14 Jul

Did Treasury just dump more gold (Ft. Knox) into the market?  If so, it happened late on a Sunday night.

Live New York Gold Chart [Kitco Inc.]

BIS chief fears fresh Lehman from worldwide debt surge

The world economy is just as vulnerable to a financial crisis as it was in 2007, with the added danger that debt ratios are now far higher and emerging markets have been drawn into the fire as well, the Bank for International Settlements has warned.

Mr Caruana, head of the Swiss-based financial watchdog, said the international system is in many ways more fragile than it was in the build-up to the Lehman crisis. Debt ratios in the developed economies have risen by 20 percentage points to 275pc of GDP since then.

Credit spreads have fallen to to wafer-thin levels. Companies are borrowing heavily to buy back their own shares. The BIS said 40pc of syndicated loans are to sub-investment grade borrowers, a higher ratio than in 2007, with ever fewer protection covenants for creditors.

“Overall, it is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally,”

Mr Caruana declined to be drawn on when the bubble will burst. “As Keynes said, markets can stay irrational longer than you can stay solvent,” he said.

The BIS says prolonged monetary stimulus in the US, Europe, and Japan has led to a leakage of liquidity, contaminating the rest of the world. The rising powers of Asia are no longer able to act as a firebreak – as they did after the Lehman crash –and may themselves now be a source of risk.

The BIS backed QE as an emergency measure in early 2009 to avert a deflationary spiral but has long since called for a return to sound money, and even rate rises. “The predominant risk is that central banks will find themselves behind the curve, exiting too late or too slowly,” it said.

This has earned BIS a reputation for Austrian School ideology , accused of encouraging crude liquidation. The bank denies this, tracing the bank’s doctrines to the pre-Keynesian Swedish economist Knut Wicksell.

Wicksell posited a “natural rate of interest”. Holding rates too low creates a host of problems. While his model looks like the modern “Taylor Rule” used by the Fed and other central banks.

“There is something strange about fighting debt by incentivizing more debt.” ~ Jaime Caruana

Read more here.

Aren’t Americans going to be real happy to discover that their gold is missing?  Especially when the rest of the world decides to create a new exchange currency that is valued (based) on the precious stuff?  The Democrats have really done it this time…

Welcome to fourth-world status.  With forty million immigrants who don’t even speak the language. 


Posted by on July 14, 2014 in Uncategorized


20 responses to “Wazzup?

  1. Dannyboy53

    July 14, 2014 at 9:23 am

    I don’t profess to understand all this however I do know our regime deliberately spends tons of our money on stupid “projects” that are meaningless or worthless. Investing in ourselves by extracting crude oil, natural gas, coal and using nuclear energy here at home is the ticket to a great economy and TPTB know this. But in addition to not doing these things, we are involved in outright lies like all this “green” shit (green jobs, green cars, etc), foreign aid to third world dictators, borrowing money from one of our worst enemies and pretending it’s okay. Well I’m calling green bullshit on all this. We have been led, hogtied and blindfolded, into the notion that we are destroying the planet so now we are destroying our economy in order to save the planet?! What’s wrong with this picture? Evil forces are destroying our economy because that is the safest way for our usurpers to take over this country. They could never have done it with weapons and that is why they have never tried and never will.

    The media is complicit in the killing of America in that the information being withheld from the American people would fill a long train with reams of documents. The truth about our economy isn’t impossible to find such as the real unemployment numbers. At least some people “in the know” have estimated the figures to be 20% or higher. This I believe to be a more realistic figure than what past regimes and certainly the present regime is touting. All of this is simply “The Cloward-Piven Strategy of Manufactured Crisis” being hard at work.

    I have said this before both here and other sites, I am amazed that our economy has withstood this assault for so long, it’s a testament to the resiliency of America. Or, maybe TPTB are simply holding off administering the coup de grâce to the greatest nation in the history of mankind for a more favorable moment?

    • The Soffitrat

      July 14, 2014 at 10:15 am

      It is simply a testament as to the sheer size of our economy. But even it is now beginning to falter. All things being finite.

  2. militialaw

    July 14, 2014 at 10:05 am

    Have to admit I was hoping for something like this so I could trade more paper for the good stuff.

    I was treating $1300 as a given for too long and last week’s run up had me kicking myself for not pulling the trigger earlier. Don’t want to be caught with too much of the green stuff when, not if, the bubble pops…

    • The Soffitrat

      July 14, 2014 at 10:13 am

      I’m about to make a move as well. It seems like as good a time as we’re likely to see. I figure this downturn is just so the rich & famous can make their last minute moves as well. Have to take care of each other, you know.

  3. pickdog

    July 14, 2014 at 11:51 am

    I am not in a position to add any metals right now but the economic near future is looking very unstable. We did top off the food stuffs though.

    • The Soffitrat

      July 14, 2014 at 12:05 pm

      Good for you! Everyone should be stepping up their preps. I agree. All over the globe, things seem to be picking up speed.

  4. Dannyboy53

    July 14, 2014 at 12:09 pm

    The only precious metals we can afford are copper and lead, we have invested heavily in them. But like pickdog we continue topping off the foodstuffs and will until it is no longer possible.

    • militialaw

      July 14, 2014 at 12:15 pm

      Converting dollars into *anything* real is always a good bet.

      • Dannyboy53

        July 14, 2014 at 12:25 pm

        Yes sir, I agree. No use crying over spilled milk but I wish I had started buying gold when it was less than a hundred an ounce! But we’re living on a retirement income now and we chose the above mentioned items as our priorities.

        • The Soffitrat

          July 14, 2014 at 12:45 pm

          First things first, Danny.

        • militialaw

          July 14, 2014 at 12:57 pm

          Ever since someone remarked “you can’t eat gold or ammo” I made sure food was #1 priority. So many of my buddies are frankly, idiots (and I’ve told them that) for not making sure they have at the very least enough wheat for their families for one year before blowing thousands on ammo and guns and whatnot.

          That’s why I didn’t start spending my extra money on the precious metals until gold was way over a grand and silver over 17.

          Now, if I can just get into Texas before Perry closes the border to emigrants from blue states, all should be ok 🙂

          (Of course, I suppose that’s one reason to have gold or silver: even if Perry closes I-10 or I-35, may be able to bribe the border guards to look the other way, LOL)

      • The Soffitrat

        July 14, 2014 at 12:46 pm

        Real estate pricing will be coming back to us when this all goes down.

        • rogerunited

          July 14, 2014 at 3:25 pm

          I have read stories regularly over the last few years about similar shenanigans with silver.

  5. The Soffitrat

    July 14, 2014 at 1:04 pm

    Good luck with that, Militia. I’ll come get you. 🙂

  6. Dannyboy53

    July 14, 2014 at 2:05 pm

    Mary and I have enough food, etc. to last us 1½ – 2 years right now but we continue to stock up. Ammo? The two of us together are incapable of carrying it in one trip, unless we both use a wheelbarrow! But we have been doing this for well over a year.

    • The Soffitrat

      July 14, 2014 at 3:05 pm

      You’ll outlive me then. As things stand right now.

  7. Dannyboy53

    July 14, 2014 at 2:11 pm

    Militialaw I agree with you reference the #1 priorities, there should not be a discussion about that at all!

    If you don’t want to answer, I understand but in what part of the country are you? Have you found a place in Texas?

  8. The Soffitrat

    July 14, 2014 at 3:28 pm

    “…similar shenanigans with silver.”

    Oh yeah. It’s all the same game. I read where Mexico is going to peg their money to silver and not gold. Sounds Mexican to me!

    • Dannyboy53

      July 14, 2014 at 4:02 pm

      How ’bout those Mexican saddles? They have enough silver decorating them to pay for a small island in the Pacific!


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