Are we on the verge of a stock market crash? It would be right in line with the rest of 2020 in Australia – Drought, Fires, Floods, WuFlu and, to top all that off, a government mandated collapse of the economy, while simultaneously vastly increasing the debt that the economy has to service. And it’s only May! Those Gold-holders who have bet against the dollar for so many years sense that This Is It.
Fortunately, we are probably wrong for another six months or so. The fiat system is like one of those old B&W movies where a guy, dying of thirst, crawls through the desert. Every time the camera pans back to him you expect him to be dead. But no, on and on he crawls. At some point he will be dead, but the crescendo of suspense and dramatic music interminably builds and builds.
Despite Australia’s horrendous debt levels and the fact that our bed-wetting, pearl-clutching politicians (of all parties) took it upon themselves to sabotage the economy, the Au$ remains quite strong. That is because of a/ complacency, and b/ because there is a demand for it from every person who needs to pay bills – mortgage, rent, power, tax etc. Times are going to be much, much tougher than most people realise – even many of the Gold/silver holders. If necessary, Gold/silver will have to be exchanged for fiat in order to stay one step ahead of the debt collectors and to put food on the table.
When the economy reopens, the extent of the damage will begin to be understood. Many businesses will never reopen, many of those that do, will soon close again. The level of bankruptcies will be unprecedented in modern times. The frivolous consumption of the past will be replaced by a more cautious attitude. There will be a growing perception that having some savings set aside for a rainy day is not such a bad idea. In other words, the easy spending ways of the past are over.
I come from the 1940s. Money was tight and any spare money was used to buy non-perishable foods (yes, and toilet paper) – just in case. I sense a return to that more frugal and conservative era.
The aggregate momentum of economic activity, built up over generations of good times, has been forcibly stopped. It will restart, but it certainly will not pick up where it left off. It will tentatively start, splutter and stall; it will have zero momentum behind it. Old businesses, big names amongst them, that cannot adapt to the new economy will fall by the wayside.
Then Gold will really begin to hammer the Au$. Even the Gold bugs, those who have laboured under the delusion that they are investing in Gold in order to make ‘money’, will see what is really happening.
The economy will never recover until the cudgel of regulations, including award wages, ceases to be used to bludgeon business. The economy was already failing from the beating that it was receiving. A business person knows now that he/she not only has to be smart, fleet of foot and brave to survive, but that they face the prospect of forcible shutdown and bankruptcy whenever an ‘expert’ says Boo and the government panics.
By this point, the stock market will well and truly have crashed and the Au$ will come under real pressure. It won’t be just the Australian currency that begins its long-awaited collapse. Capital from all over the world will be sold in order to bid the US$ higher and higher. It’s known as a ‘flight to safety’ – don’t laugh. The US$ will be the last currency to fail.
There are three stages for the Gold/silver hoarders. The first is acquiring it. For those with an ounce of foresight, that was the easy bit. The second stage is the most difficult – hanging onto it in the period immediately prior to currency collapse. That is where we are now. That is when your income has gone, or at least diminished, and when you desperately need Au$s for day-to-day survival. The third stage, if you still have any metal left at that point, is when it finally assumes its real value in the marketplace.
But what sort of world will we be in, and what will be left that’s worth buying?
I anticipate that this whole process will be well underway before the end of 2020. The interminable suspense and dramatic music is about to conclude.
And still our idiot politicians want to bring in more migrants. What for? To eat?