Larry Edelson
Merry Christmas and a Glimpse Into 2015 ...
Larry Edelson | Wednesday, December 24, 2014
If you think 2014 was relatively calm and peaceful in the markets, fasten your seat belts. 2015 is going to be anything but calm!
I'm not an alarmist. I am simply going to tell you like it is.
How I see things unfolding based on my economic models. How I see the markets developing. How I believe you should protect and grow your wealth in 2015 and beyond.
Don't underestimate this. 2015 will go down in the history books as a year that all hell broke loose - a year when the world was turned upside down. A year when everything you thought you knew about the markets was largely proven wrong.
To be true, some of the forecasts I expected for 2014 turned out to be a bit delayed. But that doesn't mean they won't be right. In 2015, new trends will emerge. Relationships between asset classes will change. Geo-political turmoil will ramp up - even more than it already has - at a super feverish pace. And there will be more money to be made - and lost - than ever before.
The Dollar Will Continue A Surprisingly Strong Rally
I am the ultimate dollar bear. I called the peak in the dollar back in July 2001, and I stated emphatically that the dollar would lose value for at least 10 years heading into the year 2011.
I also shouted from the rooftops that the U.S. dollar would eventually lose its status as the world's reserve currency.
For the first 10 years of the 21st century, the dollar did nothing but plummet, losing nearly 37 percent of its value in international currency markets.
While it has not yet lost its global reserve status, it will. It's etched in stone.
There is simply no way the U.S. dollar can remain the world's sole global reserve currency when the emerging markets of Asia and Latin America are rising like zeniths.
There is simply no way that our country's fiscal and monetary policy can be exported throughout the world when so many countries are gaining market share and contributing to global GDP like never before.
But here's the irony. Even as the dollar is destined to lose its singular reserve status - in a financial crisis, it's still the reserve currency by default.
That means when markets and economic systems go into turmoil, the dollar gets a shot in the arm as the rest of the world goes into "risk-off" mode, selling assets and parking their money in cash.
And with the back wall of the financial hurricane now starting to hit again - in Europe - and the war cycles continuing to ramp ever higher - the dollar has more upside to it, before it resumes its long-term bear market.
Indeed, in just the past three months, the dollar has staged an incredible 8.3% rally against a basket of foreign currencies. So the question then is "Why would the dollar continue to rally?"
The biggest reason is Europe. Europe is sure to go down the drain in 2015. You'll read more about that below in my forecast section for Europe.
The second biggest reason: The continued ramping up of geo-political tensions as forecast by the war cycles. Rising geo-political tensions benefit the dollar more than any other currency.
So for the hyperinflations out there, don't expect it in 2015. In fact, expect the opposite: The strong winds of disinflation that a strong dollar always brings with it.
Forces that are turning out to be far more powerful than all the money printing by the Fed and other central banks combined.
And it basically comes down to this: People everywhere are starting to hoard their wealth. That means cash and alternative assets are coming into play, and since the dollar is still the world's reserve currency, it means a stronger dollar ahead.
Gold And Silver Will Plummet To New Lows, Then Bottom
I don't know anyone who has pegged gold's moves over the years as accurately as I have. I have beaten the biggest names in the investment arena to the punch in gold, time and time again.
Yes, I was a bit off in the middle of the year. But I quickly warned you that the bear market was back, and you were able to shed some holdings and hedge other holdings in the nick of time.
Moreover, many of the biggest fund managers in the world are still getting clocked in gold and silver. But you avoided most of the carnage.
I see the coming bottom in gold as a rare chance to truly double up on the precious metal and make a true fortune as it inevitably turns around and heads to somewhere north of $5,000 an ounce in the years ahead. Ditto for silver.
What you need to know now is how the final lows in gold and silver will pan out. They are coming. 2015 will be the year gold and silver bottom and begin an awesome new leg to the upside, one in which very few investors participate, for they won't understand the forces at play.
Let's step back in time and review. As you know, from the September 2011 high, I said that gold and silver would enter a two- to three-year interim bear market that would end in either 2013 or 2014.
We got our first chance at seeing a bottom in gold in June 2013 when it hit a low of $1,178. It was close, but not close enough since major cyclical long-term support at that time lay at $1,029.
Still, there was a chance that gold could have bottomed in 2013, provided that in the aftermath of the June low at $1,178 it moved up and elected major buy signals on my system. It did not. So gold fell again, down to the $1,180 level at the end of 2013.
Then it rallied yet again in the early half of 2014, but it failed to issue any major buy signals. And here we are today, and gold and silver are acting miserably.
Look at the 2014 momentum and trend ranges that I gave you in last month's issue. For gold, the ranges were:
2015 Momentum: $1,814.30 - $1,545.80
2015 Trend:
$1,466.30 - $1,087.10
With gold at the $1,194 level, it is severely negative in momentum, but neutral in trend. Nevertheless, all of my models suggest that gold will soon break the bottom number in the trend range - $1,087.10 - either before year-end or shortly after, and then head down to test major long-term support, which lies between $900 and $920.
And then, the bottom will finally be here. The most likely time periods for a bottom: January and October of 2015.
Likewise, silver is not done on the downside either. Recently, it plunged to a new five-year low in the $14 area. It has since recovered, but only in a bear market bounce.
Here are the momentum and trend ranges for silver published last month:
2015 Momentum: $37.80 to $26.26
2015 Trend: $31.16 to $14.89
$14.89 was penetrated on the last decline, indicating lower prices yet to come. Severely negative in momentum as we head into 2015, silver is destined to fall to major support, as low as the $12.50 level.
But keep the following points in mind:
First, gold and silver WILL bottom in 2015.
Second, when they do bottom, it will represent the opportunity of a lifetime.
Third, I will position you appropriately in gold and silver at the right time and within striking distance of the final lows.
I will be recommending a combination of physical holdings, ETFs, bullion coins, mining shares, and more. Right now, I recommend you continue to hold your remaining core gold holdings.
I recommend you build your cash and be ready to deploy it in both gold and silver in 2015
as the bottom comes into play. I cannot overstate the importance of this.
Europe And The Euro Will Collapse
The euro has already begun its descent, plunging more than 14.2 percent in the past seven months. Yet many still think Europe can recover. I say: No way.
Instead, one of the biggest surprises for 2015 will be how Europe and the euro will crumble - despite Herculean efforts by the European Central Bank (ECB) to pump trillions of euros into the economy.
As I've said previously, before the euro got off the ground more than a decade ago, Europe's experiment with a single currency was doomed from the get-go, for a variety of reasons.
But all you have to do is read between the lines and see what's happening in Europe:
First, deflation has a tight grip on Europe. Latest figures show inflation running at 0.4 percent in the euro region, its lowest levels since the 2009 crisis. That's despite massive ECB money printing.
And it's sure to continue and worsen because ...
Second, unemployment is stubbornly high, with youth unemployment reaching 65 percent in many parts of Europe. Most importantly ...
Third, Europe's leaders are out of their minds. They are raising taxes, engaging in confiscatory themes, chasing the rich out of Europe and unknowingly unleashing powder kegs of social and political protest that are sure to tear the union apart.
None of it will work. ECB money printing will not work. Raising taxes will back fire. Confiscating money will drive more and more businesses out of Europe, and the rich will continue to leave in droves as well.
Moreover, with Germany's economy starting to also slow, Europe's fate has been sealed.
What's more, there are the rising war cycles and the conflict between the United States and Europe with Russia - and the economic sanctions against it - that are also pounding European business earnings.
In these initial stages of the ramping up of the war cycles - keeping in mind they have five years to go - Europe will be center stage. Hence, why I see more civil unrest in Europe in the months and years ahead.
Bottom line: The euro - and hence, Europe - already declining, will CRASH in 2015.
That also means that in 2015 you will see even more savvy money leave Europe's banking system in droves. A recent study I did showed nearly $1 trillion worth of European money came to our shores over the past 12 months. Expect more capital flight from Europe.
The consequences will lead to a stronger dollar, as discussed above, and the final bottom in the precious metals.
Jim Sinclair
Magic Growth Numbers
Paul Craig Roberts December 26, 2014
Everyone wants good news, so the government makes it up. The latest fiction is that US real GDP grew 4.6% in the second quarter and 5% in the third.
Where did this growth come from?
Not from rising real consumer incomes.
Not from rising consumer credit.
Not from rising real retail sales.
Not from the housing sector.
Not from a trade surplus.
The growth came from a Bureau of Economic Analysis survey of consumer spending on services. The BEA found that spending on Obama care drove the US real GDP growth to 5% in the third quarter. http://www.zerohedge.com/news/2014-12-23/here-reason-surge-q3-gdp
In America, unlike in other countries, a huge chunk of medical spending goes to insurance company profits, not to health care. Another big chunk goes to paperwork, which has a variety of purposes such as collecting personal information on patients and combating fraud (probably the paperwork costs more than fraud). Another chunk goes for tests and procedures in order to justify further procedures. For example, if a doctor thinks a patient's diagnosis requires a MRI, he must often first order an x-ray to establish that a cheaper procedure does not suffice. If a cancerous skin growth needs to come off, first a biopsy must be done to establish that it is a cancer so that a needless removal is not performed. And, of course, medical practicians must order unnecessary tests in order to protect themselves from the liability of relying on their medical judgment.
To regard any of these expenses as economic growth is farfetched.
There are sampling and other problems with the survey of personal consumption, and apparently Obama care spending was all dumped into the third quarter. Why the third quarter?
More...
Zero Hedge
Civil Asset Forfeiture: The Final Stage Of Collapse Of Empire
Submitted by Tyler Durden 12/28/2014
This is the final stage of the collapse of the Roman Empire. When the state runs out of money, it historically attacks the people. In Rome, whole armies began sacking their own cities to get paid. The police are doing just that. Whatever they can confiscate goes to funding their own pensions. This is a national problem that will only get much worse going into 2020. We have nobody in Washington representing the people any more.
The Line Between Rational Speculation and Market Collapse
Submitted by Tyler Durden 12/28/2014
"Current equity valuations provide no margin of safety for long-term investors. One might as well be investing on a dare..."
LeMetropole Cafe
THE ECONOMY IS NOT RECOVERING - GET PREPARED
By: Devvy
December 28, 2014
NewsWithViews.com
To look at data being released by the Lying Machine out in Washington, DC., specifically minions who work for the criminal impostor in the Red House (formerly known as the White House), one would think happy days are here again!
I know it's tiresome and depressing to constantly read how bad things are economically in this country, but commerce runs the engine of our economy and our lives for it generates the income we all need to survive. It's also confusing because one doesn't know who or what to believe. However, is it not better to know the truth than to rely on an illusion? Truth from people who actually care what happens to we the people.
Intellectually lazy media hacks, some who actually pass themselves off as journalists, not only in the 'mainstream' media but also on cable networks are nothing more than good little toadies who prattle on about a growing economy without ever broaching the subject of the head of the beast, the privately owned "Federal" Reserve and what impact its had on our economy and daily lives for over 100 years. Oh, sure, once in a while one might see a headline about the "Fed" and raise a softball question about how "they" manage our money and economy. But, for the most part, they simply stick to the script:
Everything Is Awesome! (Dec. 24, 2014): "Good news! The U.S. economy grew at a rollicking 5 percent rate in the third quarter. Oh, and it added 320,000 jobs in November, the best of its unprecedented 57 straight months of private-sector employment growth. Just in time for Christmas, the Dow just hit an all-time high and the uninsured rate is approaching an all-time low. Consumer confidence is soaring, inflation is low, gas prices are plunging, and the budget deficit is shrinking....
"This bah-humbug brand of moral superiority has flourished since the crisis: How dare you celebrate this or that piece of economic data when so many Americans are still hurting? It's awkward to argue with that view, since many Americans are indeed still hurting. But the economic data keep showing that fewer Americans are hurting every month. No one is satisfied with 5.8 percent unemployment, but it's way better than the 10 percent we had in 2010 or the 11 percent Europe has today. Declining child poverty and household debt and personal bankruptcies are also worth celebrating. Better is better than worse. Whether or not you think Obama care had anything to do with the slowdown in medical cost growth, it's a good thing that Medicare's finances have improved dramatically, extending the solvency of its trust fund by an estimated 13 years."
Really? The deficit is shrinking? The deficit is the shortfall needed by the thieves in the Outlaw Congress to continue their lunatic spending. That deficit gets added to the debt through borrowing. That is not shrinking, it's growing faster than weeds. Paying Down The Debt Is Now Almost Mathematically Impossible
Consumer confidence is soaring? That's why so many of us contribute little to nothing to the economy except what we need, not want. Why? Because unlike the author of the piece above who must have been kissing the Blarney Stone lately, the real numbers tell a different story.
Fewer Americans are hurting every month? I guess that accounts for the continuing rise in the number of Americans on food stamps; closing in on 50 MILLION. Obamacare most certainly has hurt millions of Americans causing financial hardship from being forced into that monstrous mess, and oh by the way, did you see this one?
Obamacares Christmas surprise by Rep. Mark Meadows (December 19, 2014)
"If you like your health care plan, the Centers for Medicare and Medicaid Services (CMS) has a Christmas surprise for you! When will this new present arrive? December 25th....CMS has proposed a new rule that includes an overly reaching provision allowing CMS to re-enroll anyone who has not made the annual trek back to healthcare.gov in a cheaper plan of CMS' choosing. That's right, the government will choose your plan, perhaps limit access to your doctor, and ultimately make the decision on what is "best" for you.
"Not to worry, just like Lady Justice, who wears a blindfold when determining guilt or innocence, CMS will use a blindfold to pick your plan. The agency will select your plan without knowing your medical history. They will do so without knowing if you are currently undergoing treatment or working with a specific doctor. They will do so without knowing your financial status. Despite the fact that the millions of people who already enrolled chose the plan that they believed was best for them.
"CMS has laid the perfect trap: Sign up at healthcare.gov one time in your life and we will never let you go. If you don't continually re-enroll each and every year, CMS will keep you on the plan that it chooses because, after all, CMS knows what's best and they always make the best decision...
"To be clear, a citizen will sign up once for a private plan with a healthcare provider, only to have that plan changed by the federal government. Moreover, CMS will change your plan after the open enrollment period ends, leaving you and your family stuck with a potentially unwanted plan for the year." I encourage you to read all of the article if you are one of tens of millions forced into that unconstitutional Ponzi/taxing scheme.
As for the idea that Medicare's finances have improved dramatically, well, fiddle-dee-dee, let's just ignore the numbers. As I write this column Medicare's unfunded liabilities are $80,483,145,378,862. By the time I could write down those numbers on a piece of paper it jumped to $80, 483,146,986340. That's TRILLIONS of dollars. TRILLIONS. I also ask: What Medicare trust fund? You mean the one like Social Security? Oh, good. That's reassuring, but since there's no money in the U.S. Treasury each month for the payouts, it all comes from borrowing from our enemies like Communist China, printing up more worthless paper to pay off old debt to issue new debt.
The national debt created by the thieves in the Outlaw Congress and urged on by millions of Americans who now depend on all those government agencies to create unconstitutional, worthless jobs, is $18.4 TRILLION bux and climbing. That's awesome?
Not according to those who are not on the government payroll:
Expert: Obama economic surge built on doctored data - 'Suggestions that all is right again with the world are nonsense'
NEW YORK - "The White House appears determined to deliver in the president's upcoming State of the Union speech a ringing message that economic growth under Obama is robust, with the DOW topping 18,000 for the first time and the Bureau of Economic Analysis reporting last week revised estimates placing third-quarter growth at an impressive 5 percent.
"But critics, like ShadowStats.com econometrician John Williams, call it a smoke-and-mirrors illusion of economic data dishonestly calculated and reported to look rosy. Put simply, Williams, in the most recent edition of his subscription newsletter, argues that the developing White House narrative of "the strongest economic growth in a decade" is nonsense. He argues that the full economic recovery indicated by the real GDP numbers reported last week by BEA is "a statistical illusion created by using too-low a rate of inflation in deflating (removing inflation effects) from the GDP series."
"Williams further argues "no other major economic series has shown a parallel pattern of official full economic recovery and meaningful expansion beyond, consistent with GDP reporting." Williams' analysis of retail sales, again adjusted to remove an artificially low rate of inflation, shows "a pattern of plunge and stagnation and renewed downturn, consistent with patterns seen in series such as consumer indicators like real median household income, the consumer confidence measures and in the unemployment and most housing statistics."
"WND previously has reported that real unemployment in the U.S., measured by traditional definitions that include an estimate of those forced to drop out of the labor force because jobs are lacking and those seeking full-time employment who are forced to take part-time employment is closer to 23 percent, rather than the 5.8 percent the Bureau of Labor Statistics reported in November, confirming Donald Trump's accusation that Obama's jobless numbers are "phony."
It's not just one person blasting the trumpet (although Williams is very good at what he does), it's many. Dr. Edwin Vieira, who was one of the first sources I ran across 24 years ago when I began my journey, has written exhaustively about the subject for over 35 years and written what should have been a Pulitzer prize winner: Pieces of Eight -The Monetary Powers and Disabilities of the United States Constitution. If you would like to further your knowledge about our debased monetary system and why it always brings down a country, constitutional attorney, Larry Becraft, has a whole section on money on his web site.
* Another Fabricated Jobs Report - Paul Craig Roberts* You better believe it: Fisher Sees New Housing Bubble Signs, Warns of MBS Buys - "A top Federal Reserve official said on Thursday he is seeing signs of the United States re-entering a "housing bubble," and warned about the U.S. central bank's ongoing purchases of mortgage-based bonds."* 5 U.S. Markets That Are Already Back in Housing Bubbles* John Williams of ShadowStats debunks the myth of economic recovery* New Global Crisis Imminent Due To "Poisonous Combination Of Record Debt And Slowing Growth", CEPR Report Warns* What's Really Going on Inside the Latest GDP Number
And, if you think what those rotten, corrupt Republicans did in passing the budget deal last month was bad, which it was (illegals and fully funding Obama care), I highly recommend you read this one through: Meet Your Newest Legislator:Citigroup because it's an in-your-face set up for the next collapse. None of it constitutional, all of it designed to bankrupt you and me. Dead serious. They know what's coming.
In 2008, thieves in the Outlaw Congress stole hundreds of billions of dollars from we the people- all borrowed with the debt slapped on our backs - to unconstitutionally bail out banks. No where in Art. 1, Sec. 8 of the U.S. Constitution does it authorize the bandits in the Outlaw Congress to steal from you and me to loan or give one penny to private banks or automobile manufacturers. Not a penny. But, the banks were "too big to fail". You, me, our children and grand children on the other hand aren't 'too big to fail'. We are being driven into poverty to pay this massive debt shoved down our throats and keep the banking cartels pumping worthless paper. And, voters were so pleased with it all, they just reelected most of the same incumbents who were in the Outlaw Congress in 2008 who voted to further impoverish them.
Now, comes the next round; people had better be very afraid :
It's Official: "The Worldwide Bail-ins Are Coming. "On November 16, leaders of the G20 Group of Nations - the 20 largest economies - made an important decision. The world's megabanks now have official permission to pledge depositor accounts as collateral to make leveraged derivative bets. And if they lose a bet, the counterparty to the contract has first dibs on your money.
"But this proposal profoundly changes the rules for banking globally, and not in a good way. Deposits in banks that are "too big to fail" will be "promptly recapitalized" with their "unsecured debt." This avoids those nasty taxpayer-funded bailouts that proved so politically unpopular during the 2008-2009 financial crisis.
"And the largest chunk of unsecured debt is your bank deposits. Insolvent banks will recapitalize themselves by converting your deposits - checking accounts, but also money market accounts and CDs - into stock. Thus, when you deposit money in a bank, you're taking the same risk as someone buying a stock. Or, for that matter, betting on a horse named "Falling Star" at the local racetrack. Because, in effect, that's what banks are doing with your money."
Virtually ALL of the Big Banks' Profits Come from Taxpayer Bailouts and Subsidies: "The government moved the arms and legs of the big banks to pretend they were still alive and have been doing so ever since. But they were no longer going concerns after they went bust. The government pumped blood back in these dead banks and turned them into zombies. They will never come back to life in a real sense ... they are still zombies 3 years later. Many of the world's leading economists and financial experts say that by choosing creditors over debtors, the government is dooming the economy. See this and this. The big zombie banks can never come back to life, and - by trying to save them - the government is bleeding out the little guy. By choosing the big banks over the little guy, the government is dooming both."
The B Word by The Mogambo Guru: "And now, thanks to new legislation by the Congress, the taxpayer is suddenly responsible for a massive, unbelievable $300 trillion in derivatives owned/financed by banks, because the economic system is now so dependent on corruption after corruption that nothing can change it, meaning that cash and credit (debt) will continue to be created in ever-increasing amounts so that the government will grow like a malignant cancer and the economy continue to sputter, until the economy collapses in a Huge Stinking Heap (HSH), as confidently predicted by Ludwig von Mises of the Austrian School of economics, which is (since you were too shy to ask) the only true theory of economics, and I spit ("ptui!") on all the other stupid theories, the takeaway being that if you are NOT buying gold and silver with a frantic, manic urgency born of unrelenting hysterical fear, then there is something very wrong with you."
What's underway is like a huge hurricane forming and it is going to slam this country. For decades countless individuals have been warning about the "Fed' and the disabilities of our monetary. It is the subject, which caught my attention big time 24 years ago. America 'Crossed the Rubicon' a long time ago. The lying thieves in the Outlaw Congress (with a few exceptions like Dr. Ron Paul) have refused to abolish the head of the beast, the "Fed", and so we have come full circle. The herds will be devastated while wailing, "How come no one told us?"
In an effort to mitigate the destruction, years ago, Dr. Edwin Vieira began his concentrated effort on trying to get certain states of the Union to protect their citizens by passing constitutional sound money bills into law. In my column, Second Critical Bill for Your State Legislature - 2013 Session, I have again outlined the problem and given you the solution along with exhibits to get to your state rep and senator. Here we are over two years down the road with no states that I'm aware of getting prepared for what's going to hit and it will hit the states big time. There is still some time left if the states act, but they better get off the dime and quit ignoring reality.
I have written about the massive amount in pension liabilities being carried by the states as have many others. Even the CBO, the non partisan Congressional Budget Office has issued a warning: The Underfunding of State and Local Pension Plans: "By any measure, nearly all state and local pension plans are underfunded, which means that the value of the plans' assets is less than their accrued pension liabilities for current workers and retirees."
Think this has changed since 2011? How can it with more folks retiring and not enough dying? Pension Tsunami, Record Federal Spending Increase U.S. Debts by $4.2 Trillion; State Debts Explode:
"But that's just the federal shortfall. States, too, have trillions in unfunded pension obligations, which they use funny accounting methods to conceal, resulting in states claiming to have just a small fraction of the unfunded pension liabilities they actually have. State pension obligations have repeatedly been expanded in ways that were supposedly "revenue neutral," but which any honest legislator could see would actually cost taxpayers countless millions. Under one such expansion, a Philadelphia councilwoman recently "retired" from her position for just a couple days in order to collect a $478,000 pension, then returned to office on January 2. She took advantage of a pension-law change that was "touted as being 'revenue neutral'" when it was introduced. "It's been anything but that. Since its introduction, Philadelphia's DROP program has cost the city $258 million in extra pension costs over a decade, according to a 2010 Boston College study.
Well, this is likely to come to your state in the not too distant future:
Kansas Governor Proposes Using Pension Money to Cover Budget Gaps Created By His Tax Cuts - (December 15, 2014)
"In 2012, Kansas Gov. Sam Brownback signed a landmark bill that delivered big tax cuts to high income earners and businesses. Less than two years after that tax cut, the state's income tax revenues plummeted by a quarter-billion dollars -- and now Brownback is pushing to use money for public employees' pensions to instead cover the state's ensuing budget shortfalls. Brownback's proposal: Slash the state's required pension contribution by $40 million to balance the state budget. But Kansas already has one of the worst-funded pension systems in the nation. The state was also recently sanctioned by the Securities and Exchange Commission for not accurately disclosing the shortfalls.
"Brownback, an icon of tea party economics who was re-elected in 2014, defended his proposal to divert money from the Kansas Public Employees Retirement System (KPERS), telling the Wichita Eagle: "It's kind of, uh, well where are you going to go for the funds? And I don't like it, but it's kind of what's your other option if you don't hit K-12 and higher ed with allotments?"
When hack politicians like Brownback get in charge of your money with a little help from their friends in the legislature, the end result is always the same: YOU get screwed. As for "tea party economics", that's a new one to me. A lot of Americans who belong to tea party chapters have become knowledgeable about the problem with fiat currency and the "Fed", but sadly, most don't. Hopefully, in the future they will learn as I did so long ago.
State legislatures go back into session week after next. The time for getting bills into the hopper for the upcoming session - which in states like Texas, Montana, Nevada and North Dakota are not only short, when they go out of session, they don't come back until 2017 - has passed. But, all state legislatures have the option of getting emergency legislation introduced or even call a special session. Is your state legislature addressing the money issue? What about your state pension? Your 401(k) for the "golden years" - what backs up the paper? The time to find out is now.
Arrogant and uninformed state reps and senators throughout the land are playing with fire while they go about business as usual. Budgets and new legislation to wade through while the 800-pound gorilla sits smiling in the middle of the floor.
* "But I don't want to go among mad people," Alice remarked. * "Oh, you can't help that," said the Cat: "we're all mad here. I'm mad. You're mad." * "How do you know I'm mad?" said Alice. * "You must be," said the Cat, "or you wouldn't have come here." ? Lewis Carroll, Alice in Wonderland
The madness is believing the day of reckoning for all the massive debt - including taxing schemes like SS, Medicare and "free" prescription pills - won't come because somehow, someone in a position of power is going to ride in on the proverbial white horse and save everyone's bacon. People hope things will get better. I read a line in a book recently: "Hope sits on the shelf collecting dust." It's boots on the ground that gets the job done, but when you have blind legislators in the state houses and crooks in the Outlaw Congress, it usually takes a catastrophe to wake them up. Well, maybe not since the core problems of what happened in 2008 still have not been fixed spelling future disaster and a bigger repeat of what happened back then.
The "Fed" continues to print worthless confetti to pay off old debt that can't be paid off because there's no money in the people's purse. Is that not madness? It is the only reason the big 'whoosh' hasn't hit, but how long can it go on? You can only put so much air in a balloon before it bursts.
We frequently hear, "Are you better off than four years ago?" during the campaign "season". Are you? Better off than two years ago? How much more will the criminal enterprise in Washington, DC steal from your paycheck in 2015 to fund the madness? Are you living paycheck to paycheck? What will you live on in retirement? Social security and a pension or retirement fund backed by worthless paper? Will past predictions like the ones in the column below come true?
Speeches Ignore Impending U.S. Debt Disaster by Carolyn Lochhead, September 12, 2004: "Laurence Kotlikoff, Economics Chairman at Boston University, who has written abundantly on this subject, offers up a shocking response on how to close a $51 trillion dollar fiscal gap: "To give you idea how big the problem is, you'd have to have an immediate and permanent 78 percent hike in the federal income tax." More than double the payroll tax, immediately and forever, from 15.3 percent of wages to nearly 32 percent; Raise income taxes by two thirds (roughly 78%), immediately and forever; Cut Social Security and Medicare benefits by 45 percent, immediately and forever;"
That $51 TRILLION dollar fiscal gap is now $212 TRILLION and growing. Is this not madness?
When I started this column Medicare's unfunded liabilities was $80,483,145, 378, 862. That's almost $80.5 TRILLION dollars. I'm finished and catching the numbers as they rack up faster than a slot machine, the debt is: $80,484,271,260,537. Another billion in debt in just a few hours. Where is the money going to come from? How much more of your paycheck? Throw in 20-30 million liars, cheats and thieves (illegal aliens) and what do you think will happen to the numbers? The big squeeze is on and it will continue until "shop 'til you drop" brings reality under the noses of the herds who pay little or no attention to what's going on around them in their pursuit of tweeting, texting, sexting or just plain heads up the dark tunnel syndrome.
I can only encourage everyone to take the time to assess your assets and encourage you to buy gold (and some silver) because it's the only real money and unlike politicians, it doesn't lie. Right now gold is low so it's a good buy. This is a very good interview with James Turk about currencies and the war going on most Americans know nothing about. Gold is not an ATM machine. It's a long-term investment as a hedge against inflation. When panic starts and demand goes through the roof, availability will be zilch.
Money Morning
Gold and Silver Prices in 2015
By PETER KRAUTH, Resource Specialist, Money Morning December 29, 2014
Precious metals haven't grabbed dramatic headlines like oil and gas have.
But their story is no less exiting. And the metals remain a fundamentally critical part of the global economic and strategic landscape.
Indeed, gold and silver took roller coaster-like rides throughout the year, both screeching towards their respective price lows before bouncing, albeit cautiously, ahead.
With the benefit of hindsight and the value of foresight, it's time to look at how gold and silver acted in 2014, and what we can do to profit in 2015.
Let's start with the yellow metal...
Gold Will Bounce Back Quickly
As you follow along with the graph, note that gold started out with a bang, bottoming around $1,195 December 19, 2013, then surging upward 12% to $1,390 by mid-March. It then headed back to the $1,300 level, and meandered sideways between $1,250 and $1,350 until mid-year.
The U.S. dollar began a strong climb from July onwards, likely in anticipation of the Fed ending its asset purchase program in October, as it ultimately did.
By November the SPDR Gold Trust ETF (NYSE Arca: GLD), the largest gold ETF, saw its gold holdings at six-year lows. Gold had become almost universally hated, which may well have marked the bottom.
And then it embarked on a new rise...
One of the biggest positives is how gold held up over the recent months: as oil prices plunged 27% from early November into mid-December, gold climbed by 7%.
Not even news of the defeat of the Swiss Gold referendum held it back.
Then India, battling for top gold consumer spot with China, relaxed some of its import restrictions on gold, making it more attractive during the traditional wedding season, and helping to push its price higher.
Chinese gold demand remains robust as well, and is expected to grow substantially again in 2015.
Will 2014 eventually prove to define the bottom in gold?
The odds of that are improving. Even if the U.S. dollar continues to show relative strength, I believe the fundamentals are in place for gold to reach back into the $1,400 to $1,500 range by this time next year.
Silver Will Take Longer - but It Will Be Worth the Wait
Silver's had it rougher than gold, which, thanks to its nature, is to be expected.
While gold is off about 1% so far this year, silver's given up about 12% - way more than it typically would.
But not everyone is selling...
A Crash Bigger than 2008 the full presentation.
Looking at iShares Silver Trust ETF (NYSE Arca: SLV), the largest U.S. silver ETF, it enjoyed a very stable level of outstanding shares, despite weakening silver prices. That means investors held on, despite falling unit prices.
Last year the U.S. Mint set a new sales record for its American Eagle silver bullion coins, with sales of 42.68 million coins.
By December 9, 2014, that level was bested with sales already reaching 43.05 million.
And physical demand has been strong, with physical bar & coin consumption reaching a whopping 46% of industrial consumption levels, which by last year had undergone a five-fold increase in just 6 years.
With a wide and growing array of uses, industrial consumption is set to grow in 2015.
Meanwhile, production is likely to be somewhat limited. Silver's often a by-product of producing the two base metals, lead and zinc. With their prices relatively weak, that's likely to lead to somewhat softer supply levels.
All things considered, I think we could see silver turn in a positive 2015, likely to regain $20 and trade in the $20 to $25 range by end 2015.
