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All posts for the month January, 2016

(This is an update of a previous warning)

Here is a validation or another update in the Collapse of the Petrodollar Part1, and the Collapse of the Petrodollar Part-2. By the way, what I do is not quite a prediction, but an observation of a foreseeable behavior or pattern. For instance, if a cop stops a car to give a ticket; but while reaching for the wallet the driver pops the trunk open by mistake.

Tools found in the trunk…

The cop to be cordial and goes to close it; but before closing the trunk, the cop sees a pair of gloves, a bolt cutter, a stethoscope and a black ski mask. Having these items in the trunk is not illegal, but the cop is familiar with the pattern of robbery and the tools required to rob a safe. A crime has not been committed yet, but there is a pattern in progress that the cop may not be able to stop. See?

It is not illegal for China and Russia to buy tons of gold (and literally speaking, tons of gold). Nevertheless, why buy tons of gold and not put it to use? What is the point of allocating billions and billions of dollars just to stash it away for no purpose whatsoever?

Repursury-Full-Cover-03

Repursury

In my book “Repursury,” I wrote about the power and demise of the Spanish Dollar, the British Pound rise and fall, and what is going to replace the American Dollar as international trade currency, I prefer to call it Petrodollar for short. Just like the stethoscope, gloves and ski mask in the trunk the accumulation of gold bars by China and Russia is leading to a pattern that is bound to happen in a not so distance future.

Since the publication of “Repursury” and the publication of “the Collapse of the Petrodollar Part1, and the Collapse of the Petrodollar Part-2,” China and Russia have increased their gold reserves. At the end of 2014 Russia’s gold reserve was 1208 metric tons of gold and in January of 2016 the estimated amount by World Gold Council (WGC) is about 1393; therefore a rise of 15.31% in one year. In 2015, while the Russian stock market collapsed, the Russian Ruble (рубль) collapsed and trade sanctions were imposed against Russia; the Russians were still able to raise their gold reserves by 15.31%!?

Now let’s look the numbers coming from China. The Chinese gold reserves at the end of 2014 were 1,054 metric tons of gold, and in January of 2016 according to WGC is 1,743.3 tons. This is a whopping 65.37% of an increase in one year; once again the increased happened even while the Chinese stock market collapsed and the Chinese growth rate has been the half of the past decades, and not to mention that China’s Yuan is a currency basket of the IMF as of November 30th 2015.
Look at this chart below:

2015_3Q_Gold_Reserves__Tonnes

Chart Source: World Gold Council January 2016

The United States gold reserve in August of 1971 was 8,133.5 tons of gold, and as of today it is the same—8,133.5 tons, an increase of zero percent! The green and purple lines (China and Russia) show a steep rise in the accumulation of gold even when the media is reporting that Russia and China are in trouble!?
That the financial media is saying is analogous to this:
“Hey Bob! What are you doing!? Begging for money?”
“Yeah Bill! I’m in trouble?”
“Well, let me at least treat you for lunch!”
“Thanks Bill! I have to run to the bank, I’m buying more gold!”
So, do not believe the media, it is time to believe the numbers!

At any day, before 2018 China could say “each ounce of gold is equal to 10,000 Yuan (or another hypothetical number).” What does it mean? It means is that the Chinese Yuan will no longer fluctuate against the gold; in other words, holding Yuan currency is just as good as holding gold. What will money markets do? The answer is buy Yuan, well at least for the short term. Money markets will be dumping the US Dollar (and US Treasury Bill) and buy Yuan, the United States and European Union only response is to bring back the gold standard. This is the day I do not want to be holding my cash reserves in British Pound; UK is going to crash worse than Greece.

The US will not be able to peg the dollar to 35 units per ounce like it used to do in 1971, but it is going to have to find a new unit, what will that unit be? When I look back in history, the US is going to do the pegging to gold in two steps, first step would set the gold at one price about $7,000 per ounce soon after pass a law making illegal the hoarding of gold bullion, like what happened with the Gold Reserve Act of 1934. Step two; drop the price of the US Dollar to $10,000 per gold-ounce. What are the main benefits?

  • To round up the math, I’m going to use round numbers.
  • a) American debt soon will be 20 trillion Dollars.
  • b) The international markets are artificially keeping gold at 1,000 Dollars.
  • Therefore at today’s gold price, the US debt can be paid with 20 billion ounces of gold.
  • Here is the simple math, 2 x 10 e13/1 x 10 e3 = 2 x 10 e10 or 20 billion ounces of gold.
  • However, when gold is pegged is finally pegged to $10,000 then the math is like this: 2 x 10 e13/1 x 10 e4 = 2 x 10 e9 or 2 billion ounces of gold.
  • Do you see the advantage?

When China pegs the Yuan to gold, the United States may evaporate 90% of its current debt simply by inflating the gold price to $10,000.00 per ounce. These are close numbers for easy math, today’s gold quote is U$ 1,120.90 per ounce. Are there more advantages? Yes!

Gold at a hyper-inflation of 1,000% every trinket at the Dollar Store is now going to cost 10 dollars per item, and Walmart will not be able to import socks from China at one dozen for 5 dollars and 40″ flat TV at $200. Do you understand now, why Walmart is closing 154 stores in USA? There will be fewer buyers and most goods are going to be made in USA.

The media keeps saying that Russia and China are in trouble, yet their gold reserves has had the highest rise since the Global Recession of 2008, it does not appear that buying gold is the behavioral pattern of countries in trouble. If it quacks like a duck chances are it is not a chicken; and by the way if a cop stops you and finds black gloves, a ski mask and a flashlight in your trunk, without missing a beat tell the cop, “I’m in my kid’s school play; please come, it’s only a 10 dollar donation at the door.”

School play $10 donation at the door.

Thanks for reading, sharing and being prepared,
Fiat Lux!

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(Another warning sign to friends and blog-sphere friends)

The Stock Market

So, there is this old joke:
“Doctor, I have another issue for some time…”
“What’s wrong with you?”
“No doctor, is not me, it’s my brother!”
“What is wrong with your brother?”
“Well, doctor, my brother thinks he’s a chicken!”
“How long has this been going on?”
“Five years.”
“Five years? Why did you wait 5 years to tell me? That’s too long!”
“Well doctor, you don’t understand. We need the eggs.”

I usually use this joke to explain fiat currency, but it is also a good analogy for consumer sentiment before the stock market collapse. Everyone knows that the market will collapse, but it is hard to pass a stock bargain when the prices keep going up.  This month of January still has 10 days to go and it already has been compared to the January of 1928 (which happens to be 22 months before the Great Depression and the Black Tuesday or also known as the Market Crash of 1929, on October 29, 1929; and yes you guessed it—Tuesday.

Headlines on October 30th, 1929

A few days ago, I was validated about my arguments regarding the collapse of England, I first mentioned about it on July 2015; the short essay is called, “Wait for England Before We Collapse,” it was the announcement of England’s second major bank—RBS, announcing the pending collapse of the English market. Adding insult to injury, America’s second largest bank—JP Morgan, also echoed my words recently. The advisers for JP Morgan are encouraging clients to cash out of the Stock Market due to America’s pending collapse.*

Photo J.B. Reed/Bloomberg News

When is the next crash officially coming? Well, I think we never recovered since 2008; nevertheless, if history repeats itself for the next major crash, we have two options; we may assume that the American market will have its worse correction at the end of October 2017; or we can also use another historical method of counting:
The 31st president, Herbert Hoover assumed his office on March 4, 1929 and 239 days later or on October 29th, 1929 the market crashed. Using this hypothetical linear count, the next major correction is due on September 15th, 2017.

Eggs!

Whatever you do, be alert! I will do the best to keep these warnings coming. Don’t count on the chicks before they hatch, especially if was your brother who laid the eggs.

Fiat Lux!

Souce*: Marketwatch.com

Bearish J.P Morgan Says Sell Stocks On Any Rally!
Marketwatch.com by Sue Chang, January 11th, 2016

 

 

 

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On August 22nd, 2015 I published an essay called “The Corruption of Donald Trump.” At the end of the article I sort of made a prediction, yet back then was more like a comparison. I compared Donald Trump to a Sarah Palin in suit and tie, in fact it is the last line of the essay: “We created our own corruption and now we deal with the consequences of having a new mercurial Sarah Palin back wearing a suit and tie claiming, “I can see Mexico from my luxurious golden trimmed penthouse!”

Trump and Palin sharing an archetypal mind. (Photo Credit to Jamie Roberts and “Unilad.”

Since the essay is more on ethics and archetypal behavior, it was logical to show that they have the same mercurial mind. As the old saying goes “birds of a feather flock together.” In today’s announcement Palin endorsed Trump. My essay was not bent on prediction, but as far as archetypal behavior goes it was only natural for Palin to see her archetypal reflection in Trump.

You may click here to see the essay from August, “The Corruption of Donald Trump.” It is important to keep in mind Trump and Palin are not the problems with our society, they are the symptom of a corrupted society.

Fiat Lux!

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(Another warning sign to my friends and blog-sphere friends).

Repursury-Full-Cover-03

“Repursury”

In my book “Repursury,” I have listed Walmart as a “hybrid subsidy,” because the United States Government subsidize Walmart’s work force as well as Walmart’s clients with food-stamps. So the US government subsidizes Walmart business models and infrastructure.

If you ever lived in a small town, a Walmart comes to destroy the local economy and after all the mom-n-pops stores are closed, there is no more room for expansion, Walmart will close the store and move to another area. In other words, when there is no growth to be made, Walmart will close its store.

So, it appears that Walmart is loosing confidence in the United States market and appears that it was not really impressed by Obama’s speech in the recent State of the Union Address. Although Obama said that the economy is strong, Walmart still decided to close 154 stores in the United states and a total of 269 around the world.

I have been gloomy about the economy for a while; in fact, on July 2015, I posted two videos about a hyperinflation that it is about to come and how it will affect global and personal economics. The videos are called the Collapse of the Petrodollar Part1, and the Collapse of the Petrodollar Part-2, later in 2015 I posted The Petrodollar Collapse Part 3. On “Part 3” I did not make predictions but I only stated some of the predictions that I’ve made on Part 1 and Part 2 and they are already reality. How does Walmart fits in the video predictions that I’ve made?

Walmart Closed Store

Simple! Walmart did not get to grow for having bad economists working for them. I have been predicting a hyperinflation on the order of at least 1000% to come to The United States to catch up with the United States’ Debt ratio per gold reserve. Gold parameters are not being used now, but it has been in used before (for hundreds of years), and I postulated that China and Russia will bring this standard back because by doing it, it will destroy the U.S. Dollar. Even the cleverest economist will not get it right 100% at 100% of the time, Alan Greenspan and Ben Bernanke were discredited after the 2008 Great Recession. Japan has been discrediting Keynesian Economics for the last three decades, because Keynes’ logic has been applied and Japan has not recovered.

If a person is a good economist, the person could become a professor, a better economist will write books, but the best economists are employed either by hedge funds or Walmart. In a hyperinflation of 1000% that I have been predicting, folks will buy 90% fewer items. Therefore, there are two ways Walmart can close its stores: via bankruptcy (in a not so distant future) or anticipating an economic collapse—close its stores.

“Never believe anything in politics until it has been officially denied;” is a very old quote. Our economy is in peril, Obama made it official in during the State of the Union Address by denying it and Walmart is making it real by closing their stores.

I want to close this economic update with these words: banana and asparagus. I was just kidding, I really want to close with this thought: We live in an economy based on greed, we do not live in an economy based on ethics. Therefore, our economics will go through a jubilee of destruction. Just imagine the economics of greed as bacteria in a petri-dish, eventually the food is exhausted and all the bacteria die. Should the future of our economics be the same as lectured by Adam Smith and John Maynard Keynes? Are we ready for something new? In “Repursury,” I wrote that in our human history we never had, neither pure Capitalism nor pure Communism. For instance, when the governments bail out banks, it is not Capitalism it is Communism for the rich. This next jubilee of destruction will certainly come before 2018; this new warning should not be all negative; but an opportunity to design a better system of economics with less greed, no wars, enduring peace, more space travel, and fewer Walmarts.
Fiat Lux!

Post Script:
Here are three reports of Walmart closing its stores.

Business Insider

http://www.businessinsider.com/list-of-walmart-stores-closing-2016-1

New York Times

http://www.nytimes.com/2016/01/16/business/walmart-to-close-269-stores.html

CNN Money

http://money.cnn.com/2016/01/15/news/companies/walmart-store-closings/index.html

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Repursury-Full-Cover-03

Repursury

My close friends, and friends of the blog-sphere know that I have been talking about the domino-effect that will start with the U.K. Fortunately or not, we (USA) are surely to follow the Union Jack. In my videos the Collapse of the Petrodollar Part1, and the Collapse of the Petrodollar Part-2 I have been saying that the U.K. gold to debt ratio is incredibly high. In general terms, US’ economy debt to gold ratio is twice worse than Greece’s; but the U.K. is seven, I repeat seven times worse than Greece’s. The main difference between the U.K. and Greece besides great food and wonderful climate, is that Greece is not allowed to print its own currency.

At one point the emperor will be seen with no clothes. Now, you could ask. Why would the U.K. do this to themselves? It simple! The debt is in the public sector and the rich (private sector) have their money in foreign bank and foreign assets. When the U.K. collapses the little people that will pay for it, not the billionaires.

UK-Queen-Gold-my precious

Queen of England inspecting the little gold they have, when measured against their national debt.

A valid argument would be; “Mr. Sandy, you are talking about the Gold-Standard, we don’t follow it anymore!” In response, I would say, we have a 10,000 years of recorded history using precious metal for commerce and about 45 years of using fiat-currency. So, the questions are; If we don’t care about the Gold-Standard, why didn’t the US government sell all of its gold? Why are India and China buying all the gold available, and they don’t care in that price gold is? Why did China announced that it has 61% more gold reserves last year? See? It’s no longer “show me the (fiat) money!” Now is, “Show me the Gold!”

There are other fundamentals for the collapse of the U.K.; nevertheless, to all my friends and friends of the blog-sphere who have been following my posts. I also mentioned to them, what to do before the U.K. collapses. So, I hope you take the Guardian’s publication as a pre-validation of my predictions from July 2015. I hope it is also an encouragement to follow my suggestions before the “London Bridge is Falling Down!”

The Guardian, “Sell everything ahead of stock market crash, say RBS economists” by Nick Fletcher on January 12th, 2016 (Link below)
http://www.theguardian.com/business/2016/jan/12/sell-everything-ahead-of-stock-market-crash-say-rbs-economists

Here are the videos once again Part 1 and Part 2

Part 2

Thanks for reading, good luck and Fiat Lux!

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While vacationing in Hawaii, I ended up doing much more reading than surfing.
I highly recommend “Digital Gold” for anyone who wants to understand Bitcoin or wants to invest in Bitcoin.

Please do not take my approval for the book as an approval for Bitcoin, in fact I disclosed the fundamental of Bitcoin as another fiat currency in “Repursury.”

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Book “Repursury.”

 

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