-- Published: Tuesday, 19 August 2014 | Print | Disqus
By Bill Holter
This past week we saw the hedge fund industry release their 13F filings which showed their holdings as of June 30th. The most famous and arguably the most successful hedge fund manager is George Soros. If you know about George Soros, you may or may not like his politics or his beliefs, I personally don't. No matter what you think of the man, he does know how to make money on large outsized moves which have a tendency to happen in very compressed timeframes.
Going back to 1992, Mr. Soros made a very outsized bet against the British pound. He levered into a $10 billion short position and "won". It has been said that "he broke the Bank of England" when they were forced to devalue. Soros made $1 billion on this adventure.
The latest 13F holdings report showed that Soros nearly doubled his short position betting heavily against U.S. equities. He also holds a large position in the ETF GLD and has outsized option positions betting on junior miners so it's apparent he believes in the merit of gold. Is he right? Does he "know" something that we don't know? He is positioned for a crash and will profit when one occurs. To answer the question, I believe yes, he probably does "know" for a fact what is coming to pass. He has the ability to speak with presidents, prime ministers and central bankers at will. Has he been told that the banking or financial system is already upside down or that a war is going to take place? My guess is probably yes, he knows and has been advised. Even if this is not the case, the man is smart and can see for himself...just as we can.
So is there a point to me writing about George Soros' positioning himself for a crash? Well yes, because he has a very long term track record of being correct and correct in very big ways. If you are already positioned in this manner or some form of it, you now have something to strengthen your convictions. If you haven't completely bought the math and logic pointing to a coming crash, this news might move you off the fence?
I also want to use Mr. Soros positioning with a hypothetical. Where would we be right now if Ukraine really did wipe out a Russian convoy? What if Russia does just start the engines and roll into Ukraine? That all "supposedly" happened this past Friday, today is Tuesday so we would have had 2 full trading days behind us. Again, hypothetically, what if the Dow Jones was down 700 points on Friday and another 1400 points on Monday, what would you do today? Would you buy the dip? Would you sell? Would you do nothing and just wait for the smoke to clear?
What about gold and silver? What if gold was up $90 on Friday and $230 on Monday? Would you be a buyer here at the new price of $1,600+ or would you wait and hope to be able to buy some on a pullback? Or would you hit the sell button and wipe your brow in relief that you could sell your gold at a breakeven from metal purchased in 2012? How would you react to $27 silver? Remember, this is what George Soros is positioned for, what do you think he would be doing?
I cannot answer any of the above questions because only you personally may have an idea as to what your thought process might be. I caution you however, in the heat of battle, what you believe now may be very very different from the reality when you are faced with it. My personal thought process is this, once the collapse starts it will be bigger and farther reaching than anything we have ever seen before. In fact, I believe what is coming will be 1929, 1987, 2000 and 2008 all wrapped up into one big toilet flush! We have more debt than ever before. True unemployment if calculated the way we used to is probably pushing levels seen at the depths of the depression. The same can be said about true inflation, we are probably running at levels or close to what we saw in 1980. Our Treasury has never before been this indebted and our vaults not this empty in over 100 years.
How is that for a mix? Yet the majority go on as if it's business as usual and fool themselves into believing "I'll do what I need to do when the time comes". My point is this, if the stock market is down 10% or more in a couple of days or gold and silver up 10-20%, what will you do? Will you hesitate to sell stocks or buy metal (real money)? Human nature says that you in fact will hesitate.
I can foresee a meltdown/melt up in stocks and precious metals coming. I believe it is possible we could see in a one week to one month timeframe where stocks lose nearly 50% and metals double ...AND THEN the markets close. I have said all along I believe we will see a bank/market holiday where everything closes and then will reopen at "new" levels. Human nature says you will not do anything in the tumultuous phase, this is called the "deer in the headlights" syndrome. Then, if I am correct, you won't be able to do anything while the markets are closed ...which leaves you with what alternative?
The "alternative" is to use your own common sense and logic to where we are now, where we are headed and what you need to do about it. The time is now, right NOW! Did you know last Thursday that WW III could have started the next day? Do you know when or what the spark will actually be? No, you don't, I don't and only a handful of insiders do. All I can say is that the U.S./NATO/West is hell bent on starting a war somewhere and soon to cover up the bankruptcy they've caused. Markets will do things that previously had been unthinkable. Trades will "clear", or not. Metals will be available for delivery, or not. Markets will be open to transact business, or not. Please don't wait for the "or not" phase, in my opinion it has an almost 100% probability of arriving.
Regards, Bill Holter
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-- Published: Tuesday, 19 August 2014 | E-Mail | Print | Source: GoldSeek.com