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4.8.2015 Financial Intelligence Report Bookmark

The End

Pretty harsh words they are…”the end”.  It usually means you’ve finished the movie or finished the book. But it also means you’ve finished “something” and in our case the something is the great Nixonian error of “let it be”  fiat money.  The end of that particular experiment is indeed nearing its end.

One of the issues that a person like myself has is that because we are not “widely” known, my voice has little sway over public opinion. If you’re a TV star, or movie star, or basket ball player for the Heat, anything you say will be followed by a tremendous amount of people “backing you up”.  The most obvious examples of that are fashion trends. When a few Hollywood “A” lister’s started wearing “ugg” boots for example, there was such a public rush for them, the company “ran out” and had to increase production by over 400% to keep up with demand.


The End

Pretty harsh words they are…”the end”.  It usually means you’ve finished the movie or finished the book. But it also means you’ve finished “something” and in our case the something is the great Nixonian error of “let it be”  fiat money.  The end of that particular experiment is indeed nearing its end.

One of the issues that a person like myself has is that because we are not “widely” known, my voice has little sway over public opinion. If you’re a TV star, or movie star, or basket ball player for the Heat, anything you say will be followed by a tremendous amount of people “backing you up”.  The most obvious examples of that are fashion trends. When a few Hollywood “A” lister’s started wearing “ugg” boots for example, there was such a public rush for them, the company “ran out” and had to increase production by over 400% to keep up with demand.

We see it with the lunacy revolving around the “Jordan” brand. Every time a new pair of “Air Jordan’s” are released, people line up around the blocks and riots usually ensue as everyone scrambles to buy the latest $200 dollar pair of sneakers. Word on the street is that it costs about $16 dollars to produce those sneakers, but because they’re endorsed by Michael Jordan…people shoot each other for the status of owning them.

Yet just because one isn’t a movie star or a famous quarter-back, or what have you, it doesn’t mean that their opinion is not worthy of exploration. Which brings me back to “the end”. See I’ve been telling you folks what’s coming down the pike as far as the end of our current monetary system for over 5 years now. Yet it doesn’t get that much air play.  I’m not famous.  If Kim Kardashian had said the things I’ve said about what’s happening behind the scenes the entire nation would be a drastically different place. Why? Because she can reach “millions” of people. I on the other hand, can only move a few tens of thousands.

So what generally happens is that we will lay out  our vision for what we see coming, and then a year, two, three later, someone big picks up the theme and everyone runs around saying “did you see what so and so said the other day!”. Hey it’s okay, I don’t need the attention, but it does happen enough to warrant a mention.  Well it’s happened again.

Keith Neumeyer is the President & CEO at First Majestic Silver Corp. During an interview the other day, this is what Keith had to say….

With the central banks now buying gold… which is quite unique… we haven’t seen that  in our lifetimes… they’ve always been sellers of gold and now they’re buyers of gold… I think there will be a reset of the financial industry…

I think China is being allowed to accumulate gold purposefully by the American government… I believe that the Chinese need to own at least the same amount as the U.S. owns before this reset occurs. I think that there’s some kind of deal that’s being made between all the central banks behind the scenes and that’s why you’re seeing governments accumulating the metal.

I do believe there will be some kind of new currency created with the backing… and it might not be a direct backing of the metal… but it’ll be some kind of blend of currency.. it could be through SDR’s… Special Drawing Rights… or some type of mechanism… I think that’s where we’re going.

And when that reset occurs I think gold will be left to rise… and I wouldn’t be at all surprised to see three…four… five thousand dollar gold over the next five years.

The gold accumulation that’s going on… this is gold that’s outside of the system… you don’t hear about it… these are big sovereign wealth funds, these are government funds, these are banks that are buying the physical metal… they are very intimately involved in the sector and they know what’s going on.

Wow. I don’t have the energy to go back and look it up, but this looks an awful lot like a word for word copy of one of our 2011 letters when we discussed why gold was being capped.  But hey, the fact that other folks are picking up on the reality of the situation is okay in my book. Sometimes it just takes a while for the “bigger people” to catch on.  Consider Jim Rickards with his book about currency wars. Well, Bob Chapman and I were discussing currency wars brewing 6 years before his book ever went to print. Go figure.

Okay, so what’s my point here? Am I whining and seeking some glory or is there something deeper? There’s something considerably deeper folks. See I like it when “named people” finally get around to telling the masses about the things we talk about. Each time it happens we get the credibility for our initial theories. But it also helps more and more people start to really catch on to the ugly things that are taking place behind curtains.

So here’s the point behind this little diatribe of mine. Gold was capped off so that China could buy enough of it at the “official” level and at enough of a bargain that they didn’t wholesale sell US dollar holdings to do it. The reason for them amassing the gold was the same as why Central banks are buying up the gold not shown on official books. The Chinese want IN the IMF’s SDR program. They needed to show on official paperwork that they had about the same percentage of gold in reserve that the US supposedly has in relation to the amount of dollars outstanding.  In basic terms…gold is indeed very valuable at the sovereign level. It is used by nations as a measure of their worthiness on the global scale.

That will get them in the SDR basket this fall. But that is NOT, repeat is NOT their long term goal. Their long term goal is indeed a renminbi  (their currency which is oft called the Yuan) completely backed by gold that becomes the full replacement for the US dollar as global reserve. That’s the “End” game. That’s their ultimate goal. But you don’t get from here to there overnight, it takes years, and this is why we’ve been laying out the steps for you.

Why it’s important is because for the Chinese to gain a parity of “global respect” for their currency that the US now has, means the US’s role is diminished.   Now here is where the timing becomes a bit tricky. The overall game plan is already in process folks. Leaders of the world have been working together to try and accurately value each nation’s basic fundamental economic strength. They know the debts are too big, the derivatives too crazy to ever be fixed. We need a global reset, a revaluation. Well they’re working on that.

But, do they get that done and agree to it before something untoward happens in the meantime? That’s hard to say. If you’ve been paying attention, you now know that all our so called ally’s rushed headfirst to join up with the Asian infrastructure bank, which is basically run via China. They know China’s going to be carrying a lot more weight globally than they ever did and they want “in” on it. Is it possible the dollar goes into a free fall crash before the “official” global reset? Yeah, it is. That’s the danger.

The End of the US dollar reign is in sight. It isn’t hype, theory or drug induced hallucination. More and more people will slowly awaken to how this is playing out and more and more “named” people will come forward to spread the word.  Since it is indeed going to happen and the process is in gear, the big question for you is this…”what’s it mean to me and my family?”

I don’t know exactly. I’m sure that’s not what you want to hear, but hey lets face some facts here. What we’re talking about is epic in nature. The US has been the so called “leader” of the world for 70+ years and it isn’t going to take kindly to losing that status. Take a look at some of the things we’ve talked about concerning Homeland Defense. They bought almost 2 billion rounds of hollow point ammunition. They’ve got military vehicles all across the nation. Now they’re actively bidding on the Federal bidding website for tons of ‘less lethal” armaments such as rubber bullets, and flash-bangs. What’s all that stuff for?

Could it be as the conspiracy people suggest that we’re about to see huge upheavals and areas of martial law? Is this “Jade Helm” scenario that’s going to play out in several states soon; be the training mission for when the economic reset hits and they need to patrol the streets of our towns to keep the peace?  It could be folks.  

What about “money?” When this reset hits, will it indeed be the people that have gold and silver that “win?”  It could be.  Lots of things “could be” and that’s why we talk about the possibilities and try and figure out what makes the most sense for everyone. I understand that some of it is unpleasant to talk about, I really do. But each day that passes finds another “named person” waking up to the things we’ve been talking about for years. This “stuff” is real and “something” pretty big is coming down the pike. You can do the stick your head in the sand thing, or you can be preemptive about it and try and plan for it.

Let me just end with this thought. Last night I had a good chat with my younger son. He was one of just 25 kids accepted into the advanced radiology program out of the 84 that applied at the college. I’m proud of him, he had earned the Deans list while working two part time jobs and just bought his own car with “his own money”.  Don’t you think I want life to go on as we always pictured it, with him having a tremendous future and growing up in a good solid US? I most certainly do. Do you think I get some kind of kick out of suggesting that the US is going to go through upheavals as the entire monetary system gets reset? I don’t.  But the signs are there, and frankly I really see no other way out.

I just want you all to understand that I’m not looking forward to what I fear could be coming our way. I don’t delight in any of this like some deranged lunatic. I simply see it on the horizon, know it’s likely to be coming our way and want to try and minimize the impact. If I can find a better way and share it with you all, I think I’ve done my job. Stay tuned.

The Market….

More chop. First a quick review…last week the market was pretty weak and thankfully they rescued things for the long Holiday weekend. Then Monday they came in and really pushed the market higher, it was a good session for the bulls. Unfortunately, there was no follow through on Tuesday.

Tuesday we were up over 100 points by noon and even in the last hour of trading we were up over 65 points. But in the last moments all the air came out and we ended the day slightly red.

Today was a mirror image of yesterday. We jumped out of the gate and gained 100 DOW points. But then all that air came out and we dipped red. Then they came back in and got things green again, but not by a lot. At 2 pm we only had the DOW up 11, the S&P up less than 3.

What’s the problem? They are manifold folks. First off we all know that the first quarter was really weak. The Atlanta Fed figures GDP was FLAT. That’s like in “0” growth. We know we had some weather issues in the first quarter, but there was much more. Oil had plunged like a rock, layoffs were galore, the jobs report for March was horrid, 90+ companies had lowered their guidance. So on one hand you have Wall Street and the bankers pushing the market as high as they can push it and on the other, the fundamentals don’t support a market much north of about DOW 8K.  There’s the problem. There’s the chop.

At 2 pm we got the results of the Fed’s “minutes” from the last meeting and in that “several” members were all aboard the idea of a rate hike in June. Well that bugged the street, until they realized that these minutes were produced before the lousy March jobs report. In any event we went red, we went green, we went red and finally ended the day up 27.  It was a very bouncy ride.

After the bell, Alcoa announced earnings and they are going to look a LOT like a ton of other earnings we get. They beat the estimates but their revenues were light. We’ve seen that action for the last 5 years as they account their way to beating the estimates on ever lower sales.

So what happens now? The market is “stuck” between support and resistance. On the low end, they “have” to keep the S&P over the March 26 close of 2056. If we fail that on a closing basis, we’ll see 2040 quickly. Lose that and we’ll visit 2000.

On the other side of the coin, we’ve established a pattern of slightly lower highs ever since the March 2 2117 close.  Basically we’re forming a pennant pattern of rising lows and falling highs.  Which way is it going to resolve? Breakout? Breakdown?

April is generally a good market month. The first couple weeks are often soggy and then the second two fire up. We could see that very pattern again, however this earnings season certainly isn’t going to help the case.  I’d lean “long” over 2086 and I’d get very cautious under 2056. In between, we can bounce and chop all over the map. Good luck folks.
 









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