Lady Fortune Spinning Her Wheels
by Dr. Jeffrey Lewis, Silver-Coin-Investor “Opportunity is missed by most people because it is dressed in overalls and looks like work.” – Thomas A Edison I’m writing this after spending a few days with my son and a couple of friends. My wife and I are both health professionals by day. Our life and schedule often leaves one of us “in charge” on the weekends — usually me. Now, at the advanced age of five years old, these fellows are just learning how to get along. They are learning how to work out differences, negotiate possessions, and deal with all of the emotions contained and expressed therein… As a bystander, it’s somewhat absurd at times. It is hard not getting sucked to their madness. Their feelings are real; their desires, passionate. No doubt it will continue to go on for a while until one day they sort of figure out how to dance among the civilized. Then I started thinking about the level of corruption, fraud, and deceit that (thanks to the media, technology, and the internet), we can see all around us very clearly. Things are out of control. Power has once again become concentrated in the hands of a few. But these few are not like their nepotistic forefathers. They are a mutant breed that is rewarded for sinister behavior. They have taken power, usurped justice for the sake of power alone. image/OCCUPY.com These parasitic sociopaths infiltrated the most powerful institutions in the world, from the world banks, top political offices, and the various nodes of industry below them. They appear evil. And maybe they are. Maybe they’ve been trained revert back to some previous stage of development. Like giant spoiled children on a quest for power, control, and ownership for the sake of a reptilian urges deep within. The problem with the elite is that their tantrums lead to destruction of real things, people, and civilizations. The price of silver still sits below US $20 per ounce, despite somewhat of a gradual swing up from the depths of despair. Of course, this is further proof that ‘market’ is not even close to ‘pricing in’ reality. Price controls create illusions. They lead to alternative reality. The problem is when so many people believe in the fantasy, it can make it seem crazy to choose otherwise or live according to rational truth; or at least make the necessary preparation for its return. The reality that very few want to acknowledge is that we are in a deflationary depression caused by the gradual progression of elite banking power and its ultimate control of currency for its own purposes – and no one else. This is not capitalism or free markets. This is the epitome of regulatory capture, combined with the fact that the wide majority across the political spectrum believe the system represents their view and interests. They say they do so eloquently. They have all the power and money — so they must be doing something right… This depression, which threatens the banking system and the massive leverage they control, will continue to be fought using the currency – printing more of it – while dumping as much of the responsibility on to the backs of taxpayers. Of course the banking system or the Federal Reserve System by definition – is merely a set of nodes in an internationally managed and ongoing debacle hell bent on currency destruction and endless power. I wonder when the SDR exchange rate will become par with the macro-financial vernacular. In order to pull this off, old practices have evolved in complex ways. The modern form of coin clipping is futures trading — where the churn of paper contracts wags the tail of the tiny physical reality backing it all. And so we are stuck in this price range while the real economy wilts all around us and the state becomes that much more costly and overtly Orwellian. People say, traders say, you can’t fight the tape. Don’t fight the Fed. But what would be the alternative exactly? — Go with the flow? Put it all on the line like everyone else. Jump anyway-the lemmings are doing it. See? And hence, everywhere you look, you see asset bubbles. Overbuilding in the commercial space is apparent all around. Housing prices are once again detached from basic measures of affordability. Auto loans are the new sub prime. But sub prime has also returned to home. Student loans are insanity – another massive – unsustainable bubble. Equities continue to act as the pied piper. By almost every measure, from valuation, the use of margin, down to the actual health of corporate balance sheets tells a very different story than what prevails. Labor force is a joke. Those who make up the will be retiring soon. An alternative misery index is… well more miserable. Take the labor force non-participation combined with the real inflation rate. Combine that with the number of food stamp recipients. Then you have the true nature of the modern bread lines. But we have more circuses. More channels – more screens to distract us or be distracted by. A circus orchestrated from the upper crust. The low price gift is the double edged sword. The conundrum of lady fortune, with her dose of humility. We have access to low price, yet the reasons why manipulation and price controls come down from a much larger systemic problem – unavoidable calamity. There is certainly room for prices to run. But ultimately, the day we truly count in ounces will be the same day many realize they should have been practicing much sooner. Beware of where we are headed and be thankful that the supplies were available before the journey began. And we have enough access to the past to make a good guess about where it’s all headed. We can see the rhyme ahead of time.