Money Under the Mattress

Reading time: 457 words, 1 to 2 minutes plus 4:14 video (skip ad)

Another historic economic milestone has been reached. The yield on the 2-year German bond is ZERO.

I’ll let The Young Turks host Cenk Uygur explain how we are rapidly circling the drain in the video below.

Also, of great interest is crusty Jim Sinclair’s recent pronouncement about the game of musical chairs that global economies have been playing. He said, “My feeling is simply that the end is not near, but it is here. There is no going back to good old times. The music has stopped and the chairs are full. The West is standing politically and economically right here and right now.”

There is much distracting media noise. Eyes are focused on Europe as U.S. credit rating agencies pick off one European nation or bank after another. Greece is a sideshow. The media leftists scream for more government spending. However, it doesn’t matter anymore. We are long past the point of return and nothing can be done to stop the decline. We have bankrupt banks bailing out bankrupt countries bailing out bankrupt banks.

Short term forecast: the U.S. oligarchs will try to hold it together until after the November Presidential elections by manipulation, deception and propaganda. After that, the wheels start coming off. The only question is when and how fast.

Long term forecast: global fiat currencies are still melting down as I’ve reported for years but they might still have enough momentum to survive until 2015 – 2016. There are many black swan (unexpected) events that could derail this timeline. Europe is one possible black swan except it wouldn’t be unexpected. This means regardless how Europe plays out, the market has ‘baked it into the cake’ long ago. Rest assured there are endless black swans.

One such is Rob Kirby’s expose June 15, 2012 The Greatest Hoax Ever Perpetrated on Mankind

His conclusion might rock the financial world which, until now, has seen the U.S. dollar as a safe haven. He says, “The U.S. Bond market has been “gamed” beyond belief and the only institution in the world with the means and motive to conduct this business is the U.S. Treasury [ESF] in conjunction with/acting through the New York Federal Reserve. As such, U.S. bond pricing and interest rates are set 100 % arbitrarily and today represent the BIGGEST FINANCIAL HOAX ever perpetrated on mankind. “

Our financial and economic systems are slowly disintegrating because they are based on trust and confidence and every day that trust and confidence is being eroded. How else do you explain interest rates so low that you might as well put your money under the mattress?

There will be no recovery until trust and confidence are restored, the oligarchs eliminated, unaddressed structural problems identified and solved, gazillions of dollars of derivatives written off, socialism finally discredited and on and on. You’ve heard it here before. Don’t hold your breath. The question is how far will we fall before we can start rebuilding?

June 17, 2012

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About gerold

I have a bit of financial experience having invested in stocks in the 1960s & 70s, commodities in the 80s & commercial real estate in the 90s (I sold in 2005.) I'm back in stocks. I am appalled at our rapidly deteriorating global condition so I've written articles for family, friends & colleagues since 2007; warning them and doing my best to explain what's happening, what we can expect in the future and what you can do to prepare and mitigate the worst of the economic, social, political and nuclear fallout. As a public service in 2010 I decided to create a blog accessible to a larger number of people because I believe that knowledge not shared is wasted.
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