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Gold Surges After Japan Says It Is Considering New QE And Geithner Guarantees Currency Wars
A quick look at gold price action demonstrates that someone somewhere is actively debasing currencies. An even quicker scan of headlines confirms this to be the case: per Reuters "Bank of Japan Governor Masaaki Shirakawa said on Wednesday the central bank will consider expanding a new scheme for buying assets ranging from government bonds to exchange-traded funds when deemed necessary." Harakiri Shirakawa continued: "We have taken a very bold measure ... If the need arises in the future, making further use of the new fund as part of monetary policy is one of our strongest policy options." Judging by the chart below, either gold has a tent in its pocket or was really happy to hear this announcement.
And just to confirm that the world is going to hell in a depreciating handbasket, Geithner essentially has guaranteed that a currency war is imminent. Also from Reuters:
U.S. Treasury Secretary Timothy Geithner said on Tuesday he sees "no risk" of a global currency war and wants to maximize incentives for China to allow its yuan to rise in value.
He told the Charlie Rose Show in an interview that China would work against its basic development objectives if it kept its currency undervalued.
"I'm very confident over time that this is going to happen," he said of Chinese currency appreciation. "We just want to make sure it's happening at a gradual but still significant rate."
Mm hmm. And for a vivid demonstration of Geithner's top-ticking predictive capacity, we bring you: "Welcome to the Recovery", the SecTres' August 2 OpEd, which appeared days before the massive July NFP miss set off America on its trajectory with fate and QE2. In other words, stock up on that Costco year-long ration. It will be a long, devalued winter.
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When the movement into gold+commodities commences, the collapse of paper assets is going to be epic.
"When the movement into gold+commodities commences, the collapse of paper assets is going to be epic"
The movement started just after the internet bubble, gold was around $300 an ounce and oil $25 a barrel.... Just saying
The collapse in paper assets has been swept uner the rug for now, the rug ain't big enough.
Theyve swept so much under the rug that it looks like an elephant under a postage stamp.
Yet the elephant is still under it, for the little people living on the stamp.
Must watch for you:
http://www.thedailyshow.com/watch/tue-august-18-2009/cnn-s-just-sayin-
As Trace Mayer says, "the system does not collapse but rather evaporates".
I'm pulling for 1370 by All Hallows Eve.
The system will collapse and foldup, and then liquidation of the non-performing liabilities will have to occur.
The amount of liquidation needed to form a solid base from which the lemmings can once again start their march to doom will be historically large. You have had basically 7 decades of growth, unless you use nukes or something on that scale, you can expect anywhere from 35-70 years of collapse and liquidation. Of course, Japan has been fighting the collapse for 20 years, they could very well be in this phase for much longer.
All I see is a bunch of unfunded liabilities running around... eventually unfunded lemmings are going to run out of time.
there were 7 decades of growth prior to the last Great Wars.
What was the "liquidation"? Like 1%?
Cut the Chicken Little shit.
You basically had the great depression before the last great depression which was in the 1872-1892 range, basically the world was in and out of depression then, of course the depressions are getting bigger now as the system gets bigger. Most of the growth was actually from 1922-1929. Before the 1872 depression was the 1807 depression.
Liquidation of the nonperforming liabilities was north of 80-110 million. Worldwide population was around 2.3 billion. Somewhere around 4-5% were liquidated, of course the system is magnitudes larger.
No way you feed even close to 7 billion without a functioning credit system. A billion is going to have to go right away just through starvation and eventually the lemmings will be hacking at one another. Not only will the raw number go up this time, but the percentages will have to go up as well.
My guess 1-2 billion with have to go within a decade as soon as the liquidation phase starts, I would say to have a solid base the number might have to be north of 3 billion. I don't see how you establish a base with only a few million gone. You chop down all the trees in the forest, it takes a while for all the trees to growth back.
22-25 million were liquidated in the Soviet Union alone. Of course, humans are much more efficient than they were then.
"The Architect - Denial is the most predictable of all human responses. But, rest assured, this will be the sixth time we have destroyed it, and we have become exceedingly efficient at it."
Remember the Club Of Rome "experts" in 1972, dividing countries into "very difficult" and "cannot be saved" categories regarding starvation within a decade from then?
You sound as ridiculous now.
Yes, but is an economic Norman Borlaug going to come out of the woodwork and magically unfuck everything for us this time? In the recorded history of mankind I'm not aware of anyone doing anything remotely like that... it's not the sort of thing to make you rich, powerful, or popular, so why would there be?
Would even something like a sudden success in cheap fusion save us?
If your main concern is energy, looks like recently improved natural gas extraction can cover us a few decades more.
Take a look at the price chart of the last 24 months.
Well just like you said Tyler. Its on like Donkey Kong.
i was wondering what was causing the shiney to get all worked up
Also posted on another thread:
Disappearing Stores Of Value
Brazilian minister of finance Guido Mantega last week accused the major economies of starting “currency wars.” To a large extent he was trying to divert attention from his own overspending misdeeds. However this week’s decision by the Bank of Japan to enter more “quantitative easing” and Chinese premier Wen Jiabao’s aggressive response to the EU/US campaign to force up the renminbi suggest that he’s right. Such a currency war will produce two problems. It will reproduce one of the more damaging features of the 1930s’ global depression. Even more important, it will leave the thrifty without an adequate source of value.
Competitive currency devaluation has traditionally been thought by economic historians to have been a major cause of the 1930s’ exceptional unpleasantness, yet another major policy error. Actually most of the policies involved were relatively forgivable compared with the rest of that decade’s appalling blunders. In 1925 the British had returned to gold at an overvalued parity, having in 1923 bottled out of introducing a modest Imperial Preference tariff, which would have removed Britain’s long-standing but in post-war circumstances economically suicidal unilateral free trade policy. After this, transatlantic payments balances were structurally out of kilter. Germany’s balance of payments was also destabilized by reparations payments, so its economy was only kept afloat by U.S. loans. Meanwhile France, seeing Britain’s mistake, returned to gold in 1928 at an undervalued parity.
Then after U.S. banks started going bust in late 1930, the Fed kept money too tight, sucking gold across the Atlantic and putting an intolerable strain on the British balance of payments and the German banking system. Britain solved its problem in 1931 by going off the Gold Standard, devaluing by about 25% and sorting its economy out by anti-Keynesian means. Germany failed to solve its problem, after which its electorate chose Nazism over the apparently failed free market. In the U.S. the incoming Roosevelt administration worsened the world’s imbalance problem by devaluing the dollar against gold, invalidating existing property rights by banning Gold Clauses, and refusing to participate usefully in the 1933 London Conference, called to sort out the mess. Finally in 1936 France, whose currency had now become overvalued, went off the Gold Standard and devalued.
Most of the “beggar thy neighbor” currency devaluations of the 1930s were thus reasonable reactions to difficult circumstances; only FDR and the German electorate took actions motivated by primitive nationalism. Thus the chances of a repeat performance of this unpleasant farce, which proved hugely damaging to the nascent 1930s economic recovery, seem pretty high – one need not suspect more than normal malice on the part of any of the actors concerned.
The nexus of the current problem is China. Between 2005 and 2008 China played a constructive role in world economic arrangements, revaluing its currency by about 20% against the dollar and thereby shrinking its balance of payments surplus. Then at the end of 2008, the Chinese government (one of very few which could properly afford it) undertook a massive “fiscal stimulus” program. This was corruptly managed as always but on the whole sensibly directed towards infrastructure, including the Wuhan-Guangzhou rail line, begun only in 2005 and completed in December 2009, on which trains cover 601 miles in only 3 hours. China’s rapid growth in 2009 brought down its balance of payments surplus, indeed the balance swung briefly into deficit in April 2010. However as U.S. consumer and government spending, artificially stimulated by an excessive budget deficit and over-expansionary monetary policy, sucked in Chinese imports once more, the U.S. payments deficit with China widened again.
The case for a massive revaluation of the renminbi is thus a weak one. Premier Wen is further justified in resisting it because China’s rapid growth has brought an explosion of wage rises of 20% or in some cases even 60%. Thus, while the Chinese consumer market is an engine of growth, domestic costs are rising rapidly and its exporters are being horribly squeezed. Wen is happy to reorient Chinese growth towards the domestic market, but naturally doesn’t want his major export industries to go belly-up. He thus wants only a gentle upward path for the renminbi, avoiding extra strain on exporters.
China is therefore justified in resisting U.S. and EU demands on the currency front, however obnoxious its foreign policy may be in other respects. The United States and Japan have through exceptionally foolish fiscal and monetary policies tilted their economies into major imbalance, and it’s not clear why this should be regarded as China’s problem. Nevertheless, the rational U.S./Japanese responses, to raise interest rates and slash budget deficits, are unlikely to be forthcoming in the short term. Instead both countries seem determined to pursue the dangerous and counterproductive policies of further quantitative easing and competitive devaluation.
The interesting unknown is the reaction of the European Central Bank. Under heavy German influence, the ECB is less subject than other central banks to the sillier fashions in monetary policy. (It must remembered in this context that Bank of England Governor Mervyn King was one of the 364 economists who signed an angry letter to the Times in 1981 claiming that Margaret Thatcher’s successful deflationary policies were doomed – those people should never subsequently have been allowed near the levers of power.) Left to its own devices, the ECB would be moving gently in the direction of raising its short-term interest rate from the current 1% while attempting to enforce draconian fiscal discipline on the less self-controlled countries of southern Europe or those like Ireland with banking systems similarly lacking in self-control.
If the U.S., the Japan and Britain all go in for quantitative easing, the ECB will have a problem. Once the inevitable inflation (which the Fed now regards as a solution rather than a problem) has intensified in its trading partners, Europe’s comparative cost position will improve. However in the short term if its major trading partners all trash their currencies the ECB will find a mass of hot money flooding to the euro, forcing it up and pushing even the well-run but export-dependent Germany back into recession. Thus, however reluctantly, the ECB may be forced into some quantitative easing of its own.
The immediate economic effect of all this money sloshing around will be obvious: more inflation and higher gold and commodity prices, as beleaguered savers seek refuge from the mass currency debasement. It probably won’t surprise most people to see the flood of money create new and damaging bubbles, for example in junk bonds, as warned this week by ECB President Jean-Claude Trichet. However the long-term effect is more significant, and more pernicious.
Fiat currency was tried on a number of occasions before the twentieth century, most of which ended in hyperinflationary collapse – think of the Continental Congress’s “continentals” or the French Revolutionary “assignats.” Only in the exceptionally stable and well-run society of Song Dynasty China did it provide an adequate store of value for more than two centuries, although even there collapse followed once the Mongols, nearly as aggressive in monetary creation as they were militarily, got control of the printing presses. Through the eighteenth and nineteenth centuries, fiat money was regarded as an unfortunate but temporary expedient for poorly-run countries, to be replaced by a return to the Gold Standard as soon as financially possible.
The reversal came after the destruction of World War I, when in a world of rapidly increasing population the Gold Standard was found to be unacceptably deflationary (because gold supplies could not be increased fast enough to keep up.) Maynard Keynes provided spurious rationales for a fiat money system, which is always preferred by governments because they profit from the seignorage of creating money of no intrinsic value. In a world where governments were relied upon for unemployment insurance, old age pensions and increasingly healthcare, it seemed natural to trust them to maintain careful control over the money supply. While huge monetary mistakes were made – notably by the Fed in the Great Depression – the central confidence problem of a fiat money system was overcome. Only in regions such as Latin America where confidence in government remained weak did investor fear of fiat money produce its normal bouts of hyperinflation and dollarization. Even here it appeared by the 1990s that wise advice from the IMF would limit the problem except in countries whose economies were anyway unstable.
A global turn towards money creation would reverse this. It would quickly become obvious that none of the world’s major currencies now represented a stable store of value. Moreover, except for marginal exceptions like Switzerland and Canada, it would become clear that governments could no longer be trusted with a fiat currency system. This happened to a certain extent with the Anglo/U.S. inflation of the 1970s, but at that time the Deutschemark, managed by the admirable Bundesbank, remained substantial and available to investors.
This collapse of confidence would not restore the Gold Standard. While global population increase is declining, official opposition to a Gold Standard would undoubtedly remain too strong for it to be restored. Should hyperinflation arrive, the official response would probably be some equivalent of German chancellor Gustav Stresemann’s 1923 rentenmark scheme, following the Weimar hyperinflation, in which the currency was declared to be backed by the value of Germany’s land. With the smoke and mirrors stripped away, that was simply another fiat currency; the German government did not own the country’s land, and no conceivable mechanism existed for land to be delivered in exchange for monetary claims.
However the private sector does not necessarily need government in order to act. This week the first “Gold to go” gold-dispensing ATMs in the United States were announced, by which investors will be able to use cash or credit cards to buy gold bars of up to 8 ounces or krugerrands, with the prices updated electronically every 10 minutes. Initially, the market will be one-way; there will be no provision for gold to be sold back to the ATMs. However over the longer term, if inflation becomes a problem, it seems likely that the bugs will be ironed out and that investors will be able to hold their cash reserves directly in gold.
The next step would be for them to be able to hold gold denominated bank accounts, accessible primarily by debit card, operated presumably by banks run more conservatively than current U.S. banking regulations prescribe. Since the debit cards would be entirely conventional, a gold account holder would be able to operate in daily life just as does a current Internet-savvy consumer who has liberated himself from physical cash.
There is after all no need for a central bank in a free-market economy, but only for a means of storing and dispensing value. With modern electronic technology, a cash-free existence can be managed just as easily on the basis of gold as on the basis of dollars; the currency has no physical existence but is only a means of measuring value. If such a system spread, governments could find their money creation and management functions entirely dispensed with, as consumers and businesses increasingly relied on a private sector system operated by conservatively managed private sector banks. Unless governments physically prohibited the creation of such a system (which FDR did in 1933 but might not be possible in a democracy today) they would find themselves bereft of power or even influence in the monetary sphere.
Central bankers enthusiastic for more “quantitative easing” should beware. They may find the move institutionally suicidal.
great write-up, but these thugs will not relinquish power quite so easily, not-to-mention the implications for the Welfare State.
Ok, it's critically important to correct some of the misconceptions in this.
First, that of the so-called "gold standard." During the pre-Fed years, there never really WAS a gold standard, not like people conceive of it.
First off, Real Bills circulated as effective money. Gold was *merely* used as a restraint to GOVERNMENT issue of bills. The money supply is NOT tied to the gold standard or to gold in an asset-backed paper doctrine. Real goods back paper. Gold is merely ONE type of real good.
So the *government* is restrained by the gold standard to not print paper not backed. The CB-led notion of "gold standards" was an apocalyptic failure, by which I mean the FORCING of solely gold-backed paper as legal tender or money. There simply isn't and wasn't enough gold to back *all* money necessary for the world economy's growth rate at the time.
HOWEVER, Real Bills backing production *did* provide sufficient backing and were previously traded as effective money. This is because no good for production need exist absent a bill that it backs.
Money is a transactional instrument...the notion of money as *wealth* came from bankers who wanted to store it and profit from it and ultimately control it. Gold was what they had, so they pushed for the "gold standard" in England, which was an infection foisted on the world by the BOE/Rothschild axis.
If we want OUT of inflation/deflation, creditmoney, parasitic compound interest, and have *sound* money, we MUST return to RBD. At the current spot of 1357 POG, vs 82.xx oil, a bill backed by 1 oz Au could be broken into change of 16+ oil bills, which would themselves be 3 and change silver oz bills. ALL of them are fungible as money because they are backed by REAL goods; all of them are equally sound "money" and could be traded or even "saved" as wealth until they self-liquidate and mature into the real good itself, which could be re-billed to another if necessary.
The Gold standard meant ONLY gold was money and that gold was controlled by the banks! Real Bills Doctrine removes control of money from banks and gives it to production. In fact, you can make a persuasive case that the Gold Standard ITSELF is effectively a FIAT REGIME! Unless GOLD is denominated in OTHER REAL THINGS, you have a FIAT standard.
Review the history of the BOE's Sterling Bill and how it was wielded as an imperial tool to create bubbles all over the world (Miss, S. Seas) by inflating and deflating with paper gold via Sterling Bills. All on an ostensible "gold standard."
Gold cannot exclusively back "money," gold's value exists in terms of ratios with other real goods.
Thanks for the comment. You are absolutely right.
Almost, but not quite:
There simply isn't and wasn't enough gold to back *all* money necessary for the world economy's growth rate at the time.
How do you figure that one, Trav?
There would certainly have been enough gold to match a more responsible growth rate.
Real bills still mature into gold, I think the two (real bills & gold standard) go together.
Gold stops (end point) debt. Thus the "no counter party risk" aspect. Real bills as a backing for goods is still a debt. It's not settled until goods are delivered or gold takes its place. You are correct in your brief statement.
only at a 1:1 ratio.
great thoughts.
in the meantime, be your own central bank. keep all long-term non-working capital in physical gold & silver until you need to convert it back to fiat in certain cases where you believe you will achieve inflation-beating positive risk-adjusted rates of returns.
BE YOUR OWN CENTRAL BANK, bitchez.
Excellent info, Trav; sharing like this makes ZH worth refreshing.
http://www.youtube.com/watch?v=gvbqG8EbxW0
Uh, Trav...
The Mississippi Bubble was a French product, courtesy of Scotsman John Law, and was not connected with the BOE.
http://mshistory.k12.ms.us/articles/70/john-law-and-the-mississippi-bubb...
http://en.wikipedia.org/wiki/Mississippi_Bubble
http://www.ft.com/cms/s/0/0220b174-eb98-11dc-9493-0000779fd2ac.html
Interesting post! Real bills would definitely be preferable to what we have now. However, gold need not be denominated in anything but itself if you let the market decide what money is. Case in point: The chart Tyler posted.
Your critique of the gold standard also assumes that the inflationary model of economic growth accurately describes the phenomenon of capital creation, that printing is necessary for growth. It isn't, Mises disproved that a long time ago. The gold-pegged dollar had to go because they'd printed more claims to physical than they actually held.
What you mean? The very first bankers were none other than "Goldsmiths".
From "Gold, Peace, and Prosperity"
The argument that there's not enough gold ... is false. With a gold dollar, a car might cost $600 instead of $6,000, but the exact amount of the medium of exchange used wouldn't matter.
"In a free market economy," points out Dr. Hans Sennholz, "it is utterly irrelevant what the total stock of money should be. Any given quantity renders the full services and yields the maximum utility of a medium of exchange. No additional utility can be derived from additions to the money quantity. When the stock is relatively large, the purchasing power of the individual units of money will be relatively small. Conversely, when the stock is small, the purchasing power of the individual units will be relatively large. No wealth can be created and no economic growth can be achieved by changing the quantity of the medium of exchange. It is so obvious and yet so obscured by the specious reasoning of special interest spokesmen that the printing of another ton of paper money does not create new wealth."
"There simply isn't and wasn't enough gold to back *all* money necessary for the world economy's growth rate at the time."
Pure nonsense
" Unless GOLD is denominated in OTHER REAL THINGS, you have a FIAT standard. "
Gold AND Silver are both money, problem solved
Bimetallism bitches!
http://en.wikipedia.org/wiki/Bimetallism
first reply to the comments:
Gold is NOT MONEY.
Gold is a good just like any other upon which people place value.
A pure gold standard is a fiat regime. Real Bills are fungible money irrespective of the good that backs the bill.
Too many people have only a superficial understanding of gold's historical function as ultimate liquidator of real bills and came to believe that gold *IS* money in the abstract.
It is not. There's no persuasive case for gold in lieu of platinum or any of a number of other commodities. Anything non-perishable sufficies in this regard.
To tie a need for gold to EVERY transaction is a shackle upon commerce. Let gold serve its function as the last mile, but there is no reason that *all* bills must be gold backed or that there is no room for paper exchange means
Will someone please recommend some books on the subject of Real Bills?
A Real Bill, backed by an actual good, sounds like real money to me. I've never bought into gold being real money, as it's based on confidence and perception. After all, gold is nothing more than a chunk of metal. However, a bill backed by production or usuable commodities (food, oil, etc.) sounds like real money to me.
Money in the real world
"In case it's not obvious, what we've just done is to put together a logical explanation of money, using gold as an example, and using only made-up terms like "collectible" and "levitation" to avoid the trap of defining money in terms of itself.
Now let's apply this theory to the money we use today - dollars, euros, and so on.
Today's official money is an "artificial collectible." Money production is limited by legal violence, not natural rarity. If in our condom example, the condom market was patrolled by a global condom mafia which got medieval with any unauthorized condom producers, it would resemble the market for official currency. No one can print Icelandic kronor in the Ukraine, Australian dollars in Pakistan, or Mexican pesos in Algeria.
It may be distasteful to hardcore libertarians, but this method of controlling the money supply is effective. There is minimal unlicensed production of new money - also known as counterfeiting.
It should also be clear from our discussion of gold that there is nothing, in principle, wrong with artificial paper money. The whole point of money is that its "real value" is irrelevant. In principle, an artificial money supply can be much more stable than a naturally restricted resource such as gold.
In practice, unfortunately, it has not worked out that way.
Artificial money is a political product. Its problems are political problems. It does no one any good to separate economic theory from political reality.
Governments have always had a bad habit of debasing their own monetary systems. Historically, every monetary system in which money creation was a state prerogative has seen debasement. Of course, no one in government is unaware that debasement causes problems, or that it does not create any real value. But it often trades off short-term solutions for long-term problems. The result is an addictive cycle that's hard to escape." - FOFOA
Excellent comment !!!!!!!!!!!!
Excellent comment !!!!!!!!!!!!
...Chinese...exporters are being horribly squeezed. Wen is happy to reorient Chinese growth towards the domestic market, but naturally doesn’t want his major export industries to go belly-up. He thus wants only a gentle upward path for the renminbi, avoiding extra strain on exporters...
What about the US? I too would be happy to "re-orient" growth towards the domestic market etc., etc. But no, we must endure the extra strain on our exporters due to ????
Our exporters and wealth generation industries have taken an incredible hit and will require a generation or two to recover, (if our eductational system will allow) and while I doubt China will lose much sleep over our plight, I won't over theirs either. Regardless of Mr. Diane Feinstein's best efforts to promote China's interests at the expense of US industries.
bitchez
http://i53.tinypic.com/2z6v9lk.jpg
LOL - It was only a matter of time.
Why buy gold at 1350 when I can buy a six shooter for less than half that and take all the gold I need?
I think you can get 2.5 18-shooters for an ounce of gold now (glock .40)............
When's the gold/gun arb fund start?
I'm favoring the Sig 220/ 45, and a modest Sig 239/40 for CC....
I've never seen a concealable .45 that will hold more than 8 rounds. I guess it's fine if you never face a group of thugs.
Most people who own gold also own a gun collection. God speed.
Because it's a hell of a thing, killing a man. Taking away all he's got, and all he's ever gonna have.
i shot a man in reno just to watch him die.
You'll end up in a burning ring of fire.
Or walk the line, or have a son you'll call "Sue" or one of these things. I forget which.
My sister shot someone near a bridge, but I got hunged for it...
Was that the night the lights went out in Georgia?
The phrase "well hung" is going to evolve different meanings...
Not sure why you got junked - you quoted Johnny Cash!
+1
http://www.youtube.com/watch?v=IgI6nm8ANY8
http://www.youtube.com/watch?v=rU-KVObNEd4
tough song. love Eddie Money.
Most gold owners own one other precious metal - supersonic lead.
Some of the sneaky ones have subsonic lead too. Those BASTARDS.
Never take a six shooter to a rifle fight DaisyMae!
A pistol should be used to fight your way to the nearest rifle.
A pistol should be used to fight your way to the nearest shotgun.
I'll see your six shooter and raise you my twelve gauge.
Ok lets follow the logic. Why buy a house at 100k when you can buy a 50 cal with scope for 25k and take all the houses you need? Or a car, or groceries, or a wedding rig. If you are willing to kill and rob with no remorse why work at all? Though if you would like to join a gang the government is always looking for brutal sociopaths.
Hot damn, that was a good one!
Indeed, why buy anything at all when corporate fraud and failure get bailed out by taxpayers? Stealing is stealing, the means of force is moot.
Banks (and bank posers) are stealing everything using government capture (campaign contributions among other things) as the getaway vehicle -- does that make it okay?
It appears so even though savers and prudent behavior is forced to cover the losses -- robbed through their fiat and Congress. No guns needed when the force is money or corruption, or inflation, but nothing less than outright generational theft.
Don't forget the record bonuses for failure/larceny this Christmas season.
But they are using force. The government gets it's authority to tax by force. I have to think that not many people would be paying taxes if the IRS didn't have the power to come at them with force of arms and pillage at the point of a gun? Hell I was at a job-fair in undergrad and the IRS showed up to recruit and they were packing.
Shameful,
I am afraid to ask...what is a wedding rig?
;-D
The answer to "why not rob and pillage" is always, and ONLY, because it doesn't work. It doesn't (generally) work now, therefore, it is not happening all over the place.
(Realistically, even if we had complete anarchy, one person with a rifle is simply not able to rob and pillage at will, delusions of Rambo-hood notwithstanding. You're going to need some help.)
Not long after it starts working, it starts happening.
Because the guy holding the gold is holding a Mossberg 590 to your chest with his finger on the trigger.
so you are basically a no-good, fuckin thief?
Actually it would make him a no-good, fuckin thief with a gun.
As a goldbug from way back - bought my first ounce in 1979, at age 8, and watched it go belly up...and then rise from the ashes.
i find it a bit depressing when the hill-billies start going on about guns and ammo.
have you seen the numbers of the great unwashed wanting to take it all from you?
there aint enough bullets in fort bragg .
You imply that I must make a choice between the two.
Not so cordite-breath. I have both in abundance.
Yeah, it's not rocket science to aquire both. I still laugh at someone who piles up a huge heap of wealth and has no means to defend it, or to defend their family. Height of foolishness, there.
Darling, if things revert to that, someone will hang you. You will be hunted down like an animal and hung from a tree. No judge, no jury, no trial.
Great until you get shot trying to take it.
Your skillz better be superior to mine, sunshine.
looks like someone found your comment unpleasent DaisyMae. Having worked as a prison guard my whole carreer in a large overpopulated state I can assure you this is how it will go down. When you having nothing, you have nothing to lose.. I'd venture to guess that most private gold will be taken from it's owners sooner or later in a shtf scenerio whether by corrupt local authorities or organized gangs unless of coarse you own enough of it to pay for protection.
of course, nothing else will be. Not cars or housing or food or guns. Nothing will be stolen except gold. By gold eating zombies.
Tyler, you just never miss a beat. I have never met a man who hardly ever needs sleep. Always a pleasure and always a pleasure to contribute financially to the site.
ty.
Just the beginning, I am afraid. Just the beginning.
Geithner's gone after 11/2.
Ben grabbed the book at the end of the shelf and thrust it, catapulting the row of books air bound. They scattered around the room where Timmah sat slurping jolt from a beer helmet while playing his PPT video game. "I will rule the world if it is the last thing I do!" Yelled BS. He was a little drunk. "My team of banksters and I will buy up every asset on this scorched earth. Come hell or high water." Timmah lay distracted, engrossed in the game. He had recently led a retreat of the humans of the infamous Dow 11,000. He had secretly joined the Algo Machines from Hell long ago, but was trying to hide this fact and reach the lofty Dow 12,000 position.
"Timmah, I know you won't believe me, but this tree house isn't big enough for the both of us. I challenge you to a dance off!" This was all Timmah needed to hear: settle King of the Tree house with a little dance off! They called Shirikawa to judge it. They started the contest with an arrangement of Lady Magaga songs, followed by 70's disco. Shirakawa thought BS ripped it up, the clincher came when BS did "Poker Face" and pointed to Shirakawa while singing "I want to roll with him, a hard pair we will be a little gambling is fun when you're with me (I love it)"; Timmah said it was rigged. "I expect to hear your resignation shortly after the election." Timmah knew this would be his last chance to liberate the Algo Machines from Hell; he has 3 weeks. He would do it! "Timmah!"
Ya but he'll have an kicked ass in a currency war to put on his resume. So he's got that going for him.
I hear he is under Obama's desk everynight.
Geithner lying his ass off right now on Charlie Rose.
Catch it tomorrow when you get the time.
He is a light weight
Oh my, is it possible that all Fiat currency users will now start to go after Gold even faster. Let's see, back of the envelope that's about 2 billion eligable adults living in Fiat land with discretionary income willing and able to chase Gold.
Oh my
If one friend tells 2 friends to buy gold and those 2 friends tell another 2 friend to buy gold....wait a second. If people starting thinking that their currency is going to become worthless we could see an exponential rise in Gold purchases in the next few years. And since the largest Gold holders are no longer selling that means the supply will rapidly dry up....I'm starting to think we'll reach a critical mass of buyers pretty soon....could the Second London Gold Pool collapse?
They don't have a clue!
How far from reality and basic principles has it now gotten? The moral aspect of things ... ethics... little or none left anymore. The USSA has changed into something unrecognizable. Money ...Dollars (Federal Reserve Notes) are only a false currency and a poor one at that and are not a store of value.
The average American is so dumb and purposely bastardized by the "banksters" that people no longer even know what money really is.
THIS is the reason cheerleaders on CNBC everyday are "hoping and praying" for QE2.... cheering for the destruction of the country. This "scam" has been run a 1,000 times before in history and never once worked. Bond traders and investors playing the game of "a greater fool" who will take bonds off their hands.
It has now become a national pastime and talk everywhere is that "the Fed will will save us with QE2".
The Fed has ALREADY KILLED the USSA with debasement of the currency and enabled the Treasury to borrow more than the market would have allowed AND at far lower rates!
Why some Elmer Fudd accountant hasn't burst out laughing at Maria Bartiromo and tell her to her face, on air, what a total idiot she and the rest of her cohorts are for believing that something that has NEVER worked before and ALWAYS destroyed currencies will work this time and the currency will survive?
CEO's, PhD economists, bankers all saying that QE2 is the only hope...with straight faces!
This disease is where common sense gets destroyed and never never land becomes reality. Would a 6 year old kid give lemonade away for a piece of paper that says "I O.U. NOTHING"?
This is what every American and virtually everyone on the planet does EACH AND EVERY DAY when they go to work! They collect their paycheck and "cash it' at the bank or "save it" but what do they really have? They have pieces of paper that "spends" until they don't. The day is soon coming where "paper" will not spend. All it will take is "one break in the chain" where someone says "NO... I want something real for my labor".
Just because Dollars have "In God we Trust" written on them doesn't mean that "I O.U. nothing" isn't really there in invisible ink. Where do you go to "cash in" your Dollars? You can't, you have to "spend them" on goods which works just fine until it doesn't. "The greatest Ponzi scheme of all time!".
Common sense that is instilled in 6 year old from birth, but over time gets erased from memory. TRUE, HONEST, History is no longer being taught in schools. The Constitution is not taught. God forbid should a 3rd grader start a movement by asking for SILVER (real AND Constitutional money) as payment for cutting a lawn or shoveling a driveway! The poor kid would get locked up as a terrorist.
So think about it the next time you see some "smart person" on CNBC or the Nightly Business Report spouting stupidity that the market did this or that in the hopes of QE2. They are idiots... MORONS from the word go, who have been "wound up" and placed before a brainwashed public by the powers that be to continue the lie and keep the game going "just a little while longer".
When "a little while longer" finally does arrive, you will not recognize the world you live in. 99% of the population could never even have nightmares resembling this coming reality because the USSA MORONS have become brainless lemmings who would jump off a cliff because they are told... "it is good for you"! QE anything is THE antithesis of sound and stable monetary policy, PERIOD, end of story!
Sorry for the rant but it is the truth for anyone with even an ounce of common sense left.
Viva LeMetropoleCafe !
+1 silver rabbit
http://www.coinzine.net/wp-content/uploads/2010/09/2011-Perth-Mint-Lunar...
QE anything is THE antithesis of sound and stable monetary policy, PERIOD, end of story!
Yes, but they're gonna do it anyway. Hardcore gold bugs never had any doubt.
Bravo.
Anyone who behaved reasonably over the past decade--didn't overpay for a home, didn't rack up crazy debt--is now getting the shaft. lever up and all debts will be forgiven! or devalued through inflation! this government needs to be overthrown. the elections won't do anything but further stave off the inevitable. We'll get the illusion of responsibility in all the talk and pomp. Dollar may strengthen a touch for a brief spell, as this inflation trade is so obvious it probably is getting a touch crowded short term. Unless this really is the final destruction.
Gotta love those choice of words by the Japanese Plutos....
They are watching FX with "great interest".....
They are "annoyed with the Yen's irreparable surge"
“Every loss for the BoJ
is a profit for someone else in the FX market,”
"Speculators must be crushed"
LOL.....
It's time for bed Robot, run along. We're talking about Gold here. We don't want to give you nightmares.
But DM, the TA is all wrong !!! If folks don't get this by now...but I have noticed a falloff in the can't eat it trolls...
True enough, ever since I started my drinking game "but you can't eat gold (byceg)" the trolls have disappeared. I am getting thirsty.
Maybe they ran up against some crazy gold bug with a tooth fairy costume and pliers.
"Join me or die! You can do no less!"
So that's what happened. I was watching it while listening to Ron Paul, and wondered why the sudden rise in silver/gold.
shiny yellow metal Bitchez.
Now we know who is going to be doing at least part of the feds private label paper purchases ... in trade for assisting the Chinese in their diversification out of UST and into those hy Japanese assets.
What's Geithner's real reason for wanting the Yuan to appreciate? Are TPTB holding the RMB or invested in Chinese solars? But seriously, I'm curious to here ZH thoughts about this.
A Diversion. Blame it all on somebody else. We're victims. Gotta rally the troops. Can't let 'em focus on the reality of failed policies and looting of the land. Like Hillary (Sir Edmund, so don't even think of going there, folks.) said about Everest.... Because it's there.
So if the Chinese were to consume their own produced goods (as a result of a Yuan appreciation), Geithner could blame the Chinese when our shelves are empty?
Fuck yeah. Ignore the specifics, though. Just when anything goes wrong, the Power Elite gotta blame somebody else in order to pass more laws increasing taxes, fees, filling the Greata Nation of the People's Coffers to be looted and restricting personal freedoms (particularly press) whilst providing adequate Bread and Circuses to mollify the Peon Slave Class to perpetuate the Game.
Hillary Von Kankles blamed a great right wing conspiracy....
it's also always good to blame people who look different, pray different, and live far far away
.
Instead of all these threats against China why not simply stop buying Chinese goods? Substitute American goods.
Buy an iPOD made in North Dakota.
Ooops. No factories in USA. Why not?
Cause it is much more profitable to innovate on Wall St. More profit and bonus in MBS than in iPOD mfg.
What is truly odd is that under the conventions of Free Trade if the counter party wants to seel you goods at below cost then you should buy all he produces as he is subsidizing your consumption. Which is what the Chinese are doing for the USA. But the USA does not like this?
Where were you when Ross Perot was showing his charts and graphs about what free trade would do to the U. S.?
Probably doesn't even know about the giant sucking sound
They call it music now, and they put it on them there iPhailz
ah yes the giant sucking sound....
what was that other quote of his regarding having experience to which he replied something like,
well yes I do not have experience in creating billions of dollars in deficits...
He was a quack, but at least he called bullshit when he saw it!
there are two giant sucking sounds, the other one is heard behind closed congressional doors
+1
At best political posturing and blame redirection for domestic consumption. At worst, groundwork for a future war with China.
--mamba-mamba
knukles: right idea, but the quote abut Everest - "because its there" was much before Hillary. It was George Mallory, a British climber who died on Everest.
Inserts Golden Cock into RoboJaw
Slam dunk right over Timmy's curly head by the big bad Red Machine. Oops - we didn't export as much as we thought so our currency must be devalued.
Too unbelievably fucking funny!
Deleted comment.
I better go check /ES with all this crazy currency war news....
Whew! It's ok, futures are up. Boy that was close.
O.K. Harry, make your call Nov. 1 DOW = ?
I say its under 10,000.
By 11/1? I don't really follow the Dow but there's no way in hell it'll be under 10k. I'll go with maybe 10700ish area.
Now we're getting some fun news, huh? This is the good stuff - currency wars. Forget the nagging little mortgage stuff, this is big leagues!
Ah, go ahead and post different numbers in different threads, and you can come back later with your "evidence".
Heh he heeh...
Yeah, and right now this is all the "inflation hedge/currency debasement" portion of the trade, where gold is utilized as the last house on the block for the store of value currency function. All's it is when the debasement process is in full swing. Last chance holding, especially when the whole world is involved in the round robin, beggar they neighbor devaluation routine. Nobody gets to sit this one out, seems. Sorta like playin' fuck yer' buddy, Russian Roulette with an automatic.
Next, just wait, just a tidge more. All's needed is one itty, bitty, teenie, weenie yellow underlying accounting or inventory problem, assay explosion or major delivery fail for the actual physical or allocated, unencumbered to absolutely skyrocket amongst panic buying.
Absolutely nothing else is working as billed in this world. Everything else seems broken beyond belief. We're living in a real time, real life FUBAR city. That's why folks are buying the stuff and I can just feel it a-comin' like my imaginary friend used to say.
Very precarious, very scary. The FED shot off its big mouth and has really screwed the pooch this time beyond belief.
Again, buy every dollar-denominated asset that isn't nailed down.
Except the stuff that matters. Shutting that down.
Shutting Detroit Down:http://www.youtube.com/watch?v=Gyz-DbYuRp4&feature=player_embedded#!
one little dog and you're labeled for life.
Hey what was that about JPM front running silver again?
Oh, you mean the DoJ investigation into silver market manipulation (I think that was the general drift of the matter.) that seems to have fallen off the world's radar? And falls off the radar seemingly contemperaneous with....
-JPM closing down prop. trading (where the gold and silver books were run?)
- Fed minutes suggesting, no stating outright, that deflation is the casue du guerre these days
- And makes sense if one wants to combat deflation/increase inflationary expectations as a precursor to inflation, to have price of gold and silver Move Up
- And ties right in with abandoning any defense of the $1200 level at last round or two of COMEX settlements.
But you mean the DoJ stuff?
Don't think anything's happened. Don't even believe that most folks have connected some of those pretty damned obvious dots. And talk about dots, remember the DoJ dropping the anti-trust actions against Google when they signed on to the Internet Identity Layer Protocol?
But nope, heard nothing else about it.
And I ain't holdin' muh breath, neither.
The new quantitative ETF buying program of Japan has barely got off the ground, if it has taken off at all. Is there any confirmation that the $50 billion + ETF, etc. fund, funded by new fiat money, has even bought any ETFs yet?
If not, then why do they need to expand the fund a short time later? Looks like Japan is getting prepared to go tit for tat in the race to bottom of the currency barrel.
I wonder if our success in currency wars will rival that of our recent traditional
+++++++++++++++++++++++++++
Precinct. Run by the same Ship of Fools. (Ref, Ted Kaczynski. Yes, that Ted Kaczynski!)
http://www.sacredfools.org/crimescene/casefiles/s2/shipoffoolsstory.htm
This piece ranks high on my recommended reading list. Of particular note, introductory sentence; "Once upon a time, the captain and the mates of a ship grew so vain of their seamanship, so full of hubris and so impressed with themselves, that they went mad."
Yes. In both cases our government is going to blow something up.
And that does seem to be how they define success, doesn't it?
The Evil Empire threw an absolute shitpile of brand spankin new, genuine imitation, paper shorts at the gold market last Thursday and Friday. As of this moment, about 95% of them are underwater!
HAHAHAHAHA
assholes.
Short squeeze Bitchez! And JPM can go pound sand when they need a bailout from loosing their asses over naked silver shorts....
(My sincere apologies to Howard Beale for my use of the words Bitchez, but in my defense Howard, I have been sitting patiently on these PM positions for a while and 'Bitchez" describes my mood most accurately....)
Justice Served. JPM is short GLD and SLV. And to think, Jamie wants to be head of the FED or Treasury.
JPM will close out their GLD and SLV shorts for a massive profit. There's a black hole in deleveraging and credit implosion that will absorb all this excess liquidity. I don't know for sure if we make new lows as the government owns 3/4 of all issued stock through "institutional funds." (Read about the comprehensive annual financial reports of more than 75k separate gov't entities). There will be another scramble for dollars but the next time there will be nothing the Fed can do. Gold will not get you anything in the End Game. Skills and commodities will be the new form of currency. We are at the end of the materialistic phase and Gold will go down in history just like the Tulip Bubble. I keep myself grounded by watching this http://www.youtube.com/watch?v=5OFThORmR-s&feature=fvw and realizing that our fiat system will implode just like the stars. We are at critical mass. Learn valuable skills. Good luck.
Okay Einstein, please explain how GLD and SLV are "massive profits" to this bankrupt institution when they are the major short in the PM market? LMAO. What a fuckan joke...
I think he/she is anticipating that gold gets liquidated in his coming deflationary collapse. He might have taken a bit more time to explain himself/herself.
What I think is missing in this theory is that there are still enough people that have excess capital (savings) in order to invest. It only takes a little push to overwhelm gold prices as net savers look for something, anything to preserve their wealth. Not all assets will get liquidated (and it's hard to barter wheat for oil as an individual).
THey are the custodians of GLD and SLV's metal. All they have to do is ensure that they don't have any available, and leak that information out, and their shorts will pay off 100%.
Quite a racket.
Of course, physical PMs will be well beyond the moon at that point. This is why we tell people to avoid fraud vehicles like GLD and SLV and go for physical. The brave can go long physical and short GLD and SLV.
two things. All stars do not implode. Gold is a commodity
unless they're Lindsay Lohan
They should have been defending $1350 last october. Now they have to defend $1650 because if they try to defend $1980 the cat will be so far out of the bag they won't ever get it back in.
They think $28 is number to defend on silver. They are so wrong it'll set a world record for the history of wrong. Silver wants $35 and wants it bad.
Shirakawa PPT'ing the PPT!
Yep. Shirakawa and Geithner have Blythe Masters bent over their chaise lounge and they're pulling a train on her with a 12" auger-shaped, golden dildo.
Visuals, dude! Yo'!
They better have their fun now, they are in a total bind. The only way to save the dollar is to weaken the Yen, but everytime they do that, gold spikes! Ha!
Global power is front and center in this epic clash of tectonic proportion. The survivors will win and carve up the world. Talk about a bloodless war; well only maybe we will not see something worse happen.
I think if small businesses started offering prices in silver dollars at a discount to greenbacks/electronic dollars, people could go a long way toward extracting the financial tapeworm in the economy.
only it is illegal for businesses to do this, strangely.
although, i wonder if it can be treated as 'barter' and simply assigned a value for tax purposes.
anyone have any thoughts on this?
All currency and coinage issues by the Treasury are legal tender after 1933.
Silver certificates still floated around long after their discontinuation, even tho it was understood that there was no claim on physical silver from the Mint.
That includes silver coinage. A merchant has no restriction on accepting this with any discounts he wishes.