Congress shall make no law that applies to any citizen of the United States that does not apply equally to all Congressional members, moreover Congress shall make no law that applies to any Congressional member that does not apply equally to all citizens of the United States.
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As you must know by now, Detroit is bankrupt and must restructure...somehow. They once were the manufacturing capital of the United States and the largest concentrated manufacturer in the world. They now have over 28% unemployment (actually much higher), and cannot afford to pay for even basic services and much of the city is "bombed out" as in destroyed. There are calls for all sorts of remedies such as private equity rebuilding and public (federal) bailouts. ALL of this misses the point...
The point is that Detroit is not "fixable" and is actually only a signpost along the path that all of the U.S. (and entire Western world) is traveling. If you recall, Meredith Whitney forecast this scenario 3 years ago. She was early and made the mistake of saying "in the next 12 months"...BUT she was correct in her analysis. Monetization by the Fed only postponed the final reckoning, it has not been cancelled. Bond investors will be killed by the ability to service even a fraction of the debt when it does not exist, this is a "given." What is not a "given" and only a very few have figured out yet is that pensioners will also be destroyed. I am not talking about "Detroit pensioners" (though this is a certainty); I am talking about pensioners in general, across the spectrum and all over the world. Let me explain. Pension "promises" have been made throughout the years by corporations, institutions, cities, states and sovereign governments during a "different era." Years ago, pensions were actually funded, FULLY funded. Then along came the 80s and 90s and the actuaries started to "up" the assumed growth rates which meant that less money had to be deposited to pay future benefits. Well here we are years later and the actuaries were wrong...REALLY wrong! We did not get the expected growth rates, interest rates were pushed to virtually zero AND not enough was deposited to begin with. Not to mention enough to make up for poor investment results. THIS is going to be a prob lem everywhere, a huge problem. Those already receiving pensions will see them curtailed, those expecting pensions will receive far less than they were promised AND the "kicker." The "kicker" being the fact that benefits will be paid out in currencies that have only a fraction of the value that they have today. This will in essence wipe out a middle class that "played by the rules," they went to work, they saved, and they "trusted" their future in their employer's promises. I have said for years and it now looks assured to have been correct, "When it comes to retirement, rely on your own investments and do your own thinking because promises will be broken at your expense." The same could be said for everything else financial in your life. Do you feel good because you have large balances in the banking system? Or a huge muni portfolio that pays you tax free income? Or a large stock portfolio in a "house of cards" market that is supported by the low interest rates in a Ponzi currency and debt market? Or how about that ETF that allows you to sleep at night because it is "backed" by gold? Do see my point? "Promises were made to be broken" and they will be Bill Holter ~
India has imported over 900 tons of gold so far this year while China has imported just shy of 1,100 tons. To put these amounts into perspective, the world (ex. China) produces 2,200 tons per year. As an aside, with prices where they are right now, production will decrease in the future as some mines are not profitable at these levels. My question is this. With China and India buying almost every ounce that comes out of the ground "how much is too much?" "Too much" as in what level is THE level where existing inventories cannot absorb the demand from "the rest of the world" as India and China are speaking for the current production. Where is the gold going to come from? It is already clear that existing inventories are being squeezed as evidence by the backwardated GOFO rates 8 days running. I would like to point out that this is not only the longest streak, but more days total than ALL of the last 20 years combined! Also lurking in the shadows is allegedly a second Dutch bank to call a halt to delivering out gold. Why would this be? Why would any of this be? Why is the gold market so tight after so much "selling?" Shouldn't inventories be not only flush with product but simply overflowing with so much metal that they don't know what to do with it? Where did all of this "metal" that was sold, in a panicked, fast and furious fashion go? Did it evaporate? Is it being held in some alien, invisible vault system that we don't know about? Of course not...because it was not GOLD in the first place. We are now more than 90 days past the April "fool's" selling of supposed gold. This is enough time to look back and see for sure what happened. At the time "we" said that the selling was not physical gold and in fact was merely paper contracts without any real metal backing. "We" said that only those who wanted a lower price would ever sell futures in the fashion that they were sold. Well guess what, WE were right. If we were wrong then gold would be plentiful right now...it is not. Not only is the gold market "tight," it is tighter than it has ever been over the last 20 years. I took some serious flack back in April when I said that "the plan" all along was to default. I said this because I knew that there was no way 1,000+++ tons of real metal could, or ever would in that fashion hit the market over less than 12 trading hours. So here we are, 90 days later and inventories have done nothing but bleed everywhere you look. Not only that but as I see it, some deliveries have not even been made. Unless someone can show me where JP Morgan has concluded their May deliveries or delivered anything at all on their June deliveries I will assume that I have read their reports correctly and are in serious arrears. Please, send me data that illustrates the movement of gold from JP Morgan to those contractually entitled to receive it. That said, I will again state what I wrote back in April. We are facing a major default in both the gold and silver markets on COMEX, which has a whopping 29 tons of registered gold inventory available for delivery. I also believe we will see the LBMA in the same boat though they do not publish inventory numbers. All that is needed is to look at the inventory drain coupled with the explosion in demand caused by fraudulent prices to see that this will come to a head shortly. August COMEX deliveries of gold should be at least 30 tons which would take care of all existing registered for delivery inventory...and then what? What happens after August? Like I said "How much is too much?" ...Demand that is |
This blog is a list of reasons I have built my solar home off the grid and continue to prepare and improve my survival skills. Please leave me any comments below that you wish and hit like or share on Facebook and Twitter. Moreover share this information at your discretion anywhere and everywhere you feel relevant. Finally thanks to the contributors to the left who have given us this information and alternative to the main- stream presstitute media.
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http://www.solavei.com/hensongeorge I now am paying $24 / month for unlimited text and talk and using the internet via wifi. |