Zeev's Turnips Patch-No Politics (ZEEV)

[valuepump]

Train wreck of the week...

by Bob Chapman...


We do believe we are in deflationary times, but elitist mouthpiece Sir Alan Greenspan has told us he will inflate as long and as much as he has to in order to fend off depression. Thus, we are faced with hyperinflation as the elitists grope to find a way out of their financial morass. We are about to enter Weimerland and right after that is over we enter a depression, worse than the 1930s. That will be followed by civil war or revolution and the termination of the elitist conspiracy. All this agony will bring $3,500 per ounce gold prices. All this, of course, will be accompanied by a dollar that will fall 70% or more. The euro and Swiss franc should do very well versus the dollar in relative terms. The biggest holder of dollar asset debt is Asia and the Middle East, both of which will take mega losses. Oil producers Mexico and Venezuela will take losses unless they switch to euros, Swiss francs and gold Needless to say, all of this threatens the entire world economy and if you throw in derivatives for good measure you have an ultra toxic brew. China and Japan alone have $600 billion. That figure could become $1.2 trillion in just another year. They can enjoy screwing the US and European markets now, but they’ll lose 70% of their dollar gains if they don’t bail out now. We are very skeptical that China will adjust their dollar currency peg. They’ll go down in flames as will Japan. The Plunge Protection Team will do as it has been doing, rigging the markets, but in the final analysis they’ll be losers. They have already begun losing control of the gold market. The current account balance can only worsen as the dollar weakens. As import prices rise, gold rises, the dollar and the market falls as interest rates rise. Once foreigners stampede for the exits and dump their dollar-based assets it will be like a cascade as gold jumps $50 a day. The market distortions will have the professionals in shock and investors in panic. Stick around; it will be very exciting and very nasty.