QE∞

Please read and forward this free public thread.

102
Mon, Mar 23, 2020 - 10:47am

What's the old adage about how "first they laugh at you, then they criticize you", that whole thing? Well, ten years on, all of our talk about The End of The Great Keynesian Experiment is seemingly playing out before your eyes. I hope you prepared accordingly.

Every Sunday, MrsF and I record and watch the US program called "60 Minutes". When I heard that Fed Goon Kashandkari was going to be on last evening, I was prepared for the usual BS. And that's basically what it was...until we got to this:

"There is An Infinite Amount Of Cash At The Federal Reserve. We Will Do Whatever We Need To Make Sure There Is Enough Cash In The Banking System." - Neel Kashkari (Federal Reserve Bank): >>Translation<<: We Are Going To Obliterate The Purchasing Power Of Your Currency. pic.twitter.com/qaMFfOI70b

— Ben Rickert (@Ben__Rickert) March 23, 2020

When I heard it, I immediately looked at MrsF and asked, "did you catch that"? What a blatant and bald-faced (pun intended) admission! "AN INFINITE AMOUNT OF CASH!"

So there you go.

And now today we have this....truly QE∞: https://www.marketwatch.com/story/fed-announces-unlimited-qe-and-sets-up...

Understand this...Yes, there is a corporate bond and commercial paper market that needs some bids. And yes, there are some municipal markets that need some bids, too. But this is 95% about direct debt monetization.

The US Congress is trying to put together a $2T "stimulus package". As I've told you for weeks, that won't be nearly enough. Combine that reality with the startling drop in tax revenue receipts that is about to hit ALL levels of government, and you get a US 2020 fiscal deficit that might reach $5TRILLION or more. How will that possibly be funded? They might even try that silly "platinum coin" idea at some point! But it doesn't matter HOW they attempt to rationalize and justify it, the debt/deficit is going to explode and the only source of funding is.....MASSIVE "INFINITE" FED CASH CREATION. Plain and simple.

So what does this mean for us? Well, to begin with, maybe not that much. The dollar price of gold and silver is still determined by the trading of futures contracts that are no more related to the actual physical metal than the trading of baseball cards. While this remains the pricing scheme, you can be assured that The Banks, the Central Banks and the BIS will do the very best to smash rallies and contain "price". I mean, look at today! "Gold" is only up 2% on the news.

We've warned and advised for the past several years that ONLY a physical market disruption can cause the run on confidence that will destroy The Bullion Banks and their criminal, fraudulent pricing scheme. That collapse in confidence and run on physical is coming....but it's impossible to say when. Could it already have begun? Maybe. The Mints are out of silver and not producing more coins for at least a few weeks. Reports out of Switzerland show that up to 75% of that country's refineries are temporarily shutting down.

Almost half of World’s gold bar production will stop this week: https://t.co/OZAtv3I0fn

— willem middelkoop (@wmiddelkoop) March 22, 2020

So look, we can continue to talk about price and levels and moving averages and all the rest. There will still be time for all that. However, for today, you need to understand that The End of The Great Keynesian Experiment is truly upon us. The Banks have finally shown their hands and they are openly admitting their strategy. Fiat currency can be created from nothing to service accumulated debts in a desperate attempt to keep the economic plates spinning. However, ONLY GOLD AND SILVER ARE MONEY. They have been for millennia and they shall be globally-recognized as such again in the months and years ahead.

Be situationally aware. Care for your family. Wash your hands. And prepare accordingly.

TF

p.s. Now more that ever, you need objective and honest analysis. At TFMR, we provide a morning update and evening podcast every day. We are your financial eyes and ears so that you can focus on the other items that demand your attention on a daily basis. Join us. The community here is like no other. And it's all available for just 40¢/day.

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About the Author

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  102 Comments

Stackable
Mar 23, 2020 - 10:56am
jaba
Mar 23, 2020 - 10:57am

The Outlook For Gold and Silver

I posted this very close to the end of the Friday Free Audio and Video Blog thread thinking that was the main event for the weekend. Only realised my error late last night before going to bed when I visited TFMR. So forgive me for posting this again as I think very few few saw it Friday last.

The route that the major Governments of the world have chosen, is apparently to print money without limitation, as they realise that they must do so to prevent a humanitarian and social calamity on a global scale. But also, in an effort to save the international financial system as we know it. This chosen route has historically resulted in hyperinflation!

The action taken by the major Governments is that they will throw all available resources:

  • (a) To defeating this Corona Virus and they will succeed, but how long it takes and how many die, only time will tell.
  • (b) To prevent social collapse and/or a social uprising, as well as a collapse of the business (Main St) sector. If implemented properly any such action should also succeed, particularly as Governments appear to be throwing any financial budget constraints completely out of the window.
  • (c) To save the international financial system as we know it. In this regard, IMO, to any objective observer, the current international financial system is so corrupt, dysfunctional and broken, as to make it no longer fit for purpose. Ergo, it can either die a painful death via hyperinflation, or the G20 needs to get their collective heads together, along with those of the BIS, US Fed and the other major Central banks. The objective, to agree and introduce a new financial system which incorporates sweeping branch and root reforms that address the core problems undermining the current system and causing these financial crises. This scenario is highly unlikely (see below).

As to item (c) above, the West (i.e. the Puppeteers), will do everything possible to prevent the abolishment of the Central banking and the Fractional banking systems because they are the bedrock of their financial and political power. However, they are also the principal reasons for this corrupt, dysfunctional apology for an international financial system.

IMO, this financial crisis triggered by the Corona Virus, is only in the embryonic stage, but when full blown, it will make the 2008 crisis look like a walk in the park on a warm, balmy sunny day.

The problems are, the central banks have lost control of the markets, coupled with the fact that this current Frankenstein of a financial system has grown so large (probably in excess of TWO QUADRILLION US dollars, that is with a 'Q' when one includes global debt, financial markets, derivatives and future Government liabilities !!) and it is probably well beyond the combined ability of the Central banks’ and the governments to save, unless a gold standard is re-introduced.

The most likely financial scenario may well be one of the following:

  • (1) Do nothing and embrace hyperinflation and the implosion of the current system, with the Puppeteers hoping that they can use the ensuing chaos to tighten their control over the population, a la 1984. But the Chinese-Russian bloc would probably be unhappy.
  • (2) Implement a half-hearted adjustment to the current financial system which may buy some time but will, not address the real issues, so option (1) will probably kick in after a few weeks/months. Again, the Chinese-Russian bloc would probably be unhappy.
  • (3) Implement a more serious adjustment to the current system by adopting a variation of the 1944 Bretton Woods Agreement (a quasi-gold standard). This would buy more time, but does not address the core issues, so eventually, in a few years, option (1) will probably kick in again. The Chinese-Russian bloc may go along in the short term.
  • (4) Abolish the Central banking and Fractional banking systems, introduce sweeping reforms that truly address the root problems facing the current financial system, with Gold playing a central role. That is unlikely to be adopted by the West, at least willingly. However, it is entirely possible that the Chinese-Russian bloc will go their own way and launch a new international financial system that would operate independently of the current US dollar dominated system. In that scenario, it is also possible that they may be joined by some Western nations, creating a global financial/economic schism. Only time will tell.

Regardless of the financial outcome, in any of the above scenarios, gold and silver prices may well rise to extraordinary levels, far higher than most commentators imagine.

Short term, the gold and silver supply chain volumes look likely to decline and possibly dry up, as a result of lock downs of mines and refiners. As investors begin grasp the potential implications of the corona virus fallout in the financial arena, any such disruptions of the gold and silver supply chain should see gold and silver prices rise sharply, along with the share prices of PM miners, locked down or not. However there is always the possibility of:

  • A PM re-set.
  • A closure of financial markets, which would inevitably be followed by a bank holiday, probably globally.

We live in interesting times. It would undoubtedly be preferable if times were less interesting!!

The above must not be construed as investment advice, dyodd.

J Siefert
Mar 23, 2020 - 11:00am

Dritter Platz

?

Who comes next?

Mar 23, 2020 - 11:02am

FYI, we're working to clean

FYI, we're working to clean up the comment loading problem on the Cal Lawyer thread. A comment was removed at the exact instant someone was responding to it. This caused a reference to a post that was no longer available. All comments after the one that has an issue are still intact and will be accessible once the cleanup is done. Thanks.

Mar 23, 2020 - 11:05am
Dr. P. Metals
Mar 23, 2020 - 11:08am

Bankster life

$10 for me, nothing for thee
$100 for me, nothing for thee
$1,000 for me, nothing for thee
$1,000,000 for me, nothing for thee
$1,000,000,000 for me, nothing for thee
$1,000,000,000,000 for me, nothing for thee
$1,000,000,000,000,000 for me, nothing for thee

Exodus 20:15 "THOU SHALL NOT STEAL"

Double Bogey
Mar 23, 2020 - 11:12am

Michigan

Michigan is now under a stay at home order

billhilly
Mar 23, 2020 - 11:12am

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

Mar 23, 2020 - 11:14am
J Siefert
Mar 23, 2020 - 11:18am

Re. Gold Refiners closed in Tecino

The fact of the matter is that because of CV ALL manufacturing has been closed down there. Egon von Greyerz makes it sound like refiners only.
The reason for the closure is that very many workers in the Canton of Tecino cross the border daily from North Italy (where COVID-19 is raging out of control). Just to put things in proportion.

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