Tag Archives: gold

JAPAN INC. GOES NEGATIVE

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Remember Japan, once the envy of the capitalistic world, today a bag of bones shrinking faster than the Fukushima reactor. Image result for fukushima daiichiWhat happened to their state controlled, keiretsu cabals is the question; the economists don’t have an answer, but it is plain as the light of day; they hobbled, like a cripple from the dragon.

After the implosion of their stock market twenty plus years ago the government stepped in large to alleviate the pain, dropping interest rates in a vain attempt to spur the economy; sounds like our dim-wits here took the same approach. However, things are so bad in Japan right now, the people are afraid to spend their money.

This has caused the government to step into the fray once again. This time they have gone over board with the Mother of all policies. The Bank of Japan (BOJ) is charging banks who make deposits in the BOJ, interest. In other words banks that don’t loan out money will be penalized by paying the BOJ a fee (interest) for keeping or depositing their surplus funds in the bank. This is a way of telling the banks to loan out money to anyone who needs it, good credit or no credit.

Does anyone imagine what a policy like that would cause in the United States. Say you had a $100,000 in your bank account and the government forced the bank holding your funds to charge you, say 5% a year, for keeping the money in the bank. We know what will happen then, the deposit will be withdrawn and the depositor would convert the paper into GOLD.

You say it can’t happen here! Wait, we are living in a funny, fluid and ….ed up world. Thank you economist, thank you Obama, thank you Bernake, thank you Yellin. Thank you dumb politicians who have stolen the wealth of the middle class. You are personas non-gratae. THE REVOLUTION IS AT HAND.

GOVERNMENTS AFRAID OF GOLD? YOU BETCHA!

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Since 1971 when Nixon closed the gold window, governments have been free to print fiat money and spend at will. Why not, no one will stop them. Secondly this keeps the politicians in power. Without handouts to one constituency or another no one would vote for an incumbent.  What is confusing to us is why do governments bring up the gold subject so often? This does not make sense. This action is similar to digging up an old body looking at for a moment or two then covering it over until next time.

The main reason governments bring up the dead is because they fear them and so it is with gold. Suppose gold never existed, what would prevent governments for printing as much wallpaper as their pretty heart desires? Nada! Like a governor on a car, the shadow of gold keeps the thief within certain parameters.  Gold is the invisible hand restraining governments from going off the deep end as did Weimar in the 1920’s.   Picture of a 5 trillion dollar note.

When government loses their credibility, a REVOLUTION is ready to fill the gap.

The old saying went like this, “when the United States sneezes, the world catches a cold.” The world is now topsy turvy, today the world looks at China not the United States for the sign of a sneeze. What appears to be the onset of more than a whiff of a sneeze in China has caught the attention of the developed and undeveloped world. First sign of problems were the ghost cities, then the unrestrained growth forecasts then went thud, then came the everyday speculators who went whole hog buying stocks in a frenzy. Then came the recent missed economic forecasts which sent up a red flag. Then out of nowhere the China crash, stocks imploded in a flash. Instead of letting the free market take care of the problem, the government decided to be the purchaser of last resort. But they were not through, China saw signs of influenza in the distance and they reacted by debasing their currency 2%. This was their Nixon moment. This has caused turmoil in the Asia currency markets. Others soon followed not wanting to miss the sampan. 

Back to gold for a moment. With the world economy in the tank, oil sliding to new lows, commodities rusting in warehouses, inflation negative in many countries; in fact some banks charge their customers for making a deposit – give them $100 and they will give you $99 a year later. Wow, that is a new twist.  With all of that being said isn’t it logical to see gold at $20 or $35 like it was in 1933? But there must be something buried out yonder, it is the call of the wild that implores the initiated to take hold, something is up while the world economies are going down.

Something certainly is up. Currencies being debased in a frenzy. China, last week spent $500 billion. With reserves now at $3.5 billion, if this continues in another seven weeks they will be out of cash. And our old friend the Chavismo state of Venezuela, we heard that they are on the verge of economic collapse, riots breaking out in city after city. The calls for Brazilian President Rousseff to quit are becoming louder by the day. And all sorts of stuff, like bombs exploding in country after country; makes one wonder what is will happen next. Wack a mole world keeps us on edge, particularly with many governments in the hands of liars, ours included.  Stay tuned for more elephants dropping by. No wonder gold is still in the $1100 range.

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WHY LISTEN TO THE GOVERNMENT WHEN THEY STEAL FROM THE PEOPLE

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Governments past and present are nothing more than magicians; they are adept at the three card monte where the taxpayer’s money disappears quicker than a vehicle vacuumed up by a Florida sinkhole. The best way to phrase the politician is a fugitive 180 degrees different from when they first became elected. In the majority of cases the political class summons the news media to put on a spectacle for the very few parasites who continue to mooch off the systems. The public in essence is to busy to protest such a prearranged spectacle. Always notice that the politician do gooder is always surrounded by his or her comrades. This is not because they believe in the policy or action to be taken, but to give support to a weaker member of the cabal.

The scheme of confiscation was initiated by FDR in 1933 when by executive order 6102 the gold window was abruptly shut. All citizens were required under edict to exchange their gold for paper. Think about this happening today. There would be lead flying in the streets. The main rationale behind the order was actually to remove the constraint on the Federal Reserve which prevented it from increasing the money supply during the depression; the Federal Reserve Act (1913) required 40% gold backing of Federal Reserve Notes issued. By the late 1920s, the Federal Reserve had almost hit the limit of allowable credit (in the form of Federal Reserve demand notes) that could be backed by the gold in its possession (see Great Depression). If gold can’t be legally owned, then it can’t be legally redeemed. If it can’t be legally redeemed, then it can’t constrain the central bank.

Numerous individuals and companies were prosecuted related to President Roosevelt’s Executive Order 6102. The prosecutions took place under subsequent Executive Orders 6111,[8] 6260,[9] 6261[10] and the Gold Reserve Act of 1934.

There was a need to strengthen Executive Order 6102, as the one prosecution under the order was ruled invalid by federal judge John M. Woolsey, on the grounds that the order was signed by the President, not the Secretary of the Treasury as required.[11]

The circumstances of the case were that a New York attorney, Frederick Barber Campbell, had on deposit at Chase National over 5,000 troy ounces (160 kg) of gold. When Campbell attempted to withdraw the gold Chase refused and Campbell sued Chase. A federal prosecutor then indicted Campbell on the following day (September 27, 1933) for failing to surrender his gold.[12] Ultimately, the prosecution of Campbell failed, but the authority of the federal government to seize gold was upheld, and Campbell’s gold was confiscated.

The bottom line here is that the government then became the authority on what amount of money was put into circulation. They, at their will, could print any amount sufficient to keep the scheme rolling. Today we have seen the result of a the printing at all costs paradyne.

For instance, during Obama’s almost seven years in office, debt has risen by $8 trillion. Yet we have an economy in tatters; don’t believe the official dogma of 5.1 % unemployment, counting those who have given up, the unemployment rate is close to 14%. Keep in mind that during the depression not one single human being gave up looking for work. But it is a different matter today because of social programs and the what not provide a safety net. Putting that aside, those who have given up look is not because of the safety net, but because there are no jobs available.

If the government paper hangers feel that gold was the enemy in the past and paper (fiat) currency is the panacea, then why not print trillions of dollars and hand out a ten million to every citizen. By the way that has been tried in Germany during the reign of Weimar. 

The confiscating of gold produced a monopoly in all countries that did not back their currency with gold or silver. Effectively we have turned over out lives to the Federal Reserve money mongers without our permission.  Through printing the government has devalued an individuals assets over time. Soon the day of reckoning will be upon us. Very soon!

 

BANK RUN

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bankrun.png

They lined up, but the doors were closed. Citizens, honest tax paying citizens, the salt of the earth type were told that their money was not there. Scammed by bankers the vault was empty. The depression was in full force, the economy imploding, bankruptcy for many inevitable.

EXECUTIVE ORDER 6102, issued by US president Franklin Delano Roosevelt 80 years ago, on April 5th 1933, banned private gold ownership in the United States, forcing gold owners to take their bullion to a bank and exchange it for Dollars at the prevailing rate.

Think about it, the Federal Government of the United States, in broad daylight confiscated the wealth of its citizens. This enabled the government to transfer power to the Federal Reserve, they then began the printing of fiat money with abandon. Why? To perpetuate the lying and the deceit of their hidden agenda. What is that agenda: to retain their political power above all else. However, the day has come to stop the charade.

One look at the price of gold, in the mid $1100 per ounce is a tell tale sign of what is to come. Prognosticators predicted, that’s what they do, that gold would be selling for $300 today. Inflation is zero, the economy is in intensive care, (very serious- negative interest rates are in the discussion) interest rates are zero; the question is then why is gold selling where it is?

The answer, the world is in turmoil and the government, our government, every government around the world cannot be trusted. Printing money is not the answer, it is the problem. Your politicians are not there to help you, they are there to deceive you.

The day is close at hand where the United States will no longer be able to sell their fiat paper and then the window will close once again, gold will skyrocket, maybe to $20,000 or more. No one knows what will happen, but be sure to protect yourself from the criminals in Washington D.C. Insurance is what you need.

An added note, those people in Illinois who have winning lottery tickets worth more than $600 can’t cash them in, given IOU’s. Read about the story here. Think about it, that is what our $$$’s are IOU’s.

GO FOR THE GOLD

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Gold is once again on the rise. The pundits can’t nor are they willing to understand the attraction to gold;  steadfast has it been in an island global turmoil. Uncertain on what will happen have caused many to insure themselves with the metal.

What have the naysayers missed? One wonders why they even mention gold at all. And the volcanic rise of Trump, Sanders and Carson, not to mention Carly Fiorina who would have thought. The pundits failed to miss their rise too. Americans are fed up with the Boehners, McConnells, Reids, Pelosis of the world. They are plain old ready for a revolution. teapartylogoredThe boxes of tea in our logo have names on them, Democrats, The Fed, Public Unions, Big Government and entitlements. Yes, Americans are FED UP with do good politicians who only care about getting reelected.

We tell you what, America and the world is in turmoil. The socialists thugs running the paper printing scam are now worried about the next three years, we would not be surprised if some of them commit suicide. They are desperate to find a solution when none accept gold exists. They have dug their own grave and now will reap the benefit of disastrous monetary policies over the past 45 years.

GOVERNMENTS AFRAID OF GOLD? YOU BETCHA!

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Since 1971 when Nixon closed the gold window, governments have been free to print fiat money and spend at will. Why not, no one will stop them. Secondly this keeps the politicians in power. Without handouts to one constituency or another no one would vote for an incumbent.  What is confusing to us is why do governments bring up the gold subject so often? This does not make sense. This action is similar to digging up an old body looking at for a moment or two then covering it over until next time.

The main reason governments bring up the dead is because they fear them and so it is with gold. Suppose gold never existed, what would prevent governments for printing as much wallpaper as their pretty heart desires? Nada! Like a governor on a car, the shadow of gold keeps the thief within certain parameters.  Gold is the invisible hand restraining governments from going off the deep end as did Weimar in the 1920’s.   Picture of a 5 trillion dollar note.

When government loses their credibility, a REVOLUTION is ready to fill the gap.

The old saying went like this, “when the United States sneezes, the world catches a cold.” The world is now topsy turvy, today the world looks at China not the United States for the sign of a sneeze. What appears to be the onset of more than a whiff of a sneeze in China has caught the attention of the developed and undeveloped world. First sign of problems were the ghost cities, then the unrestrained growth forecasts then went thud, then came the everyday speculators who went whole hog buying stocks in a frenzy. Then came the recent missed economic forecasts which sent up a red flag. Then out of nowhere the China crash, stocks imploded in a flash. Instead of letting the free market take care of the problem, the government decided to be the purchaser of last resort. But they were not through, China saw signs of influenza in the distance and they reacted by debasing their currency 2%. This was their Nixon moment. This has caused turmoil in the Asia currency markets. Others soon followed not wanting to miss the sampan. 

Back to gold for a moment. With the world economy in the tank, oil sliding to new lows, commodities rusting in warehouses, inflation negative in many countries; in fact some banks charge their customers for making a deposit – give them $100 and they will give you $99 a year later. Wow, that is a new twist.  With all of that being said isn’t it logical to see gold at $20 or $35 like it was in 1933? But there must be something buried out yonder, it is the call of the wild that implores the initiated to take hold, something is up while the world economies are going down.

Something certainly is up. Currencies being debased in a frenzy. China, last week spent $500 billion. With reserves now at $3.5 billion, if this continues in another seven weeks they will be out of cash. And our old friend the Chavismo state of Venezuela, we heard that they are on the verge of economic collapse, riots breaking out in city after city. The calls for Brazilian President Rousseff to quit are becoming louder by the day. And all sorts of stuff, like bombs exploding in country after country; makes one wonder what is will happen next. Wack a mole world keeps us on edge, particularly with many governments in the hands of liars, ours included.  Stay tuned for more elephants dropping by. No wonder gold is still in the $1100 range.

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“NO CHARLATAN” JIM GRANT

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From Kitco news – interview of Jim Grant from the eponymous Interest Rate Observer.

‘I’m Bullish’ On Gold, Fed In A Hurry To Raise Rates – Jim Grant

Jul 23, 2015
Guest(s): James Grant

Don’t tell Jim Grant, the publisher of Grant’s Interest Rate Observer, that gold is a hedge. The author and publisher said the metal is much more dynamic; providing a trifecta of price, value and sentiment, and investors should have exposure to it. “[G]old is an investment in monetary and financial disorder – not a hedge. You look around the world and you see exchange rates are properly disorderly, when you look around the world of lending and borrowing — we are in a regime of price control by another name, so-called zero percent rates and quantitative easing by the world central banks – we are in one of the most radical periods of monetary experimentation in the annals of money,” Grant told Kitco News Thursday. Grant added that it could be that it all works out, albeit a very “low probability.” “You want to have exposure to the reciprocal asset of the paper assets that are the most popular – so gold, to me, is now the conjunction of price, value and sentiment, and I am very bullish indeed.” Gold prices are on track for its longest run of losses since 1996. After reaching five-year lows this week, the metal was relatively quieter on Thursday with prices slightly rebounding on some bargain hunting in the spot market. Kitco’s spot gold was last up $0.60 at $1094.60 an ounce. Grant summed up the gold selloff as “Mr. Market having a sale,” and added that the downward spiral is “terrifically vexing but a wonderful opportunity.” He explained that no one knows the bottom for the metal and that should not be the sole focus. “The important thing to recall is why those of us who own it, bought it. What is it about gold that ought to make it appealing – when it seems to be absolutely the thing you don’t want to have.” He added that gold thrives in the face of monetary turmoil, disorder and uncertainty, noting, “I think we have all three of these things.” Grant said he likes owning physical gold particularly South African Kruggerands. He added he is also the owner of “too many gold mining shares” for which he has, “a great deal of worry for the present but a great deal of conviction for the future.” Mining stocks have suffered even more since lower gold prices means less revenue per ounce of the metal for producers. The Market Vectors Gold Miners exchange-traded fund (GDX), which consists of stocks of gold-mining companies, was down $1.70, or 11%, to $13.72 on Thursday. On the topic of U.S. Federal Reserve rate hikes, Grant said the central bank is in a hurry to raise rates. “The Fed feels it must act just for institutional pride; but, money supply growth is dwindling, the turnover rate of money likewise, the only thing that is dynamic in the world of money and credit is the issuance of more and more dubiously sourced debt, and more and more lenient terms,” Grant said. “What debt does is two things: it pushes forward consumption and pushes back evidence of business failure,” he added. Kitco News, July 23, 2015. (show less)

TEXAS GOES LARGE ON GOLD

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Whether you call them visionaries or call them chuckleheads–or anything in between–you should tip your hat to the Texas legislature and Gov. Greg Abbott, who have now written fears of a fiscal Armageddon into state law.

Late last week, the Republican governor signed a bill establishing the first state-run gold depository in the nation. The Texas Gold Depository will position itself as an alternative to the U.S. government’s Fort Knox and the vault beneath the Federal Reserve Bank of New York.

When people in multiple states actually start using gold and silver… it would effectively nullify the Federal Reserve and end the federal government’s monopoly on money.
– Mises Institute
Its ostensible aim is to safeguard what its supporters say is $1 billion in state-owned gold bars once they’re retrieved from the Fed’s Manhattan vault, protecting them from seizure by outside forces, like the federal government. (More on that supposed $1 billion in a moment.) It will also hire itself out as a depository for private investors looking for a place to store their bullion, pending the collapse of civilization. in the meantime, they would be able to write checks on an account tied to their holdings.

The initiative, which was launched two years ago by a Dallas-area state legislator, has gold bugs everywhere vibrating with anticipation. These are people convinced that the Fed and other central banks are consistently “debasing” the value of money by running their printing presses; only a return to the intrinsic value of gold can preserve the economy.
“When people in multiple states actually start using gold and silver instead of Federal Reserve Notes, it would effectively nullify the Federal Reserve and end the federal government’s monopoly on money,” the right-wing, Alabama-based Mises Institute wrote on its website Monday, heralding the possible launch of “a system of gold and silver ‘certificates’ that could be traded as a type of money.”

Others “go further in blowing the secessionist dog whistle,” observes Brian Murphy of New York’s Baruch College, writing at Talking Points Memo. Among them is Geoffrey Pike of Wealth Daily, who writes that the Texas depository “is symbolic in retaining some liberty, similar to gun ownership in this country.” To be sure, Pike isn’t advising his followers to dump their gold into the Texas vault quite as yet–after all, he writes, Texas is a government too, not entirely to be trusted.

Gold
Not the best investment strategy? Since Texas officials invested in physical gold in mid-April 2011, stock market has soared and the gold price (represented here by the SPDR gold shares ETF), have slumped. (Yahoo Finance)
Radical conservatives long have cherished the idea of gold as a hedge against Armageddon. The ownership of physical gold is seen as a bulwark against such violations of individual liberty as Franklin Roosevelt’s 1933 order outlawing the hoarding of gold, part of his broader plan to take the country off the gold standard to give him more flexibility in crafting a recovery from the Great Depression.
The Texas measure reflects an outbreak of anti-Washington paranoia in the Lone Star State, which loves to picture itself as standing, well, alone. Gov. Abbott was among the politicians stoking conspiracy theories depicting the U.S. military’s Jade Helm training exercise, scheduled to start in Texas and other states this week, as a prelude to a federal takeover.

Former Gov. Rick Perry, who is again running for the GOP presidential nomination, has cited what he says is his state’s unique right to secede from the U.S., ostensibly granted as a condition of its joining the union in 1845. But historians say that right is mythical. In any case, Perry didn’t appear to have gone all the way toward advocating secession.

Texas also long has been a hive of hard-money fanatics. In 1979 and 1980 the Dallas-based brothers Nelson Bunker and William Herbert Hunt attempted to corner the silver market. Eventually they amassed one-third of all the privately held silver in the world, creating turmoil in the metals markets. But the price cracked, they wound up with a loss estimated at $1 billion, and eventually filed for bankruptcy.

It’s not unusual for financial advisors to counsel investors to keep some exposure to gold or other precious metals as a hedge against inflation, for their value tends to rise when inflation does, especially during sharp runups.

Owning physical gold, however, is another thing entirely: Bullion is expensive to store because it requires rock-solid security. It needs to be regularly assayed to establish its purity, especially if it’s moved, unless under painstaking chain-of-custody conditions.

How much gold does the state of Texas actually own, and where is it? Despite Abbott’s assertion that the depository law will “repatriate $1 billion of gold bullion from the Federal Reserve in New York to Texas,” the state doesn’t appear to own $1 billion in physical gold, and what it does own isn’t at the Federal Reserve.

The state’s holdings through the University of Texas Investment Management Co., or UTIMCO–UT’s $29-billion endowment fund–come to about $500 million or less. it’s held not at the New York Fed but a private bank vault in Manhattan. The holdings are the product of a policy created by a gold bug on the UTIMCO board, who persuaded his colleagues to convert UTIMCO’s investment in gold futures into nearly $1 billion in metal in April 2011.

Since then, the fund has cashed out of some of its gold bars; its current holdings, Murphy calculates, come to about 420,000 ounces worth about $500 million. As an investment, moreover, the gold bar ownership has been a bust since its inception; the price of gold has fallen from about $1,490 per ounce in mid-April 2011 to about $1,183 now. In the same period, the Standard & Poor’s 500 stock index has gained nearly 60%.

Keep up to date with the Economy Hub. Follow @hiltzikm on Twitter, see our Facebook page, or email [email protected].

Copyright © 2015, Los Angeles Times

OBAMA AN “AMERICAN SNIPER” WHO IS HE KIDDING

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So much bull crap gushed out of the anointed one’s mouth last night that an emergency call was made to the EPA. Clean up in aisle “hope for change.” For our President to not understand the word “no” is telling. In 2010 the Republicans took the House, in 2014 they took both the House and Senate; in between BO emerged the victor securing a second term. In Obama’s mind this is a winning hand, the implosion of the Democrats (can’t blame it on Bush this time)  in both years is meaningless, but what makes it more remarkable is the fact that Obama still believes in his ascendancy, when in fact his star is crashing to earth;  or we can put it another way, he has flown to close to the son.

In his 6 years in office Obama has pissed off one group after another – his campaign style is divisive,  a divide and conquer mentality where hard working Americans, those who have succeeded without a government handout are to be demonized. Never  will POTUS accept the conclusion that some people don’t have a job  for a reason. Taking from the rich and giving to the parasite is Obama’s modus operandi, starting a cultural war is his cup of tea. Class warfare the coin of the realm. “We are the victim and the rich are to blame.”

One of the main issues pitting Republicans and a handful, possibly more, Republicans is the ongoing negotiations with Iran. One deadline was not met, another is set to expire in June. The Senate is adamant on passing legislation which would once again punish Iran with more sanctions if the negotiations fail. However, Obama says no, do this and Iran will be mad enough to walk away from the table,  they will not negotiate with a hammer over their head.  Why is Obama is in Iran’s corner touting their position?  Why is he  their advocate; for what reason?  It is still fresh in our mind,  Obama’s vigorous and unwavering support for the Muslim Brotherhood. That too is very suspicious.

Taxes, Obama loves that word more than any other in the English language; without them his socialist utopia collapse. So he must tax more in order to spend more, a financial nuclear reaction. And we can go on and on, but what is the use. Perhaps the Senate will give him a good kick in the butt with his first override. Humble pie is hard to digest – can’t wait to see the snake lash out and Democrats after that happens. Stay tune!

In passing, the price of gold has not responded the way many pundits have prognosticated. On the way to $700 the gold has surged to $1300. What has inspired many to hop on the gold wagon is the continued debasement of world currencies. Venezuela and Russia have seen their currencies lose 50% of their value in short order. their citizens have learned their lessons well, many have purchased gold as insurance for just sort an event. But Europe is  approaching the abyss, printing fiat money like it is going out of style – we have to believe that many of the EU’s citizens are buying as well, for the Euro has dropped 15% too. What is surprising is that the dollar run up vs these currencies, typically not good for gold, has not had the usual effect. One other item worth mentioning, deflation is not good for gold too, then why is it going up? Our guess, “somebody big knows something.”

Through out history gold has been the medium of exchange; the store of value. Paper money displaced gold early in the 17th century; first used in Massachusetts then by the states during the Civil War. The banking industry’s genesis was initiated early on by warehouses which issued a receipt – thus a warehouse receipt – entitling the holder to redeem the receipt for the said amount of gold as defined in the receipt. As the industry blossomed it became apparent that the holders of receipts very rarely requested the physical gold; they only transferred the receipts. Thus the warehouses evolved into lenders realizing that a call for 100 percent of the gold at any one time was not a probability.

The 18th through the 21st century became the glory days of gold. Banks became behemoths lending more gold than they had in inventory. When a run on a bank occurred, which it ultimately did, culminating in bankruptcy and ruin. As the United States entered the 20th century as the world’s big money player the world treated the dollar as if it was good as gold.

This was true up until 1971.  Not dismissing the illegal taking of individuals gold by FDR back in 1933 (see executive order 6102).  The world was on the path of becoming a dynamic and risky adventure from 1971 on; the dollar was no longer convertible to gold, the dream of El Dorado became a reality by inventing paper gold on a scale never seen before. The physical gold window had closed, the dollar pyramid scheme began.  Hence the printing of paper money on a scale never seen before. Economies were on financial cocaine, a euphoria that is still manifested by governments gone wild. More printing enabled the exalted to exert control of economies, countries and world politics. But good times don’t last forever.

Entering the 21st century has proved that the dollar panacea has a long reach, but things can changes in a quant moment. Across the globe one country after another has defaulted; Greece and Argentina head the list. Is it possible that the United States is next?  A probability that cannot be counted out. What brings us to that conclusion is the loss of faith in the United States. We are no longer control world events – Obama saw to it.

Future obligations are the tail wagging the dog and that is about to become the albatross under our neck for the next two decades. Obligations are coming due. And the question remains, who will be responsible to pay them. for sure you can’t count on today’s youth to hand over their hard earned cash.   17 Trillion and counting is a gargantua number, that is just debt, counting social security, medicate obligations and interest on the debt we are looking at a google type number closer to 100 trillion. $100,000,000,0000,0000.

Another relevant question to ask a politician of the goldbrick variety is:  Will we ever be able to pay back the money we owe?   Don’t expect a straight answer.  The next question is, Will gold provide a solution to political largesse?

WHAT THE GOLD BRICKS WON’T TELL YOU

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Through out history gold has been the medium of exchange; the store of value. Paper money displaced gold early in the 17th century; first used in Massachusetts then by the states during the Civil War. The banking industry’s genesis was initiated early on by warehouses which issued a receipt – thus a warehouse receipt – entitling the holder to redeem the receipt for the said amount of gold as defined in the receipt. As the industry blossomed it became apparent that the holders of receipts very rarely requested the physical gold; they only transferred the receipts. Thus the warehouses evolved into lenders realizing that a call for 100 percent of the gold at any one time was not a probability.

The 18th through the 21st century became the glory days of gold. Banks became behemoths lending more gold than they had in inventory. When a run on a bank occurred, which it ultimately did, culminating in bankruptcy and ruin. As the United States entered the 20th century as the world’s big money player the world treated the dollar as if it was good as gold.

This was true up until 1971.  Not dismissing the illegal taking of individuals gold by FDR back in 1933 (see executive order 6102).  The world was on the path of becoming a dynamic and risky adventure from 1971 on; the dollar was no longer convertible to gold, the dream of El Dorado became a reality by inventing paper gold on a scale never seen before. The physical gold window had closed, the dollar pyramid scheme began.  Hence the printing of paper money on a scale never seen before. Economies were on financial cocaine, a euphoria that is still manifested by governments gone wild. More printing enabled the exalted to exert control of economies, countries and world politics. But good times don’t last forever.

Entering the 21st century has proved that the dollar panacea has a long reach, but things can changes in a quant moment. Across the globe one country after another has defaulted; Greece and Argentina head the list. Is it possible that the United States is next?  A probability that cannot be counted out. What brings us to that conclusion is the loss of faith in the United States. We are no longer control world events – Obama saw to it.

Future obligations are the tail wagging the dog and that is about to become the albatross under our neck for the next two decades. Obligations are coming due. And the question remains, who will be responsible to pay them. for sure you can’t count on today’s youth to hand over their hard earned cash.   17 Trillion and counting is a gargantua number, that is just debt, counting social security, medicate obligations and interest on the debt we are looking at a google type number closer to 100 trillion. $100,000,000,0000,0000.

Another relevant question to ask a politician of the goldbrick variety is:  Will we ever be able to pay back the money we owe?   Don’t expect a straight answer.  The next question is, Will gold provide a solution to political largesse?