Note: A chart example of what else we are up against: A Return of OIL Prices
Banks, given trillions stolen from the taxpayer, are using their ill-gotten fiat to speculate in markets using quant computers and insider information, neither of which the taxpayer has access. Nor do they have access to national level politicians, their contributions simply are not as large. Thus, the banks hoard their trillions while cutting off lines of credit to the very taxpayers who bailed them out. What lines are not cut are charged 30% or more, rates that the Godfather could only dream of.
The consumer knows that credit is tighter than it was before. I’ve been saying all along that total money and credit are contracting, that the world of derivatives and leverage is contracting despite our government’s best efforts to flood the system with money. While it’s difficult to see the overall shape of the shadow banking world, clues can be found when digging. Again, I point to the OCC reports showing that JPM notional derivatives have shrunk by some $10 TRILLION in the past two years despite acquisitions. The OCC reports overall growth in derivatives, but that is only because investment banks, speculators like Goldman Sachs, applied for and were granted status as a commercial bank (to gain access to taxpayer money).
So, we have the money supply increasing, government debt skyrocketing, but that is more than offset by the shadow banking system and falling overall private credit. Today I’m going to show you the real dollars behind the collapse in consumer credit along with how that is affecting the securitization of that credit, this being but one small piece of the derivatives and credit (debt) world.
Yesterday, a $14.8 billion contraction in consumer credit was reported for the month of September. That translates into a contraction at an annual rate of 7.3% for the month, 6.1% in the third quarter, which follows a 6.6% contraction in the second quarter. Revolving credit decreased at an annual rate of 10 percent, and nonrevolving credit decreased at an annual rate of 3.8 percent.
It would seem that never ending growth has ended. Keep in mind that the consumer and their spending represents 70% or more of this nation’s economy.
LINK HERE
Prepare for the Great Depression.
Survival Seeds
Received my Citibank letter yesterday. My rate goes to 25% unless I transfer more debt to Citibank.
ReplyDeleteAmex cut my line of credit in half last month.
Doesn't effect me because I pay in full each month but clearly something is up my credit score is over 700 and I carry no debt.
We will hover in deflation a little longer. Companies have not cleared out their inventories yet. It should be over by the other side of holiday shopping. Then mass bankruptcies, for lease signs galore.
ReplyDelete@ 3:29
ReplyDeleteThat is correct!
Deflation is about to rear it’s ugly head one last time AND IN A BIG WAY. Next year the abysmal Christmas sales and the commercial real estate collapse is going to be the biggest boat anchor on prices similar if not worse than the crash earlier in the year. I wouldn’t be surprised if we see DOW 5000.
However, this will be your last opportunity to buy Precious Metals cheap. DON’T get suckered in now. Your buying at or near a top. Those people suggesting $1500 to $2000 Gold are correct in the Medium to Long term but NOT in the short term.
I expect a contraction of EVERYTHING early next year. Well, actually there will be one thing that wont contract and that is the money supply. Also, expect higher interest rates too. Think 1979-81 but not quite yet.
Watch and wait for the big buy opportunity.
Your comments are intriguing 4:54.
ReplyDeleteEveryone likes a bargain. I wouldn't count on it 100% though, I'd still have some gold, silver, etc, NOW just in case you are wrong.
OT: If anyone has bought any of the freeze dried food advertised please comment. I have bought Mountain House, Shelf Reliance and some brand names and looking for a better 'generic' deal on bulk freeze dried food.
ReplyDeleteFreeze dried food is great - long shelf life and no worries about freezing (stick it out in the garage).
@8:49
ReplyDeleteI agree everyone should have Gold and Silver. I just think right now we are a t a short term top.
Now that being said I in NO WAY would expect Silver to test its lows of the $8-$9 range. Those days are long gone. If you didn't get any at that price you will NEVER get it ever again at that price.
However, I can see a modest retrenchment of say the $13/oz range which would be a bargain considering the situation we are in.
I would even go as far as suggesting to take a "fixed" rate loan out to buy precious metals at that point. Your ROI will be greater than the interest you would have to pay.
Two comments. When I saw the graph of oil at 1000 barrel, I thought to myself, that could be the dumbest graph I ever laid my eyes upon. There is no way that oil will go to $1000 per barrel. Even with the dollar being super weak oil is not going up that much. It is having a hard time getting, and staying, above $80. In my lifetime (another 40 years) we will probably not see oil go above $200/barrel. In fact, oil has a better chance of going back toward $20/barrel than $1000. This graph is sheer stupidity and just shows the audacity of how someone who has access to Powerpoint can get themself on the web.
ReplyDeleteThe second point is aimed at the comments from 11/9/09 at 9 AM. One thing I learned at a young age is to never use the never. Silver and gold will eventually come crashing down again. If you think you have some investment that is immune to cyclical flows than you must not be that good of an investor.
Hundreds of stocks are providing a better return than gold or silver.
Take your profits on gold and silver. She is starting to crumble...Below $1100 now.
ReplyDeleteHold your gold, Headed to $3000.00 plus soon, when the dollar collapses, coming soon silver at #17.44 Headed to at least $200.00 an oz hold it and be rich in the future.
ReplyDelete