Has the West been cornered? It's an odd question isn't it? This can be interpreted in several different ways. "Cornered" as in financially? Militarily? Economically or even from a production standpoint. How about "morally" or even religiously? Or even intellectually? Let me explain with hopefully few side tracks.
I first thought about writing this because I believe the West has allowed itself to be "cornered" in both the gold and silver markets. You know by now that it's my belief the Chinese are the longs in the COMEX silver and have actually "carried" us along time wise so we would divest more and more of our gold. In order to keep the game going, China put forward 1,000+ tons of silver in their Shanghai inventory which has been 90% drawn down and more than likely used to keep the game going. But after thinking about this for a little bit, it occurred to me that it's not just the precious metals markets "we have let go of" ...it's pretty much everything!
Think about it, we have "cornered" ourselves within a $1.4 quadrillion (with a capital Q!) derivatives market. Like it or not, the U.S. is at the epicenter of this. (We didn't have to be but "rulers" like Alan Greenspan lobbied for it). We are now financially in a position where there is no way out because there must be a loser for every winner and when the loser is busted so badly and cannot make settlement ...even the winner becomes a loser. Without a huge explanation, we live in a "zero sum" financial casino where if someone wins, someone also must lose. This has become the "American way", the Chinese mindset is different as they believe in business as a "win, win" process. Maybe this is why China announced within the last year "they reserve the right for any state agency to default on any derivative"?
How about militarily? Are we cornered here? First, how many bases and how many different fronts can we afford? I don't know the answer but I do know the "direction", less. Finance and military are connected at the hip, in order to "reflate" the economy and markets, wars have always been started because they are "good for business". The problem is that over time, we actually had to start skirmishes in order to get wars started... but the world has wised up to this...and alliances are shifting. Maybe the word "cornered" is wrong in this instance, instead maybe it should be "isolated" as we have proposed for Russia.
Next, has the U.S. been cornered from an industrial or productive standpoint? What is it exactly that we make for export? Unfortunately the answer is "not much". We do however grow a lot of food and foodstuffs ...but much of this is of the GMO variety. What exactly will we be exporting if other countries decide they will not import GMO foods? What if foreigners decide to no longer accept dollars? How will we buy shoes or underwear? How about TV's, smartphones, computers and let's not forget our kids video games? Where will we get these from? How about simple things like wrenches, screwdrivers or even a saw or an ax? We don't make this stuff anymore...where will we get it from if we can't trade dollars for them and no one wants to accept GMO's in trade?
How about religiously? I'll bet you haven't thought much about this one. All over the world, Islamic populations are migrating to western nations with the intent of imposing Sharia law. Just look to Europe, Muslims can block a busy street in prayer with no consequences. Can you imagine were a group of Christians, Jews or Hindus to try this? They would all be hauled off for "disturbing the peace". Don't get me wrong, I am completely tolerant when it comes to religion, anyone has the right to pray to any God they choose but they do not have the right to impose their views, beliefs or laws on anyone else. Particularly if the country was not based on Islam at its creation. In this instance, religion, Europe in particular is being cornered, maybe a better term is "boxed in". As today is election day in the U.S., I might as well mention that "religion" is not a requirement to vote, however, what will happen if a single religion grows so populous that they "vote" to change the land's laws from top to bottom. Scary thought huh?
Speaking of election day, what about our "morals"? In my opinion, we have outright "cornered ourselves" from a moral standpoint which directly affects us from the financial standpoint, let me explain. We have become a nation that no longer believes in self reliance. We are now at the point where half or more of our population receives some type of support or stipend from the government. Does anyone really believe that the "receivers" will ever vote to have their benefits "turned off"? I will give you my opinion on this and if you don't like it then "oh well". In my opinion, anyone under the age of 65 years old who receives any benefit whether it be for housing, food, medical or disability (other than military), should not be able to vote. Once you are 65 years old and receiving Social Security, theoretically this is the repayment of monies already deposited (even though we know the money was spent years ago). The only people who should be allowed to vote are those who "pay in" to the system. They should be the ones who have a say as to how it is spent. I am sure I will get all sorts of liberal pabulum telling me I'm not a nice guy for saying what is obvious and what most who think fairly are thinking. Bring it on!
As for my definition of "corner", I believe we have slowly put ourselves in a position where nearly no movement is possible. We chose this road years ago and it started out harmlessly enough when our prosperous post WWII parents wanted a better and "easier" life for their children. What happened is that this began to weaken the backbone of a once strong nation. Don't get me wrong, much damage has been done by "politicians" along the way always offering "free this and free that" but we should have known better. We should have known that nothing in life is free. The population of the U.S. will probably vote incumbents out of office like unwanted trespassers, it's not going to work and it's too late. We have a two party system of wolves in the same sheep's clothing. Voters can choose door number one or door number tow but both corridors lead to very same corner we have allowed ourselves to be painted in.
The above was written prior to the election results. Americans stood up and "threw the bums out" as the Republicans have taken over the legislative process. I say "bravo" to Americans as they did the only thing they could do in protest. Unfortunately I believe this to be one last shrill of protest before collapse and chaos. As I said prior, we live in a two party system where each party serves the same master, there is no door number three. One can hope but "hope" is the vestige of fools. We can hope that America returns to that of a rule of law. One can hope we go back to strictly following The Constitution. One can hope for investigations into what has happened over the last six years (and prior administrations) to hold accountable all sorts of wrongs and outright crookedness. At least we can hope the new Congress will thwart a dictatorial executive branch and hold the Attorney General accountable for actions and the inaction of looking the other way. In my opinion it is now far (as in many years) too late. Changing Congress at this point is like flying in a new crew to the Titanic after hitting the iceberg. The damage has already been done in every way possible. We are taking on water quickly, a new crew, a new captain, a new anything will not fix the gaping hole in our hull. Only a new ship (system and currency) will do. May God bless America, she needs it!
BILL HOLTER, Associate Writer, Miles Franklin Precious Metal Specialists
