February 13, 2014

Federal Reserve Chair Janet Yellen spoke before the House Financial Services Committee on Tuesday and vowed to continue the massive scale of money printing.

 “*(she expects)....A great deal of continuity in the FOMC’s approach to monetary policy” . Said Yellen.

After the meeting markets picked up steam. The Dow Jones Industrial Average picked 192 points to finish Tuesday's trading session The Russel 2000 surgered .93 percent to end the day at 1,129. April gold futures advanced $16.60 (1.30 percent) to $1,291.30 per ounce.

Sounds like things are really bouncing back, right? Wrong. That old saying "those who forget history, are doomed to repeat it." comes to mind. Lets look at some history.

Right before the Stock Market Crash of 1929, markets were booming with prominent bankers shouting from the roof tops how great it was. Then on March 25, 1929, a mini crash happened after investors started to sell stocks at a rapid pace, which showed the public the shaky foundation of the markets. Banker Charles E. Mitchell tried to slow the crash and provided $25 million in credit to aid in recovery. The influx of the credit extended caused losses to drop from 20 to 8 percent. But it did little to halt the crash, many more signs appeared that showed the scale of what was occurring. Steel production fell to a new low, construction was sluggish, car sales were down and consumers were building up high debts because of easy credit. Then it all came down, a chain effect that left every sector of business in shambles. This was directly caused by speculation by investors that stocks would never fall and because of that, let the average Joe only pay half of the purchase while the other half would come from banks and creditors. In other words, you cannot give money that does not exist without repercussions, thus giving credit without having something real like gold to secure the debt given.

Yellen's push to continue printing fiat currency to offset inflation, is another version of speculation.

The markets responded positively, not because they think the markets are going to increase, but because they know it's crumbling down around them and to avoid losses, they are selling at a quicker pace to other less knowledgeable investors, like your local 401K or your local bank.

A Mindful Patriot source inside a mid-level investment firm has noted that they see an increasing sell off of precious metals like gold and silver. The source added many in the know, are labeling and actively informing their high volume clients that an "economic apocalypse" is fast approaching and is instructing them to divest now to collect while the market is high. The source predicts in six months to a year, the market landscape will be drastically different, with impacts being felt across the board.

If our source is correct, this means instead of speculation like in 1929, we will have super inflation happening so quickly that the Federal Reserve will not be able to offset it.  Like another black Tuesday, with such high volume of sell offs that the markets could drop by an 33% in one day. With a drop that large that quickly, it would never recover under any current strategy we know or use today.


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