Jim Sinclair’s Commentary
This article is written by CIGA Perks. Our CIGA is called Perk by his friends, I call him a total genius.
When it comes to political commentary, keep in mind we will all in the USA have a favorite when voting, but “None of the above” should be a legal mandate for a do-over with all contenders eliminated.
February, 2016 Review
‘We cannot solve our problems with the same thinking we used when we created them.’ Albert Einstein. (1879-1955)
Back in the day, the world’s successful economies largely ran on three basic principles:
- Free and open markets.
- Small government.
- Sound money. (ie. currency units redeemable in a precious metal unit.)
Sadly, all three have been largely replaced by debt, debt instruments and debt derivatives; the proliferation driven by institutions dependent on their usage; banks and governments. In that order.
Despite the clear failure of this methodology in 2000 and 2008 and the application of the remedy to simply do even more of the same, we now arrive at another crisis; the same, only larger.
A certain Four Horsemen are mounting up.
‘A great civilization is not conquered from without, until it has destroyed itself from within. The essential causes of Rome’s decline lay in her people, her morals, her class struggle, her failing trade, her bureaucratic despotism, her stifling taxes, her consuming wars.’ Will Durant, The Story Of Civilization III, Epilogue, 1944.
‘By 2020, the US Government will be spending more annually on debt interest than the total combined military budgets of China, Britain, France, Russia, Japan, Germany, Saudi Arabia, India, Italy, South Korea, Brazil, Canada, Australia, Spain, Turkey, and Israel.
‘Through government spending, the indulgence of one is the burden of another; through government borrowing, the excess of one generation becomes the yoke of the next; through international bailouts, one nation’s extravagance becomes another nation’s debt.
‘Everyone takes, nobody makes, work doesn’t pay, indulgence doesn’t cost, money is free, and money is worthless.’ Pierre Poilievre (1979- ), Canadian Member of Parliament.
‘Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.’ John Adams. (1735-1826)
Sadly, the 2015 review of the US economy is almost exactly the same this year. Only worse:
The beginning of the end has been reached for American hegemony. The desperation in its economic ‘management’ and Foreign Policy is tangible, as is the fear of any rise in interest rates which would be the death knell for the economy. Such as it is.
With the on-going shredding of its Constitution, major corporations representing Banking, Energy, Food, Big Pharma, Armaments and the Media, now effectively control Congress, and the regulatory watchdogs; ie. The Government. This once bastion of Capitalism has descended into Crony Capitalism. Defn.: Big Government + Big Business = Fascism. Head fer the hills, Billy-bob.
Government/Banking manipulation and corruption of all markets, has now become embarrassingly obvious, with class-action suits beginning.
There is also a growing awareness of the inevitable concomitant rise in social unrest as its economy and culture disintegrates. Army ‘exercises’ have begun in urban areas together with a militarization of police forces, nation-wide.
Years of meddling in the Middle East to control oil supplies has transformed the region into one huge powder keg, and the wick is lit….and ISIL has the petrol.
The disastrous, obvious attempt to goad Russia into war over Ukraine has only resulted in an almost complete loss of support from allies and made plain its increasing ineffectiveness as a World power.
Summary of statistics for 2015:
Decreasing: GDP, tax receipts, housing starts, corporate earnings and CAPEX, exports, dollar hegemony, ‘petro-dollar,’ military capability, household income/consumption, vehicle sales, productivity, wealth, water, gold ‘reserves,’ food production, water, birth-rate, hope. Some ‘recovery,’ Mr. Obama.
Increasing: Debt (federal, state and municipal government, personal and ‘student.’), debt service, inflation, US$ devaluation, government spending, wage disparity, welfare/entitlements/food stamps, unemployment, ‘money printing,’ corruption, financial/banking fraud, trade and budget deficits, taxes, college tuition, infrastructure decay, poverty, drought, hunger, guns ownership, social disorder, crime, government/bank manipulations in all markets (incl. algorithmic ‘trading!’)
1. No government data have been used in the above summation. Severe credibility gap, to put it mildly.
2. No markets; currency, bond, precious metals, or stock, can be relied on due to constant, heavy, government/bank manipulation/corruption. Too Big To Fail has now apparently become Too Big To Jail.
3. There is no means of rescuing an economy that is 70% consumption, with vast debt and unemployment, no industry, accelerating growth in entitlements, and no mo money. Say Good Night, Uncle Sam, the party’s over!
Watch: The dying dollar and revaluation/default (perhaps a re-issue as a new ‘dollar.’), loss of dollar reserve currency status, Bond market (partic. 10-yr. yields.), derivatives/bank failures/bank runs, ‘bail-ins,’ food stamp levels, Hillary Clinton, shrinkage of entitlements, Donald Trump, loss of personal freedoms/rights, ‘terrorism’/false flag incidents, social disorder; the militarization of the police forces and the DHS grows apace; the camps and trains are ready.
Fund implications: The economy, and the dollar are now being ‘Marked to Market’ and are clearly sinking.
Short markets/dollar; long precious metals/stocks (espec. silver.).
‘We are asking the nations of Europe between whom rivers of blood have flowed to forget the feuds of a thousand years.’ Winston Churchill. (1874-1965)
As with the USA, more of the same this year; only worse. The naked aggression of the Americans/NATO towards
Russia/The Middle East and the growth of Chinese/Russian economic influence and you have the early stages of the Union’s final days.
Summary of statistics for 2015:
Decreasing: Same as the US. More or less.
Increasing: Same as the US. More or less. Plus the invasion of ‘refugees,’ and inherent major social issues.
Watch: Further state defaults/near defaults; Italy, Spain, etc., negative interest rates, bail-ins, gas supply for this Winter, broadening take-up of AIIB/NDB funds, sovereign gold repatriations from the US (you wish!).
Fund implications: The European/UK economies are clearly dying. Long precious metals/stocks (espec. silver.)
‘No asset is safe now. The only choice to hedge risks is to hold hard currency, as in gold.’ Zhang Jianhua, Peoples Bank of China.
Even in Ancient Kingdoms, new brooms sweep clean. China gets a new one every five years.
To continue the reformation of the economy from production-based to consumer-based, the 2014 Plenum of the current 11th. Central Committee released the following reform agenda (it remains the same through 2018.)
- Land, fiscal and legal reform.
- Freer markets (resources, stock, interest rates, etc.) to allow normal asset allocation; less state control.
- Competition in the banking system. (private, gasp, banks!)
- Competition between private corporations and state-owned-enterprises. (and more accountability for same.)
- National social security.
- Exposure of corruption at every level.
- Birth policy adjusted. (Someone’s discovered demographics! Japanese consultant?)
- No more labour camps.
For this year, the comments remain largely the same. They are well aware of what’s coming, hence the massive accumulation of gold and silver.
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No more study for now.