Chicago Gold and Silver Investing Fan Blog

The Impending Cyprus Bank Run

Cyprus will open their banks tomorrow. I am predicting a run on their banks. Expect to see long lines of people at the bank withdrawing all of their money and hiding it on their own.

This is what happens when you have a tyranical government imposing their will on a populace that is unwilling. The run on banks will be a clear message to their government and to governments world wide that you cannot just go and steal money from it's citizens without their permission.

This bank run will spread to other countries like a contagion. Some will choose to ignore it. The smart ones will get their money out of teh government controlled banks before it is too late.

Cyprus Could Be the Snow Flake That Starts The Avalanche

All it takes is one snowflake in a tenuous mountainside to trigger an avalanche.

Cyprus could be the snowflake that starts a world wide run on banks and collapse the current fragile financial system.

Some people will blame Cyprus for agreeing to the crazy IMF terms. Some people will blame Germany for putting Cyprus against the wall and force them to make their decision. Some people will blame the Russians for using Cyprus as a tax haven.

It's not any of them. It is the powder keg that was created over the years.

As I right this, no one in mainstream America is even aware of the grave danger they are in. See, the United States is in an even bigger financial mess than Cyprus. One day - maybe much much sooner than anyone even thinks it could all blow up over here. One day Americans could wake up and see that their own governments have nationalized all banks and have confiscated- better yet stolen some of their wealth.

The United States government is already taking- no stealing - its citizens wealth. Maybe not as direct as the Cyprus government is doing. But they do it much more stealthily through currency devaluation, through interest rate manipulation, through various capital controls, through inflation, and more. The average American is not even remotely aware of the scam being perpetrated on them. The smart money is aware. The average middle class and average rich person has no clue.

One day a Cyprean type of event will happen here. When that happens there will be a scape goat. They could blame the conservatives, the Tea Party, the Republicans, the Democrats, the liberals, the Chinese, God, Wall Street greed, the Fed, George Soros, the banks, and/or a mutitude of other scape goats. But they cannot blame them, Americans must only look at themeselves, for only they are to blame because this is a situation that could have been prevented a long time ago. With courage, with strength, with conviction of doing the right thing.

Those who are smart, will take action before their money is confiscated and before their world collapses. The rest will have their money stolen and see their world collapse before their eyes and try to blame someone. Too late. A smart Cyprinian could have seen it all coming and got their money out of Euros and into something else of value. Now it is too late. Their money is gone and it won't be given back to them. The Russians will be very mad. They will not forget this. They will take corrective action and when they do some people will be even angrier.

 

Citadel

A group of patriotic citizens plan to build an armed self sustained community called the Citadel. IT will be located in Idaho and the plan is to eventually house about 5,000 families on 2-3,000 acres of land.

If this is not a sign that citizens are preparing for some kind of economic collapse or armageddon, then I don't know waht is.

It will be a self armed and self sustained community. According to their website:

Marxists, Socialists, Liberals, and Establishment Republicans may find that living within our Citadel Community is incompatible with their existing ideology and preferred lifestyles.

 

Gold Bug Hitting Japan

There is mounting evidence that the gold bug is hitting Japan. According to Profit Confidential :

"I don’t believe it is a coincidence that, ever since the Japanese government reported a budget deficit, the Japanese consumer increased their buying of gold bullion to be at a 15% greater pace than last year (source: Market Watch). That is, the Japanese consumer bought 15% more gold bullion in 2011 than 2010. Thus far in 2012, this trend has shown no signs of slowing down."

The biggest Gold players in Asia are India and China. Smaller countries like the Phillipines and Vietnam are increasing their holdings. Add Japan to the mix and you got the makings of a gold buying frenzy in Asia.

Could it be that these countries central banks are buying gold to diversify their assets in the event of some kind of currency collapse? Could it be that citizens of these countries are waking up to the realities of this world that its citizens are worried about faith in their currency?

The Flip Side of a Weaker Currency

A reason why some countries choose to weaken (devalue their currency) is that now their goods become cheaper to foreign countries whose currencies have become stronger. They are now able to buy more of your goods at a cheaper price. Because they can buy at a cheaper price, they buy more and the countries exports to foreign countries increase and thus helping the local economy.  Also, if the national government is heavily indebted, the government can pay off its debt using money which they have more of.

That is the theory any way. But it is not that easy. What about the business who imports more foreign goods than they export? For example Wal-Mart. They purchase so much goods from China that they now resell at their retail establishments in the states. With a weaker dollar, the price of those goods costs more now. Wal-Mart suffers and it's retail buyers suffer from having to pay higher prices.

So the flip side of a weaker currency is that its citizens have to pay more for goods from foreign countries. Devlauation is in essence a tax to its citizens in the form of higher prices.

Currency devaluation has happened recently in Belarus and in Switzerland. The US devalues it's currency every month with QE3. As more countries choose to devalue, a wiser place to put their currency may be in real money such as gold and silver.

 

More Texas Secession Talks

More than 25,000 people have already signed the online petition at the White Hose website calling for Texas to peacefully secede.

I feel this does not mean much now. However, when the economy contiues to tank, when we hit higher unemployment, have higher taxes, and go into a period of high inflation, there will be more turmoil. This is just an initial sign.

Conversation are already happening. As the economy get's worse things will start to simmer. This time it won't be a Tea Party uprising, it will be some other type of uprising. I have not figured it out yet. But, something will surface.

The movement does not necessesarily have to be a secessionist one, nor does it have to come from the right. It could very well come from the left. Teachers recently held a Marxist conference at Northwestern University.

North America Turning Socialist with Mexico's Nieto.

America's Obama and Mexico's Nieto give North America Two Socialist Leaders

Newely elected Mexican President Pena Nieto


The continent of North America saw two huge steps toward a socialist movement. President Obama was reelected two days ago to serve as President for 4 more years. Meanwhile America's neighbor to the south Mexico elected Pena Nieto last summer. Both have socialiast ties and socialist policies. Some may feel, I am too forward to label those two socialist. However, in my opinion, a country can only have one of two economic systems- either socialism or capitalism. Freedom or tyranny. Remember, my definition of socialism is the public ownership of the means of production. Once a government interferes with the free market, it heads towards a path of socialism that builds a momentum that is so large that it is very difficult to reverse. Usually the only way to stop it is to have a total collapse. Two good examples of this is Nazi Germany run by Hitler and the former Soviet Union. Both regimes collapsed and had to start over.

With Pena Nieto of Mexico in charge, look for a Mexico that goes toward one party central government controlled rule, an expansion of their entitlement state to a nation that already has about 50% of its citizens living in poverty, more power to the already powerful state controlled energy companies like Pemex, and definitely pushing Mexico towards statism or estatism as I like to call it.

In order to fund these overaggressive and inefficient government projects look for Mexico's Central Bank the Banco De Mexico, to print even more fiat currency. When that happens, you will further impoverish the Mexican economy, create even more inflation, and create more state dependence by the people. The smart ones will go away from Fiat currency now and trade them for real money- such as silver and gold- before the policies of Nieto take full effect.

What was used as a medium of exchange in dire times?

In 1943, Germany was in the middle of a life or death struggle for it's very existence. Every citizen was involved in the war. Either as a soldier fighting the war or if you were not in the military every child, woman, and man was expected to do their patriotic duty for Germany. Prices as you can expect at that time sky rocketed since almost all the resources of the country were used for the war effort.

At that period when all resources were scarce including money and food, what did people use as a medium of exchange. Many used food. If someone needed an inner tube for their bicyccle, they traded food for the inner tube.

So when the nation goes into a similar type of crises which it could, traditional methods of exchange such as paper currency can collapse. In that case people can go back to a barter system. Where one trades something of value for another item of value. In those times, what could be more valuable than food when everyone needs food and food is in short supply.

What also happened in Germany was rationing. The Nazis were in power. Food was in short supply, so the Nazis tried even more government control and rationed food. Each citizen was allowed only a certain amount of food or calories per person. If you were a farmer and were caught hoarding food, you could be in dire danger of being executed on the spot, or if you were lucky sent to a concentration camp.

 

The Speech that Wins the Elections

The question is, will someone deliver this between now and November?

My fellow Americans,

Almost exactly four years ago the stock market began a sickening plunge that would shake the world. Declining from just over DOW 11,000 to under 7,500 in two short months, only to fall another 1,000 points in the next three, this period marked an unprecedented time of government intervention that you were told was for all of our good, and the good of our nation.

You were lied to. more...

QE 3- Will Collapse Dollar