes sense. 

I have been considering escape for quite a while.  Of course, physical on hand, cash on hand, tools, land, supplies, network of local services and farmers, self-protection, alternate power supplies, alternate heating, a well, fishing and hunting equipped, etc...   We have real estate, apartments and houses, small office space with adequate tenants currently, and if the housing crisis worsens, we should have more as people will need a place to live,… but what do to about trusts??  Investments that need to stay invested??


I've been in PHYS and PSLV since their inception, and I have periodically added to those.  I been using a sort of Malthus theory of investing.  Manufacturers and Producers of goods that people NEED, regardless of the economy's plight.  Low to No Debt companies, dividend paying companies.  PM funds like Tocqueville, Ag ETF's, Mining ETF's.  Each party within a trust is "insured" to 250K for cash.  Sure the Govt. would be printing less valuable paper in such case, but you'd get something at least.  If the market takes a dump, it will be difficult to avoid a serious hit, but with the right array of "vitals needs" & "real things" in the portfolio, this should correct more quickly than, say, tech and/or growth stocks.


The World’s economic production centers have changed to low cost labor States/Countries.  The fuel that ran that build up was both the capital of established Main Sector (U.S. Japan G.B. Germany) Producers (granted much of it borrowed), the IMF provided (wasted) hundreds of billions from respective member Country’s citizenry (via taxation upon those citizens) in what may have been and earnest and sincere attempt to improve living standards.  Country after Country, we have seen crony capitalism at work, we have seen money “vaporize”, investments bailed out, and bankers bailed out, and now we are seeing the final stage of Countries themselves being bailed out.  There is no safe haven for those of us that stay market invested.  It’s all going to get hit.  Governments will insist upon their unlimited control of the citizenry.  Governments will pursue policies of austerity and draconian taxation to save themselves and their system.  The Banking powers, ever convinced of Usury’s legitimacy, of Fractional Reserves (key base error = everyone won’t want their money back all at once) propriety, and the Enforcers (Military/Police) who need their jobs, who will take the food, shelter, and provisions from those that have them to give to those that have not in exchange for their “service” will enforce willingly, if perhaps grudgingly.  They will know which side their bread is buttered.  Life and living it just might be dramatically different than anything the last few generations here have ever known.  Add in to risk of World War (the Elite wiping the slate clean), and we could enter a new Dark Age Feudalism.


Gad!  Does any of that really concern me?  Does any of that really mean I can help my children, or grandchildren?  Am I lost?  Are we all lost?  Errol Flynn, the cavalier actor, once remarked that, “Anyone who dies with more than $5 in his pocket is a sucker”.  Perhaps he was right.  And, perhaps if we see a spell of deflation, allowing time for cash to be withdrawn from the Banks (and the rather large assumption here being that they actually could come up with it), people will buy up the assorted stored treasures of those afraid of falling prices, or forced to liquidate.  Blood in the streets.  If the cash is as hand, if one’s credit remains viable, there will be bargains on many truly valuable things.  Carpetbaggers, Scalawags, and the like, led by whatever remnant ISDA committee survivors who legitimize smash and grab looting distributing the crumbs to their member States cum Provinces.  Gad again! That is all beyond me.  That’s out of my control and hope for any influence to avoid…


?Apologies for running on... must be the time change here, and too much coffee this a.m.


RockyRacoon's picture

You stated your thoughts quite well.   The scorn goes to those who read half, find one small concept they disagree with, read no further, post a junk, and move on to be a burr under some other thoughtful person's saddle.

Reading about the corruption and graft in the gov't programs is nearly laughable in light of the untold fortunes being amassed by the financial elite.  The inefficiencies and outright fraud in the various programs and departments are merely a metaphorical drop in the same bucket that is described.  Or a leak of infinitesimal size to stay true to the metaphor.  

All the monies for infrastructure improvements that would normally be made, and interest lost by savers is going to the top tier.   Don't they have enough?   When the American Spring arrives it will differ somewhat from others.   There are militant snipers in the hills and behind every well-manicured hedgerow in America.   I don't think the oligarchy is gonna like what they see.

I've had a mini-campaign of sending out emails about the state of the disunion and some ZH articles of particular interest.   The recipients rarely reply.   Some folks I see in person from time to time and I get a ribbing for being a doom-and-gloomer.   I'm giving up on the "campaign" and taking care of my own.  No more cajoling of friends, family or neighbors about getting themselves ready.    If it hasn't soaked in by now, it won't.   They are on their own and they will find my doors locked.   I'd suggest not knocking too hard.

I'll pass on what I've gleaned to those who genuinely want to know.  The others will know the wrath of a jilted market.

FinsterMonster's picture

No apologies needed! Should have more of these ramblings on ZH comments. Thank you for an interesting read.

espirit's picture

The boat rocked so hard that I lost all my phyzz overboard.

Now all I've got left is the "deer in the headlights" look when somebody says to BTFD!

I no nothing.

laosuwan's picture

i was just thinking about this yesterday. we know the centrla banks are suppressing the price of gold right now. can we trust these people to honestly administer a new currency partly backed by gold?


we hold gold physically as insurance about currency collapse. fair enough. after the collapse the new currency will be based on gold, then will there still be interest in and demand for physical gold? Less, for sure. And that opens an opportunity for these people to dump the price of gold again.


There has to be some way to create a parallel market for physical, where the price of physical trades on a physical only basis

disabledvet's picture

for 5,000 an ounce would you say yes? how about 20,000?