How & When, But More Importantly, Why?

Posted at 7:19 PM (CST) by & filed under General Editorial, Martin Armstrong.

Dear CIGAs,

Martin Armstrong just wrote a paper on gold titled, "How and When." My response to this article is why?

Why in the world, if you believe that the gold price can go to $5000 and $12,500, as the article says, do you give a damn about the next 90 days?

You must realize that the economic and political damage is already done.
You must realize that the mountain of OTC derivative paper is not going away.
You must realize that all the old legacy assets (broken OTC derivatives) demand to be adjusted at each market turn in order to maintain any semblance that they are serious contracts.
You must realize that this adjustment means adding on new OTC derivatives.
You must realize that this means the mountain of OTC derivative weapons of mass financial destruction can only grow.
You must realize that it is not whether or not QE will continue, it is what it already has done to the Western economies that much higher gold prices will reflect.
You must realize this is not a business problem, but rather a debt problem as it applies to the gold price.
You must realize the monumental change in the Middle East is NOT positive for the West in any manner, shape or form.
You must realize that the change in the Middle East is from some form of government to chaos.
You must realize that the beneficiaries of chaos in the Middle East are Iran and Russia.
You must realize that the main product of the establishment of a no fly zone in Libya is to benefit the Rebels.
You must realize that the rebels are an unknown factor in Libya.
You must realize that a second product of the no fly zone is greater hatred in the Middle East for all things West.
You must realize that the peak production of energy is behind us.
You must realize that the production of energy in chaos will be less than under some form of rule.
You must realize that this combination of monumental Middle East change and peak oil means peak oil is no longer a consideration 10 to 15 years from now, it is now.
You must realize that the Angels (gold prices) are not simple talk but rather a method used by the great market maven, Jesse Livermore.
You must realize that on the next trip to $1444, that price will fall to the long term bull market on gold.
You must realize that $1650, a place where gold will trade, is so low it will be comical looking back from 2015.
You must realize that "QE to Infinity" is not a choice but all there is left in the tool box of the US Fed.
You must realize the truth of today’s comment by Dallas Federal Reserve Bank President.
You must realize that what the President of the Federal Reserve Bank fears will occur. 
You must realize no sovereign country needs to go broke.
You must realize they simply refer to QE as policy.
You must realize that it is the currency that breaks, not the country.
You must realize that the point of correctness in the article "How and When" that is true is his $5000 to $12,500 figure and not the prognostications of the next 90 days.

Fed’s Fisher: U.S. debt situation at tipping point
On Tuesday March 22, 2011, 10:43 am EDT
By Marc Jones and Sakari Suoninen

clip_image001

FRANKFURT (Reuters) – The U.S. debt situation is at a "tipping point," Dallas Federal Reserve Bank President Richard Fisher said on Tuesday, and urged the U.S. central bank to refrain from any further stimulus measures.

"If we continue down on the path on which the fiscal authorities put us, we will become insolvent. The question is when," Fisher said in a speech at the University of Frankfurt.

Fisher, seen by economists as one of the most hawkish policymakers within the Fed, said that although debt-cutting measures would be painful, he expected the U.S. to take the necessary actions.

"The short-term negotiations are very important. I look at this as a tipping point."

He said the U.S. economy was now growing under its own steam, but voiced his concerns about building global inflation pressures and said it was now time for the central bank to stop pumping out extra support.

"The Fed has done enough, if not too much, and we should do no more.. In my opinion no further accommodation is necessary after June either by tapering off the bottom of treasuries or by adding another tranche of purchases outright."

More…