The US Federal Reserve has been printing money since 2011 to cover USGovt debt securities in a frenetic manner. They have lost control. They call it stimulus, when it is actually the opposite. It does assist the speculators with nearly zero cost money to borrow, but one must be a club member to win loan grants. The Quantitative Easing programs are deceptive. When the program was initially announced, the Jackass claimed it would be part of an endless sequence. With QE1 and QE2 and Operation Twist and QE3, following the failed trial balloon called Taper Talk, it is quite clear to anyone with an active brain stem and absent rose colored glasses that the USFed is caught in a trap called QE to Infinity. It is not stimulative. Instead, the uncontrollable bond monetization causes capital destruction. It causes economic degradation. It causes lost jobs and vanished income. It is a gigantic wet blanket to smother and destroy the USEconomy slowly, amidst unending propaganda. QE is the device that will result in Systemic Failure, which is already flashing signals of its arrival. [Read more...]
Likewise, the U.S. represents the height of scientific knowledge of our age, but this did not protect it against the quackery of Keynesianism and Friedman-style monetarism. If we escape disaster this time, it will be by the skin of our teeth. [Read more...]
The history of US finance and economy is a complex saga involving multi-generational interchanges in cycles between gold backed currency and fiat currency. There has been a turbulent and ongoing war.
Banksters thrive spectacularly when fiat currencies are in place. If you think gold is suspicious or worthless then the Banksters have done a real job on you.
America is bankrupt. Additionally so is most of Europe and Japan. China’s debt printing is more sizable than the US. Additionally China’s shadow banking debt levels near double official figures to the comparative total percentages of Japan and Italy.
Assets have been rehypothecated to an unbelievable extent. This means that assets have been resold multiple times to numerous owners. There is a day of reckoning approaching where people who think they have assets (paper) will learn there is nothing there.
Before 1971 the US dollar was pegged to gold, and foreign countries held dollars in reserve because the US had promised they were “as good as gold”.
The dollar came under pressure because the US money supply grew, but they insisted to keep the gold price at $35. Many European countries were redeeming their dollars for gold, because the dollar was overvalued relative to gold.
By the end of the 1970′s currency war, the dollar had lost more than 50 % of its value in 1981. Devaluation can be a short term fix but, but causes long term problems. [Read more...]
Linking gold to a currency is always doomed to fail. The expansion of the money supply through bank lending and government deficit spending puts pressure on a fixed gold price, a pressure which can only be released by either revaluing gold at a higher price (from $20,67 to $35 per troy ounce in 1934) or by selling gold (London Gold Pool during the sixties). There is no discipline in a gold standard which links gold to the currency, it is just a matter of time before we can all agree it has failed. How long such a gold standard can live depends on the price at which the gold is fixed, how much gold there is in the vault to back up the currency and how fast the supply of currency expands. The only certainty is that it will fail sooner of later. [Read more...]
The office building of JPMorgan with its largest private gold vaults at Chase Manhattan Plaza, opposite to the New York Federal Reserve building, has been recently sold to the Chinese.
This indicates the US and China seem to be working together in advance towards a global currency reset whereby the US, Europe and China will back the SDR’s with their gold reserves so the dollar can be replaced.
We have now arrived at the point where it is not the banks, but the countries themselves that are getting in serious financial trouble. The idea that we can ‘grow our way back’ out of debt is naive. The current solution to ‘park’ debts on to the balance sheets of central banks is just an interim solution.
A global debt restructuring will be needed. This will include a new global reserve system to replace the current failing dollar system, probably before 2020. [Read more...]
During the span of the 100 years in which the gold standard was established, the world economy was quite stable- there was no inflation, and wealth distribution was very fair. Every country who participated benefited a great deal from it.
The world financial crisis in 2008 is the worst financial crisis in history. We haven’t yet found an alternative to gold which can play a better stabilizing role under these circumstances. We have been trying- for example, we found this thing called SDRs, but SDRs have their limitations. It’s impossible for SDRs to play the same stabilizing effect as gold.
President Xi has proposed the Chinese dream. In the process of chasing a “World Dream” through the pursuit of gold, we aspire to seek peaceful development in the world. In this process, we still haven’t found a stability factor which is inherent in the system. Since gold had played a stable role in the process of human development, we will put focus on it. We think gold will continue to draw much attention from the whole world. - Zu He Liang [Read more...]
The next year will feature many powerful new effects. The Indirect Exchange will become a prominent fixture, its channel filled. It will direct many $billions in USTreasury Bonds from large scale asset acquisitions by Eastern and BRICS players, sent back to New York and London. The payments for the asset purchases will be done in USTBonds, as the Eastern entities dump them as fast as they can before the great devaluation.
At the same time, the Russians & Chinese will be busy conducting indirect audits of the Wall Street and USFed themselves. By becoming the landlord at the JPMorgan gold vaults, the Manhattan metals warehouses, and the Platt energy offices, they can push aside the corrupt gold and oil market interventions. They can realize a capital gain in the 15,000 tons of gold sitting as reserves at the Peoples Bank of China, more than enough to offset USTBond writedowns. The year 2014 will see important changes in the bond market, gold market, oil market, and currency market.
But the biggest shock waves will come from the currency reset followed by the introduction of the Gold Trade Settlement. The return of the Gold Standard is near, but it will arrive on the trade vehicles, not the FOREX currency or SWIFT bank platforms. It will feature the Gold Trade Note, used as letter of credit.
It will feature the BRICS central bank, where emerging market reserves held in USTBonds and other toxic sovereign bonds will be redeemed for Gold bullion.
The year 2014 will see important changes to global trade, in a major Paradigm Shift.
As the head of our Central Bank this year admitted he “does not understand gold”, and the MSM continues to claim it is a “barbarous relic” perhaps a historical review of the gold standard is in order.
Before 1974, U.S. dollars were backed by gold. This meant that the federal government could not print more money than it could redeem for gold. While this constrained the federal government, it also provided citizens with a relatively stable purchasing power for goods and services. Today’s paper currency has no intrinsic value.
It is not based on the value of gold or anything else. Under a gold standard, inflation was really limited. With floating value, or fiat, currency, however, some countries have seen inflation reach extremely high levels—sometimes enough to lead to economic collapse. Gold standards have historically provided more stable currencies with lower inflation than fiat currency. In this excellent 4 minute clip Professor Larry White asks: Should the United States return to a gold standard? [Read more...]
Jim Willie’s Stunning Claim: The Game is Over. King Dollar is Dead! – Gold to $7,000 Silver to $250+!
Many analyst writers choose the Black Swan analogy to describe deeply ominous events in progress, with little forward notice. The analogy simply does not fit anymore, as an armada of black swans is more appropriate, spotted on regular and frequent sightings.
The US financial fortress died in September 2008.
The Grand Paradigm Shift is in progress. My sources indicate that 5000 metric tons of Gold bullion moved from London to points East between April and July 2012. The flow eastward never stopped. The pace has continued. The Gold bullion continues to be shipped in enormous staggering volume.
The agreements have already been made on the new Gold Trade Settlement system with its newly imposed Gold Trade Standard. They have agreed on a $7000/oz gold price, with a similarly exalted silver price of at least $250/oz.
Decisions have been made final. The implementation is slow but steady.
The game is over. The King Dollar is dead.
In part 1 of this supurb interview with Lars Schall, London based investment manager and author John Butler discussed how the dollar reserve equilibrium is breaking down as the world moves away from the US dollar as reserve currency, and towards gold and the yuan.
In this MUST WATCH 2nd installment, Butler discusses the ongoing collapse of the paper gold market; the prospect of trading nations refusing paper money in exchange for their exports; what a gold bubble would look like, and why the euro won’t survive in its current form.
Butler points out that all major earthquakes are preceded by a pattern of smaller earthquakes:
“2008 was a fore-shock! It wasn’t the real earthquake. The real earthquake is when paper currencies are repudiated internationally! When China, Russia, etc simply refuse to accept paper money for exports. That’s the big earthquake! The real financial earthquake is yet to come!”
When this happens there simply won’t be enough gold in the world to go around at current prices. It will force the price up in a hyperbolic spike as gold becomes de-facto remonetized.”
One of the best discussions on gold you will ever see is below: [Read more...]
The central bank concept is the Matrix in embodiment, but the Eastern nations led by BRICS and G-20 have a key to unlock the USDollar prison. A quick look at the Australian banking system reveals four global banks who own outsized portions, their reach extending to the largest gold producer in Oz as well. Incest is best. The fast decline in Money Velocity is the most convincing proof of the failure of monetary policy. It does not provide stimulus, but rather capital destruction. The foreign dumping of USTreasury Bonds actually accelerated this past summer, amidst the Taper Talk trial balloon offered by the hapless desperate Bernanke Fed. His legacy will be one of disproving his own PhD Thesis, since liquidity in torrents does not repair insolvency, and no traction comes to soaked ground.
A grand game of shuffling gold bars has begun, actually accelerated in a final phase. The big bullion banks wish to obscure that they are almost bone dry of gold in inventory. The COMEX will shut down from no gold, rather than criminal prosecution in a land where crime rules and treason is the syndicate bylaw.
The climax event will be the return of the Gold Trade Standard, discarding the USTreasury Bonds, converting them to Gold bullion. The early adopters and those who follow the viable solution will be the winners. Those who cling to their USTBonds and their other paper securities in indentured servitude will be the losers. [Read more...]
“There is precedent for a government shutdown,” Lloyd Blankfein, the chief executive officer of Goldman Sachs, remarked last week. “There’s no precedent for default.”
How wrong he is.
Let us face facts: We have defaulted in the past. Let us confront the implied message of the Federal Reserve’s pro-inflation policy: We will default in the future, though no lawyer will call it “default.” And let us preempt the world’s flight from our intangible money by taking steps to fashion a 21st-century improvement. We have the gold and the brains to find the solution.
If you believe that gold no longer plays a role, think again.
In effect, if you know what to look for, the world is on a gold standard now. [Read more...]
In this MUST WATCH interview, Currency Wars author Jim Rickards states that the dollar standard is being abandoned by the United States, that it is “definitely collapsing”, and that either the IMF’s SDR, gold, or a combination of the two will become the next global reserve currency in the dollar’s place:
“A return to a gold standard is a possibility, but I don’t see that in the immediate future, I think we have to have a collapse first. A collapse of the dollar standard, and the petro-dollar deal. Then it (the dollar) will have to be replaced with something, which will either be the SDR or gold. The dollar standard is definitely collapsing … the collapse is definitely coming” [Read more...]