Posted at 11:53 AM (CST) by & filed under In The News.

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ISM Services Plunges To 13 Month Lows As Post-Weather Bounceback Fades
Tyler Durden on 06/03/2015 10:05 -0400

But the post-weather bounce? Markit’s Services PMI in May missed expectations and dropped for the 2nd month in a row to its lowest since January. This notched the Composite PMI also down to its lowest since Jan, leaving Markit warning “the US economy has lost some momentum after an initial bounce-back from weather-related weakness at the start of the year.” Worst still, ISM Services thenprinted a notably disappointing 55.7 (against 57.0 expectations) – its weakest since April 2014. The breakdown shows weakness across the board with prices rising. Finally, we note that an incredible 75 of 79 ‘qualified’ economists had an ISM Services estimate that was too high… extrapolated hope springs eternal until it is smashed on the shores of reality.

Services PMI – Bounce…dead…

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Commenting on the PMI data, Chris Williamson, Chief Economist at Markit said:

“Slowing service sector growth adds to signs that the US economy has lost some momentum after an initial bounce-back from weather-related weakness at the start of the year.

“May’s PMI data showed service sector activity rising to a slightly smaller degree than signalled by the flash reading. Alongside the slowdown in manufacturing, the services PMI points to the weakest pace of US economic growth since January.

“While the survey still supports the view that GDP growth looks set to recover after the 0.7% rate of decline seen in the first quarter, the softness of the data raises big question marks for policymakers over the strength of the rebound and whether the economy is losing momentum as it heads into the summer.

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Posted at 3:54 PM (CST) by & filed under Bill Holter.

Dear CIGAs,

You really have to wonder how it is that so much is going on all around us yet almost nothing is being reported by the mainstream press.  I know it is hard to do, but imagine yourself 20 or 30 years ago, could what is currently happening ever be “slept through” as it is today?  Could markets have just snoozed it off as if nothing bad “could” happen?

  For example, the U.S. economy is in another recession.  The 1st quarter GDP was revised to show a decline of -.7%.  Do you know why the number was not worse?  Because the BLS used as a very “special” assumption, a NEGATIVE inflation rate, if they used just a 1% inflation rate, GDP would have reported negative 2% plus!  But wait, the funny part is this, the Fed at the same time is again bringing up tightening interest rates.  Again, imagining yourself 20-30 years ago, the speculation would be “when will the Fed begin to loosen” …and here is one of your problems, the Fed CANNOT do ANYTHING to turn up the economy.  The Fed has fired all its bullets and cannot loosen further.  Yes they can start up another QE (the opposite of what they are taking about now) but I believe even they fear the reaction this time around.  What would they do if the selling pressure increased on the announcement of another QE?  Can’t happen you say?  I hope you’re right!

  The Chinese stock market took an 11% nosedive over the last two days of the past week, did you hear about this?  Is it “unimportant”?  Or how about COMEX having 26 tons of gold standing for June delivery with only 11 tons currently on hand?  You probably didn’t hear about this one because they will just cash “settle” (they have already begun as 2,800 contracts “disappeared” last night), nothing to see here, move along.  How about David Cameron promising an “in or out” referendum pertaining to the British and the EU?  Or the right wing in France demanding a similar referendum?  Probably not important enough either?

  Or how about this list; Goldman warns “too much debt” threatens the world economy… China places artillery on disputed South Sea islands… Margin debt 50% higher than last peak… Russia backs alternative to SWIFT… 5 billion euro bank run in Greece … or just plain old Greece?  Even worse than all of these pieces of “real news” that didn’t make the news, did you hear about Yemen?  Or more specifically a (or several) nukes were lit up?  Yes, nuke(s) went off in Yemen late last week and the press (yawn) decided it wasn’t “newsworthy”.

  Shifting gears just a bit, I want to bring up a topic I have not seen anyone even talk about.  Do you remember last November when Congress, the Senate in particular was “shaken up”?  “We” (the American people) threw the bums out!  I can remember it vividly, Congress would now be able to hamstring a president running roughshod over the Constitution.  I thought it might be a glimmer of hope …I thought WRONG!  Has anything been done to reverse or retard Obamacare?  The answer of course is no, nothing.  I ask you this, what exactly did we get for our votes to evict the “bums”?…  …How about Loretta Lynch!   How did she get confirmed as Attorney General?  As Ted Cruz said, “she looked Senators in the eye and told us she intends to disregard the law”http://www.breitbart.com/big-government/2015/04/24/exclusive-ted-cruz-loretta-lynch-was-confirmed-because-gop-establishment-wanted-her-to-be/  .  I ask, was there even a purpose to the last election?  Or better yet, once the financial system comes down and social unrest unleashes martial law, was that our LAST election?

  I am not kidding here folks, the rule of law is gone in the U.S., our financial system is a totally rigged sham and people believe they are “wealthy”… are they really? W e have zero press left to hold anyone’s feet to the fire or accountable for anything.  More people now “take” than “pay” and we are so broke as a nation we can’t even afford to pay attention!  What could possibly go wrong?  The worst thing of all is if you were to bring up even one of the above “cluster bombs” at a summer BBQ, it is YOU who are the nutcase!  Our Forefathers are in tears.

Regards,
Bill Holter for Holter-Sinclair collaboration
Comments welcome!  [email protected]

Posted at 3:48 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

What a dark humor joke this is.

The CME Cracks Down On Another Gold Spoofing Mastermind
Tyler Durden on 06/01/2015 13:57 -0400

One month ago, days after explicit Zero Hedge step-by-step guide of precisely how gold manipulation takes place, the CME cracked down on the evil Indian market manipulating mastermind Nasil Salim (and his ostensibly less evil sidekick) Heet Khara, for spoofing and otherwise rigging the gold market for months on end. His punishment: a 60 day denial of access to the CME. A week late, a seven person crack CFTC team finally figured out how to read the charts posted on ZH 10 days earlier, and charged the two with illegal market spoofing.

Well, it is time for another sacrificial gold market manipulation crackdown (the same gold market, mind you, which CFTC commissioner and HFT lobby sellout extraordinaire Bart Chilton said was completely unrigged). Only it’s not Barcalys, JPM, Virtu, Citadel, the NY Fed, the Bank of England, or even the PBOC – i.e., the real market manipulators – who is the receiving end of the CME’s special breed of “justice.” It is another “trade from his parents’ home” Indian.

To wit:

NON-MEMBER: HIMANSHU KALRA

EXCHANGE RULES: Rule 432. General Offenses (in part)

It shall be an offense:

B.2. to engage in conduct or proceedings inconsistent with just and equitable principles of trade;

Q. to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange;

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EURUSD Up 300 Pips In Last 24 Hours, Dollar’s 2nd Biggest Drop In 6 Years
Tyler Durden on 06/02/2015 13:24 -0400

As EURUSD surges towards 1.1200 once again, we note that it is now 300 pips stronger than 24 hours ago. This is the 2nd biggest collapse in the USD since March 2009… Treasuries and Bunds are getting monkey-hammered… and US stocks just want higher (as Dax slides)…

Euro surging…

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Roundtripping to May 22nd’s plunge…

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This is the 2nd biggest down day for the Dollar since March 2009…

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Robert Shiller: Unlike 1929 This Time Everything – Stocks, Bonds And Housing – Is Overvalued
Submitted by Tyler Durden on 05/29/2015 18:19 -0400

Robert Shiller is a professor of economics and finance at Yale University. He is the author of Irrational Exuberance, which in 2000 predicted the collapse of the tech bubble and is now in its third edition. He was awarded the Nobel Prize in Economic Sciences in 2013 for his work on asset prices and financial market behavior.

In the attached interview he observes that the recent equity run-up seems to be driven more by fear than by exuberance, as a lack of confidence in the future prompts investors to save more and thereby bid up asset prices.

Below is an interview he gave to Goldman Sachs’ Allison Nathan

Allison Nathan: Are US stocks overvalued today?

Robert Shiller: I think that compared with history, US stocks are overvalued. One way to assess this is by looking at the CAPE (cyclically adjusted P/E) ratio that I created with John Campbell, now at Harvard, 25 years ago. The ratio is defined as the real stock price (using the S&P Composite Stock Price Index deflated by the CPI) divided by the ten-year average of real earnings per share. We have found this ratio to be a good predictor of subsequent stock market returns, especially over the long run. The CAPE ratio has recently been around 27, which is quite high by US historical standards. The only other times it has been that high or higher were in 1929, 2000, and 2007—all moments before market crashes.

But the CAPE ratio is not the only metric I watch. In my book Irrational Exuberance (3rd Ed., Princeton 2015) I discuss several metrics that help judge what’s going on in the market. These include my stock market confidence indices. One of the indicators in that series is based on a single question that I have asked individual and institutional investors over the years along the lines of, “Do you think the stock market is overvalued, undervalued, or about right?” Lately, what I call “valuation confidence” captured by this question has been on a downward trend, and for individual investors recently reached its lowest point since the stock market peak in 2000. The fact that people don’t believe in the valuation of the market is a source of concern and might be a symptom of a bubble, though I don’t know that we have enough data to prove it is a bubble. In general, I try to get a sense of investors’ excitement and anxieties through these kinds of measures and even by just reading the news. You might say that’s very unscientific, but I do what I can to understand the state of mind of investors, which I think is very important in understanding market moves.

Allison Nathan: Wharton professor Jeremy Siegel argues that using S&P 500 earnings data for the CAPE ratio inflates it. What is your response to this?

Robert Shiller: Jeremy Siegel’s 2013 paper that makes this argument does say that the CAPE ratio is useful. He just wants to make an improved CAPE ratio. And he proposes an alternative based on National Income and Product Account (NIPA) earnings, which he says yields a CAPE ratio that has predicted returns better, at least over the time period for which he has these earnings data. I think it is an interesting paper. But I am not ready to endorse the switch to NIPA earnings partly because they are conceptually a little different, valuing not just publicly traded stocks but also other companies. But the critical point he makes is that NIPA earnings—at least as of 2013—were higher than S&P 500 earnings, which made the market look less overvalued. Given that market valuations have continued to rise, I think that discussion has faded somewhat.

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Jim Sinclair’s Commentary

Finance can be dangerous today if you know too much but are not on the inside of the insiders.

Wall Street Banker Deaths Continue; Where Are the Serious Investigations?
By Pam Martens and Russ Martens: June 2, 2015

1 West Street, Manhattan, Where Thomas Hughes Allegedly Took His Life

Last Thursday, 29-year old Thomas J. Hughes, later described by his brother as “one of the happiest people I know,” allegedly took his life by jumping from a luxury apartment building at 1 West Street in Manhattan. Before any serious investigation had taken place, the New York tabloids had dismissed the matter as a suicide. Hughes was an investment banker on Wall Street.

In any serious investigation, law enforcement is required to look at any potential motive for foul play. But when it comes to serial deaths among Wall Street bankers and technology personnel, occurring repeatedly over the last 18 months in highly unusual circumstances, the deaths are almost instantaneously labeled non-suspicious by the police. But there are two glaring motives for foul-play in almost all of these deaths involving Wall Street or global banks.

First, major Wall Street banks hold hundreds of billions of dollars of life insurance on their workers, and even prior workers, effectively betting that an early death will pay off big for the corporation. The bank collects the death benefit as tax free income, an added perk. In most cases, neither the employee, public nor shareholders know how much life insurance is held on any one individual. The death of a technology vice president could generate a $3 million tax free payment to the Wall Street bank and there is no public acknowledgement and no way to obtain the data.

As of December 31, 2013, the four largest Wall Street banks, JPMorgan Chase, Wells Fargo, Bank of America and Citigroup, held a total of $68.1 billion in Bank-Owned Life Insurance (BOLI) assets according to their financial filings. Since the ratio of life insurance in force to assets can run as high as ten to one, just these four banks alone may hold $681 billion or more in life insurance on their current or past workers.

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Posted at 2:53 PM (CST) by & filed under Jim's Mailbox.

Jim,

This game called “here we go round the Greek roses” is getting absolutely hysterical. The EU starts out telling the press it is a very serious problem with the Greek debt and sets a deadline. The deadline comes and goes, nothing happens so the EU says it’s VERY, VERY serious and sets another deadline. This deadline comes and goes and nothing happens so the EU sets another dead line and says it’s VERY, VERY, VERY serious and the results are the same. This gets repeated until everyone agrees there is no resolution and there is a chance of correction. This is truly Extreme Can Kicking.

CIGA Miki

European Leaders Assemble for Urgent Meeting on Greek Crisis
By LIZ ALDERMAN, NIKI KITSANTONIS and JACK EWINGJUNE 1, 2015

ATHENS — As the Greek government faces a looming debt payment, top European leaders met in Berlin on Monday night to reach a consensus over what to do about Greece, signaling the urgent need to unlock emergency financing for the cash-starved country and avoid a devastating default.

But a growing political backlash in Greece adds to the uncertainty about whether a deal can be sealed. Prime Minister Alexis Tsipras faces increasing dissent within his leftist Syriza party over creditors’ demands for austerity terms as a condition for releasing the aid.

Greece’s main creditors — the International Monetary Fund, the European Central Bank and eurozone countries — have refused to release 7.2 billion euros in bailout funds until Athens agrees to a series of economic reforms and spending cuts. They have been at an impasse for months.

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Posted at 12:06 AM (CST) by & filed under Bill Holter.

Dear CIGAs,

Rather than write about the economy, the markets or geopolitics, today let’s look at something a little different.  It’s important every once in a while to step back and take in the big picture because we are all guilty of getting too close or “finite” if you will.  We fight the daily battles while losing sight of what the war is really about.  Gold advocates otherwise known as “gold bugs” have been worn down by the daily battles, some have even forgotten what the real war is.  Gold bugs, these are the “crazies” out there who are described as nuts or “conspiracy theorists”.  We know now they were not “theorists” at all. JP Morgan’s $32 billion paid in fines along with many other fined and censured firms is proof of conspiracy FACT!

The term itself “gold bugs” is disparaging as if gold advocates are like some sort of cockroaches running around and dirtying up the place.  It is true that some “advocates” go off half-cocked and see everything as a conspiracy, I have even come across some who are so fervent they believe in gold as some sort of “religion”.  It is not.  “Gold” as JP Morgan once said “is money, nothing else”.  Gold is in fact money, it is real money that has value on its own and not “legislated” or as it is in today’s world, “mandated upon” the public.  Most Americans who are reading this may have a difficult time understanding it even though true, many foreigners are nodding their heads with a slight smile!  It should be pointed out, everything these crazy gold bugs have been saying about the world from a “fiscal” standpoint has and is in fact coming to fruition.  It has not happened “when” nor as soon as they believed it would (me included), because the current insanity of balance sheets could never have been imagined even 10 years ago …however, “timing” does not change “the ending”!

Stepping back and looking at the forest rather than the trees, collectively a very large part of the world is in a state of bankruptcy even though not declared, recognized or admitted.  No matter how you look at it or on what level (state, corporate or individual), the standard of living is broadly in decline globally.  (Yes I know, that top 1% or even .1% is living well and improving with each drop of sucked blood they receive from the system.)  While choosing this topic to write about, I had no idea how fortuitous the timing was.  Within 15 minutes of beginning this piece, a link https://www.youtube.com/watch?v=pfpEHwARhvc to an interview of none other than Alan Greenspan, Richard Fisher, and Lawrence Lindsey hit my inbox! 

I could only chuckle after watching the interview because my entire writing can now consist of “yeah, what they said!”.  Rather than write an entire article on this, I believe it might be better to let you watch what I was going to write, and we can move on to the “motives” of these three telling “mostly” the truth.  If you watch this interview, please keep in mind this one question “…and the alternative is”?

Why exactly would these former Federal Reservists hint that, mathematically, logically, intuitively and in real life, IT’S OVER!  They did back pedal a little bit as the interview went on but “why” or better yet why now?  I believe they know what the crazy gold bugs have been saying all along is true and the day of reckoning is very close at hand.  They must be trying to get “out in front” of what is coming so they’re on the record for historical and “legacy” purposes.  Nothing else makes any sense.  Are they “trying” to torpedo the system or to break confidence?  I highly doubt it but after watching the interview, would any kid with a paper route invest their money into the current system?  Are they trying to bad mouth the Fed now they are no longer employed there?  No, in fact, they each one pointed the blame at Congress.  It’s Congress’ fault we are in this mess!  “They” (Congress) spent the money and made the promises which cannot be honored and will ultimately be broken.

There is a punch line of course, one these three men don’t want you to hear!  Actually, the joke AND the punch line are both one in the same, “the money itself is bad and is the core to ALL economic and financial problems!”.  You see, Congress could never had authorized all of the spending if the Treasury did not have the “money” in its coffers.  Yes Treasury could have borrowed money but would have been restrained if “money” was gold or something “real”.  The only way that Congress has been able to get away with bankrupting the country was with the aid of … yes, the FEDERAL RESERVE these guys used to work for!  The Fed has in fact underwritten the scheme, if there was no Fed …the leverage could never have been built into the system.  Greenspan, Fisher and Lindsey of course know this but they can never admit it.  Were they to admit it, it would be an admission that they knew all along they were driving the bus over a cliff …with a roadmap wide open!

All three spoke about the current state of interest rates and the unsustainability of the situation.  They ask “why”, for what good reason are interest rates at levels only justified by a crisis?  The answer of course is; we are still in a crisis, we never exited and if rates HAD been increased …their greatest fears would have already been realized!  Mathematically, rates cannot go higher because of the inability to service interest payments (not to mention blowing up the leveraged interest rate derivatives) would come front and center.  They are trying to say the inability to pay is guaranteed to come …but is a future event.  If rates were to rise now, it becomes a current event.  It’s really this simple!

Lawrence Lindsey even said at the 45 minute mark, “this is how they all end …including Zimbabwe”!  All “what” Larry?  Fiat currencies?  Or central banks who issue them?  This brings me to another article which has come out and ties in perfectly.  Actually, it ties in so well we can bring this entire article full circle and back to one of the gold bugs most central theses.  Zerohedge posted an article regarding http://www.zerohedge.com/news/2015-05-27/billionaire-hedge-fund-manager-paul-singer-reveals-bigger-short a systemic bet being made by billionaire hedge fund manager Paul Singer.  Mr. Singer’s strategy is simple, he calls it the “bigger short”.  He believes interest rates have only one way to go, up.  He also believes we will see far more staggering defaults than we did in 2008-09.  He believes shorting the debt of the world is a no brainer trade and one where you can win ALL the marbles.

Zerohedge of course picked up on the “minor flaw” in this strategy.  The very same flaw I might add that Harry Dent, Martin Armstrong and others are missing.  You see, when you “win”, you must be “paid”, but paid in “what” is the question.  Assuming Mr. Singer is correct and the system does collapse on itself and he “wins”.  His win of course will be HUGE …but, he will be paid in dollars or euros or whatever fiat currency his trade is done in.  What will his winnings be worth if the currency itself is worth nothing?  It reminds me of Mikhail Barishnikoff in the movie “White Nights”, he had a stack full of worthless rubles and threw them handful after handful up in the air while saying “rubles, rubles, lots and lots of rubles”.  He had money …but it wasn’t worth anything.

You see, the currencies themselves are supported by the very debt Mr. Singer is selling short and expects to collapse!  Which now brings us back full circle to the crazy gold bugs.  This is exactly what they have been saying all along, a debt default will also mean a collapse in confidence of the currencies themselves and direct “fear capital” back into real money.  This will create huge demand, force supply into hiding and additionally revalue gold higher because the currencies themselves are losing value and confidence.  Gold bugs are not so different from those who see the dangers in the system from overheated markets and overleveraged debtors.  The only difference is that these nut jobs want what hasn’t been for nearly 50 years, they want TRUE and REAL “SETTLEMENT”!  They actually want to get paid in something real!  How crazy is that?

Regards,
Bill Holter for Holter-Sinclair collaboration

Posted at 12:02 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Comment on the great recovery in housing.

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Jim Sinclair’s Commentary

If you do not GOTS you are screwed because as a depositor you are an unsecured creditor, and that is simple fact.

You bail the bank out first. That is FACT!

EU regulators tell 11 countries to adopt bank bail-in rules

The European Commission on Thursday gave France, Italy and nine other EU countries two months to adopt new EU rules on propping up failed banks or face legal action.

The rules, known as the bank recovery and resolution directive (BRRD), seek to shield taxpayers from having to bail out troubled lenders, forcing creditors and shareholders to contribute to the rescue in a process known as “bail-in”.

The Commission drafted the rules in response to the financial crisis which started in 2008, giving the 28 countries in the European Union until the end of last year to apply them.

It said Bulgaria, the Czech Republic, France, Italy, Lithuania, Luxembourg, the Netherlands, Malta, Poland, Romania and Sweden had yet to fall in line.

“If they don’t comply within two months, the Commission may decide to refer them to the EU Court of Justice,” the EU executive said in a statement, referring to Europe’s highest court based in Luxembourg.

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Spot What’s Wrong With This Headline
Tyler Durden on 06/01/2015 11:31 -0400

Bloomberg reports the following.

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Federal Reserve Vice Chairman Stanley Fischer said bankers who have engaged in wrongdoing should be punished, and he chided the industry for pushing back against financial regulations adopted to prevent another conflagration.

“Individuals should be punished for any misconduct they personally engaged in,” Fischer said in a speech to bankers Monday in Toronto.

Well then… if a Fed vice chairman says bankers should be punished for, you know, “crimes” then so be it.

Which in retrospect seems a little odd: why would anyone, let alone the second most important person on the planet, feel the need to state something that, for every other human being is self-evident?

Which reminds us, just how many of the market’s caught-red-handed criminal manipulators have gone to jail?

Stanley? Anyone?

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Posted at 1:14 PM (CST) by & filed under In The News.

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De-Dollarization Du Jour: Russia Backs BRICS Alternative To SWIFT
Submitted by Tyler Durden on 05/29/2015 11:10 -0400

Back in February, Russia detailed a SWIFT alternative that would link 91 domestic banks to the Central Bank of Russia.

On the one hand, the plan represented yet another move towards global de-dollarization but on the other, was borne out of necessity when Russia began to believe it may be expelled from SWIFT as punishment for its support of rebels in Ukraine. Prime Minister Dmitry Medvedev warned of “unlimited consequences” if the West decided on a punitive SWIFT freeze.

Two months later, Moscow would receive a seat on the SWIFT board.

Now, Russia is taking de-dollarization a step further by suggesting that a BRICS alternative to SWIFT may be in the cards. RT has more:

The Central Bank of Russia has proposed a discussion about establishing an analogue to the SWIFT global network for transmission of financial information that processes $6 trillion worth of communiqués daily.

The CBR hopes to cut the risks of possible disruptions.

“Seriously speaking, there is no analogue to SWIFT at the moment in the world, it is unique. The only topic that may be of interest to all of us within BRICS is to consider and talk over the possibility of setting up a system that would apply to the BRICS countries, used as a backup,” said Deputy Governor of the Central Bank of the Russian Federation Olga Skorobogatova on Friday.

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Posted at 2:06 AM (CST) by & filed under Bill Holter.

Dear CIGAs,

Jim has asked me to review “G.O.T.S.” (Get Out of The System) with you and comment on it. From a timing standpoint, I can tell you he is as adamant as I’ve ever seen, now, RIGHT NOW you must exit the system! You will not be afforded the opportunity if you are even one second too late!

For your convenience, here is the GOTS check list:

1. Your equities are held in certificate form or direct registration
2. You have no Federal sponsored retirement funds such as 401K etc. 
3. You have no CDs and investments in bonds. 
4. You have modest money deposited among selected BRICs countries or BRIC protectorates like Singapore 
5. You store your own precious metals. 
6. You have no mortgage obligations. 
7. You keep cash on hand for 6 months expenses. That is cash, not plastic with credit open
8. You have no consumer debt at all. Pay it down or off.

9. You have a small hobby farm for protein and veggies outside of where you are living with no mortgage debt, set up green. 
10. You have a gas, diesel or electric car with high fuel mileage for the farm. 
11. You have a generator with large fuel capacity for the farm.

12. 33 1/3% of your liquid net worth is in gold and silver or according to your preference.

The above is by no means a complete checklist. Please keep in mind, not everyone even has the ability to attain the position of this checklist because they simply cannot afford to.  In a perfect world, the above checklist would be a “start” only and situated on a private island, preferably with other likeminded people.

Let’s break this list down into groups.  Numbers 1-4 pertain to your “paper assets”.  When the system comes down and is reset, do not count or rely on your paper wealth as an “asset”.  There are two problems, first whether your institution will even survive and then of course whether the paper itself retains value.  The basic premise is to rely as little as possible on paper and the institutions holding that paper. #4 is notable because having some capital outside of the West and within the BRICS ahead of time will leapfrog any capital controls put in place.

#5 is very important because of the counter party risk issue.  Is it really and truly gold and silver that you own? Or is it a piece of paper or a receipt “promising” you gold or silver?  Promises are made to broken …and “promises” are the only thing holding the financial system up from total collapse.  Better said, it is the “belief” in these promises preventing an outright collapse.  I have maintained all along, all that has been done has been to hide the relationship of values between paper currency and gold.  Quite simply, more paper exists than is believed and less gold is held than claimed.  We will find out the true relationship as the promises are broken!

  Numbers 6-8 are all about debt, have as little as possible!  For some, this is impossible.  Some believe gold will explode in current dollar terms (it will) and their debt will be washed away via inflation (it will not).  Jim wrote to me:

“Anyone who knows the real history of Weimar collapse know that the banks were not hurt as mortgages & debts owed were readjusted to value to gold before the collapse to the value of gold after the collapse so you owed the bank the exactly the buying power in terms of the Rentenmark (new currency) after the currency collapsed. Those that owned gold, closed debt obligation ahead of time and GOTS to the greatest degree they could were the winners to the degree they GOTS. They and the banks were the only winners.”  I agree with this, there will be no “debt jubilee”.  I would also add this, with gold (and especially silver) priced as they are right now, selling metal to pay down debt is not smart because the relationship is skewed.  I believe you will have a better gold/dollar relationship at a later date and prior to the issue of a new currency.  That said, having zero debt means zero chance of becoming a slave.

Numbers 9-11 are the hardest of all because they require a lot of capital.  Being totally self sufficient may only be a dream to you, ignoring this and living in a city will be a nightmare!  If the best you can do is to live 30 miles away from a city and in a rural setting, this certainly will be a better choice than living in a metropolis.  Remember, food stocks will run out within 3 days and even if you have paper dollar bills, they cannot spend on what does not exist.

A few months back I penned a fictional article referring to how it might begin to go down and can be found here: http://blog.milesfranklin.com/fact-or-fiction

By no means was this all inclusive, the exercise was undertaken to make people think.  It was meant only as a start for some or a reminder for others of what you may have forgotten. When Jim requested a review, he finished with the following “GOTS = Get out of the system. It is as or more important than owning gold and being in the system.” Please understand what he is saying, “gold will help but it is not a magic bullet.” Gold is meant to get your wealth “from here to there.” In other words, gold will transport wealth from today into tomorrow. It is up to you to live long enough to get there. Sufficient quantities of water, rice, beans and lead will be more helpful than gold or silver in this department!  Do the best you can with what you have, do not beat yourself up because you forgot something …you will.  Plan with like-minded people or neighbors and don’t mistake what is most important, your family and your spirituality.  Do what you can even while being laughed at by your friends and family, in the end, they will “get why you GOTS”!  And no matter what your faith or who your God is, make your relationship right because when push comes to shove, there are no atheists in a foxhole!  For those who have a belief, this is the Absolute GOTS of them all!

Regards, Bill Holter
Holter-Sinclair Collaboration
Comments welcome! [email protected]