Latest Letter form Martin Armstrong dated January 25, 2011

Click here for the latest letter from Martin Armstrong dated January 25, 2011 entitled, The Assent of China The New Face of China (11 pages). Mr. Armstrong talks about China in general as a global power and also charts its respective stock market indexes on last 2 pages.

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Michael Pento……crying and laughing at $100 trillion more in debt

Great interview with Michael Pento over at kingworldnews.com. Click here.

groovygirl comments: Michael talks about a serious concept. Expanding debt level beyond sanity. But since the US can still print whatever and borrow whatever, the bankrupt balance sheet is not a problem….yet. But the collapse will occur when we have a cash flow problem, when we have no ability to service the interest on the outstanding debt. Accounting gimmicks can cover up a bankrupt balance sheet, but cash flow problems will be where the rubber meets the road.

World Affairs

Groovygirl doesn’t comment much on world politics outside of their economic impact. Lots of other websites cover that info. However, the recent surge in rioting is very interesting.

I have been visiting zerohedge.com regularly. They seem to have the most up-to-the-minute, and I mean minute, coverage.

They were one of the only ones to cover the story of more fake US bonds seized in Italy last week and the gold missing from Tunisia.

Groovygirl highly recommends their site. Eastern Europe and Asia are changing fast. A good resource.

Leverage can kill you

The truth in the recent downturn in gold has been revealed.

Click here for Jim Sinclair’s comments and the whole story.

Daniel Shak’s $10 million hedge fund held gold contracts valued at more than $850 million, more than 10% of the main U.S. futures market.

Daniel’s bet went bad. Wonder if he was working for anyone.

Expect more and more of this type of thing as the paper price and physical price break and those with leverage get hosed.

This is physical gold positive, not negative.

Confirmation of what you already knew: rising inflation

Great analysis over at Chris Martenson’s website. Click here.

At the very least, inflation will squeeze those on fixed incomes and non-increasing wages, creating stagnate economic growth such as in the 1970’s that will enable unemployment rate to rise..

At worst:

Chris is becoming more and more concerned about the possibility of hyperinflation. Groovygirl thinks it is only a matter of time.

It will take a radical acknowledgment of reality in Washington to change the tide from the road to hyperinflation to just hurtful inflation. Groovygirl sees no political will to make any such acknowledgments. Groovygirl doesn’t even see the people demanding any such acknowledgement either.

Protect your yourself and your family’s investments. It is time to build your own ark. The water is rising, ladies and gentlemen.

The Barbaric Relic-10 yr avg-18% ROI

Click here for a post from John Embry via Jim Sinclair’s site.

Do not be discouraged by the recent downturn, it is a normal short-term correction, not a change in trend.

If you use the 3 wave system for a bull market, we are in the second wave in this gold bull market. This wave is usually the most active. It is slower in duration than the 3rd wave that shoots up, but it is better in returns than the first wave.  So expect better than 18% for the next few years during this second wave (last year was almost 30%).

The third wave is always the shortest and best return, but you must time the collapse well to see those returns. That is very hard to do and you will probably miss.

Must read from WatchDog

Click here. Make sure to read all the comments and Greg’s responses. In groovygirl’s opinion, there is very good advice there.

Advice from Harvey Organ

Ladies and gentlemen:

I am afraid that the end game is being played out and thus expect huge volatility on the comex and also be cognizant of the fact that paper gold and silver will deviate from the real price.

I urge all of you not to leverage.  Take physical position of your metals and do not watch CNBC as they are nothing but a mouthpiece for our bankers.

see you tomorrow

Harvey

Click here for full post from yesterday.

Is unemployment really at 45%, not 9%?

Great article over at Automatic Earth. Click here.

It certainly isn’t 9%.

To summarize: 108.616 million people in America are either unemployed, underemployed or “Not in the labor force”. This represents 45.5% of working age Americans.

AutoEarth also lists several other examples of the moral fall of American corporate and government judgment.

Debt slaves

Jim Rickards is interviewed on kingworldnews.com. Click here.

$100 trillion in new debt?

Did you catch the comment about the growing reality that those with a large mortgage and falling home value will be working only to pay the bank and never create equity? That is a debt slave. With the reality of continuing falling home prices for the next 22 years (according to Martin Armstrong), that makes almost everyone that holds a mortgage on the home they are living in a debt slave at some point in the future.

What can you do right now and in the future to prevent yourself and your family from become a debt slave? This is a two-tier approach. Eliminate or minimize current debt (or enough to make sure you are never upside in your home) and create a cash-flow income for the future that can adjust for higher inflation and higher taxes.

Everyone’s path will be different. This is the time to start asking these questions, finding solutions for your situation, and working a plan.