FINAL WARNING

The severe problems that the world economy and financial system have experienced in the last couple of years will seem like a walk in the park compared to what will happen in the next couple of years.

For the investors who haven’t yet protected themselves, let us tell you that you are very lucky. You are lucky that you have been given yet one more chance to protect yourself. But let us be very clear, you have a very short time to put your house in order. Because during the month of November the events that we outlined in our Newsletter “A Shocking Fall” are going to start to unfold.

Dollar down and Gold up

Starting in November, we are likely to see the dollar falling precipitously and stockmarkets turning down after this bear market correction. We will see the bond market falling and especially long term interest rates going up. And most importantly gold will start to move up very strongly.

We have since 2002 advised our investors to protect themselves by buying physical gold and store it outside the banking system. Gold has since gained more than 250%. Also, in the last ten years the Dow Jones has moved down 80% against gold. Most world stockmarkets have had similar falls against gold. So in real terms the stockmarket has been a very poor investment. We expect the Dow to fall another 90% against gold in the next few years.

The party is over

Earlier this year we said that a 50% correction is totally normal in a bear market and that would take the Dow to 10,300 which could happen by early November. Stockmarket investors have been given an incredible gift in the last seven months but the party is now over. Most investors will not realise this until it is too late. They will hang on to their shares for a long time yet and follow the market most of the way down. In our view, the only stocks worth holding are precious metals stocks which are grossly undervalued and will benefit from a very strong rise in gold.

The next few years will be devastating for the world economy, for the financial system and for private lives. We have outlined this scenario in our newsletters and commentaries for a long time.

The majority of people are short sighted and believe the economy has improved because governments have printed trillions of Dollars, Pounds, Euros etc that they call money. But let us be very clear, you can’t abolish poverty by printing paper and you can’t solve the world’s enormous debt problem by exacerbating it. These debts will never be repaid with normal money, not today and not tomorrow – NEVER!

Still time for protection

In the next few weeks until some time in November, investors can still protect themselves by selling their stockmarket investments and buying gold at reasonable prices. Gold at $1,050-60 will be seen as the bargain of a lifetime in the next 12-24 months. But remember that the main reason for buying gold is to protect yourself from the destruction of paper money and assets that will take place in the next few years. Many countries, including the US and the UK will have a hyperinflationary depression which will change the face of the world as we know it today.

So physical gold (and silver) stored outside the banking system is your best protection.

Matterhorn Asset Management has set up a separate Gold Division called GoldSwitzerland (www.goldswitzerland.com) in order for investors to purchase physical gold at very competitive prices and store it in their own name in Zurich, Switzerland outside the banking system and with personal access to their own gold bars.

22nd October

Gold Switzerland - Matterhorn Asset Management

Citigroup (Citibank) Might Implode; Citi is in trouble.

If you watch economic and market websites there has been some interesting news lately out of Citigroup.

Check this out:

Citi (C) is abruptly shutting down credit cards linked to gas station partners.

The bank is offering few details:

The bank said in a statement it "decided to close a limited number of oil partner co-branded MasterCard accounts." That includes not only Shell, but Citgo, ExxonMobil and Phillips 66-Conoco cards.

The close date was Wednesday, and letters were sent out Monday to customers informing them of the change, a Citi spokesman said. The bank would not say how many cards were shut down or how much available credit they represented.

Here's what The Market Ticker has to say...

Citibank's average yield year-to-date (consumer and plastic) was about 12%. But they're suffering 10% defaults, making their true margin about 2%. That's still a positive number.... if it's accurate.

This spread, of course, has a lot to do with previously-issued fixed-rate 12.99% cards (they and everyone else had a lot) that were handed out like candy to everyone and their brother, frequently with $10,000, $20,000 or even $50,000 credit lines.

Huge numbers of small business owners - especially sole proprietors - use these cards as a means of financing operations. They relied on that 10 or 12% interest rate, and most of them have huge balances outstanding.

I have since confirmed that this letter is not just going to people who have had credit "challenges". Indeed, this appears to be a blanket change on the part of Citibank. I now have multiple copies from people who assert that they have 750+ FICOs and have never missed a payment on this or any other obligation - the "paragon" of so-called "responsible" credit use. All of the letters are identical.

The problem should be obvious - for someone with one of the 12.99% cards that is now 30%, this is a radical change that more than doubles monthly interest expense. Of those who have sent me copies of this letter and disclosed their previous rate, none were over 20%, meaning that these changes represent 50% or greater interest rate increases. If you're anywhere near the edge of being unable to pay, this will shove you off the bridge and into the deep, shark-infested water of bankruptcy.

Perhaps what we're really seeing is a business reacting to hidden deterioration of asset bases that are not known by investors and the public due to the legitimation of bogus accounting that happened this last March, but which is known by company executives!

This sort of "terms change", which is an effective declaration of default even against those who haven't defaulted (see above; the same 30% rate is being applied to defaulted and non-defaulted accounts!), will drive two consumer behaviors that could ultimately destroy Citibank's credit card business and perhaps the bank as a whole:

1. Those who can transfer balances out somewhere else and/or pay them off will immediately do so. Nobody is going to pay a 30% interest rate and an imposition of default rates on non-defaulted balances willingly and on purpose unless they have no other choice.

2. A significant number of people, on receipt of this notice and understanding what it means (a declaration that non-defaulted accounts are being charged the same penalty rate as a defaulted account!) will immediately go out and charge up the entire unused balance on their card and then intentionally default.

In short, this looks to me like a "Hail Mary" pass. So long as this remains a Citibank-only story my interpretation is that Citibank is in a lot worse financial shape than is being let on - perhaps poor enough that they're at risk of imploding anyway, "too big to fail" or not.

An economic blog's comments

Citigroup needs money, and needs money badly. Moreover, there is no reason to believe this is all credit card related. In fact, there is every reason to believe Citigroup (and other banks) are in trouble on multiple fronts.

Possible Credit Dislocation: Be Warned

It's bound to happen that one of these "To big to failers." Only a matter of time in my book. Now all we need is a rumor floating around that something big will happen (Leeman copy) and their stock will plummet so fast you can hear it scream.

Take note that MSM will not notice the start of this. They will clue in when the major signs are flashing neon bright in their faces, saying "CITIGROUP IS DEAD AND DYING!"
Probably around November 4th or 5th is when youll see this news hitting the MSM.

I see some banks, MAJOR banks, imploding in the near future.

I'm Back From RP Land

Sorry for not posting very much lately guys I've just been having a "mental vacation." That pretty much means I am Role Playing in my new video game Fallen Earth.

Since the October deadline is coming up I will be active once again and posting the news and events.

6 unemployed people for every available position

Market Watch ran this story today:

WASHINGTON (MarketWatch) - The number of open jobs fell 50% over the past two years to a seasonally adjusted 2.4 million in July, the lowest in the brief history of the data, the Labor Department reported Wednesday.

The job opening rate fell to a record-low 1.8% in July.

Job openings track the demand for labor, the flip side of the unemployment rate, which measures the supply of labor. Read the full government report.

In July, there were 6.05 unemployed people for every job opening, according to the most recent data on labor turnover. In December 2007, when the recession began, there were 1.72 unemployed people for every job opening.

The number of workers hired in July was little changed at 4.06 million, while the number of workers separated from their jobs was little changed at 4.29 million. The hires rate rose to 3.1%, while the separations rate remained at a series-low 3.3%.

In the past 12 months, hires have fallen 13.9%, while separations are down 12.8%.

Layoffs were little changed in July at 2.3 million, while 1.7 million people quit their job. Layoffs have increased 15% in the past year, while quits are down 32%.

In the 12 months ending in July, hires totaled 51.3 million and separations totaled 56.6 million, with a net job loss of 5.3 million.

Basically this means there are less jobs available for every unemployed person.
Yes, it's bad.

Gold above $1000, oh my!

My goodness everyone is freaking out about Gold going above $1000 Dollars an Ounce.

They have good reason to in my opinion. The jist of it is: As gold goes higher the USD falls.

Go have some fun and read the articles related to Gold:
Market Watch
Peter Cooper - Seeking Alpha
GoldCore - Seeking Alpha
Terence Chan - Seeking Alpha
Reuters
Yahoo! Finance Gold
Yahoo! Finance Oil and USD
FT

and finally an extra tidbit to bring it all together!

The Next Financial Crisis

It's coming--and we just made it worse.

An International Run on the Banks (and other news)

News: Seems there are reports of some countries demanding their gold bullion back. As in all of their gold bullion. Being that most banks most likely dont have all their invested gold we're going to see some angry countries soon.

So we have an international run on the banks happening.

Background inventory strain has come from unexpected sources.

The Germans have demanded that gold bullion held in US custodial accounts be
returned to their owners, with physical gold shipped back to Germany.
The Dubai bankers have demanded that gold bullion held in London custodial
accounts be returned to their owners, with physical gold shipped back to the
United Arab Emirates. They are following the hired German counsel. In all
likelihood, neither US nor London sources are in possession of all the
gold held in those custodial accounts, since at least some of it probably was
improperly leased. By that is meant without owner permission or knowledge.
So an uproar could come soon with charges of gold bullion theft, or at
least failure of fiduciary responsibility. Theft is a simpler description.

I'll post the news articles as I find them.


Market Watch

HONG KONG (MarketWatch) -- Hong Kong is pulling all its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at the city's airport, in a move that won praise from local traders Thursday.

MMORPG: Fallen Earth comes out on September 9th and I am very excited! There are reports of the server coming online as early as 12:01am Est. Which would mean I get to play it on the 8th! Central time zone yay.

I upgraded my computer with a new graphics card for the game a nVidia GTS 250 Performance Edition. I admit I went a little overboard but it is worth it. Also got new headphones and mouse as the dog ate the old ones.

The Future: This week will be interesting. Most likely have a loss in the Stock Markets.

Webbots are reporting possible Terrorist Event within the week. Might be a false flag.

Still researching the October 25th event. Have reports that National Guard officers are receiving orders to remove their families from major metropolitan areas by mid-October. Speculation as to why.

ATSnews.com: I'm pondering the idea I might share will Bill for the Press Corps. Maybe a tip line or when we get our Press Corps email accounts, making them public so our ATS fans can give us tips they would like to see researched and written about. I know I enjoy having the ATS community involved in my work makes me 1000% more satisfied with what I am writing.

Issues, not politics, is their cup of Tea

Found this floating around on ATS, it deserves a blog entry. As reference 9,000 people came to the Tea Party I attended in April!

18,000!!!!!

WEST CHESTER TWP. — Some were clad in colonial-era costumes. Some hoisted signs or waved American flags. But the thousands who filled the lawn in front of the National Voice of America Museum of Broadcasting on Saturday afternoon, Sept. 5, were consistent in their passionate plea for change.

Whether it was health care reform, a country at war, education, government bailouts, the national debt or Congressional term limits, it was the issues — not politicians — that took center stage at the rally hosted by the Cincinnati Tea Party.

The crowd continued to grow throughout the afternoon, and an estimated 18,000 people had come together at the event’s peak, according to Butler County Sheriff Richard K. Jones.

Jones said the crowd Saturday nearly doubled that of the Tea Party’s event he witnessed in Columbus, which drew an estimated 10,000 people to the state’s capital in April.

Saturday’s rally drew people from all over the region, many to view the day’s highly anticipated town hall-style forum featuring U.S. Reps. Jean Schmidt and Michael Turner, Ohio gubernatorial candidate John Kasich and House Minority Leader John Boehner, R-West Chester Twp.

“It was college football’s opening day, and we were looking at some serious competition,” said Chris Littleton, director of the Tea Party’s Community Groups, which include West Chester and Liberty townships, Monroe and Fairfield. “These people came out to talk about their personal liberties being taken away instead. That’s crazy. It’s bizarre.

“People are engaged and (the movement) is going to continue to gather steam and momentum,” Littleton said. “People are engaged and saying, ‘I’m going to make my voice heard, I’m going to be politically active.’”

Following his town-hall segment, Boehner said he was amazed at the response from the crowd and the overall Tea Party movement.

“I’ve never seen anything like this,” Boehner said. “These people are saying enough is enough.

“They’re scared to death,” he added. “They’re scared that the country they grew up in is not going to be the country their children and grandchildren grow up in.”

Laura and Andy Rosenberger of Springfield were trying out their professionally made banner stating, “Obamacare no, tort reform, yes” at Saturday’s rally. Laura Rosenberger plans to take the sign to the Tea Party in Washington, D.C.

“It’s sagging in the middle, we’ll have to work on it,” she said.

Signs of the time

Other signs read “Wake up America,” “DC politicians kiss my grits,” “No tax slavery,” “Commander in thief,” “Socialism rich or poor you will hate it,” “It’s time to drain the swamps in DC,” “Stay out of my schools Obama,” “Out of control federal government back off” and “Don’t tell me what to teach on Sept. 8.”

Wendy Jenkins of Anderson, Ind., stood out among some holding a sign that read: “I am ashamed I voted for Obama.”

“I had to be honest about it,” she said.

Jenkins said she is a Libertarian who thought she was making the right decision when she voted for Obama. She no longer feels that way, citing the war and the Patriot Act as factors.

“If the government would follow the laws of the Constitution, we would be fine,” Jenkins said.

Cathy and Norm Breckel of Cincinnati held signs, one stating “Bitter voter, clinging to my wallet and doctor.”

“Our country that we know and love is being stolen from us,” Norm Breckel said. “We are not Republicans, we are anti-Democrat.”

The couple sited the “demonizing” of the U.S. troops overseas by Democrats as one reason they wanted their voices heard.

Tom Milinski, of Fairfield, was among the nearly 20 people who posed questions to Kasich, Schmidt, Turner and Boehner during the town-hall forum that capped off the afternoon event.

His question to Schmidt was whether she supported term limits. The long answer was somewhere between yes and no.

“I’m happy with her answer because it was thoughtful, but I didn’t necessarily agree with it 100 percent,” Milinski said, adding that politics “should be a service and not a career.”

Like others, Milinski said he was impressed with the turnout Saturday.

“The main thing I’m hearing here is that we have a constitution, and we need to start following it again,” he said. “It’s getting trampled.”

Other voices heard from

Less than a half-mile away at Cox and Tylersville roads, 20 demonstrators — also holding handmade signs — from another Butler County grass-roots group, Changebutler.org, advocated for health care reform.

Liberty Twp. resident and Change Butler PAC President Jocelyn Bucaro said the group wanted to make sure Butler County got to hear two voices on Saturday.

“We wanted to present a positive case for health care reform,” she said.