The eye of the Economic Storm

By Bob Livingston

To understand this moment in history is to be aware of the present cross-current of economic and political reality.

It is difficult to think of history as happening today and every day with us in the middle of it. History always implies what happened in the past.

We were in a period of economic euphoria from 1982 at the beginning of the great bull market on Wall Street to the year 2000. Since 2000 we have entered a time of economic convulsion under a disguise of Greenspan and then Bernanke's rain of paper money and credit expansion.

This period of time from 1982 until 2008 was a time of the great illusion of economic prosperity. After a small blip on the radar screen of a slowing of credit expansion in 2008, which almost caused the world's economy to collapse, we have been on another upward ride in the stock market as companies buy their own stock to support asset prices. It has all been quite addictive and quite a fantasy.

More than any time in history, we have been in an era of paper money and a great and general deception of what is substance and what is myth. There is great confusion with the difference in financial assets and long-term material value.

This illusion has triggered an era when the basic economy has changed from industrial production to a financial economy. American industry has been changing from the production of things to the shuffling of paper assets and the promise of what might be.

Confidence game

The building economic and financial crisis is based on the illusions that computer numbers in a bank account and debt represent real wealth. People with big mortgages actually believe that they own their homes. Well, even the people that have their homes paid off still don't own them. Try not paying your property taxes and see what happens.

What creates the state of mind that a high stock value, or having paper money, is wealth? Paper money is always stable in the confidence building period because it can be exchanged for houses, farms, new cars and wars. Yes, wars would never happen except for paper money and credit. Hitler's panzer divisions were created with paper money exactly the same as the American military colossus. It was a paper money war.

Now we are in a paper money and credit world. We are in the final stage of history's greatest paper monetary era. As the great collapse progresses, even savvy people still trust financial assets. Men and women daily scramble to add more digital numbers to their bank accounts and pension funds. Even as they see their paper money inflated and depreciated they run faster to get more and more numbers which they believe are dollars which they believe are wealth and savings and retirement funds. It's a world class confidence game now collapsing.

Insiders, some central banks and a very small savvy group of individuals are quietly accumulating hard assets instead of paper ones. Gold and silver valued at low four figures in paper money are now on the bargain counter as history will record. This is the only counter-play to disappearing financial assets.

The gradualism of the collapse keeps the crowd asleep. As some are jolted along the way to find themselves impoverished — too late to recover... their good life is gone and their pomp and circumstance now as silent as a funeral march. They were just too busy being busy accumulating numbers in their bank accounts.

We are now in a worldwide paper money war. Some call it competing devaluations. It is an agonizing and constant process of depreciating and collapsing currencies. The advantage of the moment goes to the country which can inflate their currency the fastest. 

Not who can exchange value, but who can gain temporary advantage with printing press money. 

The U.S. was way out front, but China has learned and is catching up fast. In fact, the countries of the world's very survival depend on paper money that must and will depreciate. 

Unfortunately, because it has been the reserve currency for world trade and banking, the world float is dependent on a diminishing dollar. This is the reality of international finance. Those who can see perceive a world afire. It's all about the end of the paper aristocracy system which has transferred the wealth and hard assets of the world to the elite with created money which cost them nothing.

We buy gold and silver for profit and security! It's the most permanent way to preserve assets no matter what the politicians do.

Remember, U.S. silver coins are still legal tender. Should we have a raw collapse in paper money confidence, no telling what you could buy with a silver dime... which is real money!

Americans have forgotten real money, but I suspect they would relearn in a hurry after a monetary shock. 

I still like the gold and silver stocks. It's a good time right now to buy as we are coming off an inactive if not weak period in stocks and metals. Eighty percent of the time, action in the gold market is neutral or negative. This keeps the public out until the blow-off a few years away.

Have you noticed that gold is not tracking the dollar as it was? Since 2015, the dollar and gold have been moving closely with each other. This is new, good action for investors!

The next really big action that we look for will be the breakout of gold against all the currencies, as has happened in every instance in the past. We expect that within two years. That event will signal a strong gold bull market.

If you bought late and have losses, stay with the trend, high prices are coming. You're not spending your grocery money so stay with the trend until the top. 

It's hard to know what the world will be like with gold at high four or even five figures, but if it holds together, we will take some profits and invest in the big stock market which I can assure you will be a black hole by then. There will be plenty of bargains that nobody will want.

Paper v. gold reasoning

Eventually, everybody will discover that paper money is dependent on politicians. Gold is dependent on no one and it is an international currency. No matter what language or culture, people will accept gold. 

Governments and their politicians don't like gold in the hands of the people. This is true because when the people understand gold, there is no problem at all to see that paper money is the way to political and economic power over the people by politicians.

Now you understand why politicians will not touch the subject of debt slavery. Neither the public nor most private media will touch the subject. They don't want you to realize that all wealth flows to the creators of money, who not only get to use it first when it's most valuable, but who get to exchange it for real wealth before it's devalued as it gets used.

Unless you protect yourself with hard assets and items of real value that give you a store of wealth, you have nothing. Everybody should have at the very least 10 to 15 percent of their paper money "assets" in gold. Gold today is very cheap in terms of paper money. For many reasons in the coming months, we will be disgusted that we didn't buy far more gold with our political paper.

Stay with the major trend no matter the ups and downs. We now have economic crises daily, and we have economic uncertainty and economic instability. Of all people, you readers understand this.

Companies are dumping pension plans right and left. As you know, the big companies like Amazon, Uber and even General Electric (due to its reinsurance business mistakes in the past) have lost billions and billions of dollars. They have to dump their high costs or they are history. There is much, much more of this to come and it should be obvious to everybody.