Loading ...STOCKMAN WROTE=
“And the resolution:
In short, what is happening now is that risk is coming out of hiding, the collateral chains are buckling, the financial time bombs are beginning to explode.
There is nothing especially new about this development—its the third occurrence this century. But there is possibly something different this time around the block.
This time the carnage could be much worse because the most recent tsunami of central bank credit was orders of magnitude larger and more virulent than during the run-up to the Lehman event or the dotcom implosion.
Moreover, the central banks are now out of dry powder—– impaled on the zero-bound. That means any resort to a massive new round of money printing can not be disguised as an effort to “stimulate” the macro-economy by temporarily driving interest rates to “extraordinarily” low levels. They are already there.
Instead, a Bernanke style balance sheet explosion like that which stopped the financial meltdown in the fall and winter of 2008-2009 will be seen for exactly what it is—-an exercise in pure monetary desperation and quackery.
So duck and cover. This storm could be a monster”
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Stockman=and his scenario is exactly why gold will not plunge because of deflation
It could plunge-like in 2008–because of official sector suppression–including margin hikes or even force majeure…but the govvie will have a much harder time doing it if we repeat 2008 cause the excesses are so much greater–plus no one will pay any attention to the “selling everything to raise cash” as a rationale for selling gold holdings…the action lately seems to confirm the idea that gold is starting to be accepted for its true role–the currency of last resort–the ultimate safe haven–and not that ridiculous 2008 category devised by the Street–as just another “risk off” asset to be liquidated
…but that’s all in the future–no need to devise end of the world scenarios just because the DOW backed off a few percent…Maybe the U.S. is still in the “virtuous circle”-with King Dollar and the whole 9 yards…and martin armstrongs DOW 40,000