Rough Seas Ahead

Government Outlaws
By Roger Wiegand

Welcome To The New Banana Republic Of The United States of America and Black Markets. We would not, under any circumstances, believe our government would make decisions flying in the face of sacred United States contract law. What they have done to auto company bondholders is to favor unions for political votes forcing bondholders into a lower, non-preferred payment order. This says corporate contracts in the United States are now meaningless.Auto union people were moved to the head of the bankruptcy line while bondholders with a preferred first lien position by CONTRACT LAW, are now forced to the end of the line.
If your government will do this to auto bondholders, what will they do to the Sheeple?
I just saw a report that FDR taxes in the 1930’s were temporarily as high as 80-90%. I have not confirmed this but pass it along for what it’s worth. Destruction of wealth by the Obama administration is moving breathtakingly faster in escalation mode reinforcing Marc Faber’s prediction of certain hyperinflation.
Should the Federal Reserve stop their reliquification-reflation program, the whole system could cave-in overnight. So far, they’ve tossed roughly $2 Trillion of taxpayer cash at all these problems but Bill Gross at Pimco says they must inject a total of $6 Trillion to begin to cover the messes creating a recovery market reaction.
We would expect a world-wide systemic crack-up at around $4 Trillion as key components of the global credit and bond markets in Europe, Asia and the U.S. will simply not be able to take it. Our expectations for the next 90 days are for convoluted choppy markets with a mild stocks’ selling event in the shorter term.
The Sheeple are girding for economic and potentially civil war. Gun and ammunition sales are off-the-charts. Tea parties are growing. The next stage will be street violence confrontations and more civil disobedience. Governmental pushback will only incite more riots and escalate troubles. States are releasing inmates from over-crowded prisons to save money. Crime shall soon go to the moon. This dire situation presents very big trouble with a potential for bank runs, seizure of pension plans to be converted for government usage (theft) and higher taxes. The newly proposed VAT tax could take an additional 25% more of your spendable income. Markets are nearing a peak in precious metals shares that generally follow primary stock indexes. When the current stock market peaking descends into the Sell in May, PM shares normally follow. With each cycle we think gold and silver shares might sell less posting higher lows. This could be decided on the shorter term by how low S&P’s trade. We expect 800 to 850 with 800 being more probable.
Do not get tangled-up in daily noise. Keep studying the larger view and buy precious metals after each profit-taking correction. Headwinds are building into an economic hurricane. Take care of business right now. My dire fall prediction might surprise us and arrive earlier. Time is short.
Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert. –Traderrog
Roger Wiegand
Editor Trader Tracks Newsletter
The Jay & Rog Blog at webeatthestreet.com
Full Article Here: http://www.kitco.com/ind/Wieg_cor/roger_may282009.html