by Bill Holter, JS Mineset:

Very brief commentary today.What happens when the most overlevered global economy in history shuts down for a month, or more?Global bankruptcy.It is over folks, the system is coming apart at the seams and the “promises” the world ran so smoothly on for so long are being laid bare.You might ask, which promises?The answer is ALL promises.

All of a sudden and immediately after the Fed and Treasury announced over $4 trillion in various stimulus and aid …interest rates on Treasuries are rising.For example, rates on the 10yr Tsy collapsed to .34% a week ago Monday.Now, after 150 basis points in cuts, the 10yr is trading over 1.1% just 7 trading days later!

In the metals arena, you see paper pricing extremely weak.However, the real world shows something very different.The US Mint is out of both gold and silver eagles.Other sovereign mints are also running out of supply or already out.So you think silver is $12.50?Maybe you can purchase 100 ounce bars for $16+ but do they really have utility?The form that does have utility (because of the small denominations) is junk silver.The only dealer I see still selling junk is APMEX, they are currently $10.99 over spot which equates to over $20 per ounce!The physical market is now taking COMEX by the throat and ignoring their fraudulent prices.

We told you (and were laughed at) that the day would come when you had what you had and that was all you had.This is now fairly apparent as “real” things like real metal and even food are showing serious supply issues.This is not a drill folks, Humpty Dumpty has fallen and the supply of super glue is gone.The dollar has gone through par and may even go to the 110-115 level or higher before it burns out.This is a function of Richard Russell’s “synthetic short”.The majority of global debt and trade is priced in dollars.The current deflation is exposing a dollar shortage as debtors scramble for dollars to settle.When all is said and done, ALL fiat currencies will collapse to their intrinsic values (zero or very close).Leaving real monies gold and silver as the last men standing.

Lastly, as physical gold and silver are becoming unattainable, there is only one last area left for exposure to real metal …the miners.The miners with real and verified reserves in the ground in our opinion are set to make stock market history.The “leverage” which has largely been forgotten about is still there.It looks like they turned or reversed on Monday and are acting much better.It is only a matter of time before investors understand it is their only avenue of exposure to precious metals to protect their financial lives.

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