Economic Outlook
We are not in a recession. We are in a depression, and have been since the turn of the century.
“If one dates the beginning of a depression from the beginning of the unsustainable expansion of debt that preceded it, then the current depression began in 1987.”
“Governments and central banks turn recessions into depressions, which are preceded by unsustainable expansions of debt untethered from the real economy.”
“Economic depressions unfold slowly, which obscures their analysis, although they are simple to understand.
related: Greenspan: Monetary policy has done everything it can
Soros triggered Black Wednesday in 1992 by selling short a massive amount of British pounds. Dubbed “the man who broke the Bank of England” with that very profitable trade, now Soros is heavily long on gold and short the US stock market.
George Soros Was Once a Dollar Vigilante, Now a Ring Wraith Buying Gold
One of the inspirations for our name, The Dollar Vigilante, was what used to be called the Bond Vigilantes.
Last seen in full force in the inflationary early 1980s, bond vigilantes were anti-establishment figures who were said to have rebelled. They had decided to keep central banks and governments honest by raising long term interest rates in the open market. They would do so whenever the authorities kept their own interest rates too low, or let budget deficits grow out of control.
It was in 2010 that I overheard the term “bond vigilante” on a radio program once again and laughed for a moment, saying in my own head, Ah, yes, with interest rates at near zero or negative percent, Quantitative Easing to infinity and budget deficits in the US stretching the boundaries of belief, where are the bond vigilantes now?
And I thought to myself, I guess the system is so far out of control now that you can’t sell bonds to keep central banks or government under control as they’ll just print up unlimited money to keep buying it.
I then had an epiphany and told myself, “What we need today are dollar vigilantes!”
That’s what started this all…
In a sense, George Soros is a fellow dollar vigilante. An outsider who once tried to break the system… and he did.
On September 16, 1992, Black Wednesday, he sold short more than US$10 billion worth of pounds (which is just play money today but back then it was a massive amount) against the Bank of England. He was betting on its reluctance to raise its interest rates or float its currency.
The BoE finally withdrew the currency from the European Exchange Rate Mechanism, devaluing the pound sterling, and earning Soros an estimated US$1.1 billion. He was dubbed “the man who broke the Bank of England”.
And for that, we cheer(ed) him! What happened, in my estimation is that the ring of power (that’s what the Lord of the Rings, by anarchist J.R.R. Tolkien was all about) is so strong that no one can be uncorrupted by it.
Anyway, George was called to Buckingham palace to see the Ring Master herself, the Queen of England. That must have been quite a conversation. Afterwards, George became a ring wraith. He started his foundation and became the leftist power he is today.
He became part of the New World in other words.
These days he clearly functions at the highest (public) levels, overthrowing countries to support the coming global order. And he raises funds to support organizations like Black Lives Matter to keep the people divided and chaotic. The more social turmoil there is, the easier it is to manipulate people and even whole societies. That’s how globalism is achieved.
SO WE MEET AGAIN
Now we meet George again. Not as a dollar vigilante but as a wring wraith and fellow gold buyer. He’s heavily long on gold and short the US stock market.
He’s plunging into gold buying 19 million shares from Barack Gold valued at over $260 million. He’s purchased 1.05 million shares of the SPDR Gold Trust ETF and doubled his short-sell on the U.S. S&P 500 Index.
You can see the dramatic sell-off of long equity holdings here:
Notice that the most recent sell-off began in September 2015, at the end of the Shemitah Year and beginning of the current Jubilee Year.
Buying and selling the same things as George Soros is a somewhat queasy idea for us here at TDV.
But, while we both expect to profit massively, his intention is to use his profits to further push the new world order agenda. Ours is to help others survive and profit and be ahead of the game… and create additional freedom wherever we can.
Perhaps our ever-growing worldwide network of dollar vigilantes can help topple the system before it reaches its ultimate end. If so, we have stated our intention is to throw the ring of power (governments and central banks) into Mount Doom if we have the chance. Frodo showed, however, no matter how well intentioned, the ring is too powerful for any mortal.
We’ll have to deal with that if we get there. In the meantime, we’ll be positioning ourselves and subscribers just like George (Sauron) Soros.
In The Lord of the Rings, remember that the ring was a metaphor for government/central banks and top down control of all of Middle Earth written by an anarchist. If you never realized it, its a whole different movie.
In the real world, we’re the men, elves, dwarfs and the hobbits trying to survive. We’re hunkered down in the Shire preparing for a great battle as the NSA all seeing eye tries to watch everything we do, the ring wraiths (the intelligence agencies) and the army of orcs (the military industrial complex) ready themselves to try and take over.
Both sides are preparing by accumulating precious metals, gold stocks, bitcoin, hard assets and shorting the system that soon will cease to exist after the upcoming Great War. Whose side are you on?
related: Fellow billionaire Stanley Druckenmiller calls Gold his “largest currency allocation”.
The three best places to invest in the past 12 months were BC’s Fraser Valley Up 30%, Battlefords Saskatchewan up 19%, and even in Alberta thats been strangled by lower Oil prices and an anti-Oil Government Calgary managed to end the year to the upside.
related: The 6 Largest Canadian Cities – April CDN Real Estate: Rocketing Straight Up
Fed official makes 6 key points clarifying to investors what he thinks they can expect. Includes a shocker on the number of interest rates hikes he’s comfortable with in 2016. Flat out he thinks the markets have “overestimated how likely we were to pause”….
more on the Fed: Bond King Bill Gross Calls For Trillions In Fed Money Printing
I have written extensively about how the current silver bull market is similar to the 70s ($3.80 to $50.00). Despite these similarities, silver will (ultimately) perform much better than during the 70s.
The fractal analysis of the US Dollar Index (below) shows some more similarities and differences between the 70s era and now. I believe that these further supports the expectation that silver will perform much better than it did during the 70s.
On the chart, I have marked two fractals (1 to 3). Both fractals exist in similar conditions – relative to the relevant Dow/Gold ratio peaks (1966 and 1999). Both fractals span over the period of the first phase of the silver bull market during the 70s and the current era (2001 to 2016), respectively.
If the comparison is justified, then the US Dollar index will fall significantly during the coming months. Given the fact that silver has traditionally had its strong rallies during times when the US Dollar Index was falling, this bodes well for a silver rally. Note that this does not mean silver only rallies when the US Dollar Index goes down.
One of the differences between the two patterns is the fact that from point 2 to 3 (the period when silver made a correction from its peak), the US Dollar Index actually moved down on the 70s pattern, whereas it was moving up on the current pattern. This is probably why the correction for silver was much deeper since the April 2011 peak ($50 to about $14) as compared to the silver correction since the February 1974 peak ($6.7 to $3.8).
The silver bottom of the 70s pattern (point 3 – Jan 1976) came in while the US Dollar Index was still in an upward move. This would have been an obstacle to a quick rise of the silver price (indeed, silver was still stuck in a consolidation long after the silver bottom.
On the current pattern the silver bottom (point 3 – December 2015) came in at exactly the peak of the US Dollar index (December 2015). This means that the first part of the current silver rally has much less resistance from US Dollar strength as compared with the 70s rally. This is likely to continue provided that the December 2015 US Dollar Index top is actually the peak.
The silver bottom of the 70s pattern (point 3 – Jan 1976) came in before the Dow peak (September 1976). This means that the Dow was still rising, which is also an obstacle to a quick rise of the silver price. This would have contributed to silver being so slow to get out of the starting blocks after the January 1976 bottom.
On the current pattern the silver bottom (point 3 – December 2015) came in after the Dow peak (May 2015). This is ideal, given the fact that silver and the Dow move in opposite directions (I have written about this extensively). Again, this means that the current silver rally since December 2015 has much less resistance (from Dow strength) as compared with the 70s. This will continue, with silver rising even faster when the Dow goes into its next leg down (which could be brutal).
During the 70s, when the US Dollar index went from point 3 (January 1976) to January 1980 (some time after its bottom), silver actually went from about $3.80 to $50. If the current pattern on the US Dollar Index plays out as expected, and silver has a similar rally to that of the 70s, then silver could go to $184. Given that the expectation is for silver to outperform the 70s rally, it is likely to exceed the $184 level.
One difference that this chart does not necessarily show is the strong likelihood that the coming US Dollar collapse will not be like the previous ones, since this will bring the collapse of the monetary system (again, I have written about this extensively). This will guarantee a sudden and quick rise of silver (in any measurement), to the extent that the US Dollar price of silver will not matter.
Check out Hubert Moolman’s premium service.
related: Silver Demand Highest On Record
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