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

Bill Holter’s Commentary

As per John Exter’s inverted pyramid, we shall soon learn exactly how little gold exists versus paper/debt assets blowing up and becoming worthless. 

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Great Depression to our Depression: Debt Deflation Doom Loop Lessons
May 24, 2020

We are now in the crosshairs of a mega debt deflationary bankruptcy phase.

Some of our sharpest forefathers left us illustrations to better understand how this cycle operates. It helps that many both actually lived through and studied the last one fresh off it happening. No not this fiat currency bifurcated ivory tower era thinking either ( not you bailout Bernanke).

DEBT DEFLATION BANKRUPTCY LESSONS

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Posted at 9:37 AM (CST) by & filed under General Editorial.

Remember 2 months ago when friends, family, and other acquaintances came to you asking for your opinion and even advice? Things looked very dour indeed and people for the most part were in full blown panic mode. They were going to lose their job, they were losing their money and if they left the safety of their home…they were going to DIE!

For a brief moment, you were no longer an idiot. Still strange maybe, but because it looked as if everything was spinning out of control, it was you they sought advice from. It was you because maybe you were the only one warning them prior, or maybe THE only one they knew who had counseled caution? You might have even heard from people you hadn’t seen or heard from in years? You might have even had relatives that needed help financially and you helped them? Very briefly, you were no longer an idiot!

Alternatively, some may have thought you even a bigger idiot than before? Some, maybe even many, only feared the virus and believed we would be back to “normal” in short order? This group believed you were dead wrong about the economy, the markets etc. Not only were you dead wrong but plain foolish because you prepped for something that would never come? (Even if it was not you who had to stand in line to purchase four rolls of toilet paper). In any case, you are still an idiot…again!

The average person has been duped again for the umpteenth time. Yes we have had 39 million new claims for unemployment. Yes there have been (and will be) many old line corporations file bankruptcy, and yes a huge percentage of debt versus all sorts of real estate go into arrears but not to worry! Not to worry because the government has (and will) save us all. Not to worry because whatever is needed to spend will be spent and all will be good. Just look to the stock market as proof! While those 39 million new unemployment claims were being filed, the stock market climbed over 30%. The unicorn juice of the stock market not falling any further has served to calm the public nerve!

But now for the reality. The reality is this, the next few months will likely become a financial and economic nightmare. Just as an atomic bomb exploding 10 miles away, you see the flash, you then hear the bang but nothing happens immediately. “Immediately” is where we stand today. The concussion and destruction is delayed but when is does arrive it demolishes everything.

Plain and simple, the world was already seriously rolling over in the fourth quarter last year. You could plainly see this in may series, “trade” being the most obvious because it is the most difficult to fudge. The fateful day of Sept. 16 when repo broke should go down in infamy as the day the levee broke. The Fed was forced to pump $ billions day after day to keep that canary from being noticed. I will only say the virus was “convenient” because it has been cover for central banks to flood the grossly indebted, financially illiquid and insolvent system with new credit and liquidity. How fortuitous!

Folks, we are already in a global depression as measured by unemployment. $ trillions in debt have gone unserviced for 2 months now and will never be paid on again. $ trillions have already been created and spent by broke central banks and sovereign treasuries. It has ONLY been this largesse that has prevented postponed financial carnage. “Normal” as we thought it to be back in January will never return because frankly, our past way of life was anything but normal! Is it really sensical to spend more each and every year than you take in and fund the gap by borrowing the difference? Can that be sustained? We are just about to see the answer to this, and the resounding NO will be in your face with clarity!

Individuals, small businesses, large corporations, cities state and local governments, pension plans galore and even central banks and sovereign treasuries have been bankrupted. The “bankruptcies” are working their way up and down the line and spreading like wildfire because every failure either adds pressure to or creates another (more) bankruptcies. We have lived a financial life where everybody owes everybody and “liability” exists everywhere and in everything known as an asset. In many cases, what was believed to be an asset has very quickly turned into a liability. All that is now necessary for you to never be thought of as an idiot again is the realization that once believed assets, turned liabilities, BECOME UNWANTED LIABILITIES! ie. To whom do you sell?

I believe this scenario will happen soon and happen with a vengeance. I have long said “confidence” would break for any number of reasons. And that is exactly what have now, ANY NUMBER of reasons for the average person to wake up to the fact the financial markets are completely fraudulent and bluntly, FUBAR’d! Vast wealth will be destroyed on a nightly basis from asset class to asset class and culminate in systemwide failures. The financial atomic bomb has already detonated, there is no going back nor “unseeing” it.

But don’t fret, you won’t be an idiot for much longer. If you have done your best to prepare, that is all you could do and all that can be asked of you. At least you will no longer be an idiot! People will genuinely ask your advice on many topics, not just financial…because you are no longer an idiot. There is even more upside, relatives you haven’t been in touch with for years will show up on your front doorstep asking for advice, not to mention food, shelter, and a shoulder to cry on…because you are no longer an idiot!

The above said, do not expect anyone to admit they were wrong. Nor should you expect any apologies for thinking (and treating) you like you were an idiot. Also remember this, once you let someone in your door out of the goodness of your heart…don’t expect them ever to leave (you would of course be an idiot if you believed this). Oh yeah, one last pretty obvious question…GOT GOLD? The only financial life preserver in a world flooded with debt…

Standing watch,

Bill Holter

Holter-Sinclair collaboration

Posted at 2:06 PM (CST) by & filed under Jim's Mailbox.

From our friend Werner. Classic hyperinflation in Venezuela. Stocks to the moon in local currency but flushed down the toilet in terms of gold…

Bill

Bill,

The purchasing power of the currency is plunging, collapsing

From the end of August 2018 until now, the Bursatil Stock index has appreciated by 89,638% (this is 89 thousands 638%, not 89.6%) in Bolivar soberano terms.

But in US dollar terms, stocks lost 71% of their value.

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During the same period, Gold has appreciated by 444,377% (444 thousands 377%) in Bolivar terms. AMAZING!

CIGA Werne

Posted at 1:40 PM (CST) by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com (Early Sunday Release)

Money printing by the Fed and Congress is off the charts. The Federal Reserve doubled its balance sheet in a matter of months, and Congress is pumping out trillions of dollars in spending bills to fight the economic crisis caused by the Covid 19 lockdown. The really scary thing is not the massive money printing, but the fact that absolutely nobody seems to care about the risk to the U.S. dollar. Money manager Peter Schiff thinks he knows why, and explains, “(Back in 2008-2009,) even Larry Kudlow was worried about what the Fed was doing, but nobody is worried about it now.  The reason is they have been lulled into this false sense of complacency in that we got away with it the last time . . . and there was no negative consequence. We didn’t have runaway inflation and did not have loss of confidence in the dollar. So, there was no price to be paid. . . . Since we got away with it before, they think they will get away with it again, and I think they are completely wrong. . . .All we did was inflate a bigger bubble, but now this bubble has popped, and it found the mother of all pins in the Coronavirus that put a gaping hole in it, so the air is coming out much faster. Now, they are trying to reflate this thing. We are going to suffer the consequences, not only what we are doing now, but what we did back then. . . . When is all this inflation going to move out of the stock market and into the supermarket? I am surprised this has not already happened, but I do think we are at the end of the line. . . . Here’s what is going on. We are going to have this massive inflation tax. We are seeing price increases at the supermarkets.”

What has to break is the U.S. dollar, and that’s coming, according to Schiff, “We are going to overwhelm with dollar supply. We are printing all this money. The Fed is buying all these bonds. . . . This is it. The Fed is going all in on QE. There is no limit. They are printing all this money, and, so, ultimately, the dollar is going to tank. It hasn’t happened yet, but it will. That’s when the party really ends. That’s when there is massive pressure on consumer prices. That’s when there is massive (upward) pressure on interest rates. . . . This could be an inflationary depression. We could have hyper-inflation. We didn’t have anything like that in the Great Depression. During the 1930’s, prices went down, and people got some relief with lower prices. That made the downturn not as bad. Imagine high unemployment with the cost of living skyrocketing. That’s what we are heading for. It’s going to be the 1970’s only on steroids because it’s going to be a much deeper economic contraction with a much bigger increase in consumer prices.”

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Posted at 2:13 PM (CST) by & filed under In The News.

Bill Holter’s Commentary

WOW, B of A now sounds like a conspiracy theorist! Did fake markets just now happen or were we tin foil hat whackos correct all along? It’s OK, you know the answer…

“Central Banks Have Created A Fake Market”: BofA Asks Why Anyone Would Expect Stocks To Trade Rationally
May 22, 2020

It’s no longer fun to be a Wall Street macro strategist.

On one hand you have to divine the future for risk assets, looking at corporate and economic fundamentals and data, and recommend “big picture” trades based on your assessment of corporate profits and interest rates which have traditionally been the two key drivers to any macro asset allocation decision. On the other, none of that matters in a time of central planning when central banks have taken over price discovery, making your job meaningless as asset prices are now a direct consequence of nothing but central bank liquidity and explicit asset backstops. As Deutsche Bank’s Stuart Sparks put it best, “These are administered markets and market outcomes will be dictated by the policy goals of the Fed and Treasury, and the tools they select to implement policy”

Not only is it not fun, there is a sense of dejected resignation (perhaps as market experts see their careers become obsolete), one which was especially palpable when reading the latest Flow Show report from BofA’s Chief Investment Strategist Michael Hartnett who writes that these are “fake markets” in which “government and corporate bond prices have been fixed by central banks…why would anyone expect stocks to price rationally?”

To be sure there is no rationality in a world in which over the past 8 weeks there has been a 38 million rise in US unemployment coupled with a $10 trillion forecast loss in global GDP in 2020/21; this however has been offset by $4 trillion of asset purchases by central banks resulting in a $15 trillion surge in global equity market cap.

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Posted at 11:01 AM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

An avalanche will take out even the strongest trees. When it gets going, nothing can stand in its way.

Dave

America’s Largest Mall On Verge Of Default After Missing Two Loan Payments
May 21, 2020

Even before the coronavirus pandemic, US malls were in a crisis, with vacancies in January hitting a record high.

shopping vacancy

However, in the post-corona world, commercial real estate has emerged as one of the most adversely impacted sectors (perhaps because the Fed has so far refused to bail it out), with the number of new delinquencies soaring to a record high in recent weeks.

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Jim/Bill,

File under avalanche theory….

Dave

Here Comes The Wave: Loan Defaults Hit 6 Years High
May 22, 2020

Two weeks ago, when looking at the recent flurry of chapter 11 filings and a striking correlation between the unemployment rate and loan delinquencies, we said that a “biblical” wave of bankruptcies is about to flood the US economy.

shopping vacancy

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CIGA Lon checks in with a topic soon to be extremely relevant.  Those who have protected themselves will still be standing yet see most everything fallen down around them.  When the time comes, even though you have been thought and spoken of as an idiot, be charitable!

Bill

Jim & Bill,

There is no need to respond; I know you are both very busy and doing a great job in trying to bring people to a better understanding of what is going to happen and how it is unfolding now.

I heard something in the message from last Saturday that was sent to me yesterday… First, thank you for sending it. It said near the end that the goal is to make it to the ‘other side of the crises’ with assets that can then be deployed to make life very comfortable for the individual. I fully agree with the intent…but I think something is also important. Someone said to finish first one must first finish.

When I was the CFO of a company called Charlotte Russe and doing very well personally and financially; I got the news that my legally separated mother and father were dying and so was my younger unmarried sister. They lived in three very widely separate parts of the country. My wife and I have always worked and lived on less than what we made and our only daughter was very fortunate to have an athletic scholarship to the university she was attending. God has been good to us.

I gave Charlotte Russe a few of months’ notice of my intent to leave and take care of my family. That was not exactly what I wanted to do as my wife and I tried to get ready for a hoped comfortable retirement. I fully enjoyed my job, chosen field of endeavor and continued to consult for several years based on when I could fit it in which meant a reduced income (I’m not a very good salesman….including selling myself).

The point of this is that a lot of people, for a myriad of reasons, are not ready or prepared for this financial crisis. My wife and I don’t donate to organizations but as individuals we help others with funds anonymously and personally over rough spots in life. Though we are careful to give a hand-up and not a handout.

I don’t want any response to this letter, but I do believe that those that have the knowledge and/or, assets should have a goal of helping others during this crises to get through it…..Just as you two are, and have been doing with your financial knowledge and experiences in opening the eyes and ears of those willing to listen and learn. I truly believe there are a lot of people who will need what can be spared by others to get through this mess. That too is a reasonable use of assets and part of the Judeo-Christian ethics of our country.

Lon Gilbert

Posted at 9:04 AM (CST) by & filed under General Editorial.

Great and Wonderful Friday Morning Folks,

    They just can’t keep the first currency down like they used to with Gold recovering from yesterday’s dip with the trade at $1,735.50 up $13.60 after reaching $1,742.00 from a low at $1,722.50. Silver is recovering from it’s usual bigger beating with the trade at $17.47 up 10.6 cents after reaching $17.565 from it’s low down at $17.19. The US Dollar’s magnet is pulling it towards par with the value pegged at 99.74 up 33.7 points with its high at 99.895 from the low starting point at 99.40. Of course, all this started before 5 am pst, the Comex open, the London close, and after a Philadelphia Judge of Elections was caught stuffing the ballot box, admitting in court he literally was standing in a voting booth and voting over and over, as fast as he could.

     The Venezuelan Bolivar now has Gold priced at 17,333.31 showing a loss of 15.98 with Silver losing 2.447 Bolivar with the price at 174.482. Argentina’s price for Gold now sits at 118,094.77 Peso’s as the currencies pull – pushed the price down only 78.39 with Silver at 1,188.19 A-Peso’s showing a drop of 15.38 overnight. The Turkish Lira’s price, close to settling for the week, now sits at 11,811.85 Lira, and increase of 3.21 T-Lira with Silver’s trade at 118.901 down only 1.516 T-Lira.

      May Silver Delivery Demands now shows 148 fully paid for contracts waiting for receipts. Reducing yesterday’s count by 10, and with a Volume of 11 up on the board today with a trading range between $17.435 and $17.385 with the last trade at the high, up 10 cents, and with NO way to confirm if any of these 11 “buys” are spread trade entries/exits or “new buys”. Yesterday’s price, for the claimed 8 lot purchase was at $17.335. The daily delivery chart claimed a trade happened at $17.435 yesterday, but it doesn’t show up in their tick chart after I reported yesterday morning’s starting Volume of 2, which went to 4 with no price posted. Silver’s Overall Open Interest gained another round of Call Option Killers as the count reached 155,795 Overnighters proving 434 more shorts stayed in the trade after yesterday’s punch in the gut price drop.

      May Gold’s Delivery Demands now total 445 fully paid for contracts waiting for receipts proving a reduction of 83 contracts from yesterday’s trades with today’s starting point trading range between $1,726.70 and $1,726.60 for the 6 Lot Volume already up on the board. Yesterday proves the importance of watching the delivery numbers as Thursday’s Volume reached up to 528 contracts which just so happened to be yesterday’s Open Interest in the delivery month. The Volume Column does not include any of the previous purchases. These are either additional purchases or more entry/exit swaps in deliveries made in a single day. What this may be telling us is Mr. Resolute ain’t done buy’n and soaked up another 52,800 ounces on the dip! That purchase must have puckered up some of the short traders as the Overall Open Interest dropped 342 Obligations leaving the count at 532,367 paper contracts with only 3 days from their Options roll. Maybe it’s nothing to worry about, maybe it is. After all Silver and Gold are very small markets in the eyes of everyone else but the currency manipulators of the world. But when someone steps in and takes away $92,000,000 worth of marbles, they have less marbles (Gold) and more jacks (Debt) to contend with.

      As mentioned here for years, the inability to maintain debt continues to rise and rise (until?) as the virus is now “the blame in the game” as US Commercial Loan defaults, hit a 6 year high. Today’s default news shows a couple of overseas issues with tourism in Japan falling 99.9% in a months’ time with new car sales over in Europe plunging 76% in the same time period, which is also the largest drop ever. These are only a very few examples of the repercussions in the ability to maintain debt payments and staying in business. We expect a sharp increase in these stories, including an epic wave of global bankruptcies, as the world corrects the imbalances in debt, and as the political machine, that seems to have encompassed a few nations politicos, gets fully exposed.

      Those that hold the physicals, are not affected by any political news or these highly valued AAA+ rated debt instruments, held by every single central, which are artificially propped up by our ever-so-truthful rating agencies and their positive spin. Back when Jim Sinclair gave the warning, our marbles where placed at Tier 3. Now our marbles are placed as Tier 1 instruments! Since then we simply watch the show, knowing our retirements are in the safety of our own hands and not those that hold more debt than what can be paid. Those that hold debt, are now jacked, with the ratings heading towards Tier 3.

      Monday is our Memorial Day. I offer my deepest bow of respect to those that fought, bled, and died before us. If it wasn’t for them, we wouldn’t be here. Have a great and wonderful extended weekend and as always …

Stay Strong!

J. Johnson

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