Here’s the post that definitively woke me up this morning, accompanied with more news reports of more riots around the world in between the rock music playing on my favorite radio station. Mike Krieger at KAM PL is the author, and the article is published as a guest post at http://www.zerohedge.com. I’ve been posting similar commentaries myself over the last few years, but as usual I tend to get a little ahead of myself as everyone else is shaking their heads, singing the same old song; this time its different. But don’t think for a second that I feel any kind of “I-told-you-so” complacency. In fact my frustrations over politicians, journalists, economists and bankers have only turned into sadness.
“My generation is coming into its own and we don’t buy the bull shit of our parents’ generation. We don’t believe in Democrat or Republican. We don’t believe in the system itself. We will be the ones making the decisions going forward. We will default on the astronomic promises our parents made to themselves. We will create an entirely new monetary and financial system.”
“When first I mentioned the food riots in Tunisia and Algeria in my note two weeks ago the former authoritarian leader Zine al-Abidine Ben Ali had yet to flee to Saudi Arabia with much of his nation’s gold. What I find so amazing about this whole situation is why someone in their right mind would take the time to take some shiny little element that is in a bubble and that you can’t eat in the chaos surrounding one’s escape to another nation. Surely he has hidden foreign bank accounts and since gold is just another “fiat” currency according to a Wall Street strategist, why bother?”
Back to the food situation. When I say that we are in Phase Two I am actually not referring to the simple fact that a leader with a 23 year rule under his belt was deposed in weeks seemingly out of nowhere, I am referring to the actions that are being taken and will be taken all over the world in response.
As I have said time and time again, government’s today throughout the world could care less about their citizens. When they show signs of caring it is merely to satiate the people back to sleep so that they can stay in control. The leaders of governments throughout the world today consist of the worst humanity has to offer.
The most egomaniacal, narcissistic specimens on the planet (with some exceptions of course, Ron Paul for one). They care about power and maintaining it. So what does this have to do with food? A lot. I have stated in the past that we are in revolutionary times. The system that has existed for most of our lives (all of my life) is crumbling under its own weight of insanity, immorality and fraud.
The last ditch effort by the global elites has been to flood the world with money and make sure nothing they are invested in ever fails or defaults. This bought them a little time and their hope was that rising asset prices would boost confidence and lead to a recovery that could maybe keep this scam monetary system running for another decade or two.
The problem with this strategy is that we are in the Fourth Turning.
My generation is coming into its own and we don’t buy the bull shit of our parents’ generation. We don’t believe in Democrat or Republican. We don’t believe in the system itself. We will be the ones making the decisions going forward. We will default on the astronomic promises our parents made to themselves. We will create an entirely new monetary and financial system. Real free-market capitalism will flourish, not this socialism for the rich garbage Obama loves so much. We will focus on doing good while doing well. Not because the government forces us to, rather because we are witness to and victims of this sick, twisted creation of our parents generation that celebrates total greed without the slightest concern of the consequences to others.
With this as a backdrop, the leaders of all nations are scrambling to somehow survive in their positions through this time period. What is happening across the emerging world now is countries that had increased prices for food and energy are reversing policy. Countries such as Saudi Arabia are bidding for world grain supplies.
Think about this for a minute: What this means is that what is being employed around the world at a time of global crop failures is essentially price controls. What happens when you have price controls? No elasticity of demand. What does that lead to? Even worse supply/demand imbalances and ultimately food shortages and everything goes to the black market and farmers stop planting as much.
So what we now have is the very beginning of a food price spiral that will lead to prices in dollars at unimaginable heights. I would start to be very careful of the quality of food you buy and where it comes from. I assume companies will start mixing in all sort of fillers and garbage into their foods. Especially in emerging markets looks for increases in tainted or corrupt food supplies.
This will also affect oil prices and they should move substantially higher. While people still quote WTI as the oil price and claim it is down, this is total and complete nonsense. Nobody pays WTI prices. Brent is $98/b and Asia Tapis is $101.50/b. Anyone that is telling you oil prices are moving lower are either lying or don’t know what they are talking about.
For example while WTI is down 7% from recent highs, gasoline is down only 4% and heating oil is at the highs. Do you pay WTI or do you buy gasoline?
There is also this idea that OPEC is going to come out and save the world by boosting production. Good luck with that.
First of all, OPEC’s true spare capacity number is highly debatable and I am in the camp of those that thinks they do not have control over the market at this point. Banana Ben Bernanke does.
Secondly and most importantly these Arab nations are short food and we are in a food crisis. They are also amongst the most vulnerable governments to overthrow. You think for a second that they will crash oil as food prices are soaring? Oil is their currency. For what it is worth I think many of these regimes will be history within a year. Then the Western governments will fall one by one.
This is the Fourth Turning. There is no point trying to stop it, the only thing you can do is prepare. There is precious little time left for that.
US Treasury Bond Holders Will Never Be Paid
Remember the old saying, “if you don’t know who the sucker is in the market, you are the sucker.” Well ladies and gentlemen if you own U.S. treasury bond you are the sucker.
There is one way these things will be paid back. With completely worthless pieces of paper, OR not paid back at all. The one thing linearly thinking investors are not appreciating right now is that there is a gigantic awakening occurring in the United States that will develop into a successful and peaceful revolution.
The new leaders that will emerge will consider this debt illegitimate as I do personally. It will not be paid. Think it can’t happen? Watch.
Meanwhile, looking at the chart of long-term treasury yields what we see is a coiled pattern where rates have been in a tight range ever since breaking to the upside in early December. I think these rates are about to break hard in one direction and I think that direction is higher.
When I looked at the commentary from the Fed yesterday and I saw this line “expectations have remained stable, and measures of underlying inflation have been trending downward,” all I could think was if I was a bond investor I would just say “alright I have had ENOUGH.” I think that some of the biggest moves ever in the history of financial markets could be coming within the next 1-2 months. I would focus on treasuries and precious metals.
While the 20th century was a brutal and violent one, some amazing things happened. Two prophets, Martin Luther King Jr. and Mohandas Gandhi we able to usher in a period of tremendous social justice for their respective causes through non-violent means.
We are now entering a time where the people (completely and totally sold out by their leaders and masters at the banks) must exercise civil disobedience and non compliance with an evil system. Fortunately for us, the most effective and powerful means of this I can think of is completley legal and consists of buying physical silver and taking possession.
Although the comex paper silver price is showing a drop, this is not reflected in the physical market which is tight as a drum.
Many major dealers are sold out of product all over the world and the U.S. Mint recently stated that they sold 4.7 million silver eagles in January alone, a new record and the month isn’t even over.
If you do not like the way the banks and politicians are robbing you blind in broad daylight buy physical silver and take delivery. I think it is abundantly clear that the raid on the comex silver market is a desperate attempt to shake out some supplies since the actually physical market is being depleted rapidly.
One of the irrational “fears” out there is that the Fed will somehow tighten rates. Get out of the emotional brain for a second and into the logical one.
The Fed funds rate is 0-25 basis points. The two-year treasury yields 0.60%. If the Fed raised rates even to 0.50% with the two-year note at 0.60% total and complete chaos would ensue and the government wouldn’t be able to deal with the rising costs of debt service. It is just not going to happen. They will print and print until the whole corrupt house of cards crumbles to dust.
V for Victory
We are in revolutionary times. The new generation will not accept the Federal Reserve. We will not accept feudalism by an oligarchy of banking criminals. We will not forget the Constitution. We will not accept SDRs or any global fiat currency. We will not accept global government or “governance” (sounds so much better doesn’t it).
As I went to grab dinner last night, I noticed V for victory posters plastered all around downtown .
Go Boulder we are winning the infowar!
Turn off the tv and think for yourself.
By Mike Krieger
Well, if there’s gonna be another revolution, I hope it will be a green one.
(All graphics in the post are available for sale at www.urbanmist.com)