Watch This Hedge Fund Manager's Terrifying Video Of What The World Will Look Like When The Dollar Collapses

Damon Vickers, a hedge fund manager in Seattle, has made a terrifying video (embedded below) of what might happen if the world markets crash. He says it happen any day now, at any time -- even right now!

Because there's a risk someone might take Vickers' apocalyptic warning too seriously, we'll tell you the good news ahead of time. Vickers has written a book that has all the answers. Just buy the book, and you'll be fine.

(Also, if possible, go back in time to June and follow the genius advice he gave on CNBC, which totally panned out exactly as he planned.)

If you don't have time to watch the video, Vickers' apocalyptic prediction goes a little something like this:

The Fed prepares to do its QE trick at the Wednesday bond auction, pushing the dollar down even more. China announces that it won't buy any more U.S. notes until the U.S. stops devaluing the dollar. The news hits the wire... Traders around the world become net-sellers of equities, bonds, and Western currency... No one has any liquidity, except China... Within minutes, electronic trading systems short circuit under the load of sellers... Some traders choose oblivion, others join the rash of suicides, others slip away quietly and are never heard from again... Panic sweeps the globe... most nations activate their police and militia to quell angry rioters... Elsewhere, the fisherman still fishes, and the farmer still hoes his fields, and the baker still bakes his bread... The world now shares a common currency... and prepares for a global currency exchange and debt re-set.

-- Which all happens in 14 days. (But remember, get the book and you'll be fine.)

0 What Happened to Silver?

The silver market has been extremely volatile as of late, and today’s action has proven no different. After peaking at 27.95 overnight, silver hovered around unchanged before dropping precipitously for no reason, ending the day down almost 2%.

The large intraday price drop is certainly cause for concern among investors, but digging into the day’s volume action may be a bit more revealing.

Both silver futures and the SLV displayed average to light volume today. The silver futures traded ~56.4k contracts compared to an average of 58.8k contracts over the last 45 days. The SLV traded 21.99 million shares compared to an average of 27.25 million shares.

What this all means is that the conviction in the selloff of silver appears to be waning. Even in the face of another big selloff in silver, with no reason in sight, silver traders did not panic and begin selling into the swoon. Rather, it appears that most holders stood pat and did nothing.

Most traders like to see high volume behind either a downside or upside breakout in order to confirm its conviction. Furthermore, they view decreasing volume behind a continuing trend as a sign that a reversal is imminent. The tailing off of volume behind silver’s selloff is an interesting phenomenon that will have to be monitored. (more)

Inflation-Protected Bonds Diverge With Forecasts for 1.7% Rise in Prices

There has been no better place in the U.S. government bond market since 2008 than in debt that protects against faster inflation. Now, traders say the securities may be poised to fall as consumer prices rise too slowly to justify the gains.

Treasury Inflation-Protected Securities returned 17 percent the last two years, compared with gains of 1.9 percent in Treasuries, Bank of America Merrill Lynch indexes show. Yields on 10-year TIPS show bondholders expect the consumer price index to increase 2.17 percentage points a year on average over the life of the debt. The rate rose 1.5 percent in 2010 and is forecast to climb 1.7 percent this year, based on a Bloomberg survey of more than 60 economists.

“We’re nowhere near any inflationary type of levels,” said Gary Pollack, who helps oversee $12 billion as head of fixed-income trading at Deutsche Bank AG’s private wealth unit in New York. “There’s a lot of slack in the U.S. economy, especially in the labor market. It’s too soon to get too bullish on TIPS.” (more)

BNN: Investing in Gold and Silver with Eric Sprott

Do gold and silver still retain their lustre as an investment? BNN asks Eric Sprott, CEO, Sprott Asset Management.


click here for audio

Ultra Petroleum: A Natural Gas Stock to Keep Your Portfolio Warm

As cold weather moves in and grips the Northeast, natural gas investors are increasingly boosting exposure to producers benefiting from the winter season storage drawdown.

Despite overall U.S. natural gas in storage remaining 1.7% above the 5-year average, national storage remains within the 5-year range, with east coast storage running 5.7% below normal and west coast storage in line at 0.3% above average.

Cold temperatures support natural gas prices, with last week’s storage draw the 6th highest on records dating back to 2002. In the week ending January 13th, the average temperature in the lower 48 states came in at an average 28.3 degrees, down 6.4 degrees from the prior week and 4.7 degrees below historical norms (National Weather Service’s Degree Day Data).

The Northeast remains colder than usual. The average January low in Boston is 22 degrees while the average high is 36 degrees. In the coming 10 days, Boston is expected to see an average low of 16.8 degrees and an average high of 28 degrees. The average Boston observed temperature over the past two weeks was an average 21-degree low and an average 32-degree high. (more)

Silver in backwardation, set to move up

Although the silver price has declined by 11% over the past three weeks, tightness in the physical market continues as the metal is again in backwardation, i.e. the spot price is higher than the futures price.

James Turk of GoldMoney provided the following comments to King World News: “Silver is in backwardation which is an extremely important development. Backwardation happens regularly in most commodities, but it is rare in the precious metals.”

“Silver is in backwardation not just in the short-term, this time it is extending twelve months forward! The last time this happened Eric was in January of 2009. Over the next few weeks silver rose from about $10.50 to $14.50, a roughly a 40% move higher. The key to understanding backwardation is that the price must rise to entice holders of physical metal to sell and accept a national currency in return. I think we can expect a similar event to repeat over the next few weeks.

“A similar type of move would clearly put silver well above its previous high. What this backwardation shows is that there is a disconnect between the physical and the paper markets in silver. As I said previously, the silver shorts simply cannot hold the paper price down here any longer without seriously discrediting the paper silver market as a price discovery mechanism.”

Also, Goldcore alerted us to another positive development in the silver market, reporting a massive increase in silver bullion demand from China, with the country’s imports surging fourfold in 2010. As on so many other fronts, China is turning out to be a game changer.

UN wants new global currency to replace dollar

In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises.

It added that the present system, under which the dollar acts as the world's reserve currency , should be subject to a wholesale reconsideration.

Although a number of countries, including China and Russia, have suggested replacing the dollar as the world's reserve currency, the UNCTAD report is the first time a major multinational institution has posited such a suggestion.

In essence, the report calls for a new Bretton Woods-style system of managed international exchange rates, meaning central banks would be forced to intervene and either support or push down their currencies depending on how the rest of the world economy is behaving.

The proposals would also imply that surplus nations such as China and Germany should stimulate their economies further in order to cut their own imbalances, rather than, as in the present system, deficit nations such as the UK and US having to take the main burden of readjustment. (more)