CRASH 2: the hide and seek of it all

Italian banks have been hiding massive derivatives losses…so now MPS bank needs a €3.9bn bailout. The Talvivaara Mining company of Finland is secretly mining uranium, and covering up dangerous accidents. Both the Germans and the Swiss think the Americans are lending out or selling more than they actually hold in gold, thus raising the spectre of ‘fiat gold’: hence their growing desire to get the gold back before things get totally out of hand. Almost nobody believes the figures for Spanish bank liquidity – and the authorities have relaxed their liquidity requirements in order to get real about this.

All these stories have one simple commonality: deception. Alongside the trend identified by The Slog in recent weeks (the élites are becoming less bothered about fessing up to fibs) is another more encouraging one: the MSM has been rather more on the ball about spotting the mendacity in the first place.

What the main ‘old’ media still aren’t doing, however, is addressing specific reasons why the deceptions are necessary in the first place. In fact, this isn’t even slightly hard to do. The three main élite activities taking place at the minute are:

1. A scramble for energy and new-industry sector resources;

2. The appropriation by sovereign banks of gold as a bulwark against insolvency; and

3. the injection of more unelected technocrats into key positions in order to help carry that out.

Realities which might cause a derailing panic have thus been hidden. But reporting the instances and symptoms of this process is becoming increasingly irrelevant: it’s very good for hits – if you’re chasing hits – but as always, that gets in the way of intelligent analysis of how the rest of us should respond in the face it. And anyway, those ‘in charge’ haha are no longer that fussed about the media finding out about such stuff: the die is cast now, there’s little we can do to stop it….and they know that.

I think any investor or survivalist must therefore apply two critieria to any investment – whatever it might be: first, do I really understand all the fundamentals of this sector? And second, is anyone dicking about with those fundamentals for commercial or sovereign/central bank gain?

For me, silver is looking a better and better opportunity. So using the advice offered above, remember that the metal is prone to at times terrifying volatility…that’s the downside. The upside is that Mario Draghi, Mervyn King and Ben Bernanke do not (as far as I know) have plans for it. Nevertheless, other directionalising folks much nastier than any of us may well have such plans.

As always, caveat emptor applies: ignore what the buggers say, but oggle what they do like a hawk.

Finally, as a trailer to what will be coming soon at The Slog, I leave you with this thought. Every top fiscal Wally around the Western world is busy predicting confidently that Zirp will be maintained until such time as things improve. It is my considered opinion that the main emotion in play during such assertions is hubris. Hugh Briss is a loud sort of cove, but prone to delusions of grandeur: he is the Icarus of our world, convinced he can fly close to the sun, and control its effect. He cannot.

Stay tuned.

Earlier at The Slog: the unalloyed joy of privatisation