The Harry Schultz Letter (HSL), which accurately predicted 2008's "financial tsunami," is now reporting a very frightening rumor:
Some U.S. embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of U.S. cash to purchase currencies from those governments, quietly. But not pound sterling. Inside the State Dept., there is a sense of sadness and foreboding that 'something' is about to happen ... within 180 days, but could be 120-150 days.
Sound crazy? Maybe. But it's not nearly as crazy as believing TARP, and the rest of the "stimulus," would do anything other than cause great economic harm. That's for sure! And yes ... it is only a rumor (as far as I can tell), but under our present economic circumstances, it's a rumor that makes a whole lot of sense!
HSL's suspicion:
Another FDR-style 'bank holiday' of indefinite length, perhaps soon, to let the insiders sort out the bank mess, which (despite their rosy propaganda campaign) is getting more out of their control every day. Insiders want to impose new bank rules. Widespread nationalization could result, already underway. It could also lead to a formal U.S. dollar devaluation, as FDR did by revaluing gold (and then confiscating it).
Why:
The world is staggering today between stagflation and net deflation right now; it varies widely around globe. Net deflation is a maybe 35% risk, due to toxics and/or deepening depression. Bit more likely, we'll slowly creep up to a dangerous 4.5% inflation on average, medium-term. But the wild card is the currency risk, which has a 50% (?) chance of boiling over and causing literally overnight (i.e. 24 hours) mega inflation in the asset markets.
Bob Chapman's influential International Forecaster is reporting the same thing. So again, it may be only a rumor, but I suggest you take it seriously. Let's take a look at what's going on ...
Yesterday (in no surprise), the FOMC held the target Federal Funds Rate at 0.00% to 0.25%, and also voted to continue the size and pace of their $1.75 trillion program to buy mortgage debt and Treasuries. Mortgage rates are on the rise too, now at their highest point since last November, putting further pressure on an already weak housing market. And just this morning, an "unexpected rise in jobless claims" was announced!
The Treasury sold a record $104 billion of debt this week, and a total $3.25 trillion of debt in the fiscal year ending September 30, 2009 (according to primary dealer Goldman Sachs Group Inc.). Boy, Goldman gets a "bailout" AND a commission for selling $3.25 trillion of debt? Must be nice to have connections inside, but I digress ...
President (and god-king) Barack Obama has now officially increased the nation's marketable debt, to a mind-boggling $6.45 trillion! The budget deficit will also hit equally freakish numbers, with the fiscal year ending September 30, 2009 expected to reach $1.85 trillion. Or in other words ... 13% of our national GDP!
But don't worry ... the consensus on CNBC is that Federal Reserve Chairman Ben Bernanke is doing "everything he can," so the markets are a-okay!
So, enjoy your "green shoots" while they last, because we're now living in the United States of Weimar!
Its about time we reclaim the word liberal for that which it was originally intended !
I agree!
She is a good looking woman..no doubt...but she is nuts...