take away punchbowlGuest Post by Bill H.

The FOMC minutes were released yesterday and said that several participants thought that pulling the punchbowl at some point would be necessary. Fat chance! No, NO CHANCE! There is no chance now just as there was no chance back in 2009 and ’10 with all of the talk of “green shoots and exit plans”. Forget about anything and everything else, if the Fed steps back then WHO will buy the Treasury’s bonds? Anyone have an answer for this one? Anyone? Buhler?


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No, this is a complete laugher. Look at it this way, if the Fed were to stop or even slow asset (bond) purchases then interest rates will rise. The Treasury continues to “roll” old debt into new debt because it’s not like they have the “money” to retire or pay down anything. This is like adding more balance every single month to your credit card without ever having the intention OR ability to pay one red cent of principal back,,,EVER! With $16 trillion of debt (on books), every 1% rise in interest rates will cost another $160 billion in interest alone. For example a 5% rise would cost $800 billion per year in additional interest EVERY year, I might add that each 1% rise in rates broken down will cost close to $500 million PER DAY.
None of the above even takes into consideration the $1+++ trillion of new debt that is being piled on each year. This additional debt is the only reason that the “doors” have remained open. Without it everything will come to a complete screeching halt which is what makes the current sell off in precious metals laughable. They are “going down” because why? The Fed and Treasury had a “come to Jesus” moment and austerity will cover the land? Can you imagine the riots that will occur? Pensions slashed, overpaid government workers losing their jobs only to go on unemployment (which will be cut back because there is no money) and EBT benefits etc. slashed? Austerity? Living within our means? Someone other than the Fed ponying up over $1 trillion per year in new lending to a bankrupt Treasury? Come on!
While we are on the subject of “austerity”, you might as well add the word deflation which is exactly what we would have if we had a REAL currency…but…we don’t. “Money” becomes more valuable in a deflation because there is “less of it”, however, we have an added twist to the situation today. The “issuer” of the money IS the problem and they are a walking talking bankrupt. Assuming that the idiots who prance around the halls of the Fed were stupid enough to believe the economy can survive on its own without further and infinite QE (they don’t, they know that within weeks or even just days the house will collapse) the result would be a bankruptcy of the Treasury. …Which means the Dollar becomes worth less (read worthless) NOT more!

Do you see the irony here? Continued monetization means a steadily weaker Dollar while austerity means the same thing…only faster, much faster, probably over weeks ending in a weekend where nothing reopens Monday morning. The only thing which will display “deflation” is real money, Gold and Silver. There is precious little of it now, wait until it goes into hiding where no one will part with it except for the most necessary items. Now THAT’S going to be one hell of a “deflation” which history will call hyperinflation!
On another subject, I played golf today and one of the “chaps” (a Brit) asked me “if you are correct about a financial collapse, what good is Gold or Silver going to be? Wouldn’t you be better off stocking up on baked beans and toilet paper?”. First off, if you can store your net worth in a closet that consists of food for say 2 or 3 years, you wouldn’t be able to purchase very much Silver, certainly not Gold ounces.
I explained to him that “a plan” is what he needed. Yes, you need food, toilet paper and supplies. You need arms to protect yourself, your family and your belongings but “something” has to be money. Why not “real money”, you know, the stuff that has been money for 5,000 years? Makes sense to me, why not “store” your savings in money, money that can never default under any circumstances. And what gets me is that those who cannot understand that a crisis is coming (because it is just too horrible to believe I suppose) is that very few can see that there is “the other side”.

Whatever crisis which is coming will surely have an end and a new beginning comes somewhere somehow at some point. I ask you, if everything financial collapses how will you get your net worth from “here to there”? I bet you can figure this one out with your 3rd grade thinking cap on. How so many don’t, or “can’t”, or maybe just don’t want to “get it” is beyond me.


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  1. Here’s the undeniable truth…..Not only CAN’T the Fed end QE, but it CAN’T even unwind the positions that it currently has on it’s books. They CAN’T even “mark to the market” the true value (or lack thereof) of their holdings because that alone would collapse the “system”!!! Obama keeps spending…refusing to cut back on spending…and no foreign country is buying US Treasuries in the quantities needed to cover that spending…..therefore the Fed is forced [or pre-planned NWO agenda] to continue buying the US Treasuries AND Mortgage Backed Securities AND bailout the EU banks…..hence, “QE to infinity” will NOT end…..that is, until the “system” collapses under the weight of it’s debt…which is a mathematical CERTAINTY!!!!!!!!

  2. Everybody is worrying about the paper spot price and here is an article which nobody has yet posted in which tells the real nature of the problem and why you should be stacking, PM’s, Food, Ammo, Medicine and other items for what’s down the road. Keep Stacking

  3. That is an  accurate and  telling article as are Steve’s and Charlie’s comment.  The central government, ours and others, know it is impossible to stop printing. If the central bank seems reluctant, like the BOJ senior officer seemed to be, they are replaced or encouraged to retire.  When CG tells CB to print, CB prints.  Period.  And we will never stop printing.  There’s $5 trillion in new and roll over debt in the US this year.

    • Agreed, AG.  It IS impossible to stop printing because we are now in the “end game” portion of this mess.  They MUST print or endure an immediate collapse, so they print in order to buy time.  Of course, time is only worth something IF it is used to achieve a goal.  The current goal seems to be to smash gold and silver as low as they can, cover the shorts, and then go long while buying up every ounce of PMs that the weak hands are selling off now.  It is likely that political power will be used at some point to gain further advantage ala some sort of tax or prohibition against silver and gold ownership.  Too bad about my stack being lost in Crater Lake, thanks to that canoe accident last summer.  :-O

  4. I think WE should take away that punch bowl, and keep it.
    The Fed (a private business) creates digits and buys the banks’ bad assets, the banks get first use of the new confetti, robbing everyone already holding the s–t.  A dollar is 371.25 grains of silver.  (24 grams or .773 toz)  So 22.2 FRNs =  $1.00 today.
    So ‘we the people’ of The US just declare a ‘technical default’ and tell them to pound sand.  If they crank about it, we stuff them in a cage at Guantanamo and seize all the business and personal holdings of all 12 member banks, their boards and their major stockholders. Their gravy train is derailed. Then use their buildings as re-education centers for Keynesians.
    We need a true National Bank, for businesses to have access to fixed rate, simple interest loans and other banking services, and a national currency like the old greenbacks until they gather enough gold and silver to launch hard money once again.  Sure, foreign countries won’t like it, too bad, keep your lousy exports and we will go back to work for ourselves.
    Who can we trust to run the greenback presses, though?  Here’s an idea, I’ll do it for ya, for free. No funny business….. 😉

    • I like your message, Conax, but think that a National Bank is next to useless.  What’s the diff between a National Bank and a Central Bank?  Not much, IMHO.  Banking looks to me like one of those things that works best at the local level and that gets progressively worse as we approach the national level. Best avoided at the national level, IMHO.  The USA not only survived but prospered for more than 125 years WITHOUT a central bank of ANY kind.  We can and MUST do so again.  Central banking is nothing more than central planning applied to banking… and central planning blows chunks… always has, always will.

  5. The European model is being put into effect here, at our door,  step by step. 
    They are printing FIAT backed by complete garbage collateral bonds with ratings of BBB minus or less.  They are taxing precious metals with VATs and other impounds while making the transport of gold and silver a dangerous, if not illegal, activity. 
    They are imposing currency controls.  Italy, Greece, Spain and France have strict  limitations for both withdrawals and purchases. 
    Several countries, most recent being Spain, taking private pensions from the people to buy sovereign debt that has zero chance of being repaid. 
    The large banks and central banks are directly connected to the Fed,  demanding that our Fed send funds to help bail these banks out of their disasters.  In January the Fed sent $237 billion across the pond.  The demands of these banks, defacto  owners of the Fed and its 12 regional banks, will require more currency than we will ever be able to repay. And that’s on top of the trillions we are overspending in this country. It’s as if we are both bailing out the Euro countries and our country simultaneously.
    If the Binford 1200 stops running, the crunch will be cataclysmic and I don’t have enough words to describe what will happen much less be able to get my head wrapped around the consequences.  Damned if we print; damned if we don’t  What a world. Atlas will shrug and do so very hard

    • “The European model is being put into effect here, at our door, step by step.”
      Yep.  It’s working so very fantastically over there that we simply MUST try it here!  /sarc off/
      “…the crunch will be cataclysmic…”
      Indeed it will.  In fact, this entire global financial mess is inevitable and the EU leaders are doing what they are doing because those actions are all they have left before their house of cards comes tumbling down in flames.  Ours will too and so will the Brits and the Japanese.  While the captain and crew are discussing lifeboat drills at dinner, the rest of us had best sneak aboard the boats!

  6. Their ship is sinking and instead of getting the bilge pump working they are attacking gold and silver. That worries me. It seems PMs are at the very top of their list. These madder than hatters are not just financially destroying nations & all the people in them. They are hell bent on making sure that as few people as possible are ready for it (or as many as posible are caught totally by suprise)! This goes beyond just being criminal. They really want as many people to die as is possible! This is EVIL not just criminal!

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