Bit-coin

WHY has the Gold price NOT Risen exponentially – YET?

Posted on Updated on

BoE

Central Bank Manipulations?

The reason Gold has not exploded yet, is because Gold as a physical asset, is undervalued in the West (in general), and highly valued in the East for historical reasons. (Partly as a result of Western Central Banks, having too much power, and thus ensuring regulation gets passed to limit Gold’s usefulness as a store of wealth and partly, because the Chinese had their education in paper currency back in the 11th Century, and others in the Far-East had their education more recently, with the currency crises of the late 1990s.)

As Gold heads east, it is in the interests of those who wish to accumulate it, to play devil’s advocate and allow the manipulations to continue. As I stated in my last post, both Russia and China, are unimpressed that when they sell goods on International Markets, they receive a depreciating currency, that can be conjured up out of thin-air [or to be more accurate – digits on a computer] by its manipulators…

When the Tide goes out (to borrow a phrase used by Warren Buffet) i.e. When Gold becomes part of the process for settling International Trade again, then we will see who is wearing no shorts – (i.e. a fast-reversal back to Bretton-Woods) i.e. which countries, are spending more than they earn – Internationally speaking – and who is managing their economy well, by exchanging physical goods, for physical goods (in the form of physical Gold, or a gold backed currency which can be exchanged for Gold)

China’s approach is therefore like an aeroplane coming into land, and on the approach path to forcing the world’s trading nations to stop using currency inflation to buy up scarce natural resources, and Gold will at that time achieve its real value.

That time will happen when the first country breaks ranks, and demands Gold for its goods, and has enough Gold to withstand a draw of its currency for International Trade, and the only country that comes even close to that is China (and perhaps Russia) and therefore when China finally – officially – releases its Gold holdings – which Pravda in a recent article suggested was 30,000 tonnes, (because they have re-smelted their Gold, and re-cast it into 1Kg bars) then the value of Gold will achieve the exponential rise we have all been expecting.

By end 2015, China, has to float its currency, (WTO regulations) so perhaps is hedging its bets, by holding huge Gold reserves to act as a floor under the value of their currency. Reference – http://english.pravda.ru/news/business/21-05-2015/130683-china-0/

That to me makes perfect sense. It will also mean those countries of Africa, South America and other developing nations, who sell raw materials, will experience rapid rises in living standards, and many will end up paying their political masters huge sums, unless the corruption that has been endemic in some of those countries, suddenly vanishes. (Just as happened during the 1970s which may in itself cause other problems as it did, during the decade and the one following.)

Of course, the poor westerner, will experience rapid price inflation for all their most important needs. And those countries who use the American Dollar as their currency system, would be well advised to consider a replacement.

Food, and raw materials, such as oil, gas, copper, tin, lead, zinc, and precious metals, too will all be more highly valued.

Those with good stores of these commodities, will flourish, those who depend on government largesse for their income, will not fare so well.

And paying for things internationally, will require some form of internationally accepted money – one I have been reading quite a bit about in recent weeks is BitGold.

This manages to marry the best of both crypto-currencies, and precious metals.

To widen your reading and viewing material, you might like to visit these channels on You-tube, and search terms and web-sites.

Recommended YouTube Channels:
SGTReport,
TheDailyCoin,
SilverDoctors,
ChrisMartensondotcom,
USAWatchDog,
X22Report,
AMTV,
TruthNeverTold,
SchiffReport,
BrotherJohnF,
Ron Gibson – WhatReallyHappened 2015 (Mike Rivero),
Gregory Mannarino,
FinanceandLiberty,
HyperReport,
Mike Maloney – GoldSilver.com – WealthCycles,
GoldSeek,
RT BoomBust,
RT KeiserReport,
NextNewsNetwork,
Cambridge House,
TrendsJournal.

YouTube Search Key Words:
Dollar Collapse,
Dr. Paul Craig Roberts,
Alasdair Macleod,
James Turk,
Chris Powell,
Jim Murphy (GATA),
G. Edward Griffin,
Peter Schiff,
Marc Faber,
Jim Grant,
Jim Rogers,
Rob Kirby,
Jim Sinclair,
David Morgan,
John Williams, (or Shadowstats.com)
Catherine Austin Fitts,
Bill Holter,
Ellen Brown,
Nomi Prins,
Andrew Hoffman,
Ron Paul,
Axel Merk,
John Rubino,
Mike Maloney,
Jim Willie,
HiddenSecretsOfMoney.

HIGHLY RECOMMEND:
ZEROHEDGE.COM

W.

Advertisements

Revenge on the Bankers (Part II)

Posted on Updated on

My day began on Friday with news that England & Scotland had renewed their Marriage vows, though not before David Cameron had blubbered like an errant husband, saying – “LOOK! I can change”, just so we wouldn’t have to have this discussion again, anytime soon.

And then later the post came, and the Book, safely packaged arriving in a bubble-wrap envelope. Great, I had been beginning to worry that it hadn’t been sent, or that somehow the post office had lost my address. But I needn’t have been concerned.

It’s the new Bill Bonner book “Hormegeddon”, and I hastily tore open the package, read the accompanying letter, and then settled down with a quickly made cuppa to digest Bill Bonner’s wit, erudition, and learning from over 40years as a trained economist. The pearls of wisdom if you like.

A synopsis of the opening chapter is not about to follow, but the basis of the book is that a little of something can be beneficial, but when you get a whole lot of it, it eventually ends badly. Like receiving a glass of water, or a whole ocean full… And Bill has applied this insight to social systems, politicians, and economics in his own inimitable style.

Some time ago now, I wrote about taking revenge on the Banksters, who having used fractional reserve banking, have increased their control of the economy, and the productive assets of a nation, by allowing them to create currency out of thin air, to give to those on the inside, which allows the Central Bankers and the owners of those printing presses, to buy assets at knock-down prices, in an economic bust, which they themselves have engineered.

By not having currency tied to any particular asset class, making the currency of every major economy, purely paper based and thus essentially valueless, they have got to the point where one suspects, the analogy in Hormegeddon is about to befall us.

If the value of money was tied to any commodity, and that commodity went up in price, the population as a whole would know instantly, that price inflation was taking place.

Of course, when you have a tie to any commodity it has to be agreed which commodity.

At various times throughout history, different commodities have been used.

In early history, people stored whatever they had an excess of. The arable farmer stored grain, that was in excess of his needs, and he traded some with the farmer who had Dairy cows, and other livestock.

The hunter stored furs, and traded some for grain when he found a farmer with excess grain.

Of course the problem for many of these commodities was that they were perishable, and so deteriorated in damp or poor conditions.

People realised that a more permanent medium was needed, so that excesses built up in the good years could be traded for things in the lean years.

This was the start of money. Money is really just savings converted into a form that is more useful.

No savings? No money. No problem.

Of course when some people learned about metals, and began making tools like swords, tips for arrows, belt buckles, stirrups for the better control of horses, and adornments. People began to realise the value of these metals as a store of wealth. And the most precious of those metals were silver and Gold.

These two metals were found in many places in tiny amounts, but also didn’t deteriorate. Gold mined in the 5th Century BC, will still resemble Gold mined last year. And Silver whilst it may have lost some of its shine, will still weigh almost exactly what it did a hundred, or thousand years ago.

Gold, of course, retains its lustre long after it is mined and refined, and even mixed with silver, copper and other metals still retains its size shape, weight and colour. This together with its shine, made it desirable, and thus when in the 6th Century BC, as populations were growing in what is now modern day Turkey, people used this strange metal – called “Electrum” – a mixture of these, in the earliest coins.

By the early middle ages, merchants who travelled in their business were prone to being accosted and their money robbed, which made the carrying of these precious metals dangerous. The Goldsmith realised that if he stored the merchant’s gold and gave the merchant a gold receipt, the merchant could transfer that gold to another by merely signing over some of that wealth, and thus the check was born, and the Gold receipt could be used to pay for things. Thus the Bank note was born.

Later the Goldsmiths began lending money and charging interest, and thus Banks were born. As the economy grew, so did the power of the Goldsmiths, now called Bankers, and as more and more people kept their wealth in the vaults of the Bank, the Bankers realised they could lend out more than they had in storage, and thus fractional reserve banking was born.

As the economy boomed during the 16th to 20th centuries as first the Spanish, the Portuguese, then later the Dutch, French and British began their pursuit of global empires, Banks provided capital for these explorers, and got their pound of flesh, whether the trip was a success or not, though the borrower frequently had to pledge their home, or other chattels.

Over the 250 years since Nathan Mayer Rothschild, sent his five sons to London, Paris, Frankfurt, Naples and Vienna to found the Rothschild empire, things have only gotten bigger.

These sons founded a Rothschild Bank in each of these cities, a truly international Banking system, that allowed the Rothschilds to benefit from local contacts, and to play each country off against the others, when they came to blows, as they had a tendency to do in old Europe.

President Lincoln, was a man who refused to do business with these Rothschilds, who demanded large interest rates to fund the civil war, and for his sins was shot when he began printing the nation’s currency.

Slowly over several generations, these Banker’s wealth and power over the economy grew, especially when they got together and formed Central Banks and colluded with other Central Banks – the largest of these – the ECB, PBoC, BoJ, Fed, and the Central Bank of Central Banks – the BIS (Bank of International Settlements) based as it is in Basel, Switzerland, home of the notoriously secretive Banking fraternity.

Since 1913, the Fed in particular, has exerted greater control over the world, as the printing presses of the United States were used to fund wars, and the military industrial complex. And the savings of the Chinese, Russians, Indians, Brazilians and other developing nations were used to prop up the dollar further extending this power.

Is this all coming to an End?

A slow start to controlling these Bankers in America was taken a few days ago, on 17th September, as a Bill was passed in the U.S. House of Representatives.

Congressman Paul Broun – U.S. Republican, promoted the Bill H.R. 24, the Federal Reserve Transparency Act (Audit the Fed), which passed in the U.S. House of Representatives with strong bipartisan support. H.R. 24 has over 220 co-sponsors and passed overwhelmingly by a 333-92 margin. Broun, released the following statement after the Bill passed…

“Today’s passage of the Audit the Fed bill brings us one step closer towards bringing much-needed transparency to our nation’s monetary policy. For the past 100 years, the Federal Reserve, a quasi-government agency, has acted under a veil of secrecy – controlling our monetary policy and thus, our economy…

While in recent years, the Fed has been granted a greater role in overseeing the regulation of our financial system, current law specifically prohibits audits of the Federal Reserve’s deliberations, decisions, or actions on monetary policy. This lack of accountability and transparency has led to grievous consequences – and it must end.”

In reality, the Fed is a private organisation with its only shareholders, the 6 or so Banking Families who sneaked out of New York in November 1910 to an (at the time) unknown location to create the organisation, that would strangle the U.S. economy several times over the next 100+ years.

Along the way, the Fed has relieved lots of people of their gold, and is alleged to be responsible for the deaths of various Presidents, and others who threatened their little racket.

We have all heard of the depression that occurred commencing in 1929. In order for the U.S. President to commit to the works that would help get the economy working again, he had to spend money he didn’t have, and the only people who could print or produce the money in America at the time was the FED.

However, the credit of the U.S. was not quite as good as it has been over the last 40+ years, and so the Fed forced the President to confiscate the gold and silver of the nation at a fixed price ($25.00/troy oz) and then re-value it when they had almost 7,000 tons to $35.00 an ounce, which with the other 13,000 tons of Gold they took from overrun Europeans, stood the test of time, until 1971, when Nixon ended the Bretton Woods agreement unilaterally.

So, to get to the meat of this piece, one day soon, this power of the Bankers will come to an end – probably VERY badly.

WHY? How? The Internet!

The Internet has changed dozens of industries in the 40years since DARPA (Defence Advanced Research Projects Agency) funded the first basic research into computer communications.

Amazon, Google, Apple, Microsoft, HP, Dell, E-bay, Netflix, MySpace, Facebook, Alibaba et-al. The Internet and these Tech giants have revolutionised whole industries, and the business models that worked before the Internet, have had to be revised, now that potential customers, can meet with potential suppliers electronically. This process is given the grand title of “disintermediation” and it is worrying the Bankers.

Crowd-funding is replacing the traditional role of Banks providing start-up capital; Electronic Stock-brokers are allowing people to trade the markets from home, or wherever their smart-phone happens to be; Digital Money and electronic payments systems initially made Bankers’ life simple, they didn’t even need the printing presses so much, but now with Crypto-currencies, people can trade value without even using their banks – all through the power of the Internet.

The most widely known of these new fangled currencies is Bitcoin, but there are around 80 of these currencies, and their value and power are growing with every passing day. And you can receive FREE Crypto-currencies daily, including Bitcoin from Qoinpro.

Bitcoin is currently valued at over $400, and its two smaller siblings – Litecoin and Feathercoin (which you also receive from Qoinpro) are like Silver and Copper to Bitcoin’s Gold or Britain’s Pounds, shillings and Pence.

Gold and Silver too are not being forgotten in this new world, as organisations are now trading Bitcoins for Silver and Gold making the banking industry all but superfluous in its historical sense. Only the Bullion Vault holders, are doing well, and who are increasingly based in the Far-East as several new vaults have opened there, and just 18months after their opening, they’re almost full to capacity.

As both of these precious metals fall to interim lows, those on the inside of the precious metals markets, are saying that now, as the economy is supposedly on the mend, is exactly the right time to be accumulating.

Many miners too are haemorrhaging as the metal price falls due to paper derivatives being used to manipulate the metal price, but many can’t continue to operate at these levels.

Only the industrial metals miners are keeping supplies coming. Because their precious metals are a by-product of their operation, the price is almost irrelevant to them, as whatever they get is in addition to their industrial mineral operations, but most of the majors who produce the bulk of the metals will either have to cease trading, or close down operations or both.

This is ultimately leading to a supply crunch – particularly in silver.

Silver is both a precious metal and an industrial metal, and demand is soaring.

Every Chinese, Korean and Japanese made i-Phone, Samsung Galaxy, Notepad, Tablet, PC, Nokia, LG, Sony, Toshiba, Canon camera, Nikon, Lumix, Panasonic, MAZDA, Toyota, or British made Ford, Jaguar, Land Rover, or German made BMW, Mini, Mercedes, Audi, or VW… In fact almost every vehicle in the world which is increasingly carrying increasing amounts of electrical and electronic equipment uses silver.

Imagine – China produces 9 million vehicles per year, Britain at its peak produces almost 2million vehicles, and then there’s America, Brazil, France, Italy, Australia, and India as well as all the other smaller nations who build vehicles including Russia and the former Soviet States.

Silver is used in them all. And with digital payments using crypto, how long can the Banks hold out before the system implodes again?

One way to get these Crypto currencies is Qoinpro, who are giving them away free, and will become a coin exchange in the fullness of time charging a small transaction fee as people use their crypto-currencies.

And as for precious metals. China holds just 1% of its $4trillion worth of reserves in Gold. Many believe they will need to have upto 40% of their reserves in Gold. At just 10% that equals $400,000,000,000 worth of Gold at current prices ($1250.00/oz) which would be the equivalent of 320 million troy ounces, or 9,953.11 metric tonnes.

As a result, I believe China will not stop buying Gold until it has around 10,000 metric tonnes.

In 2009, when they last announced their Gold holdings in April, they had just over 1,000 metric tonnes.

Given that they have been buying in increasing amounts and in 2013, that was circa 2,000 metric tonnes, the price longer term is likely to go a lot higher, once their ambitions become more widely known.

And silver which historically has been 1/16th the price of Gold, will likely return to its historical norm.

But perhaps even more, as silver comes out of the ground at just 9:1 it is not outside the bounds of possibility that silver will reach this dizzy height.

Money, Gold and Bitcoin… What’s a Government to do? (Mon, 18th Nov, 2013)

Posted on

As the Philippines begins receiving Aid, from around the world, yet another disaster occurs, this time on the other side of the planet, in the U.S., as a Tornado hits Tornado Alley – unusual for mid November (apparently). A number of deaths have been reported. Once again we watch from the sidelines, and furrow our collective brows, seemingly unable to do anything except show our sorrow, and pass on our good wishes to those involved, and our condolences to those who have lost loved ones.

Is it just better communications, and thus we’re hearing about these things more frequently, or are there simply more of these natural disasters? We can only speculate at this time.

The implications for money though should be obvious. Someone has to pay for the reconstruction and the damage.

In the absence of Insurance, those buildings will probably never be replaced, The land holders will maybe invest money, that either had been sitting on the sidelines waiting for investment opportunities, or was already scheduled for investment elsewhere, meaning that either the opportunity doesn’t get the investment dollars, or someone somewhere “prints” the necessary money, increasing the supply of dollars, and probably Philippine Pesos.

Back when I first started commenting about the Precious Metals marketplace, it was a little African Gold miner with a foothold in Zimbabwe and an influx of capital, as 5 Directors put up £100,000 each to re-start operations on a grander scale that first caught my eye.

Anyway, back then (late 2003) I did my analysis, and lept to the conclusion that Gold would ultimately reach circa $8,500/oz, and that after an initial burst to circa $2,000, it would drop back by half (circa $1,000.).
 
WHY? What prescience did I have?

I simply looked at the chart of the 70’s and multiplied by ten.

From the mid 1960’s, it was obvious that Gold was coming under pressure, from Britain, France and Italy who all remonstrated with the Fed (who were funding the Vietnam war effort at the time) for their profligacy and money printing.

The Gold price had gone from $25.00 in 1932, to $35.00/oz after the Federal Reserve got their hands on all the Gold, and there the price stayed until August 15th 1971.

However, maybe Gold was slightly overvalued back during the early 60’s and really the price should have been closer to $25.00…

Anyway, if you recall, the 2001/2 bottom in Gold was $254.00 and that was a near enough ten-fold price improvement on the theoretical 60’s price. Wages had gone up similar levels – I’m old enough to remember wages from that era, as I was already working back then, and remember the slogan £20.00 for all in 1971-72 here in the UK. and circa £30, was a grown working man’s wage.

The Silver price per ounce bought roughly one barrel of oil, and ten years later as it peaked at close to $50, it still did.

Of course since then Central Banks have been divesting themselves of silver – an even more barbarous relic than gold? And If I recall accurately, oil fell to $18/bbl during 2000/1 – I certainly remember paying between 99 cents/gallon and $1.06, in Austin Texas back in late 97 anyway, when I worked at Dell Headquarters in Roundrock, just 8 miles from the  city centre…

So, where does this lead me? To the inevitable…

Gold will certainly rise, but to where? It is unlikely that a steady rise in the price is likely, because that would mean moth-balled mines would begin re-opening, and an increase in supply, which would counteract price rises.

At $2,000 almost all current Gold mines would be profitable, so the price has to (MUST) remain in the doldrums to choke off supply, It is imperative then that those who control the world’s money supply, target the alternative currency – just as we learn again the U.S. legislators are seeking to interfere in the market for Bitcoins, as the price has risen again to a new high as it peaked at just over $600, before dropping back in recent days.

 
Gold MIners therefore have to sit on the sidelines perhaps, or maintain mines either in loss making situations, and depending on cost structures reduce output, or run at marginal profits. Not possible for all except those with huge reserves of cash, and reserves of metals too, with low fixed costs, hoping and waiting for an upturn.

I don’t know enough about the miners to know which of the dozens fall into that category, but Turquoise HIll (TRQ:TVX) is perhaps one, unless the Mongolian Government gets greedy again. (They used to be known as Ivanhoe Mines Ltd – until Rio-Tinto (RIO:L) increased its shareholding to 51% and re-named the Company)

BUT if my tenfold theory holds, then $8,500 would seem a likely zenith, as a move into five figure territory would be too horrific to contemplate for the Banksters, who would defend it to the last and throw everything they had at the price. One only has to look at the 3-Day Kitco Gold and Silver Price charts (http://www.kitco.com/images/live/gold.gif)(http://www.kitco.com/images/live/silver.gif), to see that outside the New York time period, the price oscillates as a result of High Frequency Trading to maintain price stability. We can only speculate as to WHY?

BUT a rise to the suggested figure is likely, and above is not outside the bounds of possibility given the reckless money printing in the last 5 years….

Incidentally, Peter Schiff, who is a major commentator on Gold, and the Fed’s mess, as he might call it, was on the Max Keiser show on RT late last week, and very interesting he was too. Though TBH, I think his timing is out by a couple of years, as the economy stutters along for a little while with QE-infinity still in evidence.

He feels that they won’t taper next year, because as soon as they announce they might, the markets will tumble, and bond prices will fall, raising yields (and thus interest rates) choking off any hint of growth, which is very likely.

 
But, if my timescale holds, then circa 2018 – 2019 is when Gold and Silver prices will rocket. Why?
 
Demographics. The Baby-Boomers were born over a 15 year period from 1947, to 1962. and peaked circa 1957/58, ten years after the soldiers and sailors got back from their war postings overseas.  All that pent up sexual energy went into making babies, and the first of those early retiring babies began leaving the workforce in circa 2005. The first 65 year old baby-boomers reached retirement age in April 2012, so the money supply growth should be trying to counteract this major force of economics until 2022, but of course, those with savings will be worried about inflation, and whenever that begins to take off – Gold and Silver miners will receive a large chunk of it.  
 
If the money supply doesn’t shrink sometime soon, then it will have to grow to match prices or risk deflating the already shrinking economy, further hurting growth, which means even more dollars chasing precious metals, artwork, diamonds, and all other kinds of physical resources to preserve wealth. 
 
The next ten years will I suspect be pretty much a re-run of the same era a century ago. The first world war began as a Serb assassinated the Austrian Archduke and his wife, who at the time controlled parts of what is now Serbia.  
 
Will this era signal the end of the American Empire? And the emergence of a new one – further east?
 
We shall see…