Sunday, July 31, 2016

"Not enough dollars to go around"

Mish talks about the ongoing and recently worsened collapse of the Egyptian pound.  You can read his take on it here.  I don't care about the details of the story.  I only want to point out the bottom line as seen by Mish:
"Not Enough Dollars
We see the same story once again: “There are not enough dollars to go around.” Mercy! Get out the printing presses."

Not enough dollars??  How can that be?

This is the hallmark of deflation.  The debt Ponzi needs an exponentially growing supply of cash to feed it and the only way for that to happen without the sheeple realizing that the con game was about to collapse is for this increase in money supply is to increase the debt portion of it.  If the fed were to increase the monetary base to the level needed in order to stop the deflation, the current run into gold would be as a joke.

Debt is temporary money whereas the the monetary base controlled by the federal reserve is pretty much permanent money.  The herd is no longer borrowing at a pace to increase the dollar supply fast enough to prop up the collapse.  Its being felt in the weak players first and worst.  The dollar continues to strengthen despite government best efforts to debase it and to get everyone to borrow more money, even to the point of using negative interest rates.

Mish mocks the people tongue in check saying "Mercy! Get out the printing presses" because so many have complained about use of the presses in the past (and thus now funny that people would clamor for more printing going forward).

Unfortunately, our federal reserve is now federal reserve of the world.  If they let everyone else collapse then there will be even more conflict and perhaps even world war.  IF they don't then Americans will see the dollar slide and cost of living increase dramatically.  Needless to say I paid $4.35 for a gallon of milk at the PDQ the other day.  That used to be $2.35 not long ago.

I'll say again, there is no eventual escape from the collapse of the global debt Ponzi.  Short term volatility in the dollar and other fake money aside, all of it will collapse in the not too distant future.  We are simply waiting for the wave count to play out.

What wave count you might ask?


GOLD is the only think the the world that can credibly call fiat currency a fraud and a con.  Period.  That's because only gold is money.  So if you want to know what's going on and what's likely to happen, keep an eye on the wave count of gold.

For a couple years now I have been talking about the two major models for gold prices: that of EWI and that of Avi Gilburt.

EWI thinks that gold's collapse into late 2015/early 2016 was the A wave of a giant a-b-c and that the subsequent rally has been nothing but a B wave which might at this point be over according to their model.  The C wave could then push gold down into the $700 range at which time it would, per their model, be at a generational low.

Avi says that the great collapse mentioned above was a 2nd wave and that we are now in a 3rd wave up.

While I have been siding with Avi's perspective for many quarters now, nobody knows who will be right about this.  The only think we do know for sure is that gold will eventually bottom.  Either it already bottomed per Avi or it will bottom with a rapid collapse down to $700 over the next 1- years per EWI. But gold is never going worthless; it will never BK. 

So what then?  What happens after gold bottoms?

Both EWI and Avi then think that gold goes astronomical.  Well, gold is not likely going to do that by itself.  It will do it in conjunction with a dollar collapse.  It will happen in conjunction with a trade war with China or maybe even just war with China and they will stop sending us all their nice goods for pennies on the dollar for what they could be manufactured here in the states without the benefit of Chinese economic slave labor.

When this happens "not enough dollars to go around" will turn into "awash with dollars" and then the great US "currency event" / hyperinflation will begin.  I continue to tell anyone who will listen to stop contributing to a government controlled 401k or IRA and instead use that same money to save up and then buy units of gold or silver coins from the likes of Monex over time (AKA cost averaging into gold and silver).  This is not market timing or gambling.  This is saving.  Those without physical metal gold and silver based savings will be in deep kim chee in the coming years, of that I am personally convinced.  No fiat currency ever survived and no its not going to be different this time.

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