Update on Metals, Deposit Confiscation, and Capital Controls

…one goal is to get to the point where all market participants understand with certainty that if a large SIFI (systemically important financial institution) were to fail, the losses would fall on its shareholders and creditors
–Governor Jeremy C. Stein, US Federal Reserve Board, Regulating Large Financial Institutions, speech at a conference sponsored by the International Monetary Fund, April 17, 2013

* * *

“Bank creditors,” as it happens, is a class of people that includes bank depositors. Everything about the rhetoric of banking is designed to obscure this. You deposit money in your bank account…But what you’ve really done is loaned the money to the bank…
Slate.com

A big price drop in the precious metals. So let’s see, on Thursday, April 11:

     CEOs of biggest U.S. banks to meet with Obama on Thursday

and the big selling in metals took place on Friday, April 12 and Monday, April 15.  No chance of any causation in that correlation. Nah. Move along. As Leslie Nielsen said, “Nothing to see here.

Anyway, with all that selling, there must be lots of inventory of coins around. That’s what they teach in Econ 101, right? That if a price is plunging, it’s because people are dumping large quantities of that item onto the market.

But there isn’t lots of inventory. Inventory is very tight, sold out in many cases. Delivery lead times are out to five or six weeks, and that’s if you can even place an order for what you want.  Big-volume dealers like Tulving.com are entirely out of one-ounce silver coins minted by any country, and they have been since April 15. You can scroll down this page at their web site to see how many items they normally sell are currently sold out.

And these people make a living buying and selling lots of coins. They really want to do a lot of business. And they are happy to buy right now, but they can’t sell lots of items because there aren’t any available.

This scramble to buy physical bullion coins is going on worldwide.

In Australia:

     Golden times for Perth Mint

The volume of business that we’re putting through is way in excess of double what we did last week,” Treasurer Nigel Moffatt said, without giving precise figures. “There’s been people running through the gate.”

In Japan:

     As global price slumps, “Abenomics” risks drive Japan gold bugs

But on Tuesday, buyers outnumbered sellers by a wide margin. At Ginza Tanaka, the headquarters shop of Tanaka Holdings, gold buyers waited for as long as three hours for a chance to complete a transaction.

In India:

     India’s Response To The Gold Sell Off: A Massive Buying Frenzy

In China:

     Chinese Gold & Silver Exchange Society Runs Out of Gold…Importing from Switzerland and London

Now we discover that the Chinese Gold & Silver Exchange Society has essentially sold out of gold bullion, and must wait until Wednesday for shipments to arrive from Switzerland and London.

     Gold Buying Frenzy Continues: China, Japan, And Australia Scramble For Physical

In the US:

     US Mint Sells Record 63,500 Ounces Of Gold In One Day

According to today’s data from the US Mint, a record 63,500 ounces, or a whopping 2 tons, of gold were reported sold on April 17th alone, bringing the total sales for the month to a whopping 147,000 ounces or more than the previous two months combined with just half of the month gone.

     Bullion Shortages Develop As Retail Demand Skyrockets

…on Monday there was such chaos in the markets that some of the larger wholesale dealers had to shut down at various times because of the massive demand on the buy side… Gold and silver buyers are still outpacing sellers by a stunning 50 to 1.  There were premium increases on everything bullion related.  The wholesalers are now telling us four to six weeks on silver maple leafs, and wholesalers quit taking orders on one ounce silver rounds.

In Canada and Europe:

     Massive Run On Physical Gold & Silver At UBS & Scotiabank

At the Bank of Nova Scotia in Toronto the gold window has been absolutely swamped. I have confirmed there were people lined up in droves recently for multiple-hours at a time to buy gold and silver bars and coins….

“I then confirmed with UBS today in Zurich, Switzerland, that they are experiencing exactly the same thing. They told me people are waiting in long lines for bullion related bars and coins. The physical market is incredibly tight…

In Switzerland:

     Refiners Can’t Keep Up With Massive Global Gold Demand

If you look at our company, as just one example, we did not have one single seller in the last few weeks.

So during this takedown in gold and silver there wasn’t one single seller, only buyers….

If we turn to the Swiss refiners, Eric, the premium over spot for physical gold is rocketing. Swiss refiners are unable to keep up with the demand for immediate delivery. They are working flat out, including the weekend, and still can’t keep up.

The Swiss refiners are seeing global demand coming in from everywhere, especially from the Middle-East and the Far-East. So, again, this proves that the artificial manipulation of paper gold has nothing to do with the physical market.
–Egon von Greyerz, Matterhorn Asset Management

So, with all that buying interest in real physical gold and silver, why has the price been falling? Because the two largest trading venues on the planet for metals, the LBMA (London Bullion Market Assoc.) and the COMEX in the US, are the places where the price of gold is currently set. And 99% or more of the trades there that are said to be related to gold are not for the physical metal, they are futures contracts that are traded for cash, not physical gold. In other words, these are very large trading casinos. But like the banks, they are fractional reserve systems. In other words, if everyone who had a futures contract for gold actually wanted physical gold for their contract, there would not be anywhere near enough gold to go around. Even supporters of the LBMA admit there is maybe 1% physical gold backing all these contracts. So that’s even more leverage than is used at most banks. A lot more.

Monday, April 15 was a good example. Andrew Maguire–an LBMA trader and whistleblower who the Powers That Be ran down, but did not kill, with a car in 2011 right after Andrew gave testimony on silver price manipulation to the authorities—reported that on Monday, there was a period during which 155 tons of gold was sold on the LBMA in one hour. I can tell you for sure that no one who owned or was the custodian for 155 tons of physical gold would sell it in a panic into a falling market. This was selling of futures contracts that will be settled in cash. They have little or nothing to do with physical gold. People in charge of 155 tons of real gold do not sell in a panic. If they wanted to sell—and such a thing would be quite unusual these days when even central banks are net buyers of physical gold—they would do so carefully, trying to get the best price. They would sell on days when the price was rising, not falling. This is the way anyone with a strong profit motive sells, they hire good traders to sell over time when they can get the best price. They do not panic dump their holdings regardless of price.

In fact, Maguire reports that central banks picked up 55 tons of physical gold during that one hour period when 155 tons worth of paper gold contracts were sold.

Here are Maguire’s comments about Monday, April 15.

At some point, this charade will fall apart. The price of physical gold will separate from the price quoted in these paper instruments. This is already visible when one needs to buy coins at a premium above the spot price of the metal. During these smashdown selloffs (we’ve seen these before in 2006 and 2008), the premium above the quoted spot price for physical gold and silver rises, sometimes to as much as 50% above the spot price if you want prompt delivery. During those periods, the price for physical coins is not the quoted spot price, it is the spot price plus the premium, and that price can be substantially higher. These are the indications of the separation of the paper and physical gold and silver prices to come.

The press duly reported nearly the same quote from representatives of all of the banks. Yes, reps from those same banks that met with Obama on April 11. “Gold has lost its safe haven status. “ “Gold is no safe haven.” And on and on. They should have dressed them up in silly costumes and they could have danced and sang together, at least that would have been entertaining.

So why do they want to scare you out of, or away from, gold and silver? Two main reasons:

First, so that you cough up your goods so they can buy them on the cheap.

Second, when they go to “Cyprus” your accounts, that is, when they want to confiscate some of your money, they want it easily available with a few keystrokes. Confiscating gold and silver coins would be inconvenient at best, dangerous at worst.

Do you think “they’ll never do that here”? Here is the overall order of events in Cyprus:

1. On Feb 10, the Financial Times published the plan for the confiscation of depositor money in Cyprus called Radical rescue proposed for Cyprus.

2. On Feb 11, the Central Bank of Cyprus posted a letter shown at this link saying that the Financial Times article was incorrect, that confiscating depositor money was against the constitution, etc.

3. In mid-March, the confiscation of depositor money was announced.

4. The Cyprus parliament voted against it.

5. The central bank of the EU overruled the Parliament of Cyprus and went ahead with the confiscation. So democracy and the constitution were thrown out the window along with the promises.

On the day after the confiscation, the new head of the EU finance ministers, Jeroen Dijsellbloem, gave not one, but two interviews in the mainstream press in which he said the Cyprus bank resolution was a new template for such actions. From Reuters:

A rescue programme agreed for Cyprus on Monday represents a new template for resolving euro zone banking problems and other countries may have to restructure their banking sectors, the head of the region’s finance ministers said.

The rest of the EU and IMF politicians nearly had a baby on the public stage. For the next three weeks, all they would say was that Cyprus was not a template. We should have put them in a chorus line too. Even Dijsellbloem tweeted that he didn’t say what he said.

But then a member of the US Federal Reserve Board, Governor Jeremy C. Stein, said that if a Too Big to Fail bank failed, that private investors and creditors would have to bear the losses. His speech was on April 17, well after the Cyprus event wherein depositors were ruled as “creditors” of the bank. These people choose their words carefully. I hope everyone out there listens to them carefully.

And it’s worth remembering this: In the US, for example, the bank insurance fund held by the FDIC has $25 billion. That’s the amount insuring $9 trillion worth of deposits.  So that’s 370 times more deposits than the amount in the insurance fund. And the insured banks have an additional $297 trillion in exposure to derivatives. So that’s almost 12,000 times more than the amount in the insurance fund. Very safe and sound, eh? Now you know why the authorities have just hinted that banks won’t be simply bailed out anymore; people’s deposits will be bailed in. Just remember, they’ve put you on notice now that you need to determine whether or not your bank is safe. People who spend their whole lives trying to do that can’t figure out which banks are truly safe anymore, but so what, you are now supposed to be able to do that. You can see a chart of the FDIC situation here. And you can find out a little about the safety of any US bank at the Safe and Sound section here. I am not aware of what is available publicly available for bank analysis in other countries.

Also part of the Cyprus event were strong restrictions on how much money a person could take out of Cyprus, the dreaded capital controls. This is also part of the template. When that happens, people are stuck in their own currency even if it tumbles mercilessly in value. When people tried to switch their money into the electronic currency Bitcoins because it recognizes no borders, it doubled the price of Bitcoins in a few weeks. TPTB then smashed down the price of Bitcoins as well, to show people that there is “no safe haven.”

Throughout history, currency devaluations, capital controls, and asset confiscations are denied until after they have happened. Governments typically say, “Sorry, we didn’t want to do that, but we had no choice.” You need to either anticipate them or be a connected government crony. Here’s a chart of monthly deposits into and withdrawals from the Cypriot banking system. The large withdrawals in January and February show the strong likelihood that some people were given advance notice:

CyprusOutflows

Most people were not given advance notice; if the time comes, you and I will be in that group.

Lots of people are showing that they understand. As the stories above show, people were waiting in line for metals at these prices across the globe. We have seen this play before. Sometimes the elites smash down the prices of metals. Did I see it coming? Nope. Can they do it again? Yep. But as the rising price of gold over the last 12 years proves, they can’t push it down too far. If they do, the Asians and regular people will end up owning all of the gold. And the banksters won’t like that at all since they know the financial (per)version of the golden rule: he who has the gold makes the rules.

Lots of regular people on the planet take these price smashes as a gift. I think these people are smart.

Here is Jim Sinclair’s latest comment on the topic: The US Will Be Cyprused & We Will See $50,000 Gold.

And the recently-released video The Secret World of Gold, while not perfect, has Andrew Maguire briefly explaining how gold and silver prices are manipulated, and brings up the interesting question of whether there is any real gold (and not just gold-plated tungsten bars) at the US gold depository at Ft Knox. Channeled information agrees that Ft Knox is empty of real gold.  It will be a very interesting day when the world finds out about that.

CashGrab1

What is the Transition? Conclusion

Now you can’t say that no one ever told you.
–David Daniels

In Part 7, I promised predictions for this installment. And there will be predictions. The important question is: predictions based on what? The web and the media present piles of predictions, most of which turn out to be wrong.

So based on what? Evidence; and a model of how things work. Most predictions go awry because they aren’t based on either. Or if they are said to be based on models, the models are flawed.

Evidence is what Part 1 through Part 7 were all about. And all of us, consciously or not, operate from models of what the world is like. If we walk into a dark room and flip a light switch, we are operating from a model of the world where electricity is flowing into a building with wires connected to lights controlled by switches, and flicking a switch–that often sits precisely where we expect it to be even if we’ve never entered that room–lights one or more light bulbs. We have all sorts of such models in our heads having to do with gravity, internal combustion engines, computers, shoelaces, banks, the properties of water, etc. When correct, these models have predictive abilities that make our interactions with the world relatively easy and efficient compared to operating without such models.

So these models lead to predictions about the future, and when correct, they yield excellent results. When we turn the key in a vehicle ignition, we expect the engine to start, and typically we aren’t disappointed. Thus we made a prediction about the future, one that has generally turned out to be true. Perhaps not every time. Once in awhile, the car might not start. But the results are good enough, the model reliable enough, that we rarely “give it a second thought.”

In my view, this scales up to the major aspects of our lives. Though it does seem that, the larger the scale, the greater the disagreements people have on the topic. Yet I contend that getting large-scale models right is important and possible. When we get the large scale models wrong, life can be unnecessarily confusing and difficult; when we get them right, the results can be profound.

Bias, the bringer of difficulty

We all like to think we aren’t biased, but on this planet at this time, that is a rare achievement. It runs deeper than we like to admit. Were that not true, the mystics would not have to advise us to pierce the veil. Without bias, we would likely see that there is no veil.

Let’s look at a good example of why people have a tough time getting large scale models right. This is one where, were it a multiple-choice question on a standardized test, most highschoolers would get it right. But on this one, the “masters of Wall St” got it wrong. Big time.

Several decades ago, one researcher pointed out that the economy of the USA operates on a roughly 25 year recession/depression cycle, that is, roughly every 25 years, there is either a recession or depression. Yes, there could be recessions at other times, but you could rely on the idea that one would happen roughly every 25 years.  This cycle has been active since early in the 1800s and predicted that there would be a recession or depression starting ideally in December, 2007. I told a number of people about this ahead of time, and few thought the idea had merit despite the historical track record, part of which looked like this at the time:

9/1857: very serious recession 6/1857-12/1858 (18 months contraction)
2/1882: depression 3/1882-5/1885 (38 months contraction)
7/1906: serious recession 5/1907-6/1908 (13 months contraction)
10/1932: serious depression 8/1929-3/1933 (43 months contraction)
7/1958: recession 8/1957-4/1958 (8 months contraction)
12/1981: very serious recession 7/1981-11/1982 (16 months contraction)
12/2007:

Every August, George Soros has a meeting at his Long Island estate for the biggest movers and shakers on Wall St. By August 2007, the sub-prime mortgage market was already falling to pieces. Soros asked his 21 guests, people who have the money to buy the purportedly best research on the planet, whether the current situation would lead to a recession in the US. Twenty of twenty-one said no recession. But right on schedule for the 25 year cycle, a recession started in December 2007. Some say we are still in the depression that started then, and there is good evidence for that.

So how come people would ignore such a prescient cycle with a long and excellent track record? First, because while most people are well aware of being surrounded by cycles such as heartbeats, breathing, night and day, moon phases, ocean tides, the seasons, years, birth and death, to name just a few cycles to which we are subject, they believe that such cycles couldn’t possibly apply to an economy, that such thinking is equivalent to voodoo. Second, the researcher who was the first to publish about this cycle was Edgar Cayce, and to most hard-nosed Wall St people who think they are operating by logic and science, how could Edgar Cayce possibly be right about anything.  What they think of as hard-nosed is actually thick-skulled because Cayce was right about plenty of things. But he doesn’t fit their constrained view of “logic and science,” so out goes Cayce and anyone like him. While it would be fun to say “too bad for them,” when their firms failed in 2008, it was the rest of us who got stuck with the bill for bailing them out so they could keep their bonuses, stock options, and corporate jets.

So as we all know, in 2008 we got a humdinger (serious academic term) of a recession despite the bad models being used by the Wall St mavens and people like Fed Chairman Ben Bernanke that said we would not get a recession. So why did the masters of Wall St and most others dismiss such information? Probably because, if they heard the source of the prediction, most would discount something from Edgar Cayce because it was information channeled from the other side. And “everyone knows” that stuff is only for new age goofballs. So the real answer is: bias. People would rather hang onto their bias than admit that correct information is useful if they despise the source.

Oddly, another researcher, Manfred Zimmel of www.amanita.at, later figured out the basis for Cayce’s information. OK, check your biases. For some of you, this is about to get worse. Here’s that same recession/depression series from above exactly as I first saw it, presented by Manfred, in 2006:

Ø conjunction 9/1857: very serious recession 6/1857-12/1858 (18 months contraction)
Ø conjunction 2/1882: depression 3/1882-5/1885 (38 months contraction)
Ø conjunction 7/1906: serious recession 5/1907-6/1908 (13 months contraction)
Ø conjunction 10/1932: serious depression 8/1929-3/1933 (43 months contraction)
Ø conjunction 7/1958: recession 8/1957-4/1958 (8 months contraction)
Ø conjunction 12/1981: very serious recession 7/1981-11/1982 (16 months contraction) – last deep recession
Ø conjunction 12/2007:

Yep, you guessed it (heh), the cycle is actually the Jupiter-Pluto conjunction cycle. So an astrological model has reared it head! Yikes, so if the Wall Streeters had heeded either the channeled or the astrological model for this cycle, they could have saved their firms tens of billions in losses and turned 2008 into a year of tens of billions in profits by aligning their trading with the idea that a recession was very likely. This is not a stretch since there were hedge funds that did make billions from the financial collapse in 2008.

If a model is clearly working in significant ways, it is useful to ask whether allegiance to one’s biases is more important than being on the right side of major trends on this planet. One of the worst things a person can do in this rapidly-evolving environment is get in front of a major negative trend and stay put thinking that trend is not important. Millions have gone bankrupt in recent years doing just that. In the markets, they call it picking up pennies in front of a bulldozer. Sometimes having a good or bad model is a matter of life or death, for example, a bad model about the nature of the Nazi party brought horrific suffering and the deaths of many millions. (Side note: Thundering-Heard.com exists because I think understanding and heeding good models versus bad ones could very well be a matter of life or death over the next few years, or perhaps even months.)

Handling predictions

One more brief topic, and then on to predictions about the Transition: What is a person supposed to do when they hear a prediction about the world? Assuming that they want to do anything at all, here is an approach from some people whose livelihood depends on their expert handling of predictions. When you hear a prediction:

1. Put aside the natural human propensity for wanting to know immediately whether the prediction is correct. This is emotion coming to the fore. All of the remaining steps are about eliminating emotion from this process so that rationality, research, and observation can take their rightful place.

2. Consider the prediction a script about how the future will unfold.

3. After giving it some thought, assign a rating, say from 1 to 100, on whether you think the predicted event can possibly emerge from current conditions. If it has any chance of emerging, write down the script and place it in your script pile wherein scripts about the future are sorted by your numeric ranking. If there is no chance that the event can arise from current conditions, then throw it out.

4. If the outcome of a script would be important to you, do research on the topic and, if it is appropriate based on your research, adjust your numeric ranking for the prediction in the future script pile. If there is a way to investigate the track record of the person making the prediction, and on the internet there often is, this can help a lot in rating a prediction. People with a bad track record are typically operating from a narrow or faulty model and usually continue doing so. Few people, especially people who have achieved some fame using one model, will admit their errors and find a better model.

5. Watch as evidence about all of your scripts unfolds and adjust your script pile accordingly, tossing out scripts where emerging events show a script to be faulty, and upwardly adjusting the numeric rankings of those scripts where the evidence is pointing to the idea that they might be right.

Through this process, predictions that are false are discarded and those that are true rise to the top of the pile. Emotions are kept at bay, biases fall as evidence accumulates, observation and logic guide the process. And you learn a lot about how the world works.

The Evidence

So what have we observed?

1. Acceleration, evident in a wide variety of ways, including:

2. Weather extremes and wildness, including floods, windstorms, typhoons/hurricanes, tornadoes, heat waves, droughts, superstorms, etc. The insurance industry reports a greater than tripling of “loss-related weather events” since 1980. (Part 1)

3. Earthquakes of magnitude 6.0 or greater up more than 50% since 1990. (Part 1)

4. Tsunamis up fivefold in this century versus the last. (Part 1)

5. Volcanic eruptions clearly on the rise. (Part 1)

6. Magnetic poles on an accelerating shift accompanied by hemispheric temperature changes . (Part 2)

7. Sea level rise. (Part 3)

8. Species extinction rising exponentially along with rising human population. (Part 3)

9. Sinkholes increasing rapidly enough to go from obscurity to the mainstream media. (Part 4)

10. Asteroid encounters appear to be on the rise. (Part 4)

11. Nuclear plants compromised by the increasing earth and weather changes causing problems for people. (Part 4)

12. People’s perception of time as speeding up. (Part 5)

13. An exponential rise in the price/performance of technology. (Part 5)

14. Exponential growth in money, debt, and unemployment. (Part 5)

15. Exponential growth in the amassing of physical gold by those, such as China and the oil sheikdoms, who supply real goods for all this printed money. (Part 5)

16. Relentless growth in the prices of real goods such as food and fossil fuels in response to the massive influx of printed money.

17. Despite an exponential increase in money printing, borrowing, and spending by governments to simulate economies, these same economies remain moribund and these tactics clearly show diminishing returns. (Part 5)

18. The “age of truth” brings increasing revelations of lies and truth. (Part 6)

And with people, acceleration is bringing increases in (Part 7):

19. Communication/connectedness.

20. Inner work.

21. Insistence on knowledge over belief.

22. Group consciousness.

23. A changing attitude toward the physical sciences.

And increasing exploration of (Part 7):

24. Healing methods.

25. The energetic nature of everything.

26. That energy is different at different locations on the planet.

27. The multi-plane nature of life.

28. Interaction with nature intelligences.

29. People changing from “what can I get” to “what can I do to help.”

And accelerating (Part 7):

30. General insanity.

31. Use of legal and illegal drugs and of alcohol to cope with acceleration.

Predictions

OK, so where will this lead us? Does anyone have a model that accounts for accelerating change in most if not all aspects of life on this planet? A model which we might then be able to look to for guidance about the future, from which we could actually expect some reliability?

Surprisingly, yes.  In early 2007, I was fortunate enough to run into such a model described in a book published in 2003. It went into my script pile at the time. Given that the book had been published four years earlier, I was able to evaluate whether a portion of its predictions were coming true or not, and they definitely were. I was already convinced prior to reading the book that we were likely to experience an all-out collapse of the financial system within 5 to 7 years. The book entirely agreed with that perspective, but it took things way beyond the financial world and covered the topic of the Transition from historical, geologic, meteorological, political, educational, occult, and cosmological perspectives, to name a few.  And this wasn’t a book of vague wishy-washy predictions that could be interpreted several ways. It was exceedingly specific. Here is what it said—and this was in 2003, before the explosive growth of sub-prime mortgages being sold to anyone who could fog a mirror, with those mortgages being packaged up and sold to institutions across the world as blue-ribbon, good-as-gold, AAA-rated securities—about the real estate bubble. And this was when almost all people considered real estate a perfect investment, something whose price could never go down, something that was definitely not a bubble at all:

Many who pulled their money out of the stock market…rushed to invest these funds in real estate, but again this mad rush created yet another bubble of inflated real estate. Finance companies, mortgage brokers, and banks readily accorded mortgage loans to these buyers. Once they obtained the signature of the borrower on the loans papers, they sold the mortgages to non-bank secondary mortgage companies. In order to purchase these mortgages, these secondary mortgage companies borrowed money by issuing bonds and derivatives on these bonds.

In essence, though this convoluted maze of borrowing, these non-bank financial institutions…own indirectly most properties purchased with a mortgage…

As the world economy deflates, more and more people will lose their jobs, they will default on their house mortgage payments, and be thrown out into the streets. The sinister secondary mortgage companies will take possession of the property.

When mortgage defaults reach a critical mass, the secondary mortgage companies will collapse leaving a wasteland of properties. This will spell the end of the financial grip the Dark Forces hold on the world, and the towers of finance they have spent centuries to build will fall one by one like dominoes.

So what we have here is an exceedingly accurate description of the work-in-progress that is the real estate bubble and its associated derivatives taking down the financial system. Lots of “dominoes” have already fallen. In 2007, Wall St had five big investment banks. The sub-prime mortgage collapse took three of them to insolvency—Merrill Lynch, Bear Stearns, and Lehman Bros—which were either broken up or absorbed into other companies, and it would have taken down the last two, Goldman Sachs and JP Morgan, but the government temporarily stabilized them by saying the they were now backed by FDIC deposit insurance even though they had never before paid a penny into the FDIC insurance program. In fact, they had shunned the FDIC program because they wanted less regulation.

As tracked by the Mortgage Lender Implod-o-Meter, 388 US and 13 non-US mortgage lenders have gone belly up so far. This includes giants such as “secondary mortgage companies” Fannie Mae and Freddie Mac and lenders such Countrywide, Washington Mutual, and Wachovia Mortgage. (The full list is here.) And now with sinister companies like Blackrock rushing in to buy foreclosed houses, the game is not completely over, but it won’t be long before the dominoes have all fallen.

Anyway, back to this book I’ve been speaking of. Of the 31 trends identified above, this book covered 26 of them, and for all I know, I may have forgotten references to the other five.

The book is The Sanctus Germanus Prophecies, Volume 1 by Michael Mau. It was followed by Volume 2 in 2006, and Volume 3 in 2009. The books can be purchased here or here.

There are a lot of books out there these days that are really highly-padded versions of what  could be a five or ten page article.  Mau’s books are not in that category, as demonstrated by the quote above, that is, the real estate crisis was discussed in detail on one page and that was it, the author moved on to other topics.  So an attempt to summarize the vast array of information in these books will do them serious injustice, but I will make the attempt anyway as a conclusion to this series of posts. The best advice, of course, is to read the books:

We are living in a period of transition during which much that impedes humanity’s evolution—warmongering, the manipulation/exploitation for power and profit of the many by a very few, the intentional distraction of people from their higher self, and so forth–will be cleared away. Energetic acceleration and earth changes will assure that this clearing/cleansing process takes place. The transition is a normal period of relative rest in the vast multi-billion year evolutionary cycle of our solar system called the manvantara in which people evolve through hundreds and even thousands of incarnations. Many people, called lightbearers in these books, incarnated now with the intention of helping people through this turbulent process and preserving, through the period of the transition, that which is conducive to people’s true evolution. The overall goal of the transition is to place humanity in a new golden age in which people can pursue soul liberation with excellent support and without interference. Getting to that golden age requires the dissolution of those organizations that serve the interests of those who seek to control everyone else for their own power and for material acquisition far beyond what any person would need during a lifetime. Since these organizations are not going quietly, we are dealing with increasing turbulence during which all people will have to decide where they stand with respect to war and the array of slaveries that permeate civilization. The degree of turbulence that can be expected is strongly related to whether or not people wake up and stand on the side of freedom and conscious evolution.

Volume 2 lists twelve regions on the planet that are called spiritual regions, higher elevation areas away from the coasts that, while not immune to the earth changes, are relatively safe with respect them, and which are conducive to lightbearers retrieving those abilities they cultivated in prior incarnations.

Here are some highlights from the timetable at the back of Volume 2:

2005-2012:

  • Severe worldwide economic and financial crisis
  • World economy hits bottom and stays there, all conventional efforts to revive it fail
  • Water-related catastrophes: tsunamis, hurricanes, rise in sea level, floods of lowlands and coastal areas
  • Spiritual Regions on higher ground begin to develop: initial preparations

2013-2020:

  • Water-related catastrophes multiply making more and more low-lying areas uninhabitable
  • Massive population displacements to higher ground
  • Spiritual Regions take hold as lightbearers find their way there
  • Period of Reconstruction: Transitional societies begin to consolidate in the Spiritual Regions

2021-2080

  • Indications of major continental shifts, rifts, and movements begin to perturb the earth’s surface

There is a lot more to these books that what I’ve summarized here. They place the Transition in a perspective that ranges from the innermost to the cosmic. They say that, far from being over, that we are early in many of the accelerating trends identified above. These books have risen to the top of my “script pile.” They have become a stable platform from which to view the changes and turbulence in the world, and have given me confidence that life on this planet can and will be changed, and vastly for the better, and that this goal is way beyond worth working for. These days, when I hear a prediction–and I do seek out a lot of them–if it clearly conflicts with the information in these books, I relegate it to the category of “very unlikely,” and that repeatedly works very well.

One of the main reasons that so many predictions go awry is because they are drawn from experience of a small slice of life. We hear predictions all the time about finance, politics, weather, health, the use of energy, the environment, social trends, and now even meteors and comets. I contend that so many of those predictions go awry because they work from a narrow band and fail to take into account the larger context. Most would relate to maybe one or a few of the 31 trends identified above. Mau’s books place almost all of these individual trends in the context of a much larger one.

And seeing all of these trends in their larger context is precisely what we need right now as change permeates, well, just about everything! A narrowly focused model has no chance of accounting for across-the-board acceleration in, for example, finance, earth changes, mass shootings, and the emergence of truth.

So what’s a person to do about all this?

It is truly up to each person.

What would I do? I will provide a detailed post about that soon where I will contend that a wait-and-see attitude about these changes is no longer appropriate. Life is, as usual, being very kind by giving us a preview of exactly how this will all unfold by not bringing change all at once, but by ramping up all of these trends. But it’s up to us to read the signs and take action.

In the mean time, if you haven’t done so already, you may want to do your own research on these topics. If you come to some understandings, an action plan may naturally emerge from what you learn.

One piece of advice I would give is to never underestimate the power of an accelerating trend. As trends become obviously exponential, they can be quite breathtaking in their speed, power, and scope. As a friend from Cyprus told me: “On Friday night, when we went to sleep, everything was normal. On Saturday, we were told that the banks were closed and that we would have very restricted access to our bank accounts and that we might lose a lot of our the money.” When things change these days, they can change radically and quickly.

There are suggestions for dealing with the collapse of the financial system in the post What then can we do?.

And I leave you with outstanding comments on this topic from Gandhi: View the Forces of Nature bringing Earth Changes as Opportunity to Change the World.

Thanks very much for reading this long series and this long post.

We interrupt this program…

For two items:

1. The Cyprus Bailout
2. Gold: Last Chance

That title phrase was used when normal television programming was to be interrupted for a special news announcement. And this post is an interruption of sorts—of the What is the Transition series—though actually it is a continuation of a general theme here: Lots of the events that we are all seeing—from earth and weather changes to financial events to the fact that more and more people are taking up meditation by the day—are hints, clues, indicators of things to come. They are not isolated one-off events. They are part of a trend, signs to be read and understood to see what’s coming next. Life has been very kind, bringing things on in evolutionary fashion for anyone who wishes to heed the signs. But things are ramping up. This strongly favors action over a wait-and-see attitude. This first story is a perfect example:

1. The Cyprus Bailout

Europe Does It Again: Cyprus Depositor Haircut “Bailout” Turns Into Saver “Panic”, Frozen Assets, Bank Runs, Broken ATMs

The fifth European national bailout pertains to Cyprus, where receipt of the bailout money is contingent on the confiscation of money directly from people’s bank accounts. The government will take 6.75% of the deposits of anyone with under 100,000 Euros. And they will take 9.9% of anything over 100,000 Euros.

The people will not send in this money, it will be taken directly from their accounts on Tuesday if the Cypriot legislature approves the bailout plan.

Funds to pay the levy were frozen in accounts immediately, ECB Executive Board Member Joerg Asmussen said. The levy will be assessed before Cypriot banks reopen on March 19 after a March 18 national holiday. Sarris said electronic transfers will also be limited until then.

When bankers and politicians want someone’s money…

If a word to the wise is sufficient, one can only hope that more will gain wisdom from this event.  One German newspaper is already suggesting today that a 15% “wealth tax” be levied in Italy to help with its debt problem.

2. Gold: Last Chance

Jim Sinclair (there is always a link to his web site JSMineSet.com on the Thundering-Heard BlogRoll) held lots of gold in the precious metals bull market of the 1980’s, riding the price from $40 to $850 per ounce. He sold his holdings on the very day of the top price in 1980 and thus entered the ranks of investment legends.

In 2003, he started a web site and went public with the prediction, which he reiterated many times in the years that followed, that gold would rise from its 2003 price in the mid-$300’s to $1,620 per ounce by January 2011. He was roundly derided for both the predicted rise of the price and for the precision of the predicted timeframe. It turned out he was off by 8 months: gold’s price did not rise to $1,620 until August of 2011, not January.

The gold price in dollars has been in a sideways correction since late 2011. Recently, Jim has been pounding the table that the current sideways movement in the gold price will be complete before the end of this month, March 2013, and begin its next phase of upward price movement to $3,500 per ounce and beyond. When Jim makes predictions about gold, it pays to listen.

If anyone has been hesitant about buying gold because of claims by those who have been wrong all along about gold that the gold bull market was over, that the “gold bubble” has popped, let’s just look at a few charts, first of gold, and then of charts where bubbles did pop. I think you’ll be able to clearly see that the people claiming a “bubble pop” for gold don’t know the first thing about how to read charts, meaning that they know very little indeed about financial markets. Here’s the longer term chart of gold, from the year 2000 through now:

GoldSince2000 Notice that sideways price drift at the top right of the chart? Chart readers call this a “correction in an ongoing bull market.” It’s a bull market taking a breather before powering higher.

Now, want to see what the chart of a real popped bubble looks like? Here’s a chart of the Nasdaq stock index from Stockcharts.com. This index represented the internet and tech stocks during that time when we were told that there was a new paradigm, that everyone remotely connected with technology was going to be rich rich rich because they had started a web site to sell, well, whatever, it didn’t matter at the time:

Nasd_Bubble

Notice the parabolic upmove as price increased 15-fold in less than 10 years and then: SPLAT! A high-speed drop of 78% in just over two years. Thirteen years and trillions of printed dollars later, the Nasdaq is still 36% below that all-time high price.

Here’s the chart of crude oil from 2003 to 2009 with price rising to $140 per barrel and then crashing back to $32 per barrel in less than a year:

CrudeCrash

Note in both of those cases, no sideways price movement for months and months, as is seen on the gold chart, just a sharp fast very-nasty price crash.

I think Jim Sinclair is correct. I published back in June 2012 (What then can we do?) that people might want to complete their conversion from paper/electronic currency into gold by August 2012. That was a good idea. But cycles research at the time showed that it was possible that we would get one more price downmove, into March of 2013 at the latest, so I did not label that Summer 2012 opportunity as the “last chance” to get gold at a decent price. Now price has come down again into that same area where it was during the Summer of 2012. This time I think that “last chance” phrase is appropriate. Jim Sinclair says, and I agree, that after this month, you won’t ever be able to buy gold anywhere near $1,600 per ounce again.

What is the Transition? Part 5

ACCELERATION

People’s Perception of Time

Everyone whom I have asked, including young people, feels like time is speeding up, like the day, the week, the year starts, and “before you know it,”, it’s gone. People feel like they have little time to carry out their plans. I would guess that this not universal, but perhaps it is.

Technology

And everyone, or certainly close to it, is aware of Moore’s Law, that the number of transistors that can fit on a chip doubles every two years. And Intel’s David House added that processor performance would double every 18 months. This acceleration in performance, and the fact that the price for that performance has steadily dropped, has changed the world in magnificent ways that have been difficult to envision at any point in time. People like Ray Kurzweil are famous for utilizing this increasing performance and for having made some prescient estimates of the impact of this exponential increase in price/performance, though some of his predictions have been wide of the mark, and it seems his general view that processors will outdistance human intelligence is destined to fail as well since a pathway to program a machine to have a higher self, intuition, noble emotions, will, self-awareness, and a sense of humor seems unavailable, to put it mildly.

Exponential, parabolic trends

As we did with the weather and Earth changes, let’s look at some data.

Money

It took the USA until 1990, that is, over 200 years, to create the first trillion US dollars.  The rate of money growth had increased so much by 2007 that it took less than a year to create each additional trillion.  Now, it’s seemingly all in day’s (OK, maybe a month’s) work. Here’s a chart of the money supply in the US and China combined:

USChinaMoneySupply

Yep, between the US and China, that’s $25 trillion floating around.

Another way to look at things is this: From 1971 to 2007, the world economy grew fourfold. Over the same period, the amount of money floating around increased forty-fold. And central banks were just leaving the proverbial starting gate in 2007; the continuing financial crisis had just begun, and the response was, and continues to be: Print Money!

And don’t think the Europeans want the euro to be left out of this print-a-thon:

ECB_BS

And the Japanese just joined the US and the Eurozone saying they would print “whatever it takes” to get their economy humming again.

And the Swiss!?!? The most pronounced money printing line on this chart (in light blue) represents Switzerland, purported to be so conservative about money. Ah, the good old days! No longer. For the size of their economy, they are the current money-printing front-runner by a wide margin:

CentralBankBalanceSheets

Et tu, Canada? (from zerohedge.com)

CanadaPrinting

And this has little to do with political parties, as shown on this chart of federal government debt in the US:

USDebt_DemsRepubs

though I would ask that you note the super-acceleration of this trend that started in the year 2000.

And in today’s world, the Chinese are the ones doing the heavy lifting in terms of manufacturing, so they are collecting a lot of this printed paper money, in other words, the West prints paper, sends it to China, and gets real goods in return. But the Chinese aren’t stupid, they are well aware of how much more of this paper is being created. So what’s their solution? To get real:

ChineseGoldAccum

The Chinese mine more gold than any other country now—none of which leaves the country–and they import even more physical gold from other countries. Insiders at the London Bullion Market Association, the leading venue in the world for trading physical gold, say that the Chinese are vacuuming out the London gold warehouses. And the Chinese are scouring the planet to buy mines, wells, and so forth, especially in Africa

But really, one would think that, with all this money floating around—there must be at least 200 times the money around now versus 1971–everyone must be rich! But we know that’s hardly the case. Sure, there are other parabolic charts, like the one for corporate profits:

CorporateAfterTaxProfits

The corporations seem to be doing quite well. And US banks had profits of $35 billion in the fourth quarter of 2012 alone. (Yes, the same banks that needed those big bailouts. As a group, they had a total of four quarters where they weren’t profitable. It’s been business as usual ever since. And they are hard at work telling legislators, as they bribe them, that any new regulations will seriously hurt their business.)

But other parabolic charts tell a different story. Here’s one for youth unemployment in the Eurozone (from zerohedge.com):


GreekYouthUnemployment

Yes, that’s over 60% youth unemployment in Greece, with Spain right behind.

And gasoline prices are “doing great”—for the oil companies, that is. Here’s the price chart for the US, with gas up 243% since 1998:

GasPrices

That chart is only through 2011, but since US gas prices just registered their highest ever price for a February here in 2013, this trend does not seem to be in jeopardy.

And the Food Price Index of the UN Food and Agriculture Organization is up 132% since the year 2000, with the all-important cereals/grains index up 190%. This is putting an extreme and accelerating squeeze on the budgets of the poor around the world.

This article contains the chart below showing that in 2005, it cost the US government one penny to mint a penny and one nickel to mint a nickel. Now, after all that money printing, it costs twice as much:

PennyAndNickel

resulting in a loss of $436 million for the Government of the US (GUS) to mint pennies and nickels since 2006.

So it seems clear that the accelerating money printing is accelerating the cost of real things that people need: gasoline, food, the metals that go into manufactured products, and so forth.

Here’s the accelerating cost of Social Security in the US:

SSA_TotalCost

Well, we saw the accelerating youth unemployment in the Eurozone above. And the EU just announced that its overall unemployment rate is 12%. And, as this chart shows, there hasn’t been any growth in the EU economy since late 2011 (chart source):

EU_GDP

In the US, GUS says the economy hit stall speed (0% “growth”) in the Fourth Quarter 2012. Here is a chart that shows that, of the 41 largest national economies in the world, only 18% of them expanded in the Fourth Quarter of 2012:

OECD_Expanders

Astute chart readers will notice that such a reading corresponds with the worst recessions (1973-74, 1981-82, and 2008-2009) of the last 50 years, so now you know why the central banks have started printing even more money–yes, accelerating!

How is it going for jobs in the US? As this chart shows,  the US is still 3 million jobs short of where things were in 2008:

JobsUS

Even worse, as the next chart shows, the large increase in the number of people working part-time means that a lot of the apparent job gains shown on the previous chart are part-time rather than full-time jobs:

PartTimeUS

If you think it’s only uneducated people who are suffering from all this, check this:

     Number Of PhD Recipients Using Food Stamps Surged During Recession

The number of PhD recipients on food stamps and other forms of welfare more than tripled between 2007 and 2010 to 33,655, according to an Urban Institute analysis cited by the Chronicle of Higher Education. The number of master’s degree holders on food stamps and other forms of welfare nearly tripled during that same time period to 293,029, according to the same analysis.

These job difficulties are reflected in household income in the US. The following chart shows two problems. While the red line shows income growth since 2000, it is still lower than it was at the start of the financial collapse in 2007. And the blue line shows household income adjusted for inflation. When GUS-calculated inflation is taken into account, income for the average household is 8% lower than it was 13 years ago:

RealIncome

Here is a chart of US household net worth (annotated by Of Two Minds) compared to all of the debt that has been created, showing that all of that debt is not making people richer:

NetWorthbyDebt

All of these economic charts were compiled by governments who, as we’ll show in a future post on the acceleration in lying, have a strong vested interest (it’s literally and even proudly called MOPE by academics—Management of Perception Economics) in making things look better than they are. In that light, I ask that you consider the following two charts compiled by a private bunch of computer geek types at a place called Consumer Metrics Institute. They thought, in this time of highly-networked business, that it was silly to have to wait until governments spent months collecting data before telling us what happened some months back, that the data could be collected and reported in near-real-time. If you wish, you can find out what they do at their FAQ.

But what they essentially do is track, in real time, discretionary purchases for things like automobiles, housing, vacations, durable household goods and investments.

These two charts show the trend in these purchases where a value of 100 would equal the same level of purchasing as was taking place in 2005. The first chart is the last 60 days:

CMIRecent

And the second chart is of the last three years:

CMILong

So, both charts show their index hovering around 85 or lower, which means that this large portion of the US consumer economy is 15% smaller than it was in 2005! Perhaps that aligns better with the income and net worth charts shown above rather than the rosy “we’re in a wonderful economic recovery” MOPE spewed by minions of The Powers That Be.

So what it looks like is that all that money printing is making a select few richer and, by driving up the prices of real goods, squeezing regular people—whose income is falling and who spend a far greater percent of their income on real goods. And the Western central banks say it isn’t their fault that people are rioting in countries where people’s costs for food have gone from 40% to 80% of their income. Nope, they aren’t driving prices up at all with their money printing, it’s those “evil speculators.” Well, perhaps it is evil speculators, but they are aided and abetted by a vast surplus of gambling chips supplied by the central banks.

There’s more to come. Stay tuned for Part 6.

Gold Goes Mainstream

Gross: Stock and bond managers today must be alchemists: turn lead into gold. NOT likely. Too much lead (bubbled assets).
–Tweet from Bill Gross, Founder of PIMCO, which manages $1.8 trillion

**************

“Do you own gold?” “Oh yeah. I do…There’s no sensible reason not to have some.”
–Ray Dalio to the Council on Foreign Relations

This is being written to put the precious metals market in a larger context for those people who still see the world proceeding much as it has proceeded in the past, a world without the large financial and supply chain disruptions that we foresee.

Strong multi-year upmoves in the price of any asset, aka a secular bull market in that asset, go through three stages:

  1. The speculative, early-proponent phase during which the mainstream investment community ignores or derides the potential of that asset.
  2. The mainstream phase, where the mainstream decides that exposure to that asset is a good idea for just about everyone.
  3. The mania phase, where just about everyone feels that they must own that asset and will tell you so when you meet them by chance in the supermarket.

Phase 1 for gold has been marked by derision from the mainstream investment community. Quoting Keynes, they call gold the “barbarous relic.” Otherwise-intelligent economic commentators such as Nouriel Roubini have been calling for a price top in gold for several years. Some who are old enough to have experienced the gold bull market of the 1970s have been saying, “We heard all this before in the 1970s, anyone who buys gold now will regret it later.” All of these people have been wrong all along as gold and silver have powered higher in price.

During most of Phase 1, the major central banks of the world have been sellers of gold, preferring to buy government bonds of various countries (such as Greece and Spain!) to “get a return” on their money. Gold has been a far better investment for the last 12 years. Over the last three years, central banks have become net buyers of gold, to the tune of hundreds of tons per year. Most but not all of this buying has come from Asia as the western central banks have been preoccupied with printing money in a mad scramble to keep their markets afloat.

Gold has been in Phase 1 since 2001. Most in the financial community regard it as an annoyance when their clients ask about it. The price increased from $256 in 2001 to $1,911 in August, 2011.

A couple of weeks ago, Ray Dalio gave a presentation to the CFR. He was asked if he owned gold, and he said, “Oh yeah. I do.” This marked the start of Phase 2, the mainstream phase.

Who is Ray Dalio? Most people in the investment community respect him as the best active hedge fund manager on the planet. We mentioned his firm, Bridgewater Associates, in a previous post. They manage about $140 billion. Ray is highly respected in both financial and political circles.

And the CFR is the Council on Foreign Relations. If you had to pick one organization that has the most influence on the mainstream political thought in the US, it would have to be the CFR. It was founded by the Rockefellers. You have to apply for membership. There are currently 4,700 members, including Bill Clinton, Robert Zoellick, Janet Yellen, Paul Wolfowitz, Lloyd Blankfein, Jamie Dimon…in other words, the CFR is the public face of The Powers That Be/Were.

Now that all of these mainstream movers and shakers have heard from what some consider the smartest money man on the planet that owning gold is a good idea, well, if we haven’t yet convinced you to get rid of a mainstream financial advisor such as a broker, said broker is likely to be calling you in the not-too-distant future with their “innovative” idea that you should get some gold. Of course, being mainstream, they will likely advise you to own it in paper rather than physical form, which will be a big mistake, but that will be their advice. And they will advise that you put a maximum of 5% of your assets into gold or gold mining stocks. In normal times, this would characterize the mainstream phase for gold, during which its price would rise steadily for years.

More evidence that we’ve entered the mainstream phase comes from Bill Gross, known to many as the “Bond King.” Gross founded PIMCO, which manages over $1.8 trillion. Yes, that’s trillion with a T. Almost all of the money is in conservative bond funds. But here’s a tweet this week from Gross:

Gross: Stock and bond managers today must be alchemists: turn lead into gold. NOT likely. Too much lead (bubbled assets).

Note that Gross, the Bond King, is saying that stocks and bonds are bubble markets. That money managers should turn that lead into gold. Though he also says that’s not likely.
Those who hate gold claim gold is in a bubble. Great examples of bubble markets are internet stocks in 1998 through early 2000; or real estate running up to 2006; or government bonds now. Gold, on the other hand, has had a nice steady rise for years, nothing meteoric or bubble-like at all. And here is someone, Bill Gross, who may know more about bonds than anyone on the planet, saying that bonds and stocks are the bubble, not gold.

Gold can’t possibly enter a bubble until it enters Phase 3, the mania phase. During this phase, you will be regaled on a regular basis from media sources and individuals with stories of people who got rich from gold and silver. Like the stock day traders of the year 2000, or the real estate flippers of 2006, there will be lots people trading gold on a daily basis, probably at gold trading shops like the day trading shops that were operating in 1999. People will be quitting their jobs to trade precious metals to “make their fortune.” 90% of people who talk about gold will assure you that it is the surest thing on earth to guaranteed riches. CEOs of gold mining companies will be like rock stars, getting interviewed by Charlie Rose. That’s what a bubble looks like. How many people do you know who own gold and silver?

Now, with the acceleration that is all around us, it is unlikely that we will proceed through these three phases of a secular bull market as we would in normal times. It is far more likely that gold will have a meteoric rise quite soon. But if you think that the world will proceed in a conventional manner in the years to come, we have outlined the path of the precious metals for you.

So, Did You Take Care of Business?

Preparation is everything.
–David Daniels

On June 6, we posted the following quote in What then can we do? Part 1:

Our research says that it would be wise to complete this conversion process by August 2012.

What conversion process? That of converting your paper savings primarily into minted gold and silver bullion coins. When we posted that idea on June 6, the price of gold was $1,621 per ounce. From June 6 through August 20, it meandered between $1,553 and $1,629 per ounce. Then it took off to the upside and now sits at $1,774 as I write. (At the time of posting, the price is $1,766.) If you completed the process by August 20, the dollar value of your metals holdings has increased by 9% to 14% in one to three months. If you did the entire conversion late on the last day of August, the dollar value has increased by “only” 5% in a few of weeks.

The question at the top of this post is directed to those who:

  • had monetary savings in electronic accounts; and
  • who still needed to do this conversion as of June 6.

If you have still not taken care of business in this way, we would really like to hear why. You can easily piece together our e-mail address on the Contact page. Send your reasons. What have we failed to explain with sufficient clarity?

Worthless derivatives are being created by Wall St and High St at the rate of a million dollars per second! Governments have promised citizens far more than can ever be funded. If the big banks told the truth about their financial condition, all of them would be seen as insolvent. And it has been obvious for years that most countries in the world had taken on more debt than they could ever repay, and that their only strategy would be to print money. They are doing so. With extreme prejudice! We are fairly certain that you heard that the US Federal Reserve has promised to print $40 billion per month. Ad infinitum! The week before, the European Central Bank promised to print billions as needed. The Bank of Japan joined them last week in the printing campaign. Each of the things in this paragraph would be enough to dissolve the financial system. Taken together, they are an absolute guarantee.

Your paper savings and your income are being devalued by this massive ceaseless money printing. It is an act of desperation by the central bank minions of the bankster class. Their aim is to preserve the game of the big bankers, to enable those bankers to continue their game of theft from all of us. They do not have your interests in mind. Why continue to let these thieves steal from you?

Chris Martenson of PeakProsperity.com often and elegantly describes how, once people wake up to the true nature of our current societal systems, they change their life in a big way. They can’t help it. And they do not regret the changes they make. They may lose income by leaving jobs they dislike, but they pare expenses more quickly. They might need to physically move to a new area. But they begin to enjoy life more, to find the pursuit of their new aims quite nourishing on many levels.

In these times, we contend that it is not enough to wake up only on the inside or only on the outside. We need to do both. And to live from our insights in both realms.

OK, you may have missed the opportunity to buy cheaper gold and silver through August 20. But the prices of these metals, calculated as they are in paper currencies whose quantities are being increased by the minute, will be much, much higher, and sooner than most think.

Oh, you say you prefer stocks? Here’s a chart of stock values versus gold for the last 15 years:

Two points: First, the chart shows gold outperforming stocks by about 4 to 1 over that period. Does holding stocks look like a great strategy? Second, many feel that stock indexes, calculated as they are in paper currencies that are declining in value, are approaching new all-time highs and they are smart to stick with them. If you are in that camp, here are two charts that might, that should, alarm you. It’s the path of stocks during another of the great money printing experiments in history, the Weimar Republic printing campaign in the 1920’s that resulted in an infamous hyperinflation. During that period, the value of the stock market went up when priced in the local currency that was being printed at will by the central bank. The chart looked like this:

In other words, to local people using the local currency, they felt like their money was increasing in value in stocks. The Zimbabwe stock index chart during the recent Zimbabwe hyperinflation looked even better. Stock index charts always looks like this or better when calculated in the local over-printed currency. But here’s what those Weimar stocks looked like to the rest of the world, a world that was still on the gold standard to some degree at the time:

If you think this bears some resemblance to the first chart above, the chart of US stocks priced in gold, then you are getting the picture. At the end of a hyperinflation, stocks crash mercilessly in real value as the currency loses all value. In other words, those who stay in stocks stand to lose almost all of their purchasing power! They might appear to have a lot of dollars. But those dollars will be very near worthless.

And real estate? As we’ve said before, productive real estate from which you can live independently is a great idea. All other real estate is a very bad bet from a financial point of view. Since the real estate bust began in 2006, as retorts to our advice to sell, we have been hearing: Yes, real estate has gone down, but not in my state. Which was then replaced by: Yes, real estate has gone down, but not in my area. Which has been replaced by: Yes, real estate has gone down, but not in my neighborhood. Here’s the chart of US Real Estate priced in gold going back to 1987:

If you understand this chart, you can see that US real estate is worth about half what it was worth in 1987—when priced in real money, that is, gold.  At the end of the Weimar episode, it is said that you could buy an entire city block of real estate in Berlin for one ounce of gold.  We are rapidly moving along that path. Since the real estate price peak, gold has outperformed real estate by about 6 to 1. And the real estate price collapse is happening while the authorities are madly printing money! If real estate were the inflation hedge that its proponents claim, real estate prices should be soaring. Alas, at least no one is claiming that such prices are soaring. But the proponents misunderstand this real estate “asset class.” Its prices are floating on a sea of debt. Once governments can no longer support that debt, prices will drop like a stone. And residential real estate was never supposed to be an “asset class.” It was supposed to be lived in!

Were the charts above prepared by some wild-eyed blogger? No, the first is from Bloomberg, the second and third were prepared by the premier hedge fund in the world,  manager of well over $100 billion of client money, Bridgewater Associates.  All three charts were cited here on ZeroHedge, which, in our view, is wonderfully wild-eyed. The fourth chart is from PricedInGold.com.

Our June 6 advice about completing metals purchases by August was tactical in nature: we spent years in the land of the trading thieves and one earns a knack for detecting those time-price areas where people can get lower prices. We wanted any reader who had not yet completed their buying campaign to get the benefit of lower prices.

But soon we face something that is likely to be quite different. By the second half of October, events with systemic-level impacts are likely to arise, leading to significantly greater difficulty and/or expense in the acquisition of physical metals. If we had not completed our own buying campaign quite awhile ago, we would be completing it by mid-October.

Again, from our previous posts, here is a summary of what we see coming to your current favorite planet:

  1. Electronic accounts (bank accounts, brokerage accounts, mutual funds, etc.) are found to be empty after the implosion of the derivatives market, so there are no transactions via ATM’s, credit cards, checks, on-line payment systems, etc.
  2. During a transitional period, people and businesses still accept national paper currencies—in hard cash form only, all electronic transactions will not be trusted—while barter, local barter currencies, and minted gold and silver coins become understood and accepted for transactions.
  3. During that transitional period, fewer and fewer accept national paper currencies as they increasingly favor local barter currencies, gold coins, and silver coins.

Here is the most important issue: Will you be helping others during this transition? Will you be operating from a prepared, strong position? Will you be helping to re-start your local economy by spending some silver and gold? Or will you be paralyzed, floundering, panicking, regretting, in need of help, etc. The choice is straightforward.

Preparation is everything.
–David Daniels

Why Gold?

U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
–Ben Bernanke, Chairman, US Federal Reserve Board, from a speech in 2002

If the governments devalue the currency in order to betray all creditors, you politely call this procedure “inflation”.
–George Bernard Shaw

At the end fiat money returns to its inner value – zero.
–Voltaire

Gold can make its way through the midst of guards, and break through the strongest barriers more easily than the lightning’s bolt.
–Horace

Three short segments on gold:

1. Why Did Gold Become Money?

Everyone knows that gold and silver were used as money for millenia. But those who despise gold as money, who call it the barbarous relic, who think government-created paper and electronic bits are the best money, claim that it was arbitrary that gold became money. Here is a scientific treatment of the topic, a link to a 6-minute video about why humans chose gold and silver as money versus all other substances available to them from the Periodic Table of Elements: Why Did Gold Become Money?

2. Gold As A Store Of Value

If you already know well the fabulous effect it has on a person to buy physical gold and silver, then you don’t need the next video. But for those who are still worried about gold as a store of value, who think paper currencies are better for their long term wealth, who worry about where they are going to store it, etc., here is 10-minute video on Gold As A Store Of Value.

3. The Vibrational Value of Gold

Those first two links are for all readers. The text below is unlikely to be of interest to anyone who thinks the physical plane is all there is, that is, below is a multi-plane view of the gold question from the book Unveiled Mysteries by Godfre Ray King. It gives a big clue about why many people like to keep some gold on their person at all times, and why you might wish to do that yourself, especially in increasingly turbulent times:

Gold was a common commodity…in all Golden Ages, because its natural emanation is a purifying, balancing, and vitalizing energy or force…

The outer or intellectual knowledge of humanity, holds within it little–very little–understanding of the real purpose for which gold exists on this planet. It grows within the earth like a plant, and through it there is constantly pouring a purifying, vitalizing, and balancing current of energy into the very ground we walk upon, as well as into the growth of nature and the atmosphere we breathe.

Gold is placed upon this planet for a variety of uses, two of its most trivial and unimportant ones being that of using gold as a means of exchange and for ornamentation. The far greater activity and purpose of it, within and upon the earth, is the release of its own inherent quality and energy to purify, vitalize and balance the atomic structure of the world.

The scientific world today has no inkling as yet of this activity. However, it serves the same purpose to our earth that radiators do to our homes. Gold is one of the most important ways by which the energy from our sun is supplied to the interior of the earth, and the balance of activities maintained. As a conveyor of this energy, it acts as a transformer to pass the sun’s force into the physical substance of our world, as well as to the life evolving upon it. The energy within gold is really the radiant, electronic force from the sun, acting in a lower octave. Gold is sometimes called a precipitated sun-ray.

As the energy within gold is of extremely high vibratory rate, it can only act upon the finer and more subtle expressions of life, through absorption. In all “Golden Ages,” this metal comes into plentiful and common use by the mass of the people, and whenever such a condition occurs, the spiritual development of that people reaches of very high state. In these ages, the gold is never hoarded but instead is widely distributed into the use of the masses who, absorbing its purifying energy, are themselves raised into greater perfection. Such is the right use of gold, and when this Law is consciously understood and obeyed, the individual may draw any quantity he desires to himself by the use of that Law.

Because of the gold deposits in all mountain ranges, one finds health and vigor in life upon the mountains that he cannot find in any other places on the earth’s surface. No one ever heard of detrimental effects coming to those who constantly handle pure gold. While in its pure state, it is soft and wears away easily, still the very quality is the fulfilling of this purpose of which I have just spoken.

What then can we do? Part 1

Let’s talk about what we can do about the consequences implied in The financial system is based on 12 promises that are lies, dealing with these questions:

  1. How can we prepare for the collapse of the financial system?
  2. How can we prepare for supply chain outages and disruptions?

Preliminary Remarks

In our view, one principle involved here is quite simple: If you take some of the key steps outlined below, you will be in a position to help yourself and others. If you don’t, you will need help from others. At this point, there is still some time to choose your position, but that time is growing short.

Since this is a transition, we want be mindful of where we are coming from and where we are going to:

  • We are moving from old systems and structures that are detrimental to humanity; they are collapsing from their own growing uselessness and corruption, and we are hastening their collapse by eliminating or methodically reducing our participation, our complicity, in those systems;
  • We seek to protect ourselves and our communities during the period of collapse; and,
  • We want our actions to be positive steps toward the world we aim to create, thus we aim to “be the change” and to take actions that are wins for ourselves, humanity, and the planet.

Obviously, but perhaps worth stating: We don’t know how you should live. The suggestions in this post are based on our own thought experiments, research, and by watching how people have responded to change in recent years. Some people have found the changes difficult, others have found them liberating. The actions recommended here are some that a person might take if they wish to glide through the coming changes rather than struggle through them. Please consider each recommendation for action to be a summary. We will have future posts with greater detail on each recommendation.

And I would like to be clear about one thing: I am planning to be in a community where people are lending each other a hand so all can live well. I am not planning to live in a bunker with guns pointed in all directions. Local sufficiency is what I am aiming for. I am of the opinion that this can be achieved outside of the major metropolitan areas.

In terms of priorities on the Outer Work list below, do the precious metals thing first, today. After that, if there are things on the list that you’ve “always wanted to do,” perhaps it will be best to do those next, perhaps there is a very good reason that you’ve always wanted to do them.

Inner Work

As with all aims of consequence on the physical plane, some of the work is inner:

TURN FROM WANTS TOWARD NEEDS: In these times, does more need to be said about this?

EMBRACE CHANGE: It’s clear that those who have accepted the changes of the last several years have had a much easier time of it, inside and outside, than those who have resisted change at every turn. In our view, the pace of change is accelerating and will continue to do so, thus embracing change will become an increasingly important contributor to a positive inner state. Common forms of resistance are denial that anything is changing at all, wanting and expecting things to go “back to normal,” pretending that “nothing can be done about it so I’m not going to change anything,” etc. Beyond accepting change is its active pursuit: movement toward that life which truly and deeply makes sense to you. When enough of us are on that track, the world will be a beautifully different place.

MAINTAIN EQUANIMITY: Obviously, people can be thrown off kilter by both the acceleration and by the disappearance of societal structures on which they believe they are reliant. And “off kilter” seems to reach new heights—if the latest news stories are any indication, perhaps that should be depths—every week. So whatever activities people do to maintain their connection with what is real in them, whatever they do to raise their vibration—meditation, chanting, breathing exercises, sensing exercises, energetic healings, breathing the marrow of the sun through their crown chakra and distributing that energy inside to where it is needed, whatever … these need to be very high priority activities. Ignoring these is an increasingly high-risk strategy as we proceed through this transition.

WATCH THE TRENDS: Life is clearly telegraphing the coming changes by presenting examples of each and then ramping up their frequency and intensity. The trends are not mysterious, they are very clear. We are all being shown where all this is proceeding in finance, politics, the recognition of the need for inner work, weather changes, earth changes, nuclear energy, magnetic pole migration, etc. If you observe these trends without bias, you are unlikely to be shocked as they accelerate. Expecting trend acceleration is key. As some say in Tibet, “Recognition is liberation.”

Outer Work

MONEY: When the current financial system fails, the typical sources of money will be gone or the money they deliver will be nearly worthless due to over-printing. The solution is minted bullion coins obtained from reputable, low-cost dealers for storage controlled by you.

If you have savings denominated in fiat money, convert as much of it as you can into minted gold and silver bullion coins. Minted bullion coins means gold and silver US Eagles, Canadian Maple Leafs, Australian Kangaroos, British Kings (“Sovereigns”), Kruggerands, or so-called “junk silver,” that is, pre-1964 US dimes, quarters, and half dollars that contain 90% actual silver content. These bullion coins are typically priced at some small percent above the world spot price of the physical metal itself, though junk silver can sometimes be purchased below the spot price from a good dealer.

We are not talking about gold bars, which are far easier to counterfeit than coins. We are not talking about special proof coins, which are overpriced for their metal content. And we are DEFINITELY NOT talking about buying numismatic coins, namely those coins touted as valuable because they are old and rare. That is a world for collectors and experts. If you buy them, you are 100% certain to be overpaying for their gold or silver content, and typically overpaying by a lot. If a dealer tries to steer you toward those, steer away from that dealer.

What is wanted now are coins valued for their metal content, coins that are easily recognized for that content, coins that will have known value on the street when national currencies are dying. Avoid all “gold experts” who tell you to put 5% to 10% of your money into physical metals or who call gold an “asset class.” They do not understand the scale and scope of what’s happening. Either that or they think we are all so rich that losing 90% to 95% of our savings is somehow acceptable. If you have no savings in fiat currency and no metals, do your best to obtain what metals you can. Make it a priority to save a few dollars on a schedule and then buy a silver coin or two when you can. Your effort, perhaps your sacrifice, will be very well rewarded.

And we are talking about minted bullion coins where you control possession, not situations where you have a piece of paper that says you own some gold somewhere. Most such papers will turn out to be unreliable.

When would it be best to convert fiat savings to bullions coins? Now. Today. Here’s one method: buy as much as you can stomach buying. When you’re done, do that again. And then again. Yes, leaving a little money in regular checking accounts to cover near-term expenses is a good idea. And if you can, it is a good idea to have a few months worth of paper currency around as well since there will be a time, after the death of electronic national currencies, when many vendors won’t know the value of precious metal coins so some will still want paper currency. Our research says that it would be wise to complete this conversion process by August 2012.

If these statements on precious metals are clear, great. If they are not and you want to act soon, please e-mail and we can elaborate on tactics prior to doing a major detailed post on that topic, for which there may not be time right away.

In Part 2, we will deal with topics related to outages of the global supply chain.

Even the thieves are starting to get it

Since we are definitely small fry, below is a brief presentation by a bona fide big shot that backs up the more detailed analysis found in The financial system is based on twelve promises that are lies.

The presentation is from a former top thief hedge fund manager who retired in 2004 and now sells a newsletter for other thieves Big Money investment managers that is so expensive that we mere mortals don’t normally get to hear what he says. But yesterday the slides from one of his recent presentations were made public on Zero Hedge. One interesting note: this is from a very successful career trader with a very successful trading newsletter, that is, this is someone who knows enough about how the system functions to out-trade the rest of the thieves. He says that people have six months left to trade and then:

“That is the end of the fractional reserve banking system and of fiat money…

We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses. Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe…

As defaults in governments and banks come to fruition, we risk a closure of the stock markets entirely and a closure of the banking system…

There would be no trade finance, no shipping finance, no finance for farmers, no leasing, no bond market, no nothing……

All that is left is the Dollar and Gold.”

That means the physical stuff you can hold in your hand, folks. Not numbers printed on an account statement.

And the Dollar is fiat money. While its physical form will likely be in use longer than its electronic versions, at some point few will want that physical form either.

Here is the presentation by Raoul Pal: The End Game.