The stage is "set", follow the money.
The stage is now set for a financial disaster. Whether the situation in Ukraine was "helped" by western interests, Russia itself or was in reality caused by internal friction does not matter. We are where we are and as I just wrote, "who is going to stop Vladimir Putin from doing whatever it is that he chooses"? The Russians have already indicated that John Kerry's statements are unacceptable, they have as much said...they are only words. The Western allies have discussed "sanctions" on Russia from an economic standpoint, I just wonder if the "West" has thoroughly thought through just how precarious their own financial positions are?
This is what I meant when choosing my title, "the stage is set". If you look at the economies of the West, the credit and equity markets, look at the FOREX markets and look at what we know of the "flow and the inventory situations" in gold and silver then you can see where I'm going. The markets have been managed onto a "footing" where there is no footing and leverage to these markets is at record levels. What I am saying is that if you look at the markets as a "snapshot" photo it doesn't look precarious. However, if you look at them from a motion picture standpoint, the markets have all gotten extended through the use of debt, leverage and margin and are vulnerable to massive "resets".
The current situation smells rotten to me and almost like a "trap". I say a trap because "they know". They know that the West is economically and financially like an old, one legged man with both hands tied behind his back...getting up from a bar stool after 40+ years of drinking spiked Kool Aid. Let me explain this.
The West (and thus the world) has been on a fiat monetary standard for 40+ years. We have overspent and lived on deficit spending each and every year (Clinton's 1 year surplus was smoke and mirrors). This "fiat experiment" has lasted longer than any other on record. It has lasted longer because of the creation of both computers and derivatives, these "aided" in smoke screening the truth. The "truth" being that wealth is "produced" by producing...NOT consuming. We have gotten fat and lazy and come to believe that the "way it is" ...is always the way it will be. History does not work like this!
I as usual will ask a few questions. Has the East "readied" themselves for a Western fall or collapse? I think that yes, they have to a great extent. They have accumulated infrastructure, plant and equipment...AND gold. They "know" where their gold is, do "we"? Do Americans know where their gold is? The British or the Germans? No. Has the gold moved East? Yes, we know for a fact that gold has flowed East faster and in greater quantity over the last several years than in all of history. Is our banking system "sound"? Is our currency sound? Are we even sound "socially"? Or are we "weakened" greatly than from our heyday? Go ahead, you can say it...no, we don't even resemble our former greatness. "They" know this also.
I ask you this, how much "pressure" exactly can we put on Russia? Do you really believe that Mr. Putin will say "OK, I give up, our currency and banking systems are in a shamble, you win"? Do you think that he does not know that China is our biggest banker? Do you really believe that if China told us to "jump" that we would (could?) thumb our nose at them? You see, this is the problem...we OWE too much money and have weakened ourselves too much ...for too many years. The danger of course is that "we", (the global voice of reason for so many years) figure out that there are two choices. Either acquiesce to a lower standard of living ...or "kick the table over" and end the game. Could we really play the trump card and press the red buttons that will light up the world? This is truly a scary thought but not an impossibility.
I have for several years talked about a "global reset" and how it was ultimately necessary...and desired by the rest of the world. The stage is set for this to happen right here and now. Because we live behind a façade of financial strength, the masses will not believe it's possible to go to bed one night only to wake up to an entirely "new world order" the following day. I am telling you that this is not only possible, but highly probable. Do you really believe that the East would not like to have our standard of living? Do you believe that they think "we deserve" our standard of living? DO WE DESERVE our current standard of living?
The danger right now is that markets begin to spin out of control and "margin calls" take over. The danger now is that there is a "run" not only on banks but on metal. A run on metal cannot be satisfied and the "vaults" (our vaults) will be seen to be empty. This is a huge problem because "confidence" will be broken. The financial game can only be extended if the myth of "the gold is there...and it's plentiful" can be defended. If a run were to occur and delivery is defaulted then the world will look for a new "master". The old saying that "he who has the gold will make the rules" is not just an old saying. It is reality, hard reality and history has proven this. If it turns out that we can no longer "supply" gold in return for dollars...then the Chinese will have no more use for dollars...and the world will look East for guidance as to what "the new rules are".
Ignore this or consider it the rantings of a lunatic, it is not. This is how the world has always turned financially, economically and socially. "Power" always follows, flows to and accrues to the biggest holder of gold. You have heard the saying "follow the money", I'll bet that you have never really thought this one through. "Follow the money" in years gone by meant "follow the gold"...it still does if you truly understand what is happening! Regards, Bill Holter