NYC Journal

[Calzone]

Anyone that has debt that has to get rolled over in the future has a very serious problem, and that includes the U.S. government because it has a huge deficit that exceeds it’s annual GDP.

They expect rate cuts in September because the economy is slowing. A lot depends on the jobs reporting. Some analysts suggest more than one rate cut to help stimulate the economy, but know that a rate cut will have a cost of being inflation.

So when and if there is a rate cut the follow through will be eventually inflation and more devaluation of the purchasing power of the U.S. dollar.

I already mentioned that a very large Swiss bank is selling dollars in anticipation of falling value to minimize losses. Dollar assets will eventually correct and devalue.

A fall is coming… Don’t get tripped up.

Cal

 

[Calzone]

I am kinda predicting/forecasting history here which is not easy to do. All I can say is a tipping point will eventually happen.

Pretty much in a depression you really don’t have an economy… Severe and violent sudden austerity or bankruptcy. Pretty much a choice will have to be made.

Imagine having credit card debt and rolling that debt over is a death spiral. Know and understand that credit card debt is at record levels. Many people mortgaged their future and maintained their lifestyle using debt. The households that did this will get crushed when the shoe drops…

Cal

 

[Calzone]

Wow, a 4.7% jump in price on my junior gold miner in just one day Friday. Tuesday’s open could be really interesting…

The Financial Times says the long-term effect of a non-independent FED is bad, and European Central Banks say it is very negative.

Don’t be surprised if the U.S. Dollar gets a huge sell-off. Remember a Swiss bank has 39% of it’s reserves in dollars and they already are selling those dollars. The report suggests that they are exchanging those dollars for Euros.

If the dollar tanks badly, then risk leads to future high interest rates, or very high inflation. Pretty much a tipping point lays ahead. IMHO a cut in interest rates is the worse of two evils. In my book inflation is the bigger problem. I’d rather have a recession…

I live in a calm place now, and compared to NYC Peekskill is boring. I’m cool with that because if I need stimulation, or excitement, or conflict all I have to do is look at the news. The financial situation of U.S. households and our government certainly is disturbing and alarming.

Can you believe $5K gold perhaps next year? Can you believe bigger cuts than a quarter point per month by the FED through December because of economic trouble? If interest cuts are bigger than expected, there goes the U.S. Dollar, a crash could happen, and then gold would go to $5K.

Don’t forget that paper assets would get revalued. The negative/reverse wealth effect would be a rapid transition. Should I use the term bubble?

Realize that gold is priced in dollars, so if the dollar collapses it becomes a no brainer to trade in the depreciating dollars into gold or some other hard asset. This is how I believe gold could make the huge leap. Seems like it already is happening.

If the U.S. economy goes down like a toilet all paper assets will have to get revalued. A collapse here can easily spread, and there you have a “Greater Depression.”

If China goes into the toilet, pretty much another bad outcome, and the same for Europe.

The E.U. Combined is nearly equal to the size of the U.S. economy. Pretty much a triple threat…

Cal