“Audit the Fed!”, there is now another movement within Congress to do this. Will it ever happen? Maybe, but not unless the Chinese (and rest of the world) demand it in my opinion. Let me explain this but please remember what came to light the last time back in 2010, when we found out the Fed had lent over $16 trillion (yes, with a capital “T”) during the 2008 financial crisis. Some of this $16 trillion went to U.S. banks, brokers, insurance companies and mortgage institutions …but, the majority went to FOREIGN institutions!
A full and true audit in my opinion would only do one thing, totally crash confidence in the dollar and put a permanent end to the charade we call “reserve currency status”. I do not believe Congress will ever call for a full audit for this very reason, it is known (by Congress and anyone in associated finance) just how dirty the books really are. Can you imagine the reaction when 1,000’s of S+P contracts, 1,000’s of Treasury bond contracts along with short oil and gold turn up on (“off”) their books? Can you imagine how many more “back door loans” have been made since 2008? Talk about the crazy aunt in the basement, an audit of the Fed would put an overflowing insane asylum of crazy aunts in full view! In my opinion, the only way this movement goes forward is if it is demanded by foreigners under threat of dollar boycott.
A connected topic to the audit is the recent strength in the dollar. Why has the dollar been so strong and what does it mean? First, as I mentioned yesterday, the dollar carry trade is unwinding and dollar shorts are being squeezed. The ramifications are plentiful. Foreigners are experiencing local inflation as their currencies drop versus dollar based food commodities etc.. This will not put the U.S. in any favorable light as foreigners now lose more control over internal pricing of external products. The strong dollar, and moving as rapidly as it has is also creating margin calls within the global financial system. We have not gotten news from any individual banks yet but rest assured, some have already been rendered bankrupt by being short dollars, long oil or some combination. I believe the derivatives market is no longer in danger of blowing up, I believe it already has!
This situation has not been lost on Mr. Putin as Russia suggested directly to Europe they change allegiance when it comes to trade. He has invited Europe to trade “more naturally” with their own neighbors in the new Eurasian Union. This makes perfect sense and should be viewed by Europe as an “olive branch” rather than “the hammer” of lost energy supply.
Even the timing of this proposal is prescient. Greece will vote for a new government at the end of this month. All polls suggest the party in favor of an exit from the EU is in the lead. Maybe the election will “turn” or be stolen and this is a false alarm but a Greek exit from the EU means the end to Western finance as we know it.
How could tiny Greece destroy Western finance you ask? Please follow this through as it is not complicated but is a fairly long and far reaching chain. First, a Greek exit means the $ billions of loans recently extended by the EU to keep them afloat will not be paid back. It also means default and non payment on $100’s of billion more loans extended prior to the last couple of years. Greek banks will go down and the French banks who are the most heavily exposed lenders to Greece will also be impaired. This will result in a “contagion” across Europe as others may exit, or an alternative scenario is the “core four” Germany, Netherlands, Belgium and Austria (who are by the way repatriating gold) will form a “Northern Euro” and break away.
Mr. Putin sees all of this. He knows it is cold outside and Europe is trapped by energy supply from Russia to keep warm and to keep industry running. He is offering a peaceful way out …at the expense of the U.S.. He also knows what we know, the skyrocketing dollar is pressuring everyone from the common man to financial institutions to the central banks themselves. And thus his “timing” of this offering.
Let me tie these thoughts together because it looks like something will come to a head very quickly. In my opinion, in spite of all the recent “tightening” speculation, I believe we will see by necessity a “QE 4” shortly. The dollar cannot continue on its recent path, and in fact must reverse or a financial implosion will be exposed. Asset prices, FOREX and oil in particular have swung wildly. This has created massive margin calls whether we see them or not. An announcement of QE 4 would pressure the dollar downward and support oil prices. I personally do not believe it will be done “in time” as the internal collateral damage has already been done. I also don’t believe it will change the outcome of a monetary crisis where the last currency standing will be gold …valued at multiples of current levels in ALL paper currencies.
The point is this, dropping oil prices (which was Mr. Obama’s idea and doing according to him) are impairing all sorts of debt and institutions. Oil cannot trade sub $70 for any great length of time without folding the tent because of the leverage involved in the industry. Unless the Fed wants to preside over an all out financial deflation, they must and will be forced to “QE” with something far larger in scope than any of the previous monetizations. This is exactly how all Ponzi schemes come down. They require “new money” in larger and larger quantities in order not to be exposed. If the Fed does not want to be exposed …they must supply the money!
Going full circle and back to the top of my article, the Fed cannot afford an audit of any sort. Were this to even start, rats would be jumping ship before the auditors even set foot in the Mariner Eccles building. There would be so much front running toward the exits, the fear of looking beneath the covers alone would create a panic. Just watch, if the markets do not turn around sharply and quickly, the Fed will very soon announce a new QE “elixir”. I personally believe the new elixir is already necessary, far too late, and useless anyway because of the collateral carnage already done versus razor thin margins.
As I have mentioned for the last month, I believe the drop in oil prices was in fact originally “our plan”. Lower prices have now gotten so out of hand that “THE plan” is now in view. Current low oil prices have broken the derivative daisy chain, this is something I believe China and Russia already knew but sat back and let us create our own demise. Just as fast as the dollar has risen and the shorts were forced to cover, watch as the dollar burns out like a rocket spent of fuel (confidence) and crash back down. There is no telling “where” this level will occur but mark my words, the casinos will figure out the end game where deflation in the financial system means death to the “chips” themselves.
Please remember this, as very soon it will be understood by the masses, “gold is money, everything else is credit”!
Regards, Bill Holter
The economic situation in Asia, Europe, Sth. America etc. Is creating a HUGE demand for US$ which is only just beginning. The $ is set to rise even more against EVERYTHING else, yes, including gold. You’ve been wrong for 3 years or more, don’t let this be the third. Do yourself and your readers a favor by at least exposing them to the man who has gotten it right where most ALL of you gold bugs got it wrong, Martin Armstrong.
gold is down versus the dollar a whopping $12 the last 12 months. This with a dollar rally that was supposed to kill gold. I don’t suppose you give any credence to 1,000’s of tons of paper gold sold during this time period which requires no real gold involved? You are not forced to read my work, why waste your time?
You are right that I’m not forced to read your, or others work, but I do, and have done for many years and so I have come to see who is right and who has missed the trend completely but still plays the same tune….I used to be a gold bug, I still hold a considerable amount even after selling half above $1800 which I bought just under $500 and silver at $9… I’m just tired of the gold bug mentality that has cost so many so much by being so wrong for so long but still play the same tune when you have people out there, like Armstrong, with out an agenda, who have been correct and yet are demonised and ignored by the gold community. THAT is why I decided to do my bit to make sure at least someone holds your, and others, feet to the fire for truth and accountability. If you have a public forum then you should expect public accountability and criticism.
Armstrong believes dollars are “money”. He does not understand what money is and clearly you do not either. You did not answer my question, do you give any credence to gold being suppressed (manipulated) downward in price by paper contracts that have no gold backing them? If not, then we have no conversation, if so, then you have your answer as to why gold was “topped out” over 2 years ago after Obama met with top bankers. I am very happy for you that your timing has been so good, I would submit there is more reason to own gold now than ever before.
90% of the Financial experts have been bearish on gold for years if not décades. Armstrong is just one of them who have been right as the 90% mentioned above ?
Why martin Armstrong just so Genius and not other bank analysts working at societe generale for example ?
He is the same who mocks gold guru but he is far worse than every one else : do you remember the 100 million computer ?
Martin Armstrong should have opened a gold (fiat because it is the same for him because Kings debased gold coins in the past !) coin shops with coins at 1 million dollars whose weight is 5 grams !
Who is the guru ? It does not matter if he was right on gold, some technical traders have made the same calls without knowing nothing at history, monetary theories or whatever.
So who is the guru ?
Martin Armstrong was bullish on gold for years. He immediately became bearish when he got out of jail and his logic became different. He does understand the game and is doing a great disservice to the little guy by scaring them away.
Bill,
We’ll let Kerry keep his instruments of debt (Federal Reserve Notes) while some of us keep what has been money for over 5,000 years.
The Bible clearly says what is money (gold and silver) and I’m not going against God. Man can keep his paper monopoly money and it will join the 599+ paper monies that have failed.
All I can say is that I’m thankful Kerry is not my father because I don’t want to starve in the upcoming future.
this is the flaw in thought, dollars are NOT a store of value, gold is and has proven to be for 1,000’s of years. A true deflation will destroy all credit …the dollar IS credit.
Bill you are right again, both in your response to the dodo bird above and more importantly “Derivatives have already blown up”. The chain of events in the Collapse of 2015 have begun and cannot be stopped. The majority of the 99% are going to be wiped out – They are totally and completely unaware of what is taking place as we speak. This event – This Financial Destruction is so Big – It will change everything in the U.S. and the world as we now know it. People Prepare – Time is short.
thanks Richard, get ready for a whipsaw soon.
Bill
You have authored some tremendous articles over the past few years. This may prove to be the best one ever. Thank You.
Mr. Obama and Mr. Lew have been playing with fire (weapons of financial destruction) for quite awhile and have been successfully defying the laws of economics in the process. They reversed a Gold Bull Market 3 years ago using only paper gold derivatives.
They may be coming to the realization that their Oil derivative strategy is making the burning Kuwait oil fields back in 1991 look weak in comparison. Time will tell, but I believe you are correct.
thanks Bernie, as the saying goes …”it’s not nice to fool Mother Nature!”.
It looks like Germany just caved!
http://dollarcollapse.com/currency-war-2/germany-caves-on-greek-debt-italy-takes-note/
TPTB must be really scared!
we’ll see soon.
That’s why the U. S. markets and or financial systems will experience a terrorist attack , and all proofs of corruption will be erased and the system will get a reboot ! The MSM and government official criminals have been promising … uh … warning Americans of this situation for the last few years ! Perfect crime and reboot of system , with the same characters remaining in place and power !
and the Enron evidence will be nowhere to be found.
I believe all the evidence , concerning Enron’s corruption , was taken care of with the World Trade Center building No. 7’s destruction . But no one is supposed to know that ?
yes, case closed.
Bill,
The nº 7 WTC Building was needed to be pulled down to cover Enron evidence… What kind of black swan will we (they) need to cover and reset the actual economic-financial crime escene?
Thanks,
Un abrazo desde España…
a VERY big one. Igualmente, desde los Estados.
Hi Bill, your articles have been very valuable in my quest for truth. Thank you for that. I see many still very much rely on paper gold pricing mechanisms and consequently they base their financial decisions upon just that. Why don’t they understand that alot of effort has been put into what you and many others do? Some tell the plain truth, others use certain type of methodology for educating their friends. But then others, like Armstrong, should understand that their way of educating is not the good way. It’s the wrong way. I’m not sure if you regard following person as valuable, but his thoughts changed my perception of the current gold pricing mechanism. He’s being refered to as “Another”. Who am I to judge his work, I’m just a regular guy. I do want to point out that his thoughts enabled me to totally ignore paper price bashes, thus welcome them. One other person is “Belangp” on youtube. People that applaud Armstrong will need to change course, once they researched both mentioned. Note that Another’s writings date from end nineties. The “time lag” only adds to the suspicion. The “delay of events occuring” is no prove whatsoever that he has been wrong. My humble opinion is that in between now and then, some mistakes were made by Elite buddies. They must be terrified! Again, thank you for all you do – my regards.
thank Geert, FOFOA has posted some of my work over the years.
Armstrong work can imo be sumed in one sentence : never quit the paper/debt world…
he does not differentiate between paper and physical.
I read all your missives and have for many years starting out with the “Cafe” and then switching over to following you at Miles Franklin, where I buy my metals from. My question is about an Investment (speculation) that I made numerous years ago in five million Iraqi dinars (in 25,000 denominated notes). In your opinion, is this a pipe dream that I’ll make a few bucks someday on an RV or should I use them to light my expensive cigars and quit thinking about it?
From a global perspective, you and Andy have the best information out there, IMO.
thanks Bill, I think I remember you asked me about this a year or more ago. I still think they would be neat to light your (now legal) Cohibas with!
Hey Bill, Donald Trump stated that when you owe the bank 1 Million Dollars you got a problem. But when you owe the bank $100 Million Dollars, the Bank has a problem. This is what people fail to understand. The banks have leveraged themselves to the hilt. I saw the @Kerry comment and saw on SGT where someone was trying to say the same thing. But the real is, people disregard things right in their face only to their own peril! Gold is just a part of Preparation among other things. People fail to see this and play the rigged game until everyone caught in it end up being frigged!
We all have eyes to see that QE is no different from jerry-rigging something for a while that was already broken.
QE is monetizing a Ponzi scheme of dollars…THIS is what they fail to see right in front of their faces.
““gold is money, everything else is credit”!”
So sayeth one of the greatest banksters of all time, JPM himself.
he actually said “gold is money, nothing else”.
Wrong Bill. JP Morgan actually said ““Money is gold, and nothing else”.
wrong? No, did I say JP Morgan said that? No, Bill Holter said “gold is money, everything else is credit”. Hopefully 100 years from now if they haven’t already nuked the Earth to a crisp, some honest history book will repeat MY quote. Maybe I should write a piece and use the title just so no one else can steal it from me?
Given the many episodes throughout history i don’t understand why people don’t recognize what is happening.
Government creates empire,citizens cant pay for empire,
government debauches currency,currency collapses.The big
difference this time is that it’s global and only hard
assets offer protection(if they can’t be taxed away).
A lady wrote in to the “I’m looking out for you guy” on FOX
saying she was concerned about the safety of her money.His
answer was to make certain it’s insured.And he writes history books.Something is really wrong with this picture.
because people are not wired to understand the workings of money. Did you expect a real answer out of any MSM outlet?
yes,because this is the dinosaur in the room and soon it will start biting people in the butt.they can’t ignore or mislead forever.some medium sized voices have spoken out;
glenn beck,john stossel and admiral mullen(the debt is our biggest enemy)but none of the big voices like limbaugh,
oriley or hannity have addressed it.limbaugh has talked right up to the edge of it several
times and stopped.i think they must know but don’t want to risk starting the panic.
i am retired and have been damaged by low interest rates and inflation. this got my attention big time.most folks probably won’t pay attention till they are seriously injured but by then it will be too late.at least i had the benefit of an early warning.they say there is something good in everything.
the majority will not see it until a reset destroys them.
Watch anything besides Fox?
…or the comedy channel “CNBC”? For more slapstick comedy there is always MSNBC!
joe
fox is like the u s dollar….no good but the best of the bunch.
the government has given me a partial fix on this however.
at the ranch i used to get stations as far away as houston
and baton rouge.since we were forced from analog to digital,
which has much reduced signal strength,i get nothing.
got lots of hoover hogs though.this is our ground hog.know what it is?
Now I’m wondering if I should re-mortgage the farm and buy more PMs if debt is to disappear.
don’t be so sure debt will disappear.
Good advice, I think their debt will disappear; but not ours.
their debt also happens to be our assets.
Thanks to “democracy” it is not their debt, it is “OUR DEBT”, so… “OUR DEBT” is their asset (against We The People). And may be they (The Top) can ask the payment in hard assets (land, real state…) or/and by the revaluation of the PM they hold in hand (prived vaults).
“their debt” (Treasuries, dollars) support the banks, brokers and ins. cos. “Their debt” (Treasuries and dollars) are our “assets” in the form of bank accounts and currency. Their worthless debt …are our “assets”.
Merci pour votre travail
Guillaume
con mucho gusto!
Just huge article !
I believe that QE4 will be announced officialy at the autumn or winter 2015 and unfofficialy (non reported) much sooner and maybe as early as now.
it is needed now …immediately!
You lose me a little here Bill. You say QE must be infused but that it won’t work? Are we only talking about the speed by which things will collapse as opposed to just collapsing??
Got turned onto this site a few weeks ago by AGX over at SD’s and have thoroughly enjoyed your and Andy’s musings, thanks for being there! Joe
you’re welcome Joe, I am saying they need to do QE4 now, it will not work and it is THE only bullet left. Will it hold things together for a few days or weeks? Maybe, maybe not.
Sir, the left coalition leading in Greek polls does not want exit from the EU or from the Euro. They want debt reduction and forbearance on interest payments.
Sir, debt reduction will blow up the French banks and thus the entire Eurozone banking system, debt default will also blow up the banks. This will very probably blow up the entire Euro banking zone if either reduction or default occurs. They either keep the charade going and pay interest via new handouts or implode. A reduction or default is a de facto “exit”. Just watch the reality that is coming, one thing can be said, another thing will be the consequences.
Bill, I really enjoy your articles. Your writing style is always clean, crisp and grammatically correct. Keep up the great work. JMS
thanks JMS, I have been working on my “writing style”, you should read some stuff I wrote six or seven years ago …embarrassing. Good content but very poor delivery.
Just in case the meltdown takes away the Internet I would like to place on record my thanks for your articles over the years.
Every day is a school day and you have been one of the very best teachers.
Good luck to you and yours.
thank you so very much for the compliment! Best of luck to you and yours also, may God hold your hand through it all!
Silver is money; gold is for government meseums.
silver will be the currency of the masses, gold is money.
When the inflationary panic arrives (100% has occurred historically) silver will at least sell for the price of gold. 5 times more gold on surface of earth today than silver, and gold can not do most jobs silver is needed for.
They could possibly trade to parity but there are 10 silver ounces for every one gold ounce in the ground.
Bill, i follow a lot of different blogs but i must say that your articles are the ones i send to my skeptical daughter.
I just read Maudlin’s 5 yr forecast, and it sounded more like deck chair arrangement than eyes wide open. Once upon a time there was a real economy and a financial sector that greased the wheels of that real economy. Now the financial sector has become a vast cesspool of greed criminality, and political bribes. The crash is coming, as sure as a stretched rubber band will finally break. Please keep us informed.
thanks Ozman, will do!