Insider

I admit, there are certainly some very interesting things unfolding over in the mortgage world, but as much as I think they are important and worth following, they are not the greatest risk we face at this time.

The mortgage fraud mess has the potential to trigger for the next down-cycle, but it’s not going to supply the majority of the fuel for the next conflagration.

For that we need to keep our attention riveted upon the looming currency wars.

This weekend at the IMF’s annual meeting, the world’s economic leaders tried to iron out some differences on the subject of currency manipulation and debasement.  The bottom line is that everybody wants a cheaper currency; practically all major countries are actively pursuing cheap-currency policies.  And tensions are building.  Here’s how the US press described the outcome:

Stocks soared, bonds caught a huge bid, and commodities of every description took off – grains, energy, metals, gold, and silver.

What happened?  Was it suddenly determined that everything was worth more all at once?  No, what happened is this:  The markets are figuring out that what we have been predicting here for several years is, in fact, the direction in which the world is actually headed.  Printing is being selected over austerity.

Prediction: Things Will Unravel Faster Than You Think

Friday, October 1, 2010

Executive Summary

• We do not live in a linear world
• Complex systems are inherently unpredictable (sort of)
• Accepting “what is”
• Banking on perception
• The dawning of awareness of Peak Oil, sovereign insolvency, & currency debasement
• Hope alone is a terrible strategy
• What you should do

Part I

The currency wars have begun, and the implications to world stability and wealth could not be more profound. Fortunately, all of my long-time enrolled members are prepared for this outcome, which we’ve been predicting here for some time.

When pressed, the most predictable decision in all of history is to print, print, print.  So I can’t take credit for a ‘prediction’ that was just slightly bolder than ‘predicting’ which way a dropped anvil will travel; down or up?

The only problem is, widespread currency debasements will further destabilize an already rickety global financial system where tens of trillions of fiat dollars flow daily on the currency exchanges.

Here’s a recent sampling of news items demonstrating the fever pitch that is being built:

Well, the Fed held its meeting and dutifully released a very measured statement, as expected by those who are familiar with the way the Fed adopts a ‘steady as she goes’ policy this close to an election.

Truthfully, I don’t see anything exceptional in the Fed statement, but the markets responded quite strongly to the release.

They started with the usual ‘not so hot, but not too terrible’ outlook that has dominated their views for quite some time: