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Guest Post: What A Republican Civil War Means For Gold
Submitted by John Rubino via The Dollar Collapse blog,
In one sense, the past couple of weeks’ debt ceiling debate was just one more in a long line of annoying-but-otherwise-pointless pieces of bad political theater. But in another sense it was a turning point, one that may have put the democrats completely in charge. Consider:
In a system with two viable parties, each side has to pretend to be more reasonable than it really is in order to attract just enough moderate votes to win the next election. So democrats pay lip service to fiscal responsibility and deficits – occasionally even signing bills like welfare reform that they find repugnant – when they’d much rather spend their days indiscriminately tossing other people’s money at new entitlement programs. Republicans, meanwhile, pretend to empathize with people they privately view as prey when they’d rather be cutting taxes and invading places that have oil.
We only rarely get to see the major parties’ true selves because the 20% of voters in the middle are turned off by displays of naked avarice, and in a two-party system elections go to whoever carries a majority of that block.
That’s why the latest debt ceiling debacle is such a big deal. Government shutdowns and related turmoil have become a standard bargaining chip lately, without affecting the make-up of either party. But this time the main conflict was not between republicans and democrats, but between mainstream, log-rolling, back-scratching, career-politician republicans and a handful of representatives and senators elected with Tea Party – i.e., highly ideological – support. The latter have no interest in raising the debt ceiling under any circumstances and see a government shutdown as a positive end in itself. Defunding Obamacare was just the excuse.
They got rolled, of course, as regular republicans chose to raise the debt ceiling without condition (as everyone always knew they would). But the cost of reopening the government is a republican civil war with only two likely outcomes: 1) The two groups stay in the big tent but challenge each other in primaries and intrigue over committee seats, etc., making a united, coherent policy front impossible and handing the next few elections to the democrats. 2) The Tea Party/libertarian republicans leave and either join the existing libertarian party or start one of their own, siphoning just enough votes from republicans in future elections to keep the democrats in charge.
Already, it has started. See this from today’s Bloomberg:
Republican Civil War Erupts: Business Groups v. Tea Party
A battle for control of the Republican Party erupted today as an emboldened Tea Party is moving to oust senators who voted to reopen the government, and business groups began mobilizing to defeat allies of the small-government movement.
“We are going to get engaged,” said Scott Reed, senior political strategist for the U.S. Chamber of Commerce. “The need is now more than ever to elect people who understand the free market and not silliness.” The chamber spent $35.7 million on federal elections in 2012, according to the Center for Responsive Politics, a Washington-based group that tracks campaign spending.
Meanwhile, two Washington-based groups that finance Tea Party-backed candidates said today they’re supporting efforts to defeat Mississippi Senator Thad Cochran, who voted this week for the measure ending the 16-day shutdown and avoiding a government debt default. Cochran, a Republican seeking a seventh term next year, faces a challenge in his party’s primary by Chris McDaniel, a state legislator.
McDaniel, who announced his candidacy today, “is not part of the Washington establishment and he has the courage to stand up to the big spenders in both parties,” Matt Hoskins, executive director of the Senate Conservatives Fund, said in a statement supporting him. Read more
Once the civil war costs the republicans control of the House of Representatives (November 4, 2014), the democrats will be relieved of the need to fool the middle about their commitment to fiscal sanity. The incoming Clinton administration and its congressional majorities will ramp up domestic spending and finance it with higher taxes, more borrowing and way more money printing. Janet Yellen (the perfect Fed chair for this transition) will expand QE and make it permanent. The Fed’s balance sheet will grow in trillion-dollar chunks as it buys up all the bonds issued by the government and the mortgage packagers and pretty much anybody else with paper to sell.
The resulting tidal wave of hot money will swamp emerging markets and drive Europe and Japan crazy, but the democrats won’t care because they’ll be favored by 20 points in the polls and in any event will be too busy hiring more staff to handle the upcoming legislative season to listen to non-believers. Oh, and they’ll counter any dissent with capital controls and stepped-up surveillance.
Could there be a better environment for gold? Not at first glance. But then almost the same could have been said two years ago when the Fed started buying $85 billion of bonds each month and bubbles began to form in stocks and houses. Some of that cash certainly should have found its way into precious metals. Instead the result was an epic correction. So logic isn’t necessarily our best guide here.
Still, the republican implosion/democrat ascendance comes after a two-year precious metals correction (during which China, India, and Russia bought something like 4,000 tons of gold, an amount greater than Germany’s entire gold reserves). So coming when it does, the combination of democrat dominance, an even more accommodating Fed and a growing shortage of Western gold to be shipped East…well, at the risk of being wrong again, this really does look like precious metals paradise.
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I was just thinking about the former post and all that hostory...
for America...
what if columbus wasn't the first explorer...
and if he first explorers would have been muslims....
damn...
the world would be a totally different world...
it would be burning right now.
Vikings & Chinese both met the First Nations peoples centuries before Columbus arrived.
The Vikings didn't get along so well with them. Well, they're vikings, that's a shock.
Even today some 'traditional' native clothing can be seen as actually the same as traditional Chinese clothing from certain isolated parts of the country from centuries ago. They are the same. They met, they traded.
romney was the last straw - it ripped the party in half. now the rinos have to join forces with the dems in order to hold off tea party reforms. we get to see the incredible spectacle of the "reasonable" and "statesmenlike" politicians just get us another credit card every 90 days. insane.
I consider myself a Tea Party member. I renounced my allegiance to any Republican and I can tell you we are coming after the RINO's John Cornyn, McConnell, Mccain, Graham, Corker, Ayotte and probably even Rubio.
The Tea Party may not win the war with all of these entrenched elitist assholes, but by God we are going to try. I agree that this strategy will probably split the Party and give the Democrats an easier opportunity to gain even more power but at this point I don't give a shit. Better to lose on principle than to think that things will change with the staus quo. Thats why Ted Cruz is high regarded. He at least puts up a fight.
I believe the US is like S Vietnam when the troops starting torching the village "We had to destroy the village to save it" Sad to say the same thing is going to have to happen to this country. Tea Party will try to cut out the cancerous RINOs' while the Democrats destroy the country. I fully expect an economic collapse is required to cleanse us of the Keynesians. Then we will have to pick the pieces back up.
Fuck it Dude, lets go bowling.
Ted Cruz is no fucking good. He is a GOP Tea Party plant sent to destroy it, not save it.
Look at him and his wifes bios. Totally Bankster connected and well entrenched in the Established Order of Wash DC.
http://www.dailypaul.com/300348/senator-ted-cruz-and-wife-heidi-nelson-c...
The Tea Party can recognize a traitor when it sees it.
Marco Rubio has crashed in popularity among Tea Party as soon as CFR puppet Rubio started promoting Amnesty for illegal aliens.
I think your wrong and quite frankly if a politicians wife's job looked compromising no one would be left in DC. The opposition is scared to death of this mf'er so let's just see where this goes before we impune his wife, aunt, uncle, father, or grandmother. Ted Cruz's words and actions will tell us how this needs to play out for him politically. Don't get me wrong it's nice to have this pointed out.
How am I wrong? Cruz started under Bush and Cheney. Do I need to continue? Really?
I can't believe people at ZH fall for this stuff.
Article disregards Democrats owning Obamacare and no political fallout from that, they might escape 2014 on it but by 2016 and the economy destroyed by it, highly unlikely.
In other news the Treasury site finally updated the debt ~$320B in one day, nice!
Date Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding 10/16/2013 11,929,976,600,223.38 4,817,383,948,833.85 16,747,360,549,057.23 10/17/2013 12,117,282,743,815.33 4,958,307,364,148.24 17,075,590,107,963.57The fastest and easiest way too change something is to destroy it. Welcome to the destruction of the USA.
This is depressing FUCKING SHIT!!!!
The Tea Party is the last gasp of independent hard working liberty and sanctity-of-the-individual minded families.
The Tea Party was never a "Conservative" movement until those in power on both sides became desperate to label it - to tar it - so it could be marginalized.
It was a Libertarian movement of all kinds of formerly "Democratic" or "Republican" people, but that was too dangerous for the establishment, so it was painted Red by the MSM and "Radical" by the GOP to push people back into the false dichotomy.
The U.S. has become what so many came here to escape.
It's all downhill from here.
Crossed the Rubicon.
New Rome.
Time for a 3rd party?
When the Tea Party dumbshits start voting to actually end the empire by cutting the hell out of defense, the NSA and Homeland Security, I will believe you. Until then, its just another bought and paid for bunch of politicians.
well, that little piece sure wasn't up to ZH standards.
we are a breed apart from the usual shlock. That's why I'm such a snob.
Next few elections. Lulz... like the US has many ``elections`` left before the big kaboom.
Bartender, I'll have what he's having. In fact, make mine a double!
Moar fear mongering to further marginalize the TEA party....
The TEA party, Constitutionalists and Libertarians are the last hope to save this failed republic.
Thought I was on another website while reading this.
*sigh
There is no hope for this failed republic. For clever and determined individuals, families, some communities, yes; but the the broader publick is in the midst of a long slow decline from which it will never emerge. The bloodline is weakened, the mind is compromised; the empire is simply past its prime. It's really just a matter of broader biology, imvho. Large political bodies are under similar laws, just on a different scale. The Messiah etc will spout bullshit all the way down and it makes not a whit of difference.
To them that have it shall be given; and from them that have not it shall be taken away, even that which they have.
I would say, among other things to have in these slow troubled times, own physical gold. If you have the means, there will eventually be a carry trade as I think the paper price will be collapsed and physical will retain ... well, whatever it retains. I think the Asians may well come over here to buy the cheap gold like they have been coming over for the cheap art, good seafood and other commodities.
We're bouncing near the bottom here. The price in the West may stay collapsed to attempt to further mask inflation. I am awaiting a further price decline to $1100 or less, which is production cost. If there is any sanity whatsoever in any corner, that is rock bottom. By any physical measure of price discovery, that is a bottom. Unless people break 5,000 or more years of human psychology and devalue gold; but my bet is against that.
Based on what I am seeing ... the Americans will probably sheepishly submit and get in line for the food source. Maybe S&P triples from here but most are not participating and will will be marinading their catfood with store-bought blood cubes and gubmint cheese.
Wait til we see what this just-in-time economy does when the extra ACA costs kick in. It is going to get downright ugly. The vast majority does not even want to think about the clusterfuck that will ensue. The vast majority does not even want to think.
Ok, enough of this. A few martinis beckon. Good luck.
Revolving door, Judd Greg (author of TARP went on to be advisor to Goldman, controversy steming from his enrichment over an earmark for Pease Air Force Base, now CEO of SIFA) was on Charlie Rose last night, claiming that the Republican's should never have given some of their members the microphone regarding the shutdown. Blah, blah blah...but that the Congress needs to get back to "governing." I've been hearing that a lot lately...governing? I thought that their job was to represent us! Since when are we "governed" by our elected officials? Even a local city council member claims that he needs to get back to "governing." It seems to me that they consider themselves to be Royal Kings and we are merely their serfs.
http://en.wikipedia.org/wiki/Judd_Gregg
"when they’d much rather spend their days indiscriminately tossing other people’s money at new entitlement programs."
Bullshit, at least when you talk about voters, as opposed to politicians. Democrats do support the entitltment programs we already have like SS and Medicare, and real democrats support single payer healthcare as opposed to this monstrosity the right calls Obamacare. And how do we support entitlement programs? By collecting enough taxes to pay for them, like every other goddamn government "program". One thing we don't want to do is cut taxes for people who don't need their fucking taxes cut, then whine about the deficits they produce, like the idiot conservatives.
You have already run out of other peoples money.
Clinton enabled off shoring the countries capital , Obozocare is now destroying anything
that was left.
You are a useful idiot,one of those that are disposed of first.
Enjoy you limited time in this mortal life.
Piss off to the HuffPo site, and hang out with the other fools.
Its more productive, in my opinion, to stop thinking that there will be ANY voluntary political resolve to the debt problem, or, the welfare state. Too many misaligned incentives and perverse incentives and you have exponential math working against all of it. China has floated 2 economic balloons in the last week - suggestion of an alternative reserve curency and a currency swap arrangement, and a downgrade on US debt. TEA party, dems, repubs - none of that shit matters. None of it at all. None of this shit will magically sort itself out. DEbt(s) wil never be paid - EVER. You need north of 4% GDP growth to even think about serious debt reduction. We are currently getting 2%. Entitlement reform will also - NEVER happen. In addition, the people have no power and the recipients of the welfare state will not EVER change sides until the cupboard is bare - but, by then its too late isn't it. The political pontificating will continue in February and again a year later and so on until a new reserve currency is established and that will happen. When the Republic (aka constitution) was abandoned - it marked the beginning of the end, in my opinion. The greatest document EVER written that constituted the least cost means of organizing and protecting the unfettered productive actions of ALL men and women TRADED for socially engineered social welfare maximization ponzi schemes and militarized destruction economics. There is no way - no fucking way the shit ship can be corrected.
What that does for/to gold, who can say. All I know for certain, is that the great Keynesian monetary experiment will end in shambles and about the only thing we ought to be concerned about today (even though we cannot know the inevitable form chaos takes or when), is which side of the trade you're gonna be on when it happens - protect yourself, your shit, and your family because at the end of the day its about all I have any control over and perhaps even this is questionable. Cut through all the crap and recognize the shit show for what it really is - evil disingenuous bullshit designed specifically to take from you EVERYTHING YOU HAVE.
I agree with a lot of what you wrote, but not "There is no way - no fucking way the shit ship can be corrected."
When TSHTF as those in power are desperate to avoid, the American people will come together and no amount of special interest or Koch Brothers or Chamber of Commerce money will save the politicians . . . or the banksters.
Martial law will not save them.
Their military will not save them. They'll turn on them when they see they were the real enemy, domestic.
It's a terrible thing that's coming but, in the end, if we're not invaded by China or Russia while we fight amongst ourselves, the America that comes from the ashes can and will restore the Constitution and we'll be a stronger country for the suffering (hopefully).
Characterizing the democrats as the party of fiscal insanity is pure tea party folklore. Rubino should speak more carefully. The last time we had a balanced budget was in the last two years of the Clinton administration (using the current unified budget measure). That was only 13 years ago. If it was possible then, why is it so impossible now? There are two primary causes, both of which can be corrected with adequate political will: The Bush tax cuts and the illegal wars.
And of course you forgot to mention that the books were only balanced because Clinton, thinking only of his reelection after Lewinsky, caved almost completely to a Republican controlled Congress. I actually think a Republican congress and an unpopular Democratic President is the only way to a balanced budget in the current set-up
Ah...someone trotting out that myth again.
The budget scored a surplus only because it borrowed money from the “trust” funds that secure entitlement payments, such as Social Security and Medicare.
http://www.washingtontimes.com/news/2012/feb/6/clinton-gingrich-and-the-balanced-budget-myth/#ixzz2i7eN2fjqThankyou. But it must be remembered that there is no trust fund. Moreover, ALL taxes collected whether income, SS, ect fall within the classification of excises. That includes so called "entitlemet payments" which are nothing more than an excise for the privilege of being eligible for extra ordinary protections paid for with money from the public treasury. As the taxing power is a purely legislative function, how those excises are spent pose a political question upon the judiciary.
Its a free for all. the laws of causality and mathematics can now be bent to fit the worldview of the ruling class. We may see a point where the majority will believe that its not necessary to work or produce anymore. We can just live off each other and borrow the QE difference.
Mr natural,,, it don't mean shit....
The author thinks the civil war is only going to be in the Republican party.
That's fucking hilarious.
If the statists/socialists take power, they're not going to allow an escape hatch like physical ownership of gold.
We have a 2nd Amendment that guarantees gun ownership, but you've seen how easily they've trampled on those rights. Try buying a pistol in NYC. Gold has no Constitutional guarantee, so they easily can round it up, just ask FDR. And most of the proles will cheer it on and compare them to tax cheats putting money in a Swiss bank account.
I certainly would not want to throw gasoline on the fire in order to make my gold more valuable, I see everyone getting burned in that scenario.
Actually a 3rd party by the Tea Party could make a lot of sense. At this point both main parties are statists pure and simple. Yes, it may give the Democrats complete control for a few election cycles - but the ruin of their policies would push ever more people into the TPs arms. It may also lead to the creation of a 4th party on the left. At that point the TP might have enough reps in the House at least to vote with the Republicans or the Democrats when it suits them and hold the true balance of power
ideological nonsense rant posing as a gold article. I'd rate this -1 if I could.
The roiling unwashed masses will be schooled that holding the status quo is the only way they are going to be able to feed their families. And because most of them are unable to produce anything, they will go along with nearly anything.
To turn a republis into a slave state requires a critical mass of dependents; I think the U.S. is there and the Fed is making its move, now.
Oh, and wait for the slow rise in gas prices to continue. And the ACA costs to kick in.
Civil War happens when slave owing scum like the Dem party members who were called on the carpet for their hatred by greedy non slave owing scum like the Rep party.
Remember it was the Dems who fought against passage of 13th ammendment not the Republicans.
It all boils down to the Fed printing USD.
If one has an unlimited checkbook, one can make a lot friends....and voters.
"No country has ever benefitted from a protracted war"
Sun Tzu 540 BC
The current laws are created to allow a few to plunder the many, and enforced with threats and acts of violence. Mainstream media glorifies those plunderers.
Hillary Clinton as President, and Janet Yellen as Fed Chief; It will be like giving two women an unlimited charge card, and dropping them off at the mall.
The author of this piece is operating under old rules that no longer are in place. There is no 20% that decides the election anymore. That dog died in 2008. It is now about race, gender and sexual orientation. Playing to the envious and bitter. That is what decides elections now.
.......It is now about race, gender and sexual orientation......and the Satanic demons that program the Sorosian vote counters.
We are being governed by self-serving sociopathic morons.
This is just fantasy. Over the past 30+ years it has been Republican administrations that have blown out the deficit, not the Democrats. The exception being the Obama administration, forced to deal with a catastrophic collapse of the financial system, but deficits are now shrinking rapidly. The last administration to balance the budget was Clinton's. It's amazing to me how so many Americans still buy the fantasy that the GOP is fiscally responsible, Fox is a very effective propaganda machine. Our national debt woes began with Reagan and his unfunded tax cuts and massive military increases and worsened under Bush, Jr., with his wars and drug benefits.
Your team vs my team .. Red vs Blue meanwhile your pocket is being picked. Wake up man two sides to the same coin. It is divide and conquer, fight each other while the fascists get rich.
The prospects for lead are much higher
The 4 precious metals ... gold ... silver .. lead ..brass.
I think the presumtion that a republican majority will reign in spending has proven demonstrably false the past times they have had a majority. Its asinine to ignore this and continue to lament that a tiny number of republicans actually attempt to do the people's will, and in doing so destroy the emasculated cynical democrats that compose the republican mainstream.
And for god's sake, isn't the recent debt limit debate absolute proof that the republican mainstream is not going to rein in spending? Of course it is.
Burn the republican party to the ground--they are servants to the democrats and special interests!
fofoa has a new piece out today:
http://fofoa.blogspot.com/2013/10/gold-as-forex-currency.html?showCommen...
It explains how gold is really priced....in the Forex markets!
If you fail to understand this (and not one other gold writer discusses it) you will never understand gold pricing!