During the week, I have read a number of articles which indicate the dire position of the financial system. I have selected a few relevant items, linked the original articles or interviews and made a few comments as an introduction.
- Alasdair Macleod of www.goldmoney.com once again produced an extremely useful table showing the balance sheet leverage of Global Systemically Important Banks (G-SIB’s) and the numbers shown here are absolutely terrifying. To put this into perspective Lehman Bros. leverage was 32 then reduced to 25 when they declared bankruptcy.
The Collapse of the Lehman Brothers
- If we look down this list we can pick out a number of banks close to this number or already exceeding it. The system is in a very precarious position right now. Many traders are warning of a freeze in the bond markets $126.9 Trillion, while the equity market is $124.4 Trillion.
Here are the 2021 figures.
- Many sites quote the derivatives market at a value of over a quadrillion dollars, much of which is ‘covered’ by the banks in the Table linked here. The standard argument is that the derivatives are insured and this is true. What if the insurer is insolvent? I have seen domino insolvencies when one large company is unable to pay its debts. Imagine the chaos if there is a total credit freeze.
- Marc Faber is an institution in the investment world. He is entertaining as a person but his most important contribution to me in this chat is that one should be diversified. Not on just one exchange, such as buying, Brazil, Argentine, Russia, Indonesia etc. on the NYSE, but actually opening accounts in those jurisdictions. Just look at how Russian assets were frozen that were quoted on the US exchanges. That’s not diversification. My take is to diversify and have physical assets offshore out of reach of your government as well. We see the restrictive practices happening day by day, country by country.
Watch his video here on “A Lot Of People Will Lose All Their Money” – Huge Market Losses Lie Ahead
- Warren Buffett takes delivery of 380 Million ounces of silver over a one year contract. For a man of his stature and investing prowess to be taking physical delivery over a one year period, of this quantity of silver, makes me sit up and take notice on at least two counts. Firstly that the order is for physical, which he has avoided and secondly that it is over a period. Does that mean it is not immediately available. Of course I believe the price at present is a steal. That I am sure he is well aware of.
Watch Bix Weir’s Video on this here.
- Gold and silver are both amazingly cheap at present and may get cheaper still, but I don’t believe by much. Gold for concentrated wealth preservation and silver for much larger profit (or loss) potential. When I see flows as shown below by Jesse Felder I believe that the importing countries have much better information than I do, either in terms of future events or in terms of value or of course, both. I believe that one day I will wake up and the metals will jump in price by at least fifty to one hundred percent and then continue to real market valuations. I prefer to be ahead of that. Incremental purchases at least have me in the market for physical. I doubt that paper contracts will have much value even if www.usdebtclock.org is correct.
Gold price today: $1,637.00
Last week: $1,644.00
Silver price today: $18.68
Last week: $18.52
Gold:Silver ratio today: 87.59:1
Gold:Silver ratio last week: 88.51:1
Gold Miners bullish percent index: Today:24.14
Last week 24.14
Dollar Index today 112.35
Last week 113.52
Gold’s low of the week was $1,623.00 and the high was $1,668.00, now trading at around $1,635.00.
The monthly chart for Gold is negative. The possibility of $1,561.00 is still in play. The weekly chart is a sell. The daily chart is negative.
The low for Silver this week was $18.19 and the high $18.95, trading around $18.62 at present.
Silver on the monthly chart is negative. On the weekly chart the buy signal almost immediately reversed. On the daily chart, a sell triggered last Tuesday remains in place.
On the Stockcharts.com charts, the blue vertical lines are our proprietary system buy signals and the red vertical lines are system sell signals – for information purposes only.
Please contact us to arrange the purchase and storage of your gold and silver requirements in a safe, insured, location outside of your jurisdiction.
This is my interpretation of the market and is not to be taken as financial advice. Before making any buy or sell decisions I recommend that you consult with your professional financial advisor.