Dollar Collapse

Brexit is dominating this week's headlines, but the event itself is less important than what it signifies, which is the increasing loss of faith in governments and central banks. Voters no longer trust big institutions to act in their best interest and are voting for alternatives of various kinds. When this lack of trust spreads to the financial markets, it's game over.

With the terrorist attack in Orlando world markets have headed down. It’s looking more and more likely that there will be a Brexit. What impact will it have? Will other countries follow? The system is ripe for a further unraveling. In its already weakened state, how much more abuse can it sustain? Gold and silver are up since the beginning of the year. They got through a minor correction the week before last and have now fully recovered, obviously a sign of strength. There’s a new financial system on its way. Get ready for it now.

John and I discuss the upcoming referendum in California, where barring a conservative reformation in the state, will certainly pass. Recent polls show 60 percent of the public in favor. This provides and interesting contrast in constitutional views of the right and the left. Everyone supports the Constitution when it comes to pushing their agenda. It’s when something they oppose is on the ballot, that all of a sudden the Constitution takes a back seat to the overwhelming need at hand. This is exactly what the framer/founders wanted to avoid when they drafted the document. The Constitution was not intended to be flexible and allow a sliding scale of enforcement. Rather, limited government was its primary goal. Perhaps we are in the process of getting back to this fundamental core belief.

Watch Brexit, the Movie, to understand why Britain might just leave the EU -- and why other members should leave as well. Meanwhile, the Saudis are apparently out of money, the bricks and mortar retailers are out of customers and Wall Street bankers are looking at mass unemployment. Brutal times for obsolete institutions!

Macy's reports horrendous earnings and Italian banks finally reveal their non-performing loans. Share prices plunge accordingly. China, meanwhile, admits that it's over-leveraged and promises to stop borrowing. In other words, wherever you look, a global slowdown is coming and a massive devaluation will soon be the only politically feasible solution.

China's most recent borrowing binge didn't work. Japanese and European negative interest rates resulted in their currencies going up, not down as they hoped. Global growth is slowing. Inflation is nonexistent and debt keeps rising. Only gold and silver are looking strong. The world's governments, in short, are about to panic.

Combine record-high stock prices with weak corporate earnings, a too-strong dollar and rising turmoil in Europe, Asia and Latin America, and the result is a dangerously vulnerable market. Time to go "risk-off", in other words. But don't forget to keep buying gold and silver.

Goldman, Morgan Stanley and IBM release numbers that look, well, depression-like. Housing starts plunge, gold and silver spike, China's bond market seizes up, and Deutsche Bank prepares to name names in its gold manipulation scandal. And US stocks keep rising...what's wrong with this picture?

Most US companies will report earnings this month, and most analysts think the results will depressing. That's bad news for stock prices and might add to the (already considerable) pressure on governments to step up their stimulus programs. Gold and silver, meanwhile, seem to like all this financial turmoil.

Between the "Panama papers" and the DC Madam's customer list, we might be witnessing the end of personal (and corporate and government) privacy. The result? Less financial and geopolitical risk-taking and more gold buying. But don't get burned by failing precious metal dealers. Here's how to make sure you get what you pay for.