Electronic Coin Clipping?

Posted on Updated on

HelicopterBenIn my last post, I reposted Alan Greenspan’s now famous 1969 piece, in which he clearly lays out for all to see, the tactics that the International Bankers have used to wrest control of this planet for their own ends.

The methods and tactics used over two centuries to move the people of the world into a giant supra-national state, owned by this banking Cabal, for the benefit of the bankers have been stealthy, and protracted. Each world citizen, will be essentially a slave, and those that can’t or won’t work will be used to wrack up debt, which the rest of society will be obliged to pay for, in ever higher taxation. The increasingly controlled health systems will be controlled by Mega Pharmaceutical, and Bio-Technical Corporations. Taking care of your own health via use of natural remedies, and food supplements to prevent ailments, will be increasingly not only frowned upon but illegal. (CODEX ALIMENTARIUS – 2001 in Europe, began this process)

As to claims regarding silver supply/demand fundamentals, worldwide demand has been at best steady, and supply has been robust, though longer term, demand is set to rise, as more and more electronic devices will use increasing amounts – Think: Munitions, Aircraft, Cars/Electric Vehicles, Solar Panels, Wind Turbines, Medicine, and Personal care products for silver’s Anti-viral/fungal/bactericidal properties, as well as Wearable Devices, and Silver Nano-fibres in clothing, Catalysts in chemical processes, and in plastics and paints – And the list goes on.

Whilst the high price in 2011 did indeed encourage higher production, as has been stated, some specialist pure silver mines and mostly silver mines (i.e. silver is the predominant ore in the body) with lead, zinc, plus other trace metals ( Gold, Uranium, etc et-al) increased production. BUT, If 70% of production is secondary (as a result of demand for industrial metals) and industrial metals demand is in a collapse, then this will therefore affect supply, and will over the next 2-3 years lead to a serious supply shortage especially IF the silver stackers continue their stacking, and the Apples and Googles of this world continue their technical developments, which should underpin price above the $12.50/oz level and more likely circa $13.50(ish) because production costs for all but the cheapest miners are in the $15-18 range.

Price has levelled out over the last six months after falling briefly to the $13.60 area (under £10) and leaving aside the price fix the other day, that took the silver fix price 84 cents lower than the spot price, leaving many commentators aghast, as it began rising to the current $14.20-$14.50 range, and is set to rise modestly until circa 2018/19 (IMHO), when I believe it WILL then begin to rise exponentially, as the supply glut diminishes, and the demand rises, working its way through the market. But also because of policies discussed below.

In the 1970s, the same thing happened over a shorter time frame… What was driving the markets then? DEMOGRAPHICS – just as today. The only thing then was most retirees only lived on average circa 3-5 years post-retirement. Those who worked in nice well-paid office jobs might have lived 20 years post-retirement, but your average factory worker didn’t. Those retirees, were born during the Edwardian period, i.e. 1901, to 1910.

These days, WE baby-boomers will last 30+years post-retirement (money & health care costs willing) That means any retirement monies, will need to fight inflation for at least that length of time.

Think back 30years, and try to remember what prices were like then… In Britain, an average week’s wage for a low level worker was about £60. ($150ish at exchange rates then) Today, even with average wages falling, the low wage workers are earning circa £300-£400 per week for a full week’s work of circa 35-40 hours. ($650ish)

So in 30 or so years, time your money will need to have 5-6x its current value to maintain purchasing power parity assuming similar inflation rates – Like YEAH, that’s gonna happen with $4trillion printed in the U.S. alone.. With negative interest rates in Japan introduced this week, and several Euro-land Central Banks doing the same over the last year, how long will your cash-pile last? It’s like Electronic Coin-clipping, which ultimately led to the decline and fall of the Roman Empire, as the Roman Guard, were paid in debased coinage as silver was removed little by little, making the coins less valuable over time.

And today, I heard of the final insanity. Central Bankers in Switzerland, are now considering the ultimate ignominy of paying everyone in the economy a monthly sum of money, as a supposed antidote to deflation. The Swiss are discussing paying $2,500 to every adult, and $750 to every child direct into their bank account. Keynes thought this might be the ultimate solution to the problem, of deflation. In fact, Ben Bernanke who reputedly said that in the final analysis…

…the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation…

and that is how he got his nickname – “Helicopter Ben” for his allusion to dropping money from helicopters. This madness will not end well.

As Prime Minister and subsequently – Lady – Thatcher so eloquently put it – “Eventually, you run out of other people’s money”, but the plan as mad as it sounds, echoes what Mike Maloney has said in several videos available on You-tube, when he said that the Central Banks, would do a “Helicopter drop” to attempt to kick-start the economy, when all it does is create ever bigger debt loads, which have to keep growing – until they don’t – and then the sky falls in. You can read a piece that explains it in more detail HERE.

So the answer is easy… Keep Stacking

The Value of Money – Not Currency

Posted on Updated on

alan_greenspanThis piece has been posted before, and so those who have read it, may turn away now. But such is the importance of it, which to my mind should be required reading of everyone who opens a Bank Account, and who is perhaps going to vote on Britain’s potential exit from Europe, because it is at the heart of Europe’s monetary system, where true power resides, that I felt it prudent to re-post.

Many will know that, Mayer Amschel Rothschild (Née: Bauer) said, “Give me power over a nation’s money, and I care not who makes its laws.” but many will not know of his greater threat, and how he might ultimately achieve it… This piece below for the intelligent, and analytical reader gives clues.

So long as you reference the views of the originator of the New World Order,  who follow the creed as originally laid down and are even now laying the groundwork, for the next episode in this as yet, untold history.  Read on…

==================

GOLD AND ECONOMIC FREEDOM
by Alan Greenspan

Since the beginning of World War I, [Ed: Until 1971] gold has been virtually the sole international standard of exchange.

Gold, having both artistic and functional uses and being relatively scarce, has always been considered a luxury good. It is durable, portable, homogeneous, divisible and, therefore, has significant advantages over all other media of exchange.

But if all goods and services were to be paid for in gold, large payments would be difficult to execute, and this would tend to limit the extent of a society’s division of labour and specialization.

Thus, a logical extension of the creation of a medium of exchange is the development of a banking system and credit instruments (bank notes and deposits) that act as a substitute for, but are convertible into, gold.

A free banking system based on gold is able to extend and thus to create bank notes (currency) and deposits, according to the production of the economy. Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks).

But since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security for his deposits). But the amount of loans which he can afford to make is not arbitrary: He has to gauge it in relation to his reserves and to the status of his investments.

When banks loan money to finance productive and profitable endeavours, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion.

Thus, under the gold standard, a free banking system stands as the protector of an economy’s stability and balanced growth. When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a worldwide division of labour and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold, the economies of the different countries act as one – so long as there are no restraints on trade or on the movement of capital. [Ed: or Gold and Silver]

Credit, interest rates and prices tend to follow similar patterns in all countries. For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest-paying banks in other countries. This will immediately cause a shortage of bank reserves in the “easy money” country, inducing tighter credit standards and a return to competitively higher interest rates again.

A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold, and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off and the economy went into a sharp, but short-lived, recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.)

It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post-World War I type of disaster. The readjustment periods were short and the economies quickly re-established a sound basis to resume expansion.

But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline – argued economic interventionists – why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely – it was claimed – there need never be any slumps in business. And so the Federal Reserve System was organized in 1913. It consisted of 12 regional Federal Reserve banks nominally owned by private bankers, but, in fact, government sponsored, controlled and supported. Credit extended by these banks is in practice (though not legally) backed by the taxing power of the federal government.

Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks (“paper” reserves) could serve as legal tender to pay depositors. When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage.

More disastrous, however, was the Federal Reserve’s attempt to assist Great Britain, who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: If the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those of Great Britain; this would act to stop Britain’s gold loss and avoid the political embarrassment of having to raise interest rates.

The “Fed” succeeded: it stopped the gold loss, but it nearly destroyed the economies of the world in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market – triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in breaking the boom. But it was too late: By 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence.

As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a worldwide series of bank failures. The world economies plunged into the Great Depression of the 1930’s.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold.

If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. [Ed: So saving in gold or silver is protection from government theft. I’ll come back to this in my next post.]

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

Regards,
Alan Greenspan

==========================

You can read a little more on this particular topic in “The Coming Battle” which beginning at the time of Mayer Rothschild, and ending in late 2013, is in reality, the first installment of an on-going story, still unfolding.

And if you like the content of these pieces click on our like buttons, or post a link to your facebook page.

W.

 

DAVOS Unplugged

Posted on Updated on

DAVOS-2016-wef1

Every year for many years, the world’s elite convene with senior economists, Bankers, and Politicians in DAVOS Switzerland. This is the place where the world’s elite rub shoulders, talk about the world economy, and do deals. It is also where the World Economic Forum (WEF) meets too. Many of these rich, have had their fingers on the pulse of the world economy. Where these elite invest their money, frequently acts as a beacon, and lights the way for us mere mortals to follow suit. But for the last few years, even these people are finding it difficult to use their wealth. And even more dire news has arrived.

Just over one week ago, news arrived that something was not right in the world. The Baltic Dry Index indicated something that stopped me in my tracks. Of course, I couldn’t just comment on it, without doing further research. The first inkling that something was amiss came from ZeroHedge.com. In an article there, Tyler Durden quoted a freind of a friend, who is a shipping billionaire, who told him that “they had no ships at sea at all”.

The Baltic Dry Index, measures the cost of leasing a cargo ship, per tonne of cargo for bulk dry cargo, such as corn, wheat, flour, coal etc. etc.. The BDI is termed a leading economic indicator because it predicts future economic activity (Wikipedia).

When people don’t buy goods, retailers don’t order, wholesalers don’t order, and manufacturers shut-down production, lay off staff and eventually, if left for any length of time – close.

David Morgan of the Morgan Report, in a short piece said that the economy was at “Stall speed” – a reference to an aircraft, whose trim or angle of attack is at the wrong angle, and no matter how much throttle you give it, the aircraft will stall. The only way to stop it is to tip the nose down, to generate forward momentum, and lift, before pulling up, so you have to have the height to achieve that. And the talking heads in Davos, have already suggested QE4 is almost a given, but that it will achieve little.

George Soros in an interview at Davos, suggested China, will have a hard landing, and his interviewer wondered out loud, what impact that might have on western markets.

From my previous posts, you will glean, that commodities make up a considerable part of China’s trade, as the leading producer for export markets, China imports the bulk of international commodities, and with the reduction of growth to less than 7%, commentators are now predicting a “Hard Landing”, just as was predicted by Will Hutton in his book – “The Writing is on the Wall” in 2003.

And Tim Price, a writer for Moneyweek, just one week ago, began promoting his latest book, evocatively titled: “The End of Cash”.

Like others, if you read the book: “The Coming Battle – 2013”, in the chapter “The Death of Cash”, it has been predicted for a long time. That money and now physical currency has been persecuted, by governments around the world, for their own ends, and now it is coming to pass…

Too many, will say – “Well it will make life easier, safer, quicker, and you won’t be able to lose money down the back of the sofa”. But they are missing the bigger, more sinister, picture.

When a government controls the currency of the realm, they control YOU. Money in a bank account earns nobody anything. It is only when that money is loaned out into the economy, that it generates a surplus (for the lender) which is usually paid back by the added value produced by the payee, usually as the result of producing and selling value added goods and services.

BUT, also on the other side of the coin, (so to speak) is the Sovereign Nation, with raw materials to sell. If what they receive for their real goods: coal, oil, gas, titanium, vanadium, uranium, thorium, beryllium, diamonds, or even their smart-phones, glass, ceramics, or other high value added goods, is a paper asset, or even worse an electronic one, because the buyer nation can just produce “currency” via a keyboard and terminal on a computer somewhere, and if those electronic digits do not represent “REAL” as opposed to ephemereal assets, then the world economy can be manipulated for the ends of the Bankers, and those political puppets pulling the strings in the halls of power to the detriment of those at the other end of the economic spectrum.

This can quickly lead to the situation we had in 1930, just as Germany, looked for scapegoats, and a saviour who emerged Donald Trump like in the form of Adolf Hitler, who promised to fix things by more political interference.

Markets, work best with little political interference, though governments can, and should mitigate the worst excesses of these, for people in the real economy. Whenever politicians attempt to direct markets, they end up making things worse. Of course, when events begin spiralling out of control, people in the real world revert to either barter, or as circumstances permit, goods of sustainable value, and this usually means a return to a physical coinage in the form of Silver and Gold money.

There are those who feel the crisis of 2008, has been cured. All the mainstream media pundits are singing from the same hymn sheet – talking up the economy, but beneath the apparent surface calm, the swan is paddling like crazy. And events have a habit of veering off course, because someone, somewhere in a foreign nation feels like they’re being taken advantage of, and intervenes. Just as Mongolia did, when it thought the price of its raw materials were being taken advantage of in 2011, and it imposed a new political and contractual framework, on one of its major investors, which given recent events in the commodities space, has seen the country’s economy fall from its rapid growth projections as commodity prices have fallen back. Over the last 2 years Anglo-American a massive commodity supplier laid off 85,000 of its staff worldwide, and the recent lay-offs in Britain’s steel industry, are a portent of things to come.

The financial crisis of 2008, is far from over, and when the government gains full control over the currency, then we face either hyper-inflation, or negative interest rates on deposits, forcing spending. If interest rates rise, then the Bond markets collapse, from their 300 year highs, and property value fall alongside those as property prices are inversely related to interest rates.

To maintain some value in an uncertain world, SOME (10%-25%) of your wealth needs to be hold in your hands physical precious metals.

W.

Iran’s New War on America’s Oil Interests

Posted on Updated on

Oil prices - where will they stop?
Oil prices – where will they stop?

On Friday last we heard that Iran had satisfied all the criteria required by the International Atomic Energy Authority that its centrifuges for enriching uranium meet the requirements to lift sanctions as promised in the détente agreement, and the new leadership, has opened up the country to International scrutiny.

The world is salivating at being given access to the 88 million inhabitants, who have sat outside the world economy for the last 36years, ever since Ayatollah Khomeini, returned to Iran, and the western backed Shah, fled in the Iranian Revolution. The American Embassy was seiged, and its staff held hostage until a negotiated release, 444 days later.

Both European and American, foreign secretaries are giddy with delight, that the Iranians have met their requests, and they can now send in the big guns. Europe has already received orders for 114 new Airbus Aircraft, and the big American Corporations will no doubt be hoping to deliver many of their products to that formerly pariah state. But underneath the euphoria, is another concern.

Iran with the 4th largest oilfield in the world, after Saudi-Arabia, Russia and the U.S., hopes to increase production to 1,000,000 barrels per day (bpd). This will be added to the almost 10,000,000 each that the big three produce. The price of oil, already depressed by the excess production due in large part to the additional supply that has been made available by America’s fracking revolution, and the high price of $147/barrel reached in 2007, which encouraged a flock of explorers and juniors who borrowed heavily during the boom years and who have added to current supply.

Already pundits are suggesting that the oil price could plummet to $10/barrel, which would decimate the higher cost producers, reducing output in many western oil-fields. This will in all likelihood lead to another situation in oil prices a few years out, just as happened in the period from 1971-1981.

The 1970s revisited…

A number of events kick-started that turmoil during the 1970s. International demand for oil had exploded in a little over 2 decades, from just 3.7 million barrels per day in 1950, to 34.2 millions per day by 1973, and restrictions on supply by OPEC, (Organisation of Petroleum Exporting Countries) because of the unrest in the middle-east as Egypt, Syria and Jordan had attacked Israel in the 1967 six days war and this had begun to bite. In May 1970, the TAPline (Trans-Arabia Pipeline) from Qassumah in the Persian Gulf, through Iraq, and Syria to Sidon, on the Lebanese coast had been struck by a bulldozer, and oil to Europe cut off. Whether this was accidental or intentional is debated, but the Syrians wanted more for their oil transmission fees before they would repair it. At the time, the Nigerians, were in a civil war in Biafra a province of Nigeria, that would later become famous for the famine it would cause; the arab nations were still smarting from their defeat in 1967 against Israel, and their hatred of the U.S. backed nation, runs deep, and during the six days war in 1967, the Egyptian President closed the Suez Canal, which meant oil tankers leaving the Gulf had to go round the Cape, to Europe and America, and all this reduced some of the glut.

In 1969, on September 1st, a little known Libyan Colonel – Muammar el-Qaddaffi, took over the reins of power in Libya, from King Idris. In doing so he spoke out against the colonial powers, and he would raise the price of oil to Europe, by $0.40 because of its proximity.

In 1970, the Vietnam war was in full flow, and U.S. dollars were flowing out around the world like confetti. In that year, the world oil price (now called Brent Crude) was $1.80/barrel in February 1971 (Texas Oil – now known as WTI – was $3.45). Exactly four years after the anniversary of Qaddaffi’s rise to power, the Libyan oil fields were nationalised. The middle-east was in the middle of a battle with Israel. In the summer of 1973, the oil price was already being dictated to the oil majors at $5.12. Within a few weeks they doubled the price again, taking the oil price to $11.65. In just four short years, the price had risen fourfold. Iran had auctioned oil as high as $17/barrel.

This rise in oil fed through into inflation, and at a time of union power, wages rose in line with prices, pushing inflation to 26.9% in the UK by the Autumn of 1974. It didn’t help, that the Heath government, had watched the money supply grow 25% during 1973, and the chickens were now coming home to roost. The stock market collapsed as oil prices rose. Second line, British Banks went to the wall and over the next two years, Britain and America entered a recession. In late 1973, Britain’s Heath Government, instigated the three day week, when lights were left off, and businesses closed. Then, as now, politicians pumped into the economy millions to save the Banks. Oil prices came down and Britain in 1976, had to call in the IMF to save it from default as bond prices collapsed eliminating this source of revenue and destroying the nation’s finances.

Some ten years after Qaddaffi took office, Saddam Hussein took the reins in Iraq. (If you’re interested, you can read about his rise to pre-eminence here —>>>; http://www.int-review.org/terr37a.html) and who had an equally prominent place in this tale of woe, later in 1979, the Iranian revolution would take oil prices to $41.00/barrel over the next two years as Iraq and Iran pushed up oil prices to pay for arms as these two islamic nations were about to go toe to toe.

The current price of oil, is therefore too low to sustain western producers, and when they’ve been killed off, the OPEC nations in the middle-east, will reap the profits, but, the shortage of oil might push prices back into the stratosphere.

And even if that might not be the problem there’s a bigger issue. The Kingdom of Saud with its Sunni religion hates Iran, with its Shia version of Islam, and the American back-slapping of Iran could cause the Kingdom to stop selling oil in dollars, and choose Yuan instead. And THAT could cascade around the middle-east killing the Western Banking system, and bringing about the dollar collapse, that Bill Bonner, Jim Rickards and others have long been prophesying.

Therefore, having precious metals, and currencies, outside government control, such as Bitcoin, Gold and Silver coins and bars as insurance makes sense.

Or Germany in 1923?

As the currency expanded 25% in the UK in 1973, the subsequent rate of price inflation went up almost 27% when that money hit the economy… Now imagine what an 800% increase in the U.S. money supply since 2004 will do, when that money leaks into the economy… For those who can’t, or are too lazy to do the maths, that 200 thousand portfolio, will buy around 50,000 worth of goods and services, and after the tax man has had his cut, you’ll think you’re well off

Anyone who is further interested in the period of the 1970s, and the machinations of the oil and currency-wars, and events that impacted them would do well to read: “Paper Money”, by Adam Smith (the nom-de-plume of George J.W. Goodman, who worked in Finance and Letters after graduating from Harvard, and becoming a Rhodes Scholar at Oxford, where he wrote a novel on financial bubbles, and went on to work as a writer for the New York Magazine)

And remember if you like what you read here, we’d appreciate a like, or a link on your web-site, or.

25 Basis Points – to Nothing

Posted on

Interest Rates RisingTo all my readers, this is my first real re-assessment of global matters this year. So a belated Happy New year.

Just prior to Christmas, Janet Yellen – Fed Chairperson, announced a 25 basis point rise in interest rates. Since then, a sell-off has occurred in markets both near and far. The NYSE is down from its recent 18,000 high to circa 16,400 as I write. The LSE (FT Index) is down from close to 7,000 to a little under 6,000 – no problems here?

In China, the Shanghai A Shares market fell from 5,400 in mid-June 2015, to 3,087 as I write – close to a 45 percent fall, in 6 months, as those leveraged souls sold off their holdings to meet margin calls, and this in itself forced another round of selling, which created a need for more collateral, which forced others into selling to meet margin calls, which… (ad-nauseum) you get the idea…

Of course the Chinese Government had pulled out a sticking plaster to paper over the cracks by inserting automatic trading gates when markets fell which automatically closed to halt trading for the day. And a day or so ago, I learned that employees of large Chinese corporations expecting annual bonuses in their end of year pay packets, are being required to buy their company’s shares, and are unable to sell them for six months or even a year.

They also instigated legislation to limit large holders over a certain per-centage from selling within 6 months of purchase, stopping large holders from unduly influencing key corporations’ prices. All of which suggests not all is well in the netherworld on the far side of our planet.

This steadied the markets a little, as also some good news came out of Britain and America, a few days ago, who are still the most important world economic barometer.

Meanwhile, in his Farewell State of the Union speech, President Obama, sounded a bullish note, that all was right with the world. The U.S. was still the most powerful country in the world, far above the rest in terms of influence, economic and military power, and the sheeple can all sleep snugly, safe in the knowledge that he has got their back…

He touched on the shortcomings (as he saw them) of other politicians who made swipes at other religions (no names mentioned – but it was obvious who, he meant), and he covered the new compact between those signatories to the Trans Pacific Partnership (TPP), which is making its way through the corridors of power in those 18 nations who have or will sign up to it – it will protect corporate jobs in America he stated, but at whose cost? (We will have to come back to this particular topic in the future as it is too big to cover here – but you can make your own judgement here —->>> https://www.eff.org/issues/tpp)

So, this brings me to yesterday’s news, that the oil price has dropped further and went below $30 per barrel. This may on the surface appear good news for consumers, as diesel and petrol (Gasoline) will be cheaper, making the journey to work a little less costly, and provide those who can’t afford to live in the city or town of their employment for cost or availability reasons, a little comfort. But the downside to this is ominous. Most oil producers in western nations are producing oil at circa $40-60 barrel, depending on wages, and source rocks. Those under water will require perhaps as much as $80/barrel to break-even, meaning those who work in the North Sea fields are a little nervous about their employment prospects in that area. Those oil co’s with fracked wells rely on cheap finance to drill for new reserves, and need high prices to pay off their previous borrowings on existing fracked wells. The cheap finance that allowed these wells is drying up as interest rates rise, and oil prices tell their own story.

Oil is though, the engine of the world economy, as it is the most widely used commodity on the planet, and goes into more products and services than any other – plastics, chemicals, transport, energy production, glass production, paints, road maintenance – you get the picture.

So, as to the title of this piece, Ms Yellen raised her interest rate by 25 basis points – one quarter of one per-cent – and was/is hoping to raise them in small baby steps over the coming year, but it is increasingly likely that further falls in world stock markets will risk them falling off a cliff, if rates rise any further. This may happen anyway as it is now 8 years since the last market correction meaning we are long overdue. Some pundits are predicting a March-May sell-off as the next rate rise takes effect, but China’s problems of keeping their economy afloat may be the petrol, that is thrown onto this slow-burning peat-moor fire – For those not familiar, with these, in the UK., they are famous for slow burning moorland fires that last weeks, or longer as the heat gets transferred to the root system, and the ground is so dry, that nothing short of exploding bombs can put a stop to it or it burns itself out.

Jim Rickards, Bill Bonner, and many others have been predicting this slow motion car-crash for what seems like ages, and many will be feeling like these are just doom-mongers or like the boy who cried “Wolf” because nothing seems to happen. Harry Dent – like myself has suggested we face deflation more than inflation, but where Harry and I differ is that I expect, the period from 2018-2020 to be a critical one from an economic perspective. Given the birth rates after the second world war, which peaked in the end of the fifties (at least in America), those births fuelled the growth in jobs, and the economy from 1947, through to the recessions of the early 70s to 80s, as they at first grew up, bought their first flats, and then their starter homes and then during the early 80s started their own families.

In the late 90s and early noughties, the baby-boomers spending and their desire for retirement income, fuelled the web explosion and the housing boom, as lowering interest rates meant it was expedient to buy buy-to-let property in the late stages of the interest rate reduction lifecycle. Their offspring meanwhile were buying their first flats and starter homes, and if my eyes don’t deceive me, their tiny Tims and Jessica’s are now part of the new baby-boom that will fuel the next music revolution. Whether that is more Punk, than Cool Britannia will depend to a large extent on what happens with the economy, which tends to change every seven years as teenagers become twenty-somethings, and their younger peers seek to distance themselves from those that went before, until 30-40 years later, it all comes round again… Just like in the financial and economic world. The recessions of the 70s, the Oil price spike in 73, the rise of Islamic Fundamentalism, all re-runs, and the worst of it is, every two generations the world has the big one… Think 2008 was the big one? Think again. Prepare for it. Here —>>> FREE Crypto-currency or Here —>>> Silver Coins and Bars

China’s Golden Currency War…

Posted on

0311_china-gold-hording_416x416
China’s Gold Hoard – is bigger than they claim – MUCH bigger.

China really loves gold – and its politically controlled Bankers need gold more than any Western nation.

It’s no secret that the People’s Bank of China has been buying the yellow metal for years, raising its reserves.  In fact, the country’s central bank has been buying since the 1980 nadir, when it began buying from its miners in the few tons annually, before it earned enough in foreign reserves to buy also on the open market, but since 2000, at least it has become a little more transparent about some of its purchases.

In the last decade though, the Chinese central bank has been among the world’s most aggressive buyers of gold.

In fact, there are some clues that point to the fact that their actual gold holdings are a multiple of what’s actually being reported in the financial press, which in turn points to a shocking long-term strategy: a move to link or back the yuan – at least partially – with gold.

The implications of this would send shockwaves through the world economy, so it makes sense to start getting ready to profit right now…

China and Russia Are Leading the Charge to Buy Gold

For nearly 20 straight years until 2009 and 2010, central banks were net sellers of gold. Between 2003 and 2008, central bankers sold 2,846 metric tons of gold.

And then, as the world was exiting the worst of the financial crisis, something strange happened: The trend reversed in a sea change for the gold markets. Between 2009 and 2014, the banks bought 2,301 metric tons, making for a 5,147 metric ton swing to the upside.

According to the World Gold Council, Central Banks bought 477 metric tons in 2014 alone, the second-highest level in 50 years and a 17% jump over 2013.

Now, both China and Russia have accumulated large proportions of their central bank reserves in U.S. Treasuries, and they’re growing increasingly anxious to diversify away from that “asset.” Gold makes for a great alternative, especially after such a sizeable decline in price over the past four years.

Russia alone gobbled up another 173 tons last year, adding 10 to 25 tons monthly in the past five years.

And, after six years with no updates, China finally broke its silence to announce a 60% increase in reserves to 1,658 metric tons. In the third quarter of 2014, they added another 50 metric tons. With updates almost monthly since May 2015.

And those are the official numbers – they’re robust enough, but what’s happening off the books is truly incredible…

How Much Is China Buying “On the QT”?

David Marsh, a columnist at MarketWatch, thinks “China probably has a lot more gold than it admits.”

I’m inclined to agree. What’s more, as the gold China buys from domestic miners is paid for in Yuan, these purchases can be left out of official reserve numbers, thus accumulating quietly.

By my estimates, China’s actual gold hoard tops an astounding 10,000 metric tons.

One expert, Simon Hunt of Simon Hunt Strategic Services, has suggested a figure as high as 30,000 metric tons:

He says: “China has much more gold than it is allowing the world to see. As Alasdair Macleod, probably the world’s number one analyst of the gold market wrote, between 1983 and 2002 China probably accumulated 25,000 tons of gold. Thus, its current gold holdings are likely north of 30,000 tons in contrast to the USA which has either sold or leased most of its gold.”

Clearly, that’s a huge number, and if ever China were to confirm something even close to that level, it would certainly shock gold to a massively higher price.

Whether or not China has already accumulated such huge reserves, all the signs point towards a nation that’s aggressively growing its gold stash.

And to do so covertly makes perfect sense: Their buying puts less upward pressure on the price, allowing the Chinese to accumulate even more on the cheap.

Remember, China is only slightly behind India as the world’s largest gold consumer, but it’s indisputably the world’s largest gold producer.

Its mining output is double what it was just a decade ago, and that production stays in-country to help satisfy domestic demand.

Like India, China has a deep, ancient cultural affinity for gold, and it knows only too well that “other” Golden Rule: He who owns the gold makes the rules.

With that in mind, the idea that China actually holds a lot more gold than it’s reporting makes much more sense.

At the same time, China is increasingly asserting its position on the world stage – on several fronts. Its move to make the yuan a global reserve currency is only one of several steps including harrassing fishermen in the South China Sea, as well as building landing strips on what were previously minor atols, also in that internationally contested water, and ultimately protecting and claiming the resource wealth that obviously lies beneath it.

So for China to be laying in this kind of massive stock of gold, can only mean something big is in the works…

Why China Needs So Much Yellow Metal

According to Song Xin, President of the China Gold Association (CGA), sufficiently high gold reserves are needed to buttress the yuan.

At a September seminar on gold in Beijing, Song told delegates:

“If the (Yuan) renminbi wants to achieve international status, it must have wide acceptance and a stable value. To this end… it is very important to have enough gold as the foundation, and raising the ‘gold content’ of the renminbi. Therefore, to China, the meaning and mission of gold is to support the renminbi to become an internationally accepted currency and make China an economic powerhouse… That’s why, in order for gold to fulfill its destined mission, we must raise our gold holdings a great deal, and do so with a solid plan. Step one should take us to the 4,000 (metric) tons mark, more than Germany and become number two in the world, next, we should increase step by step towards 8,500 (metric) tons, more than the U.S.”

Song’s predecessor, Sun Zhaoxue, recommended China increase official reserves and encouraged citizens to accrue gold. Some estimates peg private Chinese gold ownership at 12,000 metric tons.

Still, I don’t know that China necessarily wants to back its currency with gold, even if only at a token level. It makes more sense to buttress the Yuan and enhance its stability than to move China to some kind of gold standard.

That’s because it would negate the massive advantages of operating a fiat currency system, not the least of which includes unrestricted money-printing to spend as the administration wishes.

But the motivation to build large gold reserves still runs deep. China just needs the right opportunity, and, with the way things are going, the United States just might deliver that…

Consider that there will be another financial crisis, it’s only a question of when. Former Treasury Secretary Tim Geithner warned of this himself, as I’ve discussed here previously.

If the United States is once again the epicentre of the next financial implosion (and, with things as they are, there’s not much reason to believe otherwise), it will be that much easier for other superpowers, like China and Russia, to swing the world reserve currency system into their orbit.

In this kind of scenario, the outsized role (and prestige) of the U.S. dollar would likely diminish just as quickly as China’s Yuan, padded by immense gold reserves, would soar.

Here’s how you can take advantage of that outcome…

How You Can Win China’s Game

Right now, demand for gold, including from the official sector, is expected to remain robust.

Barclays Bank projects 2016 will see central banks continuing to be net buyers of gold. Barclays notes that China and Russia were the two biggest buyers, soaking up 95% of official sector purchases so far this year.

Barclays further highlights: “Their motives are likely to be strategic and long term… Both countries are short of gold in their total FX (forex) reserve portfolio. Russia has fewer than 15% of its FX reserves in gold, while China has less than 2%.”

In my view, the two great hedges against the next financial crisis are the Yuan and gold…

For exposure to the Chinese Yuan, you can buy the Wisdomtree Dreyfus Chinese Yuan Fund (ETF) (NYSE Arca: CYB). The fund has $64 million in assets and trades 19,000 shares daily.

You might also consider the Sprott Physical Gold Trust (NYSE Arca: PHYS). It holds gold bullion that is fully allocated and stored at a secure third-party location in Canada, subject to periodic inspection and audits. And if you prefer their Silver fund… (PSLV)

There are no levered financial institutions between investors and the gold/silver, either, plus U.S. investors holding for at least 12 months can benefit from a 15% capital gains tax versus the 28% rate with most precious metals ETFs.

Either of these are fantastic holdings, and I’m convinced that one day they’ll be indispensable.

But of course, the biggest benefit is the ability to stay liquid when China makes its move to bury the dollar.
When the Dollar dies, then Gold, Silver and Bitcoin will rise exponentially.


 

Gold – Food for thought?

Posted on Updated on

Over the last few years, I have studied the role of money and Bankers I have reached the conclusion, that the subject should be compulsory study for all, so that we understand the control that they exert over the nation, and thus we might watch them for their connivances…

Here’s why.

Thomas Jefferson wrote this in a letter to the Secretary of the Treasury, Albert Gallatin, in 1802:

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them, will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.”

 

“All the perplexities, confusion and distress in America rise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation”.

– John Adams, in a letter to Thomas Jefferson in 1787

“I believe that banking institutions are more dangerous to our liberties than standing armies”.

– Thomas Jefferson

“I consider the foundation of the Constitution as laid on this ground that all powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are preserved to the states or to the people.”

” … To take a single step beyond the boundaries thus specially drawn around the powers of Congress is to take possession of a boundless field of power, no longer susceptible of any definition. The incorporation of a bank, and the powers assumed by this bill (chartering the first Bank of the United States), have not, been delegated to the United States by the Constitution.”

-Thomas Jefferson – in opposition to the chartering of the first Bank of the United States (1791).

“If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen.”

– Samuel Adams, speech at the Philadelphia State House, August 1, 1776.

“The colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction. The inability of the colonists to get power to issue their own money permanently out of the hands of George III and the International bankers (moneychangers) was the PRIME reason for the Revolutionary War.”

-Benjamin Franklin, from his autobiography.

President James Madison (4th President) stated:

“History records that moneychangers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.”

 

“Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.”

– President Andrew Jackson, upon evicting a delegation of international bankers from the Oval Office

“A central bank is a curse to a Republic; in as much as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberty of the country.”

– Andrew Jackson

Senator Daniel Webster read this into the Congressional Record on March 4, 1846:

“A disordered currency is one of the greatest political evils. It undermines the virtues necessary for the support of the social system, and encourages propensities destructive to its happiness. It wars against industry, frugality and economy, and it fosters the evil spirits of extravagance and speculation. Of all the contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deludes them with paper money.”

“I see in the near future a crisis approaching. It unnerves me and causes me to tremble for the safety of my country… the Money Power of the country will endeavor to prolong its reign by working upon the prejudices of the people, until the wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.”

– Abraham Lincoln – In a letter written to William Elkin just after the passage of the National Banking Act of 1863 and less than five months before he was assassinated.

“The money power preys on the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes.”

– Abraham Lincoln

“Whoever controls the volume of money in any country is absolute master of all industry and commerce.”

– President James A. Garfield

“Since I entered politics, I have chiefly had men’s views confided to me privately. Some of the biggest men in the U.S., in the field of commerce and manufacturing, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.”

– Woodrow Wilson – In his book entitled The New Freedom (1913)

“The Federal Reserve Bank of New York is eager to enter into close relationship with the Bank for International Settlements….The conclusion is impossible to escape that the State and Treasury Departments are willing to pool the banking system of Europe and America, setting up a world financial power independent of and above the Government of the United States….The United States under present conditions will be transformed from the most active of manufacturing nations into a consuming and importing nation with a balance of trade against it.”

– Rep. Louis McFadden – (Chairman of the House Committee on Banking and Currency) quoted in the New York Times (June 1930)

“The Federal Reserve (Banks) are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this Nation is run by the International Bankers.”

– Rep. Louis McFadden

“(The Great Depression resulting from the Stock Market crash) was not accidental. It was a carefully contrived occurrence….The international bankers sought to bring about a condition of despair here so they might emerge as rulers of us all.”

– Rep. McFadden testified in Congress (1933).

There were at least two attempts on his life by gunfire. He died of suspected poisoning after attending a banquet.

“The real truth of the matter is, and you and I know, that a financial element in the large centers has owned the government of the US. since the days of Andrew Jackson. History depicts Andrew Jackson as the last truly honorable and incorruptible American president”.

– President Franklin Delano Roosevelt, November 23, 1933 in a letter to Colonel Edward Mandell House

“Give me control over a nation’s currency and I care not who makes its laws”

– Baron M.A. Rothschild (1744 – 1812)

“The few who can understand the system (Federal Reserve) will either be so interested in its profits, or so dependent on its favors, that there will be no opposition from that class, while on the other hand, the great body of the people, mentally incapable of comprehending the tremendous advantages that capital derives from the system, will bear its burdens without complaint and perhaps without even suspecting that the system is inimical to their interests”. [As they say, “Ignorance is bliss!”]

– John Sherman, protege of the Rothschild banking family, in a letter sent in 1863 to New York Bankers, Morton, and Gould, in support of the then proposed National Banking Act

“Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits.”

– Sir Josiah Stamp – President of the Bank of England in the 1920’s, and the second richest man in Britain.

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose”.

– John Maynard Keynes, economist and author of “The Economic Consequences Of The Peace”

“Historically, the United States has been a hard money country. Only [since 1913] has the United States operated on a fiat money system. During this period, paper money has depreciated over 87%. During the preceding 140 year period, the hard currency of the United States had actually maintained its value. wholesale prices in 1913… were the same as in 1787”.

– Kenneth Gerbino, former chairman of the American Economic Council

These statements were made during hearings of the House Committee on Banking and Currency, September 30, 1941.
Note: Members of the Federal Reserve Board call themselves “Governors”.
Governor Eccles was Chairman of the Federal Reserve Board at the time of these hearings.
* Congressman Patman: “How did you get the money to buy those two billion dollars worth of Government securities in 1933?”
* Governor Eccles: “Out of the right to issue credit money.”
* Patman: “And there is nothing behind it, is there, except our Government’s credit?”
* Eccles: “That is what our money system is. If there were no debts in our money system, there wouldn’t be any money.”
* Congressman Fletcher: “Chairman Eccles, when do you think there is a possibility of returning to a free and open market, instead of this pegged and artificially controlled financial market we now have?”
* Governor Eccles: “Never, not in your lifetime or mine.”

Congressman James Traficant, Jr. read this into the Congressional Record on March 17, 1993:

“Prior to 1913, most Americans owned clear, allodial title to property, free and clear of any liens or mortgages until the Federal Reserve Act (1913) “hypothecated” all property within the federal United States to the Board of Governors of the Federal Reserve, in which the Trustees (stockholders) held legal title. The U.S. citizen (tenant, franchisee) was registered as a “beneficiary” of the trust via his/her birth certificate. In 1933, the federal United States hypothecated all of the present and future properties, assets and labor of their “subjects”, the 14th Amendment U.S. citizen, to the Federal Reserve System.”

“In return, the Federal Reserve System agreed to extend the federal United States corporation all of the credit “money substitute” it needed. Like any other debtor, the federal United States government had to assign collateral and security to their creditors as a condition of the loan.
Since the federal United States didn’t have any assets, they assigned the private property of their “economic slaves”, the U.S. citizens as collateral against the un-payable federal debt. They also pledged the unincorporated federal territories, national parks, forests, birth certificates, and non-profit organizations (all 501c3 church’s), as collateral against the federal debt. All has already been transferred as payment to the International bankers (moneychangers).”

“Unwittingly, America has returned to its pre-American Revolution feudal roots whereby all land is held by a sovereign and the common people had no rights to hold allodial title to property. Once again, “We the People” are the tenants and sharecroppers renting our own property from a Sovereign in the guise of the Federal Reserve Bank. “We the People” have exchanged one master for another.”

Congressman Ron Paul read this into the Congressional Record on June 5, 2002:

“Gold is history’s oldest and most stable currency. Central bankers and politicians hate gold because it restrains spending and denies them the power to create money and credit out of thin air. Those, who promote big government, whether to wage war and promote foreign expansionism, or to finance the welfare state here at home, cherish this power.”

Richard Russell stated in “The Daily Remarks” on August 21, 2006:

“Under the current system with a central bank creating and controlling our money, you are guaranteed to lose purchasing power two different ways – via taxes and via inflation. The central bank system is the greatest scam ever perpetrated on an ignorant public. The eternal enemy of every central bank is – gold.”

“Don’t get suckered into black vs. white, Democrat vs. Republican, free markets vs. regulated ones, Moses vs. Muhammad, etc… Its all about the control of the issuance of currency. Everything else is a big huge fancy production put on the stage to distract the audience from the fact that the ticket sales booth register is empty, the theater doors have been locked from the outside, and the lobby is burning…”

=============================================================

I have been following the economic woes of Britain and the U.S. now for 15 years, ever since I first began reading up on money, and at how money has been usurped by currency, to the economic benefit of the few families who own the Federal Reserve. Those same Bankers and their coterie, also own Britain’s wealth too. And the above quotations were made by men who realised at the time, what would happen, and as we now know… it HAS.

However, much currency the Fed injects into the economy, the over $20 Trillion has had little effect.  As Peter Schiff of Euro-Pacific Capital stated recently, the economy in the U.S. has barely budged into positive territory as figures get revised perhaps one or two months after their initial release, and in most cases, they are revised downwards.

And RT in its Boom Bust programme, stated, 95% of American economists feel that the Fed is due to raise interest rates, yet Peter Schiff disagrees, and has steadfastly stated that the Fed will not raise rates this year, suggesting that the economy is far from rosy. The labour rates released are backwards looking, i.e. at events as they have been, whilst there have been some recent improvements in the jobs numbers, these are temporary jobs, in many cases, and/or part-time service sector, providing little scope for increased consumer spending. Britain too is following the American lead, though, figures have been better, the demographics have been distorted in recent years by mass immigration of people from Europe, who for the most part are in the prime consuming years of their lives.(25-47 age range).

The Financial Times today (31/12/15) announced that the end of Banker Bashing is here as the FCA suspended Banker reviews…

But, if after reading the above quotations by some of America’s foremost and most far-reaching thinkers, you still feel that Banker Bashing should end, then I despair for your critical thinking capabilities.

Until we as a society, take back control of our money, those who control the nation’s Banks, will control the Nation’s Politicians, and control the Nation’s economy. And investments where they will create most value to the people will be lost.

Just 5 months after President John Fitzgerald Kennedy issued executive order 11110, allowing the Treasury to issue silver certificates, diminishing the ability of the Bankers to control money, he was shot and killed in Dallas Texas… Where the two things connected? I’ll let you decide, but it is common knowledge, he despised the powers behind the throne, and believed that secrecy in public policy matters was in his word – “repugnant”.

If you think that is the correct state of affairs, then you must also believe that Josef Stalin, Vladimir Lenin, Adolf Hitler, Benito Mussolini, General Pinochet, Pol Pot, General Franco and Chairman Mao Tse-Dong all did the right thing by their people.

And you can help yourself, by following the links above right, and help us, by liking us or posting links to spread the word – to your Facebook page, your twitter account, or similar…

W.