The West’s financial system, whilst shuddering, shaking, creaking and in need of continuous ‘adjustments’, seems not on the point of collapse. A detailed explanation of why that is, is beyond my understanding. But that it is, is evident.
As Professor Fekete once said “they (central banks) have many tricks and tools Philip”. Circa 2009, the Professor predicted that the West could drag it out till around 2018 – maybe. That was inconceivable to me at the time. Well, here we are five years after that predicted, far off end-point and the debt is still successfully being shuffled around.
The economy of the West is crumbling. Food and energy prices are soaring, businesses are closing down, massive staff retrenchments are weekly news and standards of living are tumbling, but the system remains intact.
How much longer can it continue? I don’t know. It is only a few weeks since I was certain that 2023 would be ‘it’. I can no longer subscribe to a belief for which I can see so little evidence.
The crucial point (for me) is that the raising of interest rates has not caused, the bankruptcy of governments, because though the cost of servicing their absurdly high debt is rising, so, because of price inflation, is tax revenue. I just came across this chart at Wolf Street…
The graph suggests that interest rates could continue to rise which would mean the beginning of the legendary and secular move from the bond market to commodities That means even more of the misallocated capital of yesteryear will be destroyed. How many zombie companies will be allowed to fail before the resolve of the Fed follows suit?
Continue to accumulate the monetary metals – as much as you can, as fast as you can. The future welfare of your family depends upon it. When the system does collapse, so do governments and so does their ‘money’, which is simply a representation of the debt.
The US$ will remain strong for the foreseeable future, but only relative to other currencies. Measured by Gold, the only real metric of value, the US$ has already resumed its fall. Get out of currencies and other assets and into Gold, or silver.