Credit crisis imminent
Following the US government’s determination to destroy Iran’s theocracy, a rapid collapse of the entire financial system is now virtually guaranteed, driven by higher bond yields.
Introduction and summary
This article is timed ahead of an increasingly turbulent few weeks for financial markets with bond yields rising, triggered by growing inflation concerns. Debt traps for G7 governments will be triggered, and funding crises will inevitably follow.
In these circumstances, never have gold and silver become so cheap, because with other commodities they will reflect accelerating currency debasement. It is inevitable, partly because of inflation triggered by the war against Iran, but mainly because of the prospect of massive QE by governments attempting to prevent both a crisis hitting financial markets and business slumps in non-financial sectors.
As a consequence for fiat currency values, we now stand on the edge of the largest wealth transfer in history, from creditors to debtors as the latters’ obligations to the former are wiped out in a worldwide fiat currency collapse.
While this outlook is poorly understood in western capital markets, Asians led by China are sucking the physical lifeblood out of gold and silver paper markets. Chinese banks are rationing gold, which is sold out immediately, such is investor demand. Silver flies from western vaults to Asia and despite being marked down in paper markets is still in backwardation.
We cannot say for certain that the selloff in gold and silver derivatives is over, but it presents a bonus opportunity to accumulate both metals in physical form to be stored outside the banking system in a secure location — if you can get it.
