The Bankers’ Endgame And The Rise Of Gold And Silver Prices
In May 2007, in Subprime America Infects Asia and Europe I predicted a severe financial crisis was imminent: the risks that have lain dormant beneath globalization's foundation are about to erupt and a reordering of the world's financial geography is about to ensue. It's spring 2007 and the sun is shining in the US, backyard BBQs are being cleaned in anticipation of summer’s use. A severe financial crisis, however, is in the offing; a crisis as unexpected as the Golden State Warrior’s last minute steak to the NBA playoffs.
An unexpected financial crisis, however, will be much more consequential than Don Nelson’s magical resurrection of the Warrior’s NBA hopes. There, at least, the Warriors will have a chance. But because most people don’t know a financial crisis is coming, they will have little chance of survival. This summer, America’s subprime CDOs are coming home to roost, and not just to the US.
In July 2007, two multi-billion dollar subprime hedge funds collapsed. One year later, the greatest financial crisis since the 1930s bankrupted Wall Street banks; real estate fell 40–70%; and central banks flooded markets with zero-cost credit and trillions of dollars in quantitative easing to keep stocks from crashing, setting in motion a still-inflating stock market bubble to replace the collapsed 2002-2007 real estate bubble that revived markets after the 2000 dot.com crash.
After the 2008 crisis, unprecedented central bank efforts to prevent the bankers’ endgame temporarily delayed its inevitable resolution. Today, however, the banker’s edifice of debt has reached such levels that systemic dangers, e.g. speculative bubbles, low inflation, low growth, etc. increasingly threaten global markets. The bankers’ endgame is accelerating.
THE BANKERS’ ENDGAME
TRADE DEFICITS, TRIFFIN’S PARADOX AND DONALD TRUMP
I wish to talk of global trade
Said the banker to the king
Of money, goods and commerce
The wealth that it does bring
And to discuss Triffin’s paradox
That’s killing this wondrous thing
America’s trade deficits are explained by Triffin’s paradox, i.e. US deficits are related to the US dollar as the global reserve currency. After 1971, with the US dollar no longer tied to gold, US trade deficits increased exponentially.
US TRADE DEFICITS
It was the closing of the ‘gold window’ in 1971 that triggered the bankers’ endgame. Thereafter, governments could print money ad infinitum without regard to sovereign gold reserves; resulting in an historic explosion of debt that will end in the collapse of today’s overly-indebted, and overleveraged capital markets.
This destabilization of capital markets after the removal of gold in 1971 is the reason for today’s ever-increasing trade imbalances, financial bubbles, their serial collapse and the crises that follow, i.e. the failure of Wall Street banks and the global economic meltdown in 2008.
In the wake of the financial crisis of 2007–2008, the governor of the People's Bank of China explicitly named the Triffin Dilemma as the root cause of the economic disorder.
Triffin Dilemma, Wikipedia
Had not China artificially resuscitated global markets with historic levels of borrowing and spending in 2008, had not the US bailed out insolvent banks and had not central bankers cut interest rates to zero and spent trillions in quantitative easing, the global economy would have collapsed in 2009 as it did in the 1930s.
The post-2009 artificial resuscitation of markets today, however, has run its course leaving nations with unprecedented levels of debt and burdened with moribund economies functioning only because of continuing central bank life-support.
Although US trade imbalances are explained by Triffin’s paradox, Many Americans, i.e. Trump et. al., believe that exporting nations, i.e. China, Japan, Germany, Mexico, etc. are responsible for America’s negative trade balance. Such neo-nationalist attitudes are not only naïve, but pose a systemic threat to today’s increasingly fragile global economies, including the US.
Mish Shedlock wrote on February 21, 2017: Global Trade Disaster Nearly Certain…For only the third time since 2000 has global trade growth dipped below 2%. On both prior occasions, the US economy was in recession…It is “certain” we are on a horrific global trade path…the forces in play over Brexit and Trump-inspired trade policies suggest a global trade disaster is “nearly certain” to happen.
DONALD TRUMP IS NOW CONTEMPLATING TRADE TARIFFS WHICH COULD HAVE THE SAME DISASTROUS EFFECTS.
…With more than 20 top officials present, including Trump and Vice President Pence, the president and a small band of America First advisers made it clear they’re hell-bent on imposing tariffs…more than 75% of those present, were adamantly opposed arguing it was bad economics and bad global politics. At one point, Trump was told his almost entire cabinet thought this was a bad idea. But everyone left the room believing the country is headed toward a major trade confrontation. The reason we’re told: Trump’s base—which drives more and more decisions, as his popularity sinks—likes the idea, and will love the fight.
Axios, Trump overrules cabinet, plots global trade war, June 30, 2017
WE ARE IN THE BANKERS’ ENDGAME WHERE ANY MISSTEP COULD BRING DOWN THE BANKERS’ HOUSE OF CARDS AND PLUNGE THE WORLD INTO ANOTHER GREAT DEPRESSION.
THE BANKERS’ ENDGAME AND GOLD AND SILVER
Ralph Terry Foster in my YouTube video, Counterfeit Coins: Don’t Be A Victim, see https://goo.gl/ET6dFL , discusses counterfeit coins and how to tell the difference between the counterfeit and the real. With paper money it’s easy. After 1971, all paper money became completely fiat, i.e. without value except as government trading coupons with expiration dates written in invisible ink, printed and passed off by governments as the real thing.
Often, only in retrospect, does humanity see the error of its ways. Sometimes, however, humanity will choose not to see.
Buy gold, buy silver, have faith.
Darryl Robert Schoon
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