Thursday, May 10, 2012

"My Investing Model is ABCD: Anything Bernanke Cannot Destroy"

We are in the last innings of a very bad ball game. We are coping with the crash of a 30-year–long debt super-cycle and the aftermath of an unsustainable bubble  - David Stockman, interview linked below
This interview by The Gold Report (  is an excellent follow-up to my blog post from yesterday.  In this, Stockman does a superb job explaining how the Fed manipulates the cost of money and the cost of debt and how Wall Street takes advantage of this through the use of insiders, like former Goldman Sachs partner Bill Dudley, who runs the NY Fed:
The Fed is destroying the capital market by pegging and manipulating the price of money and debt capital. Interest rates signal nothing anymore because they are zero. The yield curve signals nothing anymore because it is totally manipulated by the Fed...there is also just plain crony capitalism that is not that different in character and it's what Wall Street does every day. Bill Dudley, who runs the New York Fed, was formerly chief economist for Goldman Sachs and he pretends to solicit an opinion about financial conditions from the current Goldman economist, who then pretends to opine as to what the economy and Fed might do next for the benefit of Goldman's traders, and possibly its clients.
This is a must-read interview - every word.  Stockman succinctly and clearly lays out what happened and why in 2008 and explains why the next wave that will hit our capital markets will be the final blow:  LINK

The only conclusion that anyone can draw from this - at least anyone willing to open their eyes to the truth and accept reality for what it is - is that the financial, fiat-currency driven disaster that is going to hit this country necessitates the conversion of as much of your paper wealth into gold as possible.


  1. With the G:S ratio so far to one side, my truck is backing up to the silver dock.

  2. What ?...and No Silver !?
    Don't leave us out in the cold for Pete's sake !

  3. Dave here he sums it up like this:

    "This is the question: Will the central banks be able to do that now, given that they have already expanded their balance sheets? The Fed balance sheet was $900 billion (B) when Lehman crashed in September 2008. It took 93 years to build it to that level from when the Fed opened for business in November 1914. Bernanke then added another $900B in seven weeks and then he took it to $2.4 trillion in an orgy of money printing during the initial 13 weeks after Lehman. Today it is nearly $3 trillion. Can it triple again? I do not think so."

    I think they will print until we hit 10 percent inflation. Then the Fed that is in place to protect banks will hit the brakes on printing. Then what will Congress do? Will they ditch the Federal Reserve. Who knows? In the mean time the only thing we can do is wait for a bank holiday, national default and massive inflation. Till then buy gold.

  4. where do markets turn when things go to shit? US treasuries. The end game in the treasury market, if it ever comes, is years, if not decades away. The charade will keep on going. I assure you.