Before I get started, I’d like to disclose that this morning, I purchased additional silver; to be sent to Miles Franklin’s Brink’s facility in Montreal, Quebec – in my view, the best PM storage solution I have come across. This was my second PM purchase this month, and perhaps my tenth this year; of which notably, ALL were silver.
As readers know well, I hold nearly my entire liquid net worth in the form of PHYSICAL PMs; currently, in the ratio of 55% gold, 45% silver. That figure was closer to 65% gold, 35% silver a year ago. However, given how historically cheap silver has become – in terms of the gold/silver ratio; not to mention, that nearly ALL silver mines are unprofitable at the current price, it seemed like the no-brainer decision of ALL TIME. And for those harboring fears of a future gold confiscation – which personally, I do not; silver is the perfect way to diversify one’s “protection portfolio.”
Today’s topic focuses on two comically pathetic, but heavily followed, conferences; one commencing today, and the second in just two weeks. The level of uncertainty, dissension, and potentially CHAOS is palpable in both cases, but particularly this week’s Jackson Hole Symposium, held on August 22nd-24th. This annual event, sponsored by of all groups the Kansas City Fed, has become a monetary policy flash point in recent years – as in 2010, when Bernanke used it to unofficially announce QE2; with this year appearing to be less relevant given the battle for Bennie’s soon-to-be vacant Chairman post, as well as several last minute no-shows.
Conversely, the September 5th-6th G20 meeting in St. Petersburg, Russia, has the potential for being one of the most historically important economic summits in decades. Not that it MUST end in a specific, world-changing mandate – or that those attending won’t do their darndest to prevent such actions from being immediately recognized for what they are. However, the fact remains that the Fed’s out of control PRINTING PRESS is likely to be the top issue on the agenda. Even the Canadian Finance Minister “threw Bernanke under the bus” by noting his distaste of QE, and intention to bring it up in St. Petersburg; and generally speaking, the overarching consensus is that the end of dollar hegemony is squarely within participants’ crosshairs. Throw in the fact that the U.S. has committed what I view to be a cardinal diplomatic sin by refusing to attend – under the lame “guise” of disapproval that Russia granted Edward Snowden asylum – and the potential for a heavily anti-America consensus is as high as at any time in the post-War Era.
Off topic, I’m nearly done with the seven book, 3,000+ page Dark Tower series by Stephen King; quite possibly, the most gripping, enthralling fiction I’ve ever read – which is saying a LOT. Amazingly, while reading in today’s wee hours at the gym, I came across the perfect quote to describe the REALITY of TPTB’s current, hopeless situation – as symbolized by the futility of the Jackson Hole and St. Petersburg conferences…
Any battle-seasoned general will tell you that – even in a small-scale engagement – there always comes a point where coherence breaks down; and narrative flow; and any real sense of how things are going. These matters are re-created by historians later on. In fact, the need to re-create the myth of coherence may be one of the reasons why history exists in the first place.
-Stephen King
As I write, a rag-tag group of not so illustrious bankers are enjoying a multi-million dollar boondoggle at the beautiful mountain resort of Jackson Hole, Wyoming (picture below). Taxpayers of the U.S. and numerous other nations foot the bill for this glorious, wasteful vacation in which little gets done between hikes, horseback riding, and lavish meals; other than heavy doses of lip service – and occasionally, a new MONEY PRINTING announcement…
This year, soon-to-be retired Chairman “Helicopter Ben” is not attending – under the equally lame guise of a scheduling conflict; nor are numerous other top Central bankers – such as Mario Draghi of the ECB and Mark Carney of the BOE. Many of the Fed governors themselves are not showing up; leaving the world’s most maniacal MONEY PRINTER of all – the Bank of Japan’s Haruhiko Kuroda – as the most notable speaker. The head of Brazil’s Central bank backed out at the last second to “maintain a close watch” on the market he himself helped to destroy –the Brazilian Real currency. Thanks to Federal Reserve exportation of INFLATION worldwide – from Brazil, to India, Egypt, and Turkey, among others – countless nations are experiencing MAJOR currency crises. The Indian Rupee is down 24% in the past two years (and 17% in the past three months alone); but sadly, doesn’t hold a candle to MAJOR GOLD PRODUCER South Africa – where the Rand is down 30% in the past two years; and Brazil – the supposedly powerful BRIC nation – where the Real is down 38% in the past two years, and 21% in the past three months.
In a nutshell, I anticipate utterly NOTHING of import to emanate from the Jackson Hole Symposium; which frankly, has been reduced to a shell of its former, world-destroying self since that fateful 2010 QE2 hint. The few remaining foreign “dignitaries” have not a shred of dignity between them; and now that the Fed itself is on the verge of becoming obsolete – other than their inevitable, last ditch efforts to “QE” the can down the last inch of road – I’d bet few will even remember the Jackson Hole Symposium in future years.
From thence, let’s focus two weeks into the future – just after the ENTIRE Northern Hemisphere returns from its summer break – on the St. Petersburg G-20 Summit; which conversely, has the potential to make great strides in dethroning the dollar hegemony that has defined our debt and inflation-ridden world since 1971.
The history of G-20 meetings is not promising – in that little of substance has ever been accomplished. However, the times they are a changing; as today, the world faces its worst economic crisis since the Great Depression. Only then, a gold standard largely governed the globe; and thus, Central bankers couldn’t make matters worse by HYPERINFLATING the money supply. Thus, today’s circumstances may well prove a “tipping point” in global complacency toward the political, economic, and social destruction ongoing by the United States of Exported Inflation; particularly given Obama’s HUBRIS in arrogantly refusing to participate. I’m not saying I expect an explicit anti-dollar – or pro-alternative currency – mandate to emerge; but you can bet the official “recommendations” will clearly favor a reduced role for the dollar in both trade and reserve calculations; and god forbid, the word “gold” may even be bandied about the meeting’s fringes.
Irrespective, I don’t expect the world’s Central bankers to actually do anything material until their own currencies’ respective purchasing powers fall to the level of the Rupee (in essence, forcing their hands) – which may be much sooner than most can imagine. And frankly, I expect new MONEY PRINTING initiatives shortly from the Fed, ECB, BOE, and BOJ before a new “monetary order” takes hold. However, the global exodus from dollars – as highlighted by June’s MASSIVE Treasury bond sales by the governments of China and Japan – certainly won’t lose momentum following the G-20 meeting; and just may turn into a ROUT if the Fed cannot stem the current Treasury bond mini-crash.
No matter what country you live in – from the United States to China – your currency not only could, but WILL lose purchasing power as the final death throes of the failed post-war monetary regime play out. The U.S. clearly has the most to lose – as it’s “reserve currency” status has enabled Americans to go far more deeply in debt to fund unsustainable standards of living. However, ALL will share in the inflationary destruction of the cursed pieces of “digital paper” called dollars, euros, pounds, yen, and even Yuan. ONLY the safety of REAL MONEY will protect your wealth until we move into the next incarnation of the gold standard – be it in two years, five years, or twenty. And if (when) the global political, economic, and social situations inevitably reach their low points, PHYSICAL gold and silver just may save your life.
