The following is an excerpt authored by Tom Chatham of ‘Project Chesapeake’; he compares the 1930’s Depression to what we are getting ready to experience today. Interesting how this depression will be so much different and how we could experience much greater danger as the current depression gets under way.
In the 1930’s people did not possess specialized skills, they had general knowledge that allowed them to take any job that was available. Today people are skilled in one area and loss of employment in that area requires them to obtain skills to work in a new area. The jack of all trades has been replaced by the specialist so when job loss comes they have a more difficult time finding a new one.
In the 1930’s we had a deflationary depression and anyone holding cash and bonds were able to hold on to their wealth and banks were allowed to fail. The farmers suffered from a drop in commodity prices but taxes were low and most people that had land owned it free and clear allowing them to stay in place. Today we are more likely to have an inflationary depression due to the mandate to save the banks at all costs. Anyone trying to save their wealth in cash and bonds will get slaughtered in the paper assets they hold due to massive money printing.
In the 1930’s most people lived in rural areas and people worked to help their neighbors in difficult times. Most people had the skills to take care of themselves and their families until things got better. Today most people live in urban and suburban areas and society has been fragmented into militant groups that cannot work together even in good times. Declining economic conditions will likely make society turn in on itself even more causing suffering and loss of life. Most people have no idea how to care for themselves if the system breaks down.
In the 1930’s people were forced to find new employment due to job loss because there were no social safety nets to provide for them. In difficult times they were forced to look to family, friends and the church for help but most people felt they had failed if they asked for help. Today people losing a job have unemployment, welfare, food stamps and dozens of other services to provide for them if they have no job. Many have come to rely on these services and expect the government to provide for them as long as necessary. If these services ever end it will trigger a violent response by certain segments of society.
In the 1930’s a man out of work could sell apples on the street corner for a nickel to make money to support himself. In a future depression environment anyone attempting to make some money may be selling apples for five dollars each and will likely be arrested for vending without a license. Another difference today is that most people do not want to get their hands dirty so they will opt for government assistance rather than hard work.
When people lost jobs in the 1930’s they could look for many different types of jobs they could do and they were able to negotiate pay with business owners to get the job. The large number of unemployed allowed businesses to negotiate lower wages that allowed them to stay in business. Today, minimum wage laws prevent business owners from cutting wages to stay in business which will cause business closures in difficult times. The closing of businesses is a self-reinforcing loop that puts more and more people out of work as time goes on.
In the 1930’s, the monetary system not only survived but cash was worth even more.The next depression will likely see the monetary system collapse and cash become worthless. This will likely lead to the creation of local currencies and barter among individuals. The attempt by bankers and governments to create new fiat currencies will likely be rejected to a large degree.
In the 1930’s, most properties were owned by people that utilized the land themselves. The investor mentality of today will see the mortgage market collapse and the investors buying properties to flip lose it all. Some experts expect to see a 75% to 90% drop in land prices in the coming years.
Those that own land free and clear will be able to keep a roof over their head. Those that can supply their own needs will make out better than those dependent on others. Those with multiple job skills will make out better than those with no job skills. Those that can produce a product to sell will make out better than those in the service industry.
I reposted this article to show what we are getting ready to face over the next couple of years. If you don’t believe we are heading in this direction, then you will be a victim of your own ignorance.
The following excerpt from James Turk talks about the manipulation of the gold and silver market this past week.
The Open Interest over the week increased by about 95,000 contracts, so that represents 9.5 million ounces of gold, or about $12 billion worth of paper-gold.
Big institutions and spec traders have position limits that prevent them from taking positions larger than 6,000 contracts, which is just a small percent of last week’s total increase. So it wasn’t the big institutions and the specs who were capping the price.
Only banks operating for central banks can accumulate such a huge increase in Open Interest. They pretend they are hedging and therefore fall outside of position limits. So it is clear that the central planners told their agent banks to keep selling paper-gold, even if it was going to take a record amount of selling in order to keep gold under $1300.
Folks, this is panic driven market manipulation. The Fed along with the US Treasury are pulling all the stops to keep gold and silver from skyrocketing higher because they know this is the endgame for the US Dollar and the US economy.
Remember last week when I mentioned that the first step in the crash will be the price of precious metals exploding higher? Well the Fed knows this too and they will do everything in their power to keep it from happening.
The Feds are fighting a losing battle as the price of gold and silver continue to be the best performing asset class this year. Soon the manipulations will be overrun and history will repeat itself, just like in 1968 when the price manipulators lost control of the market and precious metals surged for the next decade.
There are already headlines from precious metals insiders who say that the Comex and LBMA are out of metal and that a default is on the horizon very soon.
So that brings me to this week’s price action. Below shows the daily chart of gold and it is in another bull flag wedge pattern. It only has two options; either break the uptrend line and fall down to the lows expected by the commercial shorts or break the downtrend line above and skyrocket past the 1300 level to new 2016 highs.
The banking cartel has thrown an incredible amount of paper shorts at the market, but they can’t seem to get any traction. The demand and short supply is overpowering their efforts and I believe we will see a break above 1300 next week and then a run up to the 1400 level rather quickly as the failed attempt by the cartel will cause a huge short squeeze.
Stock Market: (SPY) (QQQ)
Stocks are on the next leg down in this down cycle. The downward trend should pick up momentum in the coming weeks, especially if gold takes off to new highs.
Energy Stocks: (XLE) (UNG) (USO) (LNG)
Oil is on an un-natural high right now. It continues to ramp up even when the headlines show increased production and extreme over supply conditions. Could it be manipulated? LOL.
Now is definitely not the time to buy, in fact, I would consider a short position in oil at this point in time and wait for the correction.
Commodities: (FCX) (JJG) (DBA) (JO)
The weekly chart below shows that (DBA) PowerShares DB Agricultural Fund has bottomed and has now moved back up to resistance around $21. A break of this resistance line will signal a move up to the next resistance around $23.38 and then potentially up to $26.
This is a bullish sign for commodities and as long as the US Dollar continues to fall in value, commodities will benefit.
This is just the beginning for commodities, but we could see some pullbacks at each of these resistance lines, so I would use trailing stops or at least keep an eye on your positions as we get closer to resistance.
Freeport-McMoran (FCX) is showing a similar pattern below. It’s worth watching over the next few days to see if we get a break of the upper resistance line for a move up to the $23 range.
(SLW) January 2017 CALLS
(GDX) January 2017 CALLS
(ABX) January 2017 CALLS
(FNV) January 2017 CALLS
(RGLD) January 2017 CALLS
(SPY) December 2016 PUTS
(IYF) August 2016 PUTS
Buy Gold, ‘Get Out Of The Stock Market’ Warns Druckenmiller
Buy gold and ‘get out of the stock market,’ legendary billionaire investor Stanley Druckenmiller, advised investors this week at an investment conference in New York. “The conference wants a specific recommendation from me. I guess ‘Get out of the stock market’ isn’t clear enough …” “…we regard it as a currency and it remains our largest currency allocation,”
Market Analyst: “Nothing Is Real…All Of This is Being Played To Keep People Believing The System Is Working”
We exist, beyond any shadow of any doubt, in an environment of absolute fakery where nothing is real… from the prices of assets to what’s occurring here with regard to the big Wall Street banks, the Federal Reserve, interest rates and everything in between… The system is so fragile that if the public senses even the smallest problem it could derail the entire thing: