Don’t Hold Your Breath

Below is an excellent article that was posted over at Don't Tread on Me. It is an excellent read and really brings to light the current financial situation that we are experiencing as well as what we can possibly expect in the coming months/years, enjoy!
-Blogging4Bullion


Don’t Hold Your Breath
By Silver Shield, on June 1st, 2011

Financial sanity is returning to the world. The silver bubble has burst. The debt ceiling won’t be raised. The government is going to make trillion dollar cuts in spending. Osama bin Laden is dead, signaling the end to the war on terror. Greece is going to be bailed out. Everything is dollar positive and it is time to dance, right? Don’t hold your breath.

Most bear markets follow the same characteristics. They start with a major wave down, followed by a brief counter trend move to the upside, only to be finished off with an even stronger and final collapse. If you look at the 2008 crash as the first wave down, and the following 3 years after that as the counter trend move, then we are due for the final collapse very soon. The reason is quite simple, none of the problems that caused the crash in 2008, have been corrected. In fact, by all accounts they have gotten much, much worse. Not only are things worse, there is no room for error. A major collapse now would be exacerbated by the fact that all of the safety nets we had in 2008, are destroyed.

I am not a market timer and don’t trade, I spot trends and see their inevitable outcome. My job is to pick the right asset, and to stick with it, until the trend changes. The big trend at work here is a shift away from fiat, paper assets to REAL assets. This is a trend that has been in the making for over a decade. If you take any commodity and compare it to any paper asset, you will see that REAL assets are the place to be. This is not necessarily because the price of these REAL assets are going up, as much as it is the value of their measuring sticks (the dollar) are going down. The more dollars that are put into circulation, the less they are worth. This dilution of purchasing power is caused by Zero Interest Rate Policy (ZIRP) by the Fed and their Quantitative Easing (printing money out of thin air.) Now that the Fed has announced that it is no longer going to do QE, does that mean the end of this trend? Don’t hold your breath.
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