Posts Categorized: Bill Holter

Posted by & filed under Bill Holter.

Dear CIGAs,

Two huge pieces of news hit Monday like a one-two punch!  First; UBS Is About To Blow The Cover On A Massive Gold-Rigging Scandal followed by; Saudi Arabia withdraws overseas funds http://www.ft.com/intl/cms/s/0/8f2eb94c-62ac-11e5-a28b-50226830d644.html#axzz3n3Ps0t97. Gold and Oil both affect the dollar, and this is happening while global liquidity is drying up. The soon to be catch phrase for October will be “lack of liquidity”!

First, the Swiss investigation into the gold market has got to be a scary one for shorts both legal or naked. The investigation will not be a whitewash similar to the CFTC silver investigation where “nothing actionable” was found. Please understand the key word there was “actionable”. I ask you this, if something was found to have occurred but was in the “interest of national security” …would it be “actionable”? It is also key to understand the suppression of gold prices also act to support the value of both dollars and Treasury bonds. In other words, the dollar can be seen to be more valuable than it really is and also allow interest rates to be lower than they otherwise would be.

As for the oil news, for Saudi Arabia to pull capital back home is a natural reaction as they now are running huge deficits and obviously an effect from the lower oil prices. It also has another effect, probably a large portion of the $73 billion withdrawn were in dollar denominated assets. It also means the Saudis are not a source of demand for dollars. Please also keep in mind from a geopolitical standpoint they have signed multiple trade deals with both Russia and particularly China, it is a good bet these will not be transacted in dollars.

Lastly thrown into the mix is the disaster called Glencore. They are a huge commodity firm with huge leverage and derivatives outstanding. Current CDS rates suggest (and it is not JUST Glencore …. http://www.zerohedge.com/news/2015-09-29/forget-glencore-real-systemic-risk-among-commodity-traders they have a better than coin flip chance of bankruptcy. Should this occur, you must understand it as a “credit” event rather than a commodity event. Yes of course unwinding their commodity positions will be a nightmare, the implications to the overall credit structure of the system are however MUCH GREATER!

This is happening at a time when liquidity has and is drying up all over the world. Whether you look at dollars, euros, yen or yuan, liquidity is just not there. Please view this link https://www.youtube.com/watch?v=w3rvZO1QYtQ&feature=youtu.be showing liquidity in the U.S. S+P 500 over the last eight years, it is basically GONE! What this means is if you are a large holder of positions, there is no exit and you are trapped! This is what I believe we will find out very shortly.

The lack of liquidity will create vacuums beneath asset prices, stocks, bonds, commodities and will culminate in a currency/credit crunch. This is very easy to see and anticipate if you are willing to see it. The “light switch” moment is near. Should we see a day where the Dow loses 700-1,000 points followed by another disaster day …it will be game over. Should the PPT lose credibility, neither the Fed “put” nor PPT “put” will be in place and it will be every man for himself. We are very close to the moment in time where the only solution to halt the selling will be to “pull the plug”!

Standing watch.

Bill Holter
Holter-Sinclair collaboration
Comments welcome bholter@hotmail.com

Posted by & filed under Bill Holter.

Dear CIGA,

Outright financial collapse, chaos and most probably war is not only in sight, it is imminent and unavoidable now. Normally I try to write and support my conclusions with current or past events via links to news. For this writing, because of the length and scope I don’t plan to do this. It will be assumed that you as the reader have already heard of or read evidence of what is put forth as connectable dots.

This past week, the following article was forwarded all over the internet

http://investmentwatchblog.com/if-deutsche-bank-goes-under-it-will-be-lehman-times-five/ as Deutsche Bank is “all of a sudden news”. Maybe this is a “German thing” with the latest out of Volkswagen? Deutsche Bank is not “all of a sudden”, they have been a derivatives monster for years and were saved in 2008 with part of the $16 trillion the Fed generously sprayed all over the world. The title suggesting DB will be the equivalent of five Lehmans is on the right track but not nearly severe enough. They are tied with JP Morgan as THE largest holder of derivatives in the world. Should Deutsche Bank fail, EVERYTHING FINANCIAL FAILS! It can even be said, “the entire world is Lehman” just waiting for their credit line to be cut 48 hours before complete failure.

What we are looking at now it “the FINAL FLUSH” of the Western financial system. The Federal Reserve has lost all credibility. This has followed both the Bank of Japan and European Central Bank being seen as hopelessly neutered of the ability to support the system. Confidence was THE very last “hope” and the Fed gave even that away last week. Of course the mainstream media chimed in on Friday saying the “market was up in the hopes of a rate hike in December”. Really? Are we to believe a tightening of credit is a good thing for a system buried in leverage and being dogged with liquidity drying up? This is like saying a flame thrower is the best tool for the California fires?

Money Velocity has crashed and so has global trade. Leveraged commodity trades have blown up and left many sectors dysfunctional. Has anyone stopped to think who (other than the sectors themselves) stands to lose with $45 oil? Maybe the lenders? Would this not tighten credit even further? Why do a dozen “advanced” economies already have stock markets in bear (minus 20%+) market territory?

Geopolitically we have watched as West has lined up against East militarily in many spots all over the world. The short list includes the South China Sea, Ukraine, Yemen and of course Syria. Russia began the build up militarily several weeks back along the Ukraine border and more recently inside Syria. Now China is reportedly sending hardware to Syria including http://www.debka.com/article/24909/A-Chinese-aircraft-carrier-docks-at-Tartus-to-support-Russian-Iranian-military-buildup ships. These are not bluffs as active fighting already exists. Can the U.S. actually “win” in any of these arenas in conventional war? It’s OK, you know the answer in your own mind, you also know what the alternative to losing conventionally is.

Before going any further I must ask you this question. Does the rule of law exist in the United States anymore? How many bankers went to jail over the blatant fraud in banking, real estate/mortgages? How many brokers went to jail for stacking MBS securities with guaranteed defaults while betting against the pools? How many exposed frauds within the Obama administration have gone un punished or even investigated? Do we really have three branches of government? Congress (Republicans) has done NOTHING they said they would when the public kicked out the snakes last November…only replaced by new ones apparently. The presidency has purged the armed forces of any conservative leadership and placed “czars” at the top of new and old agencies, what’s up with this?… which leaves the Supreme Court. They now effectively “write law” as they “interpret” ALL law. The Supremes will never see a duck as a duck and will write interpretations declaring the Sun full in the sky at midnight …final ruling and no appeal! “We the People” are screwed!

Speaking of “We the People”, while QE was used to mesmerize the middle class by holding the markets up, it in fact has gutted our real economy and has destroyed any possibility of making money the old fashioned way …by working! We now have one half or more of our population “taking” benefits and the other half “giving” them, any hope of a recovery led by the middle class is now gone as is the middle class.

Is it any wonder there are now shortages and tightness in the gold and silver markets? The East believes gold “IS” money, they also know the dollar is untenable and will not be a store of value. In fact, I believe China and Russia may step in to “help” the dollar fail. I still believe Mr. Putin will come forth with a “truth bomb”, I would love to be a fly (although hidden bugs will probably be everywhere) on the wall at tomorrow’s meeting between Presidents Xi and Obama. I can just imagine how the conversation might go, I cannot believe the U.S. will be barking ANY orders in any fashion. A sad statement but you must ask yourself this, does the U.S. have the power or ability to make demands? Remember, we are the debtor while they are the creditor!

In my opinion we are already well within the jaws of a meltdown/shutdown as liquidity is evaporating. There are a dozen developed countries with their stock markets already in bear markets (down 20% or more). All crashes come from oversold levels just as bank runs come on fast and are a surprise at the time. What is coming should be NO SURPRISE to anyone as we are looking at the end of not only an empire but of a flawed system which has endured for far too many years! This was a solvency problem in 2008 and “liquidity” was the incorrect tool used then. Now it is a bigger solvency problem with an illiquidity kicker attached …while the Fed has already used every tool imaginable and every last ounce of credibility. The loss of confidence in the issuer of the world’s reserve currency would be bad enough in an unlevered world, the loss of confidence in today’s “debt world” will be a DISASTER!

To wrap this up, do not let anything that may happen from here surprise you. The conditions are ripe for global currency crises and a shutdown of credit. The conditions are also ripe for hot war to explode in multiple venues. A meltdown or shutdown of markets will serve as a FINAL FLUSH of what remains left of the U.S. middle class. Without the “wealth” in stocks and homes, psychology will be toast. The U.S. is creating “income” from actual work at a third world level which is exactly where we are headed as our standard of living is “borrowed rather than owned”. My point is this, a market meltdown and credit shutdown will make the U.S. look like 1985 Bombay within weeks as we create nothing and have saved in “nothings” and owe everyone. This is the rosy scenario and assumes that martial law is not instituted (a poor assumption in my opinion!).

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Standing watch with tears in my eyes,

Bill Holter
Holter-Sinclair collaboration
Comments welcome!  bholter@hotmail.com

Posted by & filed under Bill Holter.

Hello Jim and Bill,

I’m a listener for a long time. I tried to prepare as much as I could also by buying your stock but am still preparing, which will take me a few more months to finish everything.

I listened to the last interview of Bill Holter who said that you both believe that there will be a collapse in September/October (before the winter). My question is, do you believe this will be the next big crash or already the final crash which will activate the reset of the current system?

It would be really nice if you could share us your opinion since we are a small group of Germans trying to prepare and understand as much as possible.

Thank you and regards,
CIGA Tyson

Tyson,

This is a great question. We can give you our opinion but it is just that, opinion. No one has an all seeing crystal ball. We do believe the next crash will be the “final crash” that sweeps away the current Western financial system. The problems as you know are numerous, too much debt on all levels, undercapitalized banks and brokers in relation to assets carried, grossly bloated derivative balances and counterparty risk, not to mention the fact that no currency in the world is anything more than a “promise to pay” …more of that very same currency.

We believe what will come very (and is happening now before your very eyes) soon is a “holiday” but not the “fun type”. Markets, banking, credit and thus distribution of goods will break down. A re set of prices and relative values will emerge along with new currencies aplenty. We think the key to the re opening of markets will hinge on how fast new currencies are brought forth and whether they are trusted. Any new currency will need “confidence” to be accepted by the masses. “Confidence” will be gold! Gold has been coming back into the system for years, not away from.

The last 4 years has been a last gasp effort on the part of central banks to retain the current system and push gold away from it. The West has substantially lost gold to the East and the reason why we believe the East will emerge as “wealthy” and why the West will need to get “back to work” to better a crashed standard of living. This will take many years if not several generations to accomplish.

As for “preparing”, move as quickly as you can and do the best you can do. No matter who, how smart, or how wealthy you are, you will forget or miss something. DO NOT beat yourself up! You are at least awake and aware of what is coming, can you imagine yourself completely unaware and thus not prepared for anything at all? Just do the best you can do, it is all you can ask of yourself. Good luck and Godspeed to all!

Standing watch,
Bill Holter

Posted by & filed under Bill Holter.

Dear CIGAs,

Last week the clock ran out on the Fed’s latest bluff. They have gone 55 meetings over 80 months without a single tightening or rise in interest rates. Last week was supposed to be “different” and a tightening of credit was predicted by something like 82% of economists polled. We of course now know that no tightening occurred and a trial balloon was even floated about instituting a new round of QE…

This of course was an easy one to call. Look at what the markets have done since that meeting, how much worse would it be had the Fed actually raised rates? Look all around the world and especially at China beginning to unwind, do they need a tightening of credit? They just devalued the yuan again yesterday (without any mysterious plant explosions …yet), had the Fed tightened you must ask yourself how much bigger the devaluation would have been by market forces?

Leading into last week, I think the easiest way to know that credit did not need to be tightened was by looking at international trade. This is one area where the “numbers are the numbers” and are not massaged (annihilated) by government reporters (not to mention mainstream reporters!). You see, the trade numbers pretty much need to match up and the freight rates are extremely hard to hide. Pretty much, they are what they are and if lied about are too easy to debunk. Last week, Zerohedge wrote on this topic when they penned WTO’s Stark Warning On Global Trade: “The Timing Belt On The Global Growth Engine Is Off”.

Further, if you look below at the Baltic Dry index, do you see a “recovery” from 2008 or a dead cat bounce which is now waning? THIS is indicative of global GDP, anything different from individual countries is an outlier and must be seriously questioned (including China).

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But why is this even important? First, because it is the REAL PICTURE but more importantly it is a very strong clue to actual rather than “made up” GDP. Spelled out for you, GDP is not growing enough (or at all) to create and bring new capital into the system. “The system” being one which has far more debt than it did during the 2007-09 event. Do you see where I am going with this? Clearly not enough growth exists globally to create the new capital necessary …yes that’s right…to carry a much larger debt load than we had back then!

Maybe it would be a good thing to remind you, one of the big problems back in 2008 was “too much debt”. Not only did the world not “liquidate” debt, it has taken on much more with an underlying economy that has been weakening for several years.

Going back to the top and full turn, how could the Fed have tightened last week? Or better, how can they ever tighten? The next move will be further additions of liquidity …at least as long as markets are open to do the “add”. Of course, just pulling the plug on the computers is another option!

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome! bholter@Hotmail.com

Posted by & filed under Bill Holter.

Dear CIGAs,

News out of Canada this past week provided a bit of a twist in the FATCA rules. http://business.financialpost.com/legal-post/canadian-judge-denies-quick-end-to-transfer-of-financial-information-to-u-s-under-fatca. As you know, FATCA requires the reporting of bank and financial assets held overseas by U.S. citizens and their institutions. Several readers sent this along believing the United States IRS was engulfing the records of Canadian citizens. I don’t believe this to be the case. As I understand it, this ruling will only affect U.S. citizens living in Canada or people with dual U.S./Canadian citizenship.

While this ruling was not a blockbuster, I believe it is important to revisit FATCA itself. As I understand it and have been told by tax professionals, the law only pertains to banks (accounts) and brokers (securities). Silver or gold held in non-bank vaults do not generate reporting requirements either from the vault or the customer. Effectively, holding gold or silver in a non-bank vault outside of the U.S. is currently a legal avenue to having assets of value outside of borders with no reporting requirements. Could this change? Yes it could but it will be a difficult one to enforce as a non-bank vault has no financial or banking charter which could be used as leverage. What I am saying is this, the way it currently stands, non-bank vaults cannot be threatened with their license being pulled.

This current situation is an important one because it is still a legal “escape route” for capital. You can do this as easily as the elite can, though not in magnitude of course. As I wrote Friday, should you desire help with storage, please contact me and I will put you in touch with the storage specialist at Miles Franklin.

It has now been nearly six months that Jim Sinclair and I have been working together. We wanted to give it some time to make sure our partnership “fit” and was comfortable. It is! We are like minded and have complemented each other by asking hard questions and pushing each other to think things “further” through. As many of you may know, prior to partnering with Jim I wrote for Miles Franklin’s blog. Many never knew I also brokered metal for them. I was paid to write, had I publicly written “call me” it would not have been fair to the other brokers in the office so I remained muted regarding my capacity as a broker.

I am writing now at Jim’s request because he believes it is time. He has done a couple of large trades through Miles Franklin and was quite pleased. After his “testing” Miles Franklin and our time working together, Jim wants me to let you know that I broker metal. I myself have completed numerous trades with them and have 100% in their ability to deliver.

Please e-mail me or give me a call and I will be happy to work with you to secure, at least in part, your financial future.

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome! bholter@Hotmail.com

Posted by & filed under Bill Holter.

Dear CIGAs,

Yesterday’s article “Is YOUR ‘pool’ full?” drew many responses and much to my surprise a reply from Bron Suchecki himself! I must say, even though I disagree with some of his writings, Mr. Suchecki is a class act and true gentleman. He began with an apology for the title and closing of his article “Who is the player and who is being played?”. He wrote his intention for that phrase was for his example of the games played with warehouse stocks.

Bron did not refute my logic but disagrees about the cause for the current retail coin shortages. He believes the shortages exist because the mints cannot keep up with demand, it is not a problem getting the raw metal he says. I would simply ask this, “why is gold in London in severe backwardation?” This condition should NEVER exist.

What he did disagree with is paying a large premium to own coins in hand. I would again simply ask, what is the cost to own a coin and have it in your hand? It is the physical price, not the pooled price nor any other paper price. We clearly saw an example of HUGE premiums of physical over paper in 2008, while COMEX briefly traded under $9, no physical metal changed hands under $15. So, what was the “real” price back then?

He went on to say he was surprised at my statement “if you hold metal in hand, you have no question as to whether you own it” because that as he said “implied I did not trust Eric Sprott’s funds or James Turk’s services”. Let me say this, I know Mr. Sprott very well and I know James Turk via e-mail and his writitngs, I trust them both. That said, I trust my own eyes more than I trust ANYTHING OR ANYONE (even though age is taking its toll and it’s time for glasses). One final point he agreed with to my shock was “there will be future cases of fraud and empty vaults” even citing the latest at Bullion Direct as an example. (As a side note, the biggest example of “empty vaults” was Morgan Stanley charging full storage fees for nonexistent metal. Only to be slapped on the wrist because they had the paper to pay clients with) I believe his thought process here reinforces much of what I wrote yesterday. Mr. Suchecki finished his e-mail by pointing out Perth Mint has been in business for 116 years, is still owned by the government and provided a bar list http://www.perthmint.com.au//documents/PABarlist.pdf for perusal.

To finish I must say thank you for the reply Bron. You showed me you are a gentleman and a class act with your response! Now I will do something I have hesitated to do because I never want to appear self serving or like a carnival barker. Since joining forces with Jim, I have retained my business relationship with Miles Franklin, still broker metals and can help with storage of metals via Brink’s in Montreal. We also have “non bank” storage agreements in Switzerland, Hong Kong, and Singapore. While I cannot comment first hand on the Swiss, Hong Kong or Singapore facilities, I have been personally to the Brink’s vault and observed while they audited the holdings. I saw with my own eyes how and where the metals are stored and how they are audited. This process is done every six months by an independent auditor. If segregated storage is something you feel necessary because you hold too much metal to be safely secured personally, please feel free to contact me.

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome! bholter@hotmail.com

Posted by & filed under Bill Holter.

Dear CIGAs,

Yesterday was a very interesting day, first my mailbox was jammed with readers saying “did you see what Bron Suchecki had to say about you”? http://research.perthmint.com.au/2015/09/14/who-is-the-player-and-who-is-being-played/.  Then a second wave of e-mails came through asking if I had seen the article Kitco put out regarding COMEX inventories? http://www.kitco.com/news/2015-09-15/Don-t-Believe-The-Hype-Comex-Gold-Warehouses-Well-Stocked-Two-Analysts.html

Before hitting Mr. Bron over the head with logic, let’s look at the Kitco article titled “Don’t believe the hype, COMEX warehouses well stocked”. First it is worth noting Kitco’s article cites only two sources, Barclays and CPM group. If you recall back in 2010 during the CFTC hearing, Jeffrey Christian of CPM accidentally spilled the beans when he said what they called the “physical market” was actually more than 100-1 paper to actual gold. Barclays and CPM are perennially long term bullish and short term neutral/bearish, for that matter, most articles I read out of Kitco are similar. It is as if they try to temper immediate demand for product, Jon Nadler of Kitco was living proof of that. Why does Kitco continually put out “opinion” pieces negative to their own product? Are they afraid of a stampede? The obvious question in my own mind is how would their pooled accounts fare under such circumstance?

Getting to the heart of their article, registered stocks of COMEX gold are now barely over 5 tons and JP Morgan’s position is about 1/3rd of one ton. I can remember when 30 tons or much more was normal for the registered category and I seem to remember just a couple of months back JP Morgan claimed nearly 20 tons registered. So no matter what spin Kitco puts on this, the current registered warehouse stocks are ridiculously low. To put these tiny hoards into perspective, 5 tons of gold is the laughable number of $176 million, JP Morgan’s position is no bigger than a single large retail client at about $10 million!

Switching over to Bron Suchecki of The Perth Mint of Australia, first I want to say “thank you” for thinking “Bill Holter” is important enough to refute. He wrote “Bill Holter may not think that you should be shocked about 25% premiums in silver and that “whatever you must pay to get it into your hands” is fine. Personally I can’t see the sense of paying 25% when for a few percent you can buy physically backed pool accounts.” First it should be said Mr. Suchecki’s “logic” is his opinion as you will shortly see. Rather than going after his entire piece, let’s just look at the logic used in his refutation of my article. If Mr. Suchecki would like to debate the merits of any of my work, I will be happy to do so publicly via Skype, live or whatever format.

If you read my article he refers to the end where I ask the question “what is the real price of silver, is it what you pay on COMEX/LBMA/pooled account or is it the amount you must pay to receive it in your hand?” If silver is “in your hand”, you then know for a FACT you own it, no questions. If you have a “receipt” for silver, how do you know the silver is actually there? Even CME group has disclaimered they cannot guarantee the individual reportings of member firms. COMEX and LBMA (thank you Jeffrey Christian) have already admitted they operate on a fractional reserve basis. How do we know the pooled accounts are not operated in the same fashion? From a logic standpoint, we know for a fact China alone is delivering via SGE more gold than is produced on the planet …then you can add in India’s demand of 1,000+ tons before the rest of the world accounts for even one ounce. Where O where is this supply coming from if no one fesses up to their vaults being depleted? Ft. Knox/West Point are full right? Just look at the audits …from 1956 (sarcasm). GLD is full although if you read the prospectus you might be surprised at what it could be “full of”.

Maybe I am just too skeptical and should be more “trusting”? Most people I know who have purchased gold and silver have done so for the VERY REASON they do not trust their government/system/currency to save their hard earned capital in! As it stands right now, if you want real silver in your hand you must pay a hefty premium over the paper markets. Said differently (by me), if you want to “hope or think” you own silver you can do so by paying a discount to the real thing, it is individual choice. For some people just seeing the word “gold or silver” is good enough, for me it is not. It is my money and my choice. I do not trust the currency markets and do not trust financial institutions for good reason. They have both already proven to be poor stores of long term value and poor custodians during times of stress (we could talk about bail in legislation but a topic for another day, legislation has been written to be used).

It just occurred to me the two articles were like a one two punch from the Canadian powerhouse Kitco and Australia’s Perth mint. It’s a shame Jon Nadler couldn’t still be around to harmonize with Bron Suchecki but I believe this is a case of “they doth protest too much”! In my opinion when all is said and done, I believe one of the largest scandals in all of history will be the discovery “vaulted gold is gone”. I believe MANY will discover they do not own what they thought they did and their “pool is not full”…this part is my opinion.

Not opinion is this, physical supply does not and has not for years been able to meet demand. The supply has had to come from somewhere and I do not know where this “somewhere” is. I also know that this “somewhere” must be a place where actual silver or gold exists(ed) and is available for delivery. The reason people own gold or silver is to protect themselves from a financial collapse. Factually, NOTHING has been changed or fixed since the 2008 affair, what comes will be very close to the same thing only worse as debt and leverage ratios are far worse. A financial collapse is mathematically coming, this is not opinion.

Gold and silver are crash insurance and will be “called” on when the markets break. They must be available in a time of crisis to perform their function. If you hold metal in hand, you have no question as to whether you own it. Your alternative is to trust Bron Suchecki et al that your “receipt” is in fact fully backed by metal. If Bill Holter is wrong, you will still have your metal albeit slightly less than you could have had at the discounted paper rates. If Bron Suchecki is wrong and all this paper is not in fact backed, you end up just like everyone else, broke!

I will finish with this. Bill Holter is not asking you to trust him. He is putting forth logic and welcomes you showing where the logic is faulty. I have pointed out Mr. Suchecki’s poor logic as it is based on his opinion. He basically says to an investment segment untrusting to begin with ,”trust paper”. Sorry Bron, I’d like to but I trust my own eyes far more than you or anyone else’s word! Logic is logic and if more gold has been demanded than produced for years upon years, it had to come from somewhere yet no one says their vault has been emptied …logic tells me someone is lying as to how full their pools really are.

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome (even from Bron Suchecki) bholter@Hotmail.com

Posted by & filed under Bill Holter.

Dear CIGAs,

There is so much to comment on today it’s hard to know where to start. As the title suggests, “war” seems to be the theme. Before getting into the meat, I read an article by Simon Black “The last time this happened was …never” http://www.sovereignman.com/trends/the-last-time-this-happened-was-never-17438/. This was quite a good piece and extremely correct but misses the point I tried to make yesterday and one I will try again with today. He is right on target, we have a superpower waning, technology advancing faster than ever and all wrapped around a financial bubble of unprecedented size. Yes it presents risk and offers opportunity …but this is not about “money”, rather it is about “the” money.

The technology of the markets has taken over. Algos written by people in “vacuums” are what run the markets and value everything today in a world where everyone knows the price of everything but the value of nothing. This will work until there is only ONE algo or computer who has won and has no one else to “eat”. A perfect example is the recent announcement by Deutsche Bank http://www.bloomberg.com/news/articles/2015-09-14/deutsche-bank-plans-to-cut-about-25-of-jobs-reuters-says

They just happen to be tied (With JP Morgan) as the largest holder of derivatives in the world. Please understand, “business and finance” are war, there are winners and losers. The problem today is when winners win “so big” they either have nothing else to eat or …the losers lose so badly they cannot pay. The markets are now terminally BROKEN and the values of everything (including morals!) needs to be RESET!

Shifting gears, I want to focus your attention on the wane of U.S. supremacy. Russia is now building bases in Syria while sending troops and supplies OVER IRAQI/IRANIAN AIRSPACE! http://www.msn.com/en-us/news/world/russian-flights-over-iraq-and-iran-escalate-tension-with-us/ar-AAegDqZ?li=BBgzzfc

Do you suppose this would have ever happened in the past? Or would our coastlines be buzzed by Russian aircraft or submarines? Yes I know, the smarty pants out there will say it already did, I will say correct but NOT BLATANTLY OR OPENLY FOR THE WORLD TO SEE!

And what about China? “When” in any past would China sell U.S. Treasury securities and announce it publicly? Or even better, how about announcing they will begin an oil contract to trade in yuan as “opposed” to dollars starting next month. They have set up currency hubs, trade deals, swaps, bought gold publicly and now they will add “fiscal stimulus” from their treasury to the tune of a couple hundred billion dollars over the next three years http://atimes.com/2015/09/china-rolling-out-trillion-yuan-fiscal-stimulus-report/ . Do you suppose these funds will come from U.S. Treasury holdings? If not, will this not weaken the yuan, something the U.S. has barked at for years?

My point is this, how much further can this game go before someone mistakenly fires a shot? Or have they already with the multiple tit for tat highly coincidental Eastern/Western explosions? The U.S. used to rule with an iron hand. We said how we wanted things and we enforced it. Years ago we said what exactly we would, or would not do and that was the way it was. Now, no one knows where we stand, who we back or whether we will or will not do what we say. The roles are reversing between East and West …and so are the holdings of gold!

Do not belittle this last point. Gold is money, it is wealth, it is ultimately power in a world where deals are not deals and settlement never occurs. Not only will “values” be re set, the fundamental way business is done and paid for will be re set. We live in a world where one half wants (hopes for) the status quo and the other half wants to move forward (or backward) to a time and place where trade is beneficial to both sides and is settled fairly. The problem is this, man has now perfected weaponry to settle their disputes which leaves no winners. Upon thinking about it, isn’t this exactly the same as our “derivatized” financial world? The only way to win …is not to play the game!

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome! bholter@hotmail.com