Below is Fitzwilson’s exclusive piece for KWN:

“Deus Ex Machina has roots that go deep into the history of Western literature.  It is a literary technique used to resolve seemingly impossible predicaments.  At the end of the tragedy or even the comedy, a god-like form emerges from the ceiling or the floor, supported by some mechanical device, the machine.  All then ends well. 

In Byzantium, it was not unknown for the Emperor to descend “from the Heavens” by a mechanical chair to remind the people in the court of his divinity and bring whatever intractable issue at hand to a happy conclusion....

Continue reading the Robert Fitzwilson piece below...  


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“In 1914, there was a popular film serial called “The Perils of Pauline”.  The series used a technique called “cliffhanger”.  Each episode ended with some form of unresolved peril which required the viewer to watch the next episode to see what happened to Pauline.  The current peril, in that next episode, would be resolved, but that episode would end with a new cliffhanger.

Within the last week, a very brave man jumped out of a balloon 24 miles above the surface of the earth and successfully parachuted to the ground.  Nobody who saw the video of the initial leap will ever forget that breathtaking moment. 

That moment conjures up an image that best describes the state of our species and our economies.  Humans have chosen to ride that figurative balloon in the sky, and it is coming close to the time for resolution.  Will there be a surprising Deus Ex Machina that gives us a happy outcome?  Do we go to the next episode of our perils, or will there simply be no happy ending and no new episode?

In the next 60 days, virtually anything is possible.  The U.S. Treasury bonds have reached record prices despite massive new supply.  The S&P 500 came very close to all-time levels despite declining volumes and individual participation.  Interest rates are extremely low and even negative in some key markets.  Sovereign debts continue to pile up.  Protests against austerity continue to mount, most recently in London.  Massive sovereign deficits continue apace.  Armies and navies continue to mass in the Middle East.  The list goes on and on.

I hope that people have taken to heart the warnings that myself and others have made on King World News.  While these unanswered questions could bring extreme chaos between societies and markets, there are proactive steps that can be taken to minimize the fallout and shocks from what comes next.  If one has not taken action to preserve wealth, there is no time like the present.  It is also a time to be vigilant, and to be flexible, so one is able to react to the unfolding events.

Wealth preservation does not mean immunity from declines.  It means saving as much as you can relative to other forms of investment, as well as preserving your family’s overall well-being.  Oil, gold and silver can all fluctuate when quoted in fiat currencies, but history has shown that real assets are the ultimate last resort if all else fails.

We believe that there is a bright future and abundant opportunities for those who adapt to the new political and economic environment that lies ahead.  In the very short-term, however, it is time to prepare for a very rocky couple of months.

As was pointed out by Dan Norcini, trading on Friday was very interesting.  Many of the bellwether equities corrected, in some cases quite severely.  However, many of the signature names in the mining sectors performed well.  Owning these issues and the underlying metals does not mean that they are immune to price volatility.  The history and belief is that they will outperform other asset classes.  Friday was a suggestion that this assumption will hold true once again.

While cash and debt instruments have been the safe choice in the past, they are ground zero for the continuing destruction of fiat currencies.  They will be safe until they are not.  The final destruction will be swift and violent, so preparation needs to be made before that day.  There will be no opportunity to react once these markets get out of control, let alone if war breaks out in the Middle-East.

If we have a perceived positive resolution to the unknowns in this 60-day period, we would expect rising interest rates, a massive rally in the equity markets, and, again, a false perception that there will be a historic global economic rebound. 

Gold and silver will continue to move higher on a secular basis, although it is possible there could be an initial pullback as people feel that our fiscal imbalances are on the road to being reversed.  That will be a short-lived hope.  It will take many years and a mandate from the population to achieve that feat.

So wealth erosion will continue as fiat currencies decline.  In the meantime, keep accumulating gold and silver, and just be aware that the equity markets may experience a significant rally if the medium-term resolution is perceived to be positive.”

© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

The interviews with Rick Rule, James Turk, Egon von Greyerz, Jean-Marie Eveillard, Bill Fleckenstein and Art Cashin (UBS $612 billion) are available now.  Also, be sure to listen to other recent KWN interviews which included, Jeffrey Saut (R.J. $360 billion), John Embry, Gerald Celente and Rick Santelli by CLICKING HERE.

Eric King

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© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast,

rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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