goldThe United States has ushered in hyper monetary inflation with the series of Quantitative Easing programs, as in QE1, QE2, Operation Twist, and QE3. My belief is no longer than hyper inflation is inevitable, since already part of current policy now. Hyper-inflation is already here!
As a result of the hostile monetary war, the USDollar and its USTBond vehicle are facing not simply opposition, but broad-based earnest organized initiatives to avoid them. The goal is to replace them in workarounds. A reset is apparently near. The pressures to install a more fair, more just, and more enduring system is enormous, and will not cease. The demand is to bring back the Gold Standard, the equitable arbiter, the true enforcer.
The demand for Gold is inelastic. As price rises, so does demand. It is called Gold Fever.
Something big is near, as the tremors are being felt in every global corner, and every global market.

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By Jim Willie, GoldenJackass.com

As introduction to this article on the bizarre nature of all things economic and financial within the Untied States, consider once again the Deflation Knuckleheads. Be sure to know that the Jackass considers Rick Ackerman to be one of the premier technical chart analysts in the world. He has taught me in the past from his T/A work, even as his hidden pivots are unique and enlightening. In 2011, we were at odds over the incessant errant ramblings about deflation and its great threat. In August of that year, the Jackass penned a public article in an attempt to clarify the inflation and deflation factors being simultaneous, not at all mutually exclusive or in some debated sequence. While respect is still high for Rick, he has misquoted me, not demonstrating the depth of knowledge concerning the incredibly difficult topic of inflation. The distortions run so deep on the topic, that even smart folks fail to comprehend. The syndicate desires such confusion. After trying to set the record straight two years ago, one more attempt is necessary. The respect for each other is mutual.

 

The motive here is to further shed light on the nasty gnarly tangled topic of inflation and how deflation is interwoven as the financial and economic domains are locked in the weave. They are twisted together to produce a storm the likes of which have never been witnessed before in history. What follows is a critique of obtuse perceptions of all things relating to inflation and its opposite. Ackerman might have stepped down as King of the Deflation Knuckleheads, but he continues to preach its shallow school of thought. No hard feelings, Rick, but you do not represent my work correctly. We might have a common goal, but we do not follow similar perceptual paths to arrive at the promised land, the Gold Standard. The critique in this article is not designed as a personal attack on Ackerman. At times, the competent among us have big differences in perceptions. The motive is to clarify in a continuing theme the shortcomings of the deflationist camp, which cannot see either the monetary inflation or its interwoven nature with policy. The result is a vicious cycle that escapes them. We will not witness one or the other, but rather both together. Acute inflation and persistent deflation co-exist and even feed off each other, due to policy action and response. My own belief is that the Knuckleheads will never comprehend the two factors woven together to produce the financial & economic hurricane of unprecedented type.

 

PARADIGM SHIFT OVERSHADOWS CHARTS

In a November 4th address to his subscribers, Ackerman discussed the Gold price and the risk for a decline to the $1125 level, another potential 15% fall from here in the COMEX posted price. He went on to show nice respect for the Jackass analysis and work. However, in his final attempt to distinguish our work on differences, he presented my position incorrectly, in an important misquote. The Jackass practice of not looking much at the official Gold chart in the last two years or more flies in the face of any chart expert. Their skill is recognized, but the relevance is not apropos. My belief is that the important non-linear factors have kicked into gear. The extraordinary events dominate within the COMEX and MF-Global, such as thefts of accounts, refusal to deliver on gold futures contracts, rapid depletion of official gold inventory in vaults, raids on the GLD Fund, even quick shifts in inventory from one major bank to another in order to cover demands. The revolt in the Eastern Hemisphere has not entered into the work of much of any prominent analysts, surely not chartists. Therefore, a grand blind spot persists. The chart experts believe all external information is wrapped inside the chart somewhere, a belief once embraced by the Jackass. No longer, not for a major structural shift in systemic revolt. The entire Eastern Alliance, with its visible front in the BRICS nations and the G-20 Forums, is working on a USDollar alternative. They include some ancient wealthy families in China, who have decided to produce change by draining the London banks of several thousand tons of gold. They influence the change factors in the most awesome manner, behind the curtains, with phone calls and surely threats. They have enlisted the aid of the trust Triads, in a counter-action to the security agencies resident among the three major nations in the Axis of Fascism. Refer to the United States, Great Britain, and their small ally.

 

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The chart as a primary tool has been superseded by a Global Paradigm Shift in progress. It is like trying to follow a chess match, but the game is changing like to a more advanced game. The pieces soon will not move like they used to. The King Dollar piece will not command his subjects on the chessboard with the same authority as before. The bishops and knights are being neutralized. The Queen USTBond is caught in a derivative straitjacket. Be sure to know that in past history, a paradigm shift involved a world war, the ultimate in altered infrastructure. The last few years have marked a significant change, often minimized by the label of Global Financial Crisis. It is much more, since endless and without solution on the present course. The Jackass name given is of a Global Monetary War, since the corrupted Anglo bankers wage war in defense of the system and their USDollar regime. They insist on perpetuating the inflation to cover deficits, perpetuating the distortions to bend the markets to their will (see USTBonds, US Stocks, even FOREX currencies), and altering the rule changes to force participation (see SWIFT for banks). Any nation that attempts to bypass the current Anglo dominated system based upon the USDollar for trade and the USTBond for bank reserves is branded a rogue nation. The deviant nation is then smeared as a human rights violator, as well as a nuclear community renegade. The accuser is the most culpable.

 

The deviant behavior is with the Anglo enforcers though. They cannot dictate geopolitical criminality on a unilateral basis. They cannot oppose other methods between two independent nation parties for conducting trade. They cannot obstruct commerce like with natural gas pipelines and expect to remain unopposed, to escape without oil on their hands. The United States and Great Britain have become rogue leaders in defense of increasingly fascist regimes and financial systems. As a result of the hostile monetary war, the USDollar and its USTBond vehicle are facing not simply opposition, but broad-based earnest organized initiatives to avoid them. Not to wreck them, but rather the goal is to replace them in workarounds. Thus the Gold chart means very little in Jackass analysis. A reset is apparently near. The pressures to install a more fair, more just, and more enduring system is enormous, and will not cease. The demand is to bring back the Gold Standard, the equitable arbiter, the true enforcer. The ultimate installation will render the chartists an embarrassing day, week, and month, in a non-linear price rise that will take their breath away, and bring a rejoicing battle yawp from the gold community. Something big is near, as the tremors are being felt in every global corner, and every global market.

 

The pressure has turned international to agree upon a grand reform for the present system of sovereign bond issuance, of bank reserves management, of bilateral trade settlement, of settlement with distributed systems (PCs or Blackberrys), even of debt ratings. The current USD/USTB system is broken. The managers and operators have no interest in either reform toward efficient function, nor enforcement of law against banker criminality. So the world pursues an alternative. When it arrives, a grand shock wave will hit the world like a tsunami, a wave of justice in finance. The winner will be the world. The new king will be Gold. The loser will the host nations to financial crimes, the United States and Great Britain. Thus the chart is of less importance when a big boot cometh to kick over the table. It is the Cossack Boot on one leg, and the Genghis Boot on the other.

 

SYNCHRONOUS BIG PICTURE

Rick Ackerman and the Jackass agree on many factors and perceptions. We both see the big cracks in the US financial fortress, the precarious position of the Saudi regime as it faces pressures for regime change, and the gigantic flow of Gold bullion eastward, as untold supply of bars flow from Exchange Trade Funds in illicit manner. Where we differ is where we have always differed, on the perceptions of inflation and deflation. My contention is simple, that the Deflation Knuckleheads do not comprehend inflation concepts at all, and surely cannot define the concept of deflation. Ackerman misquotes the Jackass position, which must be set straight. It seems despite my past efforts to set the record straight, Rick cannot comprehend my position of simultaneous hyper monetary inflation amidst powerful asset decay, for a simple reason. He does not comprehend inflation or deflation. Inflation has always been a monetary phenomenon, when Rick believes it occurs only with very fast rising prices. The Jackass position is that prices are rising in disruptive manner, but mostly within the cost structures. The result is more asset deflation pressures realized in a cycle. We both observe the veritable armada of black swans threatening to undo the banking system. A hat tip to RickA for saying, “This conclusion might seem extreme, especially to readers who believe such things only when they read about them in The New York Times or The Wall Street Journal. But only those who are blind to the obvious would say that Jim Willie has exaggerated.” Much thanks among professionals. My apology for calling him the King of the Deflation Knuckleheads. But honestly, he continues to strive toward the same lowly distinction with its broken script and scepter.

 

The main issue at odds is the Jackass perception of the current situation and its enduring degeneration. My August 2011 article attempted to set the record straight. Let me take this opportunity to haul out a section from an old article. Let the record be put in clear bullet items for the current Jackass analytic position. Deflation Knuckleheads, please read the following. Let it sink in.

 

JACKASS POSITION

Yet another attempt to set the Deflationist crowd straight. The Jackass viewpoint:

  • Hyper monetary inflation is exactly QE, the bond monetization
  • Hyper inflation exists now, on the monetary side (completed correct forecast)
  • Home values, mortgage bonds, bank equity all fell (seen as deflation)
  • The massive decline in asset prices has already occurred
  • The United States is totally dependent on inflation now (dispensed by USFed)
  • The bond monetization has supported the USGovt deficits
  • The monetary easing has supported mortgage rates
  • Except for redirected amplified inflation, asset prices would collapse
  • As asset prices weaken, the call for more inflation comes (vicious cycle)
  • The pressures rise constantly for more monetary inflation
  • INFLATION AND DEFLATION EXIST SIMULTANEOUSLY NOW
  • The two forces have interacted together since 2011, when QE began
  • They are not exclusive, but rather simultaneous, even interwoven
  • Tremendous inflation derivative devices are at work behind the scenes
  • Tremendous downdrafts on asset prices are prevented by official intervention.

 

CRITICAL MISQUOTE OF JACKASS POSITION

It is incredible how the great density in erroneous thought can be encapsulated in such a short wrong single sentence (in bold). It incorporates the wrongful awareness of my forecast and analytic position. It also incorporates the wrongful grasp by the Knuckleheads for the current complex situation (too complex for them). Here is the Ackerman misquote, “He and I have had our differences in the past. Jim Willie believes hyper-inflation is inevitable, and although I tend to agree, I think it will come like a thunderclap after deflation has laid waste to the financial system. In the past, we have both recommended holding physical gold against any and all possibilities. However, I also suggest keeping a shoebox full of intrinsically ‘worthless’ paper currency to hedge against the ultimate deflationary event – i.e., the forced closure of US banks for more than a day or two. Although no one can predict what might cause this, we should not be in doubt of its likelihood. If Jim Willie and I are in complete agreement about one thing, it is this: the dollar’s long reign is near an end.” The tone is positive. The agreements are many. The end goal is in common. However, it would be greatly appreciated if the Jackass analysis and conclusions were not misquoted. The above is NOT the analytic position written by me, never has been, and never will be. Although briefly summarized, it is incorrect in reference at the opening statement. The hyper-inflation is already here. The wasteland of financial markets is obvious also in their depletion. The overlooked part is the key integral part, the interaction of the two with central bank monetary policy after financial market calls and its resulting vicious cycle. The entire Taper Talk episode should have demonstrated to Ackerman the interaction and existing hyper-inflation at work and in progress. It did not. He is not an economist or monetary expert. He is a technical analyst extraordinaire.

 

The United States has ushered in hyper monetary inflation with the series of Quantitative Easing programs, as in QE1, QE2, Operation Twist, and QE3. My belief is no longer than hyper inflation is evitable, since already part of current policy now. The Jackass forecasted it in 2010, and it arrived in 2011 in the force of QE. It is better named QE to Infinity after the wrong-footed blunder of the Taper Talk to draw down the monetized bond purchase plans. Ackerman seems unaware to comprehend that the hyper-inflation that my forecast called for has already arrived. It not only arrived, but its continuation into perpetuity (QE to Infinity) is being debated with formally stated rational in the three-part mandate. Refer to tame price inflation, full employment, and stable markets. My forecast has been for Zero Interest Rate Policy forever and Quantitative Easing to Infinity. Events of the last several months are proving the twin monetary forecasts to be correct.

 

Q.E. AS DEFLATION MACHINE

As for the financial system, it has been laid to waste already. Ackerman surely perceives the wasteland, although he is not specific. It seems he might anticipate the financial destruction as yet to come, when in fact it is already here. The Jackass expects, adequately made clear on frequent public articles, that the hyper monetary inflation goes hand in hand with the financial and economic destruction underway. My emphatic point has been that the QE debases the USDollar, forcing a hedge in defense in the investment of hard assets. The result is the rise in hard asset prices in terms of the rapidly debased USDollar units. The rising cost structure results in shrinking profit margins, and lost profitability for companies large and small alike. Then follows the retirement of capital (equipment, machinery, buildings), and their mothball storage, later followed by liquidation. Therefore, ironically, the Jackass joins the Deflation Knuckleheads in expecting deflation, but through capital destruction, something they also do not comprehend.

 

Thus the Jackass sees the monetary policy to hyper-inflate as tied directly to the wrecked capital, or as the Knuckleheads would say, the Deflation. They are not mutually exclusive as they perceive them in extremely shallow intellectual manner. They are instead integrally related, the deflation called upon in result to the inflation. Worse, the reaction to falling asset prices has been for yet more inflation to prop prices, as freshly printed money is devoted to support bond prices, home prices, and bank equity prices. For those who do not see the home prices propped, notice the growing legion of Private Equity firms who purchase 100-home blocks of properties from the big bank portfolios. They do so with easy money made available at the USFed for the preferred clients, the associates at such firms with names like Blackrock led by Larry Fink, the most active of its players. As footnote, the Knuckleheads fail to realize the greatest suppressive factor (deflationary in their flawed lexicon) is the ultra-low USTreasury Bill and Bond yields, something the Jackass has harped upon for three years. Not only do they slow the tangible economy by providing pitiful paltry low interest income for savers, but they fail to provide adequate income from bond spread engines for the entire pension and insurance industry, plus the investment banker sector.

 

ACTIVE STORM DIFFERENTIAL

The feedback loop from a vicious cycle is at work in feverish fashion. The inflation causes capital destruction. The assets fall in value. The response is for more inflation directed at the ailing assets, under the cover of financing the gargantuan yawning USGovt debts. More capital destruction results from the rising cost structure. More response to the deflation. The Deflation Knuckleheads do not perceive the inter-relationship because they are stuck in monoline types of thinking, with mutually exclusive errant shallow concepts. Sadly, the Jackass does not believe the Knuckleheads will benefit from this article as explanation, in attempt to right their wrong-headed perceptions on inflation and deflation. They lack the intellectual capability to discern and comprehend the complexity of the inter-relationship and feedback mechanisms. It is like teaching the German language to a French poodle. They naively believe one happens or the other happens, since they tend to miss the central banks response to the system. They think passively, when the real complex systems are dynamic and active. They think in shallow terms, when the financial system and economies are totally interwoven in delicate ways. They cannot define Inflation, and cannot define Deflation.

 

The Inflation and Deflation are manifested simultaneously to produce a horrific financial and economic storm which cannot be quelled except by a return to the Gold Standard. They are simultaneous with direct effects upon each other, from the monetary spigot to the dynamic asset valuations. They are not exclusive of each other. Rather, they occur at the same time to create an historically unprecedented storm vortex as center, seen over every continent active in trade and finance.

 

The above is sadly beyond the intellectual grasp of the Deflation Knuckleheads. Many are the steps in the reluctant re-installment of the Gold Standard, since it will be imposed by the Eastern Nations in the form of the Gold Trade Standard. It will not arrive as the Gold currency standard for the many defective major currencies, implicitly backed by sovereign bonds. It will  not arrive as the Gold banking standard for the many insolvent banks and national banking systems, those zombie standing columns of toxicity and corruption.

 

REMINDER: JACKASS ANALYSIS AUGUST 2011

This section shows a direct quoted passage from a public article entitled “Inflation & Deflation in a Storm” (CLICK HERE) which without doubt the Knuckleheads did not read or else, did not comprehend. Perhaps they read and did comprehend, but later forgot, much like a creature that reverts to old stubborn behavior, since it is more comfortable and certainly more familiar. After reading the brief passage, conclude that the Knuckleheads are incapable of comprehending the complex storm underway, as are most of the mainstream public. The storm picked up speed and intensity since mid-2011 by means of QE to Infinity. The central banks provide the high pressure zone (inflation), while the damaged economy and financial markets provide the low pressure zone (deflation). Inflation has been and always will be a monetary phenomenon. The August 2011 passage read as follows, written over two years ago but still very relevant…

 

The best description of the current situation is the collision of high pressure zones against low pressure zones. The high pressure is the result of thrust by central banks of monetary expansion that has actually wrecked the USFed balance sheet, and the EuroCB balance sheet. Each is the shameful owner of worthless mortgage bonds and sovereign bonds respectively, that nobody wants, that will never recover in price. The low pressure is the result of a powerful push by falling housing prices and big bank balance sheet insolvency. The banks are making a transition from insolvent Zombies to undercapitalized Dead Made Men. They are soon to be recognized as dead. They are agents of the Syndicate, and thus guaranteed for slush fund income from multiple sources.

 

The investor community incorrectly believes that actual money is flowing into USTBonds as safe haven. They are fooled by the powerful Interest Rate Swaps applied by the big US banks, the agents of the Syndicate. The only massive asset bubble in existence is the USTreasury Bond. It loudly proclaims USEconomic recession also, just like Chairman Bernanke’s admission following the FOMC meeting this week. More still, the chart contradicts the myopic focused Deflation concentration that ignores the monetary inflation consistently and errantly. They earn their Knucklehead label every passing day, from being half blind. My contention is that none of them is very intelligent.

 

Aside from the grand deception, the markets, the pundits, the investors, and the analysts, all blessed by eyes and ears and clipboards are realizing the record price level for Gold. The Deflationist crowd and the Wall Street hive cite instability, uncertainty, and shaky confidence, all true, but off the mark. The actual motive and thrust behind the record Gold price are:

  • Endless chronic 0% official interest rates in the United States, England, and Europe. The nil rate is the traditional trigger and sustaining force for the Gold market.
  • The crumbling fortress of sovereign bonds, broken on the peripheral nations, the deep damage working its way to the core of USTreasurys and UKGilts through Italy and Spain, despite the sheep-like retreat into USGovt bonds. Watch out for France!!
  • The utter wreckage of the big US banks, kept afloat by the generous FASB accounting rules since April 2009, insolvent to their core, under siege from both toxic mortgage assets and bond investor lawsuits, under Basel II strain on reserve management, and suddenly finding themselves grossly under-capitalized after showing unwillingness to recapitalize when their stock shares were much higher last year.
  • The witness of the Euro Central Bank putting up another EUR 850 billion to bail out Italian and Spanish Govt debt, after several bailouts of Greek debt fixed nothing and only served to apply patches amidst continual bank redemptions.
  • The general sense that fiat money is losing its value, its meaning, and public confidence, as central banks are observed in the HariKari Keynesian Monetary exercise ritual, having lost their prestige and credibility, but seen still as the last hope. Every action they take debases the currencies further and lifts the Gold price.

(This marks the end of the August 2011 passage.)

 

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REICH FACTORS & & EXCEPTIONALISM

The world is being subjected to the most bizarre and unwieldy banking and economic policy. Within the United States, delusions of capitalism persist, when almost none exists at the top tiers. What is seen instead is a queer mixture of business fascism and ordained socialism, as the welfare state expands. Something like 46% of the US population benefits from some sort of state assistance, the most egregious elements being the Worker Disability Income and Food Stamps. The delusion of capitalism is actually a tragic claim and the cause of great laughter. The Big US Banks are protected from failure and liquidation. No capitalism there, as liquidation is perhaps the cornerstone of capitalism itself. These rotten pillars infect the entire economic body and cast long shadows on capital formation. The price inflation, economic growth, job creation, and even home prices are all objects of great deceptions and lies. All data is managed, massaged, manipulated, with laced deceptions. Recession is outlawed, as all quarters must conform to average. Pure fascism there, as accurate monitors are the hallmark of systems with integrity. Without proper readings, the decisions by corporate heads is often prone to error.

 

The financial markets are the bastion of control and intervention where favored, and suppression where not favored. The flash trading and derivatives have become fixed features. Pure fascism there, as free markets are not even remotely the case. The entire set of asset prices is the domain of policy makers, who wish to enrich their henchmen, while at the same time avoid a nationwide rebellion from cratered pension funds and mutual fund savings. The USEconomy has become dependent upon consumption and handouts. It has evolved in a pathetic manner. The Jackass belief is that after the tangible industry was displaced and forfeited to Asia in the 1980 decade, the US leadership crew of heretics decided to change the philosophy. They declared financial engineering a step forward in evolution, higher on the economic food chain. They also declared consumption to be the tacit privilege of the supposedly superior financial driven American tribe. The nation did not need to work for money, since it came from asset inflation and the USGovt dole.

 

Monetary policy in today’s terms is replete with heresy. Recall the off-loaded risk in derivatives that Quack Greenspan called sophisticated financial calibration. The next stage in the heretical assembly line is the installed (never to be removed) hyper monetary inflation delivered by the US Federal Reserve, given the euphemistic name of Quantitative Easing. It should be called financial engineering in climax, the last chapter of destruction that is, not development. This is pure Weimar national socialist failure to the extreme. When the Japanese ran QE for years, the Wall Street muppets called them a failure in a debt suffocation state. But when the Americans do it, just salute and call it sophisticated preservation of an advanced delicately balanced machinery. It is in reality failure to the extreme, destined to destroy sufficient capital to cause a systemic failure. The USFed inflation is in position to cover debts, public and private. The debt is not covered by legitimate income anymore. It is printed. At times, one can read or hear that the USFed is printing capital, or providing capital for the big New York banks, more extreme heresy. Inflation is not capital, when in fact inflation destroys capital. The US is exceptional. The great lie is that the USFed Quantitative Easing programs of printing money, using the phony money to cover the debt (called debt monetization), is actually called STIMULUS. It destroys capital the way inflation always has. Actually, keep in mind that under Greenspan, the entire concept of bond monetization was considered heresy and deeply destructive, by the USFed itself. Memories are short. The heresy is an integral part of what can be called Reich Economics, laced with propaganda from the controlled media. The forces of economics, finance, and money are pointed at the United States. It will bend to the forces, despite the ample nazi banker efforts.

 

The USEconomy is not the byproduct of exceptionalism. It is the result of three decades of inflation abuse and warmongering and bank sector fraud and a generation of heretical teaching. Half the USGovt debt is from war costs. The American nation has very little concept of inflation, as exemplified by the Deflation Knuckleheads. They cannot observe a high pressure and low pressure zone in the current financial and economic storm center vortex. The public could not identify a rheumatic fever, surely called a beneficial sweat. The sad fact of American University life is that the USFed pays for 35% of chaired Economics professor chairs. The teaching of false doctrine is complete, performed by economic high priests. Nowhere in the Finance and Economics curriculum is corruption taught as a key factor that influences the markets and economy itself. The formal study of derivatives is delicate, and surely does not include outlier events like the Morgan Stanley $8.5 trillion infusion in the second half of 2010 that caused the phony flight to safety in USTreasurys.

 

Russian President Putin took great exception with the amateurish US President in rationalizing the global reserve currency abused privilege. The US is exceptional in its criminality and heresy and war aggression, not in its innovation for industry. It is exceptional in its devious destructive financial engineering that helped heap wreckage upon the USEconomy and the entire Western financial structures. The foreign resentment is deep. As a nation, it is exceptional in the protection it offers the criminal elite for the gradual imposition of a police state. Forgive the Jackass, who is going off the deep end and is clearly delusional in criticism.

 

The United States does not deserve privilege in financial abuse, bond fraud, banker criminality, and war on credit card. The US as a nation is indeed exceptional. It is exceptional in the extreme degree of criminality and protection provided by the many official USGovt offices. This is precisely the bitter fruit of the Fascist Business Model that the Jackass has written about for nine years, yet almost no other financial analyst even mentions. The merger of state with big business led by the financial sector has produced a grand corrupt nation and illegitimate leadership, unless criminal syndicate leadership is given high value. Full spectrum dominance has been an exercise in theft, pilferage, fraud, market frontrunning, insider trading, murder, bribery of Congressional members, twisted agendas for the Intl Monetary Fund, the World Bank, and even the major regulatory bodies, including the Debt Rating Agencies. The USGovt leaders strut their puffed arrogant chests like mutants. The democratic process (like voting system) has been turned on its head, as corrupted as Third World nations except more sophisticated with Diebold software. The police state will have little opposition, since recruits will be easy. The brutality of police is a time-honored characteristic that appeals to the dark side of humanity. Just as the USMilitary at times has appealed to those who wish to kill in the national interest, the domestic police at times appeals to those who wish to beat heads and distribute pepper gas to unruly crowds. The dark side is prominent in humans, the debate being whether dominant.

 

INELASTIC GOLD MARKET

The Gold Market is truly unique. It represents money and savings. It represents defense against inflation and even against corruption. It represents a store of value free from debt counter-parties, and even corrupt banks that exploit and prey upon their clients. Apart from its innate defensive properties, the gold market is full of unique characteristics. To be sure, gold is the fungible, transportable, recognized store of value that is immune to effects of time decay. However, its micro-economic effects are fascinating. The demand for Gold is inelastic. As price rises, so does demand. It is called Gold Fever. Recall in year 2001, gold could not be given away at the rock bottom $280/oz price. The gold demand shoots up whenever the price makes significant upward strides. The opposite is true of demand for television sets. The supply of Gold is inelastic. As price rises, supply diminishes, the opposite of what one would expect. For years, the coverage of the insanely acidic hedge book maintained by mining firms resulted in a massive drainage of cash. Note the several Barrick Gold stock issuances to cover their hedge book, except they lied and never covered it. The toxic hedge books continue to leak. As they continue to drain cash, they inhibit devotion of capital to productive projects. Another recent bizarre phenomenon has occurred. It is a cousin effect to the inelastic supply factor. As the USDollar is debased by USFed monetary inflation to the extreme, and forces are applied to lift the Gold price, the many foreign governments marshall forces to confiscate gold mines and to impose heavier royalty taxes. Worse, as the USFed inflation raises the cost of living universally, the gold mine labor forces react. They go on strike for higher wages. The result is confiscation to reduce gold mine output, and strikes to reduce gold mine output. Gold is an exceptional industry indeed. The opposite is true of supply for milk and beef.

 

PARADIGM SHIFT ON GOLD

Paradigm Shift will be the climax crescendo to the entire currency market, its king gold included. The Gold price will someday before long enjoy a quantum leap upward in a global reset. The design and details are not for the common unwashed among us to be informed. We plebeians must plan and decide according to anticipated decisions which come. The great Global Currency Reset will come like a thief in the night. It is being demanded by a multitude of foreign nations, which are beyond fed up with US banker criminality and abused USDollar privilege. Foreign leaders are angry and motivated to produce change. The Voice has given several messages in the last couple months about enormous pressures by many nations. The Eastern nations hold a staggering amount of Gold reserves and USTreasury Bonds. They strive to bring about by force an overnight 50% USDollar devaluation. When the discussion turns to the impact on other fiat paper currencies, the conclusion is simple. All major currencies will likely retain their relative exchange rates. But they will all adjust to the 50% devaluation versus the benchmark currency: GOLD. What he is describing is a Global Currency Reset that features an overnight double in the Gold Price. The biggest loser will be the United States, the site of the greatest financial crimes and the location of the greatest abused privilege.

sic semper tyrannis

 

THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.

From subscribers and readers:

At least 30 recently on correct forecasts regarding the bailout parade, numerous nationalization deals such as for Fannie Mae and the grand Mortgage Rescue.

 

“Jim Willie is a gift to our age who is the only clear voice sounding the alarm of the extreme financial crisis facing the Western nations. He has unique skills of unbiased analysis with synthesis of information from his valuable sources. Since 2007, he has made over 17 correct forecast calls, each at least a year ahead of time. If you read his work or listen to his interviews, you will see what has been happening, know what to expect, and know what to do.”

(Charles in New Mexico)

“I commend the Jackass for being the most accurate of all newsletter writers. Others called for the big move in Gold right away, but you understand that the enormous fraud in the system needs to play out before free market forces can begin to assert themselves. You seem to have the best sources and insights into the soap opera that is our global financial system. Most importantly, you have advised readers to be patient, stay safe, and avoid mining shares like the plague. Calling the top in the USTreasury Bond (10-yr yield at 1.4% yield) stands out as a recent fine accomplishment. The Jackass understands the markets, understands the fraud, and also has the sources to keep him the most up-to-date on the big geopolitical and financial events and scandals. Few or no other writers have all three of these resources.”

(Austin in California)

“A Paradigm change is occurring for sure. Your reports and analysis are historic documents, allowing future generations to have an accurate account of what and why things went wrong so badly. There is no other written account that strings things along on the timeline, as your writings do. I share them with a handful of incredibly influential people whose decisions are greatly impacted by having the information in the Jackass format. The system is coming apart on such a mega scale that it is difficult to wrap one’s head around where all this will end. But then, the universe strives for equilibrium and all will eventually balance out.”

(The Voice, a European gold trader source)

 

Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at  www.GoldenJackass.com. For personal questions about subscriptions, contact him at  JimWillieCB@aol.com

  1. Reading a Jim Willie article is like reading a book from most authors… mucho info.  Not that many of us care about Rick Ackerman or even know or care who he is.
     
    That said, the thought that this article leaves me with is that a gold standard will emerge at some point and that when it does, the only money that any nation will have then will be its gold hoard.  Nations like Russia and China that have HUGE gold hoards will be rich and powerful beyond belief by today’s standards.  Those that do not have much gold will be very poor.  So… is there really 8,000+ tons of gold in the US gold hoard?  Probably not but whatever amount there is WILL be the wealth of this nation.  Trillions of useless fiat dollars will not be wealth because no one will want them.  Since they have no intrinsic value either, they will have no value whatever in this scenario.
     
    The rub, of course, is in the definition of the term “soon”.  What is soon?  We all have some idea of what we think this means but since it is not an exact term, there is no measurable “soon” to be pinned down as to timing.  Not that anyone knows WHEN this great reset will occur, of course.  Everyone who mentions it is guessing.  Some guesses will be more along the lines of educated guesses, so could be closer to the actual time.  Whether this occurs in 6 months, 6 years, or 6 decades, the result will be the same for those living at the time.  It will be horrendous. Only those who have real money, which is to say gold and silver, will have much in the way of wealth and everyone else will be desperately trying to get enough real money to survive.
     
    So, forgetting timing, the best course of action will be to set aside some of our current wealth that will enable us to endure the bad times that come as a result of this monetary reset.  Some of this will be as gold and silver.  Other parts will include the things that we all need in order to live, such as food and water, meds and supplies, seeds and tools, fuel, and some means of protecting what we have from those who will not have prepared but who will desperately need and want what we have.  We cannot let them have these supplies as they may be all that separates us and our own family from starvation.  Got preps?
     
    As to inflation vs. deflation… both can be powerful forces in an economy.  They can do considerable damage to wealth, whether that be the wealth of a nation or that of an individual.  As a consumer, inflation seems a larger problem than does deflation.  In a severe inflationary environment, prices surge and whatever money we have does not buy as much.  This definitely lowers one’s standard of living and can result in people not having sufficient food, medicine, or heat.  A deflation, on the other hand, seems much better for the consumer.  In a deflationary environment, prices are falling, so whatever money one has tends to buy more and go further.  This was the case in the US in the 1930s, where goods were plentiful but money was not, so people had a lot of difficulty in buying the things that they needed.  It is not kind to those who have tangible assets, however, as the value of those assets also drops, sometimes quite rapidly.  A person’s house, for example, will fall in price with deflation.  But if we are not interested in selling this asset, who cares what its price is?  When home prices inflate, they rise and people feel richer because their home is worth more.  But, again, if they are not selling their home, who cares that the price is higher?  All that means is that our property tax assessments will be higher, yet it is still the same house with all the same features that it had before it was inflated in price.  The bottom line seems to be that inflation favors those who have tangible assets while deflation favors those who have money.  Within a reasonable range of inflationary or deflationary change, neither can be said to be better or worse than the other.  It is only when they become unreasonable that we seem to have great difficulty.
     

    • “Soon” has been my question now for several years.  Really if you took Jim Willie’s report and just inserted about anything from Food Shortages to a X3 Solar Flare someone could draw the same conclusions which are “soon.”
      Given the rate at which things have declined during the past 5 to 6 years it would be my estimate we have at least 2 to 3 more years before the SHTF.  Only when the 60:1 derivative paper market which is controlling gold and silver is removed will there be any real price discovery.  Until then its whatever the computers and large banks want as the price.
      Its truly reached insane levels where a job market report which everyone knows is highly tweaked so it doesn’t even correspond to reality anymore says something positive the metals get monkey hammered.

    • @Marchas45
       
      No problem, Charlie.  If I can add my $0.02 to the mix here and help others, then that is all to the good.  I have learned a lot here, both from the articles and from the comments, so a little pay-back from time to time is a good thing.  Besides… you are MORE than smart enough to do well in this world, Charlie, in spite of all the crazy things that are happening.  The fact that you are stacking while 97% or so of our fellow Americans are not is all the proof we need of that!  :-)

    • Good thoughts Ed, don’t forget capability to produce and distribute food.  USA has been the leader but rapid improvements in S. America make them a contender as well.  China has huge production, but it is largely a few acres at a time, not efficient.

    • Good point, Mike, I agree.  Acquisition of food and potable water will become bigger problems as the Earth’s population expands and more pressure is put on those resources.  An expanding middle class in many parts of the world will want improved diets, probably with more animal protein in them.  Oil prices will have their say in this as well, since large scale farming and the transport of the products all require fuel of some sort.  Typically, that is diesel fuel, but other fuels could come into play as well.
       
      Yeah, Chinese agriculture is not as efficient as is US farming but the small plots that Chinese farmers have to grow whatever they want are considerably more productive per acre than are the big state-owned farms.  China had frequent food shortages until they decided to try a little capitalism with their agriculture.  Now, they are also a food exporter, mostly to other Asian countries.  The US sells quite a lot of food of various kinds to China.
       

    • Here’s a thought:
      Fiat money gets destroyed, and debt along the ride with a nice reset.  A lot of suffering?  I actually would like to suggest “No so much”
      Most people are in the lower income class and are in debt.  The middle class have some savings, and the rich have lots.
      1. Majority poor get their debt snuffed out and are even keel.  Since they really have no savings to speak of, they continue along as they always have, paycheck to paycheck and the working engine moves along as it always has.
      2.  Middle class get butchered, lose all the value of their savings, but keep assets. 50% or more haircut?  This will cut jobs to the poor by 50% maybe?
      3.  Rich… Lower rich get their @ss handed to them as their cash vaporizes, unknown stock reaction, home values tank 66% haircut?
      4. Uber-rich Come out smelling like a rose.  Some lost cash is covered 1000 fold by the increase in their PM holdings. Land holdings in farm lands do well, house value tanks, but rentals keep chugging along.  Depending on the levels of PM’s held (say 20%?) and the huge stock market variable they might either run -20% to +1000%
       
      Aside from losing jobs, I don’t think the poor will instantly feel anything but relief from debt.

    • @Shamus001
       
      “A lot of suffering?  I actually would like to suggest “No so much””
       
      Yes, there WILL be a lot of suffering as the economy grinds to a halt. First, who says that “debt gets snuffed out”?  Have there been ANY examples of this in the past 100 years?  If so, I would like to know about them.  Typically, debt survives.  It may be at a reduced rate or not at full value but it persists like a bad smell.  Those who borrow money are always in favor of this but those who have loaned it out are not.
       
      “… they continue along as they always have, paycheck to paycheck and the working engine moves along as it always has.”
       
      Unfortunately, they do not continue as always because millions of jobs would be destroyed during a SHTF scenario.  Lots of those jobs would be in the lower and middle classes.  Companies seem to cut from the bottom up in many cases, so many jobs disappear and a huge strain is placed upon the Gov welfare systems.
       
      Middle class will be heavily damaged but those who have real skills other than pushing paper around will recover.
       
      Lower class rich will be fine.  Members of this group know about diversification, foreign investment, PMs, and cash-in-hand.  This group is likely to do pretty well.  House value could well tank but one HAS to live somewhere.  If the house is not being sold, its price is irrelevant.  If the house value falls, then property taxes would be a lot less.  That would be good.
       
      As to rentals chugging along… who will have the money to rent?  Those who continue to be employed will be able to rent but if the rate of employment falls significantly, there will be many people out there who want to rent but cannot.
       
      The uber-rich will do very well indeed, as always.  Information and knowledge are power and they hoard them even more closely than they do PMs and land.
       
      It is also possible that multiple wars will spring up and that a new draft will be implemented that pulls many of the poor / unemployed into military service.  This not only feeds the war machine, it reduces the population and the need for welfare programs. 
       
      Stocks really are a wildcard.  No one knows how this will play out.  It is likely that some stocks will survive, some will prosper, but many will fail and disappear.  Those dealing in commodities and the companies that support them should do pretty well.  A lot of the current low-value retail companies could well disappear.  Food service and distribution should do pretty well.  Utilities should do well.  Industrial companies with much of their production off-shore should do OK.  Companies that make adult toys (think smart phones and other trinkets), autos, houses, civilian aircraft,  and home furnishings could well be in real trouble.  Companies that build military hardware should be OK.
       

  2. C&P from FB side …

    An irony that struck me while reading this article, is that both Mr. Willie and Mr. Ackerman are viewing financial and economic events from ‘status quo’ methods of analysis. While Mr. Willie comes to a more valid reconstruction, it yet fails because he puts criminality ahead of its driving element … the banknote scheme’s inherent self-destruction. In both cases, in their separate ways they ‘put the cart before the horse’.

    Charting, as MANY readers of this forum recognize, is ‘painted’ by paper-based manipulation of the markets … ALL of them. Even so, in an ‘alternative’, as many folks default to politicized blame of criminal elites for the root cause beneath the ills of finance and economy, rather than to go the extra step of deconstructing the system they use … banknote credit-’money’.

    Thus, a false specter looms up, that a ‘gold standard’ (or even a ‘silver standard’) will bring matters back into ‘balance’. This presumption constructively allows for continuation of circulating credit as a trade medium, which is the basic impetus for all our ills. Balance, can ONLY be achieved where money in circulation evenly competes with goods at market. The ONLY way that occurs, is where money itself is a good of equal origin, subject to naturally enforced supply-demand constraints.

    That means a return to the poly-metallic money scheme of copper, silver and gold, whereby they shepherd EACH OTHER into ‘fair market values’, so no ‘elite’ group can over or under value any one of them for very long and thus take command of large commercial sectors. Moreover, since each metal has a known mutual relationship of natural abundance, those ratios serve as an objective bedrock for their valuations from which they can’t far stray without raising immediate alarm.

    • Yep, the bank note ponzi is inherently flawed and is the tool of its own destruction (as always with fiat).
       
      But even Gold and Silver can be cornered, and I fear that these people have built a massive corner of the Solid and have put it off radar so that they can slowly inject it into the new system and buy all of the real assets that they do not already own/retain after the ‘reset’ (ie, an inevitable return to the Gold Standard).
       
      Once these kleptocrats own all of the Real Estate and natural resources like fresh water supplies and Hydro electricity infrastructure then the Physical Gold will flow back to the Rentiers and the massive Corner and Concentration of PM’s will forever render these kleptocrats as the masters of the world… if in fact infighting could be eliminated which isn’t likely if history is any analogue, and of course the Chimerica relationship seems to have become toxic to the point that Eastern and Western elites both are willing to go the WWIII route in order to make sure that in the world to come that they don’t have to deal with the other anymore.

    • WillNotBeASlave … “But even Gold and Silver can be cornered”

      Yes … but with what? It’s the circulating paper banknote credit that makes ALL this conglomeration of power possible. That’s why the writers of the compact Constitution made explicit that Bills of Credit are forbidden from State issue and NOT among the federal body’s enumerated Powers! There was EXTENSIVE debate on the matter and it was handily rejected.

      This ‘gold standard’ crap too, is anti-Constitutional and monetarily delusional. The relatively paltry volume of gold in equation against all goods at market worldwide, puts its rational value FAR above what could be coined in practically useful sizes. Even silver is too intrinsically valuable to be the principal commodity for common daily trade in handy sizes. So, the solution is the poly-metallic scheme, where the great bulk of ordinary money is a combination of copper (bronze) and silver (90%), leaving gold to savings and international wholesale dealings.

    • @PatFields
       
      I see the poly metallic standard returning as well but not actually being physically traded as money but solely as the backing for the paper dough. Paper works fine when it has gold and silver behind it. There is obviously not enough phyzz to go around as actual tender. Yes the value would have to skyrocket on the metals for that eventuality but that’s a problem we will just have to live with…. In my view, gold would have to be valued at appx. $50,000 and silver at $2500 in order to be the global backing for paper money. It’s all relative.

    • SilverSlicker … “In my view, gold would have to be valued at appx. $50,000″

      A dollar is a word. It’s an utterance of vibration in the air only relative to alphabetic lettering. Say the word and see how well it fits into your pocket. Discover if you hear it when you retrieve it back from your pocket. This nonsense of putting arbitrary value on that word and then relating it to real things in life is a silly essoteric exercise in transendential convocation.

      An ounce of silver is … an ounce of silver. Its physical presence in local, regional and world commerce has a difinitive rational relationship to beef, gold, shirts, cars and every other good … as they too have in relation to each other as well.

      Banknotes, whether or not ‘backed’ with anything are a claim form. The framework undergirding which is TRUSTED with ensuring the counterparty performance … even the strict legal right to enforce such a claim … is a rotten lattice hidden by a paper facade that’s about to crash in on itself.

      The true essence of exchange is not the inconceivable myriad items available, but uncontestible Legal and Equitable Title in their ownership, beholden to NO OTHER. Only substance for substance meets that test for mutual transfer of Titles. THAT’S why ‘Liberty’ is stamped on Coin. By its own inherent Right, objectively derived from natural rationality, it embodies Title in itself.
       
       

    • @PatFields
       
      I agree, Pat.  The problem, as I see it, is that the entire US financial system is built upon false premises.  Credit continues to be confused with money and used as money when it is not money.  Money is payment in full.  FRNs are not money.  They are “notes”, which means that they are debt instruments.  The Founding Fathers did not define a “dollar” as the ability of anyone to borrow 371 1/4 grains of fine silver but those 371 1/4 grains of fine silver themselves.  If I hold up a Peace or Morgan silver dollar, I can truthfully say that, “THIS IS A DOLLAR!”.  I cannot say the same when I hold up a $1 FRN.
       
      A strong and thriving economy is built upon real wealth, not credit.  For much of US history, this real wealth was in the form of gold and silver.  It was the savings of millions of hard-working and thrifty Americans.  Those savings were paid a decent rate of interest by the banks where the people deposited their money.  It was loaned out to others to build or expand a business that, if successful, repaid that loan and the interest, to buy homes, or pay for college educations.  This was a self-perpetuating cycle that grew the economy into the large size that was the envy of the world.  People came here from all over the world to participate in the opportunities that all this created.  They did not come here for free goodies but for FREEDOM… the mere chance to work hard and create a better life for themselves and their families.  No one promised them success but the opportunities were there for those who were creative and hard working.  It is almost unbelievable that we came so far and have become so spoiled.  There are many parallels between the US and ancient Rome.  Other parallels exist between the US and the USSR.  In spite of all the glaring examples in history of what not to do, we seem bent on doing them anyway.  Primary among them are the distribution of unearned benefits and the debauching of our currency… from gold and silver, to convertible paper receipts for gold and silver, to paper backed by but not convertible to gold and silver, to mere strips of paper with no backing at all.  Most recently, we have gone to electronic money via credit cards, debit cards, and bank computer digits.  This is the conversion from the substantial to the insubstantial and the further we go with this, the less real substance there is to it.
       
      These days, the US economy is shrinking each year, becoming less than the year before since about 2005.  Inflation and unemployment are rising, although we are told by our “leaders” that all is well, that we’re coming out of recession, and that more jobs are being added.  All of this, of course, is a LIE.  None of these things are happening.  With every jobs report that comes out, we are told that the rate of unemployment is falling, yet the labor participation rate continues to fall to new lows each time it is measured.  There is a HUGE disconnect here between what we are being told and what we are seeing with our own eyes.  That the wretches in DC can continue to do this with straight faces is as utterly amazing as it is unconvincing.  The stock market is not growing, it is inflating in a new bubble of epic proportions.  Of course, injecting $4B a day into the banks that then use it to buy UST bonds as well as stocks couldn’t possibly be the reason why a crummy economy is supporting ALL TIME HIGHS in the US stock market, could it?  Nawwww… what WAS I thinking???  :-/
       

    • Ed_B … “The stock market is not growing, it is inflating in a new bubble of epic proportions.”

      Ed, as our dear friend Mogambo Guru was fond of pointing out, and which many others have been echoing lately, ‘If a rising Stock Market and inflating currency were the keys to success, then Zimbabwe would be the world’s most successful country today.’

      With such a very recent and spectacular example right behind folks, one would expect the lesson to be stark and palpable. I really have to imagine that a lot more are aware of the dangers galloping up behind them than what’s made evident by the propaganda machine.

    • @PatFields
       
      ‘If a rising Stock Market and inflating currency were the keys to success, then Zimbabwe would be the world’s most successful country today.’
       
      Indeed they would… and Weimar Germany would have been an economic and financial power to be reckoned with, completely negating the events that led to WW-II.  Unfortunately, people seem to quit thinking about history the moment they exit school.
       
      “I really have to imagine that a lot more are aware of the dangers galloping up behind them than what’s made evident by the propaganda machine.”
       
      Well, one would hope so.  It’s difficult to tell for sure when they keep repeating the mistakes of the past and applying just the wrong solutions to various known problems.
       

    • These points are all great and of course completely correct, but as Pat said, Gold would still be used for international settlement … which is of course the realm of the Multi-National Super Shark. When I refer to a corner in Gold this is what I am referring to, as the families that control the boards of these companies are in fact the Power which will gain the most Power from a return to the Gold Standard.
       
      They have used the Fiat system as a bait-and-switch and a massive corner of solid gold has been taken off radar to be used in the next stage of the consolidation that I will now refer to as the Gold Standard Cleanup … the final stage of total world asset consolidation. To an elitist scum bag a real asset is not Gold and Silver at all, but Land, Ocean, High Technology Plants, Nuclear Weapons and Police Depts/Military systems that can retain the ownership of it, and that is about it! … the Gold and Silver and Fiat are just a means to an end.
       
      I don’t see a return to poly-metallic standard at all, I see a massive Gold and maybe Silver confiscation on the back of a crisis, and a new Fiat system that will ‘promise’ to be backed by Gold and perhaps Silver stored under the auspices of the Treasuries of the national governments, and NO PAPER but electronic accounts only, and all the kleptocrats who cornered all the bullion would already have transferred it into a Secrecy Jurisdiction where exceptions to private ownership of physical bullion will be allowed for specific types of exceptional people; these of course are the people who control the Multi-Nationals who offshore all their profits anyway and as such drive all small business into non-existence. The End-Game is massive depopulation and high technology production zones where average humans (lower castes) can slave away developing and producing technology until they have made themselves redundant. Sounds a little visionary and tin foil hat but Royals and Neo-Gnostics think a little different to the average person that they consider to be profane.
       
      On another note the following Video is SheepleReady and explains exactly why the idea of paying down the national debt WILL cause a recession/depression … the real problem is the debt based money system and the Fed itself, and neither the Republicans or Democrats except a few tea-party types ever talk about it and instead turn finance into a simplistic moron analogy of paying down the national credit card … the Credit Card needs to be cut up not paid down.

    • SilverSlicker PatFields A multimetallic standard is the only solution going forward when paper fiat money fails. And no you don’t need paper backing many metals. The market will determine the ratios between the metals and also the all important gold-silver ratio. If gold and silver were to get back to their non manipulated price people will be able to buy only a few grams of silver a year and maybe a few grams of gold once in a few years!!.  
      When silver and gold prices go through the roof, people will only be getting paid and be able to pay in grams of copper. Besides copper other metals like tin,zinc,nickel,stainless steel,aluminium can circulate as currency. But Gold,Silver and Copper will by far be the 3 most important metals. So we definitely don’t need a gold or silver backed paper currency. Copper will take over the role of every day money. 

  3. http://www.youtube.com/watch?v=4eSJePwRQaQ  So GIVE me a break here bretheran…Gold never changes it’s value. SILVER never changes it’s value and WARMTH is in the curies? maybe the kelvin…hymmm replay the attached ova and ova and stuffa bigga logga ina stove but I DIGRESSSSSSS  …… Shgowooo “Christine Le Guard” (not fat…kinda French…without the menag”e) (digressing again!!!!!!! }anyway play the attached and open a window to SD and then comment …love those SCOTTISH People!!!!!!!!!!!!!! Sho anyway Christine and the Irawqy gang are going to do a big whoooop die do with the digital machine which just might make all the depressed nations party but on the other hand might douse the dollar and as the Jackass would say: “I ought to confer with Idaho Eagle 999.

  4. A simpler chess analogy would be this.
    A world champion is playing a young upcoming champion. The World Champion is in total control of the game.
    All the analysts can see this clearly on the board as the game develops.
    But the World Champion has cancer, and the further the game progresses, the more his grip is imperceptibly weakening, suddenly he will make a series of catastrophic errors, and the game will be lost, and the online audience who have been watching the board, (but not the players), will be left scratching their heads.

  5. Imagine this. USA defaults, the world is angry. 
    USA offers to pay 8000mt in gold, and asks that the world will let them off the hook if they turn it all in.
    World agrees, distributes the gold, but offers provision all will need to be there, checked and remelten by them.
    USA sends a single boat to deliver it. All is well. And then rumors surface that Fort Knox is still stuffed, and so is the NY FED. 
    They just tricked the world into taking 8000mt (a fraction of above ground reserves of a commodity) as a repayment of the largest debt in history. Like making the victim of your mugging happy with 20 cents to the dollar you just took from him at gun point, after you put lead into him to not be followed.
    I am not convinced 8000mt is the ceiling of USA gold stocks. Same reason no-one believes China only has 1000mt anymore. Reasons with China are for recent inflows, where we also over-obsess USA’s recent outflows. China may turn out to have had more when they last declared a figure. USA may have underdeclared when they came up with the sizable 8000mt figure.  If there really was 20,000mt, they would have all the motive in the world to not disclose it (all). Why? because the would would believe it, and get pissed with the that much easier. Or just greedy. Suggesting USA really only had 8000mt is suggestion they lost all the wars they fought prior to coming up with the figure.

  6. Gold will double overnight + We are in hyperinflation + Gold is already on a secret $7000/oz standard = does not compute
     
    Is Jim Willie’s “insider sources” (a.k.a. the sources inside Jim’s head) giving him conflicting information?

  7. Many years ago I had a friend with a boat.  We went fishing regularly. A sign on the dash board said
    ‘FREE BEER TOMORROW’
    Each time we went fishing, I brought the beer.   Eventually I asked him ‘when will you provide free beer?”
    He looked at me like I was an idiot
    He said
    ‘That message was for ME, not YOU.  See you tomorrow, Dumbass’
     

  8. Jim Willie is a conspiracy theorist and if you listen to his latest 2 hour public radio interview he shares some of his unorthodox thinking.  He does not present many useful specifics.  He does not look at the gold price.  He won’t go out on a limb with any specifics that include even conservative timing.  He says he uses events.  While his interviews and articles are enjoyable there really isn’t much about Jim Willie that is very useful to the stacker.  I use Jim as a source of entertainment.  For that, he does a very good job.  It is nice though, to learn that someday, in an undetermined amount of time, we will see 7000 dollar gold.  By the way gold is currently trading it sure is hard to picture.  

    • Yes, it is hard to envision that due to what’s going on in the gold market these days.  But… gold was selling for $100 an oz. about 40 years ago.  It increased about 18.5x that by 2011.  If it could do that once, it can do it again.  Will it?  Who knows?  If it did, that would put gold at almost $25,000 an oz.  
       
      The path that the US dollar is on is pretty clear.  It is inflating away to nothing and more than 97% of its former value has been lost in the past 100 years.  Is there anything in view that will change this trend?  I don’t see anything that will reduce US money printing, derivatives, excess banking system leverage, or foolish monetary policy in the government.  I wish that I did but I don’t.  All of this bodes well for gold and silver but not for the US dollar, UST bonds, or our country.  Gold and silver rising rapidly in price signaling a declining nation does not make me happy.  But I continue to stack because whether or not I stack will have zero impact on the fate of the nation. It very well might have significant beneficial impact upon the fate of my family, however.

  9. I love Jim, but he’s hard to read.  Allow me a chance to simplify inflation vs deflation. 
     
    The confusion is because both money creation and money destruction are occurring simultaneously. 
     
    Our current fiat debt based money is created by two mechanisms.  1) Fed prints.  This is basically unleveraged and a minor player.  The major credit engine by far is 2) the fractional banking system itself.  This is highly leveraged.  What is happening now is this highly leveraged credit is unwinding and this is being offset by direct Fed printing.  The central banks have been adept at keeping things balanced and thus the global financial system has not crashed.   
     
    It’s like the CB’s are trying to keep the tub full of water with the drain open.  Endless amounts of water will be needed.  The unsolvable problem for the CB’s is they have no control over the drain and it’s enlarging in size exponentially.   And strapped to the side of the tub is a $1Q derivative bomb counting down.
     
    The good news for stackers is we are out of the tub, drying off.
     
     
     
     
     

    • Couldn’t have said it better myself.
      The amount of available Credit in circulation available to debtors is shrinking whilst the Debt is increasing or staying static, the debt servicing is sucking more and more out of the disposable currency supply which is causing/fueling the retail/industrial collapse. Hey, and the interest rates are at historical all time lows … HAPPY DAYS :P
       
      There will be no full on Consumer Price Inflation until the large Corps and Private Equity hoards start to open up their wallets when they realize the USD has definitely died as the World Reserve Currency.
       
      Ultra Monetary Inflation combined with Credit Apartheid thus temporary Selective Consumer Deflation and critical loss of Velocity of Money/Credit.
      a.k.a Rotting Corpse Syndrome

  10. I can solve America’s debt in one fell swoop. But first, a word from my sponsors. Ann Barnhardt at her new blog makes some good points. Our dollar is backed by me and you, our rules and laws, our work ethic, our good faith. The gold standard is a moot proposition with the advent of electronic instant verification for trade settlements. Keynesian inspired government economic stimulus policies do not work. Friedman, Hayak, Mises economic policies do work. The Federal Reserve Act on 1913 can be decentralized from its current parameters. The Boomers must vote out the oligarchs in the US today. Gen X and Gen Y must be learned in civil remedies such as the importance of elections. Going further, course work must be made available at higher educational levels offering Civil Authority/Civil Government Administration degrees. Now for my solution to our debt woes, a 2 to 1 ratio. For every 2 dollars held in reserve in our fractional banking system, 1 dollar could be lent out. 2/1, 3/2, 5/3, 8/5 and so forth. Money creation becomes controlled and wealth creation becomes decentralized.

    • In the U.S., the power has been usurped and is concentrated in the hands of a small group of individuals.
      United States – it is a country in which all power has in the hand a one-party system. It is a latent form of dictatorship.
      This one is the only ruling party in the U.S., called “The Party of big business.”
      This party has captured the right to print money, that contrary to the Constitution of the United States and for this reason, the regime of dictatorship, has unlimited power in the United States. It is the real military and police dictatorship (stratocracy).

      Theatrical struggle between Republicans and Democrats, which we see every day on the TV, it’s only screen to conceal from the people real power of dictatorship in the United States.

    • Many of the problems we face are difficult to solve because those in power are generally of mediocre intellectual capacity and training levels.  If politicians HAD to pass a rigorous group of exams on:  politics, history, math, science, current events, psychology, foreign affairs, economics, and perhaps a few other subjects as well, before they could run for office, then MAYBE we would have a shot at curing what ails us.  The idea that an empty suit or dress with a ready smile and a firm handshake is sufficient for our leadership needs is naive at best and disastrous at worst.  There are HUGE problems that need real solutions quickly and the group we have in DC does not seem up to the job.
       

    • @Ed_B , once again you nailed it.
       
      On a related note, one reason why the former Soviet Union was such a formidable military & weaponry opponent is because they put the right people in the technical positions.  Back then, students graduating from high school had to take a test, which determined whether or not they would go into the technical field.  Only the best and brightest individuals were permitted.
       
      Contrast that with America, in which ‘anybody can grow up to become President.’
      Enough said.
       
      -Mammoth

    • @Mammoth
       
      Thanks for the kind words.  :-)
       
      I did not know that about the USSR but it sure makes sense.  The Japanese do a lot of testing of students to see which will go into technical fields and which ones.  This is a good idea, since a lot of people don’t necessarily know what they should be doing as their life’s work.
       
      High school counselors aren’t usually of much help with this.  The ones I had were not, at any rate.  Their attitude was “What would you like to do?”.  I told them and then they said, “OK, that sounds good.  Here is a list of colleges that specialize in that.  Check them out”.  So I did and went on from there.  No testing of any kind was ever done to see if I was inherently better at this vs. that.  This seems typical from what others have told me about their experiences.  Most people are happier in a job that they are good at than at a job where they struggle.  Being interested in a particular kind of work is essential to doing it well and for the long term.  People can and do switch occupations sometimes but this could most often be due to them not being matched very well with their initial job type.  Given just how much time, effort, and money it takes to train people these days, it would be good to know ahead of time whether they have the basic instincts and ability to handle the job successfully.
       

  11. I highly recommend going to Youtube and search Mike Maloney’s videos on, The Biggest Scam in the History of Mankind.  He will put all your questions to rest.  Along with a few intermissions of the Country Sisters of course.  I think its “Idaho” that deserves a big thank you on that find. 
     
    OT  As I get older, I never thought the violin, sax, and Indian flute would be music to my ears.

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