Tuesday, June 25, 2013

Tinfoil Hat Alert - Martial Law Is Coming!!!

Tough loss last night for my fellow Bruins fans. They exceeded expectations, have a great nucleus and will be exciting for the next 3-5 years so tip your hat to the Blackhawks and marvel at how far these guys have come since their epic chokejob in 2010. Two cup appearances with two different goalies, one championship. That bodes well in my book. Go Sawx.

Not gonna lie - this is one of the more important blog posts that I'm going to write. I've been following financial markets, bible prophecy, and geopolitical events since the mid 1990's and I have NEVER seen things as wild as they are right now. Our global economy is teetering by a thread. Our financial system is one Federal Reserve announcement from complete meltdown. The Dow Jones index is down over 700 since the Ben Bernanke speech last week, Treasury yields are shooting up and CHINA has just hit a brick wall made out of shitty earnings and lower than expected growth. Uh oh. The Shangai composite (equivalent of Dow) is down 16% in the last two weeks ALONE. The stars are beginning to align with regards to a global crash. But I've already talked about that ad nauseum. It's going to happen eventually (I think within two years, most likely sooner), and it will be more horrific than the 2008 crisis and will SURPASS the Great Depression when it occurs. One thing that hasn't been discussed by many of the talking heads and doom and gloomers is what widespread panic will look like and how it will come about. Hopefully this post sheds some light on it.

Martial Law (as defined by Wikipedia) is the imposition of military rule by military authorities over designated regions on an emergency basis. Constitution becomes suspended, as do basic civil rights and habeas corpus (release from unlawful detention). It's been used throughout the world pretty frequently over the last 100 years, and even here in the United States recently (under different names and scenarios) - Boston suburbs after the Marathon Bombing, Jersey Shore after Hurricane Sandy, and New Orleans after Hurricane Katrina. New reports emerging from Boston detail actual gun confiscations in Watertown, MA. The same happened in New Orleans but on a wider scale, with scores of confiscations in and around the Superdome that was housing the homeless. We see it in movies, far-fetched conspiracy theories, and video games, but what conceivable scenarios exist that could trigger this nationally and what has the government done to prepare for its inevitability?

Three different scenarios emerge that could easily take us to a total police state - a cyberattack, a nuclear attack, or an economic collapse.

Scenario #1 - Cyberattack From Hell (Or China)
A lot has been said lately of the increasing frequency of high level cyber security breaches by both amateur and professional hackers (Anonymous, Wikileaks 'hactivists'). But few are talking about the fact that many sovereign countries are engaging in hacking on behalf of their governments. The United States and China are actively cyberattacking each other in a large game of chess, but instead of outrage from the average dopey American with pitstains and halitosis, our media treats it like an April Fools Day joke, complete with a flimsy wave of the finger. Russia, Iran, North Korea are also involved in frequent cyberattacks that threaten the entire electronic banking system of the United States. Can't access your bank account online? Probably related to a thwarted cyberattack. Most of these come in the form of DoS (denial of service, duhhhh) attacks, but can also be used to larger infrastructure like the electric grid and nuclear facilities. The US and Israel engaged in a 2010 joint cyberattack on Iran's nuke sites under the now infamous Stuxnet computer worm virus. Communications were jammed and their program was set back months. Earlier this week, as the Chinese stock market crashed, all of their major banks had severe shutdowns and transactions were put on hold. Rumor has it these cyberattacks originated in the US as retaliation for China harboring NSA informant Edward Snowden. Time will tell if these turn out to be true.

Hey baby...wanna cyber?
One thing is for sure - while we have a crack staff of uber-dorks working around the clock to prevent international (and domestic) hack-attacks, eventually 'the big one' is going to get through and wipe out.....the entire banking system. You'll wake up and your bank account will simply be zero. The money will be gone. No one knows where it went or how to get it back. Multiply that by 150 million and America will be instantly paralyzed. Panic will ensue, grocery stores will be flooded with cash only patrons and those who live exclusively off of plastic will be in a world of hurt. Government will have to ration food because most people will be in the same boat - instantaneous wipeout of money leaves everybody cash poor, so riots will probably result, gas stations will quickly run out of supply, and chaos will grip every street corner. If we keep up with these games of cyber one-upsmanship with China, Russia, NK, and Iran, we will eventually lose. Do you really want to piss these people off?

Likelihood - 70%

Scenario #2 - Nuclear Attack
Let's face it - a nuke will eventually go off in the United States. Don't sit there and tell me it will never happen, because I have a bridge to nowhere to sell you. You've heard it all before - sleeper cells, dirty bombs, angry Islamists, angry Tim McVeigh types - someone will detonate one of these in a city, sparking instant panic and the need to restore order. Local government shuts down transportation, occupies every street, shoves a gun in your face for trying to go out and buy baby formula.....so basically a beefed up version of the Boston Marathon Bombing aftermath. Remember the 'USA' chants two months ago when a city and its surrounding towns were SHUT DOWN to catch a terrorist? You don't think the Department of Homeland Security was taking notes and saying to each other "These shitheads will go down easily. No sweat."

We'll get into the government response in a few, but this scenario is very likely.

Likelihood - 55%

Scenario #3 - Economic Collapse
I've talked about this so many times in my blog that it's pretty obvious I think this is the most likely scenario. We are dangerously close to watching the US dollar die a painful death in front of our very eyes. We are $16.8 trillion in debt, scores of people unemployed, 50 million on food stamps, no hope from either party of turning the ship around and the spectre of Obamacare looming over us in six short months. The Federal Reserve has created over $2 trillion dollars out of thin air since 2009. Nothing has worked, other than a pretend stock market boom, more Americans taking second jobs, and an anemic housing recovery that doesn't even bring us above water from the 2009 lows. The scenario I see playing out is a bond market crash, followed by a stock market crash, followed by flash crashes in the Dow Index, followed by panic sells, exploding precious metals, and then........China decides to liquidate it's $1 trillion of US Treasuries and dump it on the market. Global demand for the dollar disappears, and even The Fed can't stop the bleeding. Hyperinflation occurs almost instantaneously, and the cost of basic food items increases 50% overnight.

Watch any number of these horrific scenarios online and try to develop an understanding about how serious this is. Obama will be like a deer in headlights. You think he gives a shit about gender wars, black unemployment, and the definition of rape with this going on? He will be in a hideout in Denver, CO when the shit hits the fan on a Friday afternoon, miles away from any civil unrest that may occur. Do you think he'll have the answers on what to do? I sure as hell don't. Remember Treasury Secretary Hank Paulson threatening Congress/the American public with martial law if we didn't sign off on the Troubled Asset Relief Program (TARP) in 2008 to bail out all banks and companies that made stupid derivatives bets? Remember all of those bankers that went to jail? Me neither. These people will be long gone when the shit hits the fan. I think an event could be on the horizon, given the fact that the Cyprus 'bail-ins' went better than expected (ie - no pushback) and the China/Japan/Eurozone/US bond markets appear to be dangerously close to a collapse with skyrocketing yields (interest payments). Things are about to get scary very soon. Be careful this 4th of July.

Likelihood - 100%

So what is the government doing to prepare for this kind of stuff happening? Well, I've already talked about the 2 billion hollow point bullets that were first denied, then admitted to, then the response was that this was done to achieve savings through bulk purchases, then finally it was blamed on a clerical error within the Department of Homeland Security. This amount of bullets pays for 35 years of Iraq/Afghanistan wars. They are obviously being hoarded for some reason. 3,000 new Humvees have been purchased for the DHS in the past few years. Google some clips of aerial views of military bases in Florida and the west coast and look at the miles and miles of Humvees lined up and ready to be deployed. 'They' are planning for something. Remember Obama talking about domestic civilian military forces during his 2008 campaign? Looks like his wet dream is coming true. Numerous reports have come across discussing hoardes of Russian United Nations troops in the Rockies, North Carolina, and Midwest regions in intense training. India, Pakistan, China and other countries have admitted to having soldiers over here undergoing urban/civilian military training. Over 40 US cities have been performing frequent urban warfare training exercises since 2005, with bio/nuclear attack scenarios being staged. FEMA camps have been set up across the company that group the various regions of the US into zones. Look this shit up. Detention/Re-education camps are on record as existing through FEMA/our military. You can get the PDF of the document if you want.

Before you pooh-pooh this, remember - this is the same government that lied to you about Obamacare, 9/11, Iraq, NSA, IRS, EPA, Fast & Furious, Solyndra, Benghazi, Pearl Harbor, and Watergate. Why would you believe them now? Read these blog posts with an open mind. You don't have to believe everything I say, but please use some discernment when developing an opinion. These past two months have been victory after victory for the 'tin foil hat' crowd. Suddenly we aren't so effin' crazy. Keep that in mind next time you pass judgment on the Alex Jones crowd.

God bless you all and pray for this country.

Friday, June 14, 2013

The Precious Metals Smackdown - Coming Attraction To The Big Collapse

2013 has been a wild year in the global markets. We've seen the Dow Jones Composite increase by 16% (over the magical 15,000 threshold, driven mainly by the Federal Reserve QE3 injections of about $85 billion each month), Cyprus have its depositors' balances raided, the pending collapse of the Japanese bond market, continued instability in Europe (Spain and Greece now asking for more money from the European Stability Mechanism because SHOCK last year's bailouts weren't enough). Well now we have the last bastion of safe investments being raided and attacked by the global banks and central planners as a means of driving down demand. The precious metals market (gold, silver, copper, platinum, paladium primarily) has exploded in the past decade, with gold up 600% at its peak and silver up 500%. 'Gold Bugs' used to be in the tinfoil hat club, but now they look mighty prescient as the US dollar continues to devalue and these metals become scarce. This year has seen gold and silver get slammed, with gold down 19% and silver down 27% in the first six months of the year. What the hell is going on, and is this indicative of a broader problem?

For those not familiar with the commodities market, gold and silver are traded on the COMEX (Commodities Exchange, a division of the New York Mercantile Exchange). This is where sovereign wealth, bullion banks, and the JPM/Goldman Sachs' of the world buy and sell their paper and physical positions of precious metals. There's one problem - the COMEX is running out of physical supply of gold and the megabanks are liquidating their positions. The NY Fed and all of the US vaults are empty. All of the gold is moving to the BRICs countries and the second China decides to back their currency with gold, it's game set match. They are a very patient people, and will laugh maniacally when the dollar finally becomes the latest currency added to the dustbin. India and Russia have also quietly built up their reserves while pretending to sit on the financial fence during the ongoing currency wars with US/Euro/Japan.

This precious metals takedown is the last ditch effort to keep the dollar strong and send the message that quantitative easing is working and that there is nothing to worry about. Precious metals tend to rise in value during crises or whenever there is economic uncertainty. Gold and silver wouldn't be valued as high as they are if things were going swimmingly. Here's how the public is tricked: megabanks like JP Morgan, Goldman Sachs, Citigroup enter into contracts to sell gold that they borrow ('short sales'). At no point do they ever own or even touch the physical metals. When the counterparty wants to exercise the option, the megabank needs to buy back the metal at a lower price. The very act of entering into a 'short' contract puts downward pressure on the market. This has been done in extremely large amounts, with JPM being the main perpetrator. Panic grips the market, and the perception (and reality) of falling metals prices causes the weak hands (Johnny Investor) to sell to the strong hands (Megabanks). This is what has been happening since April. The Powers That Be (TPTB) have been sending the message that precious metals are not to be owned. But a strange thing is happening - gold and silver for physical ownership are getting harder and harder to find, and when they ARE found, the acquisition cost keeps rising.

Each seller of the metals charges anything from 5% to 35% in premiums above spot price. They know how badly investors want gold and silver, so they can pretty much get away with any price. Not only are countries hoarding this stuff, but everyday people are getting in on the action as well. Cash For Gold stores continue to pop up, and gold is usually sold within hours of it coming in the store. I've spoken to numerous store owners and they are saying the demand is unprecedented. Never in their 30+ years of economic cycles have they ever seen anything like this phenomenon. I personally acquire my stash of bars and silver dollars through monthly trade shows (which are packed, by the way). Folks in the investment industry are now suggesting an asset allocation of around 5-10% to precious metals/commodities. Sales of American Eagle silver dollars are up between 25-50% over the same time last year. Check out this link below - people in China are lining up in droves just to buy gold (at an obnoxious premium during the recent Dragon Boat Festival):


Think the psychology of the everyday investor changing isn't compelling enough? Read the below recent unheard-of developments in the precious metals market:

1. COMEX rumored to be defaulting soon - this is the main conduit for PM exchanges. Imagine going to a grocery store and seeing the shelves all bare. Or a Dunkin Donuts with empty metal bins. Fear would grip the markets, as the pent up demand for physical would finally drive prices through the stratosphere. The COMEX has a very high likelihood of running out of metal. Completely. But as mentioned earlier, paper shorting of the metals keeps prices down. See next item.

2. The looming decoupling of paper vs physical ownership of metals. Paper ownership is defined as Exchange Traded Funds (ETFs), Mining stocks, Precious Metals Futures, Certificates, and Pool/Allocated Accounts. Physical is the actual, tangible ownership of metal. At your house, or in a safe spot. Not the bank. Not in a safe deposit box. Because when shit hits the fan, the bank can take your gold. As mentioned above, the paper shorts are what's killing the PM's market right now, as it's the latest salvo of the global elites to give false confidence to the dollar and the stock market, allowing them to continue devaluing the currency with QE. The market is so unstable now that any slight rumor of a slowing of quantitative easing, and the market tanks. An embedded WSJ journalist with the Fed gets hold of the Fed minutes and leaks hints.....Thursday's quip about chairman Ben Bernanke perhaps extending QE past December, without any taper, sent markets up 200 points. The same day the Japanese Nikkei market shit the bed by 6.4%. Everything is a big game right now, we're playing with funny money, while the globalist banksters are rearranging the deckchairs on the Titanic (and we are the passengers - they at least have a helicopter/bunker in Montana to save them). The final decoupling draws nigh - eventually, the physical demand will break through and drive the price up and the paper takedown will be ineffective. Gold may go down as low as $1000-$1200, and Silver as low as $18, but that is as low as it goes. A black swan economic event is coming very soon and we will flock to the metals.

3. Banks demanding cash settlement upon redemption. Dutch bank ABN AMRO made news recently by no longer allowing investors to reclaim their gold. If you had left your gold there in the past, you can no longer ask them to give you your gold back. They will give you the cash equivalent from now on, or give you GLD ETF shares. JPM used to be the biggest shorter of paper metals in the world, and now they are winding down the contracts, and have a historically low amount of registered ounces in their accounts right now. China/India are hoarding 80% of all newly mined gold each year. Is this a sign that the great gold bank run has begun?

4. Shadiness in delivery. As if settlement in cash isn't weird enough, those at banks without this policy are noticing something strange about the gold bars they put in a safe deposit box.....the serial numbers are different and they are marginally lighter. "No no, you're confused.....here you go it's the same bar you dropped off in 1994 thank you buh bye." You don't think we'd defraud innocent customers with replaced gold bars or even worse....tungsten-tipped bars, right? HA! Ask China how that went in 2009.


Yeah so back in the late '80's/early 90's, we took to borrowing gold from China. They started asking for it back. But we used it in other transactions and uhhh....don't have it anymore. So we swapped it out for fake gold bars in the form of tungsten, which has similar properties but is a little lighter. China has been pissed ever since, but can't do much because their economy is faker than the Farrah Abraham's boobs so basically it's one big 'touche' from one central bank to another. I've also mentioned the fact that Germany is starting to ask the NY Fed to start repatriating their gold. Except, uhhh.....the NY Fed doesn't have it either. Looks like JPM keeps unwinding their positions and using the actual tunnel connecting its NY headquarters to the NY Fed to deliver the bars and give the illusion everything is fine. Guess what we told Germany? "You will get your gold, but it will take us seven years to complete delivery. Sorry for the inconvenience."

At least we located Moammar Ghaddafi's gold stash in Libya/South Africa. At least France invaded Mali, home of numerous gold mines. At least we got Saddam's gold reserves. You get the point. Replace the empty vaults with whatever you can find. Gold, oil, and the petrodollar make the world go round. He who has the gold has the power. And I think I was pretty clear that we don't have the gold (unofficially). The latest figures still show us with over 8k+ tons (5k more than #2 Germany). But these records are notoriously cooked and outdated. China could very well have over 10k tons at this point but doesn't report their holdings. India and Russia are zooming up the charts. Expect a power shift to the East in the next five decade.

5. Can confiscation of gold and silver really happen? Wouldn't be the first time in the United States' economic history. If government senses that the American people are storing up precious metals instead of the almighty dollar, then they can enact legislation to criminalize it. This happened during the FDR years in the Great Depression. Executive Order 6102 of 1933 decreed that anyone owning more than $100 in gold coins could face 5-10 years of jail and a $10,000 fine.

That was a lot of money back then. Supposedly hoarding gold was stalling economic growth. Folks were forced to turn in gold by May 1st, and would receive the spot price of $20.67 per ounce. Good deal at the time, right? Well in January of 1934 government waved its wand and decided that gold was now $35 an ounce, basically killing the purchasing power of investors by 70% overnight. Dollar gets devalued and impoverished citizens are in an even worse situation. Thanks government. The below link casts light on what would happen if this were to rear its ugly head again:

After all the lies/scandals/bait and switches plaguing the administration, I wouldn't be surprised if this happened. Alinsky tactics to shame the 'hoarders' of precious metals, criminalize their behavior (just like anyone owning a scary looking gun that isn't registered properly), settle in crappy toilet paper dollars as the market implodes. Great way to bring all the wealth back to the fat meathooks of Uncle Sam.

So this is what's going on in the metals market. Gold and silver have been around for thousands of years. Fiat currencies that come and go have not. The writing is on the wall for the US dollar, and those that are smart will hoard up metals, bullets, guns, and food. Southern states have already begun drafting legislation to recognize silver and gold as legal tender. I would expect this to expand to the midwest before long. If you're awake, you get the feeling that something is not right with the world right now, but especially in the US. Nothing is working. Nobody is working. Congress sucks. Government can't be trusted. We're going to pass bipartisan, sweeping immigration reform that will be the death knell for America as a global leader and guarantee the death of the conservative politician as a viable candidate in a general election. New scandals every week. Both parties eternally bickering. We are fed up at this point. No more. This country is gearing for a civil war/martial law scenario where barter and precious metals will be the new system. Make sure you are on the right side.

Sunday, June 9, 2013

Beach/Pool Etiquette For Summer 2013

We are so close to summer and I think we need to establish some ground rules since we spent all spring getting our pasty bodies fake-baked and back in shape. Some folks think they can frequent a beach and/or community pool without any accountability and that is COMPLETE horseshit. Respect your fellow citizens and follow these rules to ensure Summer 2013 is the best ever.

1. Put your effing cell phones away - you are relaxing in the sun, sand, and water. I don't want to see you sitting in a beach chair texting away to see what Mildred is doing and who she met at the dive bar in Southie last night. Tell her to get a morning-after pill and hang up. She's a slam-pig/slump-buster anyway. You also don't need to check in with work because either you're on vacation or you aren't. Stop acting all important and using work lingo intentionally loud so that it looks like you are intelligent and important. You actually aren't, because you wouldn't be bothered if you actually tried to transition your work properly instead of rushing out of the office Thursday afternoon. Finally, your kid wandered over to our section and started taking my kids' shovels. If you were not texting/playing Candy Crush, then he would have stayed in his section of the beach. Plus I think he shit himself and it's leaking down the back of his leg. You might want to start parenting in the next five seconds before I start giving him pixie sticks and Fun Dip. Oh - almost forgot - your twelve year-old is doing the dead man's float about twenty feet out right now. Something about an undertow. I honestly stopped listening once he started to slur his words and went into full-fledged drowning mode. But at least you now have your plans in place for whatever cougar night club you were going to visit tonight with Donna and Brenda tonight.

2. Attire means everything. Sorry folks - if you went into hibernation from October through April, look like a Human Jar of Mayonnaise, gained 48 lbs eating Chocolate Trilogies and haven't man-scaped since the 2012 London Olympics, you need to cover that shit up.

If you look like WWE superstar Sheamus, put on some bronzer
If you still have a FUPA, don't wear a bikini. Your mons-pubis can remain hidden, we won't complain. If you have six necks and fifteen gut rolls, don't bother taking your shirt off.

On the flip side, if you are stick-thin from the new fad diet that has taken over the country (eating reproductive organs, or just grapefruit, or downing ten diet pills, or whatever the fuck paleo is), and your bikini bottoms are falling down your thighs, then wear a one-piece. Listen, I realize Daisy Dukes/cutoff jean shorts are hot. I get it. But please don't go dressing like Rihanna at the beach. If one of your vagina lips is staring at me and asking me 'if I got any cuhhh-luhhh', then you might be wearing inappropriate clothing. If I get confused and stick a few quarters in your girlfriend's coin-slot, it might be too low-riding in the butt-region. Guys - you aren't off the hook either.

If the netting from your bathing suit has somehow been removed, and I can see the outline of your veiny dick and 'brains' (balls) underneath it with a couple pubes poking out, you might want to go shopping for a new set of trunks. Shake that shit out. If you are in the heavyset club, make sure that when you walk/sweat at the beach, that your inner thighs do not suck in the bathing suit and bunch up at your nutsack. Nobody needs to see your testicle mound. 

3. Don't pee at the beach house/pool bathrooms. They are dirty. They have pubic hair and kid droppings all over the place, plus they are generally wet from whatever water people track in. You also get those slobs who think its ok to have a sweaty dump at a public beach or pool. They just bring their stench with them and YOU are stuck picking up the pieces. So its real simple. Do what you need to do at home. Get to the beach, and if you need to pee, just go in the pool. If Duxbury Beach in Massachusetts has gotten warmer in the last twenty years, its because I dipped my privates in there and pretended I was admiring the horizon. I ain't walking to an outhouse, only to look down the hole and find it covered in bloody tampons with fresh poops sitting on top. I'm gonna splash around, maybe grab a Boogie Board as an alibi and let it fly. My kids do the same shit, except they giggle while they do it - so you know they are grateful for this opportunity. Community pools are excellent to piss in. Family/friends with pools, that's a case by case. I don't pee in those pools, because I want to be invited back. But community pools? Have you seen the sediment on the surface when you see the sun reflecting off of it? Exactly. Your pee ain't gonna spoil the bushel.

4. Pack a robust cooler and make one trip to the snack bar. That way you are stationary so I don't have to watch you come in to my peripheral tilting your head sideways as you eat a cheesesteak, in the process dripping nacho cheese off of your hairy nipples. Or your swine kid snarfing down a Choco Taco in 2.4 seconds and then grabbing his sister's Screwball ice cream and choking on the gobstopperish gumball at the bottom.

Plan ahead and your fellow pool-goer won't need to witness your sloppy eating style. If you are BBQ'ing at the beach, please don't let me catch you eating corn on the cob. This is the real reason God punished Sodom and Gomorrah. It wasn't the lustful behavior - too many of the afluent people were eating corn on the cob likes fucking slobs. The butter dripped down their faces and they spit when they talked - "Ohh vish is really goobm, pass me a nappin." The latest Dead Sea Scrolls found in Jordan outline several earthquakes, lightening strikes, and floods because 'God was sick and tired of people eating like those fucking Samarians' so He took matters into His own hands and removed these scoundrels from Planet Earth. Ok that was a little dramatic, but you get the point - nobody wants to see you eat when you have clothes on, we sure as hell don't want to see you eat when you are husky and half-naked.   

5. Don't crowd my space. I got here nice and early to avoid people like you, and you still seemed to find me. I've already spoken to you about the texting and the ignoring your kid who has come over and stolen my kids' beach toys that I had the foresight to pack. Now you are moving your stuff reeeeeallly close to mine. Ain't nobody got time for that. I don't want to awkwardly say hi to your kid running around in a speedo. I don't want to listen to you and your mother-in-law speak romanian to each other. I don't want to listen to your really loud radio blasting DMB or Jack Johnson. Plus you say 'dude' a little too much, and you sound like a buffoon. Not only are you close by, but your dog just took a smash near my napping child. Soggy tennis balls are not my thing. Leash him and get him out of my sight before I recreate the scene from 'Fear'. Finally, you are so close that I can see what loser beer you're drinking. You don't bring swill to a beach. We're adults, here. I don't want to see Bud Light or High Life, or I'll plant drugs on you and have you reported. If you're gonna crowd my space, at least give me that microbrewed IPA that I've been eyeballing for the last half hour. Thanks.

Honorable Mention - if an endangered species of two inch long bird ('Piping Plovers') are on the beach, don't shut 80% of the fucking beach down. Do a cost/benefit analysis and ask yourself - 'Am I going to lose a lot of money pissing off loyal residents of the beach if we severely restrict access?' If the answer is 'yes', then bulldoze the habitat/cook their dead bodies/give them alka-seltzer/torture them or feed them to the seagulls. This actually happened in my hometown, where these things have more rights than unborn fetuses/illegal Mexicans. 75% of them die before even hatching, and each nest needs about a mile of fencing surrounding it. We should blame our federal dunderheaded government for that, not the local beach preservation society. Feel free to beat up the bird-nerds protecting them, though.

Next post - What the hell is going on in the precious metals market? I think it's symptomatic of a larger problem and the overall health of the US economy. Stay tuned!

Sunday, June 2, 2013

Something Worse Than Fukushima Is Happening In Japan Right Now

As you can tell, I'm a finance/global economics junkie, so while you are all playing Candy Crush'em and Bejewelled, I'm studying the markets and reading up on any juicy nuggets that I can get my hands on. Of course, I do this and then I blog only when the kids are in bed, lest I be labeled an absentee parent.

Anywho, back in January, one of the alternative media programs that I listen to nightly (not Alex Jones in this case) had a guest who was considered a 'financial insider' - a former commodities trader in the Emerging Markets/AsiaPac region, an investment banker with Royal Bank of Scotland, who also happens to be an economist. So he knows his stuff and he is well connected. I listened to the January 11th clip (name of the show is the 'Hagmann & Hagmann Report'...ok here's the link you lazy bastard...........http://www.youtube.com/watch?v=_Kn94kTs8FQ), and he brought up the one area that will be the domino setting off a global collapse - Japan. At the time, I didn't know what the hell he was talking about.  Japan had been pioneers of money-pumping (Quantitative Easing/QE) during the 90's/'00's, and while they hadn't imploded, they have been pretty stagnant for the better part of twenty years. So why would they start a domino effect when the Eurozone was in such peril and the US is up to its eyes in debt?

Real easy answer - Japan launched the opening salvo of a fast-paced currency war. A race to the bottom through competitive devaluation of its currency. Cheaper currency makes for higher exports and increased attractiveness of Japanese goods and services. Unfortunately, when countries engage in 'beggar thy neighbor' currency devaluations, those that don't play the game get burned. But it looks like three can play at this game - the Euro stays on life support through the ESM (European Stability Mechanism launched two weeks after QE3 in the US - not a printing press, but a 'banking welfare' for those in need, so basically every country in the Eurozone, to the tune of over 500 billion euros). The US dollar continues to stay afloat through $85 billion of new Federal Reserve injections each month, indefinitely, although outgoing Fed Chairman Ben Bernanke has indicated 'they might begin to consider the prospect of potentially thinking about the ability to maybe initiate a gradual tapering of the money printing if the job market doesn't grow at a pace that might be considered stable in the long run'. Whatever the hell that means. I interpret that as 'QE ends in December, as does the bull market in stocks'. Dow tops at 16k, people rejoice, get boners, and shit hits the fan but the boner doesn't subside for some strange reason.

These three currencies are competing to become the lesser of all evils. I think Japan is falling on the sword (committing Harry Carey? Hari Kari? What's the one where you disembowel yourself? Sooo wish Dice-K did this during his Red Sox tenure after a 4 inning, 8 BB, 14 ER, 1 SO, 6 HBP outing, which was 'ever other game') on this one and committing national suicide by announcing the biggest economics experiment in history - dubbed 'Abenomics' after current Prime Minister Shinzo Abe. It is a ballsy injection of monetary stimulus, government spending, and structural improvements to the Japanese economy. 270 trillion yen ($2.64 trillion) in qualitative/quantitative easing. It has been widely cheered by the financial community. The Nikkei index is up 32% since January and 62% since May 2012. Bank of Japan claims that inflation is held in check at 2%. The USD has gained purchasing power against the Yen over the past six months (ie - the US dollar buys more yen, as desired as part of this currency war. Currently each dollar buys 102 yen). Liberal economist/media darling Paul Krugman is even on record saying this all reflects increased confidence in the Japan recovery. If he were the captain of the Titanic, he would have thought the glacier was a false alarm too, and if we threw enough money at it, the money would have melted the glacier and the ship would not have crashed. But there are cracks that are starting to appear in the new economic model - namely, the Japanese bond market.

For starters, interest rates in Japan have been at 0% for the better part of a decade. This ZIRP policy will cause large-scale fallout when interest rates go up (estimates of about 25% of Japanese tax revenues will go straight to interest on the debt). The only problem is, about 80% of Japan's investors are its own people. The yen is not like the dollar or euro where there is a wider market of interested parties that rely on it. How will that be managed? Will the people be screwed over in the process with a less than desirable interest rate policy for the next few decades while Japan gets its act together (year 23 now, I doubt its going to happen). From a bond market perspective, when bond prices drop, yield to maturity goes up. Higher interest payments. As the Nikkei goes through the stratosphere, the bond market has suffered several catastrophic plunges and experienced extreme volatility in recent weeks (since the April 13th QE/Spending Spree/'Abenomics' announcement). There have been five times in the past month where the Japanese bond market's circuit breakers were triggered and trading was downright HALTED because of the severe dips!!!! That's unheard of since the 2008 Financial Crisis on Wall Street. Why isn't this being talked about in WSJ, Bloomberg, and the financial cable shows?

Last week, Bank of Japan chair Haruhiko Kuroda basically issued the stand-by panic statement - "Everybody chill the fuck out, we got this." The Japanese bond market is in a freefall right now, and they have no clue how to stop it. Side note - whenever a government official tells you to calm down and relax, run for the hills. I bet the people in the WTC Towers who were told to 'stay calm and don't move' wish they listened to their gut feeling. Well the gut feeling of anyone with an ounce of common sense and two ounces of disdain for central bank intervention should be 'Get out now - this thing is gonna blow!!!!!' It's gotten to the point where the Bank of Japan has had to step in and start purchasing 70% of newly issued bonds to quell the volatility. Increased yields means higher payouts and higher corporate prime interest rates for the most indebted place on earth. This will not end well. Hmmm where have we heard this before? Investors selling treasuries and government stepping in to save the day? Bill Gross of PIMCO (world's largest bond fund) and prescient hedge fund manager Kyle Bass are both predicting a Yen and the Japanese Government Bonds market imminent COLLAPSE. How many trillion yen injections are these clowns (and I use that respectfully, as they are smarter than me, just like all of the Goldman Sachs cronies running the shadow banking system across the world that's work wonderfully since 2006) going to do everytime they have a bad day at the office?

The implications of this madness will be felt throughout the world. Like a snowdrift, all of the investors will eventually leave the yen, move to the euro and ultimately pile into the dollar as a last resort. The euro is about as stable as Amanda Bynes right now, and low/behold, Spain and Greece are starting to ask for more money since they magically aren't able to pay the bills. Didn't see that one coming a year ago. Oh wait, we did. 25% unemployment on average in the PIIGS countries, after hundreds of billions of cash injections. Things are not getting better. J&J should develop a special Band-Aid for the Central Banks, cause that's all they're using at this point. Nobody can fix the rabbit hole we are in right now. The global economy is due for a large-scale/apocalyptic reset, and we are on the cusp of it. Brazil/Russia/India/China are already hip to this, and are hoarding up all of the gold that is mined. You'd almost think they were preparing for something bad to happen. And that they should probably work together and form a gold-backed currency that they can all benefit from. Keep moving along, nothing to see people.

Japan's demise will have very big implications for an already phony US economy. Japan is our third biggest investor of US treasuries, so when we lose them, we are pretty much screwed. China (our second biggest investor), has stopped buying our 10-year bonds and treasuries at this point and will soon be liquidating their dollar holdings in favor of thousands and thousands of tons of gold. We're like that college chick with herpes, gonorrhea and syphilis, but she's still hot so you at least hang out with her in a strictly platonic fashion. This also is an indictment of excessive QE, which we are so far down the path on, that, like a junkie, we will go through withdrawals the second it slows. Inflation will eventually catch up to it on average 2-3 years down the road of the initial easing, credit rating downgrades will follow, and central banks are cornered to the point where all they can do is raise the interest rate on the debt to keep the investors moderately happy, which means more tax revenues go to paying for a non-value-added expense. This will hurt the US more than Japan, because the Fed owns most of our debt, as opposed to the enslaved citizen of Japan, who can't really 'demand' anything from Bank of Japan.

So as mentioned before, here is the order of operations - Japan collapse --> Euro collapse --> US collapse --> BRICS rise from the ashes with a gold-backed yuan or............the dreaded one world currency that the globalists/Illuminati have been waiting for since time immemorial. In fact, it will be called the Phoenix, and it will 'rise' in 2018:

Scared yet? Couple that with nuclear war in the middle east, the chipping away at the 2nd amendment, 2 billion plus in DHS bullet purchases, the falling dollar/countries exiting the petrodollar, food shortages, gold hoarding, no more central bank magic bullets, and suddenly this shit all makes sense. The US will not be substantial part of the post-collapse world. Too much debt, gutted military, horrible reputation worldwide, and our only true allies Israel and UK will want nothing to do with us because we didn't help them when they needed it. Sorry this stuff sounds scary, but remember how you felt in September 2008 as the shit hit the fan? Just trying to wake you people up. Don't shoot the messenger.

BTW - big week in the global economy front. The Bilderberger Group meets in Hertfordshire, England on June 6-9. If you don't know who the Bilderbergers are, they are only the most powerful hundred people in the world who basically draw up the global agenda for the year. They also 'don't exist', 'only produce good ideas', 'care about us', and again, 'don't exist'. Subject of another post. But some big takeaways on Syria, Japan, Iran, and the US economy will come out of this event. Stay tuned.