Sunday, February 11, 2018

How will the global debt Ponzi finally be resolved?

I've written many times that the value of any fake money whether it come from a private counterfeiter or the federal government is based strictly  on confidence in the issuing authority.  Fiat current has no value, zero, except what the next greater fool will trade you for it.  Trading something that has no value eventually blows up and that thing collapses to its inherent worth of zero. If you want to see what this looks like on a chart, here its the VIX shorting ETF, ticker XIV.  I have been telling my paid subscribers for a long time that those who were shorting volatility were playing with fire.

Look at the chart below.  Mark and Patsy went to bed with shares that were trading almost $100.  They probably thought themselves quite wealthy because of it.  In the morning the shares were trading at almost $10.  They will never recover.  This ETF used to have a "market cap" of a few billion dollars.  I hope you can see just how fake the notion that market cap is some kind of measure of wealth or savings.  It's neither.  Unless you sell before the Ponzi collapses the numbers are all fake.

This does not just apply to fake paper stocks.   It also applies to fake paper money.  At some point it will go worthless and perhaps sooner and faster than most people can imagine.  The global debt Ponzi must be wound down somehow.   Someone must figure out who is going to pay for it.  Of course we already know it will not be the people, at least not right away, simply because they do not have the ability to pay.  So it will have to be corporations at first IMO because they are the only ones who can pay.  There are many ways to pay but the whole goal of settling up this account is to generate confidence again and the only money I will ever be confident in again is real money, gold and silver.  So we should not be surprised to find that government eventually has to go full circle and re-monify gold by backing the dollar with gold at some very high exchange rate.  Jim Rickards thinks that this number will be $10, 000 per OzT.

Bottom line is that Gold is money, paper currency is not, simple as that.  Gold has always been money, paper currency has simply been masquerading as money.  At some point the fake currency will collapse and everyone will come running back to the only real money that ever was: physical gold and silver coins held in your hands.

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