Yes, I believe it is the beginning of the end of the system, as we know it. It’s not all doom and gloom, stick around until the end. To me, the nickel market was probably the most defining element of everything.
What was the most recent evidence? Entitled billionaires and banks get a reversal of trades when the trade goes against them, robbing the players who won in the trade. This could have been THE beginning of the end. But I want to highlight some topics over the last year which are evidence of the end. No one comes out and says, “hey, today we’re doing something different”. What you are seeing, I believe, is creative destruction of one system as another is being stood up. (Further evidence in a newer article here shows how we may be headed in the direction of a gold/oil currency system here)
Below, I want to cover a number of topics, briefly, to give you an overview of the evidence we are seeing. I like to call it “re-creating the crime scene without the body” – as I’ve done in a few interviews. Why? We have to look at all of the evidence AROUND the area where the body was to observe changes in the environment.
P.S. I wanted to get a picture of a crime scene with some spatter to show you what I was referring to. Very, very poor life choice. Let’s stick with the picture above so you all can continue to eat your breakfast without hurling.
Many of you in FinTwit have some expertise in SOME area. Mine is the academic side of this with an MBA and PMP and 25 years in IT contracting. IT contracting is like providing utilities. You have more services that need to be done with improving technologies with lower and lower budgets. I am sort of like a mine boss for IT services, if you will. Or I run a power generation plant in the electrical grid. Or perhaps I am the lead farmer for a 25 farm collective. Meaning – I have a lot of experience with the PRODUCTION of commodities – IF you consider IT services like providing a utility to businesses.
Over the years, a lot of the industry was centralized. More tech created for central control to reduce costs at satellites. Server farms in other countries. Lots of services were offshored to perhaps Indian call centers. I feel some of these moves are irreversible, but other things may be reverting to localize supply chains once again – perhaps driving up costs in the process.
Below, I wanted to point to some macro items I feel are like dominoes falling which tip towards the East leading the way to an Eastern resource-backed savings localized financial system. I would describe our current system as a Western derivative-based debt globalized financialized system. I believe that over the last 40 years, there is so much entangling of derivatives of derivatives based on derivatives that are so disconnected from the actual commodities production that they are based upon, that a major unwinding is taking place which will favor the producers of these commodities.
I have posited that there are MAJOR drivers to push the price of silver up, substantially. That the STRUCTURE of how this is priced is broken. In the derivative-type of system, there is no free price discovery – it tells you to “find efficiencies or go out of business”. In silver, most of it is produced by a byproduct of other base metals, but the 10-20% that is produced by “primary” silver companies have pushed and pulled too hard and eroded the ability to explore and discover vast new resources – to me, this problem had been covered up by big banks paper shorting into markets, substantially, along with physical short selling meant to direct prices even lower. This price is being set by the bettor at the casino table. I believe that structure broke several years ago and we are at the last pile in the safe of IOUs, and with this, we are going to go palladium at any day, week, month, or year. No one knows the time – but we saw what happens recently when the paper games fail with wheat, nickel – and others. The game is rigged.
That game, and these exchanges, are about to have a religious experience. They will find their God in their own time, and their companies will have a baptism that will only lead to insolvency and ruin.
Let’s look at the bullet train coming at them at 300mph.
Question for you. IF you knew that next week, the whole country would have all of their credit card debts cancelled – and perhaps restructured to 1% over 30 years, wouldn’t you go out and run up your credit card? My finance professor used to say, “if someone gives you a free loan, take it”. If inflation is 16% and you can run up a credit card at 1% payment, it’s a free loan, in a sense, because what you borrow you can then put to work at a profit to thus earn an income from this – and pay a nominal fee for years to operate that profitable business.
This is kind of what we are seeing from the West with their spending. I don’t think there is any intention to make good on the money they are borrowing now. We added 33% to our national debt in 2 years with COVID, and the drunken sailors seem to stopped giving all kinds of fucks about any kind of budget deficits. Remember, they are borrowing billions at 2% with 16% inflation. Who are the morons that keeps buying this debt? This to me does not look like a nation that is worried about PAYING for that debt. It looks like a nation running up the credit card with the idea that they can refinance everything at 0% for 100 years. Or, inflate their way out of it over years of high inflation.
Let me phrase this a way the common folk can understand. “He’s a freelance photographer, she’s a part time babysitter and their budget for a second home at the beach is $53 million”. That’s where we are in the story right now, folks.
Point is, they seem to possibly know something you don’t. The debt is melting up, and many on FinTwit find it extremely comical about how the Fed tries to sound hawkish about raising rates and drawing down the balance sheet quickly. Like it’s a Laurel and Hardy routine. Literally all of them are quick to point out that doing so will destroy all markets. I then asked a question, what if that is what they WANT to do? But doing nothing could also lead to a rising inflation into a hyper inflationary doom loop higher.
Something has to give….and my bet is it is 2022. The world is calling bullshit on the financial ability for those two idiots to buy a $53m beach house with nothing but a pot to piss in to their names. THAT is what we are seeing with other nations starting to want to pay in THEIR currencies. I believe the move away from our debt is in full force. 16% inflation for 2% yields. That’s a hard pass for me folks.
Things to worry about in 2022
I put a pretty big list together, but some of the highlights….
- world famine
- nuclear war
- hyper inflation possibilities everywhere
- 7th stage of empires combining with end of world currency reserve combining with end of 4th turning.
The idea here mostly was that I felt that global instability is rising – which provides a lot of cover for a lot of dodgy shit to happen that escapes the headlines. People want to say bad things about Putin, but in this country he cured COVID the day he invaded Ukraine. The Ukraine headlines are pushing all of the deaths and people dropping over from the vaccine – the lawsuits getting filed. The insurance companies seeing massive spikes in coverage for those seriously affected by the vaccines. So there’s a lot going on behind the scenes that will be missed by the general public. Lots of cover thrown now for getting a digital slave currency passed to force people into to help get them UBI faster. Yeah. Tell yourselves that. No one wants to be enslaved into that system. I felt it could be a GOOD thing IF they allowed a third party to mask identities in a federated system. They won’t allow it. And I’m now taking an over/under on how many cities will burn to the ground in protest when this is implemented.
So there is a powderkeg going on behind the scenes.
Food will cost you an arm and a leg
This domino has to do with the Arab Spring, and the theory about how if food costs go over 35% of your income, riots happen. Well, you might want to stock up and get armed, because in this country you are going to hit that this year for a significant portion of the population. Between 25% of the world’s wheat harvest not hitting the market, or fertilizer costs going hockey stick, or the costs to feed the animals jack up beef prices, or the avian flu in the US affecting 15 states, or the high gas prices to get food on shelves – or the diesel shortage to GET food to the shelves, 2022 will show substantial food price increases in the US. Short of a UBI, you will see many cities burn to the ground. My guess is this will happen before the digital currency situation burns cities to the ground.
Lots of cities getting burnt to the ground is a theme for 2022/2023.
You want to see civil unrest? We had like 20 cities burn for months over 1 unfortunate soul who lost his life. Now imagine 40% of the country can’t afford food. Or get it at the stores.
Why are we relying on other countries for food, at all? Don’t we pay farmers to destroy their crops with subsidies to keep prices from cratering?
My belief is anyone paper short on any commodity, especially food-based, needs to find a local church and start praying.
Markets are failing spectacularly
In my MBA studies, you learn about the beauty of the free markets. The reality is, there is an invisible hand behind the scenes picking winners and losers. This is almost now clearly apparent to most participants. One of the BIG reasons our civilization has thrived was the rule of law, combined with free markets. This one-two punch is extremely powerful. But when you dig in real deep, you start to understand that the rule of law these days is becoming more subjective than objective depending on a political cause, and the free markets are about as rigged as you can get. The government wanted to take my right to work away in case I didn’t get an experimental test juice that didn’t stop me from getting or passing on COVID, but they have no problem letting unvetted foreigners of any background into this country and give them my tax money and provide them free everything? Our system is broken beyond repair because people in charge are NOT applying the rule of law equally, and this has then led to lawmakers/Fed governors front running stocks by creating the policies that make those stock prices go up. Likewise, you have government contracts with these FAANG companies, and if they do not comply to requests like what happened with Microsoft and Project Veritas, they might lose valuable contracts.
I love free markets. I love limited government that respects its citizens. I love my country. It’s just not hard to see some things are broken – I wanted to be a positive cog to help that change. This may be the best way I can do it today. But we first have to admit what is broken before we lay out a plan to fix it.
Free trade – the idea that I have something you need, and someone else has something I need allows for markets to find RELATIVE values to other things. At times, you get undersupply and oversupply, relative to other things. One of my core beliefs is that gold IS the center of the financial universe, and everything, in a sense, has a relative value to that. Eastern cultures have valued gold and silver as wealth for thousands of years. As Western economics go, they have been trying for 50 years to vanquish the idea of gold existing – but in the East, it’s embedded in their culture. In 4 years of an MBA, I never heard one mention, at all, of gold or silver. This is how they are indoctrinating our people today – and the smartest Wharton or Harvard MBAs that are going into government now in these positions have never been schooled on gold and silver. Let that sink in. Our “thought leaders” are woefully unprepared to deal with an Eastern-style of economics with gold in that system.
What you have witnessed, is blatant tampering with gold and silver, and anyone who pays attention to the market for 5 minutes or can use Google can easily cite dozens of cases of significant fines to banks over some form of manipulation – and these are only the ones prosecuted. But it goes deeper then, when you have something called the “plunge protection team” which buys everything on dips. With houses up 24% YoY, why the hell were they buying mortgage-backed securities?
You have the Fed tinkering in our financial systems, and you have bailouts for too-big-to-fail entities. Hell, you have inflation now running hotter than junk bonds, and in a truly “free” market, the government would not be buying bonds at all. I get WHY they did it, but it still ends up hurting the markets. And how can you take these ratings agencies seriously ever again?? There’s another joke.
What you have recently seen is the nickel market with the LME go up in smoke. Zinc starting to move. Nat gas prices in Europe 10x. Lithium up 10x. Steel. Lumber. Oil. What you then saw was an article by Zoltan Pozsar which talked about a doom loop of margin calls with commodities firms – which is happening as we speak.
Doom loop of inflation meets offshore dollars
When they printed $6T and the Fed doubled their balance sheet to over $9T, it unleashed stupid levels of currency inflation in the system. There are technical people out there who understand the nuances of currency creation far better than me that want to argue the mechanics. Piss off. I listened to your mental gymnastics for hours and fully comprehend what you are saying. You aren’t grasping there are more dollars created and that is monetary inflation. A 5 year old can clearly see what happens when you add more paper money to a game of Monopoly. Prices go up because the number of currency units increased but the goods and services remained fixed. It really is that simple.
So as these dollars work through the system, wage earners see gas up 100%. They see food up 25%. Medical insurance up 10%. Houses up 24%. Wages up 1%. This is what has been happening for 40 years to a much slower degree than now, but the simmering frog just hit the boiling point. In 2022.
At issue then is wage earners will fight for higher wages. Strikes, leaving work for those able to pay more, etc. This passes more costs into goods and services, thus escalating prices.
What makes this devastating at THIS point is now we are dealing with 2% bonds in a 16% inflation scenario, if you look at Shadowstats – AS we seem willing to concede the US dollar as THE world’s reserve currency. This will have the effect of a tidal wave of dollars hitting our shores buying up assets and commodities.
In turn, when people see 16% inflation, they get the hell out of bonds – which drive up rates, substantially. 38% of the S&P companies are zombie companies – something I read several years ago. What’s going to happen to these companies when their cost of hiring people goes up, the cost of their raw materials go up, and the cost of borrowing money goes up – and the cost to transport goods goes up? Less expansion. Probably significant contraction and consolidation in sectors. In fact, I wrote about this issue last July where I discussed how higher rates are coming – and hard – and how these higher rates will take down the everything bubble.
Eventually, I postulated that this would take down the markets in the article above. What I did NOT see coming was QE to that extent – which to me seemed like the money bombers that Mike Maloney predicted. That kicked the ball down the road 18 months and the inflation we are seeing from that is real. We are seeing evidence of the markets breaking down – and with that, the 60/40 model is BROKEN. Meaning, if all of your equities are going down, AND your hedge of the 40% of bonds are ALSO going down, your 401k is for shit and your retirement is evaporating in front of your eyes. In THIS environment, you need gold in your portfolio. No one in my Facebook land understands this. My friend just told me yesterday his FA moved his money out of bonds, finally. There’s a rotation about to happen people.
Maybe there’s a move up before it goes down, but why get cute. Might be a good time to get in gold. Below is the Dow Jones since March 2020.
Perhaps the 40 year trend of lower rates is reversing?
Perhaps one LAST move up with the DXY before all fall against the Yuan/Ruble backed by gold?
When I went back and looked at the projection of gold with what happened, take a look. The green area was the “cone of certainty”. To me, gold has broken out and will start to become more important in institutional-sized portfolios moving forward.
East vs West
In my 3rd and final MBA program (moving sucks) – they focused a LOT on international finance, where the first dealt with widget management in factories and the second dealt with finance and stocks – we focused a lot on emerging markets and the BRICS+16. In my “senior thesis”, I was part of a team that wrote a 125 page marketing paper on Tesla expanding to South Korea. We had to pick an industry (autos), then a company (Tesla), then which BRICS+16 country they would expand (South Korea) to and why. This gave me a pretty good understanding of what the BRICS countries economies were like in 2016. What their rule of law was like. Their geography – and in the case of Brazil, their infrastructure to be able to support an electric grid to charge an EV was not great.
Then, I watched one of Mike Maloney’s videos in the Hidden Secrets of Money which talked about how the gold has moved to the East over the last 20 years, and the balance of power has gone to the East. What is the saying – “he with the gold makes the rules”? The West seemed hellbent on selling gold to the East, then at the same time trying to pull a jedi mind trick to try and convince you gold is not money.
The East is about to do a rug pull which will take the physical exchanges to them from the paper exchanges of the West.
The problem is, the East politely disagrees with this notion that the West can dictate paper prices to them. What you are seeing now is sort of a consortium of countries within the BRICS+16 take control of their own destiny. No longer are they living under the restrictive confines of the US Petro Dollar – but now they can freely trade in their own currencies. Or so it now seems.
When the US blipped the Russia reserves out of existence by using sanctions as a weapon using the US Dollar as the warhead via SWIFT, that was the day the dollar died. Every country saw this as the US just nuked Russia from orbit, financially. Immediately from there, we have seen all sorts of discussions with countries now wanting to use other currencies than the dollar. Luke Gromen has even talked about Russia potentially selling oil in gold to re-price gold. As that was going on, Russia removed the VAT from gold so the people could buy it. Then, they seemed to stabilize the Ruble when Russia said countries can buy their oil/gas in Rubles – requiring these nations to then have Rubles. It now seems they can sell their oil in Rupees or Yuan, then use that currency to buy gold in Shanghai.
The reverse was happening in this country. Our leaders have cut our ability to produce oil – instead having talks with the terrorist nation of Iran and the despot leaders of Venezuela, AFTER Saudis and UAE refused our phone call. If all of the countries no longer NEED the US dollar to buy energy, why would they buy it?
It was clear to me years ago that the BRICS nations seemed to be wanting to challenge the hegemony of the US. And now, it seems steps have been taken to make this happen. Another domino has fallen – especially when Powell openly admitted in Congress a few weeks ago, “there can be more than one reserve currency”. It’s as if they are trying to crash the system.
I brought this up with silver the other day. I had heard that when we start to have problems with the financial system, gold and silver will be the last to move. We are seeing evidence of this, above, namely with nickel and other commodities that are all mooning. Are these simply supply chain issues they would like to gaslight you into, or is this the idea that dollars are trying to go into things of value and we are seeing evidence of debasement of currency in real time? Meaning, did nickel get 60% more valuable overnight, or did dollars chase a good that people realize is undervalued and you needed more currency units to get nickel?
When you look at Exter’s pyramid, I can tell you it appears the Great Unwind has started. To move on from the USD system, I believe a lot of these paper derivative schemes will need to fold. “Paper Gold” will be replaced by Physical gold, but you have to unwind the system first. Meaning the LME, COMEX, and all of these “unallocated” tools and shitty ETFs are pretty much in the process of a bank run as we speak. They just aren’t telling you about it. The shorts are able to keep them at bay, for now, with things like silver. They are using paper silver to depress prices, then actually buy the physical.
I ask you about the yellow line showing banks massively net short: is this the free market of a monetary metal at 1/2 its 1980 high in a super inflationary environment on the brink of a world war, or evidence of banks throwing everything they have to keep price under control? Remember, if you try and buy a silver eagle at Apmex right now, you are looking at $41. But the PAPER price says $25? What gives?
Many who have little to no understanding of supply and demand, restock, and crazy surges in demand like to castigate these bullion stores for such high prices. But these banks short also knowing the US Mint stopped production of these due to supply shortages. These banks also operate under the idea that vehicles like SLV may not have all the silver it claims to have. They also know of many paper silver vehicles which soak up investment demand which don’t touch the bullion – or have a fractional reserve on it. Lastly, they can lease out 800m oz and sell short into violent demand knowing if something bad happens, they will get bail outs. Or worse, bail ins.
What you are seeing above is how the derivatives at the top are going to fold. COVID killed businesses worldwide, and higher interest rates are going to force a lot of the zombies out of business. All of the real estate Chinese bonds are going to shit with Evergrande and their brethren. With real estate interest rates rising here to 4.7% recently, with no relief in site, it stands to reason the harpoon to the real estate market has been fired at the whale.
I believe many of the commodities are going to do a palladium. Or a lumber. Or a steel. That is, the PHYSICAL demand for these will overwhelm the paper shorts. I believe strongly that articles like this are just the beginning to scratch the surface of the Western financial system. I believe we are moving from a paper-based financialized commodities-suppressed system which subjugates the production of the BRICS commodities to artificially low Western prices to an Eastern-based PHYSICAL exchange where these countries will sell their commodities for REAL price discovery. Oddly, the BRICS+16 may bring the REAL free markets back.
Interesting here is the Chinese via Hong Kong own the LME. The reversal of this nickel mess which helps “Big Shot” and JPM pretty much put the nail in the coffin of trust in Western markets. Why would you ever let the Chinese own your exchange when they could perhaps do things to undermine the confidence in that exchange?
It’s not all bad – there’s hope
One thing I’d like to tell people here is…it’s not all bad. I believe there’s reason to have high levels of anxiety. For now. This is why I spent 2 years mitigating my concerns. However, if we went to an Eastern-based physical commodity exchange, the US has stupid amounts of natural resources, food, and skilled labor. This would immediately benefit oil companies, miners, and farmers. What this would hurt would be the NY-led financialized system of dogshit paper games at 8:30AM every morning. I just read the AVERAGE bonus for a Wall St trader last year was $246,000. Meaning – just the bonus alone would put them near the 1% top earners in this country. And that is just the bonus.
We have long talked about “being green” and shutting off our oil, but the truth is, we simply have gotten that oil from the middle east. Now, the middle east is balking at Washington demanding they pump more oil, and starting to lean towards the Chinese and Russians. So the tree huggers don’t realize that by not drilling in Texas, we are paying the Saudis for their oil and trying to get in bed with the terrorist to then give them cash for their oil to funnel that cash to rockets to fire at the Israelis. It’s still being drilled, but at the expense of our jobs. Furthermore, it would take decades to get the infrastructure needed for green energy – no one realizes how much copper, nickel, silver, cobalt, and lithium is needed for EVs and solar. No one. 187 pounds of copper for one EV. 5 ounces of silver, last I saw. And they want to crank out 100m EVs a year? Good luck with that chief. And, to top it off, we can’t get a goddamn mine here ever really permitted in many places to even explore our resources. Look at Northern Dynasty who cannot get a mine permit due to salmon. We have the Russians and Chinese looking to take over world currency dominance and we worry about saving spotted owls and hugging trees. They are acting like winners in this scenario in the sense that they are doing what it takes to win – “the ends justify the means”. Perhaps when we could print paper and export it, we had the luxury of saving salmon. What I’m saying is in 1-3 years, we may have to say “screw the salmon, we need that copper and gold and silver“.
Most of the world is ramping up their nuclear plants – as this is an emission-free form of power. It’s cheap. The US doesn’t really even have any uranium miners, and we rely on this from other nations. We need to start getting our own uranium. Look at oil and nat gas prices in Europe. You think if they all had nuclear power and heat pumps for their home that Russia would have this hold over them with nat gas? No. The policies these people created to worship the tree hugging gods is what led to them having a gun to their heads with nat gas.
With the war with Russia and Ukraine, we can see between Russia/Ukraine, they produce 90% of the neon gas needed to make semiconductors. We learned of China’s relentless pursuit of Taiwan, that Taiwan produces 90% of the semiconductors. Perhaps this threat to the supply chain moves this production home?
What I’m saying in this section is I believe the US is about to have much higher costs, but we won’t have to rely on $15 per hour career burger flippers when you can pay a petroleum engineer $180,000 per year. While we have SOME good mining jurisdictions like Nevada and Idaho, we have stupid amounts of resources we CAN mine here – which could make for a revolution here of domestic production of raw materials. “Made in America” could really be a thing again.
I didn’t understand why people like Andrew Yang tried to push UBI. The thing is, there are two choices on the table.
- Continue the system as is, with increased costs and wages not being able to keep up
- Blow up the globalized system and bring all supply chains home
The top choice above is the status quo for the billionaire (and millionaire) classes. This keeps the system on life support indefinitely, and REQUIRES a UBI for the lowest earners to even feed themselves. This forces reliance of HAND OUTS to people, and anyone who opposes these hand outs will never be elected. This favors a nanny state in which the government can then direct peoples’ lives, holding over their food rations in order to comply to mandates like vaccines.
The second choice returns us to a “free market” which may reduce the power of the elites for the blue collar industrialists who can make a fortune exploiting resources here – with good, high paying union jobs. In this system, there is no UBI, but the ability to stake out a claim to then advance your own self interests. This relies less on government intervention, no UBI, and allows for more independence.
To me, if UBI is ever implemented, it can never be taken away by an elected official. This makes your inflation doom loop worse, as these higher taxes leave you less in your paycheck to spend – but allows government to re-direct that money away from you.
To me, the table of dominoes has been set under globalism for some time. It seemed the creepy WEF-led semi-socialist West was trying to tell people that “you will own nothing and be happy” didn’t set well with those who have lived under these types of rules for decades and wanted no part of the West subjugating the East to their control – and using the USD as the stick for compliance.
It is very easy using a form of war gaming to see how COVID could have been the launch of an attack against the West in this invisible currency war. The scout mission of 2014 to take Crimea served as a blueprint for how the West would use sanctions using the USD as the counter attack. It was perhaps part of the planning to see that the West would close down and spend to infinity to shield their precious citizens from harm – tightening the noose on debt. What about China taking Hong Kong, and by proxy, then owning the LME?
It seems clear that the dominoes are falling, and the nickel move of last week into this week is playing out the future for literally all commodities. I pray for a safe landing for everyone, but you are correct to have a level of anxiety about all of this. No one knows how this is going to play out. But I can say that those who have stocked up on food and whatever commodities/things of value may have a good entry point into a new currency system, if and when it comes online.
It’s going to get bumpy. And be exciting for those invested in commodities. And be dangerous for banking. And get scary at times with food. In the next year, some of us may age 10 years. Here’s to everyone from all of the countries that read this to being safe, prepared, and have humanity towards those who are suffering. Governments are going to do their things against other governments and people for control of things – but people can just be people and be good to each other. Hoping all of you out there are stocked up and buckled in, because it’s going to get crazy. Here’s to anyone reading to becoming a millionaire and getting rich off of the commodities boom to come.