Sudden or incremental

123
Mon, Mar 24, 2014 - 10:32am

Given the overnight action in metals, perhaps discussing the big picture my be more interesting today.

I bought a house some years back that had an old curved roof barn. The architecture was amazing to behold to a wannabe carpenter like me, with curved roof beams, large oak support beams for the floor. It was probably built in the 1920s. It was dug into the side of a hill with the south side of the foundation exposed so you could walk into the lower level, the north side dug in so you could drive your tractor into the large sliding doors to store your hay. But there was a problem. That hill was saturated with water flowing underground out of hundreds of uphill acres north of the barn. The builders did not install a drainage tile. At some point, the water pressure from the north cracked the 8" thick concrete foundation wall horizontally along its 100 foot length about three feet above the lower level floor. The prior owner had re-supported the floor with vertical beams, but water seeped out continually reminding me of the problem. A contractor gave me a bid of 40K to fix it. We ended up selling the place. We have owned other homes in the American mid-west with cracking foundations and water issues in the basements. It seems to be a hazard of the region. Sump pumps are wonderful for managing the water, but they don't fix the foundation.

Fortunately, I have never owned a home too close to a river, ocean or sinkhole. But when such buildings have their foundations undermined, the collapses are sudden, spectacular and perilous. You can see it coming in many cases, if you pay attention, but there is nothing to be done but evacuate. Perhaps its the fault of the builders? Perhaps a lack of foresight? Perhaps it’s just a hazard of building anything in certain terrain where the view is beautiful, where water is abundant, where crops grow, where making a living is easier than where ground is hard, dry and stable. Certain precautions can be taken with wet ground--giving the pressurized water a route of escape. But too often it seems that the builders wanted to save money and create a quick easy structure and not worry about what would happen 40 years down the road.

In the past week, I have noticed a few posts on the boards about economic collapse, economic decline and how fast it might happen. I thought many more might be wondering the same things, and indeed the burning question in my mind these days has to do with the collapse of our nation's, indeed, the world's, financial system. Clearly, it has been unwisely constructed upon shifting, unstable fiat currencies. The bankers put band-aids on immediate issues, but have set up the economy for trouble later (perhaps sooner). Meanwhile, the architects of these currencies profit greatly and have a means of control that no person should have over an entire economy. And when the erosion forces of time, hidden underground water, or the violent forces of floods, waves or shifting ground inevitably exert their will, these fiat architects have no answers. Collapse is inevitable. But but is our foundation simply crumbling due to pressure & stress, or is the entire hillside being undermined. Will this “collapse” be sudden or incremental.

I am arguing, to anyone who will listen, that the collapse will be incremental, somewhat speedy, and have to avoid several hazards that could bring sudden disaster along the route. Verily I say unto thee, the beginning of the decline may be at hand with the ending of the petrodollar system.

Jim Sinclair: Russia Can Collapse US Economy, Gold Update, Silver is Gold on Steroids & More

I urge you to watch Jim Sinclar's recent interview if you have not already. He says that "Russia has the dollar by the” uh … short hairs uh balls? ... uh ... “has the dollar ... right in their hand.” It would behoove us to recall that the US played a part in the collapse of the Soviet Union not that long ago. I can't imagine Putin (or the Russian citizens) has any sympathy for the US. Russia will do what is good for Russia, and that means breaking the petrodollar system. All Russia has to do, says Sinclair, is accept other currencies for their energy products. And Putin is headed to china to likely sign such an arrangement, one that they have been negotiating.

A few years ago, my daughter and I climbed up to the top of a cliff that overlooked my home town. The view was fabulous. but the route back down was hazardous, with slippery places along the trail where, if one fell, you could tumble off and pretend you were Wesley in The Princess Bride yelling "As you wish..." until you were dashed on the rocks below. Our current situation is like that trail. Unstable, downward sloping, with the risk of disaster upon a misstep.

In a best case scenario, the world reserve currency is under attack. The US will see the inflation of commodities as the rest of the world no longer needs to buy dollars to convert their fiat into energy. The petrodollar's days are numbered. The value of dollars will decline. Cost push inflation will create more expensive imports. Increasing oil prices will increase food transportation costs. My rural students squealed about the price of gas when it hit 4.25. They couldn't afford the gas to drive to work and school.

When I say "incremental," I mean quick, definite increments. Not a long slow decline, but steeper, fairly fast, and fraught with the cliffs of banking freezes, war, grid shutdowns, food scarcity due to transportation shutdowns, rioting & martial law. I can't see rioting in the US being widespread. the first few riots will be met with a very heavy hand and the images of police quelling the action promptly will be splashed all over every media outlet. I bet DHS and the police are itching to try out their new gear!

The US is treading a narrow steep narrow trail, with Russia's goad at our backs. But Russia and China don't want the US and the West to completely collapse, which would not be in their best interest. They want and need a stable world economy. They want the west to lose the wealth and power to them. They want to see the west's standard of living decline while theirs rises.

But these sociopathic, power-lusting, greedy, central bankers have created an untenable monetary system that is failing the citizens of the world. Their plan, the IMF Code of Reforms that will create the SDRs--the new international world reserve currency, their plan may stabilize things for a while, but the foundation is still in need of great repairs. Indeed, the waves are undermining it as I type. I am NOT convinced that greedy IMF-led bankers will man-up and do what is needed to create real stability. As I understand it, the SDR will be 25% backed by gold. Will that be sufficient to stabilize the 50% backing of fiat? Or is this like Nebuchadnezzar's statue with feet made partly of iron and partly of clay.

I have noticed that in spite of their high intelligence and shrewdness, sociopaths do not show extended foresight.

Well that's my theory. A quick steady decline (6 months to a year after the petrodollar is broken) with many risks that could bring on a fast collapse. I am hoping that this thread might test this theory with a sensible rationale and evidence. I am also wondering if Turdville readers actually have some kind of consensus.

By the way, My wife's sister is married to a City of Phoenix policeman--25 year veteran of the force. He and his comrades have been trained to deal with rioting recently. He had ridiculed his wife for a couple of years about her conspiracy theories and prepping, but a year ago he told her to "keep prepping." For her birthday last week, he bought her a pink assault rifle and encouraged her to use it if needed.

By the other way, I think my efforts to build cheap solar panels have been successful. The beta tests have been positive. I'll share more in a later post. The quick report is that my concerns were overblown and it was much easier to solder the cells together than I expected. However, paying .25-1.50 per watt for solar capacity may be the better alternative.

Buy gold my friends, it may become scarce before we know it.

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DayStar
Mar 24, 2014 - 9:53pm

Harvey's Up! (TFMR)

The Complete Works of the Harvey Report May Be Accessed HERE : https://www.tfmetalsreport.com/comment/615962#comment-615962

  • Mark O’Byrne: NATO's top military commander said overnight that Russia had built up a "very sizeable" force on its border with Ukraine and Moscow, and may have Moldova in its sights after annexing Crimea. General Philip Breedlove, commander of U.S. and NATO forces in Europe, warned that Russian forces were amassing just to the east of Ukraine and are “very, very sizeable and very, very ready”. The forces were sufficiently large to “run” over to Transnistria on Ukraine’s south western border, he said. “Russia is acting much more like an adversary than a friend,” he warned.
  • Harvey: Last night, I already knew that gold and silver would have a tough day today as the bankers whacked gold/silver late Sunday night our time. Actually on Friday, the bell-weather silver price being down on the day despite the rise in price of gold also foreshadowed today's raid in our two precious metals. We are probably seeing the last remnants of physical supply coming from the criminal theft from the Ukraine. For the first time in 6 days, today we finally see an increase in negativity for the GOFO rates. As rates continue to go negative supply of London good delivery bars disappear.
  • GoldCore on gold: Interestingly, there is talk of Japan exporting gold to London. "Japan's fiscal year ends this month and some trading houses are closing their positions. They have exported their gold stocks to London, so there's a bit of shortage in physical supply," a dealer in Tokyo told Reuters. Bloomberg reports that gold analysts and traders are bearish on gold prices this week and the most bearish since 2009: Gold traders are the most bearish in more than four years after the U.S. Federal Reserve indicated they’ll probably increase interest rates by the middle of next year, curbing demand for the metal as store of value.
  • Alasdair Macleod: Paulson said that he was told by the Chinese that they had a message from the Russians suggesting they club together to drive down the prices of Fannie and Freddie "to maximise the turmoil on Wall Street". The Chinese declined, but in doing so they made sure the Treasury was aware that China and Russia know that between them they have the power to break western capital markets. This presents a problem for NATO's geopolitical strategists, exposed by Russia's unchallenged absorption of Crimea. Assuming military options are a non-starter, the West's financial condition is too fragile to withstand an alternative financial war with the world's largest energy exporter and eighth largest economy, let alone a combination of Russia and China working together.
  • Russia's lower house of parliament overwhelmingly approved a treaty to annex Crimea from Ukraine Thursday morning, while President Obama announced new sanctions against Russia. Obama said they target more senior officials in the Russian government, a bank that provides "material" support to Russia, and Obama said the U.S. is prepared to sanction business sectors. Related: 'The Russians are not finished': Sanctions won't stop Putin, says Eurasia Group's Sparks While Obama has ruled out any military engagement with Russia, Death of Money author James Rickards tells us the U.S. has already moved toward financial warfare with the use of sanctions (prior to the new sanctions announced Thursday, the U.S. had announced sanctions against seven key Russian officials). "Financial warfare is really all we have ... the U.S. has to be seen as doing something," he tells us.
  • Chris Powell: Gene Arensberg of the Got Gold Report writes tonight that "managed money" -- hedge funds and the like -- were getting longer in gold early last week.
  • Ambrose Evans Pritchard: European leaders have rushed through plans aimed at breaking the Kremlin’s grip on gas and energy supplies, marking a fresh escalation in the emerging Cold War between Russia and the West. The move came as the EU slapped sanctions on 12 leading Russians in President Vladimir Putin’s inner circle, and vowed “additional and far-reaching” action if he intervenes in eastern Ukraine or further destabilises the region. The European Commission has been told to cock the gun by preparing “targeted measures” immediately. The South Stream pipeline intended to link the EU to Russia through the Black Sea by 2018 is now “dead”, according to sources in Brussels, hitting contractors close to Mr Putin. EU staff are to come up with plans to shield Europe from energy blackmail by Russia within 90 days, finding ways to prevent frontline states being picked off one by one. Ukraine’s premier, Arseniy Yatsenyuk, said in Brussels that the West must stop Russia deploying energy as a “new nuclear weapon".
  • Chris Powell: Compelling comments from London metals trader Andrew Maguire. DS: Maguire says Goldman is full of ___ when it comes to gold.
  • Sprott Money Blog: The precious metals have taken another massive hit thanks to the FED. Janet Yellen has kept true to her word on continuing Ben Bernanke’s plans to scale back quantitative easing. This announcement comes despite continuing bad economic data numbers and the ongoing crisis in the Ukraine. On Wednesday, the FOMC announced another $10 billion reduction in its bond repurchase plan. This is the third announcement, which will bring the total monthly amount down to $55 billion per month. This news caused an immediate and intense sell off in assets across the board with the hardest hit being both gold and silver. Upon announcement of this most recent reduction, the FOMC had the following to say: “Information received since the Federal Open Market Committee met in January indicates that growth in economic activity slowed during the winter months, in part reflecting adverse weather conditions. Labor market indicators were mixed, but on balance showed further improvement.” Janet Yellen does not want to be seen as a weak force so early in her appointment. She must show that she will stand strong with the FED’s conviction.
  • Zero Hedge: UK Prime Minister David Cameron stated that it is “absolutely clear” that the G-8 Summit scheduled for June in Sochi, Russia will not go ahead. But it is President Obama that appears to be pressing the hardest for major changes:
  • OBAMA SAID TO PRESS ALLIES TO SUSPEND RUSSIA FROM G8: WSJ. This comes at a time when Ukraine forces are being withdrawn from Crimea and deployed to North, South, and East borders of the region. Meanwhile, Ukraine is taking its soldiers pulled from Crimea and deploying them along all other borders.
  • Chris Powell: Canadian fund manager John Ing today says that geopolitical strains and continued strong demand from China will be supporting gold and that he thinks there will be something close to a default and a "dramatic and disorderly" move up in gold.
  • Chris Powell (GATA): Gold trading long has been shrouded in mystery. In 2009, China's central bank disclosed that its gold holdings grew by 75 percent from 600 to 1,054 tons, or metric tons. According to Gold Fields Mineral Service, the world's total gold production for 2013 was 2,765 metric tons. Subtracting China's and Russia's “non-exported” domestic production from the 2,765 metric tons left some 2,142 metric tons of newly mined gold available worldwide last year. Adding China's last three years' annual aggregate production of 1,320 metric tons to its declared holdings of 1,054 metric tons indicates China's holdings are at about 2,374 metric tons. This makes China one of the world's largest holders, yet it imports on a large scale. According to the Hong Kong census, China imported a net 1,781 metric tons via Shanghai and Hong Kong. Adding this to China's domestic annual production of 440 tons suggests China accumulated at least 2,221 metric tons last year, or more than 80 percent of total worldwide production of 2,765 metric tons. Combining China's aggregate domestic production and known imports suggests it has more than 4,155 metric tons. Assuming the United States owns all the gold held by the Fed, this makes China the world's second-largest owner. United Nations, International Monetary Fund and Bloomberg statistics show that demand for gold from surplus nations, net changes in central bank holdings and jewelry demand totaled 3,401 metric tons in 2013. Added to China's imports of 1,781, this amounted to total demand of 5,182 metric tons. Gold recycling and net sales from gold exchange traded funds yielded 2,261 metric tons, making a total 4,403 metric tons available worldwide in 2013. That means gold demand of 5,182 metric tons exceeded supply by 779 metric tons. From where did the extra gold come?
  • Bruce Parker: The head of a nationwide sheriffs coalition is calling on Vermont’s law enforcement officers to defy three controversial gun control measures passed by Burlington voters three weeks ago. “Sheriffs have a constitutional duty to refuse to comply with such ordinances,” said Richard Mack, president of the Constitutional Sheriffs and Peace Officers Association. “We’re seeing sheriffs in New York oppose the Safe Act and Governor Cuomo. If we have sheriffs in New York doing this, how much more should we have sheriffs doing it in Vermont?” On March 4, Burlington voters joined a push by elected officials throughout northeastern States to enact stiffer gun control measures. By a 2-to-1 margin, they banned the carry of firearms in bars and restaurants, authorized police to confiscate guns during domestic disputes and required gun owners to keep firearms locked up at home. “It’s astonishing that people are so cavalier about violating the Second Amendment,” Mack said.
  • Brandon Smith: Take These Steps Today To Survive An International Crisis Part 2 of 10: https://www.tfmetalsreport.com/comment/615962#comment-615962

All this and more on...

The Harvey Report

DayStar

Wizard
Mar 24, 2014 - 9:52pm
ancientmoneyMotley Fool
Mar 24, 2014 - 9:44pm

Motley

I, too am left dumbfounded by your loony comparison.

Quisp
Mar 24, 2014 - 9:38pm

pesky rabbits

Hey Dr J, I found something to help with all those pesky rabbits. The Rabbit Wringer!

WARNING: NOT FOR THE SQUEAMISH!

Raising Meat Rabbits; Humanely Dispatch a Rabbit using the Rabbit Wringer. Butcher, Slaughter, Kill

​Actually, they're pretty tasty.

atarangi
Mar 24, 2014 - 9:04pm

flight 370

Announcing that everyone is dead on flight 370 does not pass the smell test. No bodies, no solid evidence. It would have to be very unusual to assume all are dead on such flimsy evidence. This whole thing is starting to look like the 'Bin Laden dumped at sea' bullshit story.

Silverivalist
Mar 24, 2014 - 9:00pm

@ buzlightening

When our MSM admits to problems with USD strength after Yellin came out yell'in about rising interest rates, you know there might be a problem...

"Investors had bought the greenback last week after new Federal Reserve chair Janet Yellen suggested the possibility of raising interest rates early next year.

But traders said the rally was always going to need backing up from strong U.S. economic data."

https://www.reuters.com/article/2014/03/24/us-markets-forex-idUSBREA2211...

AlienEyesMotley Fool
Mar 24, 2014 - 8:40pm

Motley Fool

"I am left dumbfounded."

.

Not to worry. You started out that way decades ago.

TJeffson
Mar 24, 2014 - 8:06pm

Regarding TTIP

This is all I've been able to find on it so far

https://corporateeurope.org/sites/default/files/businesseurope-uschamber...

https://corporateeurope.org/sites/default/files/commission-assess-ment-b...

I guess we won't know for sure until the whole , updated thing is released to the public.

atarangi
Mar 24, 2014 - 7:55pm

the plot thickens

That is one very intriguing article on the possible motives for downing flight 370.

Patrancus
Mar 24, 2014 - 7:36pm

This was sudden

though if true plausible, came to me late this afternoon. I loaded up on this technology 10 years ago with a flyer from Texas, though it seemed sorta like the start up and its genius just vanished into thin air, whoda thought? Extremely entertaining information one what happened to flight 370

https://kauilapele.wordpress.com/2014/03/14/the-only-post-i-will-make-on-malaysia-flight-370-leuren-moret-and-alfred-lambremont-webre/

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