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Jim Grant Warns America's Default Is Inevitable

Tyler Durden's picture




 

Authored by James Grant (of Grant's Interest Rate Observer), originally posted at The Washington Post,

There is precedent for a government shutdown,” Lloyd Blankfein, the chief executive officer of Goldman Sachs, remarked last week. “There’s no precedent for default.”

How wrong he is.

 

The U.S. government defaulted after the Revolutionary War, and it defaulted at intervals thereafter. Moreover, on the authority of the chairman of the Federal Reserve Board, the government means to keep right on shirking, dodging or trimming, if not legally defaulting.

Default means to not pay as promised, and politics may interrupt the timely service of the government’s debts. The consequences of such a disruption could — as everyone knows by now — set Wall Street on its ear. But after the various branches of government resume talking and investors have collected themselves, the Treasury will have no trouble finding the necessary billions with which to pay its bills. The Federal Reserve can materialize the scrip on a computer screen.

Things were very different when America owed the kind of dollars that couldn’t just be whistled into existence. By 1790, the new republic was in arrears on $11,710,000 in foreign debt. These were obligations payable in gold and silver. Alexander Hamilton, the first secretary of the Treasury, duly paid them. In doing so, he cured a default.

Hamilton’s dollar was defined as a little less than 1/20 of an ounce of gold. So were those of his successors, all the way up to the administration of Franklin D. Roosevelt. But in the whirlwind of the “first hundred days” of the New Deal, the dollar came in for redefinition. The country needed a cheaper and more abundant currency, FDR said. By and by, the dollar’s value was reduced to 1/35 of an ounce of gold.

By any fair definition, this was another default. Creditors both domestic and foreign had lent dollars weighing just what the Founders had said they should weigh. They expected to be repaid in identical money.

Language to this effect — a “gold clause” — was standard in debt contracts of the time, including instruments binding the Treasury. But Congress resolved to abrogate those contracts, and in 1935 the Supreme Court upheld Congress.

The “American default,” as this piece of domestic stimulus was known in foreign parts , provoked condemnation in the City of London. “One of the most egregious defaults in history,” judged the London Financial News. “For repudiation of the gold clause is nothing less than that. The plea that recent developments have created abnormal circumstances is wholly irrelevant. It was precisely against such circumstances that the gold clause was designed to safeguard bondholders.”

The lighter Roosevelt dollar did service until 1971, when President Richard M. Nixon lightened it again. In fact, Nixon allowed it to float. No longer was the value of the greenback defined in law as a particular weight of gold or silver. It became what it looked like: a piece of paper.

Yet the U.S. government continued to find trusting creditors. Since the Nixon default, the public’s holdings of the federal debt have climbed from $303 billion to $11.9 trillion.

If today’s political impasse leads to another default, it will be a kind of technicality. Sooner or later, the Obama Treasury will resume writing checks. The question is what those checks will buy.

“Less and less,” is the Federal Reserve’s announced goal. Under Chairman Ben Bernanke (with the full support of the presumptive chairman-to-be, Janet Yellen), the central bank has redefined price “stability” to mean a rate of inflation of 2 percent per annum. Any smaller rate of depreciation is an unsatisfactory showing to be met with a faster gait of money-printing, policymakers say.

In other words, the value of money has become an instrument of public policy, not an honest weight or measure. In such a setting, an old-time “default” is impossible. How can a creditor cry foul when the government to which he is lending has repeatedly said that the value of the money he lent will shrink?

The post-1971 dollar derives its value from the stamp of the government that issues it. Across the seas, this imprimatur is starting to look a little tenuous. Lend us your dollars for 10 years, the Treasury proposes. We will pay you the lordly interest rate of 2.7 percent per annum. And at the end of those 10 years, we will hand you back your principal, which will almost certainly buy less than the money you lent.

This is the unsustainable conceit of the world’s superpower-cum-super debtor. By deed, if not audible word, we Americans say: “The greenback is the world’s great monetary brand. You have no choice but to use it. Like it or lump it.” But the historical record of paper currencies is clear: Governments always over-issue it. The people finally do lump it.

What to do? Let us face facts: We have defaulted in the past. Let us confront the implied message of the Federal Reserve’s pro-inflation policy: We will default in the future, though no lawyer will call it “default.” And let us preempt the world’s flight from our intangible money by taking steps to fashion a 21st-century improvement. We have the gold and the brains to find the solution.
 

 

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Fri, 10/11/2013 - 20:10 | 4046835 BlueDonkey
BlueDonkey's picture

we have the gold???

 

Fri, 10/11/2013 - 20:15 | 4046845 CPL
Fri, 10/11/2013 - 20:22 | 4046861 SafelyGraze
SafelyGraze's picture

left out the silver certificate default

Fri, 10/11/2013 - 20:41 | 4046911 tallen
tallen's picture

Oh just what the world needs, another person proclaiming the end of the US.

Fractional reserve banking means the debt cannot ever be paid off without extinguishing the money supply. People proclaimed the end of the US dollar back in the 90s, yet it's still here. They will not let the US default, these people are all in office for the money and don't want to be responsible for the US defaulting so they lose their cushy job.

Fri, 10/11/2013 - 21:34 | 4047010 disabledvet
disabledvet's picture

exactly. you have to define VALUE first (i.e. "the existence of your City without any credit") before you start going "full frontal" vis a vis gold. not that full frontal is bad mind you..but if there is one thing Alexander Hamilton...who was a soldier btw...understood is that we HAVE a lot of things even if we don't (or didn't) make a lot of things (back then.) That's simply not the case now. I will not even bother trying to get into an historical appreciation of "what is an an industrial revolution and why it matters" with someone who clearly stares in wonder (which he should) at the Chrysler Building but has no clue what a Chrysler actually is (no, it has no gold in it i'm afraid) suffice to ask "if gold is so valuable and the dollar so worthless, why is savings even valued less?" don't even get me started on what it cost Apple or Verizon to borrow...was it 60 billion? I mean give the world a break...okay?

Sat, 10/12/2013 - 00:12 | 4047223 Pinto Currency
Pinto Currency's picture

 

FDR's greatest default was that he took away the American peopes gold outright and gave them paper chits before he devalued the currency to foreigners.

Sat, 10/12/2013 - 00:36 | 4047237 Say What Again
Say What Again's picture

everyone on this site has been predicting the end of the financial markets as we know them for for about 5 years now.  How will we know when the end is REALLY near?

Sat, 10/12/2013 - 01:57 | 4047297 Pinto Currency
Pinto Currency's picture

 

We'll all say things are looking up and we misunderstood barry.

Sat, 10/12/2013 - 02:10 | 4047300 Ham-bone
Ham-bone's picture

Maybe share this w/ folks who care (if you can find one)...I think people have no context to even begin caring right now...so here goes pissing in the wind...cause good governance starts with an informed populace.

=======================================

American Economic Cheat Sheet:

-US GDP (sum of all US economic activity upon which taxes are raised) is $16 T (Trillion...btw this =$16,000 billion...$1 billion is a $1,000 millions) and growing @ 2%'ish

-US Federal Gov Treasury debt is $17 T and growing @ 8%'ish

-2012 US Federal tax income $2.3 T  vs. Federal expenditures $3.6 T or $1.3 T deficit...2013 should be a smaller deficit, likely $800 Billion

If this debt continues growing dramatically faster than economic growth (and the tax base to pay for it)...the government (via the Feds QE...Quantitative Easing or the Fed's policy since '09 of buying $3.5 T in Treasurys and mortgage debt w/ newly created money) will continue printing money (diluting existing holders of money) to ensure non-market pricing of Treasury's and mortgages is maintained (Fed is the only party willing to buy this debt @ these very low rates w/ high risks...if the Fed did not do this, the Congress and President would be forced to make hard decisions to ultimately prioritize spending and taxation and the economy would be restructured accordingly.  Please note this would be economically painful in the short term but beneficial mid / long term).

Note that the Federal government does not pay off our Treasury debt but rather only rolls over (re-sells) our existing debt along with our newly issued debt.  Thus, the amount of debt is increasing exponentially while the economy is growing in a linear function (ie, since '07 public Treasury debt has increased by 125% while the economy has incease @ 10%'ish).

Quick breakdown of Federal Treasury debt: 

-$5 T is intragov Treasury debt owned by Social Security and other government functions...this was created when the gov was running surpluses of income and the excess was used to buy Treasurys...the government holders roll this over so no worries so long as SS receipts are greater than benefits...discussion for another day.

- $12 T Public Outstanding Debt (active Treasury's in market place)

 
- Quick Defiinition of Treasury debt...Treasury Bills or T-Bills less than one yr. duration - Notes intermediate duration - Bonds / TIPS 10yr plus duration

- $7.8 T in T-Bills (Fed owns basically zero) 

- $4.2 T in Notes / Bonds (TIPS) (Fed owns $2.2 T or 50%'ish of all medium / long term debt) 

-QE is Fed buying $45 billion monthly ($540 Billion annually) of Treasury debt (notes/ bonds) and that amounts to about 150% of Treasury's issuance meaning Fed buys essentially all new plus most if not all rollover debt (Fed QE also buys $40 billion of mortgage debt monthly to drive down mortgage rates)...The $85 billion in monthly QE is not from taxes but simply money the Fed creates with which to buy these (think monopoly and when you run out of money but still want to buy something, you just grab a sticky pad and put a number on it and pass it off as legal tender...voila, QE!!!).

- At this rate Fed will own 70% (it's own rule for the max amount of every issuance it can own) of all Notes / Bonds (TIPS) within about a year (at current QE and current Treasury issuance)...this means Fed is buying virtually all outstanding intermediate / long term US debt. 
 
- This also means all $5 T of foreign held Treasury debt (China / Japan, etc.) has essentially moved from a mixture of short/med/long debt to only the shortest duration T-bill market 
 
The takeaway is that the Fed has ensured there will never be an intermediate or longer dated interest rate spike (no bond vigilantes or market based sell-offs based on US policy)...but it also means Congress and the President have no pressure or penalty for not coming to compromise or prioritizations of spending and taxation.  This means that the US is incredibly vulnerable to a short term T-bill exodus that the Fed would be incapable of covering without increasing QE (bond buying) radically...This is the danger to the currency that the Fed will increase it's balance sheet to own in essence 70% of all marketable debt.

The implications for the dollars purchasing power is very precarious as this is threatening to skyrocket the money supply and thus a sudden and dramatic loss of standard of living for Americans.

Of course it's much more complicated due to unfunded liabilities (promises to pay SS or medicare in the future w/ money already spent) derivatives (like insurance but called something else to avoid the regulations around actually setting aside capitol in case something actually happens) and leverage (borrowing capital (money) to increase the potential return but risking greater potential loss) of everything financial.  These are topics for extra credit for those who actually may have read this far and still interested (nerds :) ). 

Thanks for reading and hopefully with greater information, discussions can start from some shared facts and reach deeper than which political party will win next.

Sat, 10/12/2013 - 04:02 | 4047325 Supernova Born
Supernova Born's picture

Jim Grant should found a new political party, run for president...basically...accept his destiny.

His wisdom must find a broader audience. The most impressive argument of all is the one that distills otherwise complex concepts into simpler truths readily absorbed by the honorable core of this Nation.

Regrettably, the "core" is unstable and at risk. If the likes of Mr. Grant don't attempt to speak to them directly I think meltdown is next.

Sat, 10/12/2013 - 04:47 | 4047341 MeMadMax
MeMadMax's picture

Normalcy factor...

 

Shit ain't gonna happen till it happens for real, as in the power goes out or food stops showing up at the grocery store...

 

Otherwise, rider er' in all the way babe... ooooh yea baby, squeeze it good...

 

Sat, 10/12/2013 - 09:30 | 4047463 Max Hunter
Max Hunter's picture

Tyler.. top Brass in charges of Nukes gets fired.. top 2 in the last 48 hours. It matters. Lets talk about it. .. Okay.. that was from a couple weeks ago..sorry.. but still? wow.. interesting stuff..

Sat, 10/12/2013 - 10:14 | 4047510 BoNeSxxx
BoNeSxxx's picture

Grant, Faber, King, and Schiff in a row?  Looks like it's going to be a wrist-slitting kinda day!

Sat, 10/12/2013 - 11:45 | 4047768 Enslavethechild...
EnslavethechildrenforBen's picture

Con job.
Ponzi.
Scam.

Why are you all discussing these as if they are anything other than CRIMINAL?

Sat, 10/12/2013 - 12:06 | 4047827 MarcusLCrassus
MarcusLCrassus's picture

Our politicians have basically taken the stance "After me, the deluge"

Sat, 10/12/2013 - 05:08 | 4047347 Boris Alatovkrap
Boris Alatovkrap's picture

Wrong, there is precedent for default, name is Obama, President Obama.

(Boris is play with homonym)

Sat, 10/12/2013 - 07:21 | 4047391 brettd
brettd's picture

Nope.

We'll just become Italy and Spain.

Huge goverment sector.  No invention or industry.

More fights over soccer than policy....

Sat, 10/12/2013 - 09:37 | 4047485 DaveyJones
DaveyJones's picture

and women with armhair

Sat, 10/12/2013 - 17:15 | 4048424 NeedtoSecede
NeedtoSecede's picture

The Italians still know how to make some mighty fine shotguns and the CX4 Storm is perfect little carbine for home defense.

We are screwed...

Sat, 10/12/2013 - 10:54 | 4047584 y3maxx
y3maxx's picture

""Jim Grant should found a new political party, run for president...basically...accept his destiny.""

As does Ex Governor Jessie who steps up and has the guts to denounce the American Political Party system...

https://www.youtube. com/watch?v=LhSJgJZspnU

Sat, 10/12/2013 - 05:52 | 4047361 geox
geox's picture

Hard to believe someone gave a negative point to such explicit and sucinct post. I guess not everybody wants to be educated in a simple way ;-)

Sat, 10/12/2013 - 07:20 | 4047387 brettd
brettd's picture

So, the fed will soon own much of America by giving the Govt credit.

Then the Fed, a conglomeration of Private Banks....

Will begin calling the loan---and they will ask for a national 

park or two in exchange for "debt forgiveness"; old postal 

buildings and museums in Detroit and utilties rights........

if I were a Fed, that's what I'd do!

Sat, 10/12/2013 - 10:37 | 4047550 Louie the Dog
Louie the Dog's picture

 I read it all.  Thanks Ham-bone. 

Sat, 10/12/2013 - 11:13 | 4047653 Kayman
Kayman's picture

Ham-bone

thanks for the succinct summary. Bottom line is one day short term debt is going to blow up. But let's party til it happens. Work ethic replaced by the scam ethic.

Sat, 10/12/2013 - 18:14 | 4048605 emersonreturn
emersonreturn's picture

thank you ham-bone.  beautifully articulated.

Sat, 10/12/2013 - 02:17 | 4047305 Poor Grogman
Poor Grogman's picture

Things are looking up...

Sat, 10/12/2013 - 04:44 | 4047338 MeMadMax
MeMadMax's picture

Rome wasn't built in a day, and it didn't die in a day...

Patience Obi'Won...

Sat, 10/12/2013 - 10:01 | 4047500 Winston Churchill
Winston Churchill's picture

It will not be long in relative terms.Romes was limited to the speed of the horse.20 mph.

With coms speeds at 186000 miles per second, Pax Americana will not take 400 years to die.

Sat, 10/12/2013 - 11:18 | 4047669 Kayman
Kayman's picture

And the Romans hadn't discovered the magic of paper currency nor electronic digits or the Roman Empire would have lasted as long as Anthony Weiner's political career. 

Sat, 10/12/2013 - 06:40 | 4047375 bunnyswanson
bunnyswanson's picture

Value will diminish.  Even Costco is carrying less than the freshest and besst produce (as opposed to raising prices even higher) or they just stop carrying the item.  This is a scam.  A ponzi scheme. 

It has happened before.  The same formula has been used at least 3 times on a large scale, and 300 million times on a small scale.  PREDATORY LENDING

Secret is money going the wrong way.

CAFR - off budget accounts.  Rainy day committees, Hallelujah the elephant in the living room.

https://www.youtube.com/watch?feature=player_embedded&v=T2aif0Wk9E0

Karen Hudes interview with RT TV.

http://rt.com/shows/sophieco/world-bank-us-shutdown-820/

https://www.youtube.com/watch?v=V9RhieHxu-I

Ex high official capacity individual sharing his observations

https://www.youtube.com/watch?feature=player_embedded&v=CXmto-Te9Ms

The American truckers

https://www.youtube.com/watch?feature=player_embedded&v=CXmto-Te9Ms

(It is unthinkable a leader/govt body has allowed their country to reach such a pitiful state, all while gaining great wealth and seemingly in the stock market thanks to their assigned privileges to insider trading information.  Disgraceful.  A mob-like mentality where corruption should be accepted as just part of it.  They live in abundance and lives of general comfort and ease, and always will thanks to their constituents.  They should hang their heads IN SHAME for allowing their citizens to become so vulnerable, that is betrayal of trust.

Sat, 10/12/2013 - 10:34 | 4047539 Proofreder
Proofreder's picture

NEVER blame intelligent conspiracy for just plain stupidity, greed, and hubris.  A government does not 'allow'; rather the political institutions become hidebound, aged, and blindly out of touch with the electorate to the extent that an alleged leader (President, Prime Minister) becomes a replaceable puppet within a revolving door - the political institution made up of unelected 'managers' and bureaucrats which view all administrations as temporary help.

We are so fuked in the future, no matter who sits in the Oval Office next.

Is it possible that the Federal Reserve System could declare bankruptcy, overturn their bench in the marketplace, and just disappear into endless litigation while the U.S. Government reestablishes constitutional money ???   Real Hope, real change in that.

Sat, 10/12/2013 - 10:46 | 4047568 in4mayshun
in4mayshun's picture

You assume that these traitors are abiding by the same set of social/moral/philosophical standards that most Americans use to measure their lives.

And they are not. They see the big picture, and in that picture we don't matter. I wish they were wrong, but sadly, America keeps proving them right.

Sat, 10/12/2013 - 22:01 | 4049240 lostintheflood
lostintheflood's picture

 

Tax the Rich: An animated fairy tale

http://www.youtube.com/watch?v=S6ZsXrzF8Cc

Sat, 10/12/2013 - 07:18 | 4047385 RSloane
RSloane's picture

Depends on your point of view. Our current financial markets can wallow in risk-on behavior with zero consequences. No matter what they do, they will be backstopped by the Fed, and ultimately the tax payers. Do you refer to this as the financial markets functioning appropriately?

What we are watching is a 'death by a 1000 papercuts'. There are unlimited bandaids left in the Fed's arsenal made at will without concern for long term consequences. This could go on and on until the US reaches full status as a banana republic.

Sat, 10/12/2013 - 13:38 | 4048071 Winston Churchill
Winston Churchill's picture

Which part of a banana republic has not been reached ?

I can't see a missing component.Having lived in a couple, I cannot see a diference.

All in 15 years or so, though longer in the formenting.

Amazing.

Just waiting on Emperor for life, Obozo 1st.

Sat, 10/12/2013 - 08:46 | 4047443 Clowns on Acid
Clowns on Acid's picture

When we tell you.

Sat, 10/12/2013 - 19:48 | 4048894 StychoKiller
StychoKiller's picture

Look to the BRICS to announce a new, gold-backed currency, then watch the Saudis stab the US in the back.

Sat, 10/12/2013 - 08:07 | 4047420 Ignorance is bliss
Ignorance is bliss's picture

You realize that the chrysler building was built in 1928...when we had a gold standard. Was that your point? It does not contain gold but gold was used to build it. 

Sat, 10/12/2013 - 08:45 | 4047441 Clowns on Acid
Clowns on Acid's picture

Vet - Alexander Hamilton was a "soldier". but not a fighting one. Probably never fired a shot. Hamilton was George Washington's butler.

Please Read " Burr,Hamilton, and Jefferson - A Question of Character" to get the actual picture of who Hamilton was.

Fri, 10/11/2013 - 21:50 | 4047044 TrulyBelieving
TrulyBelieving's picture

So what you need then is someone who will tell you everything will be great. OK, All is fine, the system is working, people are going back to work, Health costs are under control, and your retirement days will be bliss. What else would your ears like to be tickled with?

Sat, 10/12/2013 - 03:15 | 4047319 cossack55
cossack55's picture

Free booze, babes and bac.

Sat, 10/12/2013 - 09:40 | 4047486 DaveyJones
DaveyJones's picture

tickle the ivories has taken on a whole new meaning

Fri, 10/11/2013 - 22:28 | 4047106 Wahooo
Wahooo's picture

Re pubs just caved. Obamacare lives. Spending forever. BTFD.

Sat, 10/12/2013 - 00:07 | 4047220 cocoablini
cocoablini's picture

This is dumb. The US can't default because the debt is payable in dollars. This is the stupidest crap ever. If I owed people a turd, and I make turds I can pay them back. Defaulting on a gold standard is way different as the debt is payable in metal. The dollar is just some jacked piece of shit contrivance. A mere plaything for eggheads with math equations...ie: Janet Yellen. A Keynesian masturbating in front of the printer

Sat, 10/12/2013 - 01:04 | 4047262 Incubus
Incubus's picture

how do I get that job... masturbating infront of a printer?

 

sounds nice.  I don't think I have enough manjuice for fulltime, though. I'm going to need a high zinc diet.

Sat, 10/12/2013 - 10:38 | 4047555 LongBallsShortBrains
LongBallsShortBrains's picture

One of the employees at the fed, in charge of the twenty dollar bill printers, lost his job.
He came home and told his wife " I've had a terrible day, I got fired" his wife looked at him in disbelief, for Tom had held this job for nine years.

"what happened ?" she said

"I don't know" he replied, " I was just sitting there doing my job, making sure the twenty dollar bills moved out of the printer and properly to the bill slicer, when I got the strangest feeling. I wanted to put my ding a ling in the bill slicer, and I couldn't control myself. I don't know what came over me"

His wife quickly pulled down his pants to investigate. There was nothing wrong with his privates. Bewildered, she asked him "what happened to the bill slicer? "
He replied, "The god damned boss fired her too!!"

Sat, 10/12/2013 - 01:47 | 4047292 the tower
the tower's picture

Did you look this up on Wikipedia? It's not about paying off the principal, it's about paying interest.

Other than that, it's about the debt to GDP ratio, which is WAY out of control.

The people in office have no control over a default.

Sat, 10/12/2013 - 09:42 | 4047488 DaveyJones
DaveyJones's picture

reinhart and rogoff

Sat, 10/12/2013 - 11:31 | 4047710 Winston Churchill
Winston Churchill's picture

Its not even the debt/gdp ratio anymore.

Remove from gdp Fed State. and local spending + $1 Tn pa  in QE.

Real gdp is around $8tn pa.Thats a a lie with 30 yrs of compounding of understating the deflator.

Accruing annual debt is $5.9tn.Which is prolly the true gdp.

This is now a balance of payments crisis.A more  subtle but important inflection point.

The country is bankrupt by all definitions of that word.

Just waiting the knackers van ride to the glue factory..

Sun, 10/13/2013 - 00:04 | 4049431 A Nanny Moose
A Nanny Moose's picture

The dollar ended at least 100 years ago.

Sat, 10/12/2013 - 00:58 | 4047258 Theosebes Goodfellow
Theosebes Goodfellow's picture

Lost Lloyd either must not have ever studied the history of the Fed or is just another fucking bankster liar. Did he somehow forget about H.J.R. 192?

http://www.truthsetsusfree.com/HJR192.htm

My money is he's just another bankster liar. Fuck you, Lloyd, you lying sack of shit!

Fri, 10/11/2013 - 21:21 | 4046985 granolageek
granolageek's picture

Because it didn't happen. Silver certificate holders were given 5 years (until 1969) to redeem them for silver metal.

Being old sometimes has advantages.

Sat, 10/12/2013 - 01:43 | 4047287 SafelyGraze
SafelyGraze's picture

"Silver certificate holders were given 5 years (until 1969) to redeem them for silver metal."

not sure I follow.

0. continental dollar

"the bearer is entitled to receive 55 spanish milled dollars, or an equal sum in gold or silver"

http://en.wikipedia.org/wiki/File:Benjamin_Franklin_nature_printed_55_do...

"In the 1790s, after the ratification of the United States Constitution, Continentals could be exchanged for treasury bonds at 1% of face value."

http://en.wikipedia.org/wiki/Continental_dollar#Continental_currency

that's a default

1. greenback

"on demand, the united states promised to pay to the bearer 10 dollars"

http://en.wikipedia.org/wiki/File:US-$10-DN-1861-Fr.7.jpg

doesn't have an expiration date. failure to pay 10 dollars (in coin) was a default.

2. gold certificate

'50 dollars in gold coin payable to the bearer on demand"

http://en.wikipedia.org/wiki/File:Goldcertificate.jpg

doesn't have an expiration date. being forced to turn in your gold certificates for fedres notes was a default. likewise, being told they were no longer redeemable after 1934 was a default.

3. siver certificate

'1 dollar in silver payable to the bearer on demand"

http://en.wikipedia.org/wiki/File:SilverCertificate1Dollar.jpg

doesn't have an expiration date. being told it's not redeemable after 1969 was a default. just like the others.

Sat, 10/12/2013 - 07:30 | 4047395 brettd
brettd's picture

Safely:

So distilled, "default" really is another term for "breach":  

Any unilateral change in the terms of value or of "exchange?"

 

Fri, 10/11/2013 - 20:47 | 4046926 AllWorkedUp
AllWorkedUp's picture

CPL - I don't understand why you linked that.

Fri, 10/11/2013 - 21:28 | 4046969 CPL
CPL's picture

Rumour going around that the bail in's are starting over the weekend on accounts with more than 20k in them in the US.  Bunch of people are getting that message on US accounts and panicking.  Trying to determine if it's actually happening.

Still looking for anything confirming it except a banking screenshot and loons on a forum.  So it might be bullshit.

 

...yeah it's bullshit.    Meh, some guy posting from multiple proxy servers to bait threads.

Fri, 10/11/2013 - 23:52 | 4047209 Tijuana Donkey Show
Tijuana Donkey Show's picture

The good news is most people in America only have $20, on $20k in their account. How much is on my EBT?

Sat, 10/12/2013 - 09:57 | 4047497 CPL
CPL's picture

A six pack and a box of ho ho's?

Fri, 10/11/2013 - 23:58 | 4047213 Seer
Seer's picture

It's kind of like the almost-real stories popping up around Arri 1st.  Pay attention to the calendar.  In this case there isn't any three-day weekend (weekend plus holiday): well, I suppose someone might be able to confirm whether this really is proven historically (I make my statement in a semi-ignorant state).

Sat, 10/12/2013 - 09:10 | 4047472 CPL
CPL's picture

It's Canadian thanksgiving and Mabon is past and Samhain is coming up.  Nothing going on right now, it's very mellow. 

I did find a cool chicken coop concept, although I suppose 'cool' is relative.  Build a coop the length and width of a gardening patch and rotate it during the fall.  Chickens aerate the soil and add their ferts to the dirt.  Chickens are happy enough to till it while hunting for bugs and doing chicken things all day.

http://www.realfarmacy.com/diy-build-an-affordable-portable-and-predator...  

 

Fri, 10/11/2013 - 21:20 | 4046973 max2205
max2205's picture

Default to creditors  or fax default to citizens. ....citizens everytime

Sat, 10/12/2013 - 00:36 | 4047235 TheReplacement
TheReplacement's picture

In our society, it is the fault of the citizens.  As such, it is the citizens who should pay.  Elections and morales matter. 

The only thing we learn from history is that we learn nothing from history.

Fri, 10/11/2013 - 21:26 | 4046991 cnmcdee
cnmcdee's picture

HIGH ALERT : IMF FLOATING IDEA OF 10% EUROPEAN BANK ACCOUNT SUPER-TAX.

http://goldsilverworlds.com/money-currency/imf-discusses-a-super-tax-of-...

WAKE UP EVERYBODY - THEY ALWAYS FLOAT THIS STUFF TO SEE IF PEOPLE WILL SCREAM ABOUT IT OR NOT.

Just as the European Central Banker let slip - Cyprus was a TEST CASE.

If you live in America - YOU WILL BE NEXT.

If you live in Canada - YOU WILL BE NEXT.

Start warning people everywhere! Cut and paste this message and send all over.

Sat, 10/12/2013 - 10:40 | 4047511 CPL
CPL's picture

Everyone knows it's coming like train and like catching a train, you get ready.  A couple of things no one has to do in that situation.

  1. Don't have to panic. 
  2. Don't have to run around like an ass.

Things people should do.

  1. Pack and be ready.

Just simply get ready and get what you'll need.  No need to freak out.  If you know it's happening, then you are prepared aren't you?  It's a situation that no one should be proud that they are 'right', they should be proud that they prepared to take care of their immediate business and family/community priorites.

Regardless of the fact, not conspiracy at this point; when the banks rob people blind because people are too stupid to understand the situation or properly examine their lives.  Who's fault is it for keeping the money in the bank in the first place?

It's not yours.  Not mine.  Not the bank's (well, it is because they are run by assclowns).  It's everyone's INDIVIDUAL responsibility to take care of their business.

If everyone wants to know the shortcut to capital controls.  Close your bank account.  There are no capital controls in that situation.  Once the account is closed, the bank's business is no longer YOUR business.  Then do what you want:

  • sew all the money into matresses or the curtains like the 1920's.
  • trade it for PM's
  • long term trade options pairing hookers and blow.

First though, stop panicking.

Sat, 10/12/2013 - 19:59 | 4048920 StychoKiller
StychoKiller's picture

[quote]

                                  100 Items to Disappear First

1. Generators (Good ones cost dearly. Gas storage, risky. Noisy)
2. Water Filters/Purifiers
3. Portable Toilets
4. Seasoned Firewood. Wood takes about 6 - 12 months to become dried, for home uses.
5. Lamp Oil, Wicks, Lamps (First Choice: Buy CLEAR oil. If scarce, stockpile ANY!)
6. Coleman Fuel. Impossible to stockpile too much.
7. Guns, Ammunition, Pepper Spray, Knives, Clubs, Bats & Slingshots.
8. Hand-can openers, & hand egg beaters, whisks.
9. Honey/Syrups/white, brown sugar
10. Rice - Beans - Wheat
11. Vegetable Oil (for cooking) Without it food burns/must be boiled etc.,)
12. Charcoal, Lighter Fluid (Will become scarce suddenly)
13. Water Containers (Urgent Item to obtain.) Any size. Small: HARD
CLEAR PLASTIC ONLY - note - food grade if for drinking.
14. Mini Heater head (Propane) (Without this item, propane won't heat a room.)
15. Grain Grinder (Non-electric)
16. Propane Cylinders (Urgent: Definite shortages will occur.
17. Survival Guide Book.
18. Mantles: Aladdin, Coleman, etc. (Without this item, longer-term
lighting is difficult.)
19. Baby Supplies: Diapers/formula. ointments/aspirin, etc.
20. Washboards, Mop Bucket w/wringer (for Laundry)
21. Cookstoves (Propane, Coleman & Kerosene)
22. Vitamins
23. Propane Cylinder Handle-Holder (Urgent: Small canister use is
dangerous without this item)
24. Feminine Hygiene/Haircare/Skin products.
25. Thermal underwear (Tops & Bottoms)
26. Bow saws, axes and hatchets, Wedges (also, honing oil)
27. Aluminum Foil Reg. & Heavy Duty (Great Cooking and Barter Item)
28. Gasoline Containers (Plastic & Metal)
29. Garbage Bags (Impossible To Have Too Many).
30. Toilet Paper, Kleenex, Paper Towels
31. Milk - Powdered & Condensed (Shake Liquid every 3 to 4 months)
32. Garden Seeds (Non-Hybrid) (A MUST)
33. Clothes pins/line/hangers (A MUST)
34. Coleman's Pump Repair Kit
35. Tuna Fish (in oil)
36. Fire Extinguishers (or..large box of Baking Soda in every room)
37. First aid kits
38. Batteries (all sizes...buy furthest-out for Expiration Dates)
39. Garlic, spices & vinegar, baking supplies
40. Big Dogs (and plenty of dog food)
41. Flour, yeast & salt
42. Matches. ("Strike Anywhere" preferred.) Boxed, wooden matches will go first
43. Writing paper/pads/pencils, solar calculators
44. Insulated ice chests (good for keeping items from freezing in Wintertime.)
45. Workboots, belts, Levis & durable shirts
46. Flashlights/LIGHTSTICKS & torches, "No. 76 Dietz" Lanterns
47. Journals, Diaries & Scrapbooks (jot down ideas, feelings, experience; Historic Times)
48. Garbage cans Plastic (great for storage, water, transporting - if with wheels)
49. Shampoo, Toothbrush/paste, Mouthwash/floss, nail clippers, etc
50. Cast iron cookware (sturdy, efficient)
51. Fishing supplies/tools
52. Mosquito coils/repellent, sprays/creams
53. Duct Tape
54. Tarps/stakes/twine/nails/rope/spikes
55. Candles
56. Laundry Detergent (liquid)
57. Backpacks, Duffel Bags
58. Garden tools & supplies
59. Scissors, fabrics & sewing supplies
60. Canned Fruits, Veggies, Soups, stews, etc.
61. Bleach (plain, NOT scented: 4 to 6% sodium hypochlorite)
62. Canning supplies, (Jars/lids/wax)
63. Knives & Sharpening tools: files, stones, steel
64. Bicycles...Tires/tubes/pumps/chains, etc
65. Sleeping Bags & blankets/pillows/mats
66. Carbon Monoxide Alarm (battery powered)
67. Board Games, Cards, Dice
68. d-con Rat poison, MOUSE PRUFE II, Roach Killer
69. Mousetraps, Ant traps & cockroach magnets
70. Paper plates/cups/utensils (stock up, folks)
71. Baby wipes, oils, waterless & Antibacterial soap (saves a lot of water)
72. Rain gear, rubberized boots, etc.
74. Hand pumps & siphons (for water and for fuels)
75. Soysauce, vinegar, bullions/gravy/soupbase
76. Reading glasses
77. Chocolate/Cocoa/Tang/Punch (water enhancers)
78. "Survival-in-a-Can"
79. Woolen clothing, scarves/ear-muffs/mittens
80. Boy Scout Handbook, / also Leaders Catalog
82. Graham crackers, saltines, pretzels, Trail mix/Jerky
83. Popcorn, Peanut Butter, Nuts
84. Socks, Underwear, T-shirts, etc. (extras)
85. Lumber (all types)
86. Wagons & carts (for transport to and from)
87. Cots & Inflatable mattress's
88. Gloves: Work/warming/gardening, etc.
89. Lantern Hangers
90. Screen Patches, glue, nails, screws,, nuts & bolts
91. Teas
92. Coffee
94. Wine/Liquors (for bribes, medicinal, etc,)
95. Paraffin wax
96. Glue, nails, nuts, bolts, screws, etc.
97. Chewing gum/candies
98. Atomizers (for cooling/bathing)
99. Hats & cotton neckerchiefs
[/quote]

Fri, 10/11/2013 - 22:43 | 4047118 OldPhart
OldPhart's picture

Why in the hell are you still banking with BankAmerica?! 

Fri, 10/11/2013 - 23:57 | 4047216 Seer
Seer's picture

Reason #1: Stupid

Reason #2: There are no other reasons

Sat, 10/12/2013 - 10:16 | 4047513 CPL
CPL's picture

I'm not.  It's OPP.

Fri, 10/11/2013 - 20:18 | 4046856 Winston Churchill
Winston Churchill's picture

Paper gold., and all the IOU's that Ft.Knox can hide.

Fri, 10/11/2013 - 21:07 | 4046963 Jumbotron
Jumbotron's picture

Sho' nuff' we gots the gold......it's in ma teeph, bitchez.

Fri, 10/11/2013 - 20:24 | 4046864 bank guy in Brussels
bank guy in Brussels's picture

Wonder if Jim Grant is naive, or just pretending the gold is still there in the USA

Fascinating photo article with black and white photos, of the last allowed visit to the Fort Knox gold vault, by members of the US Congress and some journalists on 23 September 1974 ... 39 years ago !

They even visited the little-known tunnel leading out of the gold vault - but no worries, they said, the tunnel still surfaces inside the building, ha! And they admit that a lot of the gold they felt they saw, was the off-coloured coin-melt gold of lower purity.

Whether fact or fiction that 'the only gold in Fort Knox is in the security guards' teeth' now, interesting piece

http://www.numismaticnews.net/article/Gold_all_there_when_Ft_Knox_opened...

Fri, 10/11/2013 - 20:50 | 4046906 Arius
Arius's picture

"Even former presidents are denied entry" 

Of course they are ... what do you think?  it reminds me the minutes of a important Kissinger meeting someone shared,and how Kissinger stated that Shultz had told him to stay off the topic of gold.... imagine that and he is talking about presidents.

That guy who wrote few people would be able to understand the system was sharp .... clearly no fault on the design

 

those were the times ... just some complains, the Congressman talk to the treasury and boom right away a visit is arranged and a guy just out of school invited to participate as freelance reporter ... if you see it in hollywood, you would complain about the lack of fantasy on the part of the screen writer/producer etc.  here he pretends it happened in real life ... well i am a bit skeptic but thats just me

Even former Presidents are denied entry.
Fri, 10/11/2013 - 21:47 | 4047036 horseman
horseman's picture

I took the "we" to mean each individual to hold gold in preparation for default.

 

Fri, 10/11/2013 - 22:43 | 4047117 Mike in GA
Mike in GA's picture

Jim Grant is more trustworthy than everyone in FedGov put together.

Fri, 10/11/2013 - 20:38 | 4046908 negative rates
negative rates's picture

A wearhouse is empty until proven full.

Fri, 10/11/2013 - 23:49 | 4047203 Incubus
Incubus's picture

"I gaurantee it." -George Zimmer

 

 

Sat, 10/12/2013 - 10:53 | 4047581 Proofreder
Proofreder's picture

W a r e h o u s e

Idiot

Fri, 10/11/2013 - 20:48 | 4046927 Yenbot
Yenbot's picture

we have the gold???

nope

Sat, 10/12/2013 - 04:46 | 4047339 acommenter
acommenter's picture
Karen Hudes says here that there is plenty of gold...

https://www.youtube.com/watch?v=4hgA9j-4dB0

Sat, 10/12/2013 - 05:10 | 4047348 bunnyswanson
bunnyswanson's picture

"What happened to the treasures after the war? Sterling and Peggy Seagrave claim in their book "Gold Warriors ", that the driver of general Yamashita was tortured by the Americans and that he betrayed more than twelve hiding places. The Americans would have lifted the findings in cloak-and-dagger operations and transferred them to America.

"President Truman - so this theory - declared the findings as a state-secret "in order to exclude rights for compensation of other states and private-persons."

http://www.bullionstreet.com/news/yamashitas-gold-treasure-remains-an-un...

Yamishita's Gold

Sat, 10/12/2013 - 11:50 | 4047770 Bay of Pigs
Bay of Pigs's picture

170K tons of gold? Complete nonsense.

Sat, 10/12/2013 - 05:18 | 4047351 mvsjcl
mvsjcl's picture

Don't worry. We have tons and tons of gold--in deep storage.

Sat, 10/12/2013 - 09:27 | 4047482 scrappy
Sat, 10/12/2013 - 11:49 | 4047780 Winston Churchill
Winston Churchill's picture

I've listened to most of her interviews.If any of what she says is true:

She would have died long ago in an 'accident'.

Such 'accidents' happen frequently in the biz world for sums in the hundreds of thousands,

not even millions.You would be surprised at how common it is.

The lady better get back on her lithium.

Sat, 10/12/2013 - 23:48 | 4049414 Ludwig Van
Ludwig Van's picture

.

@ Winston --

I've also watched a few interviews of Karen Hudes and read some quotes and ideas attributed to her by sources I respect.

In a good crossword puzzle, Down and Across fills are tightly knit and seemingly inevitable, no made-up words, forced or idiosyncratic puns, obscure initials or whatnot. It is its own proof; it demonstrates its own integrity. Sometimes people can be read that way.

Karen Hudes cannot carry herself in alignment with her self-description; she cannot speak articulately of matters core to her supposed former career. She claims to have served as an attorney. Within two minutes of her opening her mouth, you realize she's just too scattered to focus and lacks the ability to connect a few rudimentary sentences into a coherent statement. The old bitch is nutzoid.

I think the reason "They" let her live is that she's a harmless fool, more full of herself than of a sense of mission, and a perfect example of a half-cocked conspirator to turn off those new to the inquiry.

.

Fri, 10/11/2013 - 20:17 | 4046842 Shell Game
Shell Game's picture

Mathematics always catches up.  The real question is are we going to allow the control freaks to muddle* us through? Or are we going to grow a fucking pair and stop paying the IRS thugs?  The only thing Leviathan fears is the loss of consent of the governed. 

 

*the new muddle = relentless surveillance, relentless forced taxation, food control, currency destruction, FEMA camp 'relief', crushing health mandate, etc.

Fri, 10/11/2013 - 20:26 | 4046878 Pareto
Pareto's picture

Mathematics always catches up........I agree.  But, when everybody prints, or, if you enjoy a reserve currency status - the math, in my opinion, doesn't seem to matter much, because if it did, it would have mattered a long time ago.  It seems that Leviathon is teflon for the time being and math is taking a back seat.

Fri, 10/11/2013 - 22:25 | 4047102 cifo
cifo's picture

"for the time being and math is taking a back seat."

Or at least until everybody is broke.

Sat, 10/12/2013 - 02:14 | 4047303 Pareto
Pareto's picture

For sure I don't disagree with anything said above.  But, I've been on the "we're gonna go bust" train since Greenspan, and as somebody here on ZH once said, this process of debasement and gutting of the middle class could go on a lot longer than we think or can afford.  way longer.  For the same reason i think Bass has underestimated the length of time for Kuroda"s monetary experiment to implode, so too will we underestimate the resiliance of the dollar, the commitment to it and the likely unwillingness to actually pull the trigger on it in the absence of any credible substitution/alternative that can persevere through the backlash you invite when abandoning the $USD for trade - just ask Hussein, Ghadaffi, Asad, Achmadinijad (sp) et al. despsite exponential math - is all I'm saying.

Sat, 10/12/2013 - 06:31 | 4047371 greatbeard
greatbeard's picture

>> when abandoning the $USD for trade - just ask Hussein, Ghadaffi, Asad, Achmadinijad (sp) et al.

No need to go that far.  Just ask any gold bug what it's like to besmirch the dollar.  We've been beaten like a red headed stepchild for better than two years now and it's not going to stop.

Fri, 10/11/2013 - 22:44 | 4047119 Shell Game
Shell Game's picture

So, you are saying because it hasn't happened on your time frame it won't happen at all....  Shirley you are right.  ;)

Fri, 10/11/2013 - 23:14 | 4047159 Imminent Crucible
Imminent Crucible's picture

"because if it did, it would have mattered a long time ago"

For some reason, you remind me of old Harry Truman that lived in the shadow of Mount St. Helens in 1980: "Blow? That thing ain't never gonna blow. Hell, if it was gonna erupt, it woulda done it a long time ago."

Old Harry's down there somewhere, under 540 million tons of volcanic ash.

Sat, 10/12/2013 - 00:14 | 4047224 Seer
Seer's picture

Have you not understood what all those "wars against terrorism" are about?  I'd hardly think that things are all peachy.

"Got physical?" is applicable to more than just PMs.  Go ahead and see how much actual work could be done if much of today's energy imports were cut*.  We know what happens, what things look like: review what happened to Cuba when the USSR collapsed; Cuba's implosion, however, was cushioned beause the rests of the world wasn't fucked, like it is today.

* Further add in the notion of economies of scale reversing.  Mega-scale stuff, such as energy production, require a lot of infrastructure, and when such infrastructure processes less volume due to decreased feedstock or decreased demand (when everyone's unemployed), the margins will be smashed- deficit production!

Kissinger et al miscalculated.  I don't think that they realized that the growth from the "developing world" would bolt like it did: one can read lots about what they'd written and see concerns about population sizes, though it seems that they were confident that they could manage them (yeah, the though that they could control population sizes in other countries).  Oh, and the reason for the concern?  The drain on resources, resources that weren't under the direct control of US interests: that's why the big push into the Middle East; it didn't happen fast enough (though I doubt that it would have ever succeeded).

No, math is continuing to steam right along.  One can see the effects via time slices.  Cycles/events are occurring more quickly.  This is exactly how exponential functions behave.  Math/physics/Mother Nature are all running normally...

Sat, 10/12/2013 - 08:49 | 4047448 GMadScientist
GMadScientist's picture

Agreed, this math is a steamer.

Sat, 10/12/2013 - 00:33 | 4047234 Simplifiedfrisbee
Simplifiedfrisbee's picture

Your playing cards in the wrong room. The real players already formed the beginning era of Neo-feudalism. Math is no longer necessary. For those in power, what they lose, the citizens abide to replace. 0-1= a negative to the people, not the feudalistic entrepreneurs. LTER can perhaps explain in better context.

Fri, 10/11/2013 - 20:14 | 4046843 Ignatius
Ignatius's picture

Who owns the debt?

Fri, 10/11/2013 - 21:49 | 4047045 logicalman
logicalman's picture

A question I have pondered for a long time.

Let me know if you get a good answer.

Sat, 10/12/2013 - 18:41 | 4048694 emersonreturn
emersonreturn's picture

what if some one ran for office on the platform of ending the fed---and making the fed pay back all the money it printed.  dream, of course...

Fri, 10/11/2013 - 22:56 | 4047132 Mike in GA
Mike in GA's picture

Who owns the debt?

"...the public’s holdings of the federal debt have climbed from $303 billion to $11.9 trillion"

Public and private pension funds, individuals, corporations, mutual funds, ie, The American Public

The remaining 5 +/- Trillion  is owed China, Japan, Britain, France, Singapore, Brazil, etc. 

http://www.mygovcost.org/2013/01/23/the-major-holders-of-the-national-debt/

Fri, 10/11/2013 - 23:53 | 4047202 The Burning Planet
The Burning Planet's picture

"Well I'm puttin' that cotton in a eleven foot sack
...with a 12 gauge shotgun at my back"

 http://www.youtube.com/watch?v=v5hw9T9Ozv4&noredirect=1

Sat, 10/12/2013 - 08:39 | 4047432 GMadScientist
GMadScientist's picture

Interesting: add up the totals for bigger categories and you get 1/3rd foreign holds, 1/3 goober holders, and 1/3 American holders.

Sat, 10/12/2013 - 10:38 | 4047549 ZH Snob
ZH Snob's picture

The Fed, as we all know, is a private corporation and not a part of the government.

Last time I looked they are the only ones buying the bonds, now something like 3 trill.  Wouldn't the American government owe this debt to the Fed?  Isn't it the central banks around the world (all tentacles of the BIS) that are owed this debt?  Greece is the model.  Look at how they have siezed the country, demanded liqidation of Cypress's gold, austerity from the Greeks.  All enforced by the military.

By the time they get to the USA they will have had it down pat.  Resistance is futile.

Sat, 10/12/2013 - 02:54 | 4047314 Mobius Poop
Mobius Poop's picture

China.

Sat, 10/12/2013 - 05:31 | 4047357 mvsjcl
mvsjcl's picture

Who owns the debt? No one does. The debt is an illusion. When there is no choice, then there is no debt. In other words, if your very existence confers this "debt," then it must be repudiated.

Sat, 10/12/2013 - 08:46 | 4047429 nmewn
nmewn's picture

Exactly right.

One of the stupidest things I hear promulgated these days is "Every child is born owing X."

The newborn didn't rack up any debt. He/she doesn't have the ability to enter into legal contracts to owe money for its mere existance.

The phrase is statist, collectivist, claptrap.

 ///////////

Perhaps my "statist-collectivist" junker would like to splain how (and by what legal/ethical/moral authority) the unborn individual can become a debt slave at birth.

Good luck explaining that criminal enterprise ;-)

Sat, 10/12/2013 - 11:27 | 4047700 LongBallsShortBrains
LongBallsShortBrains's picture

Statists don't care for logic. After all, the greater good of society is the reason for everything. You must be one of those greedy INDIVIDUALS.

Fri, 10/11/2013 - 20:19 | 4046857 rosiescenario
rosiescenario's picture

As I've been saying for sometime....we are defaulting, have been defaulting, and will continue to do so.

Sat, 10/12/2013 - 00:22 | 4047226 Seer
Seer's picture

It's like that saying, the future just ain't what it used to be...  The USD just won't be what it used to be (worth).  The printing wheels will continue to run until we can no longer convince people to take its output.  At that point it could be claimed that the US "offerred" to repay but it wasn't "accepted."  As long as there are politicians and as long as "default" is viewed as a bad thing, a bad thing that can be pinned on the politicians, a "default" will NOT happen: sure, others can claim it as such, but if it's not spoken then it didn't happen, right? (just like there was no coup in Egypt)

Al the classic signs of a drunk...

Sat, 10/12/2013 - 00:28 | 4047230 Flagit
Flagit's picture

but what does that mean? whats gonna happen?

Fri, 10/11/2013 - 20:21 | 4046863 lasvegaspersona
lasvegaspersona's picture

The future of a monetary system that uses gold only as a wealth asset and not as part of the calculation of the value of the currency has been suggested.

In freegold we see fiat constrained by their relationship to gold ...but gold at market value.

All currencies will hold gold the way the Euro already does. It is coming.

Fri, 10/11/2013 - 20:30 | 4046883 new game
new game's picture

you are in essence constraining politicians and their promisses.

we need reforms top to bottom, and i would start with a revolution

that starts with taking back what is ours in the first place.  seems we need more pain b/4 gain...

Fri, 10/11/2013 - 20:38 | 4046903 AllWorkedUp
AllWorkedUp's picture

"All currencies will hold gold the way the Euro already does."

I'm not sure what you mean by that statement. The Euro is just another fiat currency right?

Fri, 10/11/2013 - 23:57 | 4047215 Tijuana Donkey Show
Tijuana Donkey Show's picture

The Euro is like a split check at a restaurant, don't be the last one to leave.

Sat, 10/12/2013 - 12:23 | 4047874 scrappy
scrappy's picture

FOFOA thinks the Euro is more than fiat currency.

Not to disagree with you guys, I am no expert.

http://www.24hgold.com/english/contributor.aspx?article=3568734164G10020...

 

Sat, 10/12/2013 - 00:52 | 4047251 lasvegaspersona
lasvegaspersona's picture

AllWorked Up

In everything I have read in the past 3 1/2 years of paying attention to the monetaty  world this is the most misunderstood fact: the Euro is not just another fiat currency. It is unique in the history of money. It has 2 characteristics that distinguish it: it is not under the control of just one country and it promises nothing about gold. It holds a lot of gold on it's balance sheet but at market rates.

 The benfits of these differences are   enormous...no country can demand it hyperinflate, which is the death of all other fiat currencies. Severing it's link to gold means it will not try to control the price of gold.

These are significant points and are why the Euro will live after the dollar has died.

I can't see the future but this is how I imagine the near future taking us.

Sat, 10/12/2013 - 08:41 | 4047434 GMadScientist
GMadScientist's picture

In Europe, the currency lives on, and the countries die instead.

Sat, 10/12/2013 - 00:29 | 4047231 Seer
Seer's picture

BUT!  Without fiat one cannot have the "growth" with which all these fuckers ride on top of.  I totally agree on the notion of binding to some actual PHYSICAL thing, though I worry about people laying waste to land in order to mine out PMs: and figure that multi-national corporations, the very same ones who basically control everything NOW will continue and just push this pedal harder.

It is inevitable that us humans run out of Natural Capital as part of our means of pushing perpetual growth.

No, this fiat thing is but the curtain masking the MUCH BIGGER issue.

Sat, 10/12/2013 - 02:31 | 4047309 Kirk2NCC1701
Kirk2NCC1701's picture

Oh you have Growth alright, just not the kind to support that our MIC wants, nor the kind that makes the world its sweat shop or indentured laborer.

Sat, 10/12/2013 - 08:41 | 4047436 GMadScientist
GMadScientist's picture

Don't worry; quiet as it's kept, the dirty little secret of the 'gold is money' crowd is that credit bubbles will still be available for s(t)imulating 'growth', its just that the crashes will be harder and more frequent.

 

Fri, 10/11/2013 - 20:23 | 4046869 Rogue Trooper
Rogue Trooper's picture

Welcome to the Hotel, Deptopia

Such an empty place

Such an empty place

...

You can deposit your gold any time you want

But it can never leave...

Fri, 10/11/2013 - 20:24 | 4046871 mofreedom
mofreedom's picture

But now we owe it to the Red chinese baby killers.

Fri, 10/11/2013 - 21:41 | 4047022 rwe2late
Fri, 10/11/2013 - 21:40 | 4047026 rwe2late
rwe2late's picture

retracted

 

Fri, 10/11/2013 - 20:26 | 4046873 Totentänzerlied
Totentänzerlied's picture

"We (the State, not you running around with your .30-06 peashooter you can't even afford to shoot anymore, lol) have the guns." -Uncle Sam

Fri, 10/11/2013 - 20:41 | 4046915 Oldwood
Oldwood's picture

Admittedly we haven't much of a chance in a full on shooting war but the key is resistance. We can never let them think it will be easy. Thats part of what the NSA leaks and the IRS scandals and closing the parks is about. They want us to know they have us by the nuts without directly threatening us. They don't want a war, they want voluntary submission. They want us to think we haven't got a chance. The current Obamacare/budget standoff is more of the same. Do not resist their policies lest you be labeled an extremist or terrorist. Everything is about force now and resistance, even on the smallest scale, will not be tolerated. Watch this current battle. No matter what happens Obama will not let the republicans lay claim to any victory, no matter how small and pitifull. The Republican Standards will play along because they are so desperate to hold onto their positions, they will agree to anything. I think they see the end and realize barring anything really drastic, nothing will save us anyway and just want to keep what they have, just like the vast majority of everyone else.

Sat, 10/12/2013 - 00:32 | 4047228 Brindle702
Brindle702's picture
And how we burned in the camps later, thinking: What would things have been like if every Security operative, when he went out at night to make an arrest, had been uncertain whether he would return alive and had to say good-bye to his family? Or if, during periods of mass arrests, as for example in Leningrad, when they arrested a quarter of the entire city, people had not simply sat there in their lairs, paling with terror at every bang of the downstairs door and at every step on the staircase, but had understood they had nothing left to lose and had boldly set up in the downstairs hall an ambush of half a dozen people with axes, hammers, pokers, or whatever else was at hand?... The Organs would very quickly have suffered a shortage of officers and transport and, notwithstanding all of Stalin's thirst, the cursed machine would have ground to a halt! If...if...We didn't love freedom enough. And even more – we had no awareness of the real situation.... We purely and simply deserved everything that happened afterward. Aleksandr Solzhenitsyn
Sat, 10/12/2013 - 07:04 | 4047382 Croesus
Croesus's picture

@ Brindle702: 

+1B! 

Sat, 10/12/2013 - 08:45 | 4047439 GMadScientist
GMadScientist's picture

You gave up "resisting" when you went to bat for the red team.

Fri, 10/11/2013 - 21:02 | 4046951 nmewn
nmewn's picture

lol...fiscal conservatives, by their very nature conserve their brass...its almost an obsession sometimes.

But its nice to know that Uncle Sam is stockpiling theirs, for us, as well...conquered ground must be held or destroyed and in some of these places even Daniel Tosh could get in with just a wink & a promise to be a good booie ;-)

Fri, 10/11/2013 - 20:27 | 4046876 Yen Cross
Yen Cross's picture

Jim Grant understands the definition of insanity. "Fractional Banking".

Fri, 10/11/2013 - 20:28 | 4046879 Oldwood
Oldwood's picture

Our government could give a fuck about America. They just don't want a default because it would drive interest rates up and put an end to their endless spending used to buy votes and placate the mobs that may well eat their asses when the food stamps stop paying.

Sat, 10/12/2013 - 08:46 | 4047447 GMadScientist
GMadScientist's picture

How big a mob could the Wal-Mart board really muster?

Fri, 10/11/2013 - 20:28 | 4046880 Duc888
Duc888's picture

"Default means to not pay as promised"

 

 

 

  Not really.  Not technically.  We can cover the interest paid to the Fed by a factor of 10 just through current tax remittances.  But then we'd have to renegotiate "the loan" from the fed. 

 

What the Fed fears most is a balanced budget. 

 

What crack dealer wants his crack hoe to get clean?

 

See where this is goin'?

 

Think it through..................


Fri, 10/11/2013 - 20:28 | 4046881 ramacers
ramacers's picture

actually, imminent end is more like it.

Fri, 10/11/2013 - 20:32 | 4046890 RhoneGSM
RhoneGSM's picture

 Is it just me or is there a perfect inverse relationship between the publication of irrefutable evidence of the need for gold and its' price ?

Fri, 10/11/2013 - 20:31 | 4046891 Hedgetard55
Hedgetard55's picture

Printing $85 billion a month is default by another name.

Fri, 10/11/2013 - 20:58 | 4046944 Al Gorerhythm
Al Gorerhythm's picture

Printing an extra $ over holdings is dilution and default. Your observation is merely a matter of incremental astonishment.

Fri, 10/11/2013 - 21:01 | 4046947 One of We
One of We's picture

some other names.....grand larceny, embezzlement, filching, poaching, purloining, rip-off, five finger discount, Corzine-ing, wicked, evil, etc.

Fri, 10/11/2013 - 21:11 | 4046971 walküre
walküre's picture

apparently even that is not enough

did they sacrifice the opportunity for war with Syria due to a lack of funding? we're fucked even more than before Syria made headlines.

Sat, 10/12/2013 - 08:17 | 4047424 lakecity55
lakecity55's picture

I think we sometimes overestimate the power of TPTB.

They do not have complete control of Russia, or China. Add Iran.

The proposed strike against Syria was a gamble, and the bluff was called by Russia. TPTB instructed their puppet to back down. Until now, the puppet USG has waged war without a confrontation from anyone.

This was a major setback, and they will have to reconfigure their plans, imo.

Fri, 10/11/2013 - 20:35 | 4046898 ebworthen
ebworthen's picture

And how many times over the past week have I heard from the President, Members of CONgress, and the MSM:

"The United States has never defaulted on its debt obligations."

Revisionist history propaganda?

Fri, 10/11/2013 - 20:41 | 4046920 Winston Churchill
Winston Churchill's picture

Of course.

He missed a default.Its four sofar.

Fifth time is a charm.Greece is only marginally ahead.

I guess they are more exceptional.

Fri, 10/11/2013 - 20:36 | 4046901 new game
new game's picture

think it through......

debt serfs with lose of all physical means to freely produce and prosper, just as debt does to every free man and woman.

then why do honest hard working peoples sign the line to ppromise?

in the case of politicians, they certainly are not doing what we want and there are clearly legal means in the constitution

to revoke their authority.  are you pissed off enough? yet?

Fri, 10/11/2013 - 20:39 | 4046905 One of We
One of We's picture

I can't decide who I'd pick to keep in my dungeon and torture until they died of old age if I coud only pick one.....(listed in no particular order)

 

Lloyd Blankfein

Larry Summers

Turbotax Timmy

Chuck Schumer

John MCCain

Pol Pot

Lindsey Grahm

Diane Feinstein

Joseph Kony

Nancy Pelosi

Harry Reid

or Jeffery Dahmer

 

Fri, 10/11/2013 - 20:49 | 4046931 Seasmoke
Seasmoke's picture

Pot, Kony , Dahmer ...... What they ever do to you ?

Fri, 10/11/2013 - 20:55 | 4046939 One of We
One of We's picture

Excellent point.  I'll torture them last....

Fri, 10/11/2013 - 22:14 | 4047084 nope-1004
nope-1004's picture

I'll take Summers.  The fat POS is such a pompous ass, ripe with indignancy toward fellow man, and hatred toward women.  The guy is a fucking asshole, pure and simple.  If I saw him on the street, I'd piss on his feet, fuckin' prick.

 

Fri, 10/11/2013 - 21:17 | 4046978 ebworthen
ebworthen's picture

Hank Fucking Paulson.

Bamboo pounded under the fingernails soaked in salt, rubbing alcohol drip off and on.

Bland nutritional paste and Las Vegas tap water to keep him alive for as long as possible.

Sat, 10/12/2013 - 09:11 | 4047473 Winston Churchill
Winston Churchill's picture

Acetone is far better for inflicting pain .than the alcohol drip.100X more painfull.

With that minor mod. +100

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