Inflation or Deflation?

Shelby wrote:> I sold all my metals and am currently "shorting" both gold and silver.
> I follow the Elliott Wave System very close and we have another wave
> that's
> going to come down rather severely, at which time when it bottoms I'll be
> back buying again.

Please send me more info on that prediction. Everything I have seen, says that technical indictors are point up to next resistance at $16.

I have been following SSO.t (SSRI) closely and noticed something surprising after the markets closed on Friday. I'm not sure what happened, but it sure looks like short selling to me. Please check SSO.t at Stockwatch.com to see the last ten trades and large volume after the close.

It looks to me that over 127,000 shares were shorted at $19.20, from around 4:10-4:55pm. I think these are all "buy to cover" stops (@19.20) and were taken out by short sellers! What do you think?

I suppose anything is possible in paper markets.

I also suppose it is possible that we get enough of a recovery from the Fed loosening of the spigot back into money in circulation and/or a media blitz about crisis nearing an end, that there is a rush out of precious metals. Don't know if that would cause the industrial metal aspect of silver to rise in value.

Notice Bernanke has been saying recession would end towards end of 2009 or 2010. They have the propoganda machine. Oil has started to rise again.

I will tell you that I went to mall on Sunday here in Davao, and the place is booming with foreigners and high class life. Condos going up all around the mall.

I suppose it is within the realm of possibility for the global system to be rocketed back into a commodity + Asia bubble. This would be a high inflation scenario, which will wreck (mis-allocate) increased havoc down the line. What I see is Asian consumption bubble as a possibility. I do not know if it is likely. I still think much more likely we get a bounce here, then we continue downwards in global implosion. My thinking is this bounce and conspicuous consumption rush, is designed to pull the rest of the money from those who still have some and think the world is okay.

> Recognize that Gold and Silver are authentic Safe Havens against both
> inflation and deflation but that their price at any given time is subject
> to
> massive distortion by the Fed-led Cartel of Central Bankers through its
> Interventions.
>
> I'm still going 'short'..........on a short-term basis.

But that is the paper price. The paper price and bullion price started to diverge. So there comes a day where you can get all the paper you want, but no physical metal. Also I heard the paper future's markets are currently in backwardation, which is signalling a rise in price and/or unavailability of physical in future.

My article was about trying to convince people to stop being gamblers, so our world will stop being a casino. Why would our world be any different that what we do with our money?

http://finance.yahoo.com/tech-ticker/article/216235/Are-Peter-Schiff-and-the-Gold-Bugs-Wrong-Again;_ylt=AtvGN.hCG.OlvGND.DP5G2O7YWsA?tickers=^gspc,GLD,GDX,UUP,UDN?sec=topStories&pos=9&asset=TBD&ccode=TBD

It is often said that we live with a "fiat currency" or with "paper money." This is not entirely accurate. A very small portion of our total supply of money and credit is in the form of physical currency. It depends on how you count it, but regardless, it is under 10% of the total. This is what differentiates our monetary system with that of Zimbabwe or Weimar Germany circa 1920's. Their economies were based on nearly 100% physical currency because nobody would accept the promises of government in order to issue credit.

The vast majority of our money supply is in the form of electronic credit. Electronic credit can be destroyed, while physical notes issued by a central bank cannot. This is why deflation is possible in a credit based monetary system, but not in a paper based monetary system.

Also this comment seems spot on:

sigmaseek.blogspot.com - Monday March 23, 2009 09:21AM EDT

Gold is going up because the Federal Reserve will have to monetize debt issued by the treasury AND is pushing down the long end of the yield curve. This devalues currency even as the Fed is trying to soak up liquidity. The Treasury is dependent on ever higher tax receipts, which are falling. This cycle will continue until the Treasury holds the vast majority of the public debt. There are three scenarios that could unfold. 1. US Treasury is bankrupt. 2. Hyperinflate the currency to pay off all debts. 3. The Fed does a massive collateral call and we all become slaves to the bankers - corporate fascism. All scenarios are bad that cause the paper and credit to fall to near zero. Hence real money, gold, silver, and other commodities become very valuable. Had the Fed just let the system clear itself, just deflation would have occurred and those with the 10% of the physical currency would have made off quite well since the value of the credit was worth very little.

Present some charts and some actual logic, otherwise I will ignore this nonsense. I won't ask you again to send me link to something that supports this view.

If the paper price falls that low, the physical will all be gone, even at your friend's shop.

> My best friend owns a coin shop..........getting product is not a
> problem........also, Canada is very close.
>
> Still going short...........on short-term basis. I don't follow silver to
> the degree I do gold. Gold is headed for $650 minimum; I see silver
> heading
> between $7.25 and $8.00 (closer to the 7.25), however could go lower.
> Like
> I say, I don't follow silver as close as gold.
> Also, I look for this to play out over the summer, maybe into the fall.
>
> Keep your bow into the wind; it's going to get breezy.

Send me a chart that shows this.

I do not know which waves you are interpreting.

This link discusses various interpretations:

http://goldismoney.info/forums/showthread.php?t=353904

That you don't understand that Elliot Wave theory has multiple interpretations of which waves are major and minor (otherwise you would have sent me a chart of your selected waves), depending on which waves you select, further indicates to me that you are not serious.

Also you have not been able to counter the logic that there will be no bullion available at such low paper prices, if they do occur. How do you expect to get back on the train?

I assume you are referring to Prechter?

http://www.marketwatch.com/news/story/elliott-wave-predicts-bear-market-rally/story.aspx?guid=%7B6E8DEB9D-BEBE-43BB-82B9-690C9FA70A2E%7D
https://www.youtube.com/watch?v=2Yzb4ilsrzg&NR=1

Look he was consistently wrong from 1987 to 2007. And has missed most of the gold rally to date:

http://en.wikipedia.org/wiki/Socionomics#Criticism
http://www.google.com/search?hl=en&q=Prechter+gold&btnG=Search

Here is correct call in 2007 (note I also called for selling silver at $21 in March 2008):

https://www.youtube.com/watch?v=P7Nqvdswj7w&feature=related

Prechter seems to think paper can substitute for real thing forever, as he is apparently ignoring the herculian short position of JP Morgan on the COMEX:

http://www.kitco.com/ind/akerman/jan062009.html

I will repeat, if the COMEX short JP Morgan kills the paper price, then physical will disappear into very deep holes in the ground. That is the Dark Ages scenario and a real possibility.

You want to know how this happened:

http://www.elliottwave.com/freeupdates/archives/2009/02/25/Prechter-on-T-Bonds-Gold-and-Deflation.aspx

Manipulation:

http://www.gold-eagle.com/gold_digest_08/fekete032109.html
http://www.gold-eagle.com/gold_digest_08/fekete021209.html

The manipulation can only be maintained as long as there is sufficient physical supply of metals at that price. Evidence the 20 - 30% premiums on silver bullion when recently was at $9. And that was only a trickle of demand. The masses are not yet involved. The manipulation can last a long time, because the masses do not wake up until the price moves consistently higher. However, the manipulators have another problem, and that is running out of silver for industrial uses. Asia continue to develop, even in this depression.

You can play roulette with the shorting call, I will take my silver now. Any price < $50 is a bargain, if holding for 5 years.



> LOGIC???
> This is my last email. You don't take the time to pursue what I told you
> to
> do......LOOK at the waves, my friend, LOOK at the waves. There is "C"
> that
> is going to come down and hit what I already told you............in both
> gold and silver.
> End of LOGIC.

http://www.elliottwave.com/good-investments-for-deflation.aspx

He is not sure you will be able to get the metals later.

He said in other video that expects depression to bottom by 2012. So I guess he is looking at metals to soar after that.

Someone asked me about this article and the utilty of precious metals forward, versus just storing barterable items:

http://silverbearcafe.com/private/03.09/guninmouth.html

My current opinion is that precious metals should be your long-term capital storage. Buy it and forget it. You will come back to them some years from now, after the worst of the crisis has blown over. Personally I will prefer to have some of my PMs outside the USA, so they will be free of capital controls and to invest in any boom in Asia that follows this depressionary period. I expect the moneymasters to flip a switch and the USA will be closed off (but that might be years from now), and Asia will dehitch. In any case, PMs are not good short-term investments (due to volatility and spreads).

For the near-term, have 1 - 2 years of cash and/or a plan to drastically lower expenses if need be. And have enough food and water, even some extra to barter with so you don't have to barter with your metals and draw attention to yourself. You could use your metals to buy from those who have large supplies of food, then barter the food. Never go into general public markets with your metals.

Find income streams and siphon excess into long-term precious metals buried in the ground. Wait for the economic winter to pass.

Speculators will have other options, e.g. risk free profits from buy long bonds, as the Fed will probably take them down to 0% to counter this deflation. But at some point, you will get trapped. Precious metals buried can not get trapped in the same way, but also get trapped in other way.

In my mind, the least headache way is to stock up supplies, reduce expense, pile extra income into precious metals. K.I.S.S.

Do not expect to make money investing at this time. Just perserve your capital. Make money working and generating income. If no more income can be found, reduce expenses, or do both to extent possible.

Shelby wrote:
For the near-term, have 1 - 2 years of cash .

So you feel that hyperinflation is not likely?

cdavport wrote:

Shelby wrote:
For the near-term, have 1 - 2 years of cash .

So you feel that hyperinflation is not likely?

The whole world would have to go into hyperinflation also, or the USA would have to be cut off from the world by discarding the dollar.

So instead (for near-term until world strife kills the dollar), I see the world absorbing the inflation (lower cost economies that are very large in population), mitigating it from being "hyper", yet we will have inflation possibly severe stagflation (at least in inflation adjusted terms) worldwide

http://www.coolpage.com/commentary/economic/shelby/Inflating%20Deflation.html

What I mean is that developing world will continue to grow with inflation. Dollar inflation (debasement) will continue to be exported to Asia (thus deflation within USA of most assets and wages), until there is a break from the dollar by developing world, which I think won't be soon. In short, a continued gutting of the western economies, until there is nothing more to gut. Once the entire net worth of westerners has been drained into developing world, then the dollar can be cast off. Any stragglers can be locked in with capital controls. If the developing world dehitches sooner, then capital controls come sooner.

The cash should not be more than 10% of your net worth, if you have your expenses under control. Thus even 50% inflation would only affect 5% of your net worth, while the other 90% net worth goes up in inflation. The most Biblical thing to do I think is reduce expenses as much as possible (without affecting your production and income), so that 1 year of cash is a minimal amount. For example, buying up all the supplies you need, reduces your cash needs, which was the point of my last article:

http://financialsense.com/fsu/editorials/2009/0320.html

Rogers:

https://www.youtube.com/watch?v=NSYctW4-GdA&feature=related

BEIJING TO PITCH NEW GLOBAL CURRENCY; DUMP DOLLAR

http://www.drudgereport.com/

http://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html

Jeremy wrote:BEIJING TO PITCH NEW GLOBAL CURRENCY; DUMP DOLLAR

http://www.drudgereport.com/

http://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html

I suspect this will not lead to any concrete result at G20 meeting. I think this is postering for something later. I could be wrong of course.

I got off the computer and notice that Davao is booming. Condos, huge malls, new roads, 6% loans to anyone with a heartbeat for housing, etc..

The credit/inflation bubble will be re-ignited in developing world it seems. but based on what fundamentals? This is an agricultural economy right now. Seems to be turning Davao into tourist haven. Is that mis-allocation of capital? I think expecting a flood of filipinos from west to make the decision to retire back in their homeland and take their capital back out of the West. Plus a flood of Chinese and Korean investment coming in.

Shelby wrote:...I got off the computer and notice that Davao is booming. Condos, huge malls, new roads, 6% loans to anyone with a heartbeat for housing, etc..

The credit/inflation bubble will be re-ignited in developing world it seems. but based on what fundamentals? This is an agricultural economy right now. Seems to be turning Davao into tourist haven. Is that mis-allocation of capital? I think expecting a flood of filipinos from west to make the decision to retire back in their homeland and take their capital back out of the West. Plus a flood of Chinese and Korean investment coming in.

Seems gold has moved up too fast relative to commodities:

http://www.gold-eagle.com/editorials_08/saville032409.html


Either gold has to fall or commodities need to rise, or we are in the end game move for monetary issues. I say for now, that commodities rise is most likely.

Probably a good time now to buying food, oil, and perhaps silver as well. One might want to wait for a pullback on silver to 50 DMA in low $12s. Seems that the Central Banks will be successful at re-igniting another bubble in Asia, by monetizing the Tbonds.

Switch your focus to inflation, not deflation.

I do not expect monetary bomb now. There is still more blood to bleed from the dollar turnip.

Note that does not necessarily translate into a higher price for mining equities. I would rather have the commodity itself. As mining costs will also rise. Capex will rise (ouch!)

Shelby wrote:...[see prior post for chart]...Either gold has to fall or commodities need to rise, or we are in the end game move for monetary issues. I say for now, that commodities rise is most likely.

Probably a good time now to buying food, oil, and perhaps silver as well. One might want to wait for a pullback on silver to 50 DMA in low $12s. Seems that the Central Banks will be successful at re-igniting another bubble in Asia, by monetizing the Tbonds.

Switch your focus to inflation, not deflation.

I do not expect monetary bomb now. There is still more blood to bleed from the dollar turnip.

Note that does not necessarily translate into a higher price for mining equities. I would rather have the commodity itself. As mining costs will also rise. Capex will rise (ouch!)

Another Fekete blockbuster:

http://financialsense.com/editorials/fekete/2009/0330.html

But what about silver and commodities then?

The key is that the developing world (especially China and India) have very low GDP-to-debt ratios:

http://www.nationmaster.com/graph/eco_deb_ext_pergdp-economy-debt-external-per-gdp
http://www.frontpagemag.com/Articles/Read.aspx?GUID=FCE0277E-E958-4C95-A488-F4493A5DE495

The reason the West has declining marginal productivity of debt is because the government is hoarding all the capital and handing it out in military, welfare, and corruption. As the govt grows as a percentage of the economy, and as consumer debt is capital that leaves the country, then the marginal productivity of the debt declines. Asia has exactly the opposite situation, their govt largese has been decreasing relative to the rapid growth of the private sector (heck even entire highways have been financed in S. China near Hong Kong by Taipans), and consumer debt has been miniscule. And consumer debt increases in Asia will feed right back into Asia factories.

So I re-iterate to buy commodities (e.g. silver) but hold them outside the USA. The USA will fall into abyss soon of govt control and revolution.

Remember this! In 1920s the USA had a consumer bubble (Roaring 20s, Model T cars, new luxury, etc) financed by installment debt. Asia has no such thing! That is the key big difference between Great Depression and now.

The wildcard in my thinking is if Asia's govts are desiring to keep control and crush their own economies to do it. But the big difference between USA circa 1930s and Asia now, is that the Asias won't allow it. They will overthrow their govts if this huge youth bubble generation is not allowed to continue upwards. 100s of million of these youth have a college education. They will simply sidestep their govts, and if necessary they will riot. The youth of Asia are much more proactive than the decadent Western boomers. It is a bubble demographic force that did not exist in 1930s and can not be held back now. Buy commodities with confidence, but get your capital out of the USA unless you simply enjoy death by a thousand paper cuts. Another reason there won't be a new dawn in USA any time soon, is because the American people won't wake up until they have nothing (well they already have nothing and any serious move from the paper exits will flip on the capital controls and lock the corral). Asia is the opposite, after decades of being oppressed by their govts, the Asians are very astute and proactive.

I understand the issue of the difference in financial size of the economies, but afaik the raw commodities are not driven by financial size but by raw demographic demand.

I do not know if I will have time to rebut Fekete in public. He is correct about the West, but I think he wrong about the world as a whole. I would love it if someone would take the time to email him my comments and get his reaction.

I see that SGS inflation adjusted the oil price never did rise, even when it hit $150. The peak oil is another lie to lock believers into the corral, just as the concept of hoarding bullion in the USA is another way to lock Americans in the corral. Americans who wish to escape, had better redirect their thinking and fast. The door is closing on those in USA. What sent Germany and Zimbabwe into hyperinflation was the abandonment of their currencies by the world. The people in both countries wished they had got out while they still had the chance. The media have been concocting lies to get each sector of American culture to keep people paralyzed like deer in the headlights. Feed the peak oilers one lie. Feed the environmentalists another lie. Feed the gold bugs another lie. The only truth is the US dollar is dead man walking and get out of it and be prepared to invest your capital where labor is in over abundance. Or get trapped in USA and get taken down with the ship.

A wildcard is how does the world disengage from the dollar. In this case of ruckus transistion, one might prefer gold. If USA follows Germany and Zimbabwe example, then gold will be at much higher premium at some point, as people try to flee and escape capital controls. But that is only relative to dollars. Externally I think silver will outperform (although with volatility).

Fekete is correct there is (and will continue to be) deflation in USA of production, but this can be simultaneous (and actually helps cause) hyperinflation, as the world walks away from the dollar. It will happen in a very short period of time. The dollar will rise until suddenly the world walks away like a pin pricking a balloon. Then in a matter of days, all hell will break loose.

What they really discuss at G20 meetings (or at least the real thinking that goes on in the think tanks), is how to control the various populations of the various nations as they move forward. It is always about maximum raping of the people, but the realities of what people will tolerate has to be taken into account. The Westerners are going to get the worst, because the Western refuses to be international. He wants to homestead and thus is a sitting duck.

Shelby,

How does one move bullion without hassle to any destination from US. Mail it to destination point ie; Canada, Panama, Philipines, Swiss? Where is a safe place?

jack wrote:Shelby,

How does one move bullion without hassle to any destination from US. Mail it to destination point ie; Canada, Panama, Philipines, Swiss? Where is a safe place?

Imo, the best way to vote is with your capital and your feet. The ballot box is a sham.

GoldMoney.com, BullionVault.com, AngloFarEast.com are options, but in my opinion the PTB have you corralled once again, because your metal is stored in their vaults in Switzerland.

Very few Americans will actually make the effort to relocate internationally and start accumulting their investments and capital safely in their possession outside of the USA. Thus most people will just turn off what I have written. It can't enter their equation set of options, thus in their mind has to be not true.

If you come over to live in Philippines, I will hook you up. Surigao is similar geographically (except for climate and culture) to San Juan islands in Washington State. Gorgeous vistas, fresh ocean breezes, etc. I will not discuss this by phone or an electronic means. If you are willing to live in paradise at $1000 per month (or less if you live simply) and willing to pay a few percent of your capital to me, I will set you up over here with a nice life. Otherwise, I can't be bothered. Look at Argentina also. Subscribe to CaseyResearch.com Without Borders and start asking questions. Please share with me anything you find out.

Argentina residency is immediate and citizenship will cost about $3500 + $1000 per month, and takes 3 years to get the 2nd passport. You can live off the $1000 monthly. I already provided a link to the Uruguay depository which can handle imports from USA (search this forum). I listed all the fees also. I can refer you to reputable Columbian (English teacher) who can travel any where in S. America and help you will all your translation and needs. He will be your personal assistant for a minimal monthly fee. Have met him personally in 2001.

I have heard the real interior Mexico is still nice and no increase in crime. But citizenship in Mexico is impossible.

If you are over 50, Philippine retirement visa only requires a $20K time deposit (you get to spend the 6% interest) and you can take the $20K at any time you want to cancel. After 10 years (or 5 if you marry), then yuo can get citizenship. If you marry, you can get a residence visa more cheaply, no need for the $20K visa. I can source your gold and silver here for you, and you can buy and sell here. There is no limitation on exporting to China or any where else.

I would have to meet with you to learn about your requirements for living. I live very simply, so my lifestyle may not fit you. But I can find just about any level of lifestyle here for you, except you will have culture shock and climate shock (unless you come from Texas, then you will love the climate here). Some of the shock will be positive, but underlying will be a severe longing for what you were used to. It takes years to lose that longing.

God bless all.

I think the main danger silver bugs in USA face, is not to their personal safety, but to the ability to put their capital to work. It would be a shame to watch the silver bubble pass you by, because perhaps any selling in USA will be subject to a 90% tax by the govt (the entitlement majority will be looking to govt for help). I heard that taxes were that high in last Great Depression, and the income tax was only on rich then and have heard we need higher than that tax rates to fund the entitlement programs now. Then you end up selling silver at some future time (when normalcy returns to USA after a decade or so), you sell silver at no real gain inflation/currency adjusted. Celente is calling for a tax revolt by 2012 or earlier. As I said, the entitlement majority backing the govt, which is fighting against the 20% population revolution. How will you move $1 million of silver in the black market in that scenario? The govt will be fighting to block you at every possible border and exit point. How do you produce anything of significance on a farm or factory with the govt hiring millions of workers to inspect and block. The civilian army is coming too. Etc...

If you are unable/unwilling to pull most everything out of West, then I suppose I would buy gold (not silver, except maybe a little silver for wholesale barter, not public small transactions) and hunker down and try to have a self-sufficient basic survival option in a rural area. The more mountaineous and more rural, the better.

I am no longer in paper stocks and wouldn't mess with them.

i was watching Bernake testimony a couple years back when he was asked about the expansion of dollars (M3), his answer was that Americans don't realize this in regards to their spending in day to day life in the States. Now, he felt comfortable saying this because he knew the US was exporting inflation. I bring this up in lieu of Feketes new article and what his mistake is.

Fekete is pointing out what Bernanke already knows. What Fekete fails to mention is that this deflationary model rwally only appliese the

uS dollar as the reserve currency, making his theory possible. Yes, if you keep the dollars away from the economy, it will cause deflation. Well, this has already happened.

What he does not address is that inflation and hyperinflation are two completely different scenarios. Inflation is too much money chasing too few goods (economic). Hyperinflation is a lack of confidence in a currency (monetary), therefore creating velocity. Gold as a currency undermines the dollar, so yes it will be taxed to death to ensure that you must use the dollar.

Jack that is excellent post. Astute point that hyperinflation is monetary crisis (loss of confidence), and that the way to prevent it would be to tax gold and on the inflation prevention side to use subsidies and rationing. And I will just remind that the reason the dollars are not reaching the US economy is not only because of bank corruption, but also because it is being fed to entitlements where it gets wasted on unproductive activities (a lot of drugs for example), which then gets siphoned out of the productive economy or to imports.

Also I want to say that anyone that wants me to vault silver and/or gold for them in Asia, I can do it for you and at a facility that has full security and is a regular refinery of gold and silver. Your metal is then exportable to any where in world, and is saleable back to cash, and wireable back to you. I need to paid something for my efforts, but it is doable. I am doing it for myself also. My email: antithesis@coolpage.com

That is a hassle free way, but don't expect to given the level of insurance of GoldMoney.com. But then again, I think GoldMoney's insurances could end up useless, because they require you to give your complete tax id and identity and so the US govt may know exactly how much to tax you and take it away from you. I am not saying you should hide wealth against the law, which is why I am also suggesting you get a 2nd citizenship, because remember the US will have the power to require it's citizens to report all their assets every where in the world.

Again I will participate in no money laundering activity. All funds must be certified by you to be clean and legal. But we will keep these dealings very private and low key. This is how people that you read newsletters from are protecting themselves. They do low key things "between friends".

Anything big will be targetted by the govt. The govt has declared war on the people who want to be non-slave. So keep that in mind, when you are sorting through your options. Also here is another link you may find useful:

http://www.sovereignsociety.com/ASSETPROTECTION/SECONDPASSPORTSANDSECONDCITIZENSHIP/tabid/76/Default.aspx

http://www.europac.net/report/reports/report_faber.pdf

p.6

Marc Faber explains that Japan had a 12% savings rate, so when assets collapsed, even though wages didn't rise, the houses became more affordable and the citizens standard-of-living increased. Whereas, in USA savings rate was negative and people were using their houses as credit cards, and thus govt is keeping housing prices from falling and the people are too indebted to allow anyone to benefit from falling asset prices.

So the USA experience will be much different and worse than Japan. The USA is heading into a war between those without capital (large % of population) and those with (outnumbered). Anyone with capital choosing to keep in the USA, is in denial of the facts.

And as we pointed out in the prior posts, the developing world has a high savings rate, unlike the USA in 1920s which had a huge 200% debt-to-GDP ratio by 1930. So the coming result will be unlike the Great Depression for developing world.

So then Marc Faber says that any recovery will entail very high interest rates. I am not sure if he means in West or in developing world? Okay let's review the logic, including the correct logic from Fekete about the perpetually falling interest rates for the dollar (until dollar dies). First, the reason low interest rates were possible is because there is a huge over abundance of labor (a form of capital) in developing world, which instead of being allowed to grow productivity at it's maximum rate, was managed by currency pegs, migration limitations, and other controls, such that the stored capital (technology, gold, silver, commodities) of the West was exported to developing world with a model that kept interest rates very low in West and reasonably high in developing world. Essentially, the interest rates were low in west, because there was an exodus of real business opportunity in West, and thus no competition for capital. And interest rates were high in developing world, because there was huge competition for capital. This polarization was kept from blowoff and rapid annealing, by the barriers and controls mentioned above.

Interest rates are continuing to fall in West, because there is no business opportunity in the West. Demographic decline, asset correction and most other business opportunity is obstructed by the govt (an indebted and ignorant populace). But temporarily at least, the interest rates are falling in the developing world, in order to offset the consumer demand lost from exports to West. But it won't take long for the competition in the developing world to heat up and then interest rates need to rise in the developing world, otherwise their economies will overheat with wasteful expenditures and massive commodity inflation.

So Faber is correct, interest rates will go up, but not in West. They will go up in developing world, along with a renewed commodity boom, and inflation. HS Dent showed that inflation always results from boom bubbles in the youth demographics moving into mature workforce age (30s), which is exactly what is happening to the developing world. So you want to get your capital positioned outside the USA and into inflation hedges and commodities. Peter Schiff is correct on the long run.

Fekete is correct about the interest rates in the West. They will continue to decline perpetually, and each halving of the interest rates will never reach 0, yet will indebt the West with a doubling of the liquidation value of the debt (i.e. hyperinflation is the only way to exit dollar, or some totalitarian force with rationing to keep people locked in to failure). In short, the West is going to borrow until it dies. The govts will borrow from the developing world, until the West is blead to the bone of every last bit of stored capital. If you have capital and you don't agree with this, you better get your capital out of the West, because the West politics and situation is cast in stone now. And do not think that countries in Europe are better positioned, just go look at that debt-to-GDP ratio link in my prior post yesterday in this thread. Germany, Switz, France are all worse than USA. Maybe that is govt debt and maybe the personal debt situation in Europe is better?

As for timing, I don't think it will take 10 years. I think over the next 2 years, you will see developing world pulling out of this and pulling away from the dollar. Then by 2012, you will total chaos and war within the USA. This is what Celente and Doug Casey are predicting as well.

This is not a joke folks. You need to bite the bullet and stop making excuses about your anchors in the USA, and position yourself for the facts. I was also trying in vain to stop this reality, but I finally realized that the forces of reality were too strong for any of us to overcome. Ride the wave, don't dare try to swim against this one. This is the tidal wave shift in global economy coming. Anyone with capital in USA, will be lose it and be trapped for a lost decade.

The only possible wildcard is if the developing world govts suddenly clamped down on their own people. Ain't gonna happen. Migration is continually increasing over here, private enterprise always increasing, etc. Yes govt is learning to tax (especially in cities) and the govt is preparing to grow fast at some point in future govt will smother the private sector in developing world, then we will be at 666. And it will happen faster than it did in USA, just as USA empire was faster than Rome. But for at least a decade, you will see the youth bubble of developing world asset itself and outpace the govt growth in developing world. Ironically, Hommel's prediction of a long rise in the silver (commodity + monetary) value and period of 30 year prosperity followed by completion of 666 is apparently correct, but the part he apparently got wrong is he refuses to be international (I tried to talk him numerous times since 2006 in helping me, help everyone diversify their silver internationally and he was dead set that people should bury it in their homesteads).

Now is the time to be the contrarian and buy commodities. Very few people can see the facts above. You have the wisdom now act on it. But remember any option that has you investing through Wallstreet or any other mainstream proxy, is going to rob you blind. You actually have to go to the developing world and to the real stuff on the ground. I wouldn't trust any proxy, such as currency markets, stocks, futures, GoldMoney.com, etc. Hey you didn't think it was supposed to be easy and hassle free to make money did you?? Be realistic.

The USA and dollar will end in some mix of totalitarianism/communism (price controls, rationing, tax to death) and/or hyperinflation (if people flee the dollar successfully). The USA is going to be a battle zone. There is a reason Doug Casey says migrate to Argentina and watch the fireworks on CNN.

I had much of this figured out in 2006, but you know a lot of noise to sort through (and work on Miningpedia, etc, that got me misdirected) from analysts who don't have the complete picture:

http://www.coolpage.com/commentary/economic/shelby/Inflating%20Deflation.html

http://www.augustreview.com/news_commentary/global_banking/special_alert-looming_u.s._exchange_controls_20090330116/

Do not spare any expediency in getting any money out of USA that you will want out!

There is an option to turn off the newsletter in your forum membership account control panel.

I probably won't be sending any more newsletters, as there isn't much point.

I have been waiting all week to read what SRSrocco is promising to write about in the Hommel forum, regarding how to prosper in this coming time within the USA. I want to see if he has any scenarios or ideas that I haven't thought out. As I understand his philosophy, he believes the USA must return to local production, due to forces of economics and peak oil. Well I think peak oil is nonsense, and the PTB are simply trying to kill oil (as plentiful and cheap enough to support decentralized living) and move the people into cities with nuclear power and centralized energy paradigms as much as possible. Besides, I don't see how the small rural hamlets plays out realistically. Roving starving masses could render that unsurvivable. Rather the govt will provide for those in the cities. Everyone will be drawn into the cities for survival and dependence. We will receive aid from China in the cities.

Either the current crooks will back down with mass uprising, or I am correct that majority is too far indebted to be pull their own bootstraps, and will side with the govt aid. In which case (near certainty), you are going to see (rather subdued or muted) "war" in USA which crushes the "revolution" (the minority who want capitalism). I would prefer to watch it on CNN from abroad.

It is really pointless to spin the wheels on bullion ownership, when the entire nation will be walled off and rot in fascist socialism, fully supported by a dependent majority. It seems so familiar to what little I know about Wiemer Germany, in that the people were unable to choose any other option due to the economic hardship of the WW1 reparations, then as Hitler (charismatic leader, a "harmless" painter) came to power people first become intoxicated in their own emotion of illogical hope (nothing to support that hope other than desperation), and then later people went into further denial ("ah but he isn't targetting me"). Eventually the system came for everyone and destroyed everyone, but it happened in such stages as above and seems like the USA is on a very similar path and circumstances.

I doubt it will reach genocide, rather Bush already told you the outcome,. "you are either for us, or you are against us". So 15 - 20% will be against and will be exterminated. Not quite a genocide, but horrific nonetheless. However, I lean towards the outcome that not many of these 15% will be put in concentration camps, nor killed, but rather will wise up and lay low. I see higher probability of a much more muddled form of fascism, because the resistance will not be that great, because Americans are old. The young generation is compliant to the socialism.

So when Jesse Ventura says "don't start the revolution without me", I say "what revolution?". It will be a whimper for the most part. Most of the anger is diffuse on many side emotions, e.g. "immigration", etc.. This will be grumpling under the breath for the most part, not proactive revolution.

The silver and gold bugs will bury their metal for a long time or hand it over the govt in the form of very high capital gains taxes, and further taxes on anything they reinvest in with proceeds. Capital will be trapped inside a rotting socialism economy for decades.

I can relate to the older age phenomenon. I am worn out from trying to find some way to battle that tidal wave. I feel lucky that I am already outside the USA and apparently have an option to move my capital outside safely (still not sure yet). I see that most people simply have to tune out from this message, because it simply not workable for them, especially at their age. And again, I point back to what happened in Weimer Germany, in that the result was caused by people having not other realistic options and delaying their flight to the end. At the very end, afaik only a few escaped with gold carried out.

What are the other possibilities? Could the a small force of 15% cause change? Well not as long as they are spread out all over the country and divided and wasting time on nuismatics and small bullion premiums, stocks and other trivial nonsense. If these people gather into one state of small population, and were then a force that could enact a state's rights and stand up the Federal govt (force the constitutional issue of a republic), well then we would have a real revolution and war. Develop a state bullion currency with sufficient economy-of-scale to render the premiums naught. But who is going to fight? You guys are mostly older than me, and I barely young enough to physically fight. My physical strength is declining (mid 40s).

Any other realistic possible outcome?

I really don't see the masses doing anything other than support the govt, because they are dependent. Those will any wealth have to convert it to non-paper and move it out of the country, or be consumed by the tidal wave trend.

The youth will support this because they have no capital, and the new order will enable them to travel abroad under Chinese sponsorship and have an "exciting international job". Or be involved in some "community service" govt job domestically. They will be not as free as we were, but they wont know or care. As long as they have their TV, computer, and cell phone, they will be contented enough.

The govt (majority) seems determined to outlaw small scale farming and survival modes. The majority simply won't tolerate capitalism or decentralization. The black hole of dependence and centralization must suck in everything until it kills itself (Revelations precisely).

Weee, 666 here we come:

http://finance.yahoo.com/news/Meltdown-101-What-G20-leaders-apf-14842134.html;_ylt=Ap1za7IGfV.kZx5Lgp9OuHW7YWsA?sec=topStories&pos=9&asset=TBD&ccode=TBD

...WHAT THEY SAID: "The era of banking secrecy is over."

WHAT THEY MEANT: The G-20 agreed to work together to shut down global tax havens where investors hide their assets, depriving their home countries of billions of dollars in tax revenues. However, remains to be seen whether small countries that have benefited for years by operating such havens will respond to the increased pressure for more transparency...

Think AngloFarEast.com 's numbered accounts system will be able to stand up to this pressure? You think GoldMoney.com won't end up being forced to comply with US taxes if you are a US citizen? You think that bullion in your house can ever be traded back for any thing without being taxed?

http://jasonhommelforum.com/forums/showthread.php?p=51537#post51537

Steve, I agree that reducing visibility and simplifying ones daily needs is one of the best defenses. That essentially what I am planning to do in Asia.

I also agree that city might be "safer", but in a zombie/control/draconian sort of way that would make me prefer to ride it out in rural setting. Also I am happy to read you are at 6500 feet. I thought you had written previously, that you were at base of a mountain. I think the higher the terrain, the better you natural defense, because humans follow laws of natural efficiency and will pick the low hanging fruit first. Be careful, your location can be traced via your IP address.

Do you or anyone know anything about growing fish in a pond using waste product of animals for feed?

Shelby - Here is some regarding feeding animal waste to fish. It should be relevant to your tropical situation in the Phillipines.

2.7 FEEDING ANIMAL WASTES TO FISH
Intensive fish cultures, although a relatively new development, are rapidly expanding in developing countries. Feeding animal wastes to fish is an old practice; and the mechanism of manurefish recycling is illustrated in Figure 3.


Figure 3 — Manure-fish recycling

Table 72
RECYCLING PIG WASTE TO CATTLE AND PIGS

Species/classes Average annual feed consumption
(kg) Level of pig waste fed Estimated number of pigs required per animal1
% kg
Dairy cow 5,110 10 511 3.5
Beef cow 4,380 30 1,314 9.0
Beef finishing (i) 2,550 15 383 2.6
(ii) 2,550 20 510 3.5
Growing cattle (200 kg wt.) 2,190 15 329 2.3
Pig, gifts 913 25 228 1.6
growing pigs 730 15 110 0.8

1 Assumes 146 kg of pig waste (DM) per year.

New advances indicate that by controlling the rate of inflow of nutrients from animal wastes, it is possible to achieve optimum conditions for fast-growing fish in warm climates. Tropical and silver carp, catfish and Tilapia are the most popular, and their potential for utilizing animal wastes is enormous. Thus, for example Durham et al. (1966), who fed catfish in heavily overstocked ponds, replaced 50% of conventional feeds (grain and cottonseed cake) by feedlot manure. Ponds stocked with almost 60,000 fish per ha produced annually a net gain of 8.25 tonnes of fish biomass. There was no difference between yields from conventionally fed ponds and fish fed rations with 50% feedlot manure. Meyers (1977), in intensive aquaculture in Israel, fed cattle manure into fish ponds at daily rates of 250–400 litre/tonne of fish biomass, increasing fish production ten times (from 0.5 tonne to 5 tonnes per ha).

Other experiments of Meyers (1977) involving the use of cattle manure supplemented with chemical fertilizers are summarized in Table 73. The yields of common carp and Tilapia indicate that the potential of livestock manure in fish production is of great magnitude.

Table 73
GROWTH OF FISH IN MANURED PONDS1
(110 days)

Parameter Unit Common Tilapia Silver carp
Stocking rate No/ha 5,000 6,000 500
Initial size of fish (g) 20 50 30
Size of fish at harvest (g) 500 300 800
Total amount of harvest (kg/ha) 2,500 1,500 400
Calculated harvest per year (kg/ha) 8,295 4,977 1,327

1 Manure added five times per week, supplemented with superphophate (20%P) and ammonium (20% N) at 60 kg/ha/2 weeks.

Source: Meyers, 1977.

Meyer's research showed that about 45% of the cellulose decomposed within 2 weeks and that the celluloytic activity correlated positively with the increase of bacterial biomass.

Catfish cultures are also becoming very popular in the United States. Maximum gains of catfish are at 30°C, but good results are also obtained when the temperature varies between 26 to 34°C. Countries with tropical and subtropical climates have, in this respect, a great potential. Typical examples are Thailand and Philippines, where catfish production is integrated with livestock generating manure as the only source of feed for fish (see Section 2.1.4.1).

The nutrient requirements of catfish are generally much higher than those of broilers, and the high nutrient content of livestock manures can offer even more as fish feed than as broiler feed (see Table 74). The cost of these nutrients, which can be just the manure alone, is virtually zero. Moreover, the feed conversion ratio is similar in both fish and broiler feeding (1:2.5), if not even better for the fish species.

Table 74
NUTRIENTS REQUIREMENTS OF BROILERS AND CATFISH,
AND NUTRIENTS IN ANIMAL WASTES

Constituent Unit Nutrient requirements Composition of animal wastes (range)
Catfish1 Broiler2
Crude Protein % 25 23–18 18 – 42
Calcium % 1.4–1.5 0.9 0.6 – 8.0
Phosphorus % 0.9–1.0 0.7 0.5 – 3.0
Methionine % 0.52 0.52–0.32 0.2 – 0.6
Methionine+Cystine % 0.85 0.93–0.60 0.6 – 1.0
Lysine % 1.33 1.20–0.85 0.7 – 1.3
Arginine % 1.48 1.44–1.00 0.8 – 1.9
Tryptophan % 0.3 0.23–0.17 -
Threonine % 0.5 0.75–0.56 0.6 – 0.9
Valine % 0.5 0.82–0.62 -
Vitamin A IU/kg 22,000 1,500 2,000–15,000
Riboflavin ppm 9 3.6 4 – 12
Pantothenic acid ppm 28 10 12 – 28
Niacin ppm 124 27 40 –120
Choline ppm 1,537 1,300 -
Vitamin B12 ppm 23 9 100 – 1,000
Folic Acid ppm 0.64 0.55 -

Sources:1 Deyoe and Tiemeier, 1968;
2 NRC, 1977.

lllinois scientists (Buck et al., 1976) were apparently the first to utilize some Asian fish culture techniques in the USA to solve problems of animal wastes management, pollution control, and protein production. Their experiment was carried out in two ponds of similar size with nearby identical stockings of four Asian fish species and three native American species with differing amounts of pig manure. The first pond received the total waste from five growing pigs (about 39 pigs/ha of water area), the second pond received the waste from eight pigs (66 pigs/ha). The net increments in fish biomass over 170 days period were 2,971 and 3,834 kg/ha in the two ponds. The authors attributed the high fish biomass yield to the high plane of pig nutrition, a fortuitous choice of a fish stocking ratio, and effective water level management.

According to the estimates of Thai farmers, one pig generates enough manure to support the “direct feed” requirement of the fish, while the water-soluble inorganic nutrients of the manure fertilize the ponds, thus supporting the growth of algae, bacteria, and lower and higher aquatic plants.

From calculations obtained from Kamchai (10,000 pigs) and Praves (4,000 pigs), it appears that the manure from one pig produces about 20 to 38 kg of fish biomass per year. In Philippines, Eusebio (1976), in a small pilot pond with a closed recycling cycle, achieved 32.6 kg of biomass per pig at a somewhat lower production per area (587 kg/ha). The usual yields of fish ponds in Philippines and Thailand are about 1.2 tonnes/ha, manure being the only source of feed and nutrient supply for photosynthesis of aquatic plants and bacteria.

Some farmers in Asia build poultry cages or pig pens on a wooden platform above a fish pond; poultry or pig manure (or both), together with spilled feed, fall directly into the pond, where it is consumed by the fish. This system is very practical: no cleaning of poultry and pig house is necessary, and poultry or pigs situated above the fish pond enjoy an excellent air circulation which has a significant cooling effect for laying birds, particularly sensitive to heat stress; the same applies to pigs. This system, in terms of livestock waste management, increases the profit derived from fish and totally eliminates the pollution problem.

It is estimated that one laying hen (or weight equivalent of other classes of poultry) will produce enough manure to generate about 6–8 kg/year of fish biomass.

It can be concluded that fish cultures are an excellent outlet, closing circularly integrated recycling systems without further pollution discharge. This is even more true when fish ponds can be switched over to cropping every second year, a system quite commonly used in Asia. This practice supports both high production of disease-free fish and high crop yields.

Manure derived from individual, confined livestock species (annually) can support the following annual production range of fish biomass:

Manure from Fish biomass production (kg)
One dairy cow 100–220
One beef cattle 90–160
One sheep 10– 17
One pig 15 – 40
One laying hen 6 – 8
One replacement bird 4 – 5
One broiler 3 – 4
One turkey 7 – 8

The conversion ratio of manure to fish biomass is related to numerous factors, particularly the fish species, climatic conditions and pond water management.


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