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On the verge of utter economic collapse:
A suspicion, a guess, a fear, a hope and an idea
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by Mr. Chuckles, Unknown News
March 8, 2008 |
When I look at charts like these, I go weak in the knees.
The Swiss Franc has been climbing steadily since late 2005,
but in the last three months it has entered the parabolic
blast-off stage.
The financial corporations are imploding! The S&P Financial
Sector looks a lot like Enron's
stock chart just before the
bitter end.
Likewise with the $US Dollar. This trade-weighted index is based on the US Dollar vs. six
other currencies, and it has declined from 93 to 73 since the end of
2005.
Gold and oil are exploding upwards in price, not just when
measured in US |
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dollars but in all currencies. There is a
global inflation epidemic, it isn't just an American
problem (which itself is covered up with phony US government
stats and the last year's decision to hide
There will be blood on the streets as millionaires push and shove through the crowd to the dollar exit doors.
There will probably be one final insane selling climax and then Fox/CNBC/MSNBC will shout "Fire!"
That will be the sign that the rich people will soon be reversing the money flows to buy up US properties on the cheap -- like real estate, bonds and stocks that were abandoned during the hysterical rush to flee the burning theater.
Naturally, Joe-Sixpack will be selling dollars at the precise, multi-decade bottom -- and will then hold fast waiting for a final collapse, which will not be allowed to occur by The Powers That Be.
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M3 money
supply number from the public).
I have one major suspicion, one guess, one fear, one
nugget of optimism, and one investment idea.
My suspicion:| |
I suspect that part of the reason the US Dollar is falling
so fast is that Americans are frantically exporting their own
money to safe havens abroad, or "investing" them in
electronic-ownership receipts for things like oil, gold and
food stuffs (i.e. commodities.) This expatriation of money is
not something that just started, but has been going on for
the last four or five years. And now the speed is
accelerating as everyone panics. No kidding!
There will be blood
on the streets as millionaires push and shove through the
crowd to the dollar exit doors. There will probably be one
final insane selling climax and then Fox/CNBC/MSNBC will
shout "Fire!" That will be the sign that the rich people
will soon be reversing the money flows to buy up US
properties on the cheap -- like real estate, bonds and stocks
that were abandoned during the hysterical rush |
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| | to flee the
burning theater. Naturally, Joe-Sixpack will be selling
dollars at the precise, multi-decade bottom -- and will then
hold fast waiting for a final collapse, which will not be
allowed to occur by The Powers That Be. |
My guess:| |
The current orgy of dollar selling, oil buying and gold
hoarding will climax messily no later than June 1st, and
perhaps a month or so sooner. Eventually the falling dollar
will resolve the US problem of unaffordable real estate and
falling mortgage bond prices. It will also pretty much
resolve the need for the Fed to keep cutting interest rates.
Why? How?
Simple. When the dollar falls enough, all those
bubbleized assets will be affordable -- not to most
Americans, but to foreigners who will be able to exchange
over-priced Euros for dirt-cheap Ameribucks.
These foreign investors get a
twofer: their currencies skyrocketed while our asset prices
nose-dived. And if this next leg down doesn't solve the
problem then the leg down after that will be like opening an
extra-dimensional vortex which connects to The Void --
everything in the US that isn't nailed down will be loaded
into those empty shipping containers and hauled off to
Asia. (As Steve Saville wrote, the falling dollar won't
create many jobs as there are minimal manpower requirements
for loading our autos onto ships and waving good-bye.)
In other words, I don't think this game is going into extra
innings. Casey Jones is driving the train, high on
cocaine...and we are not slowing down. |
My fear:| |
There is no reason to believe that Bush, Paulson, Bernanke,
Reid and Pelosi have "the situation" under control. Based on everything we've seen from them, the
opposite conjecture is more likely to be true.
Halting a
monetary collapse is easier said than done, especially if the
country in question has essentially zero foreign currency
reserves. In fact, Bernanke's lever is destabilizing the
system and doing the precise opposite of what is intended;
loan rates for buyers are actually going up! Also, Soros's
Theory of Reflexivity comes into play; in the same way
that a rubber band will stretch just soooooooooooo far and
then break, so do systems affected by the anticipations of
participants in those systems.
So... there is actually a very good chance that the US
dollar will collapse by more than the expected 10 percent. We
could be looking at CPI increases of 10% a month if
everything falls apart. If everything turns out just so, then
I wouldn't be at all surprised to see the new Democratic
administration implementing currency controls, making it
impossible for American citizens to exchange their dollars
for other currencies. Hell, they might even need to implement
a long "bank holiday" and halt all mortgage foreclosures! I
don't expect this to happen, but if it does our days of
glorious and patriotic foreign military adventures are over
(we would be forced to leave all military assets behind
during the forced evacuations of our troops -- and many of
them would likely refuse repatriation). |
My optimistic thought:| |
Within three months at most, this catastrophe will arrive at a
conclusion. However it turns out we will see the endgame well
before Bush leaves office. Think about it: CIA-administered
enema, diaper, orange jumpsuit, leg irons, goggles, and a
fast jet flight rendition to The Hague... for trial... on
charges of crimes against all of humanity! |
My Investment idea:| |
As soon as possible, purchase the necessary items that you
would be buying anyway later this year. Prices will not go
lower, and the savings equate to tax-free profits (because
you will be consuming the products personally.)
Do this strategically focusing on what you actually need and
will use, regardless of whatever else happens...
For example, I personally require food for my face because I
am an un-evolved being unable to subsist on just sunlight,
water and cosmic vibrations. I am also in desperate need of a
new pair of sneakers and some socks.
A conceptual outlook, taking into account the worst while
leaving open the possibility of a good outcome, while also
not doing anything too insanely extreme, seems to suggest a
food stockpile adequate for three months -- and thus is
adequate for neighborhood sharing in the event of an
emergency situation. (Don't forget bottled water in your
hoard!) |
P.S. Gold is extremely overbought. Historically these
parabolic upwards moves reverse with frightening
speed and unimaginable horrors for novices who thought
they had a sure thing in hand. That might not be
true this time, but the historical precedents must
be taken into account.
© by the author.
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