The Phaserl


Andy Hoffman: This Dollar Ponzi Scheme Will Collapse

by Anthony Wile, The Daily Bell:

Daily Bell: Good to speak with you again, Andy. What’s new with you?

Andy Hoffman: Working harder than ever to dispel the mistruths and misinformation permeating the clueless, captive MSM and historically manipulated financial markets. Thankfully, despite multi-year lows in Western Precious Metals sentiment, Miles Franklin is as strong as ever, as we complete our 25th year of operation.

Daily Bell: In a recent blog entry you referred to the “potentially cataclysmic Scottish referendum.” What did you mean by that?

Andy Hoffman: Just from a pure economic standpoint, it would indeed be a lethal blow to the UK economy – which, like the U.S., is supported solely by unfettered central bank money printing, which has created nearly identical equity and high-end real estate bubbles. Scotland generates just 10% of UK GDP, but theoretically would have title to 90% of North Sea oil and gas revenues – which not only could prove devastating for England, but could yield years of bitter property disputes.

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2 comments to Andy Hoffman: This Dollar Ponzi Scheme Will Collapse

  • Hondo Stalwart

    Yes it will, then, the IMF will become the safety net with its SDR’s as the new world order plants the flag.

  • Ed_B

    I really enjoy reading Andy Hoffman’s thoughts and am grateful that he spends the time that he does to inform us all of them. How much do I enjoy this reading? So much that I am even willing to go to the Daily Bell web site, something I haven’t done since they quite printing reader comments.

    Anyway, to comment on Andy’s comments:

    “London is perhaps Europe’s most expensive city, and the British populace is dealing with the same economic horrors as Americans. Not to mention, British banks are even more levered than American banks; and thus, just one crisis away from collapse.”

    I am not convinced that the UK can collapse so long as the US Gov and Fed remain in place. If the UK were in imminent danger of collapse, I believe that both the US Gov and the Fed would pull out ALL of the stops to prevent this from happening. If that requires them to pull several trillion US$ out of thin air and give it to UK banks, so be it. They will do it and quickly too.

    “As fiat currency is the problem in the first place, why would a “basket” of fiat currencies be any better? Not only does such a concept – such as the fabled “SDR,” or Special Drawing Right – make no economic sense, but there would be no political consensus behind it in an increasingly fragmented world. And oh yeah, the people wouldn’t accept them.”

    I believe that a basket of currencies IS possible going forward IF it is the new World Reserve Currency standard… but probably not otherwise. There is a serious clash going on as we speak between the creditor and debtor nations. The creditor nations are VERY unhappy about all this money printing that is devaluing currencies of the debtor nations. They are being ripped off and they are well aware of it. There will come a time when currencies MUST be backed by something tangible and not merely the “full faith and credit” of this or that nation. Such promises have proved to be pretty much worthless with nations dedicated to massive spending that considerably exceeds their production. The time is coming when the creditor nations simply refuse to accept over-printed currencies for REAL goods and they will want something of REAL value in exchange for their real goods.

    “”Stock markets” no longer exist, but are simply manipulated higher by the Fed and PPT on a daily basis – per the exact same algorithms utilized to suppress gold and silver. In the end game, stocks will either hyper-inflate (a la Zimbabwe or Venezuela) or crash. Take your pick which, but ultimately history’s largest equity bubble – bigger even than 2000 – will end in massive real losses.”

    I agree and history provides the perfect example. In 2008, the nation of Zimbabwe collapsed utterly. But, immediately before that collapse, both their currency and their stock market were at ALL TIME highs. Remember this whenever anyone tells you that the US economy is fine because the US$ is strong and our stock market is doing so well.

    “It’s all a matter of personal preference. Silver is by far more undervalued, by many multiples. However, I prefer to maintain a 50/50 weighting, simply because it makes me most comfortable. That said, I believe the gold/silver ratio, currently at 66:1, will ultimately trade at or below its historic average of 15:1.”

    If I really thought that the gold / silver ratio was going to 15:1, I would not own a single ounce of gold but would be 100% in silver. I would do that because it is both logical and reasonable. Why hold an asset of lower potential when one can hold an asset of considerably greater potential?

    “Bonds are more overvalued than stocks, and particularly corporate bonds.”

    I would agree that government bonds are well into a bubble phase but not corporate bonds. I would buy corporate bonds rated as A or better as investments but would not touch any sovereign bonds at any price no matter what their rating. We have all seen that governments tend to cheat when they need to and putting a lot of pressure on the credit rating agencies as regards their bonds is but one example of it. If the UST bonds were rated as to their true investment quality, they could not possibly be rated higher than about C, which is vastly lower than the current AAA and AA+ ratings.

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