Gold To Provide Financial Protection From The Soon Coming Financial Emergency
Friday, March 21, 2008 9:42:29 PM
Elaine Meinel Supkis references the Bloomberg article Treasuries' Scarcity Triggers Repo Market Failures and writes of bond market instability relating that: "the bond markets are still malfunctioning. The banking crisis, far from being over, is entering a new stage. It is indeed, like watching a ship flounder and sink. The corrections are all making things worse. It is just amazing to me to see how attempts at bailing out the same men and women who put us into hazard is being cheered onwards even as it is painfully obvious that this is totally wrong. Resetting the status quo is doomed to failure since it doesn't address the core problems: the US budget and trade deficits".
It is interesting that the Bloomberg article mentions "short" in relation to US Treasury Bonds. I take this to mean two things: first, some are simply short, that is not returning, the borrowed asset; and second, have short interest, yes there is a lot of short interest in the Treasuries across the board and especially in the 2,5 and 10 year area.
Another factor of instability that could easily create a "financial emergency" are the credit default swap, CDS, derivatives mentioned in the article: Credit Default Swaps, Is Your Fund At Risk.
Ms. Supkis documents that today's financial situation is exactly like the 1929 to 1930 entrance into the Depression: deleveraging and asset deflation is going to continue; famine, starvation and war is going to spread and intensify. I believe the result being the creation of an pyramidal society in America with the governing elite at the top, protected by Dyncorp, and a massive povertized and pauperized population at the bottom.
Lots of residential real estate will stand as glimmering tombs to a former speculative age.
It could be that Obama will become the Democrat nominee and win the Presidency; if elected, he will continue the war in Iraq to some degree with bases there and throughout the region; our military bases give us sovereignty there; and Obama if elected, may be left with a war on Iran by the current President Bush.
However, there is one thing that is different from 1929 to 1930; although platinum (being speculative) and silver (being traditionally an industrial metal rather than an investment metal) may fall in price, gold is going to to do one of two things, decrease in price less than stocks and bonds, or increase in price from its current $904 to $920 level seen in this chart.
I believe, in the second alternative above: in as much as gold trades inversely with the US dollar, it is going to rise from $904 to $920, with the impetus coming from a lower dollar, and a higher Yen and higher Euro, and a sell off in the 30 Year Treasuries which will come as the US dollar falls, or will occur in late spring or early summer, when the provisions of the Security and Prosperity Partnership of North America, the SPP, are applied in response to a "financial emergency", in which cash and short selling accounts at brokerages, checking accounts and money market fund accounts are not going to be honored at full face value.
Yes, a "systemic margin call" is coming, it will reveal the insolvent nature of the banks and investment bankers; and it will result in a "financial emergency"; unlike those aforementioned cash accounts, gold will always be honored at face value.
II. The soon coming financial emergency is foretold in Bible prohecy
Bible prophecy found in Revelation Chapter 13 foretells of three separate beasts which arise to sovereignly direct mankind's activities: a beast system of verse 1, a beast sovereign of verse 5, and a beast seignior of verse 11.
The beast system of Revelation 13:1-4 directs all of mankind's activities through seven institutions and ten regions of global governance; the regions replace sovereign nations and their constitutions; and institute principles of global governance.
The seven heads symbolize mankind’s seven institutions:
1)Finance, Commerce and Trade,
7)Science & Technology
The soon coming financial emergency is alluded to in Revelation 13:3: "One of his heads appeared to be fatally wounded, but his fatal wound was healed;" the financial emergency is going to cause a massive head wound -- a stroke to finance, commerce and trade. The stroke will have severe consequences; while there will be a system resolution, the personal consequences will be extreme.
The ten horns symbolize ten regions of global governance. The world's governments will eventually fail in their banking seignority and their currencies will collapse: regional currencies as suggested by the Council of Foreign Relations will arise: gold will be in demand as it will be used as a small basis for those regional currencies.
III. The Investment Application
A corporation's resources, and an individual's retirement wealth will preserved by investing in the gold ETF, GLD, and by investing in the currency Euro ETF, FXE, and the Yen ETF, FXY; and with these margin credit obtained for short selling via one of three means:
1) The Whole Financial Sector Is Worthy Of Short Selling At This Time Because Of The S&P Downgrade Of Goldman Sachs and Lehman; This Can Be Done Via A Sell Of The ETF UYG.
Here is UYG as presented in its ongoing Google Finance Chart and in its ongoing Yahoo Finance Chart and in its ongoing Stockcharts.com Chart, this latter chart is most helpful as it shows a rise to 32.95 which is near its 50 day moving average of 34.03.
Here is the current Yahoo Finance chart of The 200% of financial sector ETF, UYG.
Here is the current Stockcharts.com chart of the ETF UYG which shows rising price on falling volume: a wonderful bearish short selling opportunity has arisen just this week.
2) Closed End Municipal Bond Funds Are Worthy Of Short Selling As The Municipal Bond Market Is In Distress
One should establish a small short position in these: BTA, VGM and CXE
3) Soon US Treasuries Will Be Worthy Of Short Selling
The US Treasury Bonds are only as good as the Federal Reserve's Balance Sheet
Currently the 30 Year US Treasury is doing very well as is seen in
the Google Finance chart of BTTRX and the Yahoo Finance chart of BTTRX.
There is coming a day soon when the US Treasuries are going to be worthy of short selling via the Rydex Mutual Fund RYJUX as presented by Google Finance and RYJUX as presented by Yahoo Finance
Jesse's Cafe Americain On Going US Dollar Chart
Chart of Gold
US Dollar Long Term Chart
A Vicious Circle Ending In A Systemic Financial Meltdown
The US Treasury Bonds are Only as good as the Federal Reserve's Balance Sheet
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