We have tried for quite a few years to point out just how bogus the financial reporting was. Few listened to us as markets “proved us wrong”. But as time went on, the economic/financial reporting became more bogus and further from the truth to the point even young children had questions. At present, the lies have been stacked sky high but there is a difference, “actions” are now speaking louder than the MOPEY rhetoric. To the point, actions are finally speaking volumes louder than words!
For example, people are finally questioning if the economy is so so good, then why does the Fed need to lower rates? Or why are individual companies confessing some very real individual problems? We went for years hearing the Fed would “normalize” rates and would have no problem doing it. We disagreed loudly and laughter ensued. Then, last fall the Fed raised rates three times which led to a near meltdown in Dec….until the Fed caved in and called a halt to rate hikes. Now, here we are again where the Fed is being forced into lowering rates or else the markets will rebel into a black hole. The Fed has it’s back to the wall facing their greatest fear, the dreaded liquidity trap!
Looking at several company/industry specific situations, does anyone really believe Deutsche Bank is less important or smaller than Lehman Brothers? Can you say $50 trillion +++ worth of derivatives? Or how about Apple, does a 42% drop in sales to India’s 1 billion population mean anything at all? Do the recent revelations of Facebook, Google/YouTube, Twitter gathering and selling data/taking political stances have any bearing at all? And Boeing…have they sold a single plane in recent months? Maybe we should also mention Greece selling new bonds at ALL TIME low yields? Whatever happened to risk versus return…is Greece all of a sudden a pristine credit? Or even one who can pay debt service alone…without borrowing more to make the payment?
The point I am trying to make is that our entire lives are surrounded and engulfed in nothing but lies. This is extremely dangerous when the entire system is held up by confidence alone. 50 years ago the global financial system had gold as its foundation even though “paper” was outstripping the amounts of gold held. Now, no foundation anywhere to any country’s financial system and paper galore to the point where 300 or more paper gold ounces have been sold…for every one ounce in existence. Is this twilight zone stuff or what?
And as for “confidence” and what might be the final straw? Can you imagine the coming body count when Jeffrey Epstein starts to talk? If there is any topic that snowflakes and conservatives can agree on, pedophilia is probably it. Can you imagine the reaction when representatives, senators, ambassadors, prime ministers, and even royals from all over the world are fingered?
Confidence in all things financial has been paramount as it always is for Ponzi schemes. Laugh if you will and all you want, confidence in EVERYTHING will be shaken and broken. The world will find out the entire system is and has been a “bad bank” for most of our lifetimes. It will be understood that the fraud began shifting in to higher and higher gears ever since August 15, 1971…the day Richard Nixon defaulted the US dollar on the rest of the world!
To finish, confidence is THE only thing holding markets together as the “bones” to the system are either brittle or nonexistent. Jim has told you many times, go back to basics. When confidence breaks and the entire house burns down, rebuilding the house, any house begins with the foundation. Whether you believe it or governments do not want it, the global monetary system will need some sort of solid foundation to begin rebuilding from. History tells us this foundation will include gold in some form or fashion. Can you imagine how expensive “new foundations” will be when everyone worldwide needs a new (real) one?