RE:Henrich 428, 2021 and 2008, absolutely different? I actually never bought a mining stock until last year. My plan was always to wait patiently until the system very clearly was going to break down, and only then to go all in. A lot of people got too excited from the time of the Great Financial Crisis onward, because the Fed Funds rate, (or Official Bank Rate in the U. K.), plunged to zero. But what they missed is that the nominal yield on the benchmark ten-year treasury was still 5%. This circumstance gave the bankers a good deal of ammunition which they could still employ to delay the day of reckoning, in the form of “Quantitative Easing.” Quantitative Easing basically means that a central bank prints money out of thin air to buy its own bonds, and therefore drives yields down artificially. Lower yields mean more cheap debt for speculation and government spending, along with more people rushing into assets as a more compelling alternative to a lower rate of risk-free return in bonds.
Trouble is that all that Q. E. did was to reinflate all the bubbles into an even greater Everything Bubble, and ensure that the inevitable collapse would become a hundred times worse. The Fed maintained some level of respectability at first by telling lies that it would eventually normalize rates. However, when yields climbed to a pitiful 3% in late 2018, the stock market immediately reacted by crashing 15%. That was the first obvious gap in the armour. Subsequently to that crash, the Fed was forced to respond with what they called “not Q. E.,” which was actually simply re-starting Q. E. again. Then in late 2019 we had the repo crisis, and it became clear that the system was imminently going to collapse. March 2020 with “Q. E. to infinity” was the final nail in the coffin.
Basically, the situation which we have now is what is called a “debt trap.” If the banks stop doing Q. E., then yields soar, and everything crashes. So they must keep printing. But bonds, with their utterly pitiful returns, are now so undesirable to real investors, that it requires literally trillions of dollars to prop up them up and keep yields down. Also, the more money which the banks print to buy bonds, the worse inflation gets, and therefore the more real yields (not simply nominal yields) go down. So it’s a vicious circle whereby bonds keep getting more and more undesirable as time goes on, and therefore the Fed has to keep printing more and more money to buy the bonds itself, ad infinitum, until the currency reaches the terminal stage of hyperinflation, and the system completely collapses.
As we see right now, things are in such a bubble that even a 1.5% nominal yield on the ten-year treasury makes the markets collapse. So the Fed is going to _have_ to do Yield-Curve Control soon. That means that it commits to spending an essentially infinite amount of money in order to keep yields from going beyond a certain point. It’s an admission of utter defeat and ensures that metals and miners will immediately go to the moon. It’s what everybody is waiting for, and it’s coming soon.
A few other considerations. During the GFC you didn’t have what was literally hyperinflation. As Alasdair Macleod said in October 2020, the progression of annualised monetary inflation went from under 6% before the Lehman crisis, to 9.6% subsequently until March of that year, to 65% in the thirty weeks since. We also have 40% real unemployment in the U. S., according to ShadowStats, a figure which beggars belief. The tyrannical lockdown hysteria is destroying jobs and ensuring that things will never return to normal. Russia now owns more gold than dollars, and along with China is getting ready to dump the dollar. Most people in America are discontent and actively want the system to be overthrown. It really is over this time. It’s done.
What we’re going to see in the end is all three of the situations which I posited: yield-curve control, a banking crisis, _and_ a COMEX default. It’s only a question of which one comes first. As I say, the most likely thing is that the Fed will do YCC soon, because this level of yield is crashing the markets, and if they crash too far and fast then all these over-leveraged G-SIB banks are going to fail and require tens of trillions to bail out. So the Fed will choose the lesser of two evils. When a COMEX default will happen it’s impossible to say, but the cat is now out of the bag with silversqueeze, and so that’s only a matter of time as well.