That is to say gold and silver would go through the roof.
Bonds would would catch a nice bid stocks would tank interest rates
will Spike housing or at least mortgage rates would spike even if
10-year treasury yields go down.
Well, prior to the the jobs report that just came in this morning.
The bond market was signaling a trend change from inflation to maybe
deflation or at least lower inflation with the 10-year yield dropping
dramatically want to, you know what the high was something like 3.3%
and then it dropped all the way down to about 2.5 percent.
But on that strong jobs market report, we had today, bounce back up a
bit, but the jobs thing.
Wasn't nearly as strong as it looks.
The economy is weak than it is a signal that the economies is strong
and the other stat that ties into.
This is Consumer Debt and for the past year or so people have been
maxing out their credit cards in order to keep on spending.
So can consumer spending, you know, retail sales and a lot of
corporate top lines have been artificially strong because people were
borrowing money in order to maintain their Lifestyles while the
Running out of the ability to do that because credit card debt is
immense right now.
It's one of the highest levels it's ever been and it's growing
dramatically which means it's going to have to stop growing pretty
soon.
So people are going to have to stop spending or slow down their
spending dramatically in the year ahead, which is just one more
indicator that the not just the us.
But the world's economy is slowing with all of that, all that, that
implies for inflation and corporate profits, and maybe stock, Is and
maybe Central Bank Behavior.
So, I think that's going to be the trend going forward, this this jobs
report notwithstanding, you know, we're probably going to be seeing
signs of slow or no growth outnumber signs of inflation and and boom.
Booming economy going forward.
Well, you know, Financial crises are things that are containable and
understandable, you know, you can get through them, you can make money
from them, and Because of that, they're not terribly scary, at least
to me.
But this new political stuff is terrifying because first, you know, we
expand NATO to the point where it it from Russia's point of view,
forces them to retaliate.
And we get what is almost a shooting war between the US and Russia
over in Ukraine.
In other words, something we didn't have to do.
It didn't have to happen.
It would been, would have been very easily avoided and now we're doing
the same thing with China where we didn't need to send Nancy Pelosi
over.
Taiwan and preview Chinese out.
You know you can say what you want about the red lines that are being
drawn by Russia and
No, but the fact is their nuclear powers and they're very serious
about these red lines.
So that leaves the rest of the world with the choice, do you on?
You know, purposefully cross those red lines to see what will happen
or do you just accept that?
Yeah.
All right, maybe it's not reasonable but this really matters to these
guys and they've got nuclear weapons and maybe we should try to
accommodate them and try and respect their opinion out of our own
self-interest.
You know?
It's not that that we're capable Paving out of cowardice in, you know,
Russia Ukraine or China Taiwan it's that you know we're putting
ourselves on the verge of nuclear Armageddon and if we don't have to
do that that should be something we try to avoid.
And you know I'm saying, this is a father of two sons.
Really doesn't want his kids to be incinerated this year.
You know, that would make this a really bad year for me and it feels
to me, like, that's the kind of thing that's kind of game of chicken
that we're playing right now with, Any good reason for doing it, you
know, it's traditionally there's this this idea that when a country is
really badly run and things are starting to get very messy internally,
they start looking for foreign enemies with which to distract their
people in from their own mismanagement.
And you know, you could make a case that that's kind of what we're
doing right now, we're mess domestically, we've got an election coming
up in which the people In power are probably going to lose a lot of
that power, and they're behaving according to that script where there
there picking fights all over the world in an attempt to distract us
from the fact that they're screwing things up here domestically, but
the flights are picking or terrify.
You know, it's one thing to get involved in some part of the world
where there's, you know, there are Rebels doing this or a dictator
doing that if they don't have nuclear weapons.
That we're doing it with the two major other nuclear powers in the
world.
Besides the u.s.
is just, I don't know.
It's inexplicably inexplicable other than complete clueless that's on
the part of the guys that are in charge.
Anyhow any kind of geopolitical trouble on the level of us and Russia,
or us and China getting into a literal shooting War, which is what
we're risking right now.
That would be catastrophic for the financial markets and then, you
know, of course, it would give the FED, it's excuse.
To ease.
But I don't think the financial markets would would find that to be
much Solace.
If we're you know if our aircraft carriers are fighting with China's
missile batteries or something like that, you know that's that's not
the kind of thing that is reassuring for anybody who's got money.
Big chunks of the rest of the world, perceive that the US has been
abusing its privileged with world's Reserve currency.
You know, instead of being making the dollar completely neutral, so
that someone uses dollars, they're not making a political statement.
Helping one faction in the world at the expense of another and they're
very frustrated by that.
So there has been the, you know, the D dollarization trend has been
kind of slowly building up steam, for quite a while in the sense that
other countries are using their currencies to trade bilaterally.
In other words with each other in Rubles or or you want or rupee or
whatever and that's turning out to be completely doable.
You know, you can Can you can buy something from Russia if you're
India, using your own currency and it kind of works for all concerned
and it bypasses dollars.
So let that Trend continue and accelerate which it kind of is now you
know they've actually set up a framework now to to create a reserve
currency to rival the dollar and it's going to include Russia China
India, which right there.
You're almost half the world's population and maybe Saudi Arabia,
maybe Brazil.
So we're talking Financial heavyweights on the side of a currency that
my rival the dollar.
Well even if you take away all the geopolitical chaos right now and we
just have the big countries of the world pursuing their, their own
Financial ends as they had been.
In other words by inflating away, their currencies at ever increasing
rates the system would still break and we would have to have a
monetary reset of some sort.
So, the question is, what would we do?
You know, and that's unknowable because it's going to be done by
people who are under pressure and who don't really understand what it
was.
They did to get into the mess in the first place so the probably mess
it up.
But if it was done right and not forced upon the big governments of
the World by chaotic markets, we would just go back to some kind of a
gold standard ish thing.
In other words, link the big currencies of the world to some kind of a
commodity, some kind of a base that controls the money creation of
those guys.
Remote.
So that, you know, it's only possible to increase the amount of
dollars in circulation by 3% a year or something like that, which the
governments of the world would hate, but that would restore faith in
those currencies because people would know that that there was a limit
to how many new dollars Euros or Yen can be created and getting there
from here.
Almost by definition has to be really messy because even if
Governments come to their senses right now.
And then, just announced a new gold-backed currency regime to do that.
They would have to have a massive detour devaluation of all their
currencies, because you have to get to a point where the amount of
gold in the world actually backs the amount of currency in the world
and to do that you have to raise the gold price, really dramatically
versus those currencies.
So you have this huge battle to deflation which would be you know
civil unrest on steroids.
Everything everywhere in the world the gold standard.
It's being voted out of office and all of that stuff would have to
happen.
So nobody wants it to happen but that would be the least painful way
for a tab.
And you know the other way is for the financial systems of the world
which is collapse.
And then the governments of the world be swept out of office and new
people coming in and having to rebuild something from the rubble of
this system.
That's probably the way it goes.
Just because people don't give up power voluntarily.
They either have to be forced to give up power and the guys in charge
Age of the world's central banks and the government's that are
financed by the central banks.
Right now have the best power in the world.
They can make money out of thin air, so they won't give that up and
the reset that happens will probably happen in a really chaotic way
because of that, and it could be pretty soon.
Now, I mean, we've got double digit inflation.
The u.s.
already and higher inflation rates in other countries.
So we're close to the breaking point for this system.
And the next phase of the, the process might be that, you know, we
have that crash in the financial markets, the central banks of the
world, go back to easing aggressively and then inflation just comes
roaring back and and then we realize that there is no fix, you know,
you can't stop inflation at this level at from accelerating without
crashing the financial system.
So there's no, there's no fix.
There's no way out of this painlessly and that realization And is what
will change the psychology of the markets in ways that make them
uncontrollable and then you get this.
And, you know, this could all happen pretty quickly now because we're
already a double-digit inflation.
So over the next few years, we could see the next phase of the chaos
happen, whatever that phase is, you know, deflation or inflation.
And when it does we'll be pretty close to the end of the system.