This week, the Russian central bank announced a shock decision to hike up its key interest rate from 10.5% to 17%, effective immediately.   Incredible.
On Monday alone the ruble declined more than 9% against the dollar, and almost 50% in 2014.    It looks like a massacre.
If you listen to conventional financial news, they’ll all tell you that you’d have to be insane to own anything in Russia right now—stocks, bonds, currency, etc.
They’ll tell you that the ruble is in freefall, and that the dollar is the place to be.
However, unlike the Russian Central Bank,  the Fed doesn’t own gold.   It loudly proclaims this on its own website: “The Federal Reserve does not own gold.”  It holds ‘certificates’ which are redeemable for US dollars. But there’s not a single ounce of gold backing the US dollar.
So… with no gold and pitifully razor thin solvency levels, it really wouldn’t take much of a shock to topple the dollar.
By comparison, the ruble is much better capitalized and actually has something backing it.
The bottom line, however, isif you wouldn’t own the ruble, then what are you doing holding 100% of your assets in the dollar?

Image: Jonny O'Callaghan

Given the short time involved, it is clear that there is a major change happening in cross-border trade hardly noticed by financial commentators.   But this is not all: sanctions against Russia have turned her urgently against the dollar as well, and together with China these two nations dominate and carry with them the bulk of Asia, representing nearly four billion rapidly industrialising souls.
To this we should add the Middle East, most of whose oil is now exported to China, India and South-East Asia, making the petro-dollar potentially redundant as well.

While the talking-heads are debating the effect on Russia and America’s shale, they are oblivious to the potential tsunami of dollars just waiting for the opportunity to return to the good old US of A.

Image: Jonny O'Callaghan

The foundation for collapse is already well established.   Hyperinflation is fluid process.  It is a becoming. A great tsunami dislocating, destroying in that sense it is already here.   NOW is the time to act.
For yourself, which is for everyone.
Don’t wait for velocity. Don’t wait for the surface tension to break.
Don’t wait for the tsunami.

hyperinflation

Investors are getting mixed Messages about whether we are facing an Inflationary or Deflationary Future.
Answering that question correctly is important both to profitability and protecting wealth.

Major Bankers and some Government Officials Claim they are worried about Deflation.
But rising costs for Health Care, Food and, until recently, Energy, indicate we face an inflationary, and perhaps even a hyperinflationary, future.
Which is it? Inflation or Deflation?

gold gift

Today, let us be thankful that the following has not occurred…YET

A young lady waking up one morning, pouring herself a steaming cup of coffee, and stretching as she walks over to turn on her TV.  As she clicks her remote, she suddenly sees a disturbing image of the U.S. President on the screen (flanked by the Secretary of the Treasury, and the Federal Reserve Chairman) making an unscheduled speech….at 7 in the morning.  She tries to change the channel, but it seems to be on most stations, even non-news stations.
“The President has called for calm in financial markets.”  “Authorities try to stabilize currency and bond markets, ahead of Dow opening.” “Dow futures down by 845 points.”     “Dow futures now down by 985 points.”
“The President has asked for patience as banks are to close for a brief period, before reopening again next Tuesday.”

gold crash

A few years ago Jim Rickards came out with his book “Currency Wars” which talked about countries engaging in a race to devalue their own currencies to try and pump up sagging domestic economies. As things have unfolded, the currency wars have indeed been intense.
We can kind of think of all these massive QE and stimulus programs like a stock car race to see who can devalue their currency the fastest.  Right now the US has pulled in for a pit stop, but Japan, China, and the EU are still fighting it out on the track. 

launch rocket vertical

The Japanese yen is now collapsing.
If the yen goes “super-nova” – i.e. collapses  - it could bring down the U.S.   The U.S. QE/Keynesian Ponzi scheme relies on Japan to help keep the scheme together.   
The yen is beginning to hyperinflate and it is now entering “parabolic” mode.  
First, this will cause the Japanese banks to implode because they’re loaded up with Japanese stocks and bonds, the way our banks are loaded with Treasuries.  The banking system would not survive a yen collapse.
If the Japanese banking system collapses, it will translate into massive derivative losses and short term funding losses in the U.S. banking and hedge funds.  In other words, U.S. banks have massive credit exposure risk to Japanese banks.

collapse

The parallels between the false prosperity of 2007 and the false prosperity of 2014 are rather striking.
If we go back and look at the numbers in the fall of 2007, we find that the Dow set an all-time high in October, margin debt on Wall Street had spiked to record levels, the unemployment rate was below 5 percent and Americans were getting ready to spend a record amount of money that Christmas season.

But then the very next year the worst economic crisis since the Great Depression shook the entire planet and everyone wondered why most people never saw it coming.  Well, now a similar pattern is unfolding right before our eyes.
Once this false bubble of hope runs out, all of our lives are going to dramatically change.

srsrocco

The amount of leverage in the U.S. Dollar fiat currency system reached an all time high in 2013.  Even though the growth in total U.S. currency more than doubled since the collapse of the Housing and Investment banking system in 2008, the majority of the increase was from just one bill in particular.
U.S. Department of Engraving and Printing issued more $100 Federal Reserve Notes in 2013, than in any year prior.
The total face value of the $100 bills printed in 2013 were $443 billion, the cost was just a mere $580 million… basically one-tenth of a percent of the cost of the face value.
If we extrapolate this further, at the current price of gold (including Friday’s HUGE MOVE UP) of $1,170 an ounce, it would take twelve $100 bills to purchase an ounce of gold…. with a little change left over.
However, if we compare the costs below, we can see owning PHYSICAL GOLD is a much better and safer deal when the Fiat Monetary FAN finally hits the COW EXCREMENT:

tfmetalslog

In the second part of this excellent interview with Finance & Liberty, TFMetalsReport’s Craig Hemke discusses:

  • Gold, silver, platinum, palladium: What are the best precious metals to invest in? 
  • Coins, rounds, or bars: Are government minted silver coins better than silver rounds?
  • Shortage- what shortage? When is a silver shortage going to hit? 
  • How do we predict the timing of an economic collapse?
  • Will gold or silver protect you in a coming hyper-inflationary currency collapse? 

Craig Hemke’s full interview is below: 

gold eagle

Nothing is ‘normal’ when gold and silver aren’t circulating as money.  The central authorities need to manage the fiat and keep going the illusion of it having exchange value forever.  By managing the fiat price lower, as occurred on Friday, the supposition is that people will be ‘scared’ out of their gold/silver and exchange it for fiat to prevent further fiat ‘losses’.
Of course, such action will backfire as more and more hoard the metal at fire sale fiat prices, never to exchange it for fiat again.

The financial crisis of 2008 hasn’t ended - nor did it start from the overt reasons given.  Every second that gold and silver coins, as well as their attendant bills, do not circulate is a ‘financial crisis.’   How this manifests itself going forward is hard to predict.
It will likely involve global famine and the complete breakdown of payment systems.   If the central authorities, as well as the man on the street, continues to believe and accept the ideology of fiat as being money, civilisation will collapse a lot more quickly than would have been the case.  This is guaranteed.

gold

We already have monetary hyperinflation, defined as an accelerating debasement of the dollar.   And so for that matter all other currencies that are referenced to it are on a similar course, a condition which is unlikely to be halted except by a final systemic and currency crisis.
Attempts to stabilize the purchasing power of currencies by raising interest rates will very quickly develop into financial and economic chaos.
The insurance cost of owning gold is anomalously low, being considerably less than at the time of the Lehman crisis, which was the first inkling of systemic risk for many people.
We are being regularly advised by analysts working at investment banks to sell gold.   But bear in mind that the investment industry is driven by trend-chasing recommendations, because that is what investors demand.
Expecting analysts to value gold properly is as unlikely as farmers telling turkeys the truth about Thanksgiving.

dollar

In the article below,  we analyze the surprisingly likely drivers that may keep the US dollar strengthening over the next few years, especially if another economic/financial crisis arrives.
While there are many reasons to fear for the longer term viability of the US dollar given America’s current misguided monetary policy and exponentially increasing debt & liabilities, the next few years could well see the greenback appreciate further by 50-100% relative to the world’s other major fiat currencies.

dollar

In the second part of an explosive interview with Finance & Liberty’s Elijah Johnson (click here for Part 1), Jim Willie breaks down why Germany is repatriating their gold, and the implications of the Fed rehypothecating thousands of tons of gold over the past 20 years.   Willie claims that German intelligence in 2011 discovered the US’ brilliant plan of instigating a Ukranian coup, & turning the Western world against Russia & Gazprom- Germany responding by calling its gold reserves held on deposit at the NY Fed. 
Willie makes the astonishing claim that the death blows being sustained by the dollar are not accidental, but that Obama was placed into the office of President of the United States with the express purpose of destroying the US dollar!
Part 2 of Jim Willie’s Explosive Interview on Germany, Russia, & the dollar collapse is below: