Galloping toward catastrophies.

The developed world is run by politicians and bankers who are irresponsible at best and insane at worst. Let's go through the coming catastrophies.

Japan.

Japan's debt service has risen to 25.3T Yen($257B), while its revenues total 45.4T Yen ($545B). Thus, half of Japan's revenues go to service its debt. The National Debt is 242% of the GDP. It will not be paid back. The Bank of Japan wants a 2% inflation (sounds familiar?). Just as in the US, the govt jury rigged the numbers so inflation is underreported: core inflation is reported as 1.3%, overall price inflation as 1.6%, while food prices have risen 13.6%. The Bank of Japan prints 70T Yen/year, which has alleviated deflation fears for now. Hyperinflation looms as Japanese Government Bonds will have to increase yield to be sold. And if the Bank of Japan becomes the sole buyer of its bonds then... Ten year bonds now earn 0.62% and if bond yields increase, it will hit the economy AND raise debt payments. This is a box from which there is no escape.

The US.

The Main Stream Media puts out the propaganda that the US economy has recovered. Not so. Total sales are down 4%, housing starts down 34%, house sales down 18% and consumer debt has increased 20% since 20010. The FED is also set on wanting a 2% inflation rate. If you shop, you may notice that coffee is up 70%, hogs are up 42% and beef is up 5% (which number is probably higher). Tapering $30B has not helped the economy and the taxes of Obamacare hand like a black cloud over us. Who buys the US Treasuries? If you can believe this: Belgium. Their ownership of Treasuries went from $170B in September to $310B at the latest reporting. Belgium????

China

China is slowing and construction  companies are defaulting. Hong Kong real estate prices are diving, but Chine continues to buy all the gold it can.

Russia/Ukraine.

No telling how the "sanctions" will effect Russia economically. The Ukraine owes $72B, of which $12B comes due this year. Since, the Russians just raised the cost of gar to the Ukraine by 40%, it is doubtful that the Ukraine can survive. I mean if Russia does not forcefully incorporate them. Putin clearly believes that he can do anything he wants in the Ukraine, Moldova and Estonia without fear of Western retaliation.

Gold

The London Bouillon Metal Association Banks(LBMA) are essentially in default. That is, they do not have the gold they pretend selling. So, where do the "get" the gold they actually sell? They simply raid the gold of people who store gold with them and "sell" that. Since, a lot of people leave "their" gold at the banks for storage, the gold can be sold to several people. When the Chinese and Indians buy, they want delivery of the physical metal.

Presumably, the LBMA avoided default by getting the BIS to allow them to "sell" more paper gold. However, this can not be carried on indefinitely. So, the financial media is trying to jawbone gold down by predicting gold prices to fall to $1000/oz.

The FED meeting was accompanied by a fall of $47 in the price of gold. Next week, expect gold prices to rise and produce the "golden cross" where the 50DMA crosses above the 200 DMA. Gold miners didn't drop much and the market is ready to roll. Will it?