There’s a scenario that could play out between May and September in which commodities (including my beloved silver) and the stock and bond markets could all sell off between 20% and 40%.  The trigger will be the cessation of QE II and a multi-month pause before QE III.

This is a reversal in my thinking from the outright inflationary ‘buy with both hands’ bent that I have held for the past two years.  Even though it’s quite a speculative analysis at this early stage, it is a possibility that we must consider.

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• Crashiversary Week Continues
• 8 Reasons Why Silver Is the Investment of the Decade
• Chinese Inflation Heats Up Again As PBoC Takes Another Step To Establish Yuan As Reserve Currency
• A Handy Guide to the Revolts in the Middle East—And Their Likely Effects On Us
• Survey of Oil Exports from North Africa
• Rocks On The Menu: Biotechnology
• Brain Scan: Betting On Green
• Price Of Wheat May Be Behind Mideast Uprisings

Our ‘What Should I Do?’ guide has steps to cook, see & stay warm in times of power outage

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• “No Way Out” of Debt Trap, Gross Says: U.S. Living Standards Doomed to Fall
• Gross Eliminates Government Debt From Pimco’s Flagship Total Return Fund
• Montreal Turns To Corn Sugar In De-Icing Efforts
• QE: Hyper-Inflation to Oblivion
• Catherine Austin Fitts: Where Is The Money?
• A Harshly Divided Planet
• Live Video Stream Of Wisconsin Protests Where Hundreds Of Protesters Rush Wisconsin Capitol, Vastly Outnumbering Security
• Hutton pension reforms could ‘light the blue touch paper’ for a wave of industrial action
• “Spectacular” Cyber Attack Gains Access to France’s G20 Files
• Winning the Biofuel Future

Own the Crash Course Special Edition Set with Presenter’s Pack (NTSC or PAL)

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• Dow In Silver
• New CoreLogic® Data Shows 23 Percent of Borrowers Underwater with $750 Billion Dollars of Negative Equity
• Europe May Face More Ratings Cuts, Greek Default, S&P Says
• Southwest joins $10 increase in airfares
• Rising prices stoke fuel thefts in B.C.
• Adding Up China’s Debt Load
• Debt Clock shows National deficit over $500 billion
• Nevada gas prices jump 46 cents in one month
• Traffic tickets increase as N.J. towns look for revenue
• Dartmouth to Raise Tuition Rates by 5.9%
• Illinois Fails To Pay Its Bills
• Redevelopment money Salinas seeks to shield from state rises to $31M
• Mayor sees red over fire station #4
• SRJC joins the rush to raise parking fines
• NJ Lawmakers Consider Increasing Penalties For Drivers Using Cell Phones
• US says Saudi oil boost can’t keep crude under $100
• Oil markets brace for Saudi ‘rage’ as global spare capacity wears thin
• UN Seminars Start to Help States Cope With Food-Price Surge
• Cotton price surge makes dollar bills more costly
• Russia seeks to stem rise in food prices
• Rising food costs could force U.S. eatery overhaul
• Price of food in Canada could jump between 5 and 7 per cent in 2011: economist

Follow our steps to prepare for a world after peak oil, such as how to store & filter water

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• Middle-Wage Workers and the Recession
• No Silver? No Problem: US Mint Would Like To Know If You Will Accept Brass, Steel, Iron Or Tungsten Coins Instead
• How Wisconsin Can Turn Economic Austerity into Prosperity
• U.S. Dollar Very Long Term Chart: Emperor et Ses Amis du Vins
• Should Fannie and Freddie Go?
• Young, Poor and Jobless
• Chinese in £750m Bid For African Uranium
• Malaysia Makes Big Bet On Crucial Metals

Share the Crash Course with your friends and family – buy the DVD today (NTSC or PAL)

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• His Recession, Becoming Hers
• Police Force Nearly Halved, Camden Feels Impact
• HSBC squashes reports of its flight from UK as ‘speculative’
• Libya: A Rebel Setback
• Obama Considers Tapping Oil Reserves
• Tech Talk – Countries producing around 2 mbd – Nigeria, Angola, Libya and the UK
• The Two Most Important Charts For The Near-Term Future Of Oil Prices
• In New Food Culture, a Young Generation of Farmers Emerges

Get started building resilience into your life with our ‘What Should I Do?’ guide

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• Mauldin: Are Booming Economies Good for the Markets?
• Illusion Based On A Fantasy
• HSBC reveals plans to quit London for Hong Kong
• Wen Jiabao makes pledge to China’s poor at National People’s Congress
• Wall Street’s secretive ‘expert networks’
• Balancing Inflation And The Rouble
• Global Currency Rally Fuels Inflation
• Saudis mobilise thousands of troops to quell growing revolt

The 3-disc DVD with presenter’s pack offers helpful guidance for sharing the 3E message with your community. (NTSC or PAL)

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• The Inimical Inflation Kind
• Coin Dealers, Other Businesses Anxious For Resolution Of New Form 1099 Rules
• Fighting Inflation With Mutual Funds
• Mervyn King interview: We prevented a Great Depression… but people have the right to be angry
• There Are No Good Outcomes
• The Chasm Between Consumers and the Fed

Learn how to protect your wealth against the Three E forces using our ‘What Should I Do?’ guide

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The Peak Affordability Lifestyle

If I were to summarize everything I have learned from Dr. Martenson and this community over the last few years into one statement, it would be “our future is unaffordable.” The mechanism by which our unaffordable future is realized – be it inflation, deflation, Peak Oil, resource scarcity, currency crisis, or overt corporate corruption – is largely irrelevant. The bottom line for each one of us and our families is that we can no longer expect the macro economy to provide for our needs. Our best chance at surviving the myriad of future predicaments facing us is to develop the capacity to provide for our own needs and to progressively achieve functional independence from the economy-at-large. I like to refer to this daunting process as “adapting the Peak Affordability lifestyle,” as it is really much more than just an agenda of preparations; it’s a way of life.

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Tuesday, March 8, 2011

Executive Summary

• Further evidence that a Fed quantitative easing stoppage in June is likely
• Implications such a stoppage will have on stocks, commodities, bonds, and precious metals
• Why this will be more damaging to the economy than the 2008 correction
• Will the Fed eventually resume quantitative easing?
• Three alternatives to watch for that could prevent the coming rout
• How to hedge against the predicted rout

Part I:  Why Things Are About To Get Turned Upside Down

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II:  The Coming Rout

There are a few things that make the prospect of a Fed quantitative easing (QE) stoppage more likely.

The Fed Notices Inflation

Using a flashlight, a map, and both hands, the Fed managed to find something:

Fed Finds Climbing Costs Hit Shoppers

March 3, 2011

Many manufacturers are passing along higher input costs to their customers, a sign that rising prices for wheat, cotton, iron, and other commodities could increasingly reach consumers in coming months, according to the Federal Reserve’s beige book survey.

The report, a summary of economic conditions across the central bank’s 12 regional districts, said manufacturers “in a number of districts reported having greater ability” to pass through higher costs. “Retailers in some districts mentioned they had implemented price increases or were anticipating such action in the next few months,” the Fed said.

It’s good to see that the Fed is at least dimly aware that price inflation is in the pipe and coming soon to a market near you.  The rest of the world has had no such difficulties in detecting inflation, especially on news like this:

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