Wednesday, April 3, 2013

Market Clearing…and market clearing events...

This is a great interview with Charles Hugh Smith…

I do not agree with the idea’s of hyper inflation being a real risk and I don’t think that central banks will be successful in monetary inflation. I do not think that the FED has the political cover or support to increase its balancesheet by 10x. The ECB is making painfully obvious what happens when you run out of options that you can sell or obfuscate. Look at what is happening in the markets, Gold and Silver, which are defacto reserves for money used by banks and central banks alike, they are dropping like rocks? Why? DEFLATION.

How could we be getting deflation of Gold and Silver? Well, its because there are bank runs going on all over the world right now and banks are selling gold and silver reserves out of dire need. It is known that central banks and banks like precious metals to be cheap, thereofre, the central banks have aimed to get inflationary assets up…during bank runs, one would think people would normally run to Gold and Silver…however, they are clearly opting for different forms of buying power because of the liquidation of Gold and Silver to cover bank obligations…People, therefore, are turning to stocks, real-estate and instruments such as the dollar and bitcoin. At this point, any assets that must rely on Bank functionality are dead in the water - so stocks and real estate are at VERY VERY high risk as these "banks runs" progress and people chase transactional and storable purchasing power. FYI they are already happening in the US…we just can’t see them in the news yet.

Regardless, of my hugely different views about what the central banks are capable of selling the public or politicians and doing, this interview has a ton of great content and is worth serious attention:
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