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Bill Buckler Discusses The Last Price Standing Of "True Money", Answers The Only Question Relevant To Gold Bugs

Tyler Durden's picture


Bill Buckler, publisher of The Privateer Report, has released one of the most scathing critiques of paper money we have read to date: "Before it can be exchanged, wealth must be created. Wealth cannot be created out of thin air. By definition, an economic good is “scarce”. If it were not, there would be no such thing as economics or exchange. Neither would be necessary because no effort or choice in the face of alternatives would be required in order to provide the GOODS which further our lives. Before we can talk about money and the VITAL role it performs, we must stress this point. Money is NOT wealth, it is the means by which wealth is exchanged amongst those who produce it. Paper money is not suited to this function." So what is the only rational investment in times in which money's role is so often confused by pretty much everyone? "Ninety-seven percent of all existing Treasury debt has been created since August 15, 1971! Ninety-three percent of it has been created since Mr Volcker “saved” the paper Dollar in late 1979! Please note that the gain in Treasuries and the loss in the US Dollar almost exactly cancel out. Please note also that even the biggest gain in these paper markets fades into insignificance against Gold’s rise."And here is the answer all the "gold bugs" have been waiting for: "The paper money “price” of Gold will last as long as the attempt to make paper money “work” lasts. In the end, Gold will no longer have a “price” because it has reverted to its role as MONEY. Whenever and wherever that happens, that nation can return to the production of wealth - rather than “money."

Buckler's brilliant observations on the inevitable death of fiat, and gold's ascent to the status of "last price standing", need no commentary.

From the Mid-September Issue of the must read Privateer Report


Just under eleven months from now, on August 15, 2011, there will be an anniversary that will get little if any coverage in the global financial media. August 15, 2011 will mark 40 years since the momentous decision taken by the Nixon administration to cut the last tie between Gold and the global reserve currency, the US Dollar. We have no idea what the “price” of Gold will be on that date. The one thing we are certain of is that it will be many, many times higher than the mandated $US 35 per troy ounce it was when Mr Nixon made his fateful decision on August 15, 1971.

On September 14, 2010, Gold leaped $US 24.60 to an all time high spot future close of $US 1271.70. We would think that you have already checked out our $US 5 x 3 point and figure chart, but if you haven’t ...

This chart shows a bit more than 28 years of the history of the $US Gold price, stretching back to the June 1982 bottom and showing in its entirety the current bull market which is nearing its tenth anniversary. At its September 14, 2010 close, $US Gold was up just over 16 percent in 2010 to date. Barring a fantastic turnaround, we expect 2010 to be the TENTH year in a row during which the $US Gold price has risen. We know of no
equivalent to this unbroken run in any other major investment market.

Of Money And Wealth:

It has been well said by several competent economic historians that there are only two kinds of paper money - those which are already worthless and those which are going to be worthless. There has never been an exception to this rule. At some point in the history of all PURELY paper currencies, prices expressed in them become irrelevant simply because they are no longer used as a medium of exchange. This process is always painful.

While the end destination of paper money can always be foreseen, the route by which it reaches its destination and the time it takes to get there cannot be predicted. But always, at some point in the proceedings, the declining “purchasing power” of the paper money re-awakens the dormant distinction between money (the medium of exchange) and wealth (that which is in fact being exchanged).

Before it can be exchanged, wealth must be created. Wealth cannot be created out of thin air. By definition, an economic good is “scarce”. If it were not, there would be no such thing as economics or exchange. Neither would be necessary because no effort or choice in the face of alternatives would be required in order to provide the GOODS which further our lives. Before we can talk about money and the VITAL role it performs, we must stress this point. Money is NOT wealth, it is the means by which wealth is exchanged amongst those who produce it. Paper money is not suited to this function.

The Global Fiat Currency Era:

Globally, it can best be described as 40 years of monetary chaos. In the US, cushioned by its stewardship of the global reserve currency, it can best be described as a decade of currency chaos - followed by a quarter century of serial credit bubbles - followed by a financial system collapse - followed by a desperate government and central bank holding action. This holding action is still going on, at an ever increasing cost to the future of the US economic system. As we said here in our previous issue (Number 661): “...the US Dollar is the world’s reserve currency. As long as this remains the case, the follies of the US government will remain the most important in the world and the follies of their central bank - the Federal Reserve - will remain paramount.”

These follies can be read directly from the grotesque - $US 400 Billion to $US 13,445 Billion - increase in Treasury funded debt since 1971. Almost 60 percent of that total has been incurred over the past decade. It can be read from the Fed’s manipulation of interest rates, specifically the year of 1.00 percent official rates in 2002-03 and the almost two years of ZERO official rates from December 2008 to date. It can be read from the REAL standard of living of the American people which has gone nowhere since the fiat era began and which has been going backwards since the GFC hit. It can be read from the stagnant nature of US paper investment markets since their 2000 highs. And finally, it can be read by the fact that the physical structure of the US is beginning to literally fall apart at the seams.

The Crumbling Infrastructure:

On September 9, there was a huge explosion in San Bruno, a heavily populated suburb of San Francisco. The explosion was the result of a rupture in a 30 inch (75 cm) gas pipeline. Thankfully, the loss of life was minimal but the destruction of property was vast. The pipeline was built in 1956, at a time when the area was sparsely settled. It has, apparently, been maintained just as sparsely ever since.

In August, a dam built 50 years ago collapsed causing widespread flooding. The famous Gateway Arch in St. Louis was finished in mid 1965. It is now quite literally rusting away. Power lines, sewer lines, roads, railways, bridges, viaducts and all the rest of the complex “infrastructure” on which modern urban (and living depends are in a state of decrepitude. Mr Obama’s latest plan to throw $US 50 Billion at the “problem” is laughable. For years, reputable US engineers have been warning that the bill just for getting the vast US infrastructure repaired, let alone replaced, would run into the multiple $US TRILLIONS.

Politicians love infrastructure spending, especially with money created out of thin air for the purpose. The spending is visible, especially when a politician gets to cut a ribbon opening a new bridge or freeway or dam. They don’t love infrastructure maintenance. The maintenance is invisible. Worse, it is a reminder that while the money used to build the infrastructure can be and is conjured out of thin air, repairs and maintenance absorb REAL wealth  which cannot be used for new “headline” projects.

The gas pipeline rupture in San Bruno is symptomatic of the entire situation. US federal government officials state quite plainly that they have recorded 2,840 “significant pipeline accidents” over the past two decades, more than a third of which resulted in significant death and injury. They go on to point out that the US has more than 2  million miles of gas pipelines and about 100 federal inspectors. Yep, that’s 20,000 miles per inspector. Clearly, “maintenance” is NOT a plum government job.

The funds necessary to build and maintain “public or “regulated” utilities are NOT earned on the market. They are extracted by law from the public. There is no pressure to maintain or replace them as they age. A private company which neglects its vital standing plant would go out of business, not being able to compete with those who do NOT neglect theirs. A government is different. It can extract the means it needs by force of law. The result is a working facade which hides a rusted-out functional core. The contrast is becoming more obvious every day in the area of vital infrastructure. But it is much more acute, if sadly less visible, in the area of financial infrastructure and its core - which is the MONEY.

Many Years Of Advance Warnings:

The warnings go back a bit more than ten years. In the bear market which followed the $US 850 January 1980 high, Gold fell below $US 500 to stay in June 1981. A year later in June 1982, that bear market bottomed with Gold just under $US 300. Those two points - $US 300 and $US 500 - formed a trading range in which Gold remained for nearly two decades. The Gold price exceeded the $US 500 level only twice - for very short periods - in early 1983 and late 1987. It dropped below the $US 300 level twice - again for very short periods - in June 1982 and again in February/March 1985. The first “advance warning” came in November/December 1997 when Gold dropped below $US 300 - and stayed there.

November/December 1997 was the point when what had been an Asian financial crisis went global. In early December 1997, President Clinton was attending an APEC (Asia-Pacific Economic Co-operation) summit in Vancouver Canada. On the first day of the meeting, he called the Asian crisis a “glitch in the road”. A decade later, President Bush used that exact phrase to describe the early stages of the GFC.

Twenty-four hours after Mr Clinton’s use of the phrase and after some sobering behind-closed-doors  conversation with his Asian colleagues, he had changed his tune. The “glitch” became a global crisis. Writing about it at the time - in our Early December 1997 issue (Number 338) - The Privateer described Mr Clinton’s about face over the Asian Crisis as “a global post-war turning point”.

This was so because for the first time since Bretton Woods and the elevation of the US Dollar to global reserve currency status, the US “authorities” suddenly realised that they could NOT stave off a financial upheaval all by themselves. They needed help for this one. And they got it, not least in the form of a globally concerted effort to debunk once and for all the REAL alternative to paper money - Gold. At the end of 1997, Gold was forced below a trading range which had confined it ever since mid 1981. And Gold remained below that trading range for well over four years, up until the beginning of April 2002.

Forcing Gold below $US 300 and its long-term trading range was a HUGE mistake made by the global financial “authorities” led by the Bank of England and their Gold “auctions”. It exposed their desperation as nothing else would have. It also made it certain that once Gold did regain the $US 300 level, a long bull market would be the outcome. In April 2002, Gold regained $US 300. It’s been all up from there.

The “Lost Decade” - For Paper:

As stated, Gold regained the $300 level on April 2002. On September 14, 2010, the spot future price reached an all time high closing level of $US 1271.30. That’s a rise of just under 324 percent. Over the same period, silver rose from $US 4.40 to $US 20.43. That’s a rise of just over 364 percent.

How have the “paper” markets fared over that same eight and a half year period? Here’s a sampling:

  • The Dow: 10301 to 10526 - a gain of 2.2 percent
  • The Nikkei: 11347 to 9299 - a loss of 18 percent
  • The (Australian) All Ords: 3350 to 4670 - a gain of 39.4 percent
  • The US Dollar Index (USDX) - 118.00 to 81.33 - a loss of 31.1 percent
  • US Treasury Bonds: 101.00 to 133.00 - a gain of 31.7 percent

Please note that the gain in Treasuries and the loss in the US Dollar almost exactly cancel out. Please note also that even the biggest gain in these paper markets fades into insignificance against Gold’s rise.

At the dawn of the 21st century, looking back over the previous five years, US investors were complacently looking forward to annual gains on their stock market of 20 percent “in perpetuity”. What they got was a decade of stagnant prices. In the period since February 2002, when the US Dollar began its long slide, the only “investment” to approach those expectations has been the precious metals. From February 2002, Gold has risen a compound 18.5 percent a year and silver, 19.8 percent.

Forty Years Of Unbridled Inflation:

In the period of ever rising paper markets and especially stock markets which took place between mid 1982 and the beginning of 2000, there was little if any mention of inflation or deflation. Over that period, the Dow in the US rose from 776 to 11723 points. That’s a gain of 1412 percent or a compound annual gain of about 16.25 percent. Not quite as good as Gold since 2002 but sustained over a far longer period.

In reality, this almost two decades of paper asset boom was inflationary to an extent that left the 1970s for dead. There were two reasons why the 1970s were and still are known as the “inflationary” decade. The  first was the HUGE increase in the amount of Treasury debt compared to the two preceding decades. The second was that the new money created by this increase did not go into paper assets, but into alternatives.

Consider the two decades prior to the “inflationary” 1970s:

  • 1950s - Treasury debt rose from $US 257 Billion to $US 290 Billion - up 12.8 percent
  • 1960s - Treasury debt rose from $US 290 Billion to $US 393 Billion - up 35.5 percent

Contrast that to the 1970s, the first decade of a purely paper US Dollar:

  • 1970s - Treasury debt rose from $US 393 Billion to $US 930 Billion - up 137 percent

You can see the stark difference, made even more stark by the fact that in the US, both stock and bond markets - the traditional paper markets - had a horrible ten years in the 1970s. It is a well known fact that had it not been for Fed Chairman Volcker and his decision in late 1979 to let US rates be set by the markets, the US Dollar would likely not have survived long into the 1980s as a purely paper currency. Tragically, thanks to 20 percent plus rates in 1981, the world was lured back into paper Dollars and the fiat currency era was prolonged - for another 30 years - and counting.

Consider the record over those 30 years, in the raw numbers as well as the annual percentage increase:

  • 1980s - Treasury debt rose from $US 930 Billion to $US 3,233 Billion - up 248 percent
  • 1990s - Treasury debt rose from $US 3,233 Billion to $US 5,674 Billion - up 75.5 percent
  • 2000s - Treasury debt rose from $US 5,674 Billion to $US 13,500 Billion (estimate) - up 138 percent

Ninety-seven percent of all existing Treasury debt has been created since August 15, 1971!

Ninety-three percent of it has been created since Mr Volcker “saved” the paper Dollar in late 1979!

Treasury debt is the ONLY backing the US Dollar has. Every bit of that debt rise is pure INFLATION.

Since 1982, the inflation has been reflected in serial credit-induced bubble markets. In the US, the last of the “market” bubbles, the real estate bubble, imploded more than three years ago. All that is left is the last of ALL the bubbles, the one in Treasury debt itself. That one is the very end of the road.

A Gold Bubble?:

Descriptions of the ever rising $US “price” of Gold have been veering into the “bubble market” category ever since the $US Gold price broke above its 1981-1997 $US 300 to $US 500 trading range at the end of 2005. The “bubble market” talk intensified when Gold topped its January 1980 $US 850 high at the beginning of 2008 and intensified still further when Gold established itself above the $US 1000 level in October 2009. It is still with us. We quote Mr George Soros from a Reuters article published on September 15: “Gold is the only bull market currently. ...I called Gold the ultimate bubble, which means it may go higher. But it’s certainly not safe and it’s not going to last forever.

The Wikipedia (which is as good a guide to popular perceptions as any) defines a “bubble” as: “trade in high volumes at prices that are considerably at variance with intrinsic values.” In economics, there is no such thing as an “intrinsic value”. Human beings impart value to economic goods by their buying or abstention from buying. The result is prices expressed in terms of money. As long as Gold is an “alternative” money, it will have a price. That will end once it re-assumes its age-old role as money itself.

The Morbid Fear Of Falling Prices:

If there is anything that keeps central bankers all over the world awake at night, it is their fear of falling prices. This is taken for granted right across the spectrum of those who administer or rely upon the global fiat money economy with the paper US Dollar at its centre. It is a most interesting phenomenon, given the fact that ALL rational economic action since human beings descended from the trees has been aimed at LOWERING the cost of producing economic goods. It is surely an easily grasped FACT that in an economy based on indirect exchange through the use of money, all eras of true prosperity have been eras in which the purchasing power of money was GROWING and prices were therefore falling.

It really is a rather simple proposition, if one actually thinks it through. If a unit of money is to be viable over the longer term, the term essential for the build up of new wealth through new and improved means of production, that unit of money must retain or INCREASE its purchasing power. If it retains its purchasing power, it will allow people to save. If it increases its purchasing power, it will encourage them to save. From the simplest economic endeavour to the most complex one, savings must PRECEDE production which must in turn PRECEDE consumption. The only form of money which has ever been found to maintain and increase its purchasing power is the precious metals. The only form of money which has always been found to lose purchasing power to the end point of extinction is paper.

One of the distinguishing features of every productive economic era in history is that prices FELL throughout the era. Even in eras of capital consumption like the one which began in earnest in 1971, the most successful products were the ones which FELL in price despite the galloping depreciation of the money. The best example of that in the modern era has been the prices of computers and electronics. In the face of all these economic FACTS, why are central bankers so worried about falling prices?

Real Money Needs No “Collateral”:

Sound money needs nothing behind it to perform perfectly all the functions of money. Unsound money, especially paper money backed by nothing but debt to be paid by future generations, is TOTALLY dependent on the prices of the collateral being held against the debt which “backs” it. For forty years, the world has operated on a debt-based monetary system which is fuelled by means of credit creation. It stands or falls on the assumption that the debt upon which it is based will, someday, be repaid.

The only means to assess the worth of the (paper) collateral which is the underpinning to the monetary and financial system today is to look at the PRICE commanded by that collateral on the secondary markets. Any reduction in the price affects confidence in the future viability of the money. The bigger the price reduction, the more adversely confidence is affected. When central bankers and politicians talk about “deflation”, they are talking about a fall in the market value of the paper which underpins the money they issue. Any fall in that market value literally undermines the foundations of the system. They know it, most of their victims do not. All they know is that what used to “work” no longer does.

The US central bank, the Fed, prints the reserve currency. The US Treasury prints the debt paper which is the only “reserve” behind the US Dollar. That being so, the global demand for Treasury debt greatly exceeds the demand for any other type of “collateral”. That has allowed the US to go on living beyond its means for far longer than it otherwise would have found possible. The limits to this situation were revealed in March 2009 when the Fed began monetising Treasury debt and were underlined in August 2010 when the Fed resumed their task. No matter what, the “collateral” value must be maintained.

The Last Price Standing?:

The paper money “price” of Gold will last as long as the attempt to make paper money “work” lasts. In the end, Gold will no longer have a “price” because it has reverted to its role as MONEY. Whenever and wherever that happens, that nation can return to the production of wealth - rather than “money”.

h/t Robert


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Sun, 09/19/2010 - 18:34 | 591028 CashCowEquity
CashCowEquity's picture

I am a Privateer subscriber. This is an  excellent newsletter and I recommend all to subscribe. Job well done!!!

Sun, 09/19/2010 - 19:59 | 591131 tictawk
tictawk's picture

Great article.  The one major problem remains i.e. over the last 40 years, all the debt was created in a FIAT currency and if the dollar becomes a hard currency, it will make it impossible to repay the debt because the means of easy credit creation will be unavailable to the Fed. Real wealth payback is a in a hard currency is impossible given that this nation has exported is blue collar and white collar job overseas. 

So all that remains is DEFAULT on the trillions in DEBT.  Shhhh! don't tell our Asian vendors :-)

Sun, 09/19/2010 - 20:49 | 591203 GoldSilverDoc
GoldSilverDoc's picture

Finally, somebody who says the same things.  It is silly to think of a "price" of gold in a fiat currency.  It is sort of like believing that wealth is equal to numbers on some bankster's computer.  It is only wealth as long as the "greater fool" theory is operative; when that stops (and it always does, and it will),  it becomes, once again, just a bunch of electrons.  

Producing ag land.  Gold.  Producing factories.  Tools.  Guns (another type of tool).   Knowing HOW to do things.  These things are wealth.  "Financial products" based on fractional reserve banking and government counterfeiting are simply ways to STEAL wealth.


Mon, 09/20/2010 - 02:21 | 591470 Voluntary Exchange
Voluntary Exchange's picture


Mon, 09/20/2010 - 02:37 | 591345 anonnn
anonnn's picture


Mon, 09/20/2010 - 13:49 | 592460 The Rogue Economist
The Rogue Economist's picture

Actually, that happened in 1971. It's just that everyone has pretended that it wasn't a default to keep their economies going. Over the last 30 or so years, they've started believing the fantasy. But the time for dreaming is almost at an end, it's time to pay the hotel bill

Sun, 09/19/2010 - 18:35 | 591030 Hulk
Hulk's picture

+1279. Gold Bitchez!

Sun, 09/19/2010 - 18:36 | 591035 CashCowEquity
CashCowEquity's picture

Physical Delivery Bitchez !!

Mon, 09/20/2010 - 03:13 | 591498 Andrew G
Mon, 09/20/2010 - 05:50 | 591533 Dead Cat Bounce
Dead Cat Bounce's picture

Gold Emerods and Mice Bitchez!

Sun, 09/19/2010 - 19:08 | 591070 Squid-puppets a...
Squid-puppets a-go-go's picture

see the figures above, dude - Gold is Silver's bitch

Sun, 09/19/2010 - 19:28 | 591092 Hulk
Hulk's picture

+20.80. Silver Bitchez!

Sun, 09/19/2010 - 19:56 | 591129 UGrev
UGrev's picture

I bought as much as I could afford when it was like 11-12/oz.. I'm a happy man :)

Sun, 09/19/2010 - 21:55 | 591287 Hulk
Hulk's picture

Keep buying!

Sun, 09/19/2010 - 22:59 | 591347 DoChenRollingBearing
DoChenRollingBearing's picture

Hulk is right!  Keep buying, I am off to the coin shop for more PMs.  I want to show (if it comes to that) the IRS that the prices I paid for gold are high!

Sun, 09/19/2010 - 23:03 | 591352 DoChenRollingBearing
DoChenRollingBearing's picture

Hulk, re your comments on another thread, yessir I remember chiggers when I lived in a small town in the South when I was a kid!  Worse than mosquitoes, worse than No-see-ums.

All of this scary talk tonight makes me want to think about buying some rural property in PERU, and maybe have sharecroppers work it...  Could Peru be a better place to be if .gov gets out of control here?  Beats me, I am watching and paying attention every day. 

Mon, 09/20/2010 - 02:16 | 591468 The Navigator
The Navigator's picture

Not sure what the political situation in Peru is like, but here are their tax rates (not much in savings compared to US rates). Not so sure they'd let you keep your guns to protect your gold either. Not many place to run to now.


Mon, 09/20/2010 - 02:57 | 591489 IQ 145
IQ 145's picture

Silver, Bitchaez !!

Sun, 09/19/2010 - 20:58 | 591183 Jendrzejczyk
Jendrzejczyk's picture

Beyond all the insanity that is happening in the world now, nobody really noted the interactive chart posted here a while ago from "Scientific American"

showing only 19 to 20 years of easily mined silver and gold left in the ground.

The elders here will attest that you can "Rip VanWinkle" 20 years away in a heartbeat. Even if this architectural, playing card Taj Mahal manages to stay upright for a few more years, buying PM's should ensure that your ancestors will be bringing frankincense and myrrh to your shrine for eons.


Sun, 09/19/2010 - 20:21 | 591152 Threeggg
Threeggg's picture

Knocked back down to where it started.

in a very few minutes I might add.

Bodes very well for this weeks expiry.

=1274  Gold Bitchez

Sun, 09/19/2010 - 20:28 | 591163 Hulk
Hulk's picture

Manipulation, Bitchez!

Mon, 09/20/2010 - 02:14 | 591466 Snidley Whipsnae
Snidley Whipsnae's picture

It's 2:10am gold = 1283, silver you know where your PMs are?

Mon, 09/20/2010 - 03:01 | 591492 IQ 145
IQ 145's picture

 Yes, they'in a nice quiet basement of a financial institution in a medium sized country with a wonderful tradition of bank secrecy; in the care of a nice family of bankers who've been bankers for generations and have no desire to be criminals.

Mon, 09/20/2010 - 11:33 | 592045 DosZap
DosZap's picture

Clue us in, that used to be the more.

Sun, 09/19/2010 - 18:42 | 591044 IrrationalMan
IrrationalMan's picture

I wish that for the decade returns he would not compare spot prices between the dates for gold and silver and price levels of the indexes.

The metals have a cost of carry and the indexes have a dividend return.  The gold investment would have to have decuctions for the cost of storing and insuring etc, while the stock market would need to be adjusted for dividends etc. 

I am not saying that Gold has not outperformed paper assets, but comparisons should be fair at least. 

Sun, 09/19/2010 - 19:01 | 591062 Oracle of Kypseli
Oracle of Kypseli's picture


You can not compare gold with the stock market. Gold is wealth preservation and the other one is investment on potential growth.

When governments are behaving responsibly, you do want to allocate more on growth stocks and less on wealth preservation.

Obviously, this is not the case. Europe, Japan, America are on steroids printing paper money and are racing to deflate their currencies.

if it all blows, people's 401k index fund will be worth less than an oz of gold. 

Sun, 09/19/2010 - 21:13 | 591246 rocker
rocker's picture

Well Now, Bloomberg ironically is having fun talking about which currency is going down the most.

Hmmmm, must me something to come about this Major debasement of fiat money.

Sun, 09/19/2010 - 23:09 | 591357 DoChenRollingBearing
DoChenRollingBearing's picture

Oracle, one day I have to talk with you about farmland in Peru.  For now I am OK with gold.

Next time you are in in Lima visit our bearing company at Av. Benavides 5495 (Surco).

Bearings = Steel Gold!

Mon, 09/20/2010 - 02:21 | 591469 Snidley Whipsnae
Snidley Whipsnae's picture

Precisely correct, I have been accumulating AU/AG since 1968. Price to store is negligible. It is like storing an insurance policy. One needs a safe place to store so that policy will not go up in a home fire, tornado, etc...same applies to gold/silver.

One also needs to store enough fiat so that one is not force out of PM positions...but, not too much. A couple of years worth of paper. Don't trust the FDIC to make good on claims to bank deposits...they are broke.

Sun, 09/19/2010 - 19:37 | 591102 cossack55
cossack55's picture

Storage is 4" ID PVC and insurance is multiple weapons and booby traps.  Enter at YOUR own risk.  Paper gold my ass.

Sun, 09/19/2010 - 20:25 | 591156 Misstrial
Misstrial's picture

Don't forget to have some coins to give in case anyone comes to the door:

(...take note of the Liberty center-front...)

Sun, 09/19/2010 - 20:11 | 591144 Misstrial
Misstrial's picture

I'm staying away from dividend stocks - reason being that if the companies reduce or can't pay the dividends, the stock price is knocked down at the knees.

Further, the only thing that can stabilize dividend paying investments is a recovery of some kind. If there's no recovery, then more stock offerings will have their dividends cut.

imo, we are faaaar away from a recovery and at the very best, we're looking at years of deflation/inflation which is not good for profits or dividends.


Sun, 09/19/2010 - 20:35 | 591176 watchingdogma
watchingdogma's picture

You forgot to adjust the indexes for the companies in them that went bankrupt (GM, AIG) or were replaced because of stock price loss (C).  I can't remember the last time Silver was worth nothing because it went into bankruptcy.

Most stock pushers seem to conviently forget this tidbit.

Sun, 09/19/2010 - 20:51 | 591208 GoldSilverDoc
GoldSilverDoc's picture

"The metals have a cost of carry" - this is akin to saying that a tax cut "costs the government money".  

Mon, 09/20/2010 - 08:35 | 591616 Miss Expectations
Miss Expectations's picture

SPEAKER PELOSI: Well, what I say is what I've said all along. The tax cuts at the high end have not produced any jobs.  They've only increased the deficit.

Sun, 09/19/2010 - 18:53 | 591051 Something Wicke...
Something Wicked This Way Comes's picture

Always some minor hairsplitting...this is the guy who whines because his sister got the grape popsickle and he got the orange one. We should compare the grape v the grape and the orange v the orange. Yawn.

Supernova bitchez! I've been buying my gold in the smaller ingot size. The tradeable size. The dealer I work with says buyers outnumber sellers 97-3.


Sun, 09/19/2010 - 18:55 | 591053 CashCowEquity
CashCowEquity's picture

Do you mean 0.25oz and 0.50 oz coins?

or the 0.10 oz coins

Sun, 09/19/2010 - 20:19 | 591148 Misstrial
Misstrial's picture

No, he's referring to the Suisse PAMPs.

2.5/5.0/10/100-gram size. Very small ingots with assay certificate.


Sun, 09/19/2010 - 21:09 | 591243 silvertrain
silvertrain's picture

 The higher Gold goes the better those fractionals look..Even the 1 grams are great for trade etc..And at $50 or so right now virtually anyone can play the physical PM game..

Mon, 09/20/2010 - 02:28 | 591475 Snidley Whipsnae
Snidley Whipsnae's picture

I buy the 'monster boxes' of US 1oz silver coins. 500 of them take up little space. They come in plastic tubes and all tubes in one plastic box. Very good feel when lifted. Very good feel in the hands. Also have a bunch of old walking liberty halves, mercury dimes. No doubt about what they are, even to someone that has never hefted them before.

Sun, 09/19/2010 - 19:00 | 591058 Bearster
Bearster's picture

In times of crisis, it is the bid that disappears but the offer is always there (flash crash, c.f.)

The gold bid for paper dollars will be withdrawn at some point, which is a point the author makes very well.

Mon, 09/20/2010 - 02:29 | 591476 Snidley Whipsnae
Snidley Whipsnae's picture

Permanent backwardation! It's coming.

Sun, 09/19/2010 - 19:00 | 591059 geopol
geopol's picture

1/10 Gold eagles by the ton

Sun, 09/19/2010 - 19:04 | 591063 Hulk
Hulk's picture

You must get paid by the word!

Sun, 09/19/2010 - 19:31 | 591096 geopol
geopol's picture

Shouldn't  I ???

Sun, 09/19/2010 - 19:43 | 591110 Hulk
Hulk's picture

You most definitely should! Your many words have edumacated me greatly!!!

Sun, 09/19/2010 - 19:01 | 591061 rwe2late
rwe2late's picture

 Article needs to embrace a more global perspective.

 Globally, the fiat dollar reserve status serves as the medium in a brutal extortion racket.

 Dollars are required to obtain commodities, particularly oil. The extraction and marketing of petroleum must be controlled to enforce that requirement. The global Pentagon acts as the paid enforcer for a cabal of international financial and war industry corporations. Subservient Mideast despots and sheikhdoms have to be militarily protected, and recalcitrant governments (Iran, Iraq, Venezuela) that would abandon the petrodollar are thwarted.

Meanwhile the US may endlessly exchange its fiat currency for the products of the world, and devalue the worth of foreign dollar holdings by endless printing and rising commodity (oil) prices.

The dollar is backed by guns and oil - some would dare call it empire.

Sun, 09/19/2010 - 19:07 | 591067 Hulk
Hulk's picture

It is an empire, but just like its infrastructure, its crumbling...

Sun, 09/19/2010 - 19:33 | 591099 rwe2late
rwe2late's picture


the two co-dependent addicts will probably hold on to one another to the very end.

 The military machine needs the unlimited credit fiat funding only the Fed Reserve system can provide.

 And the Fed Reserve system needs the global military in order to sustain its dominance over the international flow of funds. 

Sun, 09/19/2010 - 19:52 | 591125 minus dog
minus dog's picture

"The military machine needs the unlimited credit fiat funding only the Fed Reserve system can provide."

Until it doesn't.  Money isn't the only way to get things done - nor is it the oldest.  Don't forget that.

Sun, 09/19/2010 - 20:54 | 591218 breezer1
breezer1's picture

afgan poppy farmers will take gold.

Sun, 09/19/2010 - 21:22 | 591259 kathy.chamberli...'s picture

that will help in old age, great incentive for me to get ordering cum.

Sun, 09/19/2010 - 22:50 | 591337 Real Estate Geek
Real Estate Geek's picture

Calling Dr. Freud, calling Dr. Freud!

Mon, 09/20/2010 - 02:54 | 591486 Al Gorerhythm
Al Gorerhythm's picture

Calling Son of Sam.

Sun, 09/19/2010 - 19:09 | 591071 Oracle of Kypseli
Oracle of Kypseli's picture

That may very well be true, however, how does the US gets its arms arround its debt without allienating other countries just as powerful?


Sun, 09/19/2010 - 19:27 | 591091 rwe2late
rwe2late's picture

 There are no other countries with a comparable military, especially air power and nuclear arms.

Anyhow, the Pentagon prefers to target weak countries with third-rate armies.

Base-building and endless war against civilians is its chosen claim to fame.

Sun, 09/19/2010 - 19:29 | 591093 Hephasteus
Hephasteus's picture

The US makes up stories about what the country is about and what it's doing so that we see it as evil and bad and give them the go ahead to hurt them. Which is why oil can only be found in drug lord and hurt women countries. Of course that's right after the IMF installs a dictator in there.

Sun, 09/19/2010 - 20:50 | 591206 WaterWings
WaterWings's picture

Average ZHer: "IMF = WTF"

Average American: "IMF? WTF? I haz canned ham. Go Yankees!"

Mon, 09/20/2010 - 10:49 | 591846 WaterWings
WaterWings's picture

Three junks and Hulk getting junked up-thread. WTF. I would happily inherit the junks.

Sun, 09/19/2010 - 19:41 | 591108 rwe2late
rwe2late's picture


 abolishing the Fed and stopping the war machine

should actually reduce the level of global "alienation"

besides, only then will our real "debt" be transparent enough to determine what we can and should pay.

Mon, 09/20/2010 - 05:49 | 591532 Seer
Seer's picture

Who the fuck keeps flagging you?  Fucking morons!  They just don't get it.  No idea why.  It's like the lyrics to the Avett Brothers' song Head Full of Doubt:

There’s a darkness upon me that’s flooded in light
In the fine print they tell me what’s wrong and what’s right
And it comes in black and it comes in white
And I’m frightened by those that don’t see it


And I'm frightened by those that don't see it.  Yes, the masses who are brainwashed w/nationalism (programmed by the masses' own supressors, whose enforcement IS the Pentagon).

Mon, 09/20/2010 - 10:05 | 591747 RockyRacoon
RockyRacoon's picture

The JUNK button is Mt. Everest.  Some people click on it because they can.  It's about the highest mountain they'll ever climb.

Oughta be a law:  No junk option without posting a comment.

Sun, 09/19/2010 - 23:25 | 591376 RockyRacoon
RockyRacoon's picture

 Article needs to embrace a more global perspective.

I doubt that permission was given to publish all 12 pages of the newsletter.  What you see above was only the first 5 pages.  The letter goes on to North and South America, China, Japan, Europe, Australia (where Buckler is based), and a global wrap up.  You only got a taste...

Mon, 09/20/2010 - 02:32 | 591478 Snidley Whipsnae
Snidley Whipsnae's picture

Some soverigns are paying in gold. Otherwise the Saudis would not have not announced recently that they had 'discovered' that they have twice as much gold as they previously announced. lol

Sun, 09/19/2010 - 19:06 | 591064 Something Wicke...
Something Wicked This Way Comes's picture

1, 2.5, 5, and 10 gram sizes. Puny little bars, no coins. Less commish.

Sun, 09/19/2010 - 19:12 | 591073 Oracle of Kypseli
Oracle of Kypseli's picture

Less commission yes, but coins are more acceptable to non-dealers. Non-dealers don't carry assay kits.

Sun, 09/19/2010 - 19:17 | 591079 Selah
Selah's picture

Keep the bars in the assay cards.


Sun, 09/19/2010 - 22:55 | 591342 RockyRacoon
RockyRacoon's picture

Not good enough.   The Chinese are counterfeiting everything including graded "slabbed" numismatic coins.  And they are very good at it.  Some pass coin dealer inspection without a blink.

Sun, 09/19/2010 - 23:48 | 591391 Spalding_Smailes
Spalding_Smailes's picture

September 1929
"There is no cause to worry. The high tide of prosperity will continue." — Andrew W. Mellon, Secretary of the Treasury.

Mon, 09/20/2010 - 02:34 | 591479 Snidley Whipsnae
Snidley Whipsnae's picture

...and then...'Liquidate them all'...Mellon

Mon, 09/20/2010 - 09:42 | 591706 TheJudge2012
TheJudge2012's picture

I get bullion coins from a dealer who supplies mint tubes with them. I assume that means the dealer got them directly from the mint.

Mon, 09/20/2010 - 09:58 | 591727 RockyRacoon
RockyRacoon's picture

You can buy empty U. S. Mint tubes on eBay for about $2.50 each.  The Mint sells thru primary dealers and that's where the tubes come from.  Dealers regularly sell smaller quantities from the tubes of 20 (1oz size) and pile the tubes up in the corner until they have enough to sell off.

Mon, 09/20/2010 - 10:22 | 591804 TheJudge2012
TheJudge2012's picture

Authenticity then is only as good as the primary dealer. I wonder if the mint is on the hook if the primary dealer switches real metal for fake.

Mon, 09/20/2010 - 01:02 | 591435 merehuman
merehuman's picture

Bullish on Tampons, i will be the only one for many miles who stocked up on Tampons. Once the women are on my side the fellas will be easy. Ah the modern world. LOL

Much lighter than gold and just as effective.

Mon, 09/20/2010 - 07:44 | 591572 Bob
Bob's picture

Now there's a man with his eyes open!  Don't worry, merehuman, you'll always hit the ground running.  For something with lower carry costs, may I suggest perfume as well? 

Mon, 09/20/2010 - 13:32 | 592415 Fascist Dictator
Fascist Dictator's picture

You would do better to stock up on sanitary napkins. If the SHTF, women would tend to leave tampons in longer, thereby courting TSS (toxic shock syndrome). In times of scarcity, sanitary napkins would be a better alternative. Besides, they make for a better bandage than a tampon

Sun, 09/19/2010 - 19:07 | 591065 breezer1
breezer1's picture


Sun, 09/19/2010 - 19:08 | 591068 wafflehead
wafflehead's picture

does anybody know if its possible to make your own coins ?? i got a heavy gold chain that i bought when i was young and i would like to mint it into coins

Sun, 09/19/2010 - 19:33 | 591089 Jendrzejczyk
Jendrzejczyk's picture

This guy can teach you how to make anything you want out of that chain (and a shitload of fun to hang out with).


Sun, 09/19/2010 - 23:37 | 591384 RockyRacoon
RockyRacoon's picture

A "coin" would be a legal tender issue.  You would be talking about tokens, medals, or marked ingots.  Go for it!

Mon, 09/20/2010 - 02:24 | 591473 Oracle of Kypseli
Oracle of Kypseli's picture

It may be better to transport it overseas if necessary if gold is already in jewelery form.

I wouldn't mess with changing it.

Check this true story I posted before. #355166

Mon, 09/20/2010 - 11:56 | 592120 DosZap
DosZap's picture

I try and steer clear of Legal Tender BS, with a $50.00 denom on 1oz Gold,and a BUCK on an Ounce of Silver, there is a good shot at getting laid over a Bawney Fwank barrel.

If we had an honest system, these coins would be marked at an average denom, of their prices over say a (50yr period.*at a min)

Silver rounds, from a respected MINT,get paid on the Metals value, of push came to shove.(Bars,unless from Englehard/JM, with seral#'s), would be the only bars I would own. And their too damn heavy...........LOL

Mapes,Roo's,Phils,all are .9999.And not US Legal tender.

Eagles,Krugs, 50Peso, are all mixes, more folks worldwide prefer .9999.( Eagles to me are beautiful, but I do not trust U know who).

Tokens ,medals, steer clear........IMHO.


Sun, 09/19/2010 - 19:15 | 591076 Something Wicke...
Something Wicked This Way Comes's picture

Minting ur own coins? Oh yea, there'll be peeps doing that shit- selling gold plated zinc. Dude get real. I'm gonna sell my crowns, TG I've got big teeth...

Sun, 09/19/2010 - 19:19 | 591081 Something Wicke...
Something Wicked This Way Comes's picture

Hey I gotta question for us gold buggers...

Are they just gonna print more gobs of fiat when we convert everything to gold? I mean when this shiite hits the strato?? What are they gonna take as payment for gold and what is the final settlement price when they quit taking fiat...

Sun, 09/19/2010 - 19:30 | 591095 Selah
Selah's picture

They will accept land, nice cars, food, water, and of course, Silver...


Sun, 09/19/2010 - 19:20 | 591083 Charley
Charley's picture

Fiat currency isn't used to create wealth, it is used to create scarcity...

You would think people would have figured this out by now.

Sun, 09/19/2010 - 19:32 | 591097 Hephasteus
Hephasteus's picture

Exactly. It's used to expand the money supply up till it starts making all production groan under the strain which makes investment and expansion necessary which makes fiat currency able to pay "interest" for a short time till it collapses.

Mon, 09/20/2010 - 02:37 | 591481 Snidley Whipsnae
Snidley Whipsnae's picture

Printing fiat currency is the creation of more phony claims on real assets...until no one believes in the fiat any longer. It's called hyperinflation...a loss of faith in the currency.

Sun, 09/19/2010 - 21:27 | 591266 tip e. canoe
tip e. canoe's picture

thank u

Sun, 09/19/2010 - 19:35 | 591101 AUD
AUD's picture

"When central bankers and politicians talk about “deflation”, they are talking about a fall in the market value of the paper which underpins the money they issue."

The UST is deflating in terms of gold, yet inflating in terms of $. Since the $ is the UST, I think I know which metric I'll follow.

How can the price of something change with respect to itself?

Sun, 09/19/2010 - 19:50 | 591103 geopol
geopol's picture


New York Times Planted Story on Afghan Mineral Wealth Designed to Prolong US Occupation, Spur Neocon-Backed Petraeus Presidential Candidacy

This is the power of PM.....


To provide a new and spurious economic looting argument for making the US occupation of Afghanistan virtually endless, and to advance the candidacy of General David Petraeus as the principal neocon warmonger candidate for president on the Republican ticket in 2012 – these are the purposes of the story planted in the June 13, 2010 New York Times under the byline of James Risen, who is acting as stenographer for the neocons in the great tradition of his predecessor Judith Miller. In retrospect, this article may well be seen as the opening gun of an overt push to place General Petraeus in the White House in 2012 as the new Field Marshal von Hindenburg.

According to this story, a Pentagon survey has determined that Afghanistan possesses at least $1 trillion worth of valuable minerals, including iron, copper, cobalt, gold, and lithium – with lithium being especially valuable because it is used in batteries for computers and for the new designs of electric automobiles. Of course, none of this is news, as the article itself concedes. The surveys done by the US occupation authorities over the last several years are explicitly based on careful studies done by the Soviets during their own occupation of Afghanistan during the 1980s. The basic outlines of what is being presented by Risen as front-page news were already published in a May 2004 World Bank report, which was used to dictate minerals legislation to the Afghan government. More recently, Afghan mineral wealth has been hyped by the Afghan embassy in Washington on various occasions, and was a featured theme of the visit here last month by Afghan President Karzai.

Candidate Petraeus Touts “Stunning Potential”

This planted puff piece is based on anonymous “senior US government officials.” The only exception is General David Petraeus, the warlord of the US Central Command, the theater of operations in which Afghanistan is located. Petraeus is directly cited as saying that the Afghan mineral riches whose presence the US has confirmed represent a “stunning potential” for the future development of the country. The implied message from Petraeus to the Washington elite is, to paraphrase, support me and cash in on the riches of Afghanistan, or else wimpy Obama’s self-serving pullout timetable will allow the Chinese to move in.

The repackaging and rehashing of the Afghan mineral story at this time represents a bid to mobilize political support by Wall Street, major minerals corporations, and other predatory interests to keep the US occupation of Afghanistan going far beyond the July 2011 date set by Obama for the beginning of a gradual pullout of US forces. The article makes clear that, if the US should depart from Afghanistan, the immense mineral wealth will fall easy prey to China. China, it is noted, has already taken over a copper mine in Afghanistan. In March of this year, it was a sudden alarm in Washington that Karzai’s Afghanistan was slipping into the Chinese orbit that motivated Obama’s hasty visit to Kabul. The implication is that, whether or not these minerals can actually be developed by the United States, it is imperative to stay in Afghanistan to make sure that they are denied to the Chinese.

The planted story is also designed to counter the growing war fatigue and defeatism among the US-led coalition, which is building up in advance of the NATO summit scheduled for Lisbon, Portugal this coming November. This coalition currently includes 46 nations, representing one third of the military forces deployed, and an even larger portion of the logistics necessary for the occupation. The new British regime has been signaling that its commitment to Afghanistan will not be eternal. Prime Minister David Cameron told British Tommies in Afghanistan that they will be brought home just as soon as their task is finished. Air Chief Marshal Jock Stirrup, the highest ranking uniformed military figure in the UK, is being ousted in a signal of deep cuts to come for the British military establishment. Poland has demanded that NATO come up with a detailed exit plan for ending the Afghan engagement. In Germany, the most recent poll shows about 70% opposition to the endless war, and budget cuts are looming in that country as well. The Netherlands and Canada both intend to withdraw their contingents from Afghanistan next year. Turkey is another country with a presence in Afghanistan that may soon become fed up with this adventure, especially because of the contemptuous and shoddy treatment meted out to the Turks by the State Department over the Iran uranium enrichment and Gaza aid flotilla issues. All signs suggest that, when the Afghan engagement comes up for discussion at the November NATO summit in Lisbon, disaffection and defection will be the dominant notes.

NATO defeatism comes on top of growing disaffection with Obama’s endless war inside the United States: the newest poll has a majority of 53% convinced that prolonging the Afghanistan war is not worth the sacrifices involved. Even more acute is the growing backlash from inside the Democratic Party. Congressman Charlie Rangel of Harlem recently assailed Obama as being “consistent with” Bush and Cheney when it comes to lying about the wars he is conducting.

Petraeus the Neocon, The Thinking Man’s Warmonger

The neocon cabal in Washington has been largely booted out of government by the Brzezinski-Trilateral-Bilderberg financier faction who run Obama. But the neocons are determined not to stay in the wilderness forever, and their chosen vehicle for a comeback is the Petraeus presidential candidacy. Petraeus is now the main unifying figure of the neocon war party. The allegedly thoughtful general was recently lionized at neocon central, the American Enterprise Institute, which gave him its Irving Kristol Award in early May. As Antiwar noted:

many have speculated of late he is selling himself – as a potential Republican candidate for commander in chief. …. And he probably won’t become the Republican nominee without some heavy lifting from the star-maker machinery at AEI, which would enjoy nothing more than to get its own pocket general into the White House. …. This mutually beneficial relationship is already off to a great start. Thanks to ‘Team Kagan,’ AEI’s Bill Kristol and Charles Krauthammer, and a battery of sycophantic pundits and mainstream journalists, Petraeus’ lack of authentic exceptionalism has been transformed into an unshakable ‘warrior-scholar’ persona with his own ‘legacy’…. But his recent pandering to AEI and the lip-smacking response from Kristol & Co. should make anyone who still maintains a thread of common sense and an institutional memory very concerned.[1]

Petraeus is getting kudos from Max Boot, the Kagans, Frank Gaffney, and other ambitious neocon careerists.

Peter Beinart has compared Petraeus to Dwight Eisenhower, the 1952 GOP candidate, and thinks that Petraeus may be highly effective as a candidate in the current anti-politician atmosphere. Beinart, currently at the New America Foundation, comments:

Today’s GOP has a right-wing base that can damage Obama, but none of its favorites have a prayer of winning the White House. The reason is that just like the Republican right of the early 1950s, which kept insisting that the New Deal constituted socialism (or fascism), today’s conservative activists have not accommodated themselves to some basic shifts in public mood…. powerful forces within the GOP will begin looking for a candidate who doesn’t have to kowtow to the party’s activist base. They’ll need someone with enough personal appeal to avoid the culture war food-fights that obsess the Republican base, someone who exudes moral traditionalism and fiscal prudence without appearing fanatical or intolerant. Such obfuscation won’t satisfy the GOP’s hard-right core, of course, but John McCain—another soldier-turned-pol—has already shown that the right’s stranglehold on the nominating process can be broken. Like McCain in 2008, Petraeus could largely skip the Iowa caucuses, which evangelicals dominate, and instead focus on New Hampshire, where independents can vote. In both 2000 and 2008, it was New Hampshire that boosted McCain, and New Hampshire, as it turns out, is the closest thing Petraeus has to a home state. From there it would be on to South Carolina, where military pedigrees go a long way…. Parties that have grown narrow and extreme tend to spiral downward until they nominate someone who is not beholden to their narrow, extreme base. That person has to be so popular that he or she can defy the normal rules about how candidates get nominated. Right now, David Petraeus is the only Republican who fits the bill. In the weeks ahead, McChrystal may become a conservative folk hero for opposing Obama on Afghanistan. But for Democrats looking toward 2012 and 2016, it’s Petraeus who represents the real threat.[2]

The warmonger regroupment around Petraeus has been noticed across the Atlantic by the June 12 London Economist, which measures a Petraeus-Daniels ticket against a Palin-Huckabee one. In another article, the city of London house organ notes that, in addition to Huckabee, Romney, Palin, Pawlenty, and Barbour, “a few even hope that General David Petraeus could be lured in.” In reality, Petraeus is more than eager. If current US reactionary politics resembles the mad Hatter’s tea party with Alice and the white rabbit, as the Economist cover suggests, perhaps Petraeus can bring power out of chaos.

Once we know that the neocons are running the Petraeus for President campaign, much else becomes clear, especially if we recall the neocon methods used in connection with the Iraq invasion of 2003. The planted puff piece about Afghan minerals has neocon fingerprints all over it; it may have been concocted at the AEI. It implies that NATO states that stick with the US might receive a piece of the action when it comes to looting these natural resources. This is exactly the way that reconstruction contracts in Iraq were employed under neocon auspices. Back in those days, the Germans and the French were excluded because they had opposed the neocon-induced war hysteria of 2003.

One big objection to making the Afghan occupation infinite has to do with the tremendous monetary costs involved, which the sovereign debt crisis has made it harder for the participating governments to bear. Here we should remember the pie-in-the-sky promised by Wolfowitz and other neocons in 2002-2003, when they proclaimed that an invasion of Iraq would be self-financing, thanks to the promised looting of Iraqi oil, which in reality has never materialized in the promised form. Back in those years, there were even more extravagant neocon fantasies about what could be done by bringing Iraqi oil production under US control. Some neocons recommended a massive increase in Iraqi oil output with the goal of radically lowering the world price of oil and busting the OPEC cartel. All of this, we note in retrospect, was never accomplished.

Exercitus facit imperatorem: The Army Creates the Emperor

The presidency has been won by Washington, Jackson, Harrison, Zachary Taylor, Grant, Garfield, Theodore Roosevelt, and Eisenhower, so there is no doubt that military leaders have often represented formidable contenders. By contrast, the current Republican field represents a collection of largely discredited hacks and ideological crackpots who would have a very difficult time winning a presidential contest. Palin is an imbecile. Huckabee is a clown. Jindall is a bungler. Pawlenty is a nonentity. Barbour could be a deep south favorite son at the very most. DeMint is in the same regional minor league.

Romney, the asset stripper from Bain Capital, is wired into Wall Street and does well with country club plutocrats, but lacks appeal to the social issue and warmonger reactionary currents inside the GOP. Earlier this year, Romney’s future appeared to be that of vice president and de facto prime minister/austerity enforcer in a Petraeus-Romney administration. But now, many have figured out that the Obama health care bill, with its capitulation to the insurance and big pharma cartels, is directly based on the individual mandate to buy overpriced insurance under government coercion instituted by Romney when he was governor of Massachusetts. Given the current agitation of the Tea Party Romney’s identification with the Obama health bill is now an obstacle to his future aspirations. In response to this problem, various media have begun to tout Indiana Governor Mitch Daniels, a former Reagan appointee who does not share Romney’s Massachusetts problems, although he is less effective in other ways. For the moment, we must conclude that the choice between a Petraeus-Romney ticket and a Petraeus-Daniels GOP ticket is still up in the air.

Petraeus: the New von Hindenburg

If the Petraeus candidacy materializes in the way that now seems likely, it will mark a new phase in the ungovernability, economic immiseration, and erosion of democracy in the United States. Unfortunately, the historical parallels for a Petraeus candidacy do not point in the direction of Eisenhower. They point rather towards Field Marshal Paul von Hindenburg, the German commander of World War I who became president of the Weimar Republic in 1925 and during whose reactionary and authoritarian presidency the Hitler movement rapidly grew in power. It was Hindenburg who allowed Hitler to take state power in 1933 by appointing him as Chancellor, leading to the swift consolidation of a totalitarian dictatorship. Hindenburg’s appeal was that he was a general and not a politician, not a creature of corrupt parliamentary haggling and backroom deals, but only accustomed simply to obey or to command. This meant that the Hindenburg presidency had a definite anti-parliamentary and anti-democratic thrust from the very beginning, and that is what we can expect to see if Petraeus ever gets to the White House. With the German parliament paralyzed by about March 1930, Hindenburg’s presidency soon became a continuous state of emergency rule, in which the Field Marshal approved or disapproved emergency decrees submitted by a series of chancellors – Brüning, von Papen, von Schleicher, and finally Hitler.

Petraeus has the advantage of being able to play on the sense of military discipline and loyalty which is ingrained in many Tea Party activists. Even a cursory survey of the Tea Party folk shows that a very large number of them are retired military, and their movement is full of militaristic overtones favorable to foreign aggression. There is reason to believe that many of these activists would immediately place Petraeus, whom they naïvely might view as the victor of Mesopotamia, in a special privileged category above other candidates, and rapidly fall into line. This probable ability to deliver the recalcitrant Tea Party gives Petraeus a great advantage over other Republican hopefuls like Romney, who might be competitive in the general election, but who would have a very hard time fighting their way through Republican primaries dominated by ideological fanaticism.

Obama has been doing yeoman service as a union buster, forcing the United Auto Workers to give up games they had acquired through decades of bitter struggle and sacrifice. Obama and his Secretary of Education Arnie Duncan are leading the charge to bust the teachers’ unions as the centerpiece of a general assault against public employees of all types conducted under the banner of ferocious austerity. Right now, Obama still remains the best strike breaker the Wall Street financier elite can deploy. But Obama is collapsing rapidly, and the ruling elite must prepare an alternative option for 2012. But G. W. Bush left the Republican Party in a shambles, racked by internal dissent and lead by the group of reactionary clowns, mountebanks, and misfits we have already mentioned. Would the Republican Party as it currently exists be sufficient, if put into power, to break the kind of strike wave that that might emerge (as in Greece) from the current policies of retrenchment, drastic austerity, savage cuts in social services, union busting, and tax gouging? There is some doubt that it could.

Petraeus could certainly mobilize the Tea Party to break strikes and protests by workers, students, immigrants, and supporters of social services, but his big advantage would be his ability to lean on the uniformed military establishment and the secret intelligence agencies in a more overt way than other presidents could. Again, the example of von Hindenburg is instructive. A Petraeus presidency would most likely be an exercise in emergency rule, a de facto dictatorship by Executive Order under the color of the existing 9/11 national emergency, or of some other emergency which Petraeus could declare. Petraeus could maintain a certain public detachment in order to preserve his credibility longer, while leaving the dirty details to a vice presidential Prime Minister like Romney or Mitch Daniels, both of whom have experience as state governors. The content of the emergency decrees would inevitably be economic austerity of the most brutal type, combined with unprecedented attacks on civil liberties, against a background of new and catastrophic foreign military adventures.

During this week’s hearings on the wretched state of the Afghan military adventure conducted by the Senate Armed Services Committee, committee chair Senator Carl Levin asked if, in the professional military judgment of General Petraeus, Obama’s announced goal of starting the US departure from Afghanistan were advisable. Petraeus pointedly refused to endorse Obamas July 2011 target, first remaining silent for a prolonged interval, then hemming and hawing, and finally offering a highly qualified and grudging assent, while warning that it is necessary to be very careful with timetables. In other words, Petraeus has decided to leave open the option of clashing with Obama over the conduct of the Afghan war. One can imagine a scenario in which Petraeus sometime around July 2011 resigns his command in protest over Obama’s desire to cut and run, and vows to take the issue to the voters. He might even take a leaf from von Hindenburg’s book and accuse Obama of wanting to stab his gallant forces in the back, just when final victory is within their grasp.


P.S The largest crane in the world being built in ,,,China



Sun, 09/19/2010 - 20:26 | 591159 three chord sloth
three chord sloth's picture

A few points:

1. Teacher's unions, like all public employee unions, deserve to be broken. It's hard enough to keep government responsive to the people... adding in public employee unions just pushes the needs/wants of the general population another step lower on the government's priority scale. Private employee unions might be a necessity again... but public employee unions are a tool of the oligarchy.

2. Mass immigration is just a national scale version of union busting. It's purpose is to permanently divide a population, drive down wages, and introduce and legitimize oligarchy-friendly cultures, making conquest by TPTB easier. Mass immigration is a tool of the oligarchy.

3. The cradle-to-grave welfare state is the best opiate of the masses ever devised. Get the people to voluntarily surrender their liberty and independence for a sliver of gubmint cheese... works far better than the old-style, fear-based control methods of the past. Once the retirement and health care of the population are controlled by the government, well... what are the odds of large scale change? Who over the age of 50 is willing to risk the bag-o-beans they've been making payments on for 30 years? Belief in "positive rights" is a control mechanism of the oligarchy.


Sun, 09/19/2010 - 20:37 | 591178 Hulk
Hulk's picture

Well Done.Explains much...

Sun, 09/19/2010 - 21:00 | 591230 Frank Owen
Frank Owen's picture

Seriously Hulk? 1 & 2 are not only bullshit, but obviously conflict each other.

Sun, 09/19/2010 - 21:06 | 591237 three chord sloth
three chord sloth's picture

No they don't.

Sun, 09/19/2010 - 21:21 | 591258 Frank Owen
Frank Owen's picture

We constantly hear about how public unions are demanding too much money which comes out of the tax-payer's pocket. Then you go on to say mass immigration is driving down wages. Oh, that's right they don't let immigrants into public unions...

Blaming everything on "the oligarchy" is too damn easy (and I certainly do believe in conspiracies). I can't see what "The New Colossus" is about being a ploy to divide the people."Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"
Emma Lazarus, 1883 - (Co-conspirator of the oligarchy ha)

Sun, 09/19/2010 - 21:45 | 591282 three chord sloth
three chord sloth's picture

We constantly hear about how public unions are demanding too much money which comes out of the tax-payer's pocket. Then you go on to say mass immigration is driving down wages. Oh, that's right they don't let immigrants into public unions...

Uhhh... that makes no sense. Mass immigration erodes private sector earnings and pushes demand for public sector spending up... an unhealthy combination. I am pointing out that public sector spending is too high, private sector earnings too low.

Sun, 09/19/2010 - 22:07 | 591302 Frank Owen
Frank Owen's picture

Mass immigration erodes private sector earnings and pushes demand for public sector spending up... an unhealthy combination. 

Can I substitute something? 

Population growth erodes private sector earnings and pushes demand for public sector spending up... an unhealthy combination. ??? I have to go - sorry.


Sun, 09/19/2010 - 21:19 | 591257 Hulk
Hulk's picture

I re-read and I think he pegs it. I would change the language to illegal immigration though. Many moons ago, I taught in the community college system and all the unions did was keep idiot teachers employed.I felt very sorry for the kids.I left because I just couldn't stand the incompetence (and arrogance). Your thoughts are welcome though Frank.

Sun, 09/19/2010 - 21:36 | 591271 Frank Owen
Frank Owen's picture

Well if he meant illegal immigration that's what he should have said - not mass immigration. I agree that unions have gone too far in some ways, but I damn well know why they came into existence... Not many of us here were even infants in the "good old days" of cheap labour when they used to use kids in cotton mills and didn't give a shit if they fell into the machinery because they were lined up out the door trying to get a job struggling with poverty.

Don't forget the danger of a pendulum.

Sun, 09/19/2010 - 21:59 | 591297 Hulk
Hulk's picture

Agreed, unions came in for damn good reasons, but they have since been hijacked...

and now we coddle children when they should be allowed to work, at some reasonable level with reasonable reward, instead of couch potatoing...

Sun, 09/19/2010 - 22:17 | 591311 Frank Owen
Frank Owen's picture

Ebenezer: [shocked] Spirit, are these yours?
Spirit of Christmas Present: They are Man's. This boy is Ignorance, this girl is Want. Beware them both, but most of all, beware this boy!
Ebenezer: But have they no refuge, no resource?
Spirit of Christmas Present: [quoting Scrooge] Are there no prisons? Are there no workhouses?

The bitch of it is we're struggling with both want and ignorance at the same time. lol - Gotta go.

Sun, 09/19/2010 - 22:47 | 591334 Hulk
Hulk's picture

LOL, not quite the picture I was trying to paint Frank!

Sun, 09/19/2010 - 23:20 | 591368 1100-TACTICAL-12
1100-TACTICAL-12's picture

People do a shot & go to sleep CNBC will be on when U wake up...GFN

Sun, 09/19/2010 - 23:53 | 591399 Spalding_Smailes
Spalding_Smailes's picture

January 24, 1930

"Trade recovery now complete President told. Business survey conference reports industry has progressed by own power. No Stimulants Needed! Progress in all lines by the early spring forecast." - New York Herald Tribune.

Mon, 09/20/2010 - 06:11 | 591535 Seer
Seer's picture

There's a falacy of the unions.  In all actuality they were very good for big business, as it gave them a channel to engage in easier suppression of workers: as noted, there's corruption, and this happens when you consolidate power into the hands of a few, the hands of the "representatives."  Sad to say, but the reality is that the only thing that the rulers fear is violence (they know all to well, that's why they are so good at it); unions removed the threat of violence, game over...  Yeah, solidarity all good and all, but it's only led to further suppression.

The teachers union is all about establishment, not teachers.  It's about enforcing compliance with/for big business, for teaching (read "programming") a "workforce" for big business.

Like I've been saying, BIG = FAIL!  Concentration of power, FOR WHATEVER [ORIGINAL] REASON ALWAYS LEAD TO THE SAME FINAL OUTCOME -> CORRUPTION.  And that's the favorite state of the rulers, corruption means the ability to circumvent due process/laws, to violate laws to get others to follow laws!

Sun, 09/19/2010 - 20:53 | 591213 rwe2late
rwe2late's picture


what's the matter with all those people!

Abolish "positive" rights!

No one has a right to be protected from fires by firefighters, have their health protected by public health workers or food inspectors, nor do children have a right to be educated, and certainly no one has a right to be fed by food stamps.

negative rights for everybody!


Sun, 09/19/2010 - 21:25 | 591262 three chord sloth
three chord sloth's picture

No, not "/sarcasm".

Straw man. The best friend of every defender of Rule by Elites... turn it up to 11 and argue against that!

Keep on pretending  no public good ever exists unless it's bureaucratic, judicially enforceable, and codified to the gills. Of course it's difficult to explain how schools, fire departments, inspectors, etc. all existed before Washington decided to make them "rights", and therefore expensive and rigid, instead of just "good public policy", and therefore affordable and flexible.

Mon, 09/20/2010 - 10:40 | 591866 rwe2late
rwe2late's picture


There is no sensible answer to the arguments you make on my behalf.

First you reply that straw men are "the best friend of every defender of Rule by Elites" (an ad hominem argument vaguely implying I am a "defender of Rule by Elites").

Then you disparage a straw man claim that I am "pretending no public good ever exists unless it's bureaucratic, judicially enforceable, and codified to the gills".

Finally though, I do agree that it would be difficult for me to explain what you believe existed before whenever what you call "rights".


Mon, 09/20/2010 - 01:20 | 591442 Stevm30
Stevm30's picture

Yoda says:

a confused mind find you shall, one that makes sense intending to jest


Sun, 09/19/2010 - 21:15 | 591253 rocker
rocker's picture

Oh yes, us against them while the dam dollar and the U.S. goes to hell.  Be Real.  

Sun, 09/19/2010 - 21:33 | 591272 three chord sloth
three chord sloth's picture

My name is reality.

It is us against them. It has been for more than 50 years. Once the government was taken over by the technocrats it's been us vs. them. The so-called "best and brightest" have been rigging the game in their favor and completely screwing up public/foreign policy since at least the Kennedy administration; always to the detriment of the common people and to the benefit of the insiders and favored elites.

Sun, 09/19/2010 - 21:56 | 591291 Frank Owen
Frank Owen's picture

I don't mean to beat on you - but I think we have a way bigger problem than the "us vs. them" and that is the "us" vs. "us". We're populations who vote for our leaders because they're anti-abortion or won't take our guns away or we wouldn't mind having a beer with them or because they're going to pay for our mortgages.

I'd go on, but I don't type fast and have to go to bed. I didn't junk you btw.

Sun, 09/19/2010 - 21:36 | 591275 Dr. Sandi
Dr. Sandi's picture

1. Teacher's unions, like all public employee unions, deserve to be broken.

All unions must be destroyed. Only when the power of individuals to gather together into a power bloc is crushed will corporations be able to grind the common man to dust with impunity.

Sun, 09/19/2010 - 21:55 | 591288 three chord sloth
three chord sloth's picture

Public sector unions do little to oppose the power of corporations, they oppose the power of the voter.

Public and private sector unions are a different animals entirely, living in a different ecosystems with different feeding habits and different positive/negative effects upon their environments. One can easily be a plus to the nation while the other is a minus.


Sun, 09/19/2010 - 21:58 | 591295 tip e. canoe
tip e. canoe's picture

agreed with the principle, but unions are so 20th century.  unions & corporations support & maintain each other's codependenct dominance.   fuck corps & unions.  perhaps it's time for self-organizing collectives?

Sun, 09/19/2010 - 23:22 | 591372 Spastica Rex
Spastica Rex's picture


Mon, 09/20/2010 - 06:13 | 591538 Seer
Seer's picture

That's my answer! :-)

Mon, 09/20/2010 - 07:50 | 591576 tip e. canoe
tip e. canoe's picture

another concept cum ideology that's been bastardized beyond the point of no return.

"How did we come to this? Deceived by 20th-century Communism and disillusioned with 21st-century capitalism, we can only hope for new Kravchenkos — and that they come to happier ends. On the search for justice, they will have to start from scratch. They will have to invent their own ideologies. They will be denounced as dangerous utopians, but they alone will have awakened from the utopian dream that holds the rest of us under its sway."

- zizek, 11/09/09

Sun, 09/19/2010 - 23:21 | 591370 weinerdog43
weinerdog43's picture

I'll look forward to 7 day weeks and having your retarded children working for me in the future. 3 cents an hour sounds about right for you.  OK? 

Mon, 09/20/2010 - 08:10 | 591592 Seer
Seer's picture

And the other side of the "contract" is that you have no protection, that you are open to retaliation for any perceived mistreatment (the unions have effectively removed this from the equation).  So, if you're a prick you'll end up a dead prick.  Moral of the story: don't be a prick; in the future we'll have to be more civilized (in what will, when viewed against today's rosy painted picture, appear uncivilized).

Mon, 09/20/2010 - 03:18 | 591499 Oppressed In Ca...
Oppressed In California's picture

Teacher unions are doing a much more effective job of grinding the common man to dust.

Mon, 09/20/2010 - 10:49 | 591738 oddjob
oddjob's picture

'Those who cannot do, teach,those who cannot teach,teach gym.'

Woody Allen?

Mon, 09/20/2010 - 12:57 | 592321 DosZap
DosZap's picture


You left out one of the most IMPORTANT reasons for immigration(legal/illegals), Growth in population, and minorities tend to vote Democrat.Have to have more growth to pay those taxes!

Just read the USA has agreed to allow 100,000 Palestinians American Legal Citizenship, as part of the peace Plan.............

Just what we need, let's import more frigging terrorists..........

Bunch of idiots.

Dilute the American People, to where the real people are the minority.

Novus Ordo Seclorum

Mon, 09/20/2010 - 20:03 | 593516 Dr. Sandi
Dr. Sandi's picture

Growth in population, and minorities tend to vote Democrat.

Actually, the Latino minority tends to vote Republican. Not that either party or your lack of facts really makes a lot of difference to the end result.


Sun, 09/19/2010 - 21:29 | 591269 Lndmvr
Lndmvr's picture

Petraeus is scorned by both sides and wouldn't even be around if there was someone to take his place when MCCrystal quit. I junked for too damn many words.

Sun, 09/19/2010 - 22:00 | 591286 tip e. canoe
tip e. canoe's picture

don't sleep on Gary Johnson.  listen to this and imagine him on stage in a debate with the rest of the yahoos you mentioned:,0,40360...

now imagine him on a stage in a debate with herr presidente.

Sun, 09/19/2010 - 23:41 | 591363 RockyRacoon
RockyRacoon's picture

Geopol, post a synopsis and links to pertinent information.

Staying on topic would be nice as well.

Looks as if you see the site as your personal soapbox.

Mon, 09/20/2010 - 05:02 | 591520 mrgneiss
mrgneiss's picture

Can't believe you got two junks RR for posting something sensible.  Must be some chickenshit cowards.

Mon, 09/20/2010 - 10:00 | 591735 RockyRacoon
RockyRacoon's picture

Fellow tin-foil hatters.  Geopol's "comment" got 13 junks so far.  I feel vindicated.

Mon, 09/20/2010 - 02:44 | 591482 Snidley Whipsnae
Snidley Whipsnae's picture

Patraeus = Caesar crossing the Rubicon.

Edited version...for the reading impared.

Mon, 09/20/2010 - 05:13 | 591523 StychoKiller
StychoKiller's picture

Afghanistan, pfftt!  I know where Quadrillions in gold can be found -- seawater!  Good luck "Mining it!", same with minerals in Afghanistan.

Mon, 09/20/2010 - 13:02 | 592331 DosZap
DosZap's picture

This is a crock...........

When have we ever stayed in a country, and stolen their natural resources?.

We haven't.We blow the shit up, kill the so called bad guys,get a few thousand of Americans,Brits, etc killed, and come home.

Who is controlling Iraq's Oil??

Sure as hell is not us.

If there were ever a country to stay IN, it is Trashcanistan, to make damed sure the Pakis do not get their Nukes taken over by the Taliban, and Al Queerda.


Sun, 09/19/2010 - 19:42 | 591109 Something Wicke...
Something Wicked This Way Comes's picture

Dude, War and Peace was shorter.

Sun, 09/19/2010 - 19:46 | 591117 Hulk
Hulk's picture

He gets paid by the word. Edumacation ain't cheap!!!

Sun, 09/19/2010 - 19:44 | 591114 tictawk
tictawk's picture

Great analysis!  However one major problem remains i.e. over the last 40 years, all the debt was created in a fiat currency and if the dollar becomes a hard currency, it will make it impossible to repay the debt because the phony means of credit creation will not be there anymore. Real wealth payback is a in a hard currency is impossible given that this nation has exported is blue collar and white collar job overseas. 

So all that remains is DEFAULT on the trillions in DEBT.  Shhhh! don't tell our Asian vendors :-)

Sun, 09/19/2010 - 19:51 | 591123 Real Estate Geek
Real Estate Geek's picture

Is this week a particularly good one to buy PM?  I've heard options expire soon.  If that's true, are there other considerations, e.g. are some months better than others?

Sun, 09/19/2010 - 20:52 | 591204 GoinFawr
GoinFawr's picture

If op-ex always ends in tears, why on earth would anyone ever play? Repeated indefinitely, eventually it would become a very one-sided trade...eventually.


Sun, 09/19/2010 - 22:02 | 591298 JLee2027
JLee2027's picture

Is this week a particularly good one to buy PM?  I've heard options expire soon.  If that's true, are there other considerations, e.g. are some months better than others?

You miss the point. It's a bull market. Get in. No one can tell the future which week is good or not. What does matter is that you GET IN.

Sun, 09/19/2010 - 19:59 | 591132 Something Wicke...
Something Wicked This Way Comes's picture

I am dollar cost averaging. I spend 400 bucks every two weeks, on the days PM takes dips. I'm not sure-exactly-but I am not expecting any giant pullbacks but if that happens this week I will be buying my miniscule amount...

Sun, 09/19/2010 - 20:52 | 591212 GoldSilverDoc
GoldSilverDoc's picture

"dollar cost averaging".   Did you miss the entire point of this article, or are you being funny?

Sun, 09/19/2010 - 21:26 | 591264 Something Wicke...
Something Wicked This Way Comes's picture

I tried to pay them with checks-they demanded fiat. That's whats working.

Sun, 09/19/2010 - 20:08 | 591142 themosmitsos
themosmitsos's picture

Nothing new for me here, but this is truly an OUSTANDING, concise presentation that you rarely [if ever] get to see. Good to know there's other rational individuals out there.

Sun, 09/19/2010 - 23:22 | 591367 RockyRacoon
RockyRacoon's picture

As a subscriber to The Privateer for about 10 years I can say that I've had a great education as well as spot on predictions about how all this has turned out.  As with many who have described the downfall of this fiat system, Bill Buckler was early.  These guys at the helm are good!  They will fight tooth and nail to keep it going but as long as they hold the wrong concepts about how an economy works, it will fall.

What you read above is the first 5 of 12 pages.  Mr. Buckler goes on to describe the events and consequences in the rest of the world.   The newsletter is not U. S. centric but there is heavy emphasis on the world's reserve currency and its effects on the world economy.

Sun, 09/19/2010 - 20:14 | 591147 gwar5
gwar5's picture



Fiat = Fractional Banking = Ponzi = House of cards = Federal Reserve = All In == What could go wrong?

Seems Oil, Gold, and the American Taxpayer are the only relevant commodities at the table. One of the three is not holding any cards and everyone (MSM) is afraid to say out loud who the bluffer is. While .666 represents some good work, and will get you into the hall of fame, the number does not bode good tidings.



Sun, 09/19/2010 - 20:48 | 591199 Double down
Double down's picture

He stole my thesis!:)

He is welcome to it.  Quite flattered actually; means that there is at least two of us:)  I just hope it is right, gulp. 

Sun, 09/19/2010 - 20:54 | 591214 lieto
lieto's picture

Great post.

Thank you.

This just points out how long the distortions have built up and helps quantify the degree and how screwed we are when the unwind really picks up steam.

Can anything be done to stop this folly now?

Can humpty be put back together?

What a sad joke.

Zero hedge/ TD rock!

Sun, 09/19/2010 - 20:58 | 591226 thegr8whorebabylon
thegr8whorebabylon's picture

write  in  Ron  Paul  .

Sun, 09/19/2010 - 21:28 | 591267 Something Wicke...
Something Wicked This Way Comes's picture


Mon, 09/20/2010 - 01:15 | 591439 New World Chaos
New World Chaos's picture

We desperately need a dollar collapse within the next 18 months in order to destroy neocon dreams of empire and give Ron Paul a shot in the Republican primary.  That would force the NWO to steal the election for Obama, and I bet most states would secede and the military would join them.  But if Petraeus beats Obama, then the NWO will have a much easier time using the military to put down revolts.  Perhaps that is part of the plan?  Heads they win tails you lose, as always.

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