Grab your ultra-reliable 357 magnum revolver and load the cylinder
with six, not one, rounds of ammunition. Point the gun at your head if
you are a member of the struggling middle-class. Imagine pulling the
trigger and hoping …
Do you feel lucky?
The Six Loads of Ammunition for your 357 revolver are:
#1: Central banks and commercial banks exert a huge influence
over all aspects of our financial lives. Paper currencies issued by
central banks, digital currency units, credit card debt, pension funds,
retirement accounts, checking accounts, Quantitative Easing, bond
monetization, congress, regulators, Presidents, and the list goes on.
Their game, their rules, your losses, and more of the same.
#2: Derivatives are used to “manage” markets,
exercise control via futures markets over prices for physical and paper
assets, increase leverage and enhance profits for the banks. Each
derivative includes a commission – it is not a “zero-sum” game. Banks
and CEO bonuses win.
#3: Debt, debt, and much more debt. Deficit spending
increases debt, and governments run deficits. Interest is paid by
individuals, corporations, and governments. Global debt of $200 trillion
will require inflation, hyper-inflation or default. How long can
government expenditures increase much more rapidly than revenues?
Answer: As long as our current “Ponzi” finance can continue. How long
can a Ponzi scheme last? Answer: Not forever. A default or
hyper-inflation will occur, sooner rather than later. Fiat currencies
will devalue.
#4: Near zero interest rates, negative interest
rates, and financial repression. If central banks lower the interest
paid on bonds and investments, pension plans and savers are penalized.
Debtors, including governments, banks, and large corporations benefit.
Your government plan and corporate pension plan are increasingly
insolvent. Interest earnings are nearly zero. “High yield” checking
accounts pay 0.01% interest. Your savings are depleted, and you may
outlive your retirement assets. Welcome to the world of NIRP, ZIRP and
financial repression that transfers assets and revenue from you to the
banks, courtesy of central bank policies.
#5: High Frequency Trading or HFT is legalized
skimming. Ultra-fast computers, PhD mathematics and software have
replaced human traders. The result is consistent and profitable trading
for the big financial institutions.
Per zerohedge
JP Morgan’s in-house trading group has been unprofitable on only two
days in the past four years. Average trading revenues were $80 million
per day for 2016. Someone contributed heavily to the JP Morgan casino
winnings.
#6: Too Big To Fail, Too Big To Jail. If central
banks and the five largest commercial banks contribute to congressional
elections, and Presidents fill their key positions with executives from
the financial industries, and regulators work for them, what is the
likely result? If a few large commercial banks are too big to fail, the
government and taxpayers must … and you know the drill. More debt, more
influence, more derivatives, and a successful business model that
benefits the wealthy far more than the middle class.
Review:
Your revolver is loaded with six rounds of ammunition, any of which
can blast a hole in your net worth and financial security. The central
bank loads are:
- Their rules, their game.
- Derivatives.
- Debt, lots of unpayable debt.
- Near zero interest paid on your savings as currencies are devalued.
- HFT skims from many markets for banker profits.
- Too big to fail. Bail-outs, bail-ins, taxpayer assistance, and bonus checks. (Google “bail-ins.”)
One, two, three … pull the trigger!
ALTERNATE CHOICES:
Instead of playing a guaranteed to fail game of Russian roulette with your financial security, consider a return to the basics:
- Use real money – gold and silver – for your savings.
- Gold has no counter-party risk. Silver has no counter-party
risk. Most or all “paper” and debt based assets depend upon
counter-parties.
- Minimize debt and reduce your “debt footprint.”
- Reconsider your investments in bonds, stocks, ever-increasing debt,
devaluing currency units, minimal interest paid on savings,
counter-party risk and trust in your friendly central bankers.
CONCLUSIONS:
- Be cautious when playing Central Banker Russian Roulette with your
savings and retirement funds. The stock market crash of 1987, the LTCM
crash of 1998, the NASDAQ crash of 2000, and the global financial crisis
of 2008 warned us about counter-party risk, excess debt and trusting
Wall Street.
- Trust gold and silver more, and use fewer paper investments.
Read: “Banks” from Peak Prosperity
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GE Christenson is the owner and writer for the popular and contrarian investment site Deviant Investor and the author of the book, “Gold Value and Gold Prices 1971 - 2021.” He is a retired accountant and business manager with 30 years of experience studying markets, investing, and trading. He writes about investing, gold, silver, the economy, and central banking. His articles are published on Deviant Investor as well as other popular sites.
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The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
