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S&P Priced In Gold: Comparison Between The Great Depression And Now
For those looking at the recent moves in the gold chart with disenchanted amusement, here are some scenarios to ponder. Below are the recent cycles associated with the S&P priced in gold, where it can be seen that the ratio is once again climbing minutely to the upside, just below 0.96. That's fine, although as the chart demonstrates the lower low moves occur with greater frequency and greater downward momentum with each iteration.
Yet where this chart gets interesting is when it is recreated from the perspective of the 1930s. As can be seen, the recent lows in the ratio at around 0.9 are a joke compared to the nearly 0.2 achieved in 1932... just before FDR decided to make gold ownership illegal (and an implied gold price of over $5k in today's terms).
Are we at a point where the market's own voluntary establishment of a gold standard, or an alternative currency, is sufficient to see the "now" chart take the next decisive move in the ratio lower? And ignore the "stability" of Europe - it is all a scam predicated upon a systematic farce, and the very same conditions that caused spreads to blow out in May and June are still there - the only thing that has changed is how Europe deals with the symptoms: just like our Fed, the solution to all manifest symptoms is for them to be drowned in ever more money. Yet neither Europe, nor the US, has still addressed the actual cancer at the heart of the system which makes symptomatic breakouts all the more prevalent. And as the market once again realizes this simple truth, look for the SPX-gold relationship to take out recent lows. The only question as far as we are concerned: will Obama "learn" from the past, and do to gold what FDR did?
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18 more months to the bottom....
Tyler, fuck the gold comparison(s). How about the S&P priced relative to US military strength between the GDI and now?
I think, what with the advent of new electronic pulse weapons (which inflict painful radiation burns across wide areas), along with conventional joy-stick controlled drones and the good 'ole chem/bio/nuke stand byes, that AmeriCo is looking pretty damn good by any measure.
Let us repeat once again today's catechism: FRNs are real money backed by the military's ability to control global commodities. The military's ability to develop, mfg & deliver (pun intended) critical "assets" in the field, where needed, is dependent on people continuing to accept little counterfeit tickets as the real McCoy in exchange for their hard sweat & labor.
All this gold talk nonsense presumes some sort of MadMax scenario. It seems everyone is failing to consider the realpolitik nature of this crisis. The power-elite allow the charade to continue because it currently serves their interest to do so.
When it becomes too tedious and/or boring to maintain, they may very well dispense with the niceties and have a little sit down chat with the American citizenry. This is where they will tell everyone, yes Virginia, you live in a fascist dictatorship. Still, it has certain benefits, does it not? After all, you get to enjoy a standard of living around 10-50X what you're really worth if it wasn't for our fine boys & girls making damn sure no one rocks the boat.
So you got two choices: accept reality or fight. You really wanna take option #2?
looks like somebody sure is gung-ho about the ass raping obama is giving this country
all those happy with the obama administration please raise your hand ..............
(lol)
End bush tax cuts now !!!!!!! go obama !!!!!!!!!!
"just close your eyes and think of England."
Un-fucking-believable. Tyler, you have either got to increase the complexity of the captcha, or perhaps make CogDis' dissertation required reading before testing new applicants for admission to the hallowed halls of ZH. Check this out suckas:
1. by SuperBullon Tue, 07/27/2010 - 18:38 #491327
Dear Zeitgeist, how can you compare Obama to Hitler? Obama is superior to Hitler in so many ways. Rest assured, you have nothing to fear from Obama. Obama cares for Americans. America needs every citizen to work for change and to build a better future. Together, we can. With Obama, you can.
**//**
Thank you, And let us build a better America!
Five fucking junks for an excellent piece of snark! What's up with that?
2. Then check out this numbnut:
by Jasper Mon Tue, 07/27/2010 - 18:33 #491321
1) You do realize that "realpolitik" refers to land, don't you? Not trying to be language police here, it's just something that annoys me.
{snip} Loud, audible sigh:
Realpolitik (see also Political realism), from German: real “realistic”, “practical” or “actual”; and Politik “politics”, refers to politics or diplomacy based primarily on practical considerations, rather than ideological notions or moralistic premises. In this respect, it shares aspects of its philosophical approach with those of realism and pragmatism. The term realpolitik is often used pejoratively to imply politics that are coercive, amoral, or Machiavellian. Realpolitik is a theory of politics that focuses on considerations of power, not ideals, morals, or principles.
3. Lastly, apparently someone pimping their own blog is unaware of B9K9's Law, which postulates that the likelihood of a suggestion that the power-elite are clueless reaches 1.
by sullymandiason Tue, 07/27/2010 - 20:28 #491443
Just how clueless are these people? Here’s a little exercise to illustrate. Below is a series of graphs showing the Fed’s grasp of the economy over the past several years.
The Fed is in La La Land, unwilling or unable to see reality and uncertain about what to do for its next act. It will remain frozen like a deer in the headlights until another crisis puts Bernanke and Co. into panic mode where they will overreact and do something to make the situation worse.
{snip with extreme prejudice}
Tyler, bro, I gotta level with you - you've somehow allowed a bunch of mouth breathers to invade your turf.
That fed article is pretty interesting. I wonder if they have much more negative internal hidden predictions for themselves which are more accurate and another set of more optimistic kool aid predictions which they publish.
3. Lastly, apparently someone pimping their own blog is unaware of B9K9's Law, which postulates that the likelihood of a suggestion that the power-elite are clueless reaches 1.
Pimping my own blog? B9K9, maybe that's a bit of a stretch? Did you consider the possibility that it was something I read that I happened to think was good material and wanted to share? You hoser.
So what do you think, that Ben Bernanke is some kind of mad genius? He's obviously an idiot. The hypothesis that the Fed is clueless fits the evidence a lot better, in my mind, than the opposite extreme, that they are in complete control and know what they are doing. The data presented in the article I linked to makes a good case for that. Care to address the content of that article at all, B9K9? Luser.
and while you're thinking of england, remember where the british empire thought it was about 1900 and where they found themselves when the pound couldn't keep its convertibility into gold about 1914, not to mention 1916 after the death of a generation.
as for b9k9, what about the last ten years of the american military's history (or the last fifty while we're at it) gives you the feeling the country's stronger for these exercises? how did pumping that iraqi oil go? complicated machinery is very vulnerable to attack from people indistinguishable from local workers. how's afghanistan going? i'm with ron paul on this one. as presently employed, the u.s. military and its world wide infrastructure is a net negative for the long term economic and geopolitical success of the country.
IMHO both the Iraqi War and Afghan War were set up for huge wasteful government spending and not meant to be won militarily, so that those money changers at the top can profit enormously for a long time, just as the Vietnam War was never meant to be own by the US military in the first place.
I have read your post twice, and I honestly haven't got a clue what you're trying to say.
@Sabremesh
Having the world's most lethal and most efficient military will generate a lot of respect for one's currency. Or holding gold reserves doesn't necessarily stop despots like Hitler or Saddam from invading your country. BTW, this is not the world model I would advocate, but it is what we now have.
No doubt about it, the US military is the most advanced in the world.
But the political buffoonery managing our military gives one great pause. For instance, what was the net affect on the USD for spending over a trillion to invade the wrong country on false premises? Probably wasn't favorable, and the charts agree. Does our powerful military outweigh our political incompetence? Once confidence is lost in our currency, the most advanced, military-grade, night-vision goggles won't find it.
Having the largest rock to throw means nothing if it's wrapped in red tape and stored in Alfred E. Newman's garage.
Additionally, I don't think it matters if our military has 5x the number of nuclear bombs as our enemy. Two or three thermonuclear explosions in NY would be sufficient to gut the financial system, and destroy the USD.
you are forgetting where that money goes... you act like it was burned. Ask about the pentagon's 8.7 Billion they just didn't keep track of either.. and that was 95% of what was allocated...
Actually, I didn't forget where the money goes - the Great American War Machine, a budget that exceeds the defense budgets of the next 45 countries...combined.
You can't think of something better to spend our tax dollars on?
Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes … known instruments for bringing the many under the domination of the few.… No nation could preserve its freedom in the midst of continual warfare. - James Madison, 1795
Here, let me redefine military might in terms of whatever my greatest strength happens to be.
Technology doesn't win wars and neither does money. If it did we would have beaten the Vietnamese, the Chinese in Korea and the Afghans without any trouble.
do you understand War Profiteering?? perhaps the real war is the debt thrown on the public for running in circles? If America were to just destroy other nations then all the money would go to what? schools? parks?
US military is in the business to lose just enough on the front end to keep winning on the backend
err, maybe "all the money" wouldn't be borrowed nor siphoned off to feed the beast? naaah,
- Ned
If we were allowed unrestrained warfare in those conflicts, yes we would have beaten them. As it is, our ROE is set up for an "honorable win" - ie a loss
What part of those wars were restrained? With the Vietnam war: how many mega tons of bombs did we drop, how many troops did we send, how many gallons of defoliants did we use, etc. How many would it have taken to qualify as an unrestrained war? Or, better, how many would it have taken to win the war?
The Vietnam war was a war of attrition, I think that in order to win such a war you have to kill all the people on the other side who are willing to fight; if you accomplish that then what did you really win? To phrase that better, who, specifically, wins?
REALLY..WHAT DO YOU MAKE OF SWITZERLAND..THEY LEARNED A LONG TIME AGO WHAT IS THE DIFFERENCE BETWEEN GOLD AND MILITARY..YOU KNOW..ONCE IN A WHILE RED NECKS LIKE YOU SHOULD WONDER BEYOND THE BORDER.....
@ZEITGEIST
You talking to me or was that swipe aimed at Red Neck Repugnicant? Maybe you should be talking to the Man in the Mirror. BTW, if you look to the exreme middle left of your keyboard, you'll find the "Caps Lock" key. Disengage.
Cursive, he has a point though. For you sensitive types, just block the "redneck" comment. The Swiss have no military, but its citizenry is armed. They have all the gold. Sounds pretty smart to me.
Switzerland does have a military, but it is ostensibly an entirely defensive one. They (men) are all armed because they are in the reserves after mandatory service.
The military also serves a social function. The military elite is/becomes the political and business elite. Only officers become CEOs or anything close to that.
But their military will never need to do anything because Switzerland is the favored sanctuary for the global elite and that's the end of the story. That's where many of them spent WW II, and that is why Hitler never dreamt of actually invading, even while he thought nothing of sweeping through neitral Belgium. (The mountainous topography also helped.) Its neutrality served all sorts of useful purposes for all concerned, and it is/was a beautiful and calm place to live.
Now it is the hub for all sorts of New World Order activities (UN, BIS, etc.) while remaining the hole in the EU doughnut.
@B9K9
Checkmate. And I'll add this angle. Who owns most of the world's gold? I don't for a second believe the USG has any in Fort Knox. I once saw the FRB's holdings, purpoted to be something like 25% of the world's gold reserves, 5 stories under lower Manhatten, but:
a.) I couldn't tell you if it was all gold or not, and
b.) the FRB holds this on the account of the world's central banks, the IMF and the BIS.
So, in reality, the bankers control the gold bullion and if the bankers control the gold bullion, I'm not interested tying my financial fate to a rate commodity controlled by bankers and any new output heavily influenced by geopolitical events in South Africa , Russia or Indonesia.
The military really ain't shit versus anyone with nukes.
If you have the capability of destroying Washington D.C., you have nothing much to fear from the military machine. If you're a caveman, then you're in trouble.
Otherwise... meh!
It sounds like your vision of warfare is stuck in the 1980s. Nuclear winter is a lie. Our military is spread out over the country and the world, our country is isolated and cannot be invaded. If a depression gets bad enough, all we need to to is nationalize the government. Some will starve, some will be marginalized, but the vast majority will thrive.
MORON MENTALITY LIKE YOURS THAT HAS GOTTEN US WHERE WE ARE..AT THE EDGE OF THE ABYSS...LOT OF GOOD YOUR WEAPONRY IS DOING IN AFGHANISTAN ..OR IRAQ...THE ROMANS HAD MUCH SUPERIOR ARMY AS WELL SO DID THE PERSIANS AND GREEKS AND FRENCH AND SPANISH AND ENGLISH WHEN THEY WERE WORLD POWERS..IDIOTS LIKE YOURSELF..WHO COME A PENNY PER HUNDRED..WILL NEVER LEARN FROM HISTORY..WHEN A REGIME BECOMES TOO CORRUPT..BALL GAME OVER...NOW GO JOIN THE ARMY AND SERVE WELL IN THE MIDDLE EAST YOU IGNORAMOUS ASS..AS FOR GOLD..WELL YOU HAVE ALREADY SHOWN HOW STUPID YOU ARE..NOW GO AND TRY TO FIGURE OUT WHY IT HAS BEEN MONEY FOR 6000 YEARS..AND WHY FIAT CURRENCIES HAVE A LIFE SPAN OF 41 YEARS ON AVERAGE..AND HOW LONG HAS THE DOLLAR BEEN FIAT CURRENCY...40 ..GOING ON 41..NOW GO BACK AND PRACTICE WAR GAMES ON YOUR PLAYSTATION..FREAKIN IMBECILITIS
Can't compare the two, if we fought like the Roman's and the Persians of old. Iraq and Afghanistan would be in total ruin anf the people gone.
I am not judging your moral arguement just your logic on the capabilitiy. You have seen just a taste of the destructive capability. I know.
If America is caught in a real war, like WWII, our enemies will find it most unpleasant.
WOULD BE IN TOTAL RUIN...MAN ARE YOU AS STUPID AS JOHNNY BRAVO OR WHAT..YOU THINK THEY ARE LIVIN THE GOOD LIFE..WAKE UP AND REMEMBER YOU HAD A LOBOTAMY....
Turn off the caps, the button is left of the "a". Thanks.
Caps Lock is like Cruise Control for Awesome.
LOL
+65mph
You are right in that if the U.S. would fight like the Romans or Persians, there would be no doubt about victory. You'd just go into Afghanistan or Iraq, slaughter their armies and then proceed on killing the old, women, children.... In about six months all Afghans would be either dead or as refugees in Pakistan and other neighboring countries. Then you could just rename the country as 'New Arizona' or whatever, and start building McDonalds, swimming pools, tollroads and Hooters bars.
The problem is, you don't fight like that. Not even the French 200 years ago fought like that, that's why they lost Algeria, Vietnam and others. You'd like to be a force of good in this world, or at least that others think you are. That restricts your options a lot. So, go on air dropping those MREs to hungry natives, nation building and other stuff that does not work in your favor.
Zeitgeist - well said
zeitgeist applause!
B9K9,
Yeaaah, we are in a great position......until no one accepts our doela$$ to pay for shit.
War on the entire world really worked GREAT for that Roman Empire huh B9K9? Just war your way to prosperity? Snoogins.
I don't think B9K9 is advocating warmongering. I think he's presenting an observation of the way things work. Guns make a great backing for currency. Now, if the American Empire is stretched too thin or faces a counterbalancing foe (e.g. Vietnam, Afghanistan) or asymmetrical warfare (Mogadishu, Iraq), then the calculus must be adjusted.
I'm sort of surprised CogDis hasn't (yet) weighed in on this discussion. Just the few posts made above (by brand new participants no less!) warrant plenty of evidence to support his primary thesis.
Jeez, the measure of outrage, umbrage and general animosity delivered towards anyone who takes the time & effort to explain the way the world really works is valuable in its own right.
Hmm, now let's think this opportunity through. One, we have the underlying, immutable laws about the way the world works. Two, apparently, there are plenty of people remaining who are (a) both unaware of these facts; and (b) when made aware, react in predictably reactionary fashion.
Come on guys, help me out here. What product(s)/service(s) will be in most demand by the power-elite to make sure these important life lessons are readily learned & taken to heart by such resistant sheep? Simple blunt force instruments or more sophisticated aural/auditory devices & tools?
Shit, who's currently making this stuff? Anyone have a patent filed yet? Inquiring minds really wanna know. Gotta get in on the ground floor now!
Yup ... with you 100%.
Having worked for one of the largest defense contractors (in non-secret areas) and having recently done an acquisition of a technology that was developed by one of the national defense labs, it has become clear to me that there is absolutely no shortage of money for anything that can contribute to weapons technology or anything considered to be of "strategic" importance (such as modeling of potential changes in Ocean currents). And when applying for a patent, if there is a chance that the technology has military applications, a patent may be granted in secret but it won't see the light of day until you can prove that it should be released to the industry in general.
If you want to make sure that your business does not become obsolete or troubled by financial concerns, make sure that it becomes indispensible to the major defense contractors. Plenty of money, save the Mad Maxx scenario.
Just a thing to consider though... The German people of WWII lived very well and pretty much in ignorance until the war came to Germany because Hitler systematically looted the countries he conquered, killing the conquered country's currency and sapping their assets and production capacity for the benefit of Germany. Are we like those Germany people looting the world on the backs of our military?
Apt reference to Nazi Germany. Albert Speer described the efforts the regime went through to ensure the German people lived reasonably well during the war out of fear of discontent which might get out of control. The Germans didn't really wake up to reality until the bombs started falling on them.
And a great mass of their population was in the military or in concentration camps so they were only taking care of the elderly, infirmed, women and children mainly...until the fight was brought to their doorstep.
Guns make a great backing for currency..
No it doesn't. In terms of currency, guns will never substitute for confidence.
If we ever have to point a gun at someone's head to accept our dollars as payment for debt, the game is over and the dollar is chicken-fried.
To suggest otherwise, is pure Gunsmoke fantasies.
"If we ever have to point a gun at someone's head to accept our dollars as payment for debt, the game is over and the dollar is chicken-fried."
I suppose this works on many levels.
Questions RNR:
We are already using the point of a gun, no? If you (and everyone else within the US) were free to use any medium to exchange goods and services, would you choose the FRN?
I think the point was that if necessary the U.S. would use military force to acquire necessities such as oil.
Thank you for this. Maybe it will sink in.
---
If that's the case, we will be in war with China, the largest oil consumer in the world.
I think the point was that if necessary the U.S. does use military force to acquire necessities such as oil.
I fixed it.
RNR is a fool.. Saddam was selling oil for EUROS.. he is now DEAD.. Iraq was then FORCED to hold $$USD$$ as reserves... then Bush declared victory.. most people laughed and didnt know what the finish line was..
Once again, your post is as ridiculous as a football bat.
In January 2009, Iraq had $48 billion in USD reserves, ranking it 29 in the world - nine places less significant than Poland. Bernanke spills more than that out of his pockets on the way to his helicopter.
The US spends ~$10 billion/month to fight the war. That is an absolutely astronomical price to pay to force a country to hold $48 billion of our paper.
To imply that Bush declared victory after Iraq was forced to hold US reserves is knee-buckling stupid.
Actually not ridiculous. Not about them holding reserves it was about selling oil in Euros. Petrodollar goes, the U.S. goes.
Nucking Futs!
So you're saying the US went to war with Iraq to prevent their oil from being sold in Euros?
If that's your position, then you are also admitting that the entire Iraq War - as sold/marketed to the US and the world - was a huge lie?
You must think that Republicans are stunningly despicable.
Your Honor! RNR is leading the witness...
Read PetroDollar Warfare by Clark. Actually, I think it's funny you believe the Democrat versus Republican debate has any merit at this point. I think 99.9% of politicians are either monsters, or bought and paid for. I'll support anyone that actually upholds our constitution at this point, and right now it sure as hell isn't the Hope and Change crowd. I'm pretty sure you are paid minimum wage to sit around the moveon.org headquarters in your Birkenstocks and troll this board, so why don't you just let me know which political candidates you support so I can save some time doing the research of which ones are the closet communists.
More to the point, the only thing holding back the US government's creditors from drinking its milkshake is their 'confidence' that the government is still able to collect taxes from its subjects to pay off its debt.
Worked great for Hitler too. And Napolean. and......,
So you got two choices: accept reality or fight. You really wanna take option #2?
What a raw deal. Monty Hall used to let folks chose the prize behind curtains one, two or three. Why so chintzy?
He also used to give out a hundred bucks to anyone who could come up with, say, a salad fork or a red rubber band.
Great post, because it daylights the way a certain segment of the sheeple think. You probably believe you are "enlightened", but really you are simply part of the "complicity program" that the Power Elite is counting on if the unemployment level rises to 25% (u-3), food shortages develop, and societal acrimony morphs to civil unrest: don't push too hard against ol' Uncle, or the steel-toed boot of crypto-fascism will squash you flatter than a canned clam.
So, unless you think 330 million people can be "managed" by a military of fewer than 500,000, the "niceties" conversation may very well go the exact opposite direction that you believe. Foreign occupations by highly mechanized military forces do not end well for the invading force (see: India, the Levant, Lebanon, Vietnam, Afghanistan (Russia), the West Bank, Iraq, Afghanistan (USA); and for domestic equivalents: American Colonies, Cambodia, South Africa). And make no mistake: the moment the White House unleashes the military-contractor complex on the home front, "invaders" is exactly how those in uniform will be treated. Mad Max or not, populace is defined by individuality, much pent up anger and a whole lotta guns.
I heard a figure of not less than 500,000 but 4 million in the military. I mean shoot, there are 865k people in the government and contractors with "top" secret clearance (which if rumors are true is actually quite low on the "secret scale".
yeah - the Iraq public is really laughing at the problems they are giving the US military.. nothing happened to their way of life.. or even if they still have their lives
<unless you think 330 million people can be "managed" by a military of fewer than 500,000, the "niceties" conversation may very well go the exact opposite direction that you believe>
When one think about using its own military against its own people, it is a civil war. During any civil war, loyalty of your own troops is very much in doubt. A political elite does not control the situation anymore.
Consequently, it is necessary to build a loyal security apparatus and entire totalitarian enforcement industry. Usually, it takes a lot of time and very outstanding people like Robespierre, Bonaparte, Hitler, Stalin, Mao, etc.,
PS
As for America, we have a lot of weapons in private hands; and very few will surrender their weapons at the government request...
The military depends to a very, very large extent on the existence of cheap oil. It'll be mostly obsolete soon
Not our Navy, Gas Turbine and Nuclear. Don't worry, we produce enough oil to win a war if need be. Missles operate on derivatives of Oxygen and Hydrogen.
I didnt know navy aircraft operated on nuclear / gas. News to me.!!
no they run on the tears of Indians
and the powdered bones of third world children
Thanks for stating the obvious which goes mostly unsaid. The US's ultimate trump card is it military. If China, Russia or Iran try to conduct outright financial war on the US, they will find themselves having brought a knife to a gun-fight.
You are also right that everyone's thought process seems to stop at the depression; however, there are many scenarios that are possible because they have happened before, including MadMax. The Weimar hyper-inflation, the "long depression" of the 1870s, the south seas bubble, the tulip mania etc. And lets not forget the depression didn't begin to end until somebody started WW II. In fact, Rogoff & Reinhart go through all these in excruciating detail.
As for MadMax, that's just an artistic vision of the Dark Ages with a little gasoline thrown in. As the Roman Empire collapsed and its outer regions were invaded by Barbarians (former Roman mercenaries, actually), the society descended into a uncivilized state: people forgot how read and write, they couldn't grow food as well, the medical technology was forgotten, their buildings were poorer in construction, the great water projects collapsed and the population shrank dramatically. The point is that things can get VERY bad, because they have gotten VERY bad before.
Anyway, even in the case of war, gold will be the superior currency because it WILL be the currency of the winner, whose paper currency is likely to have been badly debased. The Japanese stole all the gold from china, and amassed it in the Phillipines and Japan. At the end of the war, we took it from them (well over 3,000 tons). You wonder why the Chinese don't have any gold?
At each of circle of hell, gold has a role to play. You don't have to go all the way to the bottom before gold becomes useful. "Gold is money, everything else is credit", as JP Morgan correctly said. If you disagree, then you are fighting every central bank on the planet, not just the Fed. They hoard it, precisely because it is the ultimate form of money; an insurance policy against war or sovereign default.
Gold is not an investment, it's money. When you "buy" gold you're really just converting to a different currency, one not owned or created by a government.
The world where money no longer buys food, is a world you don't want to even want see in a movie. This ludicrous end-game scenario (worse than MadMax) gives rise to the "you can't eat gold" proclamation, as if that even rises above kindergarten intelligence. Try eating bowl full of quarters with milk or a salad made of green backs. Total nonsense.
Once humans created money, we could not do away from it. It just works too well. And the best money has always been the one provided by mother nature: gold. No matter how bad things get, we will continue to use money, and that means gold
good post.. ZH should have a FAQ section .. all this heavy rotation just keeps us all on the treadmill trying to keep the insanity away..
I think ZH should slow down the posts so the major stories can sink in more..
or just take your time to absorb. - Ned
No, more like protection from the thieving bastards...
North Korea revalues currency, destroying personal savings
http://www.washingtonpost.com/wp-dyn/content/article/2009/12/01/AR200912...
Venezuela’s Currency Loses a Few Zeros
http://www.forexblog.org/2008/01/venezuelas-currency-loses-a-few-zeros.html
Argentina Declares Bank Holiday; Surprise Action Comes as Nation Prepares New Financial Controls
http://www.encyclopedia.com/doc/1P2-1308117.html
But hey, if we go mad max, I've got preps for that too.. and the balls
to use them.
your scenario is that these moron kings of our age will maintain control of their "operations"...im not so sure.
the USD is backed by oil. You can exchange pretty much ONLY FRNs for barrels. There are a few exceptions but they're minor. Even Iran is dumping or has dumped their euros (maybe to avoid invasion?). There was a lot of noise a few years ago from nations around the world trying to break the petrodollar peg, but it just never materialized.
As long as we control the House of Saud, the game in our favor continues. To all on this board, accept it for what it is. Take advantage of it. Make as much fucking money as you can in the game before things change.
I, for one, enjoy the standard of living we have in the USA. I mean, wtf is the main complaint here? That WE aren't making ENOUGH and some other guys are cheating and making more! Nobody is suggesting we cede our lifestyle to India or shit like that.
So get with the program and stop bitching so much. Just save your gold and the rest of it.
Sure, the US Empire won't last forever, but make hay when the sun shines. Rome fell over centuries. Sure, in a book, it only takes a few paragraphs but in real life, it was over many generations. We've been blessed to live at the apex of our power.
Here is a recent article for you. And it is Japan dealing with Iran now but if you think it will stop there, with an ally of the U.S., you are kidding yourself:
July 13, 2007
Iran demands oil pay in yen not dollarshttp://business.timesonline.co.uk/tol/business/industry_sectors/natural_...
True to an extent, but I don't think it works out quite the way you have outlined.
For example, the occupation of Iraq at enormous costs has just given the US a place at the table for ensuring energy supplies but it does not mean that we are advantaged against say Russia/China who can very easily inflict tremendous pain/cost if they so desired (do exactly what the US did to Russian occupation of Afghanistan).
Despite the occupation, we are at a disadvantage as our supplies/equipment have to be shipped from great distances to maintain the occupation. China/Russia can make it hot for us at any time of their choosing if they so desire as they are geographically connected.
The only reason things have not been escalated is because those other countries are not ready to rock the boat at this moment as they want to keep their economic momentum going and because they are aware that our hands are tied. It is, at best, a stalemate.
If you don't believe it is true, look at how an economic lightweight but nuclear armed Pakistan has been able to harass our forces in Afghanistan.
All this gold talk nonsense presumes some sort of MadMax scenario.
So this seems to be a common meme these days: If it were going to get so bad that gold would be money, then we would be Road Warrior anyway and I ought to be investing in guns/ammo/food/survival. I think this is a pretty naive way to look at the world. History is full of examples of monetary collapses that did not coincide with societal collapse.
Take, for example, the U.S. in the Great Depression. This was a devastating time. There were massive banks losses. The dollar was devalued %70 ($20.67 to $35 per gold ounce). People were unemployed, homeless, hungry, and starving. A quick summary of stats describing the magnitude of this event here:
http://en.wikipedia.org/wiki/Great_Depression_in_the_United_States#Facts_and_figures
Yet societal unrest was minimal. There were no riots in city streets. Violent crime did not surge. People didn't start breaking in to their neighbor's houses and stealing their food and valuables. Instead, they starved quietly. I think they learned how to cooperate and help each other out much more as well. Being home more often reduces neighborhood crime, as this article points out:
http://hamptonroads.com/2009/01/statistics-point-increase-crime-during-recessions
It also helps us get to know our neighbors better, and puts us in positions where it is much easier and more effective to combine efforts and share costs.
Many very plausible future scenarios are great for gold and, for the most part, maintain societal cohesion. For example: another massive financial collapse, once again followed by the government doing lots of nothing right; runaway inflation; continued rising unemployment; failure of food crops; riots; and a long and severe depression. All this could happen on US soil with society largely intact. Local communities could even strengthen. And gold would be very valuable.
The gold/Road Warrior meme is pleasantly reinforced by the current Hollywood reality, with its countless iterations of "everything was going along fine, when suddenly complete disaster struck." Every threat to the globe is a global catastrophe that develops and subsides within a matter of days. The every-day killer gets replaced with a super-genius psychopath that makes lampshades with her victims' skin. These memes fit so well in our culture because they absolve the individual of responsibility. (No point in trying to prepare for a massive global epidemic of killer bees. Brad Pitt can tackle that one.) The american idiots can shrug off the worry when they randomly read something about gold and accidentally consider it for a moment. Complete denial is easier.
The choice between the continuation of the way things are and the apocalypse is a false choice. It facilitates the ugly american in absolving responsibility, perpetuating denial, maintaining their consumer fantasy, and living their petty, petrol-fueled existence.
Excellent analysis.
In one short, expletive containing paragraph you have plainly described the basis of our monetary nature. Kudos!
Therefore, since the US military is greater than all of the rest of the world put together, that means that Fort Knox is full and brimming.
Where I disagree is on the sit down chat. That aint gonna happen. To continue the charade, they will bring in religion, religious persecution, scapegoating etc. They have multiple cards up their sleeve, but I'm sure you know about them all.
But what is your recommendation to Virginia? Buy KY jelly? Buy gold? Buy guns?
interesting post B9 but a few things worth considering.
"FRNs are real money backed by the military's ability to control global commodities" Do not stand in the way of China's insatiable demand for comodities. They will flush the US, and the military machine down the toilet if they have to. They stop buying or start selling UST's and it is game over for the US economy.
"is dependent on people continuing to accept little counterfeit tickets" this is a big "if" and is dependent on confidence in those little counterfeit tickets. Once confidence goes the tickets stop being accepted.
"you live in a fascist dictatorship. Still, it has certain benefits, does it not" i dont know but im sure the 17% unemployed dont think so.
"So you got two choices: accept reality or fight. You really wanna take option #2?" If your reality is that you have lost your home, your job and there is absolutely no future for you your friends and your family option 2 starts looking pretty good.
Ironically B9, the US military strength that you cling to is one of the main causes of the economic sickness.
B9K9,
I suggest you not be overly critical to other people's comments and replies as your piece is truly on the absurd.
1. Gold is not based on some Mad Max scenario. It based on sovereign deficit levels; a possibility of QE2; a growing concern of inflation in the not-to-far future; and overall confidence in all markets on the sustainability of the global economic recovery.
2. Realpolitik nature of the crisis is that the power-elite all this charade to continue because it currently serves their interest to do so? What exactly does this mean, other than conspiracy-type generalities?
Most interesting is that you're rather impressed with your writing. Ironically, it is YOU that seems moronic and that others are simply calling you out on it, as am I.
Rah!
Monoki
oooooooooooo don't say that dirty word, gold. JPM will get you...
by the way, JPM it seems, needs 2,9 tons of the hard stuff to meet delivery demand over at the Comex. .... about 900K ounces of silver...
anyone got a few ounces to help these nice guys out?
If the cartel wanted physical gold what better way than to sell puts at $1220 and short the comex for a drop in price to $1180 - $1200. At least somewhere below the call options they sold. That way the calls expire, the puts are exercised, the gold is delivered to the cartel and the premiums from calls and puts minimize the premium of physical because of the put option.
That sounds like a very sensible way to get your hands on physical without causing a rise in the price and at the same time staying under the radar.
T'was thinkin' the exact same strategy when saw the magnitude of the bear raid's price depression. If yer gonna take the price that far down, ya'll ain't gonna do it for naught. Money is as money does.
Plus, whose gonna fuck with your fuckin' around with the markets? After all, the bag man does get to pick up a few crumbs here and there.
They can have my gold when they can pry it from my cold, dead fingers. But before those fingers go cold, they will be kept warm operating several variants of high-speed lead delivery systems. I guess when I run out of lead, I have to surrender my gold. Maybe I should go long lead instead!
Brass and lead, the true precious metals.
We are not sure if its probably because of financial recession or not but housing sector goes through an issue right now. In June, new home sales went up from the record low they were in May. Ever since the end of the homebuyers tax credit, new home sales have gone down a lot which makes June nevertheless the second lowest on record. Some believe how the worst of the post-tax-credit slump is over. Others think that increasing foreclosures and the stubbornly high Americas unemployment rate offset the good news.
Yup.
I just doubt gold confiscation is in the cards nowadays. Not enough of the public owns it for it to be an effective measure. I'd think they'd confiscate something like 401k's nowadays.
US doesn't need gold, it needs dollars......and it's confiscating your dollars through taxes everyday.
And not just thru taxes, but more insidiously, through the ongoing depreciation of the dollar, which despite all the deflation propaganda is still an ongoing process --- until the final collapse of our fiat currency confiscates 50-99% of the average citizen's remaining wealth, as has happened countless times already in other nations, and even in our own (see the Continental (Fiat) Dollar of 1776-1781).
It's in the works. There are bitches and bastards in DC eyeing 401ks. First move is to convert them all into UST bonds. Then pool, like Social Security, and redistribute as they see fit. See, you stupid people don't know how to spend your life savings. mutherfuckers
The exact reason they are taxing gold as investment under the name of health care reform, as you might start chewing your gold bars leading to severe constipation.
The Jess dude disagrees
http://jessescrossroadscafe.blogspot.com/2010/07/health-care-bill-change...
Killer avatar! Did you know the "smartest man to ever live", Einstein, was a thief while working in the Patent Office? No joke. On top of that, he also impregnated his 13 yr old cousin and left her with the baby.
Amazing what the msm media ignores, ain't it?
Not to forget a government sponsored coke head.
Hmmm. I didn't know that, but I believe it! :)
That's why they call him Einstein. Before that, he was known around the way as Gonzo.
Not exactly... his cousin Elsa was 36 when they started their relationship, and they never had any children together.
http://en.wikipedia.org/wiki/Elsa_Einstein
he also impregnated his 13 yr old cousin and left her with the baby.
Geez, talk about your theory of relativity...
Cue the rimshot.... +1!
Fuckin'-A + 3.1417
"If it moves we can't measure it, if it's still, then screw it."
Was that Schrodinger or Heisenberg?
Don't know...
(pun)
"Heisenberg" Uncertainty Principle, so it must have been Schrodie.
Pi is 3.14159, not 3.1417 . . .
I thought it keeps going....
And that ain't pie!
And his wife did most of the math.
Einstein is regarded as the smartest man to ever live??? By whom? First I've heard this.
I mean, his achievements were great, but still irreconcilable with empirically proven QM. Why doesn't anyone hold up Bohr like they do Einstein?
For my money, Isaac Newton is simply peerless, though Archimedes accomplished things like calculating the length of a spiral without the calculus (Newton invented that). Newton's contributions in math, optics, the Laws of Motion, the theory of gravity, etc., would have been good for a dozen Nobel Prizes.
Fewer than 1 in 100 understands GR or SR anyhow.
David Bohm
Think Argentina.
I think you may be missing the point.
When a government confiscates gold, even though they may want the gold, a more likely reason for confiscation is, to remove the availability of an alternative to fiat.
Forcing a reliance upon something with no intrinsic value - a result that would be hard to achieve in the presence of true money.
"Greshamrs Law" - bad money drives out the good.
So, make good money illegal and mandate the use of bad.
Why do we see fiat currencies the way we do?
Perhaps because we have known no other way.
Another fine avatar. I like hot butts!
Create the problem then provide the solution, when the solution was what you wanted in the first place. Same ole play over and over. An emergency must not be wasted!
Also...just as bad money drives out the good, so too goes government. It's all about removing the contrast. You can't see the difference between black/white much less shades of gray in the dark. Sheds new light on the meaning of "the lesser of two evils", no?
The last time they confiscated gold, the dollar was still a viable alternative. Nowadays, if they take away gold, the people may still end up preferring barter to the USD.
Is there a chart of Gold vs Standard of Living going back 5000 years?
bible says in 600 bc 1 oz of gold bought 350 loaves of bread. or a good suit from prominent jewish taylor.
Looking sharp eating bread is not my idea of good living. How many dirt bikes did it buy in Jesus's time? Ha? Yeah exactly. That's what I thought.
Looking sharp eating bread is not my idea of good living.
To each his own:
George: Yeah! Look at me! I was free and clear! I was living the dream! I was stripped to the waist, eating a block of cheese the size of a car battery!
Jerry: Before we go any further, I'd just like to point out how disturbing it is that you equate eating a block of cheese with some sort of bachelor paradise.
It still does.
And that was before the population explosion...
They say that about Saville Row suits in the King James Version.
If we get a pic of Obama chewing on a cigarette holder with a Marlboro Red on the end, commence digging up the backyard gold stash. Find a safer spot and dig a deeper hole.
Monocle and top hat?
Start digging.
http://www.google.com/imgres?imgurl=http://unclemeat.files.wordpress.com...
haha, awesome
No kidding. I knew Uncle_Meat back in the FuckedCompany days. Have to stop by there and say hello. Thanks for posting that link.
I'm more worried about the "red money" theory than gold confiscation.
In 1960s Greenspan used to believe fiat currency is a fraud.
Here's the link to Greenspan on Gold - 1966 (pre-body snatcher).
http://www.321gold.com/fed/greenspan/1966.html
(pre-body snatcher).
LOL!
He still does, it's just now he's on the other side of the con.
Might want to rethink which side of the con he's on, I'll bet you a shiny buffalo that Greenspan got his gold a long, long time ago.
When Greenie was the Chairman, he parked all his money on long bond. In retrospect, what a smart move that had been.
Greenspan was known as a gold advocate, but something happened there. Paul Volcker has called gold the enemy. Tim and Ben, well you can see what we are up against.
I would expect JPM etc. to use the November election as a massive PM shorting orgy (talking points are Republicans take many seats, divided government, more fiscal responsible, etc).
Does anyone else have that expectation? I know gold will rebound months after, I just expect that scenario to buy more time, unload shorts.
I don't see economic survival in it's present form to exist past November.
I respect History a lot, but I am not sure what to make and how seriously to take the two charts.
America is pretty pissed off now. Obama tries to take away our gold, that may set off the revolution that Thomas Jefferson predicted.
Lots of gold threads today! And fofoa getting his due.
fofoa.blogspot.com
It won't because it doesn't need it. It already has 2.5x more gold in reserves than any other single nation. As I mentioned below, the US needs USD's. It can't just print them as many think without stoking the bond market but by drawing more taxes (modern day wealth confiscation), it maintains legitimacy in UST's with increased revenue. Also note that it is not uncommon to raise taxes during deflationary periods but more likely.
ozz, I have seen both you and others write that. I believe you are right, but I have no trust with these thieves in DC and NYC.
Nice comment about them needing more $ by raising taxes even in hard times.
Raise taxes....why?
Stop spending....why?
Because it's the right thing to do? They've not cared a rat's ass what's right or wrong for a long time.... Just to keep the charade going.
They're printing the damned dollars as fast as the Fed'll buy the treasuries.
Come to think of it, it's kinda a who cares, anyhow, ain't it? We're already well into the Rabbit Hole.
We're screwed. And even chatting about it here continues to play their game. Bitch, piss and moan to blow off the steam, have another burger, buy another iPhone. WTF ever.
We are not screwed once we default and go back to the Gold standard. Gov't will reform/confirm very quickly. This I believe is the only true exit and we are being guided toward it.
Bernanke, Obama, Summers, Geithner, Frank, Pelosi, Reed, Rangel will be remembered as just a brief stain on the American flag.
The only problem with respecting history, is that it is written by the winner.
Once bitten - twice shy. The FDR gold confiscation and prohibition of ownership is well known today. Even among the more plebeian. What is not as well known is what FDR did after he got everyone's gold - namely re-value gold higher, in effect devaluing the dollar.
For Obama to try this ruse in a copy cat fashion of FDR, would result in much strife. People would not stand for it. Besides the U.S. would have to man up and honor it's commitment, that was reneged on under Nixon in 1971, if it was to use gold as the dollar reserve once again. Talk about a line up at the doors of Fort Knox!
Gold confiscation again? Won't happen. Too much to lose if they did.
"People would not stand for it."
yeah, famous last words.
"U.S. would have to man up and honor it's commitment"
why? don't have to do anything, especially the US.
"people would not stand for it".
I think you're giving the sheep too much credit, they're tremendous slouches.
Oh, and you think He, the Magic Savior cares what the sheeple think? Many would say he sure as hell hasn't shown any compassion between promises and actions to date .
He's a student of FDR. MSM reported around election time that he was studying FDR... and stated it was not only the man's policies but also the mannerisms, etc.
I'd say that with the way he seems to bein' snake bit these days, that could be a legacy definiing "Big Move" to help "stabilize" the economic hell he's facing. DHS has already enumerated gold ownership as among a series of attributes that distinguish citizens as dangerous. So, take away the metal......
Probably great populist appeal, ding the rich, national security....
They'll confiscate by proxy through the taxing of gold sales as mentioned a few days ago, what they're not taking into account is the barter power of gold, particularly coins.
Very nice charts, thanks.
TD - don't know if this rises to the importance of an article, and since it was on Bloomberg might be 'well-known' already...
http://www.risk.net/risk-magazine/news/1724576/portuguese-debt-office-agrees-post-collateral-dealers
Portuguese debt office will have to enter into 2-way collateral agreements in the future with dealers...