A Cycle that Says “Get Ready”

There haven’t been many posts here lately, in part because it looks to me like we are on the precipice of major changes. So I’ve been spending some time finalizing my own preparations in terms of food (backup supplies and the infrastructure for growing more), electricity, water, and so forth. (Hint, hint.) Many think (hope?) that The Powers That Were can keep this all going for years. With the clear acceleration of infighting among the elites, to me that seems like a very bad bet.

So I found this post from Deflation Land to be interesting in terms of us being right on the cusp of major changes:

     Why I stopped worrying and learned to love the currency collapse

“For the past 300 years, the historical pattern has been for the era marked by a century to continue into the following century by fourteen or fifteen years.

“Let me explain. Everyone knows that the 19th Century, its uprightness, its optimism and sense of purpose, the halcyon days of British Empire, came to an end with World War I, starting in 1914 and building to a nasty crescendo by 1916. The 20th Century had arrived, and it had some real horrors in store for us.

“But if we return back another hundred years, we notice that the 18th Century ends in 1815 with the final defeat of Napoleon, that final project of the Enlightenment and of the French Revolution.  With the Congress of Vienna in 1814-1815, we have a new Europe along the lines of Metternich’s plan, and the 19th Century at last is here.

“In 1713 and 1714, we have the Treaties of Utrecht, Baden, and Rastatt, bringing an end to the era of Spain as a major power, and the rise of the Habsburgs.  Louis XIV dies in 1715, after reigning for 72 years.  The Baroque period is over, and we are now firmly in the 18th Century.

“We still live in the 20th Century…We still live in an era of Pax Americana, the old republic very much a strained and tired Empire now, with the U.S. Dollar as the world’s reserve currency.

“That is going to change.

“The next task for History is to dismantle the untenable structures and institutions put in place by late Modernity, which have been extended now as far as they can go. Our debt-based monetary system will collapse, our unbacked fiats will be worthless. The debts and unmeetable obligations will all default.

“There are ironies and great contradictions as the former home and hope of Liberty becomes viciously unfree and increasingly despotic. Our leaders no longer govern, but try instead to rule us — they are less legitimate with each passing day, their laws corrupt or worse. They are nearly finished, and will be swept away with the tide.

“Just as in 1914, the internationalist system will break down, dashing the hopes of the would-be first-world nations. We will probably have a pretty good war as well, or many local ones worldwide. These transitions tend to involve war.”

*  *  *  *  *

Combine the above with the Wheeler War Cycle and other war cycles discussed here, and it looks like our current faux stability–in which the gears of government and the economy grind on and on with little progress in any direction–will, within months, be a memory. The full Deflation Land article is here.

US Government shut down, except…

The US Government claims to be shut down, but that doesn’t apply to the military complex:

     Hagel Orders Civilian Pentagon Workers To Return to Work

So 350,000 civilian contractors will rejoin active duty soldiers, to whom no shutdown was applied.

And apparently the Department of Defense granted 94 new contracts on the day prior to the shutdown.

Recently, the US Federal Reserve threatened to slow down, to taper, the money printing, but they backed off on that idea at the last minute. And now the military is at full strength despite a government shutdown. Seems they are making it pretty obvious about what’s on tap. This is a very simple logical progression that has happened before:

1. An economy based on money which is debt must always grow or the interest on the debt cannot be paid.

2. When too much debt is accumulated, the economy groans under the burden, interest and principal on some of the debt cannot be paid, and the economy begins to implode.

3. Authorities put money printing into hyper-drive to try to fill the holes, to overcome this collapse, but this tactic fails. Currently, the money printers themselves are dismayed about the poor results from all that printing.

4. So to stimulate an economy in end-of-cycle death throes, the authorities resort to war.

In my view, this too will fail.

In early September, when the Military Times surveyed US troops on whether they supported US air strikes on Syria, 75% were opposed. And they were opposing air strikes; it seems highly likely that there would be even greater opposition to an invasion. US politicians have been running these troops ragged with one campaign after another, and it is taking its toll in terms of suicide and substance abuse:

In fact, prescription drug abuse doubled among U.S. military personnel from 2002 to 2005 and almost tripled between 2005 and 2008.

Alcohol abuse is the most prevalent problem and one which poses a significant health risk. A study of Army soldiers screened 3 to 4 months after returning from deployment to Iraq showed that 27 percent met criteria for alcohol abuse…

Drug or alcohol use frequently accompanies mental health problems and was involved in 30 percent of the Army’s suicide deaths from 2003 to 2009 and in more than 45 percent of non-fatal suicide attempts from 2005 to 2009.

Many people are increasingly aware that most major US war participations were preceded by false flag attacks, for example, the Lusitania for WW1, Pearl Harbor for WW2, the Gulf of Tonkin for Viet Nam, and 9/11 for the War on Terror. Many are weary of the repeated war campaigns that promise to bring democracy and bring only death and chaos. And people are increasingly aware that the economy–to which so many bow down as some kind of Moloch that must be served now no matter what the human and long-term costs–is a system for enslaving many for the mega-profits of a few. How long before people realize that murderous warmongering is simply an extension of that profiteering?

It seems clear that they will start a major war. They will have to counter war weariness among both civilians and military, and we all know how they do that. And they do need people’s support to carry this out. So once the war has started, the question will be: how long will people support it? Will people go along with these dark forces of war–for emotional reasons, or to get and keep a job in the war economy–or will they stand up and put an end to it?

An Important Whistleblower Event in the Metals

The news came out Friday at 2:00pm (circled on the chart below) that two JP Morgan employees have submitted to the government strong documentary evidence about how JP Morgan illegally manipulates prices in the precious metals markets:

     Morgan Whistleblowers Confess Bank Manipulates Gold & Silver

As you can see on this chart of Friday’s price action in gold from Kitco.com, those few traders who remained at their posts late Friday afternoon thought this was a big deal, and they ran the price of gold up $20 in the final three hours of trading:

Gold Friday13thedThey are right. This is a big deal. Why?

1. The last time compelling evidence of JP Morgan’s price suppression of the metals emerged into public view was March, 2010 when London trader Andrew Maguire told everyone that he had submitted hard evidence to the government about such manipulation, including sitting with them and showing them in real time just when and how the manipulation is carried out:

It was no coincidence gold didn’t look back from that day and it moved up over $800, from under $1,100, to (over) $1,900.  And silver moved up (an astonishing) $33, from under $17, to almost $50 in the same (time) period.

Someone tried to run Maguire down with a car two days later; he was hit by that car, but survived.

2. Many people have supplied evidence of manipulation of the metals to the US government agency that is supposed to take action about such crimes, the CTFC (Commodity Futures Trading Commission), but none, at least not that I know of, were employees of JP Morgan with direct inside information.

3. The CFTC has stonewalled the evidence received to date by staging an investigation of these allegations. The problem is, it’s been in progress for almost five years now. They haven’t taken a single action from this “investigation.” And why should they? Anyone known by Wall St to support such an action would be prevented from entering the “revolving door” and getting a cushy and highly-paid job at one of the Wall St firms as soon as their CFTC gig is over. And it is more than highly likely that the government itself is in collusion regarding the suppression of metals prices, so how can a lesser known agency point out that the US Treasury and Federal Reserve are involved in the scheme. But what was revealed Friday was that the CFTC received the data from the Morgan employees more than a year ago, in June 2012, and still they have taken no action. This will substantially increase pressure on the agency to take at least some sort of public action.

4. Allegations of price suppression in the metals markets have long been greeted as conspiracy theory by the mainstream despite the fact that government participants from the infamous Gold Pool of the 1960s admitted that they manipulated the gold price on a regular basis, though as with almost all government people, they only admitted to this after retirement or posthumously.  But with so many conspiracy theories recently being shown as conspiracy fact, and with JP Morgan getting caught in multiple illegal actions over the last few years, it is now getting tougher for anyone to claim that Morgan is not acting illegally in any market in which they participate.

The “paper gold” market (futures, options, ETFs, etc.) has been used for years to manipulate prices in the physical gold market, so much so that increasing demand for physical gold is often met by a falling paper gold price, turning all economic theory of supply and demand upside down.

The Powers That Be of the USA will do whatever they can to maintain what is rightly called the “exorbitant privilege” of having the US Dollar as the world reserve currency, which enables the US to print money to purchase real goods from the rest of the world. Part of their strategy has been to suppress the price of the precious metals to mask the deteriorating value of the Dollar. Another aspect is to keep the price of the metals very volatile to scare people out of the metals; they want to make the metals look unstable and the Dollar look comparatively stable.

Last year, the State of South Carolina considered adding gold as an investment to the state’s coffers and rejected the idea because their research showed that the precious metals are a manipulated market so they could not trust the metals as an investment. The state treasurer told the legislature this:

“Similar to other commodities, the value of gold and silver is determined by supply and demand, as well as speculation. The Federal Reserve, London Bullion Market Association, JP Morgan Chase, and HSBC Holdings have practiced fractional-reserve banking and engaged in naked short selling causing artificial price suppression.

So this testimony from JP Morgan employees is a major step toward gold and silver trading freely without government interference. No matter how old you are, gold has traded freely during your current lifetime for at most a few months at a time on a couple of rare occasions. If you hang in here for awhile longer, you will see it trade freely. And its price will be, to quote a great friend, magnificent.

War

Despite a rare display of intelligence shown by a group of politicians, with the British parliament rejecting their Prime Minister’s call for war, at least for now; and despite serious questions raised by the likes of a former NPR reporter with years of on-the-ground experience in the Middle East who states that eyewitnesses say it is the Saudis who supplied the chemical weapons to the rebel forces; it seems almost certain that the US will be waging war in Syria, likely beginning with attacks launched from US naval vessels.

Most people might think this will be another “Libya” type of war with US techno-hardware pummeling the country for a couple of months and then it will be over. A bunch of political posing and sniping. Lots of discussion about whether annihilating people is legal! Little or no direct inconvenience to anyone in the US or Europe. And little consideration of the reality of those who will hold someone they love in their arms and experience the agony of seeing their beautiful friend demolished.

Why is this war less likely to be a brief campaign and more likely lead to World War 3?

1. There are 30,000 Russians living in Syria. If some of these people are killed, do you think Russia will just say, “Oh well. No problem.”

2. Russia is a long-time ally of Syria. They have a naval base there. They sell lots of arms to Syria. If Assad is toppled, Russia loses big strategically and economically: they wil likely lose their naval base; they lose a good arms customer; but most importantly, a new regime might be quite happy to allow the Qatari’s to build a natural gas pipeline across Syria to supply Europe with natural gas, breaking the Russian monopoly on the European natgas market.

3. Iran is an ally of Syria. Both countries are well aware that they are on the list of countries  whose governments the US planned to topple as early as 2001, as reported in this required-listening two minute video interview with General Wesley Clark:

So I came back to see him a few weeks later, and by that time we were bombing in Afghanistan. I said, “Are we still going to war with Iraq?” And he said, “Oh, it’s worse than that.” He reached over on his desk. He picked up a piece of paper. And he said, “I just got this down from upstairs” — meaning the Secretary of Defense’s office — “today.” And he said, “This is a memo that describes how we’re going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran.”

And Iran is an ally of China.

4. Cycles: Manfred Zimmel, whose excellent forecasting work we have discussed here and here, has for many years been predicting that the period from 2013 to 2018 will be “the War Years.”

5. Cycles: The uncanny Wheeler Cycle of War and Political Change, discussed here, arrives again at its most intense point for the risk of major war in 2014:

WheelerCycle

6. Cycles: Michael Mau’s books predicted world war for this period unless humanity can stand up to being manipulated into war yet again. Mau’s books contain detailed discussions regarding who manipulates politicians and populations into war. So this is a big test for humanity: do people want war or have they truly had enough of it?

7. Cycles: August 2013 was given here as a major potential economic turning point. Oftentimes, people and nations play their part when a big cycle is ready to turn.

8. The US badly needs a distraction from the revelations of illegal spying that arrive almost daily.

9. The US badly needs distraction from its financial failures and its upcoming battle over the debt ceiling. Even researchers from within the US Federal Reserve have admitted that the Fed’s money printing has had little positive effect, and they have announced that they would like to gradually stop printing so much. (Perhaps the White House will basically force them to keep printing to support a war?) And even that gold-bashing defender of the status quo, the Financial Times, began an article with this quote:

The world is doomed to an endless cycle of bubble, financial crisis and currency collapse.

And included this sentence in the same article:

A stable international financial system has eluded the world since the end of the gold standard.

(Side note: Numbers 8 and 9 are partial indications that things have not been going so well for the US lately. This too is a result of a specific cyclic influence, so if you are confident that a US war foray will be quick and successful, you might wish to contemplate what the news flow has looked like for the US for the last several months.)

10. There are always those powerful groups who stand to profit greatly, financially and politically, from war, as described so well by US Marine Corp hero General Smedley Butler in his booklet War Is A Racket.

So what’s it going to be, folks? Have we had enough of war? Or do too many still want war, or not care one way or the other? Whatever the numbers, it seems that humanity still does not understand that the advice “Do unto others as you would have them do unto you,” contains the idea that what you do to others you are doing to yourself. Humanity is one, though it appears that few are aware of their awareness that such is the case.

If you have chosen to have preparations in place for when it really hits the fan, and if you have not completed those plans, my suggestion would be that you wrap them up now. Not in a state of fear, not in a panic, but with definite persistence and logic. Perhaps the status quo in this world can hold on till 2014, or even 2015. But betting that way entails some serious risks. Besides, preparing for a life independent of the theftocracy–that is, working with gardens, greenhouses, plug-in vehicles, solar arrays, water wells, and so forth–is a lot of fun.

More cycles

Yet another instance of the accelerating flood cycle: a photo from the devastating Himalayan floods, indicating a stance people might wish to take during these times:

submerged-lord-shiva-idol-in-rishikesh-1

* * *

Despite being surrounded by the cyclic nature of physical life (breathing, heartbeat, blinking, day/night, tides, seasons, birth/death … and the less visible or invisible: sound waves, radio waves, x-rays, microwave cooking, evolution … and for a fun contemplation of large astronomical cycles, see this and this), for the most part, people tend to ignore cyclicality in favor of seeing life as a straight-line progression. This is unfortunate for at least two reasons: first, because all form is cyclic—form emerges, flourishes to some extent, and dissolves; second, because there are some not-so-obvious cycles that offer understanding for what is otherwise quite mysterious. In fact, here at Thundering Heard, we are on a path to discuss the biggest cycle of them all for people, a cycle that, once grasped, contains the answers to “little” questions like the meaning of life, why are we here, and so forth. But first, let’s get more adept at seeing the cyclic aspect of life and how important it is.

The Sunspot Cycle

There is a peak of sunspot activity every 10 to 13 years, with 11 years being the average for each cycle. A chart of the peaks and troughs of sunspot activity from 1926 to 2009 looks like this:

Sunspots_Longer_Annot3

Let’s look at the three peaks labeled A, B, and C.

The peaks of sunspot activity often really “rev people up” financially, that is, there is typically an excitation of human activity that leads to a financial market bubble that coincides with the sunspot peak.

Three peaks ago, the peak in 1980, labeled A above, coincided with the peak of the commodity price boom and price inflation that took place in the 1970s after Nixon defaulted on the US promise, made near the end of World War 2, to always support conversion of Dollars into gold. Those were the days when the so-called Misery Index (inflation plus the unemployment rate) was tracked in daily newspapers, and mortgage rates in the US rose to 18%.

Here’s a closer look at the last two peaks of sunspot cycle activity:

Sunspots_2_Annot

The cycle peak labeled B was in 1990 and corresponded with the peak in Japan of bubbles in their stock and real estate markets. This was the time when it was generally held that Japan Inc. would rule the world, or at least own it; that its economy would soon be the largest in the world. A single block of downtown Tokyo real estate was said to be worth more than all of the real estate in California. Now that’s a bubble! (We’ll see in our next post on cycles why that Japan bubble grew so large when we cover another cycle that also contributed to this Japan peak. When multiple important cycles converge, the results can be gargantuan.) Following that peak, Japan experienced what has come to be called The Lost Decade, though it has now run for two decades. Both their stock and real estate markets lost 75% of their “value” after that peak, and they still have not come anywhere close to recovering their former glory as Japan has been mired in nearly constant recession ever since.

The sunspot peak labeled C aligned with the peak in the internet/technology stocks in the Spring and Summer of 2000, another famous bubble. Again money flowed, this time into Pets.com, Webvan,com, Geocities,com, DrKoop.com, and many others, most of which had little going for them except an idea and a web site. Little or no sales, no profits—who cared! They were going to the moon. It was a New Paradigm. If you thought it was insane, you “just didn’t get it.” And the thing is, that craziness for internet stocks had been in play for a few years; that hoopla could have ended in 1998 or 1999. But it didn’t. It ended when the sunspot cycle peaked in 2000.

Looking back, it would have been great for the participants in those bubbles to be aware of the sunspot cycle peak. They could have sidestepped a lot of trouble. So what’s going to happen this time around? Well, for a few years, I have thought that  this economic cycle might hang on into the peak of the current sunspot cycle, called Solar Cycle 24, which was projected for August 2013. But Amon Ra may have thrown us a curve ball. It looks like this cycle will not have the usual single large peak, but rather a dual peak like Solar Cycle 14 from the early 20th Century. According to solar physicist Dean Pesnell of NASA’s Goddard Space Flight Center:

“This is solar maximum. But it looks different from what we expected because it is double peaked.” Pesnell noted similarities between the current cycle and Solar Cycle 14, which happened between February 1902 and August 1913 and experienced a double peak. If the two cycles are in fact twins, he said that “it would mean one peak in late 2013 and another in 2015.”

Here is a chart that shows the peak in 2000 plus our current cycle:

sunspts_predict_l

If the NASA guy is right, there should be a bubble peak in either 2013 or 2015. But a bubble in what? Here are some clues:

  • Lots of savings accounts pay only 0.01% in interest.
  • Mortgage rates got near 1% in Japan and 3% in the US. (Would you lend money to a stranger for 30 years for 3% interest? Neither would banks, which is why almost all mortgages need a guarantee from a government program or the banks won’t make the loan.)
  • Short-term interest rates in Germany and Switzerland recently went negative. That’s right, if you wanted to lend money to Germany or Switzerland on a short term basis, you had the pay them for the privilege.

If you think these phenomena don’t make a lot of sense, you are right. But it points to the culprit that has all the hallmarks of a monster bubble: the world government bond market. The bull market in bonds has been running for over 30 years. On May 2, if you wanted to lend money to Germany for 10 years, they would pay you an interest rate of 1.2%; the US, 1.6%. And if you wanted to lend Switzerland money for 10 years in December, they were paying a whopping 0.4%. Japan? 0.45%.

And in the case of Japan in particular, they are working very hard to devalue their currency, to make sure the yen falls in value. So the question is, who in their right mind would lend to these countries for such a pittance in interest, especially while most of them are printing money to intentionally debase the value of their currencies!?! You get a very poor interest rate and, if you get your capital back, it will be in a currency that will have fallen in value over 10 years. Yet, that is what institutions and people are doing. Recently, if you wanted to get a reasonable interest rate on 10-year government bonds, then you would have lend money to the country of Rwanda; they paid 7% on a recent offering of 10 year bonds. Best of luck getting your capital back 10 years from now.

When this bubble bursts, the consequences will be huge. This is not a bubble in one country, like Japan in 1980, or in one sector of the economy, like tech stocks in 2000, we’re talking about government bonds, worldwide! This is the market that supports military spending, education, transportation, and just about every safety net (in the US: Social Security, Medicare, Food Stamps, Medicaid, Unemployment Insurance, and so forth) on the planet. And you get this paltry interest rate when you might not even get your capital back in 10 years. A number of governments are on a clear trajectory for bankruptcy; there is a good chance that bond buyers will not get their capital back! And yet they lend huge amounts of money to these governments. Especially Baby Boomers, they have been pouring money into bond funds. Just like they poured money into stocks in 2000, and real estate investments in 2006. Oh well.

When do I think the bond bubble will pop? This year! 2013. I don’t think it can last to 2015. In fact, the bubble pop may have already started. And guess which institutions count government bonds as their major “stable” capital: banks. Yet another reason to watch out for the banks!

Furthermore, the solar cycle might actually peak this year. The NASA guy might be wrong about the dual-peak forecast.

What will it mean if this bubble pops? It means interest rates will rise, possibly a lot. This will strongly increase the amount of interest governments must pay on their debts. Their deficits will skyrocket.

Mortgage interest rates are closely tied to the government bond market, so mortgage rates will rise as well. (US mortgage rates rose from 3.88% to 4.35% just over the last week!) And if government deficits skyrocket, programs will need to be cut, so the massive support they are currently providing for the mortgage market will be in jeopardy, threatening even further rate increases.

Still, two cycles that we will discuss in the next post about cycles argue for that 2015 date.

* * *

I would like to make one thing very clear: If you woke up tomorrow and heard that a large “systemically important” international bank had collapsed, causing chaos in the rest of the financial system, and that most banks would be closed for some number of days, would you really be surprised? Probably not. Many people are starting to get the idea that the system is not exactly solid. I am certainly in that camp. So when I talk about August 2013 or some month in 2015 as the month when the real systemic collapse will commence, please know that, in my view, the more-than-sufficient conditions are in place for that full system collapse to happen at any minute. Discussions like the one above are an attempt to get a handle on probabilities. In terms of preparation, acceleration is not to be trifled with: I think that everyone should be doing what they can to be prepared now. If it turns out there is more time for preparation, fabulous, this type of preparation takes awhile and I’m sure we can all use the time. But that time may be short indeed. As the photo at the top of the post shows, when change arrives in your area, it may be monumental change.

Waterfall of Emerging Truth

Really, what’s happening is, it’s a change in the rules of the game, which means that your cash is increasingly at risk of ending up in the government’s hands.
–Philippa Malmgren, former Special Assistant to the President of the United States for Economic Policy

So, acceleration of US government scandals, acceleration of truth emerging from the shadows into the mainstream, acceleration of clear signs of governments desperate to hold onto power. Wow, if you’ve been reading the news, you know that things are starting to move very quickly:

NSA collecting phone records of millions of Verizon customers daily

NSA PRISM program taps in to user data of Apple, Google and others

–The US has extensive offensive cyber warfare capabilities. According to a US intelligence source, “We hack everyone everywhere.”:

     Obama orders US to draw up overseas target list for cyber-attacks

–Youtube gets a video of a former Canadian Defense Minister saying that UFOs and extra-terrestrials are real, that some of them work in and with the US government, and that there is a worldwide cabal that runs the planet for their own purposes:

Who are these vested interests, and what are they up to? …I have broadened and deepened my definition to cabal, and the cabal comprises members of the Three Sisters—the CFR, Bilderbergers, and the Trilateral Commission—the international banking cartel, the oil cartel, members of various intelligence organizations, and select members of the military…who together have become a shadow government of not only the United States, but of much of the Western world. The aim of the game is a world government comprising members of the cabal who are elected by no one and accountable to no one. And according to Mr. Rockefeller, the plan is well advanced. Does this help you to understand why our civil rights are being taken away from us?

–And weather wildness continues to accelerate, Oklahoma seems to get more than its share:

The National Weather Service reported Tuesday that the killer tornado that struck near Oklahoma City last Friday was a ferocious EF5 twister, which had winds that neared 295 mph… The weather service also said the twister’s 2.6-mile width is the widest ever recorded. According to the National Severe Storm Laboratory, the tornado blew up from one mile to 2.6 miles wide in a 30-second span… There have only been eight F5/EF-5 tornadoes in Oklahoma since 1950, the Weather Underground reports, and two of them have hit in the past two weeks. The other hit Moore on May 20, killing 24 people.

We’ll have more comments on all of that government stuff soon, but today, as part of observing this waterfall of emerging truth, let’s review material from an interview with a true insider. As stated in the post Accelerating Truth, more insiders seem willing, finally, to speak publicly about what is going on.

The insider for this post is Philippa Malmgren. She has served in the White House as the liason between the White House and the Federal Reserve, as the person responsible for all financial market issues for the President, and perhaps most importantly for our discussion today, she was part of what is officially called the President’s Working Group on Financial Markets, but which is known on the Street as the Plunge Protection Team. The PPT was created in early 1988 in reaction to the stock market crash of 1987. This crew goes to work when markets aren’t doing what the White House wants them to be doing and they interfere in whatever way they deem necessary. While the details are not disclosed, these people are said to have access to a very large pile of cash to push markets where they want them to go.

Philippa gave an amazing interview this weekend to King World News.  Here are some quotes:

…the magnitude of the debt that is held by the United States, and indeed by all of the industrialized economies that have a debt problem, is so great it cannot be paid down. The human suffering involved would be so far beyond our capacity to withstand, so it has to be defaulted on.

* * *

Look, we are in a world where every major industrialized government doesn’t have the funds to deliver on the promises they’ve made to the public. So they are going to reach for the public’s cash in different ways…. Some of it is through higher taxes. Some of it is what I would call ‘expropriation,’ although taxation and even inflation are a version of that. But for example, Portugal, about a year ago, announced that they were nationalizing three of Portugal Telecom’s pension funds and placing the assets on the government’s balance sheet so that the government’s balance sheet would look better for the purposes of negotiating with the EU.

Now, were those pensioners expropriated? Yes. It made page 14 of the Wall Street Journal and the Financial Times, as if it was a non-event. But I think what we saw in Cyprus, a really overt expropriation, we are going to see that come in lots of different forms (going forward). Some of it will be obvious like Cyprus. Some of it will be subtle like Portugal, but what’s sure is that it’s happening.

So, yes, we have a really important political, philosophical battle now as states (and governments) try to find a way to take your cash in order to fund themselves, and not necessarily to the citizens best interest.

Really what’s happening is it’s a change in the rules of the game, which means that your cash is increasingly at risk of ending up in the government’s hands. So this is what we need to be alert to around the world.

* * *

You just have to whisper at it (the price of gold), and you can move it big time. Are governments good at that? Yes, they are good at that.

* * *

It is true that governments hate it when gold starts going through the roof, especially when they are in the midst of the largest devaluation, currency debasement strategy ever known…. We have never seen so many large industrialized economies all adopt this strategy simultaneously.

* * *

…this is one reason that many of the institutions that I’m advising are very wary about gold is because they do feel it’s subject to manipulation. That (as a result) the volatility is too heart-stopping to withstand.

And they are looking at other options. One option is definitely the world of diamonds. I see lots of private wealth moving in that direction. That’s one reason we see diamonds hitting absolutely record high prices. It’s because you can move an immense amount of value across a border with this thing in your pocket that a metal detector cannot find.

By the way, I was in charge of anti-money laundering policy for the U.S. government, so I’m not condoning this. I’m just saying it’s a fact. In a world where inflation pressures are definitely ripping through emerging markets, people want to move ‘value.’ And in a world where currencies are being debased, they want to hang on to value.

I’ve said a number of those things on this site, some in almost precisely the same words. The web sites listed on the Blogroll for this site published most of these things earlier than I did. These things are not complex. They are easy and clear. But I thought that perhaps these things would mean more to readers if they heard it from a true big-time insider. Let’s summarize:

1. Governments made lots of financial promises they cannot keep.

2. Governments have borrowed way more money than they can ever pay back.

3. They will try to disguise Points 1 and 2 by printing a lot of money because they see this as the most palatable way to default on their obligations, that is, they will pay their debts in money that is worth less and less and less…

4. Governments are going to do whatever they can to confiscate money from people to remain in power, in both subtle and overt ways.

5. Governments who are debasing their currency hate it when the gold price rises as a direct reflection of people trying to defend themselves from the money printing and the confiscations. So they will try to keep you in their confiscation system by scaring you away from gold. By having the price of gold and silver move wildly when priced in dollars, what governments are trying to do is to convince you that an unbacked currency that can be created digitally in infinite quantities is stable…and that gold and silver, honored as money for thousands of years, is not.

Philippa mentioned diamonds for wealth preservation and that has not been mentioned at all on Thundering Heard. The reasoning is threefold: I am not an expert on diamonds; I have heard of other non-experts who attempt to preserve wealth via diamonds and get fleeced by those who are experts; and the diamond market is a cartel run by DeBeers and the Russians where price is falsely supported by these suppliers withholding huge supplies of diamonds from the open market, so in my view, if their cartel ever gets broken, the price crash in diamonds will be epic.

However, Philippa is right: at least for now, for hiding portable wealth, diamonds are very tough to beat. And her clients are large institutions, sovereign wealth funds, etc. These people can afford to hire experts to make sure they don’t get fleeced when they buy diamonds. So if you have such expertise yourself, or access to it through friends, diamonds might be a very good way to go. But if you do not have access to such expertise, in my view, gold is far better because if you buy minted bullion coins from a reputable dealer, you don’t need to be an expert. Though I guess it is best to mention that the following quote was the advice for getting through the financial collapse from a book mentioned in What is the Transition? Conclusion, that is, the Sanctus Germanus Prophecies Volume 1, published in 2003:

Buy minted gold and silver coins, other precious metals or color gemstones. This is your 100 percent guarantee against the financial collapse. Store them in a safe place other than a bank, as bank failures will multiply. Few, if any, will survive. The US and other country currencies will collapse just as the Confederate currency did after the Civil War in the US.

The overall message here is: if you have savings in bank or brokerage accounts, governments are trying to figure out how to grab that money. They are making this very clear, as I will show shortly in separate posts on the threats to bank accounts and brokerage accounts that have recently been clearly announced by governments.

A Forecast for the Next Eleven Years

Today we’ll review one of the single best pieces of economic / political / social analysis I’ve been lucky enough to see. Read this post and you’ll have an extremely important input for how the world will proceed over the next eleven years. How can I make such a statement? Because this analysis landed on my screen in December, 2007, and it covered the time period from 1995 through 2024, and it has been working extremely well. I promised more about cycles. This is from the world of cycles.

Understand this analysis and you will understand what Ben Bernanke of the US Federal Reserve has publicly admitted has been befuddling him and his colleagues.

At the time of publication at the end of 2007, this analysis said that we had reached a major turning point: That while the period from 1995 through 2007 had been characterized by optimism (think of all the “new era” talk), manias (think bubbles in stocks and real estate), high confidence, free enterprise, free trade, globalization, unfettered capitalism, and so forth–all of which had clearly been at the forefront during that period–that the period from 2008 through 2024 would be characterized by caution, fear, contraction, pessimism, restrictions on freedom, economies planned by the state, trade barriers, low confidence, and so forth. Here is part of what was presented:

Manfred_Pluto_Switch_ed

To put it mildly, an awful lot of people would have benefited if they had known about this huge switch that did occur, just as predicted, in January 2008. It really was as if, at the end of 2007, someone threw a big switch and changed things dramatically. Central bankers and politicians around the world are still scratching their collective balding heads about why all of the things they used to do in the past, things that would work to stimulate economies, are barely working today. At first they used their old tried-and-true methods–lowering interest rates, feigning confidence, stuffing cash into the banks, spending money on stimulus plans–and they got an anemic recovery at best. So they pulled out the really big guns. “Unconventional” methods, as they call them. Also known collectively as printing money. Lots of it. Enough since 2009 that they have basically tried to add the equivalent of one year of the US economy to the global economy.

What has it got them? Well, since the printed money went into buying assets rather than creating jobs, the rich and their vendors–Sotheby’s, Porsche, Armani, et al–have done very well. Everyone else, not so well. The huge divide between rich and poor is widening at an accelerating pace. Historically, that has always been a dangerous setup. You can only push people so far before they push back. Sometimes fiercely. Overall, what it got them was continuing recession and debt crises in Europe, a US economy with paltry growth at best, and China joined the club of getting themselves over-indebted to keep their economy growing, but now that excess of debt is coming back to bite them and their economy is rapidly losing steam. Japan remains in near-continuous recession no matter what they do.

Since the analysis above has been working remarkably well for 18 years, it makes a whole lot of sense to figure that it will keep working for the next eleven years. That was the claim for this cycle, that it would have two phases, one from 1995 through 2007, and the second, radically different in tone, from 2008 through 2024.

What could be the cause, the source, of such an influential cycle, one that seems to have changed the energetic tone for the majority of people, from excessive optimism from 1995–2007, to caution from 2008–2024? Let’s show more about what the top of that table looked like when presented in December 2007, right at the point of the big switch:

Manfred_Pluto_Switch_ed2

The table was astrological in nature.  It showed what was about to happen as Pluto moved  from Sagittarius into Capricorn.

This outstanding piece of analysis was put forth by Manfred Zimmel through his web site  in his Forecast Issue for the year 2008. At the web site, you can sign up for his free newsletter or paid subscription service. The information above was given to his paid subscribers only.

Now I know that some readers here have a low opinion of astrology. I would say two things about that: First, I agree that popular astrology as shown in daily newspapers and glossy magazines is worse than useless. Second, as with most complex fields of endeavor, there is a small group of practitioners doing excellent work and a much larger group of practitioners who do not. But excluding astrology from one’s view of the world precludes access to information like the above, which can be exceptionally useful in guiding real world decisions. Also, it can provide an outstanding “truth filter” for claims about the world. For example, the article at this link contains five predictions Bernanke made in 2008 that, armed with the information above, one could see at the time that these were more than likely to be wrong. They turned out to be, in fact, entirely wrong:

1/10/08 — The Federal Reserve is not currently forecasting a recession. WRONG

2/27/08 — I expect there will be some failures [among smaller regional banks]… Among the largest banks, the capital ratios remain good and I don’t anticipate any serious problems of that sort among the large, internationally active banks that make up a very substantial part of our banking system. WRONG

4/2/08 — In separate comments, Mr. Bernanke went further than he had in the past, suggesting that the Fed would remain aggressive and vigilant to prevent a repetition of a collapse like that of Bear Stearns, though he said he saw no such problems on the horizon. WRONG

6/10/08 — The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so. WRONG

7/16/08 — [Fannie Mae and Freddie Mac are] adequately capitalized. They are in no danger of failing… [However,] the weakness in market confidence is having real effects as their stock prices fall, and it’s difficult for them to raise capital. WRONG, they needed bailouts to the tune of $160 billion.

The point here is that automatically excluding information because of its source can put a person at a distinct disadvantage in understanding how the world works and where it is heading. Anyone who has read more than a couple of my posts knows that I regularly give the US Federal Reserve a well-deserved lambasting for its lies, its attempts to get over-indebted people to borrow and spend more, and its only real goal: protecting the stranglehold that the large banks have on our society. But I used one of their reports in 2005 to decide when to sell out of real estate. They published a great research paper in 2005 that analyzed the history of maybe 30 real estate booms and busts from many countries. They said that real estate bubbles popped in the following manner: once sales volume peaked, price peaked, on average, six months later. US sales volume peaked in October 2005, and the US price peak was in June 2006, so their estimate was quite good. I took their research seriously and sold in Feb 2006. They, however, did not take their own research very seriously, at least in their public statements. Here are some quotes from Bernanke in 2007 (I won’t bother putting the WRONG label after each.):

7/1/2005CNBC interview:

INTERVIEWER: Tell me, what is the worst-case scenario? We have so many economists coming on our air saying ‘Oh, this is a bubble, and it’s going to burst, and this is going to be a real issue for the economy.’ Some say it could even cause a recession at some point. What is the worst-case scenario if in fact we were to see prices come down substantially across the country?

BERNANKE: Well, I guess I don’t buy your premise. It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis. So, what I think is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.

10/20/05: BERNANKE: House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals. (Ha!)

So, acting on the Fed’s research can be very helpful. Acting on their opinions and forecasts is a mistake. They aren’t trying to help you, they are trying to help the banks. Anyone who understands that distinction can put Fed forecasts in the proper perspective.

So the next time you hear rosy predictions about the great recovery that is turning out to be perennially “just around the corner,” whether those predictions are from someone who is mistaken or someone with malevolent intent, now you can understand that what these forecasters are up against is this: for an economy based on debt to grow, they need to get people to borrow more money. And until 2024, people are under the influence of Pluto in Capricorn, and most of them don’t really want to take on more debt. Quite the contrary, a lot of them have replaced the notion of “how much debt can I qualify for” with a wish to have less debt. Many have now seen the slavery of debt and they didn’t like what they saw.

Perhaps after 2024 the economists will be able to stimulate the majority’s “animal spirits” again. The question is: can this financial system, which depends on the constant growth of debt, survive through 2024 with people not wanting more and more debt?  I decided quite some time ago that the answer is no and persistently take those pleasant actions that ready a person for financial system collapse.  I take the influence of this Pluto “big switch” as a small but important part of the energetic change bringing us the long-awaited Transition.

Thanks to Manfred Zimmel for permission to reprint this excellent piece of research.