Below is an update from Marc Farmer of Bullion Management Group Inc., our business associate who handles all bullion purchases for clients, and is a multiple year presenter at the Cara Conferences.
Hi Bill,
Well it looks as if we have arrived at the final phase of this slow-motion financial train wreck.
With the heightening of geo-political chess-playing further clouding any vision of a quick resolution to the growing global economic malaise, we are now seeing severe stress cracks in the financial system appearing without warning. The unexpected events of volatility we have noticed appearing in the financial indexes of late (US, Japan, Europe) is a precursor to an extreme move that will signal that a positional economic change is now under way.
Many of the experts mentioned in my previous emails have been warning for some time now that the financial system, as it currently stands, is in a precarious state of solvency given the extreme debt levels that have been built up globally since the 2008 crash. Cheap money for too long carries severe consequences and it is looking very much as though pay-back time is fast approaching.
Although the news events promoted in the mainstream media create a sense of laissez-fair, and that all is under managed control, it behooves us to remain alert to the consequences of some of the actions that have recently unfolded and are now in the process of changing the landscape in which we live. Here are some of those points, too numerous to go into in detail but enough for an overview:
- Central banks around the world have no option but to continue printing money (which is debt) and this will eventually accelerate until all faith in the currency is lost and it returns to its intrinsic paper value of “0”. How long this actually takes is anybody’s guess but it will happen globally for all currencies and could happen very quickly. The transition to a new financial system seems cast in stone now with the Chinese Yuan being given the green light by the IMF to join the SDR system.
- One can now see the progression toward government and bank restrictions on the free movement of funds across borders. All it takes is these days is one well placed “terrorist act” or an unexpected financial crisis to have the government step in and restrict personal and financial freedoms (in the name of security). Just have a look at what Mr. Hollande did in France last week following their most recent and totally “unexpected” terrorist attack.
- Carrying cash has also become a liability when travelling in the USA as it can now be confiscated by the police for mere suspicion and cannot be retrieved without incurring significant personal expense and time. Banks will also file suspicious reports on you if you try to withdraw large sums in cash from your own account! Cash is being demonized by central banks and I expect that it will be eliminated soon in favor of a Bitcoin type of block-chain based system of transacting. (Several banks currently have their systems in beta testing). Bank runs can thus be avoided.
- As if that wasn’t enough, banks now have the legal right to appropriate their client’s deposits for relief if deemed necessary to preserve institution liquidity, (which it I expect will be deemed necessary in the near future). Governments will target pension funds and registered savings plans for liquidity purposes by imposing the requirement for fund managers to purchase government bonds. For those of you who have read Jim Sinclair you will recognize that he was advocating getting out of the financial system four years ago as the writing was on the wall then.
- The petro dollar is going away and signals the end of the USD reserve currency status. Russia and China together with a number of other nations have set up an alternative platform to the US based SWIFT international transacting system and many countries are now going direct instead of using US Dollars for trade. This trend has increased in intensity over the last six months.
- Massive migrations of refugees and displaced people are threatening to bankrupt many European nations. Civil unrest has broken out and inter border travel has now been restricted. Many countries are now discussing the deportation of unwelcomed migrants. The EU could collapse.
Although nothing has yet triggered a black-swan event there are just too many floating around to ignore. Those who are controlling the global financial system have indeed managed to maintain a semblance of day-to-day stability in the system so far but the volatility of events betrays the picture of stability and may be a harbinger of difficult times ahead.
We must be prepared to weather this coming transition in the current financial system in order to emerge on the other side with as much of our wealth intact as possible. Precious metals is your best vehicle to achieve this.
Gold and Silver remain the time-tested alternative to paper or digital money because they are tangible and don’t carry counter-party risk as do all assets denominated in a paper currency (by fiat decree).
Although several hard asset classes are available for hedging unexpected currency events, such as real estate, art & collectibles or jewels, precious metals gold silver and platinum are by far the most undervalued of these. At below production cost, physical precious metals have become an excellent purchase today that will surely be rewarded in the not too distant future.
Do remember there will always be a buyer for your physical precious metals and the BMG BullionBars program has been designed to give you safe and discretionary control over your assets. Because your metals are stored on an allocated basis, you always control them independently and can sell or take delivery at a moment’s notice. Your precious metals will be there when and if you need them.
Now is the best time to review your bullion portfolio and adjust your holdings to balance an increasing level of economic risk.
END