Loading ...QE to Infinity, followed by Gold balancing the balance sheets of the sovereign balance sheet disasters. Just as there is no tool other than QE to feign financial solvency, there is no tool to balance the balance sheet of the offending entities other than Gold. It is just that simple. –Jim Sinclair
My Dear Extended Family,
The question of our title is very important, “Did the FINAL WAR just start?”. If you polled Americans on this question, 99.9% would answer “no” if you took out the Middle East. Last week I wrote “The Rumblings of War” regarding the IMF rebuffing China’s entry into the SDR. This was followed up by “The shot heard ’round the world” on Tuesday commenting on China’s surprise devaluation. The purpose of this writing is to show you YES, we are in fact at war! Rather than “tell” you we are at war, I feel it is better to point out a few dots, connect some of them and then ask a few questions which might help you understand the war that is in fact being waged. If you can answer some of the questions then connecting dots and forming your own conclusions will be easier.
As our backdrop, we are “told” the world is in recovery from the very bad experience of 2008. Since then, various central banks have monetized debt on a massive scale, led by the Federal Reserve of the U.S.. Undoubtedly, the greatest “export” from the U.S. has been dollars themselves and financial products known as derivatives. For the most part, the world spun merrily until last fall when Saudi Arabia decided to increase production and lower prices. This was presumably done at the request of the U.S. and meant as a tool to injure Russia’s energy sector, economy and financial system. Can the petrodollar which became accustomed to $100 oil be supported with sub $50 oil? There are two sides to this coin, yes the consumer of oil saves but doesn’t lower oil price mean less liquidity in the system? Doesn’t it mean lower velocity and less demand for dollars?
Moving along, did anyone really wonder “why” or what (or better yet, WHO) was behind China being put off for acceptance as a component of the SDR? Then just two trading days later, China devalued their currency in a surprise move…followed by two more devaluations! Remember, the U.S. has been prodding China to strengthen their currency and has gone so far as to call them a “currency manipulator”! Now we see China doing the exact opposite of U.S. requests (demands?). World markets have been shaken, and at a time when liquidity is quite tight.
A stronger dollar since last fall has acted as a constant and nagging “margin call” to the world which has contributed to the lack of liquidity. Have the Chinese finally said “fine, you want to issue a margin call to the world, we will help you issue it. Let’s see what happens to your financial system when the margin call fails to be met?”. Do you see what I am getting at here? The Chinese are now forcing the dollar higher by devaluing their own currency. They understand the dollar is nothing more than a debt instrument, are they attacking and intending to destroy the dollar with its own strength?
Follow this through, a stronger dollar will decrease our exports and slow our already slow or negative economy. A too strong dollar can actually undermine itself and even kick off a derivatives chain explosion. Our banks and brokers are very thinly capitalized, can they withstand losses in derivatives caused by a currency crisis? Can they withstand the losses from failed counterparties unable to pay? Do you see? A currency crisis “caused” by China could be a calamity. China has already accused Citadel (Ben Bernanke’s new employer) of creating the crash in their equity markets, is a currency crisis retaliation for their equity crash and public shaming by the IMF? If you understand how the Chinese think and also understand the works of Sun Tzu, Jim and I ask if China’s strategy is … “In order to destroy the dollar permanently make it stronger temporarily.”?
Another area to look at is gold and silver. Supplies have recently gotten very tight, not just for retail in the U.S. but all over the world. Has production slowed or have buyers stepped up their hoarding? Or, have Western central banks reduced their “dis hoarding”? Whatever it is, something in the supply/demand dynamics has definitely changed …and it has not taken much money to do it! Are these separate events or are they tied together somehow?
This is where it gets weird or some might say “coincidental”. Did anyone see the explosion at the Chinese port city of Tianjin yesterday? https://www.youtube.com/watch?v=_92WaPxeqCs “Yesterday” being one day after China devalued their currency? I am no rocket scientist and cannot say for sure, but does this not look like a nuclear explosion? Can someone out there explain to me in simple terms how a chemical explosion could look like this? As for the word “coincidence”, the CIA says there is no such thing as a coincidence!
Speaking of coincidences and I have permission to pass this along to you. Jim Sinclair wrote just a few days ago for the first time in many a moon, he said “gold has very limited downside from here and could move to $2,000 as an initial stop”. Do you believe it was a coincidence that he speaks now? No, he was called and was “told” by the same people who guided him in 1980 at the market top. Do you believe it was a coincidence following Jim’s writing, the IMF shunned China followed by the shot heard ’round the world of a yuan devaluation …three times?!!! …not to mention an explosion that could be seen from space! My mind is made up, no it is not any coincidence at all.
For months I have been suggesting Mr. Putin would drop a “truth bomb” revealing all sorts of false flag events and fraud perpetrated by the U.S.. I still believe this is to come and now even more likely. Why more likely? Because the financial sparring between East and West may have taken a very serious turn yesterday and I seriously believe a tactical nuke was set off. If this is the case, China will provide proof and they will retaliate. I believe the smoldering stages of what was a financial/technological/trade war have now become hot and the first shot was fired. I truly do ask for comments regarding what happened in Tianjin. Please do not send me opinions, I would like to hear exactly why or why not the explosion was nuclear. I will believe a tactical nuke until someone proves to me it was not. May God help us all with what comes!
Standing Watch,
Bill Holter
Holter-Sinclair collaboration
Comments welcome!
bholter@Hotmail.com