The Mother Of All Bubbles Is Now Being Blown Towards Its Limits

The most massive market bubble in history is occurring collectively in the sovereign debt markets, which at least among NATO countries is becoming a one-world debt market, just as the Rockefellers and Rothschilds have long been arranging under the guise of a kinder, gentler capitalism, namely Keynesianism. Of course Keynesian economics is a grand deceit that is in fact more akin to a communist/fascist managed system. With 100% certainty we can predict it will end badly for the masses though of course these ruling elite will do everything in their power to continue to enrich themselves by impoverishing the rest of us. You can count on them continuing to socialize bank losses while privatizing profits. Just as with the wars the elite have the U.S. endlessly fighting that are causing more, not less global unrest, there is a selfish method to this economic madness. By blowing up the world, whether through war or economic means, the chaos and disaster that follow have the masses begging the Council on Foreign Relations (CFR) and other elitist groups to provide them with life’s essentials as they willingly hand control over to those wolves in sheep’s clothing. In the process it is the masses that are turned into sheep, heading both figuratively and, I fear, literally to slaughter.

In the end, for our nation, there is no answer outside of a spiritual renewal leading to recognition of humankind’s place in the universe as servants of our Creator. If we understood that, we would be a freedom loving capitalist country that would not be killing and maiming hundreds of thousands of citizens around the world, all for the benefit of a few families that control and run our financial institutions and thus our world. But short of a return to an understanding of our relationship with God, I hold little hope for our nation. Just as Esau gave up his birthright for a bowl of stew, so Americans are giving up their birth right to liberty which, as stated in our Constitution, is an inalienable right endowed to us by our Creator. But having given up on the idea of a Creator we turn to Obama who in turn relies on the wolves in sheep’s clothing that run the Federal Reserve Bank. These elites, led by the CFR, are very rapidly seeking to form a one-world government with themselves of course in charge, keeping the dollar they control backed by oil instead of a non-political dollar backed by gold.

S&PThe sheep, including most of the Wall Street masses, are unknowingly being led to the slaughter by massive propaganda that has them believing the elite are in control and care for them. Nothing could be further from the truth. David Stockman’s latest missive shows how pathetic the so called “recovery” is and how the equity markets are ready for major carnage. And we are about to see some major panic in the pension fund markets evidenced by a court ruling in Illinois that the state must make good on its pension fund promise which the state cannot pay. It is now short by $101 billion and growing. At some point the rubber is going to hit the road when the masses realize the Fed can never raise rates again but must hyper-inflate the money supply just to keep the system from a massive debt implosion. With the destruction of confidence in the Fed that follows, it will be “game over” for both the Federal Reserve system and for Treasuries.

That leads me to the chart above from dated as of May 4th. This chart shows that stocks and bonds have recently broken into a negative correlation meaning that when money comes out of stocks, it no longer flows into U.S. Treasuries. In other words, investors have been opting out of the CFR’s paper con game, opting instead for “stuff” in the form of commodities. Commodities have in fact been rising over the past couple of weeks at the same time bonds and stocks have been falling. That trend may or may not continue. Time will tell.

10YIndeed, that trend reversed a bit on Friday. As you can see from the chart on your left, the 10-year rise in yield which reached 2.25% could not be sustained as it hit up against the down sloping resistance line. Indeed earlier this week Michael Oliver warned his subscribers that “MSA’s suspicion is that trading the downside in ten year or longer-term debt markets (whether through ETF’s or futures) will be tricky. Two Reasons: On a more near-term and intermediate-term basis this selloff is already aged and approaching oversold. Second, this decline, if it serves the function of a Judas goat to developed market stock indexes, as MSA suspects, will then provide its own self-made excuse for a bounce.”

I don’t know how many times over the past decade I or free market pro-gold oriented friends of mine have tried to short U.S. Treasuries only to watch rates fall to even more ridiculous, orchestrated levels. I have held off buying TBF to short long dated U.S. Treasuries thanks to Michael’s astute momentum and structure based analysis. I did sell off TLT (Long U.S. Treasuries) from my Model Portfolio a few weeks back which proved to be a good idea. I replaced that with a rare earths company, namely Avalon Rare Earth Metals (NYSE-AVL), because there are few companies in the western world in that space. And I have been toying with the idea of allocating a portion of my portfolio to shorting the U.S. Treasury because when that major market finally turns for good, the carnage in the bond markets and the economy as a whole will be a sight to behold.

Meantime I’m keeping an eye on my IDW which has just this week broken above its three-year moving average. I’m thinking this may indeed be suggesting a major move toward “stuff” especially given the fact that an increase in inflation-sensitive items like oil and copper has pulled the IDW back above the 3-year downtrend line. When the con game is no longer believed, long gold, short U.S. Treasuries should both be fabulous trades.

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.