Robert Fitzwilson continues:

“In the U.S. markets, the Dow Jones Industrial Average saw a high of 12,650, but finished near the low at 12,398, a swing of about 250 points.  The bailout, as presented, was to provide a sum that does not exist based upon a document that has not been created and has yet to be agreed upon, finalized and signed.  On top of that, other countries, such as Ireland, are now wanting to renegotiate their prior bailout to make the terms comparable to those Spain received.

While some are rumored to have an objective of world government, what we have succeeded in creating is world chaos.  Institutions and governments are dying.  The seeds of conflict are everywhere.... 

Continue reading the Robert Fitzwilson piece below...  


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“The paradigms of wealth creation, saving and capital are under attack.  Fiscal prudence has now become imprudent.  It is no wonder that the financial markets are also exhibiting chaotic behavior.

Most people have been conditioned to move assets to cash and fixed income in the event of great uncertainty.  We have seen that once again evidenced in today’s action.  It will eventually be recognized as a massive trap.  Currencies, as a group, are being debased on a daily basis with the printing of money.  Interest rates are near zero, so even historically modest increases in rates will cause severe losses for holders of fixed income.

The eruption of Mt. Vesuvius, in 79 AD, was the type of eruption known as ‘Plinian,’ from the letters Pliny the Younger wrote to describe what he saw on that day.  The characteristic of a Plinian eruption is that the volcano ejects huge quantities of material and gas into the air in the form of a column that Pliny described as ‘looking like an Italian pine tree.’  That particular type of tree has a thick trunk with a flattish top to the vegetation.

As the Romans watched with amazement, the column grew to great heights.  At some point, the weight of the column could no longer be supported, and it began to collapse.  It did so with great speed.  As the column hit the ground, the force caused the material to spread out with devastating speed, entombing Herculaneum and Pompeii for centuries.  Everything was destroyed within a wide radius.

It is becoming more likely that we will experience a Plinian-type event with our debt-based fiat currencies.  There will come a moment when this dysfunctional system can be sustained no longer.  It is not inevitable.  There is still time for rational behavior and solutions, but that time is short.  If we do not return to a system of sound money, capital and wealth creation, we will be hard pressed to escape the monetary equivalent of the fate those Romans suffered watching the column collapse in 79 AD.

There is also little time to protect one’s existing wealth.  Last week, KWN reported that 551 tons of gold were sold in 4 hours driving the “price” of gold down substantially.  However, it was also reported that there was no physical gold available for sale.  You cannot say we have functioning markets and price discovery when there are wild swings in price and no underlying instrument or commodity changed hands.

We have been advocating an allocation to the oil, gold and silver markets for the purpose of wealth preservation.  Our research continues to show that world demand is much stronger than acknowledged for oil.  We found out today that a good part of that incremental demand is Chinese.  They are building a stockpile for strategic reasons, but perhaps also to preserve some of the massive amount of their accumulated savings.

Gold and silver stood their ground today.  We are seeing signs that individuals and governments are reacquiring massive quantities of gold as well as silver.  We continue to hope for a positive outcome from the current chaos, but individuals need to convert paper wealth into some form of real wealth as soon as possible.”

© 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 Bill Fleckenstein and Egon von Greyerz are available now.  Also, be sure to listen to this week’s line-up of other KWN interviews which include MEP Nigel Farage, Michael Pento, Dr. Stephen Leeb, Don Coxe ($538 billion BMO), Art Cashin ($612 billion UBS) and Rob Arnott (oversees $100 billion) 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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