"The overleveraged world is experiencing deflation. “Beggar thy neighbor” by central banks to increase trade at the expense of other nations is the game. The “game” by the way is a static or shrinking (global GDP)! This is a no win strategy on a global basis because someone has to lose …and then you have the same scenario as in derivatives. Sovereign nations will default! The point is this, “losses” which have been hidden so far will need to be booked and realized. There are NO BALANCE SHEETS left, strong enough to absorb the losses!
The Fed commencing another round of QE is now a lock. Outright monetization will be sniffed out and the current outsized demand for gold and silver may double or more …just as inventories and vaults in the West are running out.
Lastly
let’s look at the dollar. Commodities including oil are being sold …for dollars. Demand for product is down and so is “price”. The petro dollar cannot function with 60% haircuts in dollar usage. This acts to also lessen velocity of dollars. A very bad combination for any Ponzi scheme, less demand and lower velocity. The previous “good” leverage reverses and comes down on itself. In this instance, the world’s reserve currency loses acceptance for the very reason “safety capital” should flock to it, deflation! Can you see this?
The dollar cannot survive with deflation because not enough new money comes in to prop it up. The dollar MUST have inflation, without it, it dies. Today’s dollar is not the 1930′s dollar, pegged to gold that was deflation proof. The foundation then was gold. Today the dollar’s foundation is nothing more than debt, TOO MUCH DEBT! In fact, dollars are only promises …to pay you more dollars! The perfect financial storm? Yes. There is still time (probably very little) to get your affairs and positions in order. I pray anyone reading this does so!
Standing watch,
Bill Holter
Holter-Sinclair collaboration
At
http://www.silverdoctors.com/bill-holter-look-out-below/
