Bill Holter-World Facing Very, Very Dangerous Time

[Greg Hunter] So, is the world headed for a “Mad Max” future? Financial writer Bill Holter says, “I think the chances are better than a coin flip that we have societal breakdown. If you are asking should you hold cash, my opinion is yeah, you should have some cash and very little bank balances because that is going to go away. You are going to have to have some physical cash, which will actually … after the system shuts down, become more valuable. 

The dollar will purchase more real goods for several weeks simply because if all the banks are closed and nobody has cash, then cash is scarce. That will work up until, all of a sudden, the light switch gets flipped and people understand that cash has no real value. People are not going to trade real eggs or real tomatoes for dollars. They will say I want something real for something real. That’s where your dollar collapses.”

On gold, the math is simple. Holter says, “The punchline to this is the system has never been risker and more leveraged than it is today. Yet, the price or the cost of insurance (gold and silver) has never been cheaper than it is today with the exception of late last year in October, November and December of 2015.”

Holter goes on to point out, “They have purposely diluted the price of gold in order to portray a strong dollar… . The reason they need to portray a strong dollar is to continue confidence in the system. It allows dollars to continue to be accepted. It also allows the U.S. Treasury to turn around and continue to borrow. That’s not working so well because the Federal Reserve has had to step up and buy major portions of auctions.”

How does it end? Holter says, “I have said many times that we are going to have a reset of the system. All currencies, all bonds, all interest rates, stocks, commodities, gold, silver, etcetera. This is a very, very dangerous time.”

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Bill Holter-World Facing Very, Very Dangerous Time

[Zurich Times] The headline was scary sounding for a very good reason. This one chart that Greg Hunter should be convincing enough that you go today and buy some Physical Gold. If you still need convincing about then after seeing this Chart then God Help You in the Future and God Help All of US in the Future as we are headed towards a collapse in Economic Living Standards in Western Europe and North America. 

At least in this region the inability to buy basic items will signal a real decline in Purchasing Power which is coming.

It is no wonder that Warren Buffett has exited all his Deriatives Contracts. What else is required for evidence? Or rather how much evidence is required before people understand? What is wrong with this picture?

Gold To Monetary Base Ratio

At least in this region the inability to buy basic items will signal a real decline in Purchasing Power which is coming.

The Gold Chart Of The Century

[Bll Holter]

In a recent article, Peter Degraaf posted a series of charts including the one below. I must confess I had never seen this particular chart before but extremely glad it was posted. I knew the monetary base had grown wildly but did not realize the extent until seeing it in graph form. While Peter spent just one paragraph on this, let’s look at it in depth to get a better understanding of why it is so important and what it really means.

Gold To Monetary Base Ratio

Let’s start by deconstructing this down to what it really means. First, I must confess I do not know whether this chart is comparing the “priced” amount of U.S. to the monetary base or rather the price of gold to the monetary base (because the axis is not labeled). Either way, this chart tells us something VERY important! The price of gold relative to the monetary base has never been lower than it is right now other than the at the end of last year.

Looking at the chart, you can clearly see the “markup” of gold in 1933 from $20.67 to $35. You can also see the run from $35 to $850 during the 1970’s and peaking in 1980. You can also see the turn in 2000-2001 when gold traded down to $256 per ounce. These were very important generational turns but we can glean something even more important from this chart. In relation to the monetary base, you can now purchase gold below $20.67, below $35 and below $256 when adjusted for the monetary base outstanding! The monetary base has grown and grown for 100 years, it has exploded in the last 8 years.

Making this simple to understand, as the monetary base grows (money is printed), it is like slicing a pie. With each “cut” (addition of dollars), each slice gets smaller and smaller. As with anything, the smaller something becomes, the less valuable it will be. In banking or finance, this concept is called “inflation” when a currency becomes more plentiful in relation to goods …prices rise because it takes more of the more plentiful currency to purchase the same amount of goods as compared to previously.

Shifting gears, there is another side to this equation and one the powers that be are desperately trying to keep hidden from you. They have been suppressing the price of gold to hide the fact they have sliced and diced the “dollar pie” until now the slices are miniscule (the dollar has very little value left). They have done this at the same time “risk” has exploded. When I say “risk”, I am talking about systemic risk. Never before has the world taken on as much leverage in relation to GDP nor versus collateral. Banks, brokers, insurance companies and even sovereign governments are now more leveraged and financially in higher risk situations than ever before in history!

I would be remiss in writing this if I did so without talking about “U.S. gold”. There is so much anecdotal evidence the U.S. has been divesting gold (even custodial held gold) for years, in no way can anyone credibly believe the 8,300 tons claimed is still there. If this is the case which I absolutely believe it is, then the above chart would be revised to even lower levels. I guess the best way to illustrate would be to go back to our pie analogy, how big would the many more slices be if the total pie was the size of a thimble?

Going one step further, “gold” has been rehypothecated many times over. We have seen instances on COMEX where there were more than 500 ounces represented by paper contracts for every one real ounce they claimed to have. We have no way to know what the real global number of hypothecated gold is to actual gold …but we will find out sooner or later and the mass of paper owners will be left holding just that …paper. The cover up has gone on for years and was done to support confidence in the dollar, U.S. Treasuries and the fiat currency system in general.

The currency/debt system we live in will mathematically implode as sure as the Sun will rise tomorrow. This is simple logic, the system as a whole cannot grow enough to pay back nor service the debt already in use, “debt saturation” if you will. Richard Russell called it “inflate or die” which means either “inflate” the currency or outright default, there is no in between in the end. Someone, somewhere “loses”, there is no way around this, the odds greatly favor the holders of currencies as being the losers rather than outright default.

To finish, it is my hope you are putting 1+1 together while reading this. There has never been a more dangerous time financially than today in all of history. This, at the same time gold has never been cheaper in relation to the amount of dollars outstanding. This 1+1 is a no brainer, never before a greater need for the safety of gold and never has the insurance policy been this cheap! Of course we could talk about silver which is extremely cheap versus gold but that would be overkill for another writing. This will end with a massive call on gold by EVERYTHING credit …which is everything, everywhere financial! The “call” for real gold will come on like a light switch flipped overnight. You either have it, or you don’t …and never will!