MORE MARKET CHARTS AND ANALYSIS............ A MUST READ

The structural causes that led to the Global Financial Crisis of 2008 are identical to the structural causes that are leading us to another systemic financial crisis in 2011.

The only difference is the kind of debt at the core of the looming crisis: Mortgage-backed securities in 2008, as opposed to European sovereign debt in 2011.

And of course, the debt hole in 2011 is bigger than in 2008—a lot bigger. The financial crisis we are about to experience is going to be bigger, longer, and uncut by bailouts.

We're not going to have a Hollywood Ending this time around. The governments of Europe and the United States, as well as their respective central banks, do not have any weapons to fight off this 2011 financial crisis, as they did in 2008, for the simple reason that they used them all up—they're out of bullets, both monetarily and politically.

The beginning of the end of the fiat money experiment has begun. Being prepared for the death of paper money is the only way to ensure financial survival beyond the trailing edge of the crisis that is now upon us. Moving into hard assets and precious metals is the only answer.

Volatility is going to continue to be the "new normal" of market life. The best thing you can do to prepare for this incredible action is to shave off positions into strength, while holding a much larger core position. A relief rally will come. Note the target area on the Dow chart. Position yourself to take advantage of the bounce and then work hard to prepare for a steeper decline into the fall. Beyond this rally, I see a clear and horrible break that will likely take out the 2010 lows.

With the actions and policies of the US government, natural resource plays will be the preferred investments into the future.

• You were told by Congress and the Fed that if the government didn't raise the debt ceiling, a disaster would ensue. Well, the debt ceiling was raised and the disaster continues. The situation now feels "out of control."

• The debt downgrade was the fundamental driver that pushed gold above the technical channel and onto what I've labeled the "super highway" price channel. The Fed seems to have pulled out all the stops, and still business is almost at a standstill. Something is very wrong.

• The economy is weakening, unemployment remains over 9%, and the stimulus that did not help before is called for again. The Fed can lower rates to boost bond prices, but not enough to help businesses.

• Ben Bernanke told Congress in July that the Fed would intervene to buy US Treasuries if the economy began to stall or if deflation re-emerged as a threat. The Sept-Nov USD $65.00 target for the dollar on the chart below feels solid. Longer term, the fundamentals indicate death or coma for the dollar.