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Gold Special Report: Erste Group Says Foundation Of A Return To Sound Money Has Been Laid, Expects Gold To Hit $2,300

Tyler Durden's picture


Erste Group's Ronald Stoeferle has released another must read report on gold, recapping all the recent developments in the space, and more importantly putting the recent price moves in context. While there are numerous key observations which we leave to readers to uncover on their own, arguably the key fact is the following: "The possession of gold is tantamount to pure ownership without liabilities. This also explains why it does not pay any ongoing interest: it does not contain any counterpart risk. Along with the International Exchange and the Chicago Mercantile Exchange, JPMorgan now also accepts gold as collateral. The European Commission for Economic and Monetary Affairs has also decided to accept the gold reserves of its member states as additionally lodged collateral. We also regard the most recent initiatives in Utah and in numerous other States as well as in Malaysia, and the planned remonaterisation of silver in Mexico as a clear sign of the times. The foundation of a return to “sound money” seems to have been laid." And as the currency basket vs gold since 1999 chart below demonstrates, the key feature of fiat money is that is most certainly has liabilities, paradoxically in the form of central bank assets which collateralize it. The more worthless "assets" that are taken up by central banks to match the balance sheet expansion, the more worthless the actual currency in the form of actual circulating paper and reserves. As such it is not so much the actual dilution of fiat paper that devalues it: it is the increasingly less valuable available collateral that supports it. As for the future: one of Erste's scarier hypotheticals is that should the US lose control of its monetary base, leading to a 1000% jump in said monetary metric, the shadow price of gold assuming 40% backing of gold, would be $99,419. Frankly we have yet to hear even some of the most undaunted gold bulls throw this number around.

Probably the most important chart which each and every report on modern monetary analysis should include is the following: the one showing the relative value of gold versus a basket of currencies. While it is true that within the closed system of fiat currencies, where the devaluation of one leads explicitly to the revaluation of another (or others), the ceaseless dilution of all ultimately leads to an absolute loss in credibility and value relative to hard assets. Per Erste:

The following chart also shows the clearly intact downward trend of most currencies vis-à-vis gold. The equally weighted currency basket consists of US dollar, euro, Swiss franc, yuan, Indian rupee, British pound, and Australian dollar. The downward trend is intact and is at the moment only marginally above the trend line. We have little reason to believe that the downward trend should subside in the foreseeable future, which is why we stick to our positive assessment of the future gold price development.

And some more observations on the central bank-FX-gold interplay:

We underestimated the supply of “digital printing ink” by the Fed and the relentless deficit spending. In June 2010 we had not expected the US central bank to attach as little importance to monetary stability as it ended up doing. We believe that the “Bernanke put” is the main reason for the rising prices in the commodity segment. The Fed has repeatedly referred to the positive effects of higher share prices. Gold also benefits from the decrease in risk aversion, as the following chart clearly illustrates. The higher correlation between the equity market and many commodities can hardly be explained by traditional supply/demand structures; in fact, the monetary policy seems to have turned into the most important determinant of the financial markets.

Other key highlights in the report focus on why excessive structural debt suggest much more future appreciation in the price of gold, why negative real eates have been a boon to gold price increase, the dead end of debt saturation which means that soon baseless currency destruction will be the only outcome of further monetary and fiscal easing, on gold and silver as official means of payment versus Gresham's law, on why money is now gold according to the regression theorem, and much more.

Probably one of the most curious observations in the report goes to the gold stock-to-flow ratio.

The most important feature of gold is definitely its extremely high stock-to-flow ratio. The aggregate volume of all the gold ever produced comes to about 170,000 tonnes. This is the stock. Annual production was 2,586 tonnes in 2010 according to the World Gold Council. That is the flow. Dividing the former by the latter, we receive the stock-to-flow ratio of 65 years.

Stock-to-flow as most important reason for the monetary relevance of gold and silver Paradoxically, gold is not scarce – the opposite is the case: it is one of the most widely dispersed goods in the world. Given that its industrial use is limited, the majority of all gold ever produced is still available. The recycling of existing gold accounts for a much larger share of supply than for other commodities. This is also why any significant production expansions or disruptions can be absorbed more easily. We therefore believe that gold is not that precious because it is extremely scarce, but because the opposite is true: gold is considered that precious because the annual production is so low relative to the stock. This feature has been acquired in the course of centuries and cannot be undone anymore.

Global gold reserves grow by an annual 1.5% and thus at a much slower rate than all the other money supply aggregates around the globe. The growth rate is vaguely in line with population growth. The trust in the current and future purchase power of money or any means of payment not only depends on how much is available now, but also on how the quantity will change over time. If mining production were to increase by 50% (which is highly unlikely), this would only translate into an annual increase of 3%. This fact creates a sense of security as far as the availability is concerned and prevents natural inflation. If production were down for a year, this would also have little effect on the overall situation. On the other hand, if the copper production were to be disrupted for an extended period of time, the stocks would be exhausted after about 30 days. For example, if a huge new mine were to come online and supply doubled, this would come with huge repercussions for the copper price, but with hardly any for gold. This stability and safety is a crucial prerequisite for the creation of trust. And it is what differentiates gold and silver as monetary metals clearly from commodities and the other precious metals. Commodities are consumed, whereas gold is hoarded. This also explains why traditional supply/demand models are only of limited use for the gold market.

Due to the high stock-to-flow ratio gold tends to be traded in contango. This means that the futures price is above the spot price. The last backwardation in gold dates back to2008, while silver was traded in backwardation in January 2011. In the case of backwardation, the market sends a signal as a result of which demand all of a sudden increases, and it makes no sense anymore from an economic point of view to bet on a later delivery date, given that the costs of storage, financing, and insurance would be higher. Backwardation is a clear sign of supply shortages.

What are the implications - enter the Shadow Gold Price:

In 2008 we set our long-term price target of USD 2,300 for the first time. We continue to expect the gold price to rise at least to the inflation-adjusted all-time-high of USD 2,300/ounce (dating from 1980) at the end of the bull market. Some historical comparisons suggest even higher spheres. When we compare the pinnacle of the previous gold bull market with the closing prices of 2010, we find that gold had increased only marginally in relation to the S&P index, the money supply, debt, or even the US dollar reserves.

QB Asset Management calculates the so-called "Shadow Gold Price” (“SGP”). It divides the US Monetary Base by U.S. official gold holdings, the same formula actually used during the Bretton Woods regime to fix the exchange value of the dollar at USD 35.00/ounce. It would be the theoretical price of gold today were the Fed to depreciate the USD to a level that would cover systemic bank liabilities (transform a debt-based into a asset backed currency). The current Shadow Gold Price would be just under USD 10,000. This figure illustrates the magnitude of monetary inflation already embedded into the system, sitting latent and threatening to increase the general price level.

The following table shows the theoretical Shadow Gold Price in different base-money supply scenarios. If the money supply were to fall by 25%, then the SGP would still be USD 7,456, if the monetary base were to rise by another 50%, then it would be at USD 16,634.

This calculation is by no means a pure mind game but rather the way the exchange rate between paper and money was calculated during the Bretton Woods Agreement. After the Federal Reserve Act of 1914 coverage was set to at least 40%. Therefore we have also based our calculations on a 40% coverage ratio.

At the moment less than 2.6% of US government debt is covered by gold, which is clearly below the long-term median of 5%. Should the gold price therefore double, the coverage would only rise to the long-term median. But this would also require stable government debt, which is less than likely. The highs of the ratio dating from the 1980s would only be reached at a price of about USD 15,000.

If one were to fully cover the current debt with gold, the price would have to increase to USD 57,000/ounce. That said, a full coverage is extremely unlikely; at its highs the ratio was at 55% in 1915 and at slightly less than 25% in 1980.

All this and much more in the full report below.

Special Report GOLD - In GOLD We TRUST - July 2011


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Mon, 07/04/2011 - 09:38 | 1423988 GetZeeGold
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Looks like I'm early. Glad I packed a lunch.


Mon, 07/04/2011 - 10:48 | 1424165 Sudden Debt
Sudden Debt's picture

I wish I could type as fast as you...


maybe if I used both my hands?....


but how would I jerk off and smoke at the same time?

I tried it once....


I guess I'll only figure that one out when I gain as much experience as you do... :)


Mon, 07/04/2011 - 11:13 | 1424256 Janice
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Photos, not hyperbole.

Mon, 07/04/2011 - 13:24 | 1424599 tictawk
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There are two ways to resolve today's debt problem.  Our currency is created from DEBT. The choice is very simple.  The Fed can either MONETIZE all the debt thereby rendering the currency worthless or we have a DEFAULT on all the zombie loans and unpayable debt.  If it is the latter, many banks will go under and people will lose their money that is in those banks.   The default occurs when credit effectively dries up for most everybody and cash becomes king.  We are seeing the initial stages of that currently.    After the collapse of debt, the govt may try to monetize future liabilities.  The debt monster is so huge, that the FED at this point is powerless.  This is demonstrated daily given that nothing is working.  All the money they throw at the problem is sucked up by the equity market and does little for the economy where it really counts.

Mon, 07/04/2011 - 13:40 | 1424654 Spitzer
Spitzer's picture

No, cash does not become king in the latter, the cash is backed by the full faith and credit of the US govt. Without the credit, the dollar will sell off, not rise.

The quantitative theory of deflation is dead wrong. If it where right then the Euro should have rallied in the summer of 2010, when Greece was on the cusp of default, instead it fell from 1.49 to 1.19(incipient hyperinflation)

Also, why didn't the Thai Baht rise is 1997 when Thailand defaulted on debt ? It crashed by 40% within days. There was no huge rise in the printing of Thai Baht when that happened.

Mon, 07/04/2011 - 17:48 | 1425151 DoChenRollingBearing
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A little off topic, but I know Spitzer will enjoy this.

I was rooting around in older FOFOA articles and encountered the below quotation, which matches almost exactly what ZH-er "Acidtest Dummy" once wrote, a brilliant comment.  FOFOA wrote in Sept. 2008:

"The way "the deal" was supposed to work was that the CB's would have to use little to none of their own gold, but instead keep the price just above production costs for mines so that "oil" could take it's gold right out of the ground. The supply from the mines would be supplemented by gold going from the private sector to "oil" as well."

Acidtest Dummy wrote words to the effect that Au uses carbon, in both hydrocarbon and human forms, to gather itself together in ever larger lumps.  When I first saw Acid's remark, it electrified me...

Mon, 07/04/2011 - 20:06 | 1425337 Hephasteus
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Ya good points. But when the curve on oil and gold production collapses it's going to be a stair step ride. Right now gold should be about 3k an ounce. If it doesn't go ahead and stair step then when we hit another peak oil curve bump it'll go absolutely nuts. Since it's based on production right now as gold get's harder to get and oil to get gold get's harder to get it's game over.

Mon, 07/04/2011 - 14:23 | 1424782 Quinvarius
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Raising the price of gold so that there is a financial asset to counter the debt solves everything with no haircuts. 

Tue, 07/05/2011 - 01:15 | 1425528 baby_BLYTHE
baby_BLYTHE's picture


Tue, 07/05/2011 - 16:22 | 1427600 grekko
grekko's picture

You got it backwards.  You don't raise the price of gold, that never changes.  The only thing that can be done is to devalue the Fiat!

Mon, 07/04/2011 - 09:45 | 1424002 KlausK
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"New Deal" for Europe:

Google translated:

The "New Deal" was a U.S. reform program has been boosted by in the thirties of last century, massive state investment, the economy. The euro zone could also collect on the issue of EU bonds funds "to finance the economic recovery, rather than saving measures carried out" according to SPIEGEL information in a declaration, inter alia, the former Prime Minister Guy Verhofstadt (Belgium), Giuliano Amato (Italy), Michel Rocard (France) and former Portuguese President Jorge Sampaio support.,1518,771996,00.html

We know how to print, too!

Mon, 07/04/2011 - 09:43 | 1424009 Popo
Popo's picture

Apparently I missed the "return to sound money".   When did that happen exactly?

Mon, 07/04/2011 - 10:04 | 1424061 Michael Victory
Michael Victory's picture

The return to sound money.. escorted in with the shovel ready jobs.

Believe that..

I've got a bridge to sell you. 

(link = Why we're freggin doomed.)


Mon, 07/04/2011 - 10:21 | 1424101 fredquimby
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I asked FOFOA to make this post into a book as it is the best piece of gold writing I have ever read


Mon, 07/04/2011 - 11:17 | 1424263 DoChenRollingBearing
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+ $55,000

His "Return to Honest Money" is his summation to everything that I have read before at his blog.

Note everyone that FOFOA has called for a price that could be as high $100,000 / oz!

Mon, 07/04/2011 - 11:44 | 1424339 Ahmeexnal
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Yes, and silver will be three times as valuable as gold.

Mon, 07/04/2011 - 11:58 | 1424376 DoChenRollingBearing
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Would you be interested in writing a "Guest Post" at my blog on silver?  I direly need an expert on silver to write "The Case for Silver" or similar.  If you might be interested, send me a gmail at my name, I will send you the link to mt blog, you can take a look around and decide for yourself.  My blog uses my real name, so I do not post the link here.

Mon, 07/04/2011 - 13:10 | 1424578 sskid
sskid's picture

You should watch these videos, or link them to your blog

if you want a case for silver vs fofoa.

These are the first two, you can find the rest at his ytube channel


Mon, 07/04/2011 - 14:02 | 1424732 DoChenRollingBearing
DoChenRollingBearing's picture

THANKS, sskid!

I will go look at them, and if they are sound, up they go!

I still need someone to write something for me though...

Mon, 07/04/2011 - 14:48 | 1424847 DoChenRollingBearing
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@ sskid, I just put five of the videos up at my blog as well as the below comments:

"I still wait for a silver expert to come and write a Guest Post on the case for buying silver.  I do not know silver well.  I like gold better, but I hold about twice as many ounces of silver as I do of gold and platinum combined.

I have seen a very few, but they are there, at Zero Hedge make a case that the price of silver could actually go HIGHER than gold.  I believe those who say that are basing that on fundamentals (usage of silver is higher than what is being mined, etc.).

While I plead for a silver expert to come and write here, Zero Hedge contributor "sskid" sent me the below links to YouTube videos which basically critique FOFOA's Guest Post's (author "costata") column on silver not long ago.  There are eight of these, at the moment, I have only watched one (the first).  I post the first five, the rest are there at YouTube right along these.  To watch them all would require over two hours...  That is one reason why I need an expert to step and write a cogent article on silver!"

Mon, 07/04/2011 - 15:28 | 1424919 sskid
sskid's picture

The first one is very slow, should maybe skip it, watch this one




Mon, 07/04/2011 - 12:01 | 1424386 Oh regional Indian
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;-) Gold bugs hate that kind of talk Ahmeex.
I happen to agree.

I also think that a move to real hard money (ie. land/edible/security) assets by the end of this year is highly advisable.

We are entering final phase. Such a ride.

Mon, 07/04/2011 - 14:09 | 1424751 SWRichmond
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$10,000.00 gold wouldn't surprise me one bit.  The gold investments I have is for moving wealth forward into the next currency regime, whatever it is.  Silver is for profit potential.  Gold is safety.  Silver is fear and greed.  Simple.

Mon, 07/04/2011 - 12:35 | 1424469 gosseyn
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And a gold/silver ratio <1 for the first time in history?  Dream on, my friend.

Mon, 07/04/2011 - 12:51 | 1424516 HungrySeagull
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Actually it may be a possibility provided that Silver is a industrial metal. Gold may do well as a subistute when it becomes cheaper than silver.

Copper? Forget it. Wheat? Rots. Corn? We burned it all as fuel.

Mon, 07/04/2011 - 14:43 | 1424826 Iam_Silverman
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"Copper? Forget it"

Please elaborate.  In many cases, Copper has been used as a monetary metal.  It has many industrial uses, as does Silver (and to some extent, Gold).  Rumor has it that China has been considering a tri-metal backed currency.

I am interested as to why you think that copper might not be a useful Semi-PM to hold.  What about Nickel?

Copper Bullion Coins:

They are attractive, but are they worth holding?

Mon, 07/04/2011 - 16:09 | 1424995 XenoFrog
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Copper bullion has storage issues that Silver/Gold do not.

Tue, 07/05/2011 - 17:08 | 1427781 Iam_Silverman
Iam_Silverman's picture

"Copper bullion has storage issues that Silver/Gold do not."

Again, I am a novice.  Please elaborate.  Does it have to do with the price per unit weight issue - as is often used by Gold buyers to disparage Silver purchases?  If it does, well that's no real issue here.  I have acres and acres to store stuff.

Mon, 07/04/2011 - 16:48 | 1425070 DosZap
DosZap's picture

Check the Premiums on this rip off.......and you will change your mind QUICK.

Tue, 07/05/2011 - 17:05 | 1427773 Iam_Silverman
Iam_Silverman's picture

"Check the Premiums on this rip off"

I wasn't looking to buy from these folks, actually.  I was just looking for an image of Cu bullion (generically).  I know that like other metals, you should shop around and educate yourself before you buy.

Mon, 07/04/2011 - 13:39 | 1424650 DosZap
DosZap's picture

These folks foreigners?, FRA was not 1914......Dec 22nd 1913.

Mon, 07/04/2011 - 13:43 | 1424670 Spitzer
Spitzer's picture

That's right.

Ben Davies is a distant second at $30,000+ but he said that on CNBS. He might have been thinking $100,000 but didn't want to say it. He could be FOFOA for all I know.

Mon, 07/04/2011 - 09:52 | 1424016 Cognitive Dissonance
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What are the implications - enter the Shadow Gold Price.

I love this term. If we can have a Shadow Banking System and a Shadow Government and a Shadow Military why can't we have a Shadow Gold Price.

I spent some time this weekend with the extended family and I was asked many questions about the banking system and precious metals. When I began talking about "paper" PMs as opposed to physical they suddenly became confused. Isn't it the same thing? When I talked about the leverage used in paper, meaning that the physical backed up only a small fraction of all the paper PMs, there was shock and outright disbelief.

They simply couldn't understand how the government, that bastion of wholesome goodness, would allow this to go on. When I explained how the Fed (not a gvt agency - surprise) and the gvt were involved in this they stopped listening. The Big Lie was too big to be believed.

Can't blame them really. No one wants to believe their Daddy is a serial rapist or a child molester. Best just to close the eys, cover the ears and scream "I can't hear you".

Mon, 07/04/2011 - 09:54 | 1424036 mayhem_korner
mayhem_korner's picture

Nice post, CD. 

And as we come to understand how small of a minority it is that understands the Big Lie and how it is going to play out (yes, several permutations but all end the same), it becomes clear that the collapse is going to yield an incredible concentration of wealth housed by that same, very small minority.

I expect there will come a time when all those nuggets of ignored wisdom come to roost, and all those who've cast us aside as "paranoid nut jobs" will come pounding on the door in repentant fury.  For that potential I keep my banter to a very close few - immediate family and trusted friends.

-in my sopwith camel

Mon, 07/04/2011 - 11:28 | 1424303 dark pools of soros
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that's why TPTB do not care how water down the fiat gets..  they know it is debtmoney not wealth..  but to manipulate it to force the public into such debts as to give away the farm so to speak, then the wealth is transferred

They have already crippled the working-class private unions and are on the warpath vs the working-class public unions.  And the main thing against those unions aren't the pay scale as it is the security and benefit/healthcare factors in those contracts.

Mon, 07/04/2011 - 13:44 | 1424669 DosZap
DosZap's picture

I stopped the FACTS and the Save your butt routine about a year ago.

NO one wants to hear it, and no one (I know owns any physical).

So  be it..........

If the entire scenario was resolved and it dropped back to $300.00 an oz, I would lose a wad.

Since that is impossible in the real world,I continue as most here do to have insurance against the almost certain.

Mon, 07/04/2011 - 09:57 | 1424045 doggings
doggings's picture

CD I have these conversations too, and youre exactly right, the Big Lie needs 64bit processing power, and most of these people are Amstrads or Commodore 64's.

curiously every single one Ive managed to make take the sheeple quiz has scored 2 or more but always take offence to their verdicts.

"its not me, I can see clearly, its everyone else.."


Mon, 07/04/2011 - 11:26 | 1424294 DoChenRollingBearing
DoChenRollingBearing's picture

My score was -2.  

Nice quiz!  I recommend to everyone here.  But ZH-ers need this quiz less so than our clueless friends and family...

Bleeaat!   Baaa-aah!  Baa-aah-aah!

Mon, 07/04/2011 - 11:47 | 1424351 Ahmeexnal
Ahmeexnal's picture

"E' Meglio Vivere un Giorno da Leone che Cent'Anni da Pecora"

Mon, 07/04/2011 - 13:35 | 1424629 RockyRacoon
RockyRacoon's picture

Question 4, but who is Max Keiser one would ask?   If you gotta ask....

My score was -4.    I have a mixed wardrobe of hats in assorted metals.

Needless to say, I don't venture forth in electrical storms.   I may be crazy but I'm not stupid.

Mon, 07/04/2011 - 14:46 | 1424842 Iam_Silverman
Iam_Silverman's picture

" I have a mixed wardrobe of hats in assorted metals."

Sadly, all I can afford right now is my Aluminum foil beanie....

Mon, 07/04/2011 - 21:47 | 1425475 MagicHandPuppet
MagicHandPuppet's picture

Awesome quiz!  It's nice to get a good laugh, even in such a dark topic.

Mon, 07/04/2011 - 10:05 | 1424069 wandstrasse
wandstrasse's picture

imho, the mainstream NOT asking and answering how money is created is collective self-hypnosis or psychological repression. Why? Because the answer to that question is too dire and momentous. Our wealth (individual and as a society) has merely been PRINTED since decades now, at the expense of our children, of sweatshop slaves in Asia, of industrial stock breeding, of victims from oil wars etc. I can hardly bear this, so I do not expect anybody else to bear this.

Mon, 07/04/2011 - 10:33 | 1424129 Cognitive Dissonance
Cognitive Dissonance's picture

Our wealth (individual and as a society) has merely been PRINTED since decades now......

This is something the average person has a very difficult time understanding for some very simple reasons. Push aside the deliberate obscuring of how the system works. On a personal level it is easy to understand why they are confused, particulalry if they believe what they are told by the MSM.

I must expend my own labor to receive printed pieces of paper. Thus that paper has "value" which is derived from my expended labor. While people understand in a general way that the govt/fed/treasury "prints" money they tend to think it is only printed when value is somehow created somewhere out there to back the newly printed paper.

When I explain that there is no value created to back the extra printed paper they are very confused since the only way they receive the paper money is from the exchange of their labor. I use the example of counterfeiting and how the counterfeited money "steals" the value of the existing money, thus diluting the value of their own paper money (aka inflation) and this is what is done when the Fed creates money out of thin air to purchase Govt treasuries.

The bigger picture is often lost because they are still struggling with the concept of paper money printed into existence without labor behind it (or Gold since many people still think the currency is backed by Gold). Until that hurdle is jumped, everything else said after that point it is just words with no real meaning or understanding.

I spent some time this weekend talking about how the US removed itself from the international Gold standard during the Nixon administration and how the world financial system (with the US syaing do it or else) replaced it with the international oil standard (aka the US Dollar as the world's reserve currency) where every industrialized country (eventually) agreed to buy and sell oil only with US Dollars, thus creating an artificial demand for dollars, allowing the US to print like crazy because those extra dollars were soaked up by the world wide increasing demand for oil to feed growing countries. This was totally foreign to everyone, who had no idea the dollar was no longer backed by Gold. The Fort Knox myth is still very much alive and working it's delusional magic.

And my family is for the most part professionals, doctors, lawyers, architects, engineers etc. While everyone understood small parts of what I was saying before I started, no one ever tried to understand the bigger picture. While their egos would never admit it, they profess ignorance because they don't really want to know, not that they couldn't understand it which is what they say. The ignorance is staggering and not isolated to my family. I see this in my clients as well and they for the most part are also professionals.

Mon, 07/04/2011 - 10:59 | 1424201 NotApplicable
NotApplicable's picture

So, you're saying that they are still 'happy.'

Mon, 07/04/2011 - 11:12 | 1424255 Cognitive Dissonance
Cognitive Dissonance's picture

No....actually many of them are profoundly unhappy. They know that something is coming round the bend. And while they don't want to know what it is they also know it is coming. So while they can pretend to be happy because they don't know the specifics they can't deny it all.

I offer as proof the one third of the population on prescription antidepressants or pain killers, the two thirds that use alcohol and other various stimulants and depressants, the 10% of the population who are alcoholic and another 20% who abuse alcohol. I could go on, but I think you get the picture. They aren't happy in their ignorance. They are just afforded the opportunity to pretend they are happy and then die a slow death inside.

On a short time scale wilful ignorance is bliss. On a long time scale wilful ignorance is suicide.

Mon, 07/04/2011 - 11:29 | 1424308 DoChenRollingBearing
DoChenRollingBearing's picture

WORD.  Keep writing brother!

Mon, 07/04/2011 - 11:30 | 1424309 firefighter302
firefighter302's picture


Brilliantly stated posts, Cognative Dissonance.

Happy 4th. Cheers.


Mon, 07/04/2011 - 11:53 | 1424364 dark pools of soros
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CD - try to sum things up more like that last line instead of trying to train people to think with a detailed map. Think poetry instead of user manual. There is a place for the long journals, but if you are talking to people in person, it has to resonate quickly


I tell people that the money we use is just 'Depreciating Promises'

That seems to generate an anxious anxiety and a need for them to seek answers instead of just asking curious questions






Mon, 07/04/2011 - 12:21 | 1424432 Cognitive Dissonance
Cognitive Dissonance's picture

You must live in a part of the country where the people still has some independent brain functions. I live and work close to Washington DC, the heart of the beast. And while the population on a whole is actually very educated and several of the counties surrounding DC are in the top ten for personal income and net worth, their jobs, careers and loyalty is intimately tied to the US Govt., Congress, the lobby, the US military, Govt and military contractors, sub contractors and suppliers etc....not to mention all the various people and businesses who support those systems.

It's a very different world here near DC. Very dogmatic in their thinking......though they would vehemently argue otherwise. That doesn't mean everyone. But most certainly the majority. It is extremely difficult to get people to think "B" when they are paid to think "A".

Normalcy bias is everywhere and the trends I see here in DC are everywhere in the country. But the force is extremely strong within 50 miles of DC.

DC, the strange attractor.

Mon, 07/04/2011 - 14:08 | 1424748 SWRichmond
SWRichmond's picture

What you're describing is "Loyalist" mentality.  Dems and Repubs both love the system they serve, they just disagree slightly on how it should be used.

Next time I'm in DC maybe I'll shoot you a line first.

Mon, 07/04/2011 - 17:36 | 1425129 Cognitive Dissonance
Cognitive Dissonance's picture

I need at least a half hour to shut down the perimeter defenses and deactivate the mine field. Walk slowing and wave a white flag. :>)

Tue, 07/05/2011 - 00:39 | 1425819 dark pools of soros
dark pools of soros's picture

Philly burbs - when there's a crowd or in a bar forget it, but when just 2 or 3 people, deeper conversations can still happen.  


One thing people here need to realize is that the country can't be 'saved'.  The fore fathers were the elite and were breaking away from the things we are trying to get away from today.  But, all anyone can do now is save their county, community, town, or whatever.    What needs to happen is massive fracturing within states telling the fed to keep its aid and laws.. but it has to be widespread, diverse and happening at the same time across the country..who knows what would happen next

Mon, 07/04/2011 - 13:16 | 1424582 Popo
Popo's picture


one third of the population on prescription antidepressants or pain killers, the two thirds that use alcohol and other various stimulants and depressants, the 10% of the population who are alcoholic and another 20% who abuse alcohol.



And 5% are chronic sex addicts.  

But I still manage to make it to work.


Mon, 07/04/2011 - 13:37 | 1424645 Manthong
Manthong's picture

That can only mean you took the blue pill... er, take the little blue pills.


Mon, 07/04/2011 - 11:32 | 1424313 malikai
malikai's picture

Your plight is shared by many of us. I cannot say how many "friends" I have "lost" in my attempts to explain the matters of finance and state to the great brainwashed.

In the end what it comes down to, is just as you describe: People simply don't want to know. In fact, neither do I for that matter. I would prefer to just go about my life and focus on the things I love, like my family, my work, and my education addiction. However, unless I can somehow turn off the light in my head, it won't happen.

Allow me to share with you some lessons I have learned, which I suspect you may have learned as well.

  1. Nobody wants to know. The act of informing people is a naturally painful excercise. To bring pain upon someone is a surefire way to be ignored or condemned, no matter how right you are. Time and time again in history this point is proven. The messenger is always punished for the message.
  2. Far more valuable in waking the great unwoken is to learn to trick them into realization through subtlety. Casual conversation which leaves someone questioning a matter is far more effective than giving them the answer they do not want to hear. When an individual wants to learn more, but cannot get it for free, they value this knowledge far more, and the messenger is spared the fate of all harbingers of bad news.
  3. As the great propagandists in history have taught us, emotion is an order of magnitude more powerful than logic and reason. Therefore one must concede that appealing to an individual's emotion will always yield better results. This is tricky however, as unless we all study and master Goebbels' work, dealing with emotion is no small matter. Suffice it to say, that it is easier to avoid triggering a negative emotional response by closely following observations 1 and 2, than it is to use logic and reason overtly as one is almost certain to hit the brick wall of emotional block-out.

Mon, 07/04/2011 - 11:38 | 1424325 doggings
doggings's picture

some very good observations there amigo ++

Mon, 07/04/2011 - 11:56 | 1424372 Moe Howard
Moe Howard's picture

Excellent point. I may try number 2, as I have more or less given up on point 1, for the reasons cited.

Mon, 07/04/2011 - 13:42 | 1424656 malikai
malikai's picture

I have found that 1 works only when speaking to the converted. Which doesn't help much.

Number 2 has proved mixed results, but far better than number 1. The risk is that the person you're speaking to is simply entertaining you in conversation and not particularly interested.

I think it is important to leave people unfulfilled but truly interested. To do this, I usually just ask questions pretending to be dumb. I want them to inform me of the MSM talking points they have taken to. Then I connect that point to a provable fact which exposes a conflict or duplicity, then leave a "they must have a good reason for it" argument and quickly change the subject.

A couple of these and I can cut off an opponent at their feet with them not even knowing it. There can be no argument because I am not confronting; I'm "stupid" and questioning. I come from a subservient position, asking them for the answer I need, but they do not have. Smart and motivated people (the people we need) can not accept too many of these exposures and while they will never admit it to me, they will privately try to find the answers. If and when they do, they have awoken, without a fight and to them, of their own intuition.

Mon, 07/04/2011 - 11:59 | 1424378 dark pools of soros
dark pools of soros's picture

on point - my last post reflects this

Mon, 07/04/2011 - 12:12 | 1424409 Sean7k
Sean7k's picture


Mon, 07/04/2011 - 21:59 | 1425497 MagicHandPuppet
MagicHandPuppet's picture

That's a good breakdown.  I actually did get a few family member conversions during my panic stage of figuring a bunch of this stuff out in 2008.  It was more of a chicken-little presentation that I definitely don't recommend anyone try.  When I finally convinced my parents to buy and store extra food, I felt like I hit the jackpot.  They may have just been doing it to appease me, which is fine I guess.  I have plenty of supplies for them anyway.  I was just happy to get some real "buy in" when they made some basic preps.  I also onvinced my brother and dad to get out of all their investments in 2008 and go into 100% silver.  They are glad they did!

Outside of that, my words have fallen on deaf ears.  I have tried every strategy I could think of.  No. 2 above was effective in not getting the awful responses I received in other strategies.  Now, I don't even try to tell anyone shit unless they ask.  I look for people who already have questions.  The rest are screwed and there's nothing anyone can do about it.  I used to worry about them... but, now I just buy more preps for the zombie apacolypse.

Mon, 07/04/2011 - 12:11 | 1424404 Sean7k
Sean7k's picture

Very true and well illustrated. I find the more invested in the system: doctors, lawyers, architects, etc, the less willing they are to hear the reality of what we call America and the whole western world. They hold on, because they think they will lose something precious, not realizing it will be taken from them anyway.

Mon, 07/04/2011 - 13:52 | 1424700 DosZap
DosZap's picture



When I explain that there is no value created to back the extra printed paper





Explaining there is NO value to ANY of the printed paper makes no sense to them.

As the RC of the world, sHeeple continue in their Walter Mitty worlds, and refuse to even entertain their lives ARE going to change for the worse.


What is amazing, is they have zero problems understanding Life Insurance, but retention of wealth insurance is  like a deer in headlights look.

Mon, 07/04/2011 - 14:44 | 1424829 Cognitive Dissonance
Cognitive Dissonance's picture

I've been talking to my family for over 10 years about these problems. While they still turn off each year it takes longer and longer before their eyes roll back into their heads. I would rather dribble it out to them, but they don't want to hear about this during the rest of the year.

It's almost as if when they are gathered into a group they have more courage to listen. But as individuals they can't even begin to stomach the stench. They are modern day moral cowards. And as long as the trains run on time and the local grocer still carries fresh lettuce they feel I can be safely ignored.


Interestingly my elderly mother was most interested. At one point she asked me how to purchase PMs. I told her that she could purchase them from me at spot (when I was purchasing at spot plus a premium) or she could buy them from dealers at spot plus a premium. Then I told her if it ever come down to a real problem I would just give her the PMs she needed.

Immediately several other family members asked if I would give them what they needed. When I said no they were shocked. I told them that they still have time to plan and buy PMs. Or I would buy some extra PMs and hold the PMs for them. In return I wanted some of their pensions and 401(k)s if things worked out and the PMs weren't needed. Of course they deferred. They wanted me to be their safety net just in case without them taking personal responsibility for doing so. The entitlement mentality.

Mon, 07/04/2011 - 14:59 | 1424868 Iam_Silverman
Iam_Silverman's picture

"They wanted me to be their safety net just in case without them taking personal responsibility for doing so."

This is precisely why I have stopped "spreading the word".  You can bet that when their eyes are opened (the SHTF), they will vaguely remember your "rantings" and suddenly develop an urge to visit you (with hands extended).  They couldn't even understand the subtle hints I gave them (hey man, HEB has their store brand canned vegetables marked down to 3/$1.00-better stock up!, or we just slaughtered another calf, wanna go halfsies for jerky?)  I have gone into deep reflection on this, and I am determined that I can say NO to them now, just as easily as any other vagrant knocking on the door asking for a handout.

Wed, 07/06/2011 - 18:07 | 1431034 dark pools of soros
dark pools of soros's picture

but how long are your rations going to last?  if it gets to the point that we need to use the reserves, then it would be time to start building a village again so to speak... while you have reserves it would be best to use your voice for the reconstruction instead of hiding until you run out and everyone perish anyway

Mon, 07/04/2011 - 14:47 | 1424844 newworldorder
newworldorder's picture

Great posts today CD;

I too have experienced the same this holiday weekend. You are correct - ignorance is bliss. Especially with most of my family and friends. The great disappointment is that they do not want to know. The belief in the system is so strong, that they think "someone" will save the day. Its a combination of miss-education, patriotism, American exceptionalism and hunker down bunker mentality.

It is almost to the point that if I persist in my attempts to educate I will turn most of them off on a personal level. Reality when not desired, is not welcome. I really dont see a satisfactory answer.

Mon, 07/04/2011 - 15:26 | 1424896 anonnn
anonnn's picture

"...for the most part professionals, doctors, lawyers, architects, engineers ..."

Doctors, lawyers, architects, engineers et al have enormous training and practice with lifetime ongoing ingestion of data..all in order to maintain their proficiency and workability of their product. The quality their work is often easily demonstrated and difficult to obscure [or cover-up]. Thus they can be easily monitored and trusted. The engineer observing his bridge collapse under the test crossing of a train, has no way to escape responsibility.

Perhaps they expect other "professionals" to be similarly qualified and ethical. The banker image and motto [Trust me. I am your banker.]  are very effective cover.

Those who really are doing their job expect that othrs are doing theirs, too...and have not time to watch suspiciously over others' shoulders...much less learn their trade enough to even judge what they are doing...and in the face of non-transparency,too.

Likewise, the electrician, mason, carpenter, machinist, metal worker, et al cannot believe  other trades, such as banker, economist, real estate broker, regulator, governor, senator et al can be so dishonest and corrupted.

We wince and suffer at our own petty crimes...we cannot even imagine the scope of financial fraud. 

Our own decency allows us to be easily fooled .

Mon, 07/04/2011 - 16:14 | 1425007 Cognitive Dissonance
Cognitive Dissonance's picture

I like to say that it is our failure of imagination that enables the Big Lie. We just can not conceive, let along imagine, the lengths to which sociopaths and the truly greedy will go to rape, rob and steal. We expect in find in others what we wish to see in ourselves.

If we believe ourselves to be basically honest and trustworthy, subconsciously we need to see these traits in others in order to be validated in ours. To see anything else is to reject our own worldview and with it ourselves. This also prevents us from looking within. If we were to seriously explore our inner being we would find some form of evil........meaning the capability to lie, cheat, steal and even kill just like the sociopaths. We don't wish to find this within ourselves so we won't see it in others.

Mon, 07/04/2011 - 19:55 | 1425322 Bay of Pigs
Bay of Pigs's picture

Great stuff CD. Always appreciated.

As a kid growing up (70's-80's) I had an uncle who used to rant and rave about the Banksters and the FED. Some of the family thought he was a wing nut but he always sounded honest and sincere to me and I loved the way he cussed explaining it all. ;o) 

He was 20-25 years early on most of his calls and I'm glad he passed before watching this shit show unfold. 


Mon, 07/04/2011 - 19:58 | 1425328 anonnn
anonnn's picture

...If we were to seriously explore our inner being...

Well then, as toward remedy,  under what conditions might people look...both inward and outward? The prescription "know thyself" seems dangerous without a map.

 Where can be found a guided adventure or tested pathway to proscribe willy-nilly mental mucking-around?

There have already been some pioneers who sent back word that it is a minefield.

Who goes/went first, clipboard in hand?

Mon, 07/04/2011 - 11:20 | 1424272 Marco
Marco's picture

Property ownership (land, home, car) represents wealth more than both fiat money and shiny pieces of metal.


The greater problem is that our real wealth has been mostly collateralized for loans over the last few decades ... but you don't need fiat money for that to occur, the very same thing can happen under a gold standard. Fractional banking was causing money supply inflation and debt based economies long before fiat currencies were created.

Mon, 07/04/2011 - 12:14 | 1424415 Sean7k
Sean7k's picture

Except you never really own the property. As long as it is taxed, you don't own it.

Mon, 07/04/2011 - 14:03 | 1424736 DosZap
DosZap's picture



And this is why one must be VERY wise in considering land as an investment with the tsunami ahead.

You can own it, but can you afford to keep it?,we have eminent domain, we have seizure end around eminent domain.

We have NO idea of the taxation rates that will ensue, and therin lies the problem with land.

One recourse to this is owning outside the US.

Mon, 07/04/2011 - 15:06 | 1424876 Iam_Silverman
Iam_Silverman's picture

"You can own it, but can you afford to keep it?"

Very good point.  I considered this, and that is why I paid off all of our property and keep cattle/fruit and nut trees.  Here in rural Texas, land used in Ag production (agriculture, not PMs, J/K) is taxed at a very low rate - barely $4 an acre!  Our main house is smaller than the large barn and just barely bigger than the tractor barn, so tax savings there.  My tax bill for an entire year is less than $1,000, for now.  Texas also has some of the strongest owner protections for imminent domain now too.  Since I am debt free, I have been building up savings; both inside and outside of the typical "banking industry".  I can withstand at least three years of no income.

Mon, 07/04/2011 - 22:08 | 1425507 MagicHandPuppet
MagicHandPuppet's picture

It's good (for the real owners) that you keep your land in a highly productive state... as, Obama apparently has big plans for how the federal government will insure "your" (laugh) land's best and most productive use:

See here:

and here:

Happy Independence Day!

Mon, 07/04/2011 - 12:56 | 1424504 Rynak
Rynak's picture

IMO, there are two kinds of em.... or a spectrum between both.

On the one hand, you have a lot of people who intuitively KNOW, how horrible stuff probably is.... well, okay, maybe they do not know the full extend, but they suspect that it's really bad, and they consider it entirely possible, that it may be even worse than they suspect. They do because they are constantly gettings hints about it.... nothing specific, but a constant bombardment with information, that implies deception, corruption, parasitism, etc. Some of them deep down inside even realize that the social and cultural environment around them - including the people they know - is at least to some extend affected.

Those do however not want to know. They have given themselves up. They consider it impossible to do anything about it, and to not be complicit in it. They consider themselves trapped. And after some time, they WANT to stay trapped or at least having an excuse, because if after all this time it suddenly appears that they have a choice, they can no longer justify what they have done, and the path on which they are - their past life would be in the dock. And while they consider themselves trapped, they want to live a happy life - or at least not a depressive life. They don't want constantly do and see things which they dispise (this is not specific to the sheeple scenario. In general, in the long run, people can only either be selfhonest and act according to it, or selfdeceptive.... because it is too mentally stressful to constantly do something against one's own conviction)

On the other hand, you also have people who fully believe the public story, and who actually LIKE society and civilization as it is.... sure, just like most others, they will have their personal dislikes and enemies.... they may even be one of the usual anti's who have a polar opposite which they consider the devil - but they do fully support and encourage the overall structure and worldview.

TL/DR? Short version: There is a spectrum from conscious ignorance and passive support - to unconscious denial and active support

Mon, 07/04/2011 - 10:17 | 1424095 mahalopamala
mahalopamala's picture

As always, I am a big fan CD.  Extended family does tend to be one way or the other.  Either you are told you are crazy and the men with straight jackets are coming to take you away, or you have some really great discussions that cause you to search for more truth.  My family has both extremes. Part of my family does not want to hear what the younger generation says, and the other part of the family has been unwavering in support of these truths for 40 years or more.

When it was forecast last year that gold would reach $1,500.00 by December, that was my tipping point.  In my observation, trends take longer than expected, but the scenarios do play out eventually.

Thank you Tyler for this post, I appreciate the must reads.

Is it just me, or does anyone else feel less than festive on this 4th?  I know I love to celebrate my local community, county, and the founding of the State I live in- but as far as federal goes- I just can't muster the celebratory mood.

Mon, 07/04/2011 - 10:37 | 1424142 living on the edge
living on the edge's picture

I agree, this holiday doesn't hold the same meaning it once did!

Mon, 07/04/2011 - 12:00 | 1424384 dark pools of soros
dark pools of soros's picture

Can't really celebrate Independance when you are the Imperialist

Mon, 07/04/2011 - 15:10 | 1424884 Iam_Silverman
Iam_Silverman's picture

"Can't really celebrate Independance when you are the Imperialist"

I beg to differ.  The Imperialist can celebrate all he wants - the subjects are another matter.

Mon, 07/04/2011 - 13:30 | 1424620 I Got Worms
I Got Worms's picture

Since unplugging from the machine and jumping down the rabbit hole a few years ago, it does seem that the 4th has become a bit depressing.  Took my kid to the neighborhood parade, and even felt a little contempt for the sheeple out there throwing candy and waving little flags, as they have no clue what's being stolen from them every day, and help propogate the big lie by refusing to remove their head from the sand (and their posterior). Damn, I've gotten jaded.

Mon, 07/04/2011 - 14:55 | 1424860 newworldorder
newworldorder's picture

I dont know if you are jaded or not.

Just remember that once you "awaken" you will not see things the same as before. Seek those who are awake with you, try your best to awake those in your family who are still sleeping. That is all you can do.

Mon, 07/04/2011 - 10:26 | 1424115 tmosley
tmosley's picture

"The great masses of the people will more easily fall victim to a big lie than to a small one."

-Adolf Hitler

So true.  And in the end, the result is destruction on a scale that makes all involved wonder how they couldn't see it as it was happening.

Mon, 07/04/2011 - 10:46 | 1424148 Cognitive Dissonance
Cognitive Dissonance's picture

Because deep down they don't wish to see it. It is willful ignorance. My clients, family and friends all tell me how "hard" it is to understand the financial system. And while it can be difficult to grasp quickly, what they are really saying is that they don't wish to abandon long held and deeply cherished beliefs in order to learn the truth. Thus it isn't hard to learn about the financial system, but it is extremely hard to unlearn what you (desperately) wish to believe about the financial system.

Remember that since our culture tells us that you are what you are worth, already have or can presently buy, to change your understanding of the financial system means changing just about your entire world view.

When my son was young and he confronted situations like this he would always claim it was too hard or he didn't understand what to do or the choice was too difficult. I would always tell him that it is actually quite easy to know what to do and that deep down he always knew what to do. It was setting aside your own personal desires or emotional needs and just doing, or learning, something that your selfish person inside didn't want to do or learn.

So many people today are petulant children in adult sized clothing with drivers licenses.......myself included.

Mon, 07/04/2011 - 10:54 | 1424188 doggings
doggings's picture

what they are really saying is that they don't wish to abandon long held and deeply cherished beliefs in order to learn the truth. 

put another way..

"you have to understand, most of these people are not ready to be unplugged.

Mon, 07/04/2011 - 13:43 | 1424665 RockyRacoon
RockyRacoon's picture

What makes it hard to "understand" is the -- ready for it -- cognitive dissonance.

Once a person grasps that concept, letting go becomes easier.   That's what happened for me.   A willingness to believe that I could, just could, be wrong.   That I was basing my cherished logic on false premises.  That little crack lets in a lot of light.

Mon, 07/04/2011 - 11:28 | 1424304 Strike Back
Strike Back's picture

"It also gives us a very special, secret pleasure to see how unaware the people around us are of what is really happening to them."



"Cognitive Dissonance," your name takes on more meaning everyday.  Something that I don't even approach with family is the mentality behind TPTB.  It's hard enough trying to get them to understand the depth of the fraud.  It is so difficult for the willfully ignorant to understand because they are, at the core, horrified of the reality behind the words "absolute power corrupts absolutely."  It is too shocking for them to grasp that this is all done for laughs at the highest levels. They cannot conform the fact that sadists are in power with the deeply ingrained notion that those in power are basically like "us," or even slightly morally superior.


Mon, 07/04/2011 - 12:06 | 1424396 Moe Howard
Moe Howard's picture

Strike Back,

Can you please cite where & when Hitler said that, example, what speech given when, or if he wrote it, what work, example, Mein Kampf. I am unable to find the original quote or even a citation. 

Thanks, Moe.

Mon, 07/04/2011 - 12:23 | 1424438 Strike Back
Strike Back's picture

I stand corrected, it is not an original quote.  It is from "the voice of destruction," and a quick wikipedia search should reveal the dubiousness of the source. I still think they are evil sadistic bastards.

Mon, 07/04/2011 - 13:44 | 1424671 Moe Howard
Moe Howard's picture

We can agree on that last statement, but let us make a point of only repeating that which we can confirm was said or written.

Mon, 07/04/2011 - 11:51 | 1424362 Moe Howard
Moe Howard's picture

The quote you cited is often used, and misused, and taken out of context. Here is the quote in translated form from Mien Kampf, please note that he blames the Jews and Marxists for using the "Big Lie", he is not an avocate for the technique, in fact the opposite could be inferred:

But it remained for the Jews, with their unqualified capacity for falsehood, and their fighting comrades, the Marxists, to impute responsibility for the downfall precisely to the man who alone had shown a superhuman will and energy in his effort to prevent the catastrophe which he had foreseen and to save the nation from that hour of complete overthrow and shame. By placing responsibility for the loss of the world war on the shoulders of Ludendorff they took away the weapon of moral right from the only adversary dangerous enough to be likely to succeed in bringing the betrayers of the Fatherland to Justice.
All this was inspired by the principle--which is quite true within itself--that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.


Goebbels is often misquoted and out of context on the same type quote. He is not an advocate of the "big lie", in fact, if you read Goebbels, he insists that propaganda must be truthful to be useful.

The essential English leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stupid thick-headedness. The English follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous.

So in both cases, the Nazis were decrying the use of the big lie, and attributing its' use to Nazi enemies. Yet most times I have seen this misquoted for both Hitler and Goebbels the intent was to show both Nazis as users or advocates of the technique. This is factually not true in the sense of the quotes used. If the Nazis "lied big" is another question altogether. That would be best demonstrated by facts rather than misquotes or misleading quotes.

As I have often said, if the Nazis were horrific monsters [I believe they were], then telling the truth should suffice. When historians make up nonsense, mislead by misquoting or distorting facts, then they leave doubt as to how bad the Nazis were. Let's stick to the truth and the facts, and not continue to propagate misleading statements.

Thanks, and have a nice Independence Day. Perhaps we can have a real Independence Day when we end the Fed.

Mon, 07/04/2011 - 14:23 | 1424784 DosZap
DosZap's picture

Moe H,

A lie told often enough becomes the truth.
Lenin (1870 - 1924)

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”

The_Craven Joseph Goebbels quotes

Mon, 07/04/2011 - 12:05 | 1424394 dark pools of soros
dark pools of soros's picture

15 years ago I used to tell people that most of the governments really envy what Hitler's crew did and are trying to emulate it in a slower, all encompassing way.  They of course just think of gassing people, etc but no, it is about the power/control of government to get the people to really commit to the government like sports fanatics.  Unlike the Bolsheviks which is/was mainly by fear and loathing.


Mon, 07/04/2011 - 12:12 | 1424407 Moe Howard
Moe Howard's picture

Although I love my country, the U.S.A., I cringe when people start chanting U.S.A., U.S.A., U.S.A.. Seems primitive and mindless to me. Of course, I don't follow pro sports nor chant team names either. I could care less.

Mon, 07/04/2011 - 13:46 | 1424681 RockyRacoon
RockyRacoon's picture

I still hold my hand over my heart with the National Anthem.  Just like I hold my hat over my heart at a funeral.   Same diff.   Respect for the dead and sympathy for the survivors.

Mon, 07/04/2011 - 17:33 | 1425126 Moe Howard
Moe Howard's picture

Yes, of course. I also sing the National Anthem when appropriate. But that is a little different than the mindless USA chant, such as heard outside the WH after the annouced elimination of Bin Laden by a bussed in 'spontaneous' crowd.

Mon, 07/04/2011 - 17:37 | 1425135 Cognitive Dissonance
Cognitive Dissonance's picture

I thought they just all showed up like lemmings at feeding time.

Mon, 07/04/2011 - 15:10 | 1424881 newworldorder
newworldorder's picture

Moe Howard;

I agree with you and would like offer two additional observations.

1.  During the last 20 years our country has become more militarized. No draft, the "citizen soldier," has become the "warrior," "thank you for your service" has become a standard expression, without much regard given to its meaning.

2.  Other than sporting events there are few avenues for the average citizen to express true love of country. Political correctness has killed debate, civil disobedience and patriotic dissent. Fear of being labeled as unpatriotic, has led many people to the obligatory trappings of "patriotic display" without meaning.

Mon, 07/04/2011 - 17:37 | 1425132 Moe Howard
Moe Howard's picture

I agree. Having served in the "Drafted" Army and the "Modern Volunteer Army {MVA}" I know the difference. The gains from being a volunteer professional army are more than offset by the loss of every class and type of person serving. It once was one of those things that bound us together, now military service is one of those things that divide us. My father's generation saw all his brothers in the military, my generation, I'm the only one who has served.

As to the thank you for your service, well, for me it means something when I say it, because I have been there, they are my brothers and sisters, and my son is serving now.

Mon, 07/04/2011 - 18:06 | 1425178 RockyRacoon
RockyRacoon's picture

I served in the Air Force, late 1960s to 1970s, one year in Thailand at Takhli AB.

Mon, 07/04/2011 - 10:39 | 1424146 LongBalls
LongBalls's picture

Most people shut down at the Federal Reserve explanation point because they instantly feel helpless and no longer in control of the life they live as they have believed and been told.

It takes some digestion. It did me and the people whom opened my eyes as well. It is such an evil plan it is hard to comprehend such evil exists in man to hard working honest people. In other take's awhile to identify with it and believe it can exist.


Mon, 07/04/2011 - 11:04 | 1424212 Cognitive Dissonance
Cognitive Dissonance's picture

I agree that it is something that must be absorbed over time, not learned in two hours.

BUT it requires personal courage to wade into the water and learn the ugly truths. And while the consumer culture was bred into us over the last 40 years, personal responsibility and moral courage has been slowly bred out. I've been talking to my family for more than 10 years about these subjects. They just don't wish to know too much or to go too deeply.

They are willing to listen to just enough to confirm for themselves that something is wrong.....which confirms their own beliefs. But not too much. Because to know it all implies responsibility for that knowledge. If I know that my next door neighbor is planning a bank heist what is my responsibility? If I know they will rob the bank my friend works at, what then? How about if my daughter works there. How about if I work there?

Manufactured plausible deniability and feigned non responsibility depends upon your distance from the event and its effects. The further away you can pretend you are from the shit storm the easier it is to do nothing and to know nothing. To some extent or another we are all experts at mounting the Sgt Schultz defense.

Mon, 07/04/2011 - 14:33 | 1424793 DosZap
DosZap's picture


I think most people are aware of the truth, they just feel helpless to change it, therefore they they accept the future, whatever it may be.


Mon, 07/04/2011 - 17:22 | 1425030 Cognitive Dissonance
Cognitive Dissonance's picture

Depends upon what you mean by 'aware'. If I am feeling helpless about a situation I am going to do my darnedest to know as little about it as I can. This is what I mean by willfully ignorant. I never mean totally unaware. One must sense some danger in order to consciously avoid it. And I suspect most people are consciously avoiding knowing. They know enough to know that they don't want to know any more.

I call it the Daddy complex. "Daddy, tell me another lie so that I may believe it is the truth." The authorities lie because the people want and need to hear the lie, which gives them permission to believe the lie. As crazy as that sounds to those who are waking up, it is how many (but not all) cope with the fear and insanity.

Tue, 07/05/2011 - 08:43 | 1426200 Absinthe Minded
Absinthe Minded's picture

CD, you're hitting the nail on the head with your description. As long as the status quo continues the sheeple have no fear. I try to tell my friends what's going on and there like, "Well what can you do about it?" I tell them to prepare, get some PM's. But they're so expensive, is the usual excuse. It wouldn't be if you didn't have a brand new $30,000 truck in the parking lot. Debt slaves. Willing participants.....until they aren't. Then it's too late.

Mon, 07/04/2011 - 12:13 | 1424410 dark pools of soros
dark pools of soros's picture

I was able to talk about this with my Chiropractor and she is well ahead of the curve without knowing the facts.  She barters for things she needs with her trade.  When you can talk at that level, and say how barter frees yourself from using THEIR debtmoney and thus paying less taxes since you show less income in $$.

But that is only half of it, since some would say that it is just like 'keeping money off the books' but when you say that holding $$ is like holding depreciating promises since debtmoney has to inflate by design and always worth less over time, then it is always better to hold onto a barter promise since that will still be worth the same as you bartered for.

Mon, 07/04/2011 - 11:15 | 1424236 Founders Keeper
Founders Keeper's picture

[They simply couldn't understand how the government, that bastion of wholesome goodness, would allow this to go on.]---CD

Great post, CD. You hit on a topic worthy further exploration--in a full length article as only you can do.

Reminds me of what Henry Ford said: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

Where does this blind faith in government come from? Yet, this same believer fully and openly admits their "trustworthy" government lies to them. Can someone explain that!

Mon, 07/04/2011 - 11:20 | 1424269 Cognitive Dissonance
Cognitive Dissonance's picture

Writing on this subject is like opening Pandora's box. Each step opens up multiple pathways to follow. The problem is keeping the article down in length to a small book. :>)

Seriously though, to condense the subject forces the writer to make statements without much clarification or explanation. Then the comment section explodes because people are angry that something was over simplified or missed entirely or given the wrong interpretation etc.

If I break it down into chapter sections then people come flying in to read section 3 of 5, meaning there is no continuity to what they have read, and the shouting begins again. I have several articles of 2 or 3 parts all cued up and ready to go that I haven't posted because I'm tired of battling the comment section because context or perspective was lost or never entertained. 

I suppose I should just push the "post" button and then close my eyes and cover my ears. :>)

BTW I did cover a lot of this in my 5 part series "Welcome to the Insane Asylum" as well as other multi part series.

Mon, 07/04/2011 - 11:43 | 1424336 Founders Keeper
Founders Keeper's picture

Hi CD. I appreciate your Reply.

Hope your 4th of July is as full of fireworks as Bruce Krasting's---albeit less terrestrial.

As Tunga says, may the fourth be with you.


Mon, 07/04/2011 - 13:52 | 1424703 RockyRacoon
RockyRacoon's picture

I've read and enjoyed all your articles.  Those who bitch about the length didn't read it anyhow.  You can figger that the top half dozen comments didn't read it at all -- maybe the title and the last sentence.   There was an article recently that garnered the comments about it not being deep enough, shallow, and all that.   That tickled the crap outta me.


Mon, 07/04/2011 - 14:16 | 1424769 mahalopamala
mahalopamala's picture

CD Last year at this time I printed all the parts of your "Welcome to the Insane Asylum" and I have been sharing with friends.  I have a notebook I keep it in as well as some back story articles you referenced- it is in essence similar to a chapbook. Keep those multi-part articles coming!! Your heartfelt and enlightened writing speaks to me.

Mon, 07/04/2011 - 16:28 | 1425037 Cognitive Dissonance
Cognitive Dissonance's picture

Thank you for the encouragement.

I'm going to start a new series tonight. An occasional series with no rigid timetable. A very different series, unlike anything I've written before.

The series will be called "Dispatches From Occupied Territory" and the first installment with be called "The Awakening". I suspect you will enjoy it more than the males though I hope to be surprised otherwise. Stay tuned.

Mon, 07/04/2011 - 16:46 | 1425067 RockyRacoon
RockyRacoon's picture

Should I stock up on Jiffy-Pop?   This sounds interesting!

Mon, 07/04/2011 - 17:39 | 1425104 Cognitive Dissonance
Cognitive Dissonance's picture


Jiffy-Pop lite. A life spent feasting off the garbage cans behind the Federal Reserve is beginning to show around your hind quarters. It fact it appears you and your friends even have curb service.



Mon, 07/04/2011 - 18:08 | 1425181 RockyRacoon
RockyRacoon's picture


Mon, 07/04/2011 - 14:40 | 1424820 DosZap
DosZap's picture

Founders Keeper,

I marvel at the icons in Americana.The people that developed the America that was THE most loved and respected nation globally for many decades.

The part that I am amazed by, is WHY people of such stature, did not STAND TALL, and get the message out.

Where would we be today, had they had the balls to do so.

If you have the ability to get the MSM's attention(esp then), and do not use it, you are complicit in the crime.



Mon, 07/04/2011 - 16:20 | 1425024 Founders Keeper
Founders Keeper's picture

Hi DosZap.

Not sure I follow you. Please add an example of someone of "stature" that "did not stand tall."

And which "message" did you hope would be heard.


Mon, 07/04/2011 - 12:08 | 1424400 Max UK
Max UK's picture

Hi CD;

this issue never goes away. I quote here from a Commenter called Ellis from the UK Guardian website from 2009, discussing the same general topic:


The truth has to be that this has only just started: we are all headed downwards to a much poorer society.

But there is no reason why this should be so, there have been no natural catastrophes, no sudden diminution of fertility, or crop failures, no epidemics of dementia robbing us of our skills and ingenuity.

There are major environmental problems but they can be solved and all can be made well.

Comfort and prosperity will not occur, however, as a by-product of leaving the governing of society, most especially the economy, to an oligarchy of greedy, ruthless exploiters who, to give them credit, do not even pretend to be interested in promoting the common welfare.

"People love to be cheated, and especially to be cheated into notions of security. The lazy and luxurious man has no resentments except against those who would rob him of his ease; and the coward hates not a thousandth part so much the enemy who assails him and aims at his life, as he does the friend, who would urge him to resist. Of this sort are the feelings of this nation at this time, whether as to foreign or domestic concerns. The great and general desire is to put off the evil day."

Thus did Cobbett , in August 1809, read the public mood.


nothing changes eh? 


Mon, 07/04/2011 - 09:49 | 1424020 wandstrasse
wandstrasse's picture

from which price level on is it profitable to print gold?

Mon, 07/04/2011 - 10:18 | 1424099 wandstrasse
wandstrasse's picture

thank you for the info. BTW, probably this is not your intention, but for me, your avatar is the most eerie one here on ZH... strange light, looks like an evil fairytale person with scissors and knife... huhhh - I hug my teddybear for comfort after everytime I look at it...

Mon, 07/04/2011 - 11:30 | 1424310 Cognitive Dissonance
Cognitive Dissonance's picture

What's the cost to purchase by the tanker truck load? Shirley we can get a discount for bulk purchases.

Mon, 07/04/2011 - 13:51 | 1424698 HungrySeagull
HungrySeagull's picture

You could not afford it and the truck cannot carry the gross weight.

At best you will get a partial load.

Mon, 07/04/2011 - 15:18 | 1424898 Iam_Silverman
Iam_Silverman's picture

"Shirley we can get a discount for bulk purchases"

NO discounts!  And don't call me Shirley....


Mon, 07/04/2011 - 09:57 | 1424041 MobBarley
MobBarley's picture

57,000 paper coupons per ounce.

But that doesn't include all the 'Shadow Debt' out there.

It's probably closer to 1,000,000 paper coupons per ounce.


Mon, 07/04/2011 - 13:52 | 1424704 HungrySeagull
HungrySeagull's picture

Paper has no meaning.

Mon, 07/04/2011 - 09:58 | 1424050 Peter Pan
Peter Pan's picture

Historically gold has no equal and paper will always die either a quick or slow death. However, the astronomic predictions about the price of gold leave me cold unless someone can tell me how much more or how much less bread I will be able to buy when the price is $94,000. The relative value of gold to commodities, other assets, as well as goods and services is far more important than its dollar value. Dollar value might only be of importance if you are paying off paper debt.

Mon, 07/04/2011 - 09:59 | 1424054 Sudden Debt
Sudden Debt's picture

I'll stick to silver.


Mon, 07/04/2011 - 10:02 | 1424062 achmachat
achmachat's picture

Mr. UPS brought me another kilo today!

I love Mr. UPS.

Mon, 07/04/2011 - 10:11 | 1424085 Sudden Debt
Sudden Debt's picture

I'm saving my money to buy as many of the 2012 lunar dragons in januari. Let's hope silver stays at these levels untill than.


Mon, 07/04/2011 - 10:41 | 1424132 achmachat
achmachat's picture

From the lunar series I only have one Tiger. It's for my daughter who's born last year. Her mum being Chinese, she thought that the little one would appreciate it later.

You've probably seen her. She is the crash banksters baby who was holding a Silver Keiser on max keiser's website.

Mon, 07/04/2011 - 10:59 | 1424156 Sudden Debt
Sudden Debt's picture

That so nice!


I bought 6 bottles of wine from the birthdays of my kids!


to constantly remind me that every time my wife and I drink 6 bottles in 1 evening there's 1 more mouth to feed in the next 9 months...


I only have my best friend who conveniently happend to be in the same room to tell me the truth about those events...

I made him the uncle of my kids. He loves them like they are his, my eldest even has the same hair color and the same nose as him.... he's such a good friend.... actually they both look like him... MY GOD!!!!


I'm going do surprise him and to a little dna check with my family against him. Wouldn't that be cool!


Mon, 07/04/2011 - 15:20 | 1424905 Iam_Silverman
Iam_Silverman's picture

Next time, let HIM drink the wine, and you can take notes?

Tue, 07/05/2011 - 08:03 | 1426163 Absinthe Minded
Absinthe Minded's picture

Catchin' up here, haven't read in a couple days, SD, you are a crazy bastard. Keep it up!

Mon, 07/04/2011 - 10:13 | 1424087 weinerdog43
weinerdog43's picture

I call bullshit.

UPS does not deliver on July 4, nor July 3.  Neither does USPS for that matter.

Mon, 07/04/2011 - 10:24 | 1424111 achmachat
achmachat's picture

Dear Wiener,
There is a world OUTSIDE the US.
Kind regards,
all 5th graders that are smarter than you.

Mon, 07/04/2011 - 10:41 | 1424149 Sudden Debt
Sudden Debt's picture



That will cost him 5000$ in counseling!

Don't you remember the Santa Claus discussion incident?


Mon, 07/04/2011 - 10:42 | 1424151 wandstrasse
wandstrasse's picture

long time ago an email circulated... I just remember roughly...

'The UN asks China, the US and Europe for their own opinion about poverty in other countries. They did not get any valid response. Because China did not know what 'own opinion' means, Europe did not know what 'poverty' means and the US did not know what 'other countries' means.'

Mon, 07/04/2011 - 14:51 | 1424851 DosZap
DosZap's picture


and the US did not know what 'other countries' means.'


Prior to the implosion, the US(it's people) knew very well, and still do what other countries means.

I am sure you are not clueless as to the trillions of dollars GIVEN away to others in times of great disasters, and hardships by the American people,as well as the government.

The people from the heart, and the govt, only God knows.

Mon, 07/04/2011 - 17:30 | 1425122 wandstrasse
wandstrasse's picture

DosZap, you are right, among the frequently scolded at 'mainstream' population are the (morally) greatest people on the planet, they give more than they take, they feel real sympathy, they act more than they talk. But you know, and this is no apology, sarcasm, cynicism and childish jokes kept me alive somehow.

Mon, 07/04/2011 - 10:50 | 1424172 KlausK
KlausK's picture

... and that's why I got my 10 Oz today. Not a kilo, but every man with his means.

Mon, 07/04/2011 - 13:53 | 1424710 HungrySeagull
HungrySeagull's picture

I have a few coming this week as well.

Mon, 07/04/2011 - 20:09 | 1425343 Sunshine n Lollipops
Sunshine n Lollipops's picture

Damn. UPS is like an unarmed armored car service.

Hmmmm . . . . .


Mon, 07/04/2011 - 11:39 | 1424324 Long-John-Silver
Long-John-Silver's picture

LOL! I was wondering when your wife would start letting you back on the Internet. She know you are posting again? I'm sure you've quit posting pictures of your weiner, which caused your resignation from congress. Is that why you are on ZH instead of twitter?

Mon, 07/04/2011 - 10:00 | 1424056 bigwavedave
bigwavedave's picture

Here on the paradise island of Bali its worth about 12 Million of our local currency; the Rupiah per Oz. Still wont get you a bag of rice when TSHTF. Lol

Mon, 07/04/2011 - 10:13 | 1424089 Sudden Debt
Sudden Debt's picture

at least you can buy a sex slave for that amount over there!

2 lolita's to go please!


Mon, 07/04/2011 - 10:01 | 1424060 MonkeySmoke
MonkeySmoke's picture

According to the "stock-to-flow ratio" chart silver is much more precious than gold--by about 3x. Got phyzz?

Mon, 07/04/2011 - 15:07 | 1424878 DosZap
DosZap's picture

Silver is worth exactly what TPTB say's it is, we have seen and felt that pain once already.(I have some so I am definitely not against it), but Gold is money period.

All you have to do is look at the CB's, and the other major nations build up's.

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