bubblesSubmitted by Deepcaster:

“Nothing is normal: not the economy, not the financial system, not the financial markets and not the political system.  The system remains still in the throes and aftershocks of the 2008 panic and the near-systemic collapse, and from the ongoing responses to same by the Federal Reserve and federal government.  Further panic is possible and hyperinflation is inevitable.   What continues to unfold in the systemic and economic crises is just an ongoing part of the 2008 turmoil.  All the extraordinary actions and interventions bought a little time, but they did not resolve the various crisesThat the crises continue can be seen in deteriorating economic activity and in the panicked actions by the Federal Reserve, where it proactively is monetizing U.S. Treasury debt at a pace suggestive of a Treasury that is unable to borrow otherwise. -John Williams, ShadowStats

It had to happen. And now it has begun. The very biggest bubble in financial history has begun to deflate. And over the next few months, we expect that deflation to accelerate and morph into a bursting.

 

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And that bursting will affect the price of nearly every financial asset on the planet, and many key non-financial ones as well.

“The economic and systemic solvency crises of the last eight years continue.  There never was an actual recovery following the economic downturn that began in 2006 and collapsed into 2008 and 2009.  What followed was a protracted period of business stagnation that began to turn down anew in second- and third-quarter 2012.  The official recovery seen in GDP has been a statistical illusion generated by the use of understated inflation in calculating key economic series (see Public Comment on Inflation).  Nonetheless, given the nature of official reporting, the renewed downturn likely will gain recognition as the second-dip in a double- or multiple-dip recession.

“What continues to unfold in the systemic and economic crises is just an ongoing part of the 2008 turmoil.  All the extraordinary actions and interventions bought a little time, but they did not resolve the various crises.  That the crises continue can be seen in deteriorating economic activity and in the panicked actions by the Federal Reserve, where it proactively is monetizing U.S. Treasury debt at a pace suggestive of a Treasury that is unable to borrow otherwise.” 

“April Employment and Unemployment, M3 and Monetary Base,”

John Williams, Shadowstats.com, 05/03/2012

 

 

It had to happen. And now it has begun. The very biggest bubble in financial history has begun to deflate. And over the next few months, we expect that deflation to accelerate and morph into a bursting.

 

And that bursting will affect the price of nearly every financial asset on the planet, and many key non-financial ones as well.

 

Independent (non-main stream media) financial analysts generally agree that The Fed, Bank of Japan, and increasing numbers of other Central Banks’ orgy of fiat money printing (i.e., competitive fiat currency purchasing power debasement – i.e., the “currency wars”) will likely come to a very bad end.

 

One likely result: hyperinflation. (The U.S., e.g., is already threshold hyperinflationary with real CPI at 9.15% per shadowstats.com.) and consequent collapse of one or more sectors. Think Argentina (50% inflation) as a distinct possibility.

 

So it is crucial to recognize the 3 key warning signs that a collapse of one or more sectors is impending, so one can profit and protect. Unfortunately, 2 of these indicators are already “hinting” that collapse in one and quite possibly two key sectors may not be far off – beginning within the next few weeks or very few months. Do these signs of key sector collapse mean one is certain? No, but they are ominous indicators of probability nonetheless.

 

Indeed, it is the possible collapse in one of these sectors about which Goldman Sachs’ CEO Lloyd Blankfein warned just a few days ago and about which we have been warning for weeks, that is most likely.

 

Carefully consider the four-month chart of the benchmark 10-year U.S. T-Bond which confirms that bond technicals confirm bond fundamentals.

Note the violation of the short rising trend-line in early May. Not good. Note the key support level is the March low of 132.21.

 

It has now been violated conclusively with this past Monday’s (05/13) close of 131.31.

 

If the US 10 Year continues down, a massive collapse in the bond market (i.e., much lower bond prices / much higher interest rates) becomes increasingly probable. Such a collapse would wreak havoc on the economy because credit would become very expensive or unavailable, as it became in the late 1970s to early 1980s and again in 1994.

 

Consider Blankfein’s Warning:

 

“I worry now…I look out of the corner of my eye, to the ’94 period … you’d think in hindsight (it) should have been expected … (it) really was stunning.”

Lloyd Blankfein, CEO, Goldman Sachs, 05/01/2013

 

Going forward, watch the U.S. 10Yr Chart very carefully. It is Indicator #1 that a one or two sector, and perhaps broader collapse is impending and it is already “hinting”.

 

Indicator #2 is the U.S. Dollar. Short-term (next few weeks) we have already forecast continued strengthening basis USDX because of continued Eurozone weakness, Bank of Japan Yen (and several other Central Banks intensified) printing, i.e. the ongoing, and intensifying currency war, i.e. competitive devaluation.

 

But given The Fed’s ongoing orgy of printing ($85 billion per month) long-term the $US is toast vis à vis real assets.

 

So looking again at a 5-year $US chart we see key support is at 78 basis USDX. If the $US were to close below 78 it would be Indicator #2 that a major collapse is quite likely impending. At present, we see no “hinting” yet for the $US.

 

In sum, short-term (next few weeks or very few months) we continue to forecast the $US remains above 80. However, short-term the 10-year U.S. T-bond is already hinting at collapse with the yield popping to 1.95% very recently. We shall watch very closely, and are indeed prepared to recommend shorting the 10-year at any time. (Regarding Profit and Protection from the foregoing, Deepcaster’s recent Letters and Alerts.)

 

Indicator #3 that a key sector or, at broader, financial, collapse is impending would be crude oil prices.

A serious spike in crude oil prices would / will stop Fed and other Central Bank money printing dead in its tracks. And such a halt would remove support from Equities and other markets. Therefore, consider well that a 3-year chart of crude prices presents a triangle pattern, a pattern which is coming closer and closer to the breakout point.

The question is, which way will it break?

With WTI crude in the mid-$90s and trending up recently, it is hinting that a sector collapse resulting from a spike in crude prices may be impending.

Some month (or weeks) not too far off, Fed and other Central Banks money printing will likely cause a price breakout most likely to the upside (i.e., above $100). Equities will then tank. Given the Central Banks intensified money printing a breakout is likely just a matter of a weeks or a very few months.

The crude price is an indicator to watch, and it is already “hinting”. In sum, if crude spikes up, or bonds down (and thus, interest rates up), Equities will tank and both crude and bonds are hinting.

[By the way, we discount somewhat the enthusiasm with which the recent IEA Report (the U.S. production would increase by 3.9 Million/bbl/day in the next five years appx due to fracking) was accompanied. Even if true that would increase U.S. Production to appx 12 Million/bbl/day. But the U.S. consumes 18 Million bbl/day and fracked wells have much higher depletion rates.]

The great bond-bubble bursting is near (and a $US swoon is likely not too many months off either) thanks to Fed and other Central Banks printing, the only issue is which month, or week, will the acceleration to that burst occur.

 

In sum, bonds and crude oil are the indicators hinting that the collapse of one or more sectors impending, the US$ not yet.

 

Best regards,

 

Deepcaster

May 16, 2013

 

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  1. We can all be civil here. Think things are getting way out of hand with the new posters. If your desire is to turn this great site into the SLV message board then go somewhere else. We all have opinions and those opinions must be respected. Slander of opinions is not acceptable. Please take to heart and tone it down.
     
    Ranger

    • no kidding. shamus, henesau and mikey have come out of nowhere dropping pearls of idiocy calling regulars ( like you ) shills. At this point we should look for sponsorsip from the comex, cftcand spdr LOL.

    • Dissenting Opinions are welcome, but YES, Keep it CIVIL, and we all may learn something! 
      I have some Q’s here regarding these T Bonds… separate Post  ;)

    • @Canadian Dirtlump
      Please look through all of my posts and find one where I have called you a shill.  Please find one where I haven’t been civil.
       
      You may think of my opinions what you want (but note you are now the one called me an idiot), but I have been nothing but civil here.
       
      I’ll share opinions.  You’ll notice it’s either weakly when I am not so sure, strongly when I believe I know what I am talking about, or I’ll ask questions when I have no clue.

    • Also, still waiting for your reply about GLD, I admitted I did not know much and you responded “yeah your post is clear, you dont understand gld.”  I replied asking for help or clarifications on what I thought I knew and got nothing.  
       
      You have no obligation to be civil to me, it’s an open board and we can all hide behind our screen names, but please don’t say I’ve been unpolite when i’ve had plenty of opportunities to do so and have refrained.

    • Exactly so, Ranger.  It has been said that the essence of civilization is that we can disagree without becoming disagreeable.  The regulars on here seem quite well aware of this.  Hopefully, others will pick up on it ASAP.   It is possible to have calm and thoughtful discussions of many possibilities as regards PMs in general and silver in particular without becoming strident and obnoxious about it.  At least that is to be hoped. Those who are obnoxious should be ignored.  They will soon get the message.
       

  2. Why do you think Benghazi, the IRS and seizure of phone records of the AP are front page news? Easy, it’s a front to take our eyes away from what’s really going to happen in our beloved country. A Total Fucken Crash.
    @Ranger, I’m taking my Brother back. Lol

  3. I don’t get this “bond bubble” is ready to burst theory.  If selling begins in the bond market, and interest rates move higher, wouldn’t the Fed just buy more bonds?   The Fed just said that its ready to adjust the QE amounts if needed, less or more, I didn’t see any panic.
    Then people say, if the Fed buys too much debt, the dollar will tank. Really, if Japan and the Euro zone is doing the same QE policy, why will just the dollar go lower?    Today the dollar is moving higher with printing $85 billion per month, will it make any difference if they buy $100-125 billion per month, Japan and Euro zone will be doing the same thing.
    If it was just the US doing QE, yes then it could be risky, but it’s not.  CPI shows the inflation is dropping, where is the threat of inflation today?
    Who knows how big the Fed’s balance sheet can get, $5-6 trillion?  Maybe $9-10 trillion, or even higher, the point is this can drag on for years.
     

    • Zman,
      The foreign countries that own our bonds, could strike down the T Bond market in a heartbeat. That’s one of Russia’s plans with the BRIC Union The Fed Couldn’t print money fast enough to stop it. The Fiat Currency worldwide is becoming worthless and the dollar is creeping higher, so if you are in Japan, Italy or any country that continues to fail because your currency is falling more against the dollar, what would you choose to do to gain some liquidity? Sell or buy U, S. Treasuries? If you buy the yield goes down and if you sell the yield goes up. If Yields rise overnight which is a great possibility, the bond market and the stock market will evaporate.
       

    • zman, one reason the Dollar is “rising” is that the other currencies are being devalued FASTER
      than the dollar$, as the index is ONLY weighted against OTHER FIAT! 
      Look at the explanation on kitco if you ever get a chance. It is 56% weighting against the Euro, 
      which is sinking faster, as is the Yen. The prevailing opinion is that this “move” (Manip-Manop)

      is to get evferyone into the Dollar and the Dow, then “pop the bubble” by yanking their (TPTB) 
      monies out FIRST. They are the big gainers (selling at the TOP) and everyone else is a LOSER. 
      First ones out the door WIN! 
       
       

    • In case you haven’t noticed prices are rising every time they print. As someone who is retired and living off a limited income I see it every time I grocery shop.

    • I am well aware that if China or some other nations that hold T-bonds start selling in heavy amounts, the game is over, but that has not happened, and there is no reason to think it will happen anytime soon, if ever. 
      I am also well aware of the dollar index weightings, that is why the dollar is no worse off than the Yen or Euro. They are all going down in value over time, but I don’t see a panic, just a slow painful decline over many years/decades.
      I guess the only thing I am saying is that the Fed has a lot more bullets and time than many might think.  They know interest rates must stay low, and they are going to do everything in their power to keep it that way, including war.  If a nation starts selling their T-bonds in heavy amounts, what do you think is going to happen?  They have just started a economic and political war with the worlds superpower, that is not what they want.
      Mary, I know there is inflation, and the CPI is BS, but we currently do not have “run away” inflation, YOY the inflation is not too bad, we will know when that changes.   For now, inflation is very manageable for the Fed and other central banks, which means status quo for quite awhile.
       

    • “If a nation starts selling their T-bonds in heavy amounts, what do you think is going to happen?”
       
      Perhaps that depends upon whether or not the “offending” nation also has nuclear weapons.
       
      “YOY the inflation is not too bad, we will know when that changes.”
       
      BS inflation numbers, per the Fed, are in the low 2% range.  REAL inflation is around 9%, per John Williams of http://www.shadowstats.com.  At a rate of 9%, we lose half of our purchasing power in 8 years, per the rule of 72,  Does this qualify as “not too bad”?  Just curious as to what WOULD qualify as bad.

  4. US China and Japan are all doing or were doing about $85 billion QE a month. The totals now are anyone’s guess.
     China needs to jack up it’s economy too.  print, print print.
    Re SD site opinions are like assh****  Everyone has one. No need to be one. 
    Like Travolta sez on Pulp Fiction   “Be cool Hunny Bunny, Be cool.  No need for anyone to get hurt.”
    BTW   Divide and conquer is a well formulated battle strategy.  Allies like us need to stick togther.  Like Eisenhower, Montgomery, Clark and Patton.  Different, very different personalities but they beat the pants off Fortress Europe.  Personally I don’t like going out to battle knowing I got no one watching my back. And the sons of bitches that started WW I and WWII are still trying to conquer Europe.  the sons and grandsons of the Nazis are alive and well and have well laid plans for the rest of Europe and the UK. 
    My troll spider sense is about a good as my wife’s sense of smell.  Nonexistent. So I’ll take someone’s word that they are allied with this site.  But don’t abuse the privilege here.  We don’t need crap when there are much larger issues at hand.  Thanks all. 
    Good to hear from you again Charlie.  How’s biz?

    • “And the sons of bitches that started WW I and WWII are still trying to conquer Europe.  the sons and grandsons of the Nazis are alive and well and have well laid plans for the rest of Europe and the UK.”
       
      In the 1930s and 1940s, ships, planes, tanks, and troops were the preferred weapons of war.  These days, debt seems to be the preferred weapon.  They who pay the bills are the ones who are in charge.
       
      My question regarding the EU is whether or not Italy, Spain, and France, all of which are “too big to bail”, will sink the EU and destroy the euro currency.  It is pretty obvious that Germany has no interest in destroying its economy in an effort to save the likes of the PIIGS countries plus France.  Makes me wonder just how long Broomhilda can remain in power in Deutschland, if she continues to push her pro-EU agenda.

    • Re: “And the sons of bitches that started WW I and WWII are still trying to conquer Europe. the sons and grandsons of the Nazis are alive and well and have well laid plans for the rest of Europe and the UK.”
       
      Wow. Up until the line quoted above, not a bad post, but that was like pouring a vial of urine in a jug of Johnnie Walker Blue.  I guess that quite possibly even a majority of PM aficionados do not know (or want to honestly investigate) history, or see the big picture. Out.

  5. It’s frustrating as hell to have all these scandals going on…..Benghazi, IRS and AP and the fact is most people don’t give a damn.  Each one of these events on their own should leave no doubt in peoples minds that this adminstration is morally bankrupt.  Since I don’t know who the newest judge is going to be on American Idol or what happened on the most recent reality show, it’s hard to have a conversation with anyone.  The fact that all these scandals are happening at the same time means that none of them will get the attention warranted.  Nothing significant will result from any “investigation”.  So, as to PMs, you better be in for the long haul.

    • It is likely that PM ownership is more than a mere purchase; it’s actually more of a way of life.  :-)
       
      For me, it is part of my BSRP… which is a BS Reduction Plan.  I don’t care at all for the idiotic financial management in which the US Gov and Fed are engaged.  This makes me doubt the long-term viability of the UST bonds and the US dollar.  While many of these economic charades could very well go on for a considerable period of time, it still makes sense to me to own something that cannot be destroyed via over-printing, incompetence, or skulduggery.  I also do not like being lied to, fed BS, and told that it is chocolate.  No, it is NOT chocolate but does share a similar color.  So, to protest all this BS, I stack some PMs.  Maybe it will pay off, maybe it won’t.  In the end, we are all dead.  But what happens between now and then could very well be affected by what we do or fail to do in the time remaining.  Being prepared is better than not being prepared and hoping that someone else gives a damn, which they do not, and saves my wrinkly old butt, which they will not.  lol
       

  6. DeepCaster is getting a little ahead of things…   The USA can and will print much longer than other central banks can.   The rise in bond yields is meaningless.   They can force them to any level by printing the money to buy them.  And even if (more like when!) inflation starts to get uncomfortably high, the FED will just go stealth with its money printing.   Don’t kid yourself.  They have not been transparent since before the crisis and they most certainly won’t be transparent when inflation gets everybody belly aching.  
     

  7. Deepcaster got me to jump to the May treasury rates  Interesting trends—short but maybe telling.  30 yr up 30 BPS, 10 Yr up same,
    On the other end 1 month down to 1 BPS from 3 BPS   3 month down to 4 BPS from 6.
    Long term is rising and almost back to the level the 10 year had a couple of months ago.  That’s a 17% rise in 17 days.  Hmmm, what does that say
    The one that really gets my attention is the 1 BPS on the one month.  Come on people, down from 3 BPS in 17 days   That is telling to me and says loud and clear that the next step is 0 BPS and then NIRP.  Fed goes NIRP and the reserve currency of the world offers negative return for safe harbor. Save the dollar move/  I don’t know. But lots of money is flowing to treasuries now that Cyprus has started the mother of all bank runs. even Japan is back to buying junk UST and EURO crapbonds.
     Deepcaster is right is that our treasury rates are going to tell the world we are in trouble.  But maybe not tomorrow.  Selling treasuries to the Fed at 1 trillion a year is one thing.  With the  UST refi bubble of $4-5 trillion by the end of the year we could see some fireworks. So scaring the big money from europe will keep the UST solvent for a while.
    The Middle east is just one great big turd sandwich right now.  Sooner than later we are going to have to take a big bite.  Russia has us in their sights with their warships steaming to Tartus.  Syria threatened missiles on Tel Aviv if Israel attacks Syria again.  All this emboldens Iran as Russia flexes muscle in this area. 
    Obama can’t find his ass with both hands. These  scandals are not distraction. They are the real thing and there are gbout 5 on going right now.  The distraction or false flag will occur within a week or two IMO.  I’m guessing something big enough to avert the neocon attack dogs in the right.  War is always convenient.
      That will be the distraction needed as the Dems go into bunker mode, protect the President and excoriate his enemies, distractors and attackers by saying that it’s unpatriotic to attack the CIC when we are at war.  Remember Clinton and what he did in the middle of his scandals.
    Air Force fighters into Central Europe, a cruise missile into the Chinese Embassy in downtown Belgrade?  Cruise missiles into aspirin factories,  cigars into —- never mind.  Clinton was not very good at using war as a deception and high cover and that is probably why he got nailed so hard. Using Reno to help the cause was good for large scale casualties.  The other Janet—Chas as we like to call her, will find something interesting to cook up.  
     As rookie as he is on the international scene, BHO and his people are masters at this game of blame and subterrfuge.  watch the horizon for some nasty flash point. Ayres and Dorne go postal maybe?  They know their skills.
    Gotta go—Jim Willie’s in the house  Golden Jackass is fresh off the presses.

    • Too funny AG, took me a minute to figure who Chaz was, :). I am digging into my new Golden Jackass edition as well. We are like two peas in a pod. Cheers mate. 
       
       

    • I am not one to believe in dreams but I have a recurring one of nukes hidden in mosques in major cities… mean anything? Probably not but a very possible scenario. Nuke a midwest downtown and start WWIII

    • Actually, Mary, quite a few people believe that some dreams or at least parts of them are meaningful.  The difficult part is determining just what they really do mean.  Most are very symbolic, so we get images but not words explaining what those images mean.  Perhaps this is some form of subconscious tapping into cosmic consciousness?  I have had a few dreams that were quite vivid, much more so than the usual run-of-the-mill dream, but that were more than a little confusing at the time, only to have major events play out later that the dream clearly involved but that were understood only after the fact.

  8. Butttttttt Butttttttt
    Larry Kudlow said yesterday on his so called radio show ( saturday ) that US stocks are a great investment & there will be no inflation & bernake is a great savior of the us economy……..i had to turn his $hit off for fear of drowning from the political bs he was shoveling……
    oh gold & silver dont bother according to larry

    • Interestingly enough, Yooper, many of the same Wall Street shills were pounding the table for everyone to buy Internet stocks and houses just before those bubbles popped too.  Their record of walking face first into a thrown poo pie are actually pretty good.  SPLAT!

  9. Da Yooper.  Kudlow does to your IQ what watching Woody Allen does to your testosterone.   What at your own risk
    Yeah, Chaz, Uhh.
    Bitch Goddesss from the land of the Baritone Women

    • Brother AGXIIK
      I was trapped & only had access to a radio ( no internet – cable nothing ) & while scaning the freq’s came across this political POS pimping the admin line ……..i barely made it out alive ….the BS he was shoveling would make listeners of Pravda proud ….he sounded like a radio verson of Cramer……
      As pennace I will double down on my phiz buying……

  10. 5 Hail Marys should do  DY 
    It is good to listen to the oppositiion and check their agit-prop.  Then do opposito.  silver price in calapso-tastic phase   GSR is nearly 65 to 1.  I pinged Bullrun to see if he can set me up for another trade—AU for AG.  buy buy buy but see what this coming week rolls out 
    If something hits the equities NW we may see that fear factor PM price drop when Lehman failed.  then buying will be a feeding frenzy. 

    • IMO They (tptb) are not only discounting Silver & Gold for us, but providing enough for smaller stacker to buy, to keep the public from actually realizing there is a SHORTAGE! Who cares if there is a HKMEx collapse, WE HAVE PHYZZZ! This is so they have something to seize, in the next phase. I forsee a huge Black Market in all the durable desirable commodities, including Silver, Gold, Weapons & Ammo, and daily necessities. 
      Just got laid off, so I have time to set up me necessities  :D

    • Yep …….but I was thinking 2 -4 weeks out just the same we are …….of like mind …..spot on my brother
      have dry powder ……..waiting…….savey…….

  11. @Deepcaster:
     
    What should I do about a 401A?
    it is totally locked in, but I will still try to get it out. 
    However, I put everything in the T Bonds, anticipating a crash of the DOW. 
    I hope the DOW goes first, then I will flip it to stocks, before the Bonds crash. 
    My other choices are various mutual funds, PIMCO, or another one that is heavily into 
    California Municipal Bonds, and that one is totally stupid IMO! 
     
    No “Safe Harbor” as one local investment guru stated, so what to do??? 
     
    PIMCO looks like the safest mutual fund, as Bill Gross has some good exposure to PMs? 
    Hopefully PhyZZZ, and not paper LOL! 

    • …anyone else, just hop right in, OK? 
      I suspect I’m a screwed pooch, as far as the 401A goes…
      The Bonds and Stocks may tank simultaneously.  :P

  12. RGR And you thought I would not weigh in with my opinion.  The safest harbor outside of PMs is your own business.  I am pretty sure the system that allows you, now freshly laid off, to borrow from your retirement plan and invest in your new business. I know from our back channel conversations that you have some considerable skills in the field of electronics. 
    Two ideas
    If your former employer needs some sort of independent contractor service, you can be that person. One man shop to begin with
    If not, then start small and get those jobs you are good at under your belt and begin the process of building your business
    Back in the day I worked with a half a dozen people who left their jobs, retired or were laid off and used their 401K as seed money.
    It can be rotated through an LLC to a corporation that is funded by your 401K which ends up owning the stock of the corporation you run. It is like owning public stock but it’s stock in your own corporation.  It’s a little like my SDIRA except you dont own precious metals. You own your business.
    Get that unemployment insurance and squeeze that lemon for all its worth while you set up the business. This is just one option but a decent one that has worked well for others.  You can buy a business with your 401K proceeds as well.  That’s all I can suggest for now since I dont know enough about your situation   Good luck and good fortune  Cheers

    • What can and cannot be purchased with 401K (and presumably 401A) plan money is very carefully laid out in IRS documentation.  I would advise anyone attempting this to do so with considerable care.  Read up on this… A LOT… and then get some professional help from a seasoned CPA or tax attorney.  The rules on this kind of thing are many and changed from time to time.  Doing this can be like playing blind mans’ bluff in a mine field, so a qualified and competent guide is essential.
       
      Also, one cannot borrow from a 401K AFTER one has left their employer.  I don’t know if this also applies to 401A plans but suspect that it does.  Such loans are repaid via payroll deductions, which cease when one no longer is employed there.  Also, any outstanding loans may become immediately payable upon leaving service.  The terms of the 401K plan, aka The Summary Plan Document (SPD), will spell out the exact conditions that apply to your particular plan.  What can be done, though, is to take all of the money from a 401K plan and roll it over into an IRA.  Whether or not this is appropriate depends on both the letter of the law at the time AND your SPD.  I believe that this is do-able but that it is also tricky.

    • Soros indeed cut his stake in the GLD gold fund by about $2.5mm—a paltry sum, especially given the fact that he simultaneously purchased a massive $25mm in call options on the GDXJ Junior Gold Miners Index. This purchase outweighs the physical gold sale by a factor of 10—suggesting he expects much greater gains ahead to be had in the junior mining stocks.

  13. RGR   EdB corrected me on a vital point.  Borrowing from your retirement plan after you leave your employer.  Any time you touch the plan get the advice of a good tax attorney. I didn’t full expand on my post.  Once out, rotating the 401K into an IRA could be the first step taken.  After that your CPA can offer you the steps to take if you chose to use the plan for a specific purpose.  When we left CA for NV, I shut down my business and converted our Defined Benefit and 401K business plans into to separate IRAs   We did not borrow from the plan but did use the funds to start SDIRAs for physical bullion.  That is a complex, slow and methodical process not recommended unless you do your diligence.
    There was an article in Saturday’s WSJ that chilled me a bit.  Over a decade ago the IRS appeared to allow people to use their IRAs to fund a start up firm or buy a business.  There is a narrow channel to accomplish this but the caveat to this is if the business owner also borrows to leverage the IRA funding.   If, in the course of this process,  the owner personally guaranties the loan directly or indirectly, this could make the IRA taxable and create penalties too boot. Retirement plans are not permitted to be offered as collateral for a loan. If they are the general rule is that creates a taxable event.  It is one of the firm rules we had as bankers.  We would take guaranties from anyone and lien any asset needed as collateral but retirement plans were scarosanct; untouchable, because by compelling the borrower to sign over his IRA as collateral would be very damaging to the client.

    • “It is one of the firm rules we had as bankers.  We would take guaranties from anyone and lien any asset needed as collateral but retirement plans were scarosanct; untouchable, because by compelling the borrower to sign over his IRA as collateral would be very damaging to the client.”
       
      Exactly so, AG.  There are quite a number of federal and state laws regarding the protection of retirement plan money, both from those bent on skulduggery and from the IRA owners as well.  If there is a foolish move available, it is not surprising that a lot of people will go out of their way to take it and then suffer the consequences at a time when they can least afford foolish moves.  This is one of the reasons why there are so many strings attached to retirement plan distributions.  Fortunately for us, we are in “the golden years” time frame when those rules are minimal.  At age 70.5, they increase a bit but it is not onerous for me because I tend to remove more money from my IRA than the minimum amount that the law requires at age 70.5 anyway.  Uncle Sugar gets the tax that he has long allowed me to defer and I get more freedom to do with it as I please.  Not a bad trade, that.

  14. Kenneth 
    the reason I said what I did about the Nazi SOBs and their plans for the rest of the Europe is a matter of connecting the dots. It may be an inflamatory statement, and I meant it to be, I have done some research on those groups and individuals who survived the purge of the Allied forces trials, executed or jailed, and those who were brought to the US after the war. 
    Without getting into details, the bankers and industrialists who were part of the Nazi regime prospered during both wars but most of all during and after WWII. US banks helped fund the Nazi regime as well.  The political sentiments and zeal to see German as the predominate power in Europe did not abate after Nazi Germany was defeated.  These people  found another venue with the US as we became the predominant power in the world, spent trillions defending Germany during the cold war and allowed German to regain its economic, financial and industrial might.  I would have absolutely no issue with this if TPTB from the War era disappeared.
    But they did not. 
    It would be cowardly for me to say otherwise, as all the male members of my family fought in WWI and WWII .  My father gave his life in this fight as did 3 uncles in WWI
    So when I see SOBs trying their best to destroy countries like Portugal, Ireland, the UK, France, Spain, Italy and particularly the Cyprus through debt, theft and asset confiscation, that riles me up and I call it out.  Take it for what its worth.  German, Merkel, the Troika and other mean to have complete power over the Eurozone by hook or crook.  I also do not care the circumstances of how the PIIGS, Ireland and the UK fell into this trap.  Destroying people and their countries by any means is evil any way you look at it.  And I’m not happy with the way things have gone in this country but that’s a topic for another post.
    Debt and the ability to destroy the economy of a country by forced austerity, taxes and supranational regulations from an unelected and external elite  defines hegemony and the lust for control.  The means are right out of the playbook of the National Socialist playbook with Fascism written all over it. 
    German is a powerful nation capable of great good.It has been the economic tractor in the Eurozone.  Other countries have wasted their birthrights while German strived.  It has chosen a course of great evil and in my opinion,  not a humble on this subject, I don’t trust the German banks, elites or politicians even one tiny bit.   They are showing their teeth. 
     The UK would be very well advised to get the hell out of the Eurozone if they want to retain even a hint of soverienty.  Merkel and her people mean to control GB by any means short of a hot war.  Debt, currency debasement and those pesky regulations that the UK must operate under will be the undoing of Great Britain if they fail to extricate themselves from this  4 decades long trap set by German to gain control over the entire continent. Anyone looking to Brussels as the power base of the Euro Zone would be wise to look east to Bonn. That is where the strings are pulled and orders issued.
    Call it WW III, fought with every means except the bombs and bullets of war. German is winning handily thus far and the Eurozone is taking it on the chin. 
    I write with respect to your comments and want you to make sure where I come from when I wrote that statement. I should have expanded my initial statement but have now and hopefully you understand why I think and feel so strongly on this subject.  I also support the underdog when it’s being kicked.

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