“Know what you own, and know why you own it.” ~ Peter Lynch
By Catherine Austin Fitts
The rebalancing of the global economy continues:
- The flow of wealth moves from West to East; from North to South; as goods and natural resources flow back;
- The infrastructure for a global currency builds out: Swift and Swift alternatives, smart phones, satellite systems and navies;
- There is drama and tension created by competing teams: Snowden vs. the NSA, Putin vs. the G-7, the BRICS trading, swapping and reorganizing;
- The institutions of Global 2.0 struggle to manage as funds flow into Global 3.0 investment and dark pools.
As the pendulum swings back and forth, the Hegelian dialectic is served. Rebalancing does not go in a straight line. It is a pendulum swinging back and forth; with insiders harvesting the outsiders as money cycles through the financial markets. Digital systems facilitate ever more leverage, feeding centralized control.
At the heart of the dance is the price of the US dollar and of gold. The prices swing up and down – usually moving in opposition. Factions push their book:
- The US Dollar Index is going to 122, no, now 165;
- The US Dollar Index is collapsing – it is going to zero;
- Gold is going to $10,000 per ounce;
- Gold will drop through $1,100 and then sink to 700.
The price prophecies are rife with stories that terrorize and delight:
- The future is hopeless, there will be nuclear war;
- JP Morgan will collapse shortly and the richest bankers will be bankrupted;
- Mother earth has taken over the bank information systems – they no longer obey the central banks. All will be well;
- The Dragon Elders are the wealthiest families in the world. From Asia, they are shrouded in mystery. They are going to save us all;
- The Iraqi dinar is being reset tomorrow and my investment will be worth $20 million. No, tomorrow. A day later, tomorrow. A year later, tomorrow. For years now, tomorrow.
- Climate change is a huge emergency. We must centralize control and live in poverty to save our planet.
The stories play on our fear and greed. They appeal to our desire for certainty; for an explanation that makes sense of the chaotic process; for a big bang ending to the slow burn after which everything promises to make sense again; for a peek into the inside circle.
Behind the scenes, the build out of the global currency and payment systems and the growth of equity markets fueled by central bank largesse march steadily forward. The governance system may be invisible and the process may be emergent, but the financial goals are clear.
This week is the Precious Metal Market Report on The Solari Report, Franklin Sanders of The Moneychanger will join me to brief us on the latest developments in the gold and silver markets and to share his insight on what technical analysis is telling him about current market trends.
I have asked Franklin to help me address potential scenarios for my 2015 investment strategies. We will also address how to follow geopolitical developments and financial prices in a manner that looks squarely at all the risks ahead without losing time, money or even our minds to less likely, wildcard or whacky scenarios.
We will also touch base on Christmas to tell you the story of how giving gold and silver to the kids I love at Christmas inspired me to work with Franklin on launching his idea for a Silver and Gold Calculator. Now is the time of year to consider gifting to the children you love during the holiday season.
In Money & Markets this week I will discuss the latest news in current events and finance.
In Let’s Go to the Movies, we will view the rebalancing of the global economy through the eyes of those who lead the world’s most famous vineyards. When I worked on Wall Street, one of the rewards for being promoted to vice president was a case of Château Haut-Brion. Savoring it one bottle at a time inspired a love for Bordeaux wines. So I was fascinated to watch Red Obsession, a marvelous Australian documentary about the price bubble in Bordeaux wines in 2008-10 resulting from unprecedented Chinese demand. Narrated by Russell Crowe, this one is not to be missed!
Talk to you Thursday!