Economy

This insider has been opened to allow for intra-day commentary on what is going on in the markets.  As I see it, there is something quite profound going on at the moment; I just don’t know what it is yet.

As I wrote in the last Martenson Report, the behavior of gold was quite noteworthy, as it ran counter to both the dollar and the stock market.

As of this writing, gold has suddenly vaulted to a new, all-time high, even as the dollar remains in positive territory and the stock market is negative.  Silver is following.

Here are the relevant charts.

Even as the whole world seemingly is transfixed on economic recovery and what the stock indexes are up to, the 800 lb. gorilla in the room has grown to 1000 lbs.

There have been a recent spate of news articles and book reviews triangulating on the topic of Peak Oil, although none quite get to the heart of the problem, and I think it would be wise to keep the issue of oil and energy directly in view.

The first article I’d like to draw your attention to shows that, for a rapidly industrializing country, even the most destructive economic crisis in generations is not enough to halt consumption growth.

This article by Matt Taibbi in the October 15 issue of Rolling Stone is the most important and aggravating of what I’ve read in quite a while. If strong language is not to your liking, you should squint your eyes and read past the offending bits, because you need to really understand why it is that true economic recovery is not even remotely possible.

Besides fibbing to ourselves about our true economic strength with falsified economic numbers, we’ve apparently also been living with a government captive to the interests of Wall Street.  Not only has blatant and massive theft been running rampant on Wall Street, but it has been done under the protection of the federal government.

In short, what I have been calling the “Greatest Looting Operation in History” is now laid out in stunning detail in Matt Taibbi’s article.  To face facts squarely, we live in a kleptocracy, a massive racket where the misdeeds are never punished for the largest players, only the bit players, now and then and purely for appearance’s sake (think Martha Stewart).

We are now experiencing a nice, temporary reprieve in our financial markets. The very best that $10 -$20 trillion can buy.

I am actually quite thankful for this lull, as it means we have more time to square things away.

What is catching my eye these days, besides the obvious amount of liquidity sloshing through every capital market and the obscene profits being skimmed off by the Wall Street firms, is that there’s really no exit strategy in place for either the fiscal or monetary authorities.  This only grows more glaringly obvious with every passing day.

I am on my way home from Denver, where the ASPO conference was held, and I had the opportunity to speak to a truly distinguished group of individuals.  My short talk was on “what comes next,” and it can be viewed at ASPO.tv (if you are registered and logged in).

What I talked about was the notion that if we are going to have any chance of a secure future together, we are going to need to have a coordinated, massive social movement – perhaps larger than any seen before.  The vision we have here at Martenson central is that we are seeking to create “true prosperity.”

That’s it.  True prosperity.  That’s what we seek to create.

More coming up on that soon.

In the meantime, I want to welcome all the new enrolled members and let you know that the Martenson Insider is the place where I put my more frequent (and less polished) ideas and observations as each week unfolds.  Sometimes the concepts placed here make it into the weekly Martenson Report, but not always.

There was a short report put out by the Council on Foreign Relations (CFR) that really caught my eye.  It seems that their results confirm my own:  Central banks have been buying more than their fair share of US government debt.

It is safe to say that if it weren’t for the massive interventions of central banks, the US fiscal situation would be entirely different.

How much different?  Well, according to the CFR calculations, central banks (called “official buyers”) bought more than 100% of all US government debt offered in 2009, while “economic buyers” (defined as those who actually care about whether they make or lose money) were net sellers.

This is a piece that I wrote in response to a request for a guest authorship over at ZeroHedge.  It builds on a point, made in yesterday’s piece, that Switters thought had not yet been fully addressed elsewhere in the great Inflation/Deflation debate.  

I am interested in your thoughts on this line of thinking.  I will send it over to ZeroHedge later on.

My central thesis to this crisis, developed a few years before it even hit, is that the economic troubles are the symptoms, while the money system itself is the cause.