Too Small to Fail
A ‘bail-in’ saved Cyprus. But dark days are ahead.
Under the bailout model, taxpayers implicitly promise to bail out bank creditors and depositors when things go south. Accordingly, banks are regulated by the government, in order to “protect” taxpayers.
We all know that markets don’t always reflect the health of the economy. It is not unusual to experience stellar market returns in an otherwise mediocre economic backdrop – something that investors are currently experiencing.
Financial history is marked with times when populations took collective leave of their senses and succumbed to delusions of ever-expanding wealth. Times of rampant speculation have been enthralled by the introduction of new technologies, that are used to justify pumping-up market valuations, - not just for the present, but also for the near future, and far over the horizon as well.
Many think Bitcoin is a bubble the likes of which we haven't seen since US housing or NASDAQ stocks or even tulips, while others think it is the future. Certainly, the behaviour of Bitcoin this past week has given the advantage to the naysayers, but to dismiss the virtual currency out of hand is to miss the point entirely.
Banks and even entire jurisdictions are feverishly responding to increased government scrutiny from the world's monetary power centers in the name of exposing political corruption, combating terrorism, and preventing tax evasion.
I am very disappointed by, but not surprised at, the latest transfer of weath to the bankers from everyone else. The most recent gold bear raid has vastly enriched the bullion bankers, once again, at the expense of everyone trying to protect their wealth from global central bank money printing.
The reason for why I own gold and why I recommended it as an essential self-defense asset is not the chart pattern of the gold price, the opinion of Goldman Sachs, or the Indian wedding season but the diagnosis that the global fiat money economy has check-mated itself.
What do billionaires Warren Buffet, John Paulson, and George Soros know that you and I don't know? I don't have the answer, but I do know what these billionaires are doing.
The landslide in Utah is just one example of how quickly and unexpectedly the supply and demand factors facing the red metal can shift, which I believe underscores the need for nimble active management.
An engineer, a chemist, and an economist are stranded on a deserted island. They are starving, when miraculously they find a box filled with canned food. What to do?
FS Newshour Q-Line
Question? Give us a call!
USA Toll Free 800.794.6480
Int'l 208.758.0383 (Toll Charge)
Sponsored
