Monday, October 15, 2012

Gold, Silver, and the Last Battleground

I opened a new brokerage account a few weeks ago. It's time to get ready to protect what assets you have. I'll explain why by way of metaphor.

In many respects, the citizen/consumers of this country are prey animals. Government with it's many levels, the corporate oligarchy, the health care monopoly, the bankers and their fiat currency are predators willing to steal from you in ways you don't even understand.

You can't get away from them. They know that.

Here's the metaphor. Sooner or later, the prey have to go to the watering hole. Waiting nearby are the predators. The predators goal is to strip you of all of the money that they can. Government taxes. Businesses gouge for minimal services and goods. If you are in need of medical services- the health care monopoly will steal you blind, in many cases margins well in excess of 1000%, especially if you are well insured. Health care charges with respect to the level of care provided have no basis in reality any more. I paid 200 dollars last month to talk to my doctor for ten minutes on a routine office visit. I'd love to make 1200 dollars an hour to bullshit. There are no limits to excessive charges, no laws, no regulations where money is concerned. And then there are the bankers. The bankers will steal your wealth by counterfeiting, inflating, and offering nothing for your deposits. Those are a few of the big predators lurking at the water hole.

We have to have water. They know that.

I understand the predatory nature of business in this country. Gone are the days of customer service and fair profit margins. They have been replaced by predatory practices, price fixing, monopolies, and a government that lies and misleads- that sees nothing wrong with seizing all of your money. The elite managed to escape the confiscation of their wealth and now our country is broke.

The day of reckoning is finally here. Somebody is going to have to fix this economic mess. Personally and mathematically, I don't think they can. I love how the elite, the bastards who benefitted the most, are now coming forward with offers to pay more in taxes. Like Warren Buffett. How magnanimous, after they've robbed us blind with their crony congressmen. Then there's the next crop of politicians.

Paul Ryan is a hoot. He comes off like this brilliant accountant- this genius with an actual plan who is going to find 6 trillion in tax cuts- and all those greedy stakeholders are gonna let Romney and Ryan have their way with them. Bet me. It will be a war zone.

Selling optimism is easy for a country starving for some. That's how we got the guy in the White House in the first place. Let me add something. Whipping Obama and Biden in a few debates is almost like teasing animals in the zoo. Hardly something to be proud of.

Finding tax cuts is one thing. Implementing them is another. But most importantly- you are going to have to find a spare 17 trillion to pay off what we already owe. And then you have to find a way to stem a few hundred trillion in entitlements coming due as the big demographic hits the liability side of the ledger.

With 50 million jobs lost or farmed overseas? Got math?

If you choose to stay in the United States, all that's left to you and your vanishing wealth- are investments to hedge losses inflicted by the predators- if you can. Invest outside the United States. Precious metals. Commodities. This isn't an option. You will either do this or go broke- that's the future. The people who do not hedge all of the mounting losses that they are going to sustain as the predators strip away their wealth are going to find themselves with a third world standard of living.

This isn't going to get better. This is going to get far worse.

I started buying gold and silver when I realized that the game is over. By that I mean the government's only course of action is to counterfeit and inflate away the currency. I think rather than confiscate gold and silver- the government will attempt to impose extraordinary taxes on the sale of it to keep people mired in their worthless and inflated currency. Clearly, the Supreme Court has no problem allowing the government to seize our assets. So people will simply quit paying taxes and reporting sales. An irrelevant government, straining to maintain power and control, will fail. There will be growing unrest and civil disobedience. There will be hyperinflation and then ultimately we will default. The U.S.A will lose it's reserve currency status.

We are in the last battle of an economic war that probably started in the mid 60's. I don't think I am being too dramatic.

The rich and elite own the equity markets in this country. Truly they do. All of the accumulated wealth of this country beyond real estate- that which hasn't been offshored- is sitting in U.S. equity and commodity markets. Bonds are dead money. They can only go one way from here. The elite, the non elite and simply wealthy, and that part of the middle class that have retirement savings- own U.S. equity markets. The vast majority of Americans no longer have any skin in that game. They were forced out in the implosion of 2008. So this I think, is the last battleground.

On one hand you have the owners- hopelessly and desperately invested in a market that cannot go up because there are no new buyers. The old would be buyers are unemployed, dwindling, retiring, dying. Foreign workers cannot buy stocks or invest anything with their dollar an hour Foxconn incomes. Discretionary income is being eaten up by inflation, gas prices, food prices, rising taxes everywhere. The owners of this stock market are doing everything to keep US equity markets alive but the patient is dying. How long can this market cling to life?

It reminds me of an old alcoholic. He smokes, he drinks, he eats poorly and lays around. He has high blood pressure, respiratory problems, poor liver function, and some gout. Maybe sleep apnea and a few other ailments. You think, how long can this guy keep living like that?

The answer is- for years. You are amazed that he can live this long. But sometime, well before average life expectancy, he dies. The actuaries know that. We know that. Here's an excellent piece on ZH which summarizes the fate of countries once their debt exceeds 90% of their GDP. Like ours.

That's why I'm in. I am going to spend my last fiat currency on precious metals, gold and silver miners, maybe some doomsday stocks, shorts and put options, and some personal preparation. Ultimately, I expect to see the market completely collapse. I see that as inevitable and consistent with a governmental course of action that embraced socializing losses, enriching elites with trillions under the auspices of stimulus, off shoring and eliminating American jobs for fifteen years, ignoring the rule of law, pretending the whole thing didn't matter, and now trying to plot a solution with the same type of statist idiots who landed us here in the first place.

Call me a girly man but I'm probably not going to follow that kind of plan into battle.


Anonymous said...

Excellent Brian. Not much more to add to above. The amount of walking dead in this country is unbelievable!AE

conservativesonfire said...

Did you read my post on the capitalist paradise being built in Honduras?

It may be time to look at other options. You younger folks have more time to suffer than we old codgers.

boatman said...

then there are those that abuse things and die youngish, or at least not old at all.

greece leaves in the spring avalanching other PIIGS,then bond vigilantes look to japan...... after US debt ceiling raise and downgrade by the other two credit raters......pension funds mandated for AAA debt ...leave treasuries......

it may rattle on longer than we think but once it starts to go .....then it accelerates.

i'll be checking in on you from Turdland.

Brian said...

Thanks you guys...yea Jim right next door to this is a piece I did on the free market experiment. I am seriously considering Honduras. Why not?