Is This The Time To Go All In?
September 30th 2008 01:49
I am wondering how aggressive to be!
Yesterday, I read a report at Le Metropole Cafe (by subscription only, but two week free trial is available) written by Bill Holter. He writes:
Well, the bailout bill went down to defeat, Congress is in recess until Thursday, apparently, and the stock market had its biggest point drop in history, 777 points!
Holter writes further,
This is a credit seizure, it is about solvency not liquidity. The Treasury is trying to make the banking system solvent while endangering their own solvency. The realization that the system is insolvent will cause a liquidity "black hole'. When it becomes every man for himself, margin rates will sky rocket and in many cases the margin itself will be called. This will start a forced liquidation that can only be stopped by the closure of markets and banks.
And the most frightening thing of all, he writes:
In normal times, there is a 1,500 ton shortfall between demand and gold supply. That shortfall has been met by central bank selling of gold reserves. Now the central banks say they are done selling. Not only are they done selling, but the Swiss said they no longer write gold and silver certificates. They have told
If Holter is right, but wrong on his timing, is this the time to go all in on Gold and Silver coins" Even borrowing money to buy more? Scary times!
Yesterday, I read a report at Le Metropole Cafe (by subscription only, but two week free trial is available) written by Bill Holter. He writes:
The proposed Treasury bailout will be signed this week. If one does not get done, I would imagine that within 48 hours the banking system would seize up and markets could not be opened.
Well, the bailout bill went down to defeat, Congress is in recess until Thursday, apparently, and the stock market had its biggest point drop in history, 777 points!
Holter writes further,
This is a credit seizure, it is about solvency not liquidity. The Treasury is trying to make the banking system solvent while endangering their own solvency. The realization that the system is insolvent will cause a liquidity "black hole'. When it becomes every man for himself, margin rates will sky rocket and in many cases the margin itself will be called. This will start a forced liquidation that can only be stopped by the closure of markets and banks.
And the most frightening thing of all, he writes:
In the words of Mr. Sinclair, "this is it". Please use this week to make all final preparations for a different world. The music will stop suddenly, when it does "you will have what have, and that's all you will have". There will be no opportunities to change seats until after this show is over. Please feel free to bring all the food and drink you please as none will be served until after the show. Once the show begins, you will no longer have access to your credit, debit or check cards. Very early in the show, your Dollars will no longer spend. This will be a truly unbelievable show as some will enter poor and leave with fortunes while other fat cats will exit virtually penniless. No matter how well prepared you are, this show will be ugly. Enter unprepared and "disastrous" will be an understatement.
...their clients that they would no longer be offered paper gold or silver certificates in the bank's name. It seems the bank had previously granted the accounts because it was able to protect itself against an upside move with a derivatives contract with another financial institution. Due to the financial turmoil, the bank was no longer comfortable with the counterparty risk from the other financial institution.
If Holter is right, but wrong on his timing, is this the time to go all in on Gold and Silver coins" Even borrowing money to buy more? Scary times!
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