However, I have also been critical of Governments who use legitimized counterfeiting (QE) to stem the natural economic downturns that occur in all mature markets as producers fight for market share, and prices are forced down as a result when the growth in incomes is stagnant, or falling, or savings rise in preparation for retirement, because this fixes one part of the economy at the expense of others, and that is never a good thing, as it merely transfers wealth to the few from the many.
The markets boom or bust as people switch their buying habits, change their tastes, or prepare for their retirements, and either begin borrowing, or saving at different times in their lives. And the demographics of the population (the average age, sex and range) determines what is likely to happen and when.
For those with pension plans, their savings build up on Pension Company books increasing that company’s liabilities, and if the investments they’ve chosen fall significantly (such as during a stock market correction) then they risk not having the liquidity to pay out for those retirees when their bills come due, and in April 2012, that reached 10,000 people per day – in just the U.S. alone.
I am prepared to admit, that the Central Bankers, may, MAY, be raising the base money level for perceived socio-economic reasons, but the people who benefit most from such actions are always the Central Bankers, and those closest to them in the Banking Elite, as they receive the money first, enabling them to buy government securites, and draw huge salaries, while securing a steady income from future tax-collection.
Of course future taxes MAY or may not, cover the government’s debt obligations, as economies shrink or change shape, when the buying public changes its tastes and some industries prosper, as others decline, perhaps at just the point when welfare payments rise due to a faltering economy, but raising taxes on the apparently wealthier members of society is not always the way to go, as this discourages further investment, which of course is the best way to create meaningful jobs.
The problem for economists and politicians alike, is that the world is changing, and in ways we are only just beginning to perceive.
A CHANGING WORLD – NEW INDUSTRIES
Robots and other programmable production machines have capital costs – Eg: Robots, 3D-Printers, CNC & DNC machines etc, (you need to buy them) and they have operational costs, in the materials they use, or financial costs because you need to depreciate that capital cost over time, to ensure you have sufficient capital to replace it at some future point in time, whether to replace it on a like for like basis, or whether you want to, or need to improve its functionality.
But robots don’t have an income (except to the owner) and that income doesn’t always get spent in the location of the factory, typically like the human capital does – the worker’s wages. Which means the benefits don’t always flow equally in the factory location. The owner benefits – perhaps from a low taxation status in one country, and the factory produces little in economic benefit in the country in which it operates. A problem for governments the world over.
And, in a zero-sum economic world, there will always be winners and losers (Until we start trading with Martians, or Venusians if you prefer.) the trick is to not be on the losing side.
Money was invented to facilitate trade, and to ensure that value for value was transferred. Money is really – savings – and was initially just Gold and Silver as well as copper for small transactions – the origin of the British £,s,d (Pounds, Shillings, and Pence, which were gold, silver and copper respectively) because when I trade my wheat or sheep, or cows, maybe I want to buy something not now, but in 3 months or 3 years time perhaps: seed or fertilizer or a new Barn, for the new industry I want to create, and gold and silver retain their value over time, making saving possible and these metals perfect for money purposes.
The first currencies, were gold and Silver certificates of deposit, as Mike Maloney of GoldSilver.com outlines – A currency is a receipt for money. Certificates of Deposit which were a claim on the gold and silver that was in the vault (the money was in the vault, the currency was in circulation) then began circulating in trade and the Bankers hit on a wonderful idea – they could make more of these certificates than there was Gold and Silver available to back them. Thus modern Banking was born, and bankers became richer than Midas. But if there’s no money there in the vault when people want it… Then what?
Now in recent years the world’s Central Banks have been inflating their Fiat currencies (Money dictated by government, and NOT backed by metal) which means that the value of currencies fall, as the amount or quantity of currency now rises – through QE., (Quantitative Easing) and the purchasing power falls. (the cause of Price-inflation)
ANTIDOTE TO QE – CRYPTO-CURRENCY
As an antidote to this debasement of the currency supply, Satoshi Nakamoto (If you want to read more on this person – Click HERE – Who is Satoshi Nakamoto) developed a series of pieces of software to create a digital currency, with a fixed supply of 21,000,000 units and a system for transferring that value to others by digital means. Currency is initially earned by “mining”, which is a way of linking the world’s networks together to transfer the currency between users, and earning credits along the way. Or you can buy them, and transfer them to your digital wallet.
Of course the value of these digital currencies will rise and fall, like any commodity or currency, and one of these currencies is, if you have not already deduced – BITCOIN.
As Bitcoin has grown, and others have realised its features, there have been many who have emulated it. Max Keiser, of RT fame, has already launched MaxCoin, and there are dozens of others – upto 80 as I recently read, However, it is also obvious that governments have now decided that it is time to legislate these digital currencies for political reasons – some valid, others less so. The perhaps valid reasons are that it has been used to purchase goods and services, that the government would rather you didn’t, such as: Drugs, Ammunitions, Firearms, and other items of dubious morality.
In use, no means of identification is necessary, though the block chain can be followed to trace ownership, however, this means that to all intents and purposes it is a private transaction, but increasingly governments want to track ALL transactions so that they can extract their pound of flesh (to pay off the debts to their banker paymasters amongst others.)
Mount Gox, a Japanese built business in Shiboya, acted as a coin exchange has been recently attacked several times, and money stolen by attackers, such that Mt Gox had to file for bankruptcy protection in Japan. Was this government sanctioned or controlled? Was it the Banker elite fighting back? Time will only tell. Though as in all financial systems, fraud is a possibility. However, much has been made that the Banks received Billions in subsidies to stave off bankruptcies, and little has been made of that wealth stolen from the citizens of various countries.
However, while researching this article, I found other web-sites that will perhaps replace Mt Gox, but one that is still in the early stages of development is QoinPro. The business strategy is unclear (and I asked them, but was unable to get a straight answer) however I suspect they will become a coin exchange, and trading house for which they will charge transaction fees as Mt Gox, They are registered in the Netherlands, and Hong Kong, so appear legitimate. To encourage memberships, they apparently mine for coins of several crypto-currencies, and for those participants they deposit sums directly into their accounts on a daily basis. So no mining fees, or set-ups for those who become members, and they have an affiliate system, whereby you receive between 7.5% and 16.5% on all currencies issued to those who you recommend, and who sign up under you. (dependent on the number of people at each level)
That means you get an initial deposit just for joining, but you also get daily top-ups, which though low at the moment, are designed to rise as they iron out any wrinkles over the coming months.
As a devout skeptic, I could not see the value of these crypto-currencies, but as I have given it some thought, it is just possible, that all existing fiat currencies will disappear, and be replaced by cryptographic-currencies. That will mean the banks will suffer as they will not have control of the money supply, and essentially the banking system becomes the network. However, we can expect them to fight back. Governments will not have control, as these are essentially stateless currencies, and the currency will be resistant to legislative processes, and these new currencies will circumvent legislation as it tries to keep up. Evolution happening faster than the bureaucrats can keep up. The Chinese recently made trading of BitCoin illegal, though it can still be used for purchases, but will the legislation stop other currencies from emerging? It has not so far.
Having thought extensively through the implications, it is clear, that crypto-currencies are here to stay. So what happens if crypto-currency exchanges begin, backing the digital currency with real money – Gold and Silver, and the crypto-currency digital wallet becomes in effect a bank account?
Then we have a parallel banking and finance system outside the control of any government, and true free-market principles will flourish. Having become a member of this web-site, I have to-date in a little over a week received over 100 coins split amongst 4 currencies, and three more currencies to be added shortly.
That end result, may be a few years away, so in the absence of monetary metal backing, it is safe to say, that you will still need to use some of your savings for Gold and/or Silver, and use the crypto-currency (or currencies) of your choice perhaps for everyday transactions – Of course, eventually it may be possible to buy these precious metals with them.
The below tables give details of some of these alternative crypto-currencies:
Abbreviation…..Name……… Algorithm….. Total Coins…. Retarget…… Reward
NMC……………..Namecoin . . SHA256 . . . 21,000,000 . .2,016 . . . . . 50 NMC / Block
PPC……………..Peercoin . . . SHA256 . . . No Limit . . . . .1 . . . . . . . . 103.10 PPC / Block
DVC……………..Devcoin . . . .SHA256 . . . .No Limit . . . . . 2,016 . . . . . 5000 DVC / Block
TRC……………..Terracoin . . SHA256 . . . .42.000.000 . . .540 Blocks . 20 TRC / Block
List of Scrypt based Alt-coins
There are many Scrypt based altcoins.
The following list is not exhaustive and only serves to give an impression about other coins available. Some of these coins can also be collected through QoinPro.
Abbreviation…..Name……… Algorithm….. Total Coins………… Retarget………. Reward
LTC…………….. Litecoin . . . .Scrypt . . . . . 82,000,000 . . . . . . 2,016 . . . . . . . 50 LTC / Block
DOGE…………. Dogecoin . . .Scrypt . . . . .100,000,000,000 . . 240 . . . . . . . . 250,000 DOGE / Block
WDC…………… Worldcoin . . Scrypt . . . . . 265,420,800 . . . . . 120 . . . . . . . . 50.79 WDC / Block
FTC……………..Feathercoin .Scrypt . . . . . 336,000,000 . . . . . .504 . . . . . . . . 200 FTC / Block
List of Hybrid/Other Alt-coins
There are many altcoins not based on SHA256 or Scrypt. The following list is not exhaustive and only serves to give an impression about other coins available. Some of these coins can also be collected through QoinPro.
Abbreviation…..Name………. Algorithm….. Total Coins………… Retarget………. Reward
XPM………………Primecoin . .Other . . . . . .Unknown . . . . . . . . Unknown
QRK……………. Quarkcoin . .Other . . . . . .Unknown . . . . . . . . 20 . . . . . . . . . . 2 QRK / Block
NXT…………….. Nextcoin . . . Other. . . . . . Unknown . . . . . . . . Unknown
MAX……………..MaxCoin . . . Unknown. . . . Unknown . . . . . . . .Unknown
MNC……………. MinCoin . . . Unknown. . . . Unknown . . . . . . . .Unknown
CL………………. CopperLark Unknown. . . . Unknown . . . . . . . .Unknown
The last three were discovered on another coin exchange – McxNOW., which offers exchange of some of the above, but also offers interest on deposits, based on the value of the trades conducted on the exchange for each of the currencies – So if you hold BTC, your interest gets paid in BTC, and if you hold one of the others, in that too.
This video tells you a little more.
And if the currency or the alternatives listed above follow the path of Bitcoin, their value wil rise in line with it.
BUT it won’t be a straight line, and the unpredictability for some will be too much to handle.
However, in time, they may, just MAY replace currencies created by the Banks. And unlike those currencies, they are not simultaneously a debt to the Banker class.
In Africa, already many people now use these crypto-currencies exclusively for daily transactions, perhaps because of the distances involved, and the costs of installing fixed line telecommunications systems, is such that the newly emerging technologies in wireless telephone masts have been the engine of growth, and as banks were only available in cities, this has meant many Africans have leap-frogged the west as these technologies have become actively entrenched in the economy, allowing that continent to develop at a much faster pace than hitherto.
The West may have to run to catch up. YOU can begin your journey HERE -
And if you wish to learn why Bankers are a menace… Watch This.
Housing Crisis? What crisis?
To paraphrase Mrs Thatcher in one of her parliamentary exchanges in the early years of her premiership, many people feel that there is a housing crisis in Britain.
Of course rising prices generally are indicators of increasing demand – at least that is the classical theory of economics that says that in the normal case, rising demand for a good (a product or a service) will initially lead to higher prices, the rising prices will in the normal course of events lead to rising profits, and rising profits will encourage entrants into the industry, or existing providers to produce more, which should over time lower prices. The invisible hand of the market, as Adam Smith – author of ”The Wealth of Nations” might have put it.
The problem with this view is of course the historical view by many that house prices can only rise over time. Perhaps that is true in most time periods, but that demand will be driven by population movement into and out of localities, and age and income demographics. As people age, their needs for housing change, and there are times such as recently, when house prices fall, despite increasing demand from a demographic point of view, because of a lack of available finance.
The rise in UK population over the last 30 years has taken population from circa 56 million in the mid nineteen-eighties, to 62 million recently. Of course the changes to EU legislation allowing continent wide migration will inevitably cause problems for governments in the whole of Europe, but especially those countries that have a booming economy.
When people move to a country, the net effect is to increase demand for goods and services, and this stimulates further economic growth, which further encourages migration – it becomes like a fast breeder reactor, feeding on itself, causing house price rises, particularly in population dense countries like Britain.
The resulting crisis is almost inevitable, booms in lending, and rising house prices, with a bust following in direct proportion to the size of the previous boom.
For the Banks, protected by the underwriting of their loan book, by governments keen not to have the economy collapse on their watch, it is Nirvana. Over decades the banking sector then grows in importance to the point where we are today. If you are a bank and you have two people competing for financial resources: One a mortgagee who has a rising asset like a house, and the other a new entrepreneur, who has more than an eighty per-cent chance of folding in the first five years of business – which would you choose?
But the banker’s logic must be tempered by the nation’s need for a robust economy. Is therefore, legislation the answer? Or should the market be the only arbiter?
The Banks need for profits to meet increasing profit demands by shareholders, must be also tempered by the wider economy’s needs, and politicians who are keen to attempt to meet their voter’s understandable concerns, need to fully appreciate the effect of their legislative actions.
Of course, for the international investor, Britain’s historical legal system, political stability, strong economy and thus the currency, and the widely held view of Britain being a fair and tolerant multi-cultural society – especially in London, make buying property here an investor’s dream – especially at the upper end of the price range.
But pity the modest retail worker, the local street-sweeper, council clerical worker, or market-stall holder… Where do they live, when property and land prices get driven up to unprecedent levels as a result of such speculation? And how does this speculation not increase the start up costs of new businesses fighting for a foothold? Or their operation costs making them internationally uncompetetive?
And what happens when the money spigot gets turned off, or even down a little, as the Fed’s taper programme begins to take effect, raising interest rates and slowing house price inflation, or worse?
Those naïve ordinary men and women who have been encouraged to buy a new home on the back of a finance scheme, which the government must surely knows will drive up property prices – the taxpayer money backed “Help to Buy” scheme, will suffer the most when the inevitable bust happens, as I believe is coming within the next few years.
As China now struggles with asset bubbles, and unrest grows around the world as inflation particularly in the basics, leads those on modest incomes into penury, the world economy teeters on the edge of a financial precipice, and when we fall off it, as we inevitably must, the financial calamity will be a lot wider, and deeper than many anticipate, and governments around the world may lurch into military conflicts as they strive to stop their own economy from spiralling downwards.
Just the conditions that led us into global conflict a hundred years ago, as those who seek power, point the finger of blame at one country, culture or social class.
As this unfolds, those with the only asset class that is not simultaneously a liability of someone else, will have the best insurance. And the name of this asset? Gold. (& by inference – silver).
And if you haven’t got the message yet?
Click Here! Especially as the last seven months have seen both Gold and silver rise from their interim lows. Silver bottoming out at $18.52/oz, and now just over $21, giving those brave ones who bought an already nice profit of circa 20%. And Gold, rising from its lows of below $1200, to the current $1320 area.
And for those who take the time to study the price action in the 1970s, this is quite likely the shape of things to come over the next five years. (See image below) And if you want to read more of how we arrived here, the free e-book - “The Coming Battle” is still available.
The news recently has been focussing on the irrational weather systems that have been plaguing the UK, the U.S., and even the east coast of China and Indonesia, where the warm moist air from Indonesian rain-storms, has had a knock-on effect over the North Pacific, which had the effect of causing the Polar Vortex to shift from its normal location, rotating as it did around the Pole, and in fact caused the Ice and Snow Storms covering the U.S., and driving the Atlantic Jet Stream to drag more moisture laden air towards the UK’s shores, giving us the wettest winter in almost 250 years.
Of course our journalisitc boys and girls love a good visual story, especially when it affects the Home Counties, and the Fleet Street Pack can get out and about and take impressive pictures of water flooded streets, villages, hamlets and towns in the Tory Heartlands.
The left wing element can then also blame the Government for their lack of spending on maintenance. The religious nutters can blame the lack of appeasement to their particular Gods, and the Prime MInister can take the hint and look for a few photo-opportunities.
Of course the opposition can then pledge to do more, with even more money, and when the crisis is over, in the fullness of time, it will all be forgotten about by the public, and the polly’s can get back to their snout-in-the-trough ways.
So, who does the real journalistic endeavours?
Well, I recently began reading a book called “Bad Pharma” by Doctor Ben Goldacre, who has a history of writing such exposées about such things, and he tells of how the Corporate Pharmaceutical Community are skewing the results of research studies, perhaps unwittingly (we’ll say for legal reasons) such that the results appear to back up the thesis being proposed in carrying out the research work, rather than being as objective as we might hope for.
Then yesterday and today, I watched in slack-jawed astonishment as RT (Yeah – THAT Russian Channel – Russia Today – with its own news gathering services, video channel, and now in several major languages – English, Hispanic, Arabic, and of course Russian) produced a half-hour documentary that exposed how the Pharmaceutical Corporations of America, are now influencing the medical field in ways that serve their interests, rather than ours.
Big Bad Pharma?
Back in the 1960s, the pharma industry came up with Benzodiazapines, which helped boost mood, but were later prescribed for PMS. (Pre-Menstrual Syndrome)
The drugs work by selectively affecting neurons that have receptors for the neuro-transmitter Gamma AminoButyric Acid (GABA). When Benzodiazepines are introduced, the inhibiting effects of GABA are magnified. As a result, people taking these drugs experience altered mood, relaxed muscles and drowsiness
Of course, many women and their husbands or partners will recognise the symptoms, of rising tensions, and the irritability of the days before a women’s menstruation phase, and BZD as it is often called, is useful in extreme cases.
Of course with the growth of vaccinations in the 50s, 60s, and beyond, many of these corporations grew fat on the land, and they’ve been instrumental in finding new molecules to treat many of the major diseases that weren’t viral, or bacteriological in nature in the intervening years.
Of course in the 1960s, companies still had huge revenue streams from vaccines, and other similar treatments, such that “Anxiety” was seen as a minor condition, but over recent years these medical conditions have been revised in such a way as to make them treatable with pharmaceutical means, and have become huge profit streams.
Anxiety and Stress, we were told were the major cause of stomach ulcers, until in a research lab in Australia in 1994, a research student found the real culprit – a bacterium called “Helico-bacter Pylori” and it could be killed by a cocktail of anti-biotics and bismuth as is found in Pepto-Bismol – a pink coloured antacid available in most pharmacies.
What perhaps is annoying for those in the veterinary field, is that this had been known about in pigs, and was treatable over 50years prior.
Unconventional Medicine, Unconventional Results, Unconventional Costs?
Of course, I too have had recourse to use unconventional medicine for my own ailments, when I treated my own Osteo-arthritis, and by accident my Sciatica, which had plagued me for over 20years using the techniques of a naturopathic medical doctor, who previously trained as a Veterinarian from America.
However, to return to the reason for this post, this report from RT, interviewed several Physicians from France, and India, who alleged that the U.S. Pharma giants, are redefining clinical diagnosis, under slightly different names, and producing the treatments to treat these new ailments, but which, are in fact just the same molecules previously out of patent period, but using different colourings, and released under a different name.
One of these new medical conditions – PMDD, Pre-menstrual Dysmorphia Disease – You might know it as PMS…
Now you watch out girls…
Let’s be careful out there… And remember, your partner or husband loves you. Take it easy on him, he’s only a man.
Which brings me to the other conditions that came under the programme’s scrutiny which were Erectile Dysfunction, for which men were being encouraged to take their “medicine” daily, just in case, and Statins, which lower cholesterol, but for whom many of those taking it were doing all the right things to protect themselves, so all other things being equal, were putting themselves more at risk of certain side effects for little or no benefit, or worse.
On a wider note, perhaps we ought to be forcing our politicians to redress the balance of research, so that we can be sure that the research is impartial, and that the Academics are sufficiently well-funded so that we don’t end up paying unnecessarily for drugs we don’t need, for conditions that are within the bounds of normality, which would save hundreds, if not thousands of millions on the nation’s medical bills, and if the alternatives, that I am happy to use again if necessary, will cut the nation’s health bill dramatically then more power to us. But there’s an element to this story that perhaps deserves a telling for another day.
1: Remotely Sensed Data Acquisition: Blom Aerofilms Limited, COWI A/S and Getmapping Limited.
2: Imagery data management and processing: Infoterra Limited.
3: Capture and maintenance of geospatial data content: Blom Aerofilms Limited; COWI A/S, Infotech Enterprises Europe Limited and Photarc Surveys Limited.
As Britain, languishes under the deluge of late, that has seen the Somerset levels returned to their normal pre-historical state – under water – partly due to lack of maintenance of the river systems, which have silted up forcing the unrelenting rainfall to overtop the banks and flood farms, hamlets and villages, much has been said about the costs, to people and businesses in the locality. The wettest Winter in 248 years – since 1766. And this morning too, those on the banks of the Thames have realised the folly of building on a flood-plain – unless you’re in a first floor flat, or your building is on stilts. No-one, who has seen the pictures can not feel sympathy for those poor victims.
Of course several other nations have also suffered under these unusually disruptive weather systems too and other disruptive events. In the U.S., the Polar Vortex, was brought about because of unseasonally wet weather in China and the Far East, which forced a column of warm, moist air north, towards the edge of the North Pacific, which dislodged the jet-stream that tipped the weather into this unusual cycle.
Snow fell as far south as Texas, which most of us from the UK might not find that unusual, until you also learn, that in 1997, when I worked there in Austin, Texas, it was over 100 degrees in February, and during that particular year, I was wearing short sleeves in December taking photographs of the State Capital building, in glorious afternoon sunlight as the sun descended on the Colorado river…
Of course, the Tsunami on Boxing Day 2004 in the Indian Ocean, and the increasingly frequent eruptions along the edge of the Pacific/Australasian tectonic plates, leaving death and destruction in their wake, and the several earthquakes on several continents as the earth’s tectonic plates gradually move, also force resources that are either saved, or were destined for other uses into replacing lost property, and re-building and repairing those damaged buildings, and worse, lower output as people are lost, taking the skills and knowledge that they have built up over many years with them.
Events have a habit of disrupting people’s and countries’ economies and it is usually the Central Banks who benefit.
The floods in the UK. have been costed to-date by Bloomberg at $1.6billion dollars (£1.0billion).
We can but hope, that with all the events of late, that events don’t spiral out of control.
So whilst having money sitting in a Rainy day fund on the evidence above might seem like good insurance. However, the best insurance is Gold and Silver,
Not only do you not need to contact anyone to get at your wealth, not only is there no risk, that your insurance company might be insolvent, due to the huge claims on it.
No, you don’t have to contact your Bank, you don’t have to try to use your crypto-currency stored on your now wet flash-drive or mobile phone, or computer, perhaps valued in the hundreds or thousands of dollars, which might now be irretrievable, but when you own Silver and Gold, held in your own hands, under your own control, they are portable, water-proof and can be carried to any destination in the world, and turned into currency within minutes.
The reason Gold and Silver became money all those centuries ago, is precisely because they have such qualities. Gold sitting in a ship’s hold of centuries ago, still have the value they held all those years ago.
No other form of money has been able to replicate these characteristics, and as my previous posts have indicated, the current low prices will perhaps be the best opportunity to buy and the last chance in your lifetime, to set aside some portion of your income that will still be valuable, (even more so) when you’re over 100, and your pension has been either taxed away, inflated away, or spent long after your ability to earn has passed.
Events in the Bio-tech sphere suggest anyone alive and under 40 today, will have the potential to live to between 120-140 years of age, or even well into the age we might now consider impossible for anyone except those who lived in the fictional Shangri-La – famously written about in the 1930s, when a man who claimed to have been born in the 1600s in the Tibetan/Nepalese mountains died at the age of 264. Dr. Li, reputedly had several certificates from the Chinese Emperor, congratulating him on his 150th, 200th and 250th birthdays, and he was the man who was written about, that the original novel, gave as the foundation of the Film.
As Gold has been rising over the last few weeks, today the price is fast approaching $1300 ounce, at $1284, and that is just the beginning. Read back through my posts to see where I see it going before this particular crisis is over.
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A little known U.S. government document spells doom, for the U.S. economy, and where the U.S. goes, so goes the world.
It is said, that when the U.S. sneezes, the world catches a cold, and the U.S., has just advised it is about to come down with a full-on bout of influenza. The U.S. government, has been able to borrow at record low rates, because it had one thing that the world believed in – GOLD.
12 years after 9/11, the spending of the U.S. government on all the security and new institutions will blow up in the faces of the Americans, and almost nobody knows it yet.
During the early 20th century the U.S. accumulated a couple of thousand tons of Gold, by 1920, that had risen to 4,000 tons, and by 1930, 6,000 tons. In 1933 newly elected President Franklin Delano Roosevelt issued executive order 6102 which made it illegal to hold more than a modicum of Gold, and that had to be only in jewelry form – fashion items. (Is that a clue to the future?)
A year or so later in January 1934, he made the hoarding of silver illegal also. The nation’s Gold and silver held by private citizens was ceded to the Government at the rather fixed rate of $25.00 per troy ounce for Gold, and for those who didn’t comply, there were fines of upto $10,000 – a HUGE sum at the time, and upto 10yrs in jail.
The vaults at Fort Knox and beneath the Federal Reserve Building in New York bulged with Gold, that gave the government the strength to back its currency, thus making the dollar “As good as gold”, and by 1940, those vaults held almost 20,000 tonnes.
By 1950, the U.S. had received the gold from several other nations, as those western allies, concerned that Europe might be overrun by Russian tanks, placed their Gold in Paris, London, and New York, for safe keeping. All told the Fed held over 20,500 tonnes of Gold, which appeared on their balance sheet. (Almost half the world’s supply of above ground stocks). But, by 1971 with several governments asking for gold in return for Dollars sent overseas, including France and Britain, the Fed’s balance sheet was reduced to around 8,500 tonnes.
Of course, so worried by this flight of Gold was Richard Milhous Nixon, that on August 15th 1971, the President announced to the American people, and the world, that he had “Temporarily suspended dollar convertibility to Gold”, and that “Temporary Suspension” has, like all other financial impositions, become permanent.
Since the 1970s, the Fed has claimed that they had 8,133 tonnes of Gold, yet document FT900 – Shows imports and exports – in terms of goods and services, and a line item labelled – Gold, has shown that they have been lying – sorry – being economical with the truth.
Jeff Opdyke, former financial journalist with the Wall Street Journal, and now executive editor of ‘The Sovereign Investor’, has researched this for his research letter, and his discovery shocked him.
He discovered in document FT900, released on 7th January 2014, that the U.S., had been a net exporter of Gold for the period in question, and furthermore, other research revealed it had been since 1991. Now, after researching in-depth, Opdyke has calculated that there is a supply gap of 5,577 tonnes of Gold meaning, their holdings mentioned in the accounts are dead wrong.
And he calls this: -
“The Biggest Cover-up in U.S. Financial History”
To add to this mystery…
On December 22nd, 1992 at a closed door meeting at the Fed, in the Fed’s own minutes, Alan Greenspan, Chairman, posed the following questions…
“Did I hear you correctly when you said that the gold exports in October appear to have come from the coffers of the Federal Reserve Bank of New York? Has anyone looked lately?”
Mr Truman (A Fed Official) answered simply:
“Well, I didn’t want to tell too many secrets in this temple! “
Is this the reason why the Fed has steadfastly refused to audit the Gold Reserves?
In fact the last time that the Gold had a full audit was back in 1953, when Dwight D. Eisenhower was President – over 60 years ago.
Governor Ron Paul of Texas and three times a Presidential Candidate introduced an “Audit the Fed” bill in 2011, but which never became law, and has repeated calls for a full audit of the gold in Fort Knox but these have been steadfastly ignored or refused.
Even a former Federal Reserve official, Karen Hudes has gone on record to say that “The emperor is wearing no clothes” – The Gold has gone.
In fact in the 1970s, a mysterious piece in the New York times told of a woman who had given an interview with the American “Tattler Magazine” to the effect that all the gold had gone, and had mysteriously fallen from her 10th floor window.
The woman an executive secretary to Nelson Aldrich Rockefeller was also the grand-daughter of Colonel House – who with Nelson Aldrich, shepherded the National Monetary Commission to its ultimate conclusion – the creation of the Federal Reserve, which suggests she had inside connections to the truth.
The Bank of England too, holds a similar secret…
As Germany blitzkreiged its way across the Rhineland and into Poland, in the summer of 1939 the Polish Central Bank had just one thought… Get the Gold out of Poland to safety.
In September 1939, on the eve of World War II, in the dark of night, Polish officials secreted their country’s gold – estimated at between 75 and 83 tons – onto trucks and sent them packing to a port on Romania’s Black Sea coast 1,000 miles to the south.
All along the way, the Nazis tried to intercept the shipment as it switched between trucks, buses and trains. Through sheer luck, the Poles managed to sneak their valuable cargo onto a British tanker that had been diverted to Romania to help Poland protect its national treasure from the fascists.
Over the next several weeks Poland’s gold landed in Istanbul, Beirut and the vaults of Banque de France in Paris before ultimately coming to rest at Threadneedle Street, London, the address of the Bank of England, where Poland’s gold reserves have spent the last 74 years.
And now, after all these years, Poland wants its gold back.
In the last few years, Finland, Germany, Switzerland, Venezuela, Ecuador, Mexico, Romania and Poland: They’re all either talking
about repatriating national gold, or they’ve already done so.
Some are clearly countries run by leaders with an anti west agenda – i.e., in Venezuela – former President Hugo Chavez, famously asked for his country’s 90 tonnes back from the U.S. in 2012 and Ecuador too, also not aligned with the U.S. hegemony also asked for their gold back.
Others, such as Germany, Finland et-al, are run by sober governments making sober decisions about their nation’s wealth.
The German Politicians even asked the Bundesbank to audit their gold, and the Fed at first said, “Nein!”.
Germany, stalwart ally of the U.S. since the end of the second World War, subsequently asked for its Gold back from the Fed.
The Fed at first agreed it would send 300 tons, but that it would take 6-7 years to send back. Despite the fact that China last year imported over 1,000 tonnes, and has, since 2011, imported over 2,200 tonnes.
Since the German request, the Fed has managed to send back just 35 tons, meaning it will take at the present rate 21 years to send back all of Germany’s Gold. And we have to ask – “Why?”
These countries want their gold back because they’ve lost or are losing trust in the U.S. and the U.K. banking authorities.
Better to have local gold in local banks than exposed to the shady finances of the world’s greatest Ponzi schemes. Taking back their own gold is, effectively, a vote of no confidence in the monetary policies pursued by the U.S., in particular.
Who can blame them?
Consider the state of the global union. The West has accumulated so much debt that the International Monetary Fund now says that meaningfully large, one-off levies that tax every Westerner’s wealth are the only way to save the world from financial calamity.
Politicians in too many Western nations – except maybe the Germans – have reached the point that French political philosopher Alexis de Tocqueville predicted in the middle of the 19th century – namely that democracy will survive only to the point that lawmakers discover they can only bribe the public with the public’s own money before the public realise too-late.
We have reached that point in much of Western society, most ominously in America. Politicians no longer press for any semblance of financial prudence, only for the preservation of personal power by spending ever larger sums of public money on various forms of welfare and regulation that hurt one class over another.
This will not end well for anyone who has savings or a pension to protect.
That so many nations are now seeking to repatriate gold is the canary in the proverbial coalmine. The end might not come today – it might not come tomorrow or even next month. But it will come. It always does. And it will come in my and your lifetimes.
Will You Be on the Wrong Side of History?
To anyone who has sold their physical gold or silver in recent months, I say that was a: Big Mistake.
Why is it that central banks the world over refused to sell their gold reserves? Why is it that so many, continue to add to their holdings, – officially: Russia, Turkey, Kazakhstan and Indonesia, and, unofficially, China. Of course, Iran has also been accumulating Gold in its attempts to get round the sanctions imposed by western nations, but Turkey, a muslin ruled country has been purchasing its citizen’s gold and this has been used to pay for oil from its main muslim supplier – Iran.
Imports into Turkey over the last few years therefore, have risen, while the villains on Wall Street, inside the Fed, and the Bank of England allow the nation’s wealth to dissipate. Is this a cynical ploy to allow their respective currencies to fall? And if so, by how much?
China has already mooted that it is worried that the U.S. will re-value its currency by lopping off a nought. Any item at $100, becomes 10 new dollars. Any item at $10, would become 1 new dollar,and lesser amounts, mere new cents. Britain effectively re- valued its currency downwards, twice in recent history – once in 1967, when Prime MInister Harodl Wilson, imposed currency controls, and devalued the pound when it went from $4. to the pound, to $2.80, and again when it abandoned its old currency on February 15th, 1971, and the old Pounds, Shillings and Pence, became simply Pounds and New Pence.
France in the 1940s reduced the value of its currency and again in 1960 by dividing by 100. In the mid 1980s, older age residents, still referred to the 10 Franc piece as mille-Francs, accustomed as they were to the old currency.
And the Germans of course abandoned their Reichsmarks in the 1940s after their war debt was restructured, and the Deutschmark replaced it.
The unification of Europe and its move to a central currency allowed this trick to be pulled on its European citizens once more when they introduced the “Euro” on January 1st 1999, and the French, Italian, Spanish, Portuguese, and several other nation’s currencies were consigned to the history books. Forcing those who held even small reserves outside the banking system to either spend them or cash them in, leading to a temporary boom in those economies.
Will the U.S. follow the same well-worn route?
Yet all over the world, central banks in countries large and small cling to their gold, or are adding to their gold reserves and are increasingly demanding that their gold be returned to national treasuries.
Those that have parted with any gold have sold off just the tiniest fractions of what they own. India who bought over 200 tonnes from the IMF back in 2009, has reputedly been pressured to stem the flow of gold into the country by the raising of duties…
No countries except, Turkey which used Gold to buy oil, from Iran; Britain or the U.S., has sold a meaningful amount of its gold reserves, and the bet is that the U.S. has sold a very large amount of gold from Fort Knox that, to date, has gone unreported by the Federal Reserve, but which will one day soon, come to light.
The last time the Chinese officially announced the size of the country’s gold reserves was on April 24, 2009. The People’s Bank of China, (PBoC) the Chinese version of the U.S. Federal Reserve, told the world that China’s gold reserves had grown to 1,054 tons from just 600 tons five years earlier. And that’s the last official word from the Chinese.
So, the market still operates under the assumption that the Chinese central bank controls 1,054 tons of gold. But it’s about time for China to make a new announcement. I think it will happen by the end April 2014.
And that announcement when it happens, will be, the BIG BANG, heard around the world!
According to research by Opdyke, China has a gold hoard of at least 5,000 tons. Jim Rickards, hedge fund manager and author of the best-selling book Currency War, has come to the same conclusion.
He recently said:
“Come April 2014, China will announce that they own 5,000 tons of gold. That should be an earthquake. I have spoken to a number of sources in Asia. I’ve spoken to a number of people who are very close to the physical [gold] market, I’ve done my own investigations, etc. Every time I have an estimate and try to verify it, what I get back is that I’m wrong on the low side.”
By my calculations, in the last 10 years, China has imported in excess of 7,000 tonnes, though how much of that is held in private hands, and how much the PBoC has is anyone’s guess. Is owning gold or silver, such a crazy notion that central bankers in 100 countries are all delusional?
Or, might it be that gold really is of value as the ultimate insurance policy against the destruction of fiat money that is now necessary to help the West manage a half-century’s worth of excesses?
Poland went to extraordinary lengths to protect its gold from fascists and communists in the late 1930s. Now, it’s going to extraordinary lengths to protect it from Western financial decay. Even the U.S. Treasury is concerned that the elimination of Gold from the Fed’s vaults would be disastrous, saying:
“[It] has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.”
This is a game where, ultimately, you have to pick sides. Do you side with U.S. officials who talk down gold as a quaint tradition out of step with modernity? Or do you side with 100 central banks around the world that are increasingly putting their reserves in gold and silver rather than fiat currency?
I know which side I’m on…
If you like this blog, or post, feel free to recommend to your friends via the usual: Facebook, Pinterest, LinkedIn, Twitter or wherever. And if you haven’t already, download a FREE copy of the e-book, “The Coming Battle” where you can get the full story on this still unfolding crisis.
I have to admit, that I have to give myself a HUGE portion of humble pie.
Apparently, I inadvertantly left out a character from a link to the FREE e-book in an earlier post, and couldn’t understand why the link didn’t work as expected.
To those who were keen to read the 632 pages, which tells the history behind the current global financial crisis from the late 1700s, to the end of 2013, and offers a few hints and tips on to how to survive “The Coming Battle”, between the people and the Banks I say “Sorry.”.
As China accumulates with increasing fervour Gold and Silver, and advises (tells?) its citizens to put 5% or more, of their savings into precious metals, we have to wonder, what does China know, that we in the west don’t?
I said in a previous post, that I’d provide some background and business opportunities in new tech, and the emerging post-industrial economy, as 3-D printing becomes mainstream, and manufacturing returns to the home.
LIke in the run up to the industrial revolution, craftspeople made things for their neighbours, and exchanged things with those who lived nearby. IF, the price of 3-D printers comes down to levels that make them viable for local business people to purchase, together with the necessary raw-materials, and software design tools, then we may yet see a situation like England in 1720, as artisans, and craftspeople sold their wares in towns and cities, and people sell their products on-line to more distant clientele.
However, we will all need to have a basket of skills, and a return to the soil, as people grow more of their own food, because they will be at home already, and that may well be the way that this crisis unfolds, leading to more self-reliance, and more of a community spirit.
As people learn to be more self-reliant, the need for others to tell us how to conduct our lives, and the need for more government interference in the economy, may yet be reversed.
It may be a utopian ideal, but the much vaunted “Internet of Things” currently being touted as “The Next Big Thing” may free us from totalitarianism.
That said, the road to this new Utopia, may be strewn with the bodies of countless of our fellow citizens as we adapt to these changing circumstances.
End of Corporatism? End of Big Government?
If we exchange goods in barter fashion, because we can provide goods of equal value, then the government revenue goes down, and with it their influence. A return to Adam Smith style free market thinking, and community may just turn out to be the Utopia we all crave, and those who delight in telling others how to run their lives, will have to find new occupations.
This bottom up approach was enshrined in the new Republic of the United States of America, when presidents walked to work, without the need for dozens of security staff, when they themselves lived like their fellow men, and Gold and Silver were the money of the people, not the paper currencies that has allowed the people to be ruled by sociopaths intent on controlling the population for their own ends, and to enrich themselves.
- True Liberty – means controlling as much as possible of your own life, and choosing to do what makes you happy.
That most profound of thinkers Thomas Jefferson, adviser to Goerge Washington as first President of the U.S. in a letter to John Tyler, May 28, 1816, wrote:-
“The system of banking we have both equally and ever reprobated, I contemplate it as a blot left in all our constitutions which, if not covered, will end in their destruction, which is already hit by the gamblers in corruption, and is sweeping away in its progress the fortunes and morals of our citizens.”
As the current financial crisis unfolds, it appears Thomas Jefferson was right, but we have an opportunity to undo this and throw off these shackles, by returning to sound money. Doug Casey of Casey Research suggests we are in the eye of the storm, and that as we emerge from it, it will be worse than 2008/9.
That we have ignored Jefferson’s advice for 200 years may be one more reason to all eat some “Humble Pie”.
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