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A Fed Apology (Wed 13th Nov 2013)

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The aftermath from the Typhoon Haiyan disaster in the Philippines is now being more widely reported, and the scale of the disaster is now being revealed. Scenes of sheer devastation greet the eye. Our sympathies extend to those poor benighted people..

That out of the way, we turn to money matters once more and while dipping into Bloomberg earlier today, I heard something, I never thought I’d hear – An apology… Not from  our own financial or political masters, but from a former Fed Official

Andrew Huszar, a Federal Reserve Official for nine years, wrote an Op-Ed piece in the Wall Street Journal this morning and in it wrote:

“I’m sorry America… As a former Federal Reserve Official, I was responsible for executing the centre-piece program of the Fed’s first plunge into the bond-buying experiment, known as Quantitative Easing.”

An apology? What for?  His interviewer Erik Schatzker asked him the same question,  His answer, surprisingly, didn’t surprise. He said: “We knew after QE1, that it wasn’t working.” He went on to add that they knew that their efforts really just bailed out the Banks, but his final admission is what shocked me, when he said that the economy was in a similar if not worse state than it was in 2007.

Erik’s co-presenter – Stephanie Ruhle jumped on that suggesting that the growth was better, etc etc, and he acknowleged it was, but that suggests all is not well…

Well there’s a surprise… Peter Schiff, who runs The Schiff Report, also thinks the Fed’s actions were bizarre, and that the damage will come back to bite us all in the derriere.

Of course the Chinese are using some of the Fed’s largesse to buy up as much gold and silver as they can. According to several reports, their imports through Hong Kong have steadily risen from about 36 metric tonnes in 2001, to 86 tonnes in 2008, 114 tonnes in 2010, 375 tonnes in 2011, 625 tonnes, in 2012, and to-date in 2013, over 1,000 tonnes.

Along side this, their output from their own mines has steadily grown whereby they are now the biggest Gold producer in the world with over 300 million ounces mined in the last year for which results are known. But also reports have come through that they’ve been scouring Africa and buying up output from artisanal miners at the spot price, and at the rate of circa 40 tonnes per month.

If this is true, then they are already the second largest holders of Gold in the world after the U.S’s 8,700 tonnes – If they still have it?

Reports surfaced in 1974, that the Gold in the Federal Reserve vaults had gone…

The magazine article in the “The National Tattler Magazine”,  of the U.S., claimed – “All the Gold in Fort Knox is gone”

This hit the news stands on June 30, 1974. On July 3, Louise Auchincloss Boyer, who was attributed as the source of the story, and who was an executive secretary to Senator Nelson Aldrich Rockefeller, had fallen from her tenth storey apartment window at 530, East 86th Street in New York.

What perhaps adds to the mystery behind this story is that her death was reported as – “Probable Suicide” and reported in the New York Times the following day.

Recent reports, that Germany wants its gold back and has been told it will take up to 6 or 7 years further adds to this mystery.

I wonder if we will ever get to the truth, or an apology for that little mystery?

Until next time…

 

W.

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The State and the Dollar (Wednesday 6th November)

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So, who’d have thought it? Our very own Guy (Guido) Fawkes being raised as the flag-bearer against oppressive and unjust governments.  In the U.S., people have been wearing the Guy Fawkes mask and adopted it for their Occupy Wall Street protests, against what they see as an oppressive Executive, Congress and Senate that exists merely to serve the interests of the Corporate State – BIG Business and Big Banks…

It is perhaps too easy for Governments, eager to please their political pay-masters, to believe that serving business, serves wider society’s interests too…

It seems so nice and simple.

The President can have a nice cosy fireside chat with the CEO of one large company or other, and reach a conclusion and both part feeling like they’ve resolved or headed off some crisis or other.

Rather than consult more widely, making laws or giving access to one or other CEO, can help one company at the demise or sufferance of thousands of others who, because they don’t command major public presence on National Newspapers or in National Media Corporations, don’t have their particular problems addressed.

When one company has a large dominant position in the economy, political figures can occasionally appear to bend over backwards trying to protect that business, because headlines that shout “1,000 employees to be laid off” as happened here in the UK by BAe, can drive many people, ignorant of the bigger picture that is being hidden behind the financial news, to seek simplistic solutions.

Charles Mackay’s Book, “The Madness of Crowds” should be required reading for all – especially politicians.

And Banks and Senior Bank Executives and those who ultimately decide the fate of Governments through their control of the Money supply with their claim on your taxes via the national debt is just one more example of this, as people scream: “The government must do something to help”, when quite often the actual long term solution is to do precisely the opposite.

In Britain we the people owe over £1 TRILLION and Central Bank Governor Carney, seems only too keen to add to this.

To use that American Phrase – Economics 101 (meaning the first course of an economics degree at level 1, year 1) teaches us that our income equals our expenditure over our lifetime,  I = E.

The only way we can spend more than we earn is by borrowing, and that borrowed money takes spending power away from the person or institution from whom the money is borrowed. If we borrow at the national debt level, we borrow not from rich people who have the money sitting idle, but we borrow from our children.

And in so doing we impoverish THEM.

THEY will have to work, and pay taxes to pay the Principal plus the Interest (P+I) the principal being the sum borrowed, for those not familiar with the term. The plutocracy (those with immense wealth who influence the political systems from behind the curtains) merely watch their immense wealth grow, as THEY OWN THE BANKS.

The Federal Reserve – set up in 1913, was deliberately so named to avoid the name “Central Bank” and is owned by these plutocrats. Those who were involved were the immensely wealthy Banking families of early 20th Century America, – JP Morgan, the Seif family of Israel, the Warburgs of Switzerland, the Baker, Rockefeller and Rothschild Banking families of Europe.

These powerful interests were whisked off in a private rail-car in the dead of night on November 22nd 1910 and then onto a motor launch to a small Island – Jekyll Island, off-shore Virginia where they could plot their Banking futures – sorry – they could devise a system, and drive the legislation to create the most powerful organisation on the Planet – The Federal Reserve.

At the head of this cabal of Bankers was a politician, Senator Nelson Aldrich who had been tasked with setting up a system to manage the currency of the U.S. by being appointed head of the National Monetary Commission.

A system that had already been decided upon in its founding constitution was to have ONLY GOLD AND SILVER as money, and Certificate’s of Deposit (CODs) and Gold and Silver Certificates as its currency.

BUT, Gold and Silver don’t grow on trees, and these metals merely hinder wealth creation when you don’t control the supply of them – as the Bankers don’t.

So, the goal of the Federal Reserve was to rid the world of monetary metals.

WHY?

Its true goal was best summed up by George Howard Earle, Jr. of the Real Estate Trust Company.

In 1908 he wrote:

A Central Bank as a Menace to Liberty

The solution of the problem of a central bank, with power to control the currency of the United States, to be at all adequate, must depend upon and be controlled by ultimate political principles.
The same principle that underlies the never-ending conflict between the advocates of a strong centralized government and what are called “states rights,” governs this question.
Taught in the school of experience and adversity, the early English and American patriots learned the salutary lesson that the development of peoples, as well as their happiness, depended more upon liberty – that is, the power to control and govern themselves, rather than to be controlled or governed by anybody else – than upon any other single thing; and they, therefore, in drafting our Constitution, always viewed government as an evil made necessary by the weakness and defects of human nature, and never extended it beyond that necessity.
Under the plan of freedom, of self-reliance, self-dependence, self-government, we have become the greatest, the happiest, the most powerful people of the world.

So without freedom, without liberty,  there is no happiness. (I will return to this in a future post)

But by giving one segment of the population a clear preference, a clear assistance or help, you inevitably steal a little from someone else.

By giving the NSA the power to snoop, into people’s lives, you force people who wish, for whatever reason, to remain private, to use less efficient methods of communication or to be devious in other ways.

And that can only end one way, with the slow strangulation of the economy.

Ultimately, this will end in the demise of the currency as it is currently operated. people will always strive for freedom and liberty.

China has been steadily accumulating Gold and Silver since the mid 1970s, and they have been producing Gold in increasingly larger quantities for themselves. In 2012, they mined over 300 million ounces of Gold, and imported over 1,000 metric tonnes of the yellow metal in preparation for the currency being internationalised. When that happens, the dollar will be replaced as an international reserve, and the price of all commodities will rise significantly.

People adapt to laws, and people use their ingenuity to sidestep legislation they deem unworkable, unjust or just plain not in their interests. The changes take effect over time as people adapt their behaviours, and it is changes like these that slowly affect the economy then the elastic snaps causing the unemployment we see today. A free currency system that allows people to use the monetary metals as they were intended, will raise all ships. But that will take the people by surprise as politicians and the media hide the realities from the people.

As Mao Tse Tung once cleverly stated – “A journey of a thousand miles, begins with a single step”

The battle between east and west may be bloody, and at its heart will be the value of money. A fiat currency like the dollar? Or one backed by precious metals, as used for upto 5,700years?

Until next time.

W.

PS: You can read more on this topic in my e-book “The Coming Battle”.

Monday Matters… (Weekend musings)

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So, It’s Monday again, the weekend is behind us, fun over for another 5 days of slog…

And after thinking about my week-end, I got to thinking about money, and recent posts I’d made. Thanks too to those now following events here…

As I recently mentioned IBM, I’ll kick off with that.  As I previously mentioned, IBM’s sales in China are down 40% on last year, and that begs the question.., What is happening with the other American Tech behemoths?  

If you’re a stock-market Trader, or Options, CFD’s, or Spread-Trading specialist, this might be the time to do a little digging to see if there are shorting opportunities. (I know this is contentious for some people, but it provides liquidity, and makes prices lower to buy, or sometimes just exposes risks that are not yet so widely known)

Anyway, this whole NSA scandal is making news, as a European Parliament commission headed over to the U.S. last week, for talks with legislators to get answers to questions, and raise concerns of Privacy, Security, and Industrial Espionage – after all, with so much technology in use worldwide, if one country can just skim the internet for traffic, and store that away in some digital bunker, while they sift through it, because they have the technological edge, then the rest of the world might begin to mistrust that country, and that can affect international trade, and also spark developments outside the country, which might in itself lead to the very concerns that led to WW2, in the aftermath of WW1…

We already know that many middle-eastern countries mistrust the U.S., and the Russians, and Chinese have a long standing concern over American dominance, it is not outside the bounds of possibility that if unemployment rises world-wide, through lowering of trade, this will not only affect stock-markets worldwide, but also likely increase QE*, which many already believe is anathema, and lead to digital isolationism, protectionism or worse. 

We have to remember though, that the Americans are becoming just a little paranoid – the Twin Towers attack, was the modern equivalent of the Pearl Harbour attack, and that woke the slumbering beast, with disastrous consequences for the country that did it… (I wouldn’t be surprised to learn that the reason that the Americans dropped the two bombs on Hiroshima, and Nagasaki, was because of feelings of retribution…  Anyway perhaps we shall see in the fullness of time)

Some say that the U.S. isolationism, is at the heart of their problems, because so few Americans travel overseas they lack perspective. I worked there in the Tech-boom, at Dell HQ, in Roundrock, Texas, and to be honest the people I worked with were lovely – especially a certain lady, half of European ancestry, and half Native-American – If you’re out there – I’d love to hear from you btw, but their media, was only interested in the U.S., or if the President ventured overseas. It’s a no wonder George Dubya, struggled with his geography. (amongst other things)

So back to money matters. The U.S. gained prominance on the back of its technology. The DARPA agency  (Defence Advanced Research Projects Agency) began research into the use of computer communication in 1969, which ultimately led to the internet, and to U.S. dominance of the tech-sphere, but it could be coming to an end, as India and China now have space exploration programmes, and their high-tech grads are making serious intellectual improvements – I heard recently that India has a Mars mission planned, so perhaps some research into Indian Space Technology Corporations is in order. (If you get a sniff of any, perhaps you’d let the rest of the followers here know – NO mere plugging though without supporting information)

Anyway, this post has rambled on for far longer than I imagined, so Until next time.

 

W.

 

 

* QE – Quantitative Easing if you’re not already aware – A euphemism for printing more money to dilute the buying power of all existing currency by debasing the currency and thus raising the cost of goods through price inflation. Incidentally, for non-historians – Germany, Zimbabwe, Yugoslavia, Austria, and Argentina, have all tried that to detrimental effect with Hyper-inflation.

(Read my book mentioned below if you want a fuller explanation – mentioned in one of the later chapters)