Financial Reserve

[Toto]

Hey Silver, watch this…

https://youtu.be/qnFr1ttmFKI

In particular, watch it here…

https://youtu.be/qnFr1ttmFKI?t=1403

Excerpt:

“I use debt as a proxy for all the new money that’s been printed. And you see what they do when they do that reset is they cover some level of how much money is out there, and that we’re not going to know they do it. But since gold if finite, and debt is infinite until nobody trusts it anymore, easily put, I’m not going to get you to the penny, but at least I’ll get you to the vicinity, YOU TAKE ALL THE DEBT AND DIVIDE IT BY ALL THE GOLD, (my emphasis) and so right now that number is somewhere…north of nine thousand dollars in gold, in terms of dollars, and six hundred dollars in terms of silver, and what I think is interesting is people go; “Whoa whoa, nine thousand?” Well that’s because we’ve been trained to put value in in dollars when they have no value until you convert them into a good or service. So what gold primarily does is it hold your wealth even.”

[Silver]

Excellent, Toto. I watched for a few minutes at the 2nd link and will try to see the rest later.

The message is clear: Our financial reserve should be measured in ounces, not dollars. Fiat will fail so don't rely on fiat.

[Silver]

Hey Silver, watch this…

https://youtu.be/qnFr1ttmFKI

In particular, watch it here…

https://youtu.be/qnFr1ttmFKI?t=1403

Excerpt:

“I use debt as a proxy for all the new money that’s been printed. And you see what they do when they do that reset is they cover some level of how much money is out there, and that we’re not going to know they do it. But since gold if finite, and debt is infinite until nobody trusts it anymore, easily put, I’m not going to get you to the penny, but at least I’ll get you to the vicinity, YOU TAKE ALL THE DEBT AND DIVIDE IT BY ALL THE GOLD, (my emphasis) and so right now that number is somewhere…north of nine thousand dollars in gold, in terms of dollars, and six hundred dollars in terms of silver, and what I think is interesting is people go; “Whoa whoa, nine thousand?” Well that’s because we’ve been trained to put value in in dollars when they have no value until you convert them into a good or service. So what gold primarily does is it hold your wealth even.”

Sobering stuff.
"The ultimate plan to chip us all," he says.
"It's food, water, energy, security, community, barterability, and wealth preservation," she says.

Sound like "prepare every needful thing" and have a "financial reserve" which are commandments from God.

Thanks for sharing. I think it will soon be too late for middle-class people to prepare in time. The poor, forget about it. The rich may be able to skate a while longer.

[Silver]

This chart shows when most Americans made the switch to being debt slaves -- 1990 or 1991. President Benson warned us about debt in 1987, as have prophets since then. They are called seers because they can see what's coming. We ignore them at our eternal peril.
https://www.lds.org/ensign/1987/06/pay- ... e?lang=eng

20170804_dusen_0.jpg (22.76 KiB) Viewed 2228 times

[Silver]

Debt, debt and more debt. Raise your hand if you got out of debt as the prophets warned you to do. Fancy charts at the link below.

http://www.zerohedge.com/news/2017-08-0 ... ns-hit-new

US Credit Card Debt Surpasses Financial Crisis Record, As Student And Auto Loans Hit New All Time High

by Tyler Durden
Aug 7, 2017 3:19 PM

Who would have expected that today's otherwise boring monthly consumer credit report would be the day's most exciting event. Well, moments ago the monthly update from the Federal Reserve confirmed that as of the end of June, total revolving (i.e. credit card) credit rose to $1,021.7 billion, an increase of $4.1 billion on the month, and a new all time high, taking out the previous record high set during the summer of 2008.

Coupled with the monthly $8.3 billion increase in non-revolving credit, which also rose to an all time high of $2,834.1 billion...

... means that total consumer credit in June increased by $12.4 billion, slightly less than the $13.9 billion expected and modestly less than the $18.4 billion increase in May, to $3,855.8 billion, also a record high.

Taking a closer look at the quarterly update in non-revolving debt, we find that for another consecutive quarter, both student and auto loans hit record highs, of $1.450 trillion and $1.131 trillion respectively, although there does appears to be a modest slowdown in credit issuance for these two largest categories.

Considering the recent sharp revision to the US household savings rate, which wiped out $250 billion in personal savings with the stroke of an excel pen...

... the fact that US households increasingly have to rely on their credit cards to support their daily lives will hardly come as a surprise.

[Toto]

RED ALERT CRYPTO NEWS: "BLOCKCHAIN: The Devil Uses It To Destroy The World" -- The Global Unit of Account from the USD to the SDR

August 08, 2017

The Global Unit of Account from the USD to the SDR has started -- Lynette Zang


https://www.youtube.com/watch?v=SYPsygSHnAs

[Toto]

More from Sean and Lynette Zang

Brad Peters – Intel Software Designer:

“Sean, if a global crypto coin controlled by the BIS comes to internationalize property onto their crypto block chain, they get their One World Government and one world currency all in the same stroke.”

Watch the follow up interview with Lynette Zang here: https://www.youtube.com/watch?v=sG3Ju8AhCKM

[Silver]

RED ALERT CRYPTO NEWS: "BLOCKCHAIN: The Devil Uses It To Destroy The World" -- The Global Unit of Account from the USD to the SDR

August 08, 2017

The Global Unit of Account from the USD to the SDR has started -- Lynette Zang


https://www.youtube.com/watch?v=SYPsygSHnAs

I watched this video at lunch yesterday and forgot to thank you for it. It seems there are still some pieces of the puzzle missing, but I do like the lady's analysis.

[Toto]

Between Jim Willie, Catherine Austin Fitts, and Lynette Zang, it seems that the hand basket is about to spill the entirety of its contents. This should be a clarion call for constitutional restoration, but it seems the vast majority of the Elders are still asleep in the poppy fields. There may still be some time, but the window is closing faster than a pupil in the bright light of day.

Personally, my favorite Coins are Morgan and Peace Dollars as I consider them LAWFUL money of the united states, according to the coinage act of 1792, as they contain 371.25 grains of silver, followed by the lightened coins of junk silver because they are readily identified in a barter situation. However, considering Lynette’s advice, I am considering starting a “coin collection” of gold coins as they are not subject to confiscation under current “supposed” laws. I also learned that Ron Paul only accumulate numismatic coins.

But then sometimes I wonder if precious metals will be of any value at all in a global debt slave scenario. I still maintain a 3 month reserve of FRN’s just in case there is an opportunity to pass through the reset and come out on the winning side. But at this point; I’m not holding my breath.

That’s all I have for now. Been too busy being a happy idiot in the struggle for the legal tender to discuss any further. But I do recommend the videos posted above. I think Zang is right on the money!

BTW, I can honestly raise my hand about the being out of debt thing. I have barterable skills, and need to go make kale chips, freezer pickles, and still looking for a good recipe for pickled beets. Between demands for my value production, and gardening chores, my plate spilleth over!

[Silver]

Between Jim Willie, Catherine Austin Fitts, and Lynette Zang, it seems that the hand basket is about to spill the entirety of its contents. This should be a clarion call for constitutional restoration, but it seems the vast majority of the Elders are still asleep in the poppy fields. There may still be some time, but the window is closing faster than a pupil in the bright light of day.

Personally, my favorite Coins are Morgan and Peace Dollars as I consider them LAWFUL money of the united states, according to the coinage act of 1792, as they contain 371.25 grains of silver, followed by the lightened coins of junk silver because they are readily identified in a barter situation. However, considering Lynette’s advice, I am considering starting a “coin collection” of gold coins as they are not subject to confiscation under current “supposed” laws. I also learned that Ron Paul only accumulate numismatic coins.

But then sometimes I wonder if precious metals will be of any value at all in a global debt slave scenario. I still maintain a 3 month reserve of FRN’s just in case there is an opportunity to pass through the reset and come out on the winning side. But at this point; I’m not holding my breath.

That’s all I have for now. Been too busy being a happy idiot in the struggle for the legal tender to discuss any further. But I do recommend the videos posted above. I think Zang is right on the money!

BTW, I can honestly raise my hand about the being out of debt thing. I have barterable skills, and need to go make kale chips, freezer pickles, and still looking for a good recipe for pickled beets. Between demands for my value production, and gardening chores, my plate spilleth over!

I heartily thank you for your contributions. The info source you introduced is quite good. Blessings on you and yours and here's hoping that the reset is as short as possible.

[Toto]

Thanks Silver.

Enjoying a main course salad as I write. 5 kinds of lettuce, tomatos, radishes, carrots, scallions, beets, hemp sunflower pumpkin and flax seeds, avocado, and my favorite blue cheese dressing. All from my garden, except for the seeds, avocado,and dressing. Making red Russian kale chips (if you can beat em, eat em) and freezer pickles after dinner.

YUM!

Ah yes, the life of abundance! (Using OPD...other peoples dirt...I don't own any dirt of my own)

BTW, I am using silver to extend the life of my greens. Extends the life of living food about a week in the fridge. Who says you can't eat silver?

[Silver]

Thanks Silver.

Enjoying a main course salad as I write. 5 kinds of lettuce, tomatos, radishes, carrots, scallions, beets, hemp sunflower pumpkin and flax seeds, avocado, and my favorite blue cheese dressing. All from my garden, except for the seeds, avocado,and dressing. Making red Russian kale chips (if you can beat em, eat em) and freezer pickles after dinner.

YUM!

Ah yes, the life of abundance! (Using OPD...other peoples dirt...I don't own any dirt of my own)

BTW, I am using silver to extend the life of my greens. Extends the life of living food about a week in the fridge. Who says you can't eat silver?

Very cool. Thanks for making us all jealous with your healthy menu.

Hey, the Japanese eat gold flake and gold leaf. I lived there a while of course and ate some myself. It's a somewhat expensive delicacy.
https://www.lonelyplanet.com/news/2016/ ... -malaysia/

[Toto]

Guess I'll have to eat my Tillamook Marionberry Pie ice cream (feeling guilty - can't taste the cesium 137 either) without the gold tonight. :ymsigh:

But I have pre-Fukushima tuna fish in my food storage.

[Silver]

I am NOT recommending you buy these pennies. I am recommending you save pennies. Keep every penny and nickel (which is 75% copper) you receive in change to add to your financial reserve. If you're ambitious, you can trade your paper money for rolls of pennies and nickels at the bank.

Please note that your pennies should be sorted into two piles. One is for the 95% copper pennies and the other is for the recent pennies that are almost totally zinc. Their weights are slightly different so if you don't have a gram scale to check, you can make a simple seesaw as in the picture below. In 1982, the US Mint switched to the 97.5% zincoln so there are both types that year. If you don't want to measure the weights, you can just throw all your 1982 and later pennies into one ziplock and all the pre-1982 pennies into another.

test pennies.jpg (89.86 KiB) Viewed 1783 times

The current value of the 1981 penny is 1.95 cents, or almost double. People actually sell them at a premium below that though:
http://www.ebay.com/itm/7500-COPPER-PEN ... SwY3RXJKBy

More info:
https://www.cointalk.com/threads/a-guid ... ion.55647/

[Silver]

history.jpeg (87.7 KiB) Viewed 1726 times

[Silver]

http://www.munknee.com/why-you-should-h ... l-as-gold/

Which is Better to Own – Gold or Silver?
August 22, 2017

In this article I’d like to focus on silver’s attributes as compared to gold, make a case for holding some, and discuss some ultimate price possibilities.
Gold is known as the ultimate form of money; the king of money. Silver is generally thought of as gold’s little brother or ‘Poor Man’s Gold’. It is said that:
Gold is the money of Monarchs,
Silver is the money of Gentlemen,
Barter is the money of Peasants, and
Debt is the money of Slaves.

Both gold and silver have been used as money forever. Historically, the price of gold has almost always been greater than that of silver. This is because silver is ten to twenty times more plentiful in nature.

Should We Only Hold Gold?
I say no for the following reasons:
1. you get more (metal) for your money holding silver.
2. the price of silver has more room to appreciate, both because of its relative low price and because of the current relatively high gold:silver price ratio.

Should We Only Hold Silver?
I say no again – for the following reasons:
1. Gold is highly recognizable and highly coveted in all societies. Most world governments and central banks hold gold but virtually no silver, save a few notable exceptions (Russia, China, and India). They know that gold is the ultimate money.
2. Just as you would diversify your portfolio among asset classes and large/small cap stocks, etc., so too should you diversity between gold and silver. No one knows which will appreciate faster or further and be the superior investment going forward. Therefore, I hold both.

What Are Silver’s Major Attributes?

Silver has three huge attributes that make it special, valuable, and unique:
1. Versatility: silver has many and varied important uses where it is the best solution. It is either the best material to use for a given application or it is the least expensive of all the alternatives.
2. Inelasticity: more silver is not produced as price increases because most silver comes from other-than-silver mines, and less is not consumed as the price increases because there are no less-expensive alternatives.
3. Duality: silver has the potential to do well price-wise in both an up and a down economy. Being both an industrial metal as well as money in and of itself, silver tends to have a market no matter the condition of the economy.

How Do Gold and Silver Compare With Each Other?
Below are 22 things to ponder when comparing and contrasting gold and silver, in no particular order:
1. Gold is hoarded and the above-ground stockpile is continuously expanding. Silver is consumed and is uneconomical to recycle in most uses.
2. There is greater than 300 times the dollar value of gold in above ground form as there is silver. Silver is the smaller market by far.
3. According to the U.S. Geological Survey, there are fewer years of production of silver left in the ground than any other metal or mineral, including gold.
4. Silver is used in more applications than any other commodity (aside from petroleum).
5. About 30% of silver comes from primary silver mines. Approximately 70% is byproduct of other primary metal mines. Most gold is produced from primary gold mines.
6. There is less gold mined than silver, but there is more gold than silver bullion in existence.
7. Both gold and silver have been selling near or even below the cost of production for the last 15 years.
8. Both gold and silver are up over five fold since the beginning of this current bull market.
9. Silver is used in industry and for investment. Gold is used almost entirely for investment.
10 Silver is more expensive or difficult to store (or hide) than gold because you get more for your money.
11. It would be easier for silver to rise higher on a percentage basis than gold due to the ‘law of large numbers’.
12. Only about 2% of the 160,000 tonnes of gold unearthed over the last 5,000 years has been lost and is unrecoverable according to Goldfields Mineral Service (GFMS) and the World Gold Council (WGC) while most of the silver ever mined is unrecoverable and gone for good.
13. Silver supply and demand are both ‘inelastic’. This means that supply cannot be ramped up quickly when its price rises.
14. The National Inflation Association (NIA) picked silver as its investment of the decade.
15. The Silver:Gold Price Ratio favors silver appreciation to return to historic norms.
16. Both gold and silver tend to rise and fall in price together but not necessarily in percentage terms. Their price movements are still highly correlated though.
17. In precious metal bull markets, silver always outperforms gold before it is over. Silver has a tendency to underperform gold as a rally in the metals gets going, however, it tends to greatly outperform gold near the market tops.
18. Gold and silver related stocks tend to greatly outperform on the way up but terribly underperform on the way down. On the way up, many stocks leveraged the metals 3, or 4, or 5:1 but on the way down some gold and silver stocks lost 90% or more of their pre-crash market value.
19. When the economy is good, silver will tend to outperform and when the economy is bad, gold will tend to outperform. This occurs because silver is also an industrial metal besides being a monetary metal and, [as such,] is in great demand when the economy is rolling along but less in demand when the economy is in recession. Conversely, gold tends to be forgotten when times are good and remembered when times are bad. Even though gold fell substantially during the financial meltdown of 2008, it fell less than did the stock indexes, silver, or oil.
20. I believe silver may outperform gold dramatically before the bull has run its course. Silver rose more than 38 fold in the 70’s bull market; from a fixed price of $1.29 to $50 ($52.50 CBOT). Silver bottomed just above $4 in 2001. 38 x 4 = $152. Not a bad initial target.
21. Interestingly, the Silver/Gold ratio bottomed at ~ 16:1 in 1980. In other words, you could exchange one ounce of gold for 16 ounces of silver near the end of that bull market. Today, the ratio is almost 5 times higher (76:1). Should gold get to $6375 and the ratio return to 16:1 at the top, silver will reach almost $400 an ounce. That’s a 100 fold increase from its pre-bull low. Remember, we’re only playing with numbers here, the markets will surprise and do their own thing in due course.
22. The following two extremely important and potentially explosive events for silver have happened just recently:
a) CFTC commissioner Bart Chilton, in regards to the trading of silver on the Commodities Exchanges, said; “There have been fraudulent efforts to persuade and deviously control that price”, and “I believe there have been repeated attempts to influence prices in the silver markets”, and “the public deserves some answers to their concerns that silver markets are being, and have been, manipulated.”
b) Two separate lawsuits against JPMorganChase and HSBC for manipulating and suppressing the price of silver futures on the Comex in violation of the Commodity Exchange Act and the Sherman Anti-Trust were filed as class action suits. Any hint that these suits have merit and may be settled in favor of the complainants or a finding of price suppression by the CFTC in its current silver market investigation, could send the silver price sharply higher.

Conclusion

Which is better to own – gold or silver? Both will do well but:
Silver Will Outperform Gold in the End!

[Silver]

Here's an interesting chart. It shows that nothing lasts forever. So if your savings and financial reserve are all denominated in US$ or some other 1st world fiat, you might want to overcome your recency bias, take a big ol' step back and look at the big picture. There's a huge wave of reality heading this way. Prepare now.

World reserve currency.jpg (127.09 KiB) Viewed 1200 times

Source: The Burning Platform


The chart was part of the article below. For some background, Trump, our beloved Marmalade In Chief, is a tool of the Gadiantons, and has been threatening the Venezuelans with murderous sanctions for no good reason. Sure, Maduro is a commie and should be thrown out. How likely is that to occur if the Venezuelan middle class is starving to death?

http://theantimedia.org/venezuela-stops ... -payments/

Venezuela Just Officially Stopped Accepting Dollars for Oil Payments
September 14, 2017 at 7:06 am
Written by Tyler Durden

(ZHE) — Did the doomsday clock on the petrodollar (and implicitly US hegemony) just tick one more minute closer to midnight?

Apparently confirming what President Maduro had warned following the recent US sanctions, The Wall Street Journal reports that Venezuela has officially stopped accepting US Dollars as payment for its crude oil exports.

As we previously noted, Venezuelan President Nicolas Maduro said last Thursday that Venezuela will be looking to “free” itself from the U.S. dollar next week. According to Reuters,

“Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,” Maduro said in a multi-hour address to a new legislative “superbody.” He reportedly did not provide details of this new proposal.

Maduro hinted further that the South American country would look to using the yuan instead, among other currencies.

“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro also said.

[harakim]

All of those countries have strong currencies now

[Silver]

Reminder: You are commanded by the Lord to have a financial reserve along with your food storage.

Question: How is your financial reserve looking?

If you're American and your financial reserve consists mainly of what you'll be paid by Social Security after retirement, you need to get a new paradigm.

http://www.zerohedge.com/news/2017-10-1 ... e-tax-hike

Social Security Means-Testing Looms: "It's Impossible Without A 50% Income Tax Hike"

Oct 14, 2017 2:30 PM
Authored by John Mauldin via MauldinEconomics.com,

The projected total US debt will be $30 trillion within 10 years, using the CBO’s own numbers. But the CBO also makes the rosy assumptions that there will be no recessions and that GDP will grow at a 4% nominal rate.

Now, that’s possible; I'm inclined to haircut it a bit.

If you asked me to bet the “over/under” on the debt in 2027, I would bet the over at $35 trillion.

After the next recession the deficit will be $30 trillion within 4–5 years and then grow from there at a rate of anywhere from $1.5 to $2 trillion per year (I covered my team’s calculations in this letter).

Is it any wonder why I’m so concerned about pensions?

Social Security Is Impossible Under This Deficit

Note: That is not the CBO’s projected debt. It does not take into account the off-budget deficit that still ends up having to be borrowed. Last year the deficit was well over $1 trillion—but we were told it was in the neighborhood of $600 billion.

If any normal company tried to use accounting like the US Congress does, the SEC would rightly declare it fraudulent and shut it down immediately.

Larry Kotlikoff wrote in an article on Forbes that we would need an immediate approximately 50% increase in taxes to fund our future deficits. That’s what we would need to create a true entitlements “lockbox” with the funds actually in it.

But surely everybody knows by now that there is no lockbox with Social Security funds in it. That money was spent on other government programs and debts. And so when the CBO doesn’t count the trust funds as part of the national debt, they are not only being disingenuous, I think they are committing financial fraud.

The money that will actually pay for Social Security and Medicare down the road is going to have to come out of future taxes, just as for any other debt of the US.

So at some point – even though Republicans are jawboning hard about cutting taxes now – we are going to have to raise taxes in order to fund Social Security and Medicare. I personally think it will have to be done with a value-added tax (VAT), because the necessary increase in income taxes would totally destroy the economy and potential growth.

And yes, I know some of you will write back and say we had much higher tax rates in the 50s and we had good growth then, but our demographics and productivity levels were completely different in that era.

Plus, nobody actually paid the highest tax levels. I remember that in the 80s, before Reagan cut the tax rate, I had so many deductions that my effective tax rate was about 15%. The irony is that after the Reagan tax cuts, my total tax payments went up, not down – I lost all of my cool deductions! Aaah, the good old days…

But the simple fact of the matter is that no Congress is going to fund Social Security and Medicare through tax hikes. Before they ever go there, they will means-test Social Security and increase the retirement age – which they should.

[Silver]

Meanwhile, in Puerto Rico...

http://www.zerohedge.com/news/2017-10-1 ... and-silver

Prior to the hurricane residents were warned to stock up on all essentials, but few could have realised just how important cash would become.

Few people appreciate this. In times of disaster like this, cash becomes king. Followed closely by gold and silver which can be traded for cash or used as deposits or for payment for life's necessities.

Most shopkeepers who are struggling to sell their merchandise as they cannot take electronic payments and whose potential customers do not have cash will gladly accept small gold and silver coins and bars as payment in lieu of cash.

Coin dealers, jewellers who buy from the public and pawnbrokers in Puerto Rico have been very busy since the crisis as people exchange gold and silver jewellery and bullion coins and bars for cash.

Ironically, less and less governments want us to have access to cash, let alone to gold and silver, and this is making us more fragile financially.

[Silver]

As long as the Federal Reserve exists you will know that whoever occupies the White House is a puppet and that you are a slave.

Do you really want your financial reserve to be based on a fraud from the private company that makes you a slave?

http://www.zerohedge.com/news/2017-11-0 ... malization

Dear Janet - About That Balance Sheet Normalization?

by Tyler Durden
Nov 1, 2017 12:45 PM

At the last FOMC meeting - on September 20th - Janet Yellen and her merry band of failed forecasters proclaimed that the Federal Reserve Balance Sheet would be allowed to normalize with reinvestments slowed or stopped in October.

There's just one thing...

The Federal Reserve balance sheet has risen by over $5 billion in October - the biggest monthly rise since February.


Now, we are well aware of the lags in reporting data from SOMA but this is as of last Wednesday and so unless The Fed suddenly dumped over $5 billion in its balance sheet on Thursday and Friday, we suspect 'normalization' means something different to the PhDs at The Fed than it does to the avereage joe.

[Silver]

Being a marginal buyer, borrower or renter means you are living beyond your means. Living beyond your means means you are not obeying the commandment to build your financial reserve.

http://www.zerohedge.com/news/2017-11-2 ... and-renter

Beware The Marginal Buyer, Borrower, And Renter

Tyler Durden's picture
by Tyler Durden
Nov 22, 2017 8:04 AM
5
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Authored by Charles Hugh Smith via OfTwoMinds blog,

Bubbles always look unstoppable, yet they always burst.

When times are good, the impact of the marginal buyer, borrower and renter on the market is often overlooked. By "marginal" I mean buyers, borrowers and renters who have to stretch their finances to the maximum to afford the purchase, loan or rent.

In bubble manias, buyers of real estate reckon the potential appreciation gains are worth the risk of buying a house they really can't afford with the intention of flipping the home for a profit.

Workers moving to high-rent cities reckon they'll either make more money going forward or find a cheaper flat later, so they pony up the high rent.

When there's steady overtime or generous tips adding to the household income, buying a new car or getting a new auto lease looks do-able.

It's difficult to assess how many recent buyers, borrowers and renters are marginal, but given the stagnation in household incomes and rising debt loads, it seems reasonable to guess that a substantial number of recent buyers, borrowers and renters are one lay-off or one missed bonus or one unexpected expense away from being unable to pay their mortgage, loan payment or rent.

On the surface, home and auto sales and the rental market all look robust because there's no differentiation in sales data between people paying cash, qualified buyers/renters and marginal buyers/renters for whom every month is a stretch.

There have been times in my life when I was down to my last $100, and if things don't turn up very quickly and in a sustained fashion when finances are that fragile, then payments will be missed at the first unexpected drop in income or first unexpected expense. Budget-killers include medical emergency, illness/lost work time, major car repairs and a host of other everyday risks.

There's another layer of recent buyers who don't feel they're marginal--but their financial stability is more contingent than they realize. Their employment seems solid, but their employers sales and profits are more contingent and fragile than they realize.

When good times reverse to bad times, every enterprise with marginal sales takes a hit, and layoffs follow as night follows day. When times are good, layoffs are not even on the horizon. But when the economic tides recede, skittish, hollowed-out, and/or debt-burdened employers push the layoff button sooner rather than later because their own financial structure is so fragile.

Those laid off assume they will find another job quickly because in good times, there appears to be a labor shortage. But when the tide ebbs, the job offers dry up seemingly overnight.

The Grand Illusion being pushed by central bankers and conventional pundits is that another round of interest rate cuts and quantitative easing (QE) will restart the economy should it falter. This is illusion because it ignores how much of the market is dependent on marginal businesses, buyers, borrowers and renters who will not benefit from QE or a tiny decline in interest rates.

Conventional economists don't quantify marginal businesses, buyers, borrowers and renters, and so the rapidity of the next drop in the economy will come as a great surprise to them. There is little to no awareness of how many enterprises, buyers, borrowers and renters are hanging on by a slender thread--and how many who reckon their finances are robust are one layoff away from insolvency.

Bubbles always look unstoppable, yet they always burst. The symmetry in this chart of the Case Shiller Housing Index for San Francisco suggests the clock is ticking on markets being propped up by marginal buyers, borrowers and renters:

[Silver]

What's in your Financial Reserve?

https://www.zerohedge.com/news/2018-01- ... harge-offs

Dan Zwirn Prepares To Profit From Coming "Tidal Wave Of Consumer Debt Charge-Offs"

Wed, 01/03/2018 - 15:52

The coming wave of consumer debt defaults, from the subprime auto market to credit cards and student loans, has been a frequent topic for us over the past several months...here are just a couple of examples:

Carmageddon: Deep Subprime Auto Delinquencies Spike To 10-Year Highs
New Warning Signs Emerge For Subprime Auto Securitizations
Is The Bubble About To Burst? Student-Loan Delinquency Rates Rise For First Time In Years
Baby Boomers Borrowed $100BN In Student Loans For Their Children And Now Defaults Are Soaring

Of course, while it's relatively easy to recognize the signs of debt bubbles (deteriorating underwriting standards, rising delinquencies, etc.) it's almost impossible to know precisely when, where or how they will pop...as anyone who lived through the 'great recession' can tell you. Which is precisely why Daniel Zwirn (formerly of the now defunct DB Zwirn hedge fund) and currently of Arena Investors, says he's taking steps today to position his fund to invest in the inevitable "tidal wave of consumer charge-offs" when the various consumer debt bubbles do finally burst. Per Bloomberg:

“We’re about to hit a tidal wave of consumer charge-off activity,” Zwirn says in an interview. “We’re working on positioning ourselves to buy a lot of that. That whole defaulted subprime consumer finance ecosystem is going to be very interesting.”

Zwirn, whose firm is based in New York, sees opportunities in the more than $1 trillion of U.S. student loan debt.

Subprime auto market has shown “cracks for an extended period of time and those are getting worse,” Zwirn says. “A lot of that has been masked by a blazing, white-hot securitization issuance market. We think that will offer opportunities as collateral performance deteriorates.”

“Many people who are buyers of those tradeable corporate, ABS and mortgage securities across the board will close their eyes,” Zwirn says. “As long as the rating is there, they’ll buy it.”

As we pointed out a couple of weeks ago, one potential catalyst, at least for the auto loan market, may come in the form of private equity firms throwing in the towel on roughly $3 billion worth of subprime auto bets they made in the wake of the 'great recession' that have made no money over the past eight years.

A Perella Weinberg Partners fund has been sitting on an IPO of Flagship Credit Acceptance for two years as bad loan write-offs push it into the red. Blackstone Group LP has struggled to make Exeter Finance profitable, despite sinking almost a half-billion dollars into the lender since 2011 and shaking up the C-suite multiple times. And Wall Street bankers in private say others would love to cash out too, but there’s currently no market for such exits.

Since the turn of the decade, buyout firms, hedge funds and other private investors have staked at least $3 billion on non-bank auto lenders, according to Colonnade. Among PE firms, everyone from Blackstone and KKR & Co. to Lee Equity Partners, Altamont Capital and CIVC Partners waded in.

Many targeted smaller finance companies that often catered to the least creditworthy borrowers with nowhere else to turn. Overall, subprime car loans -- those extended to people with credit scores of 620 or lower -- have increased 72 percent since 2011. Last year, about 20 percent of all new car loans went to subprime borrowers.

“The PE guys sailed into this thing with stars in their eyes. Some of the businesses have done fine and some haven’t,” said Chris Gillock, managing director at Colonnade Advisors, a boutique investment bank. But right now, “it’s about as out-of-favor a sector as I can think of.”

As it turns out, making money on consumer finance companies only works to the extent that manufacturers maintain some level of discipline and refrain from exploiting their captive finance companies to flood the market with new supply...a move which will eventually lead to crashing used car prices and massive subprime securitization losses.

Unfortunately, as we pointed out last month, a review of the latest Fed data on auto loans underwritten by "Banks and Credit Unions" compared to those loans provided by "Auto Finance" companies prove that the nightmare scenario is playing out for independent subprime lenders...

First, taking a look at auto loans provided by traditional banks and credit unions, one can see some marginal deterioration in subprime auto loans. That said, the deterioration is certainly nothing substantial with 90-day delinquencies pretty much in line with 2004/2005 levels and no where near the rates experienced in 2008/2009.

But, a drastically different picture emerges when looking at just the auto loans originated by America's auto finance captives. To our great 'shock', auto OEMs in the U.S. seem to have been much more "flexible" on underwriting standards over the past couple of years resulting in delinquency rates that nearly rival those last experienced at the height of the great recession.

Of course, waiting for bubbles to burst can be about as rewarding as watching paint dry so we sincerely hope Zwirn is a patient investor.

[iWriteStuff]

Ironically, less and less governments want us to have access to cash, let alone to gold and silver, and this is making us more fragile financially.

This one's for you, Silver!

For in every country of the world, I believe, the avarice and injustice of princes and sovereign states, abusing the confidence of their subjects, have by degrees diminished the real quantity of metal, which had been originally contained in their coins.
- Adam Smith, The Wealth of Nations, Chapter IV, p. 34.

[Silver]

The Dow closed over 25,000 today. Please ignore all the articles posted in this thread before this post. Everything is awesome.