Thursday, March 4, 2010

Bob Chapman: The Dollar Devaluation Event

International Forecaster Weekly
Big Players Get Out Of Risk And In To Gold
by Bob Chapman article link
Posted: February 27 2010

Full Article Summary: Who will be the buyers of US bonds? Questionable Fed policy to keep economy afloat, liquidity drain to keep pressure on gold and silver, George Soros putting his money in gold companies, upheaval in currency markets, TARP was to pay out the people responsible, difficulties for small and mid-sized banks.

We ask, who on earth will now buy our bonds as our multi-trillion dollar Obama-ordained deficits run America into a state of bankruptcy? Certainly not the Chinese, who are no longer buying our "worthless paper." They are now buying Canadian bonds and gold. Certainly not the Russians, because they know exactly where the dollar and America are headed (i.e. where Russia was not too long ago - in total collapse). Certainly not the US lapdog Japan, at least not since the Obama administration and the largely US government-owned car companies orchestrated a wildly exaggerated attack on Japanese auto quality. And certainly not the Middle East, who are already swimming in treasuries and who want to start their own currency so they can finally break the dollar pegs that are driving them into inflationary hell. Who does that leave then, you might ask?

We'll tell you who that leaves. The Fed, panic-stricken stock investors and the US public, that's who! The Fed will continue to feed money to foreign banks via currency swaps, this time in secret, and will continue to feed leveraged funds into secret Fed-supported off-shore hedge funds to invest in treasuries and agencies. Then you will see the PPT plunge the stock markets periodically to push money out of those markets into US treasuries. The problem there is, that although investors may buy short-term treasuries because they can't think of anything else on the spot, they are going to be looking for other venues, like gold, silver and commodities, both because the US economy and dollar are going to be looking rather sickly, and because rising interest rates due to an increase in perceived risks is going to destroy bond values. They will hold the bonds while the blood-letting is ongoing to take advantage of the increase in bond prices, but then they are going to have to find another location for their assets in short order when that blood-letting stops, and that means gold and silver. After the stock markets around the world have been bled down to whatever level the PPT is told to bring the markets down to by our shadow government, guess who's next? That's right, the American people and their pensions, 401(k)'s and IRA's. You will be offered the option to buy an annuity from an insurance company, who will fund it's obligations under that annuity, with, well, you guessed it, US treasury bonds. After the government gets its foot in the door with voluntary annuities, you can be sure that mandatory annuities are next. The only problem with these proposed annuities, beside abysmal rates of return, is that after the US government goes bankrupt, the US treasuries will be worthless and the insurance companies will be unable to deliver on their annuities, leading them into bankruptcy and further government takeover, and leaving you with a big goose egg for retirement income. That is where we are headed unless you take action to stop them. ...

... The recent correction in the stock market and in the gold and silver markets was just a preliminary move to tamp down gold and silver until the Fed presumably stops buying treasury and agency paper. The real trouble may start once the threatened liquidity drain by the Fed is commenced some time in March. Very poor performance by the financial sector, disappointing levels of consumer spending, the downturn in the real estate market that will occur as the tax credit nears expiration and the elevation of interest rates as the Fed pulls back on its quantitative easing and interference in the bond market, ever growing numbers of real estate foreclosures (both new ones and the ones the bankster-gangsters have put on the back burner to stop the deterioration of their balance sheets) and the ongoing bank failures that will occur due to massive loan defaults across the debt spectrum, together with problems in Europe, China and Japan, will all be used by the media to lead the way down. This tanking of the stock markets will be used, unsuccessfully, as a substitute for Fed monetization. In the end, the Fed will still have to monetize, especially if the American public puts the kibosh on the pension takeover. No one else wants our bonds anymore. So the Fed will have to monetize, or the entire bond market and financial system will collapse. Also remember that the Illuminist institutions are using dark pools to dump dollar-denominated paper and to pick up gold and silver bullion, shares and derivatives on the sly. They will leave you holding the bag. The train is once again leaving the station. Make sure you are on it.

Any pension fund that does not diversify into gold and silver bullion and their related blue chip shares is a betrayer of their beneficiaries' trust and is either grossly or criminally negligent. You won't have to wait for the lawsuits. You will just suddenly disappear off the face of the earth when the people who trusted you find out that they are going to starve to death because of your negligence and malfeasance. A word to the wise is sufficient. ...

... The total upheaval in the currency markets that would be wrought by any dollar devaluation would rock the quivering mountain of growing trade imbalances and mal-investments to the core, and unleash a financial, political and social cataclysm that will bring the whole world financial system down as already boiling civil unrest and revolution around the globe bubble and overflow from their roiling cauldrons. The BRIC nations will be destabilized along with the US, Canada, Japan, the Middle East and most of Western Europe. Eastern Europe has already gone under. The European Union will be DOA after it is bludgeoned into a bloody pulp by the consequences of the dollar devaluation, which will send its many financially borderline nations over the edge, including the UK, Ireland, Italy, Portugal, Spain and Greece, just for starters. This will lead to a new worldwide meeting of bankers to strike a new accord, perhaps leading to a basket of currencies to be used in international trade as a world reserve currency that would be backed by perhaps 15% gold. Or perhaps out of fear of the potential impact on the Quadrillion Dollar Derivative Death Star which a dollar devaluation might detonate, and also out of fear for their own lives, the bankers will have their meeting first and devalue all the currencies at the same time in the hope that they could avoid out-of-control financial upheaval and keep risk and interest rates from skyrocketing too much. Either way they will fail. In any case, the dollar would then be officially dead as the world's leading reserve currency. Then we will move on to the next stage in the Illuminist evolution of a one world government, a one world economy and a one world currency. The next step of the elitists might be to establish a system of regional currencies, followed by an attempt to boil things down to one currency. Or they may just go for the gusto, and risk moving to a single world currency in one death-defying, risk-filled shot.

The dollar devaluation event, whether coordinated with the devaluation of other currencies or not, will mark the end of any bear market rallies in stocks, will end the US treasury bond rallies which have been spurred by the Fed's near zero interest rate policy as risk elevates and interest rates rise, and will begin the final descent into financial hell for the derivative markets as well. As the credit default swaps and interest rate swaps that comprise the Quadrillion Dollar Derivative Death Star go out of kilter as interest rates explode, the QDDDS will implode and go supernova and banks will start dropping like flies around the world as virtually all real estate markets crash and burn, with the result that gold and silver will be unleashed and allowed to run up to their true values as investors flee stocks and bonds in search of the only real money the world has ever known - gold and silver. Gold and silver producer shares will also rise in meteoric fashion after the initial onslaught is over as they separate from all the other bloodied shares and prepare for launch. The producer shares are where the spectacular, legendary gains will be made just as occurred during the 1975-1980 rally. Any and all commodities will rocket to new levels as everyone tries to unload paper trash for real assets.

You, the US and European public, must run the prices of gold, silver and other commodities up now to take cheap pricing away from the various Illuminist factions around the world who will be dumping all their dollar-denominated paper assets through the dozens of existing dark pools of liquidity behind your backs and outside the purview of market regulators who are as useless as tits on a bull in any case because they were established to cover up and whitewash felonious market manipulations, not to protect the investing public. This will also put pressure on nations like China and Russia who know they must add thousands of tons of gold bullion to their coffers or face total financial annihilation and social upheaval. You, the serfs, must rise up and beat the Illuminati to the punch now, knowing that they will be dumping all their dollar-denominated assets between now and the time for the big takedown, which will most likely happen in late 2010 or early 2011. Dark pools Project Turquoise and Baikal were established at breakneck speed to open up the escape hatch for the European Illuminists to dump their euro-denominated assets outside the view of regulators and the investing public, so they would not be outdone by their US counterparts who already had dozens of dark pools to choose from for the unregulated, secret dumping of US dollar-denominated assets. Neither the euro or the dollar are going to fare very well when the dollar devaluation unleashes the financial forces that will ultimately pulverize both developed and undeveloped nations with almost equal enthusiasm. The winners will be those who get gold, silver, oil and other commodities on the cheap before their prices explode. ... (article continues)

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