“Calm” Before The Storm

Andy Hoffman / Silver Seek

For centuries, if not millennia, the concept of financial “calm” had a patently obvious, nearly objective, definition. Which was, for the most part, steady economic activity; modest market volatility; and, for the most part, no major cataclysms – either perceived or actual. Sure, stocks had big moves – both up and down. However, within a largely free-market environment, such moves were neither worrisome nor particularly impactful on other business sectors; let alone, assets classes, global economics, or sovereign stability. When “major events” shocked the markets – such as the 1987 crash, for example – they rarely lasted long; particularly in the post-1971 fiat world, when an unsuspecting world didn’t realize the artificial debt capacity it was “papering over” such events with would inevitably run out.

Prior to 1971, financial and economic shocks were, for the most part self-correcting. Whereas, after the gold standard was abandoned – particularly after the global economy peaked in 2000, and broke in 2008 – said shocks were, as a policy, “absorbed” by extraordinary monetary policy. To wit, this incredible chart depicting the expectation that, for the first time ever, Central banks are expected to monetize more than half of all 2015 issuance.

I have been a financial analyst for 26 years, and never could have imagined that the profession I so diligently studied would be rendered useless by such manipulation. However, this “new financial order” decidedly has a “fatal flaw”; which is, that no matter how much markets are rigged; economic data fudged; and perception “molded” by propaganda, “Economic Mother Nature‘s” immutable laws cannot be usurped for long. When losing money in financial markets, “not long” may be an irrelevant term. However, in the big picture of things, it really and truly isn’t – particularly if one avoids catastrophic investment risk (like mining shares, for example).

I mean, consider that the Euro currency, a massive project uniting the economies and finances of 500 million people, is on the verge of collapse after just 15 years; or, for that matter, that the supply/demand balance of physical and gold and silver, after 15 “long” years of historic price suppression, has become historically tight. Conversely, just seven years after crude oil and copper prices surged to $150/bbl and $4/lb, respectively, their supply/demand imbalances have never been larger; and likely, care of said “extraordinary monetary policy,” will be for years to come. In other words, financial and economic relationships – and dogma – can change quite rapidly, and usually do.

Read more at Silver Seek:

http://www.silverseek.com/commentary/%E2%80%9Ccalm%E2%80%9D-storm-14111