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1974 Enders To Kissinger: "We Should Look Hard At Substantial Sales & Raid The Gold Market Once And For All"

Tyler Durden's picture




 

Four years ago we exposed what appeared to be a 'smoking gun' of the Fed's willingness to manipulate the price of gold. Then Fed-chair Burns noted the equivalency of gold and money, and furthermore pointed out that if the Fed does not control this core relationship, it would "easily frustrate our efforts to control world liquidity." Through a "secret understanding in writing with the Bundesbank that Germany will not buy gold," the cloak-and-dagger CB negotiations were exposed as far back as 1975. Recently, we exposed Paul Volcker's fears of "PetroGold" and the importance of the US remaining "masters of gold." Today, via a transcript of then Secretary of State Kissinger's 1974 meeting we see how clearly they understood that demonetizing gold was a critical strategy to maintaining a dominant power position in the world, and "raiding the gold market once and for all."

 

Burns' 1975 Smoking Gun...

...

On June 3, 1975, Fed Chairman Arthur Burns, sent a "Memorandum For The President" to Gerald Ford, which among others CC:ed Secretary of State Henry Kissinger and future Fed Chairman Alan Greenspan, discussing gold, and specifically its fair value, a topic whose prominence, despite former president Nixon's actions, had only managed to grow in the four short years since the abandonment of the gold standard in 1971. In a nutshell Burns' entire argument revolves around the equivalency of gold and money, and furthermore points out that if the Fed does not control this core relationship, it would "easily frustrate our efforts to control world liquidity" but also "dangerously prejudge the shape of the future monetary system."

Furthermore, the memo goes on to highlight the extensive level of gold price manipulation by central banks even after the gold standard has been formally abolished. The problem with accounting for gold at fair market value: the risk of massive liquidity creation, which in those long-gone days of 1975 "could result in the addition of up to $150 billion to the nominal value of countries' reserves." One only wonders what would happen today if gold was allowed to attain its fair price status. And the threat, according to Burns: "liquidity creation of such extraordinary magnitude would seriously endanger, perhaps even frustrate, out efforts and those of other prudent nations to get inflation under reasonable control." Aside from the gratuitous observation that even 34 years ago it was painfully obvious how "massive" liquidity could and would result in runaway inflation and the Fed actually cared about this potential danger, what highlights the hypocrisy of the Fed is that when it comes to drowning the world in excess pieces of paper, only the United States should have the right to do so.

...

Lastly, the memo presents a useful snapshot into the cloak-and-dagger, and highly nebulous world of CB negotiations and gold price manipulation:

"I have a secret understanding in writing with the Bundesbank that Germany will not buy gold, either from the market or from another government, at a price above the official price."
 

Volcker's 1974 "PetroGold" concerns...

First, here is what the S intentions vis-a-vis gold truly are when stripped away of all rhetoric:

U.S. objectives for world monetary system—a durable, stable system, with the SDR [ZH: or USD] as a strong reserve asset at its center — are incompatible with a continued important role for gold as a reserve asset.... It is the U.S. concern that any substantial increase now in the price at which official gold transactions are made would strengthen the position of gold in the system, and cripple the SDR [ZH: or USD].

In other words: gold can not be allowed to dominated a "durable, stable system", and a rising gold price would cripple the reserve currency du jour: well known by most, but always better to see it admitted in official Top Secret correspondence.

 

Specifically, this is among the top secret paragraphs said on a cold night in March 1968:

If we want to have a chance to remain the masters of gold an international agreement on the rules of the game as outlined above seems to be a matter of urgency. We would fool ourselves in thinking that we have time enough to wait and see how the S.D.R.'s will develop. In fact, the challenge really seems to be to achieve by international agreement within a very short period of time what otherwise could only have been the outcome of a gradual development of many years.

 

And Now Kissinger's 1974 Transcript...

Via Mike Krieger's Liberty Blitzkrieg blog,

The following excerpts are from a transcript of a 1974 meeting held by the then Secretary of State Henry Kissinger and his staff. This particular meeting was held on April 25, and focused on an European Commission Proposal to revalue their gold assets. What follows is an incredible insight into the minds of powerful American leaders scheming to maintain power and show other nations their place. What is most significant is how clearly they understood that demonetizing gold was a critical strategy to maintaining a dominant power position in the world.

So to those who continue to say that “gold doesn’t matter” because it hasn’t been used as an official asset in the monetary system for decades, I say give me a break. In fact, the reality of gold having been largely demonetized makes it an even greater threat going forward if the U.S. does not have all the gold it claims to, and other nations have more than they admit to.

Thanks to In Gold We Trust for bringing this to my attention. Choice excerpts are provided below, and breaks in the conversation are denoted with an “…” Enjoy.

Secondly, Mr. Secretary, it does present an opportunity though—and we should try to negotiate for this—to move towards a demonetization of gold, to begin to get gold moving out of the system.

Secretary Kissinger: But how do you do that?

Mr. Enders: Well, there are several ways. One way is we could say to them that they would accept this kind of arrangement, provided that the gold were channelled out through an international agency—either in the IMF or a special pool—and sold into the market, so there would be gradual increases.

Secretary Kissinger: But the French would never go for this.

Mr. Enders: We can have a counter-proposal. There’s a further proposal—and that is that the IMF begin selling its gold—which is now 7 billion—to the world market, and we should try to negotiate that. That would begin the demonetization of gold.

Secretary Kissinger:  Why are we so eager to get gold out of the system?

Mr. Enders: We were eager to get it out of the system—get started—because it’s a typical balancing of either forward or back. If this proposal goes back, it will go back into the centerpiece system.

Secretary Kissinger: But why is it against our interests? I understand the argument that it’s against our interest that the Europeans take a unilateral decision contrary to our policy. Why is it against our interest to have gold in the system?

Mr. Enders: It’s against our interest to have gold in the system because for it to remain there it would result in it being evaluated periodically. Although we have still some substantial gold holdings—about 11 billion—a larger part of the official gold in the world is concentrated in Western Europe. This gives them the dominant position in world reserves and the dominant means of creating reserves. We’ve been trying to get away from that into a system in which we can control—

Mr. Enders: Yes. But in order for them to do it anyway, they would have to be in violation of important articles of the IMF. So this would not be a total departure. (Laughter.) But there would be reluctance on the part of some Europeans to do this. We could also make it less interesting for them by beginning to sell our own gold in the market, and this would put pressure on them.

Mr. Maw: Why wouldn’t that fit if we start to sell our own gold at a price?

Secretary Kissinger: But how the hell could this happen without our knowing about it ahead of time?

Mr. Hartman: We’ve had consultations on it ahead of time. Several of them have come to ask us to express our views. And I think the reason they’re coming now to ask about it is because they know we have a generally negative view.

Mr. Enders: So I think we should try to break it, I think, as a first position—unless they’re willing to assign some form of demonetizing arrangement.

Secretary Kissinger: But, first of all, that’s impossible for the French.

Mr. Enders: Well, it’s impossible for the French under the Pompidou Government. Would it be necessarily under a future French Government? We should test that.

Secretary Kissinger: If they have gold to settle current accounts, we’ll be faced, sooner or later, with the same proposition again. Then others will be asked to join this settlement thing.

Isn’t this what they’re doing?

Mr. Enders: It seems to me, Mr. Secretary, that we should try—not rule out, a priori, a demonetizing scenario, because we can both gain by this. That liberates gold at a higher price. We have gold, and some of the Europeans have gold. Our interests join theirs. This would be helpful; and it would also, on the other hand, gradually remove this dominant position that the Europeans have had in economic terms.

Mr. Rush: Well, I think probably I do. The question is: Suppose they go ahead on their own anyway. What then?

Secretary Kissinger: We’ll bust them.

Mr. Enders: I think we should look very hard then, Ken, at very substantial sales of gold—U.S. gold on the market—to raid the gold market once and for all.

Mr. Rush: I’m not sure we could do it.

Secretary Kissinger: If they go ahead on their own against our position on something that we consider central to our interests, we’ve got to show them that that they can’t get away with it. Hopefully, we should have the right position. But we just cannot let them get away with these unilateral steps all the time.

Full transcript here.

 

 

 

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Sat, 11/30/2013 - 16:00 | 4202244 LetThemEatRand
LetThemEatRand's picture

What is most amazing about this story is that no one is even talking about charges for any of the persons involved.   

Sat, 11/30/2013 - 16:00 | 4202246 CH1
CH1's picture

And everyone obeys their edicts, just the same. (And bitch that nothing changes.)

Sat, 11/30/2013 - 16:05 | 4202255 LetThemEatRand
LetThemEatRand's picture

Things would indeed change for the average person if they stopped obeying the edicts of their oligarch overlords.  Peter Schiff's father can attest to that.  

Sat, 11/30/2013 - 16:08 | 4202262 CH1
CH1's picture

The state is not God.

Sat, 11/30/2013 - 16:08 | 4202265 LetThemEatRand
LetThemEatRand's picture

No, but they sure have a lot of hollow points and armored police vehicles and drones and big ass prisons.  Not your downvoter, by the way.  Sometimes I'm right there with you.

Sat, 11/30/2013 - 16:11 | 4202268 CH1
CH1's picture

they sure have a lot of hollow points and armored police vehicles and drones and big ass prisons.  

Still, millions of people evade them every year. And when working people stop paying them, and fixing their cars, and... it's game over.

Not your downvoter, by the way.  Sometimes I'm right there with you.

Thanks.

Sat, 11/30/2013 - 16:18 | 4202280 LetThemEatRand
LetThemEatRand's picture

No doubt TPTB think you're on to something.  They are sure as shit preparing for it.

Sat, 11/30/2013 - 16:26 | 4202303 flacon
flacon's picture

What does Kissinger mean when he said that Obama can usher in a "NEW WORLD ORDER"? How has Kissinger's thought process evolved since 1974, if at all?

Sat, 11/30/2013 - 16:41 | 4202322 Pinto Currency
Pinto Currency's picture

 

 

"I think we should look very hard then, Ken, at very substantial sales of gold—U.S. gold on the market—to raid the gold market once and for all."

 

As if dumping a huge amount of gold would kill gold once and for all.

What it would do is strip the US and Europe of the most important stabilizing asset.

There is a sickness in these people and the tremendous damage they have done to the world but especially North America and Europe - and they know full well there is a reckoning coming.

The question is then, what is their next trick as they hold the reigns of power.

Sat, 11/30/2013 - 16:51 | 4202344 AlaricBalth
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55. Memorandum From John Reynolds of the Federal Reserve System Board of Governors Staff to the Chairman of the Federal Reserve System Board of Governors (Burns)1

Washington, November 1, 1973.

SUBJECT
Possible Consequences of Seeking a New Agreement on Gold

The question has arisen whether it would be in the U.S. interest to seek at this time to negotiate a termination of the gold agreement of March 17, 1968, together with a reaffirmation of Article 4, Section 2 of the IMF Articles of Agreement which provides that "no member shall buy gold at a price above par value plus the prescribed margin."2

It appears likely that the several parties would enter such a negotiation with very different objectives. The U.S. objectives would be (1) to permit market sales of gold by central banks at times when this sememed desirable in order to tranquilize foreign exchange markets, (2) to prevent official purchases of gold at premium prices, and hence (3) to reduce further the role of gold as an international monetary asset.

European countries might share the first objective. But their main interest in gold at the moment is to make use of it in intra-European settlements which, as a practical matter, they are prepared to do only at a market-related price, well above the official price. Some of them, in addition, wish to reserve the right to buy gold in the market as well as to sell. In general, they wish to increase the usability of gold as means of international settlement, and thus to enhance or at least preserve the role of gold, rather than to reduce it.

Against this background, any negotiation to reach a new agreement on gold seems likely to be difficult, and to precipitate decisions about gold that it has so far been possible to postpone, and that might be contrary to broader U.S. objectives in C–20 negotiations.

http://history.state.gov/historicaldocuments/frus1969-76v31/d55

Sat, 11/30/2013 - 16:58 | 4202354 Manthong
Manthong's picture

China is going to change all that devious nonsense.

Sat, 11/30/2013 - 17:12 | 4202385 SWRichmond
SWRichmond's picture

Hence my assertion that "Bitcoin is controlled op".  Who gives a fuck about Bitcoin, really?  GIVEN THE HISTORY OF FIAT CURRENCIES, WHY WOULD ANYONE PUT ANY VALUE AT ALL IN ANY CURRENCY BACKED BY NOTHING?  People are so stupid.

Sat, 11/30/2013 - 17:20 | 4202403 markmotive
markmotive's picture

Personally, if SHTF the most useful currencies will be guns, non-perishable food and shelter.

The Mises view on bitcoin may come as a surprise to some.

http://www.planbeconomics.com/2013/11/the-mises-view-bitcoin-hits-1000-m...

Sat, 11/30/2013 - 18:00 | 4202459 quintago
quintago's picture

Charges? We just had a hollywood producer come out and admit that he ran nuclear devices and such for Israel, and a bunch of others saying they knew about it. 

...and a bunch of crickets is all we get.  

Sat, 11/30/2013 - 18:24 | 4202487 JohnnyBriefcase
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Hmm what do that hollywood producer(Arnon Milchan) and Kissinger have in common...

Sun, 12/01/2013 - 15:16 | 4203883 Four chan
Four chan's picture

raid

rid

Sat, 11/30/2013 - 18:08 | 4202471 Oldwood
Oldwood's picture

The beauty of corruption is that it is extremely profitable to those who participate.

Sun, 12/01/2013 - 01:28 | 4203076 brokenspoke
brokenspoke's picture

don't forget the LEAD!

Sun, 12/01/2013 - 01:57 | 4203091 mrmister
mrmister's picture

My thoughts exactly. Why is the media publicizing Bitcoin so much? Maybe just another way to say "poof and its gone".

Sat, 11/30/2013 - 17:16 | 4202390 AlaricBalth
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60. Paper Prepared in the Department of the Treasury1

Washington, March 5, 1974.

Possible U.S. Proposal on Gold
"...U.S. could propose a package agreement which would attempt to trade a U.S. commitment to limit severely possible U.S. gold sales over the next few years in exchange for European commitments not to take what we regard as a backward step toward placing gold back in the center of the international monetary system and to join with us in some steps toward phasing gold out of the system."

http://history.state.gov/historicaldocuments/frus1969-76v31/d60

And here is link to a treasure trove of documents concerning the US suppression of gold within the monetary system due to its challenge to the USD as the reserve currency.

http://history.state.gov/historicaldocuments/frus1969-76v31/ch2

Sat, 11/30/2013 - 20:09 | 4202632 artless
artless's picture

Kissinger? Thought process? Evolved?

Are you kidding? Henry Kissinger is the same mass murdering war criminal, piece of shit, double agent, new wrold order, global elitist scumbag he ever was. Guys like this do not change. He is a sociopath. What he sees in Barry "The Empty Suit" Obama is what he sees when he looks in the mirror. 

Guys like this go to the grave never examing their thoughts or considering alternative ideas. And they usually live long, lucrative, lives as the parasites they are instead of being frog marched off to the worst prison in the world where they belong.

If there were justice or karma or something like that Kissinger and Soros would share a cell.

Sat, 11/30/2013 - 23:07 | 4202910 Fred Hayek
Fred Hayek's picture

If you saw Kissinger or Soros floating in your pool you'd slap your dog.

Sun, 12/01/2013 - 00:20 | 4203019 earleflorida
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@ Flacon

"France in Search of Security"    Spring/1993 Edition 'Foreign Affairs'                                                                     (towards a New Transatlantic Pact)* and the EU)

http://www.foreignaffairs.com/articles/48763/pierre-lellouche/france-in-search-of-security

"Timeline: History of the Euro"   11/30/2010   (1969- 11/2010)

http://www.telegraph.co.uk/finance/markets/8170326/Timeline-history-of-the-euro.html

,... and this book by Frank Costigiola (c.1992) quoting "Rothschild's Right-Hand Man?", Kissinger *((?the fat man?))-- "France and the United States: 'The Cold Alliance Since World War II'"

Note: These guys (Kissinger, etel.) are just messengers for the grand-plan's... devised decades ago, with alterations need be necessary and somewhat TIMELY? The Rothschild's finance countries debt-- they're not interested in the small stuff... their's is to own all countries debt (beggar`d-thy-neighbour?) and the FRB System is their tool. Why did the Rothschild's leave the "LBMA"in Feb/2004 and three months later, AIG leaves May/2004?

Yes, the same AIG that bankrupted the USA???

jmo

Sun, 12/01/2013 - 01:30 | 4203079 earleflorida
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"Timeline of History, Price, and Economics of U.S. Gold"  (1579 - 2008/2010)       http://www.tchistory.org/TCHISTORY/Gold_Timeline.htm

Sat, 11/30/2013 - 16:59 | 4202358 RafterManFMJ
RafterManFMJ's picture

Sometimes I feel the fear of uncertainty stinging clear

And I cant help but ask myself how much I'll let the fear take the wheel and steer

It's driven me before, it seems to have a vague

Haunting mass appeal

Lately I'm beginning to find that I should be the one behind the wheel
Whatever tomorrow brings, I'll be there

With open arms and open eyes yeah

Whatever tomorrow brings, I'll be there, I'll be there

So if I decide to waiver my chance to be one of the hive

Will I choose water over wine and hold my own and drive...

Sun, 12/01/2013 - 03:27 | 4203139 bunnyswanson
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http://www.youtube.com/watch?v=BmWJ_nGzSME (Lyrics)

Hunger Strike - Temple of the Dogs (Eddie Vedder) Songwriters: CORNELL, CHRIS I don't mind stealing bread from the mouths of decadence But I can't feed on the powerless when my cup's already overfilled But it's on the table The fire is cooking.  They're farming babies.  The slaves are workin. Blood is on the table and their mouths are choking I don't mind stealing bread.  I am going hungry. (It will get so ugly) http://www.youtube.com/watch?v=VUb450Alpps Official video
Sat, 11/30/2013 - 17:19 | 4202400 piceridu
piceridu's picture

Goldman buying Venezuela's gold held in Europe...why?

Sun, 12/01/2013 - 07:52 | 4203221 GetZeeGold
GetZeeGold's picture

 

 

Because they already have it.....seems fair they should pay them for it.

Sun, 12/01/2013 - 10:12 | 4203293 Papasmurf
Papasmurf's picture

That would be inconsistent with their MO.

Sat, 11/30/2013 - 17:20 | 4202401 piceridu
piceridu's picture

dupe

Sat, 11/30/2013 - 16:19 | 4202284 SRSrocco
SRSrocco's picture

I gather Jeff Christian of CPM Group doesn't read this sort of Govt Manipulation Info.  He will continue to put out forecasts on supply and demand until the day it no longer works.  However, we are breaking all records in Official Silver Coins Sales:

BREAKING: Canadian Maple Leaf Sales Q1-Q3 Already Surpass 2012 Total

http://srsroccoreport.com/canadian-silver-maple-leaf-sales-already-beat-...

Sat, 11/30/2013 - 16:50 | 4202346 Bay of Pigs
Bay of Pigs's picture

Jeff Christian is a blight on the human race. He is an evil, rotten, lying, deceiving little prick.

Everything out of his mouth is pure propaganda.

Sun, 12/01/2013 - 07:53 | 4203222 GetZeeGold
GetZeeGold's picture

 

 

Jeff Christian gives me heebee geebees.

Sat, 11/30/2013 - 17:16 | 4202397 sudzee
sudzee's picture

Scotia-maccotta has not been able to supply both 1/20 or 1/2 oz maples since March of this year.

Sat, 11/30/2013 - 16:09 | 4202264 ebworthen
ebworthen's picture

What are these "charges" you speak of?

Are they like the fabled "rule-of-law" Unicorn?

Sat, 11/30/2013 - 16:34 | 4202321 James_Cole
James_Cole's picture

Kissingers rap sheet of war crimes is long and diverse and nobody would dare hold him to account for that - this gold manipulation is pretty small fries.

Sat, 11/30/2013 - 19:23 | 4202579 DaveyJones
DaveyJones's picture

he does have a medusa touch doesn't he

Sat, 11/30/2013 - 17:21 | 4202404 max2205
max2205's picture

Kissinger should have been locked up a long time ago.....

Sat, 11/30/2013 - 19:08 | 4202561 neidermeyer
neidermeyer's picture

Kissinger was lucky to survive WW2 , he was in my fathers unit (Railsplitters - 84th Infantry) ,, having an German in your unit meant never having to decide who's going to be on point. As luck would have it my father ran into him after the war at NYU , apparently his views have been consistant forever..

Sat, 11/30/2013 - 18:23 | 4202489 Tim_
Tim_'s picture

Henry Kissinger is a jew.

Sat, 11/30/2013 - 18:36 | 4202501 dark pools of soros
dark pools of soros's picture

A lizard overlord zionist that is 5000 years old

Sat, 11/30/2013 - 18:58 | 4202542 SMG
SMG's picture

Wrong. Luciferian Oligarch.  Different Religion.  Make sure the pitchforks get pointed in the right direction.

Sat, 11/30/2013 - 21:29 | 4202751 Rock On Roger
Rock On Roger's picture

marduk amen ra

Sat, 11/30/2013 - 21:23 | 4202737 roadhazard
roadhazard's picture

And a repubican.

Sun, 12/01/2013 - 01:34 | 4203082 TheHound73
TheHound73's picture

And recipient of the Nobel Peace Prize.

Sun, 12/01/2013 - 02:01 | 4203093 mrmister
mrmister's picture

Kisinger is very anti israel though. Odd as it seems. He was the one that tried to keep Nixon from helping Israel during the 73 war. Kissinger is a Nazi type just like Soros. They believe in new world order where they kill all the little people. 

Sat, 11/30/2013 - 16:44 | 4202331 falak pema
falak pema's picture

In the context of that discussion they defended US interests.

But...it was the beginning of death by a thousand cuts...and more and more DENIAL of the laws of Consequence and moral hazard; aka his antics in Cambodia to kill that country in collateral damage and then S. AMerica and Pinochet and Operation Condor and then...shuttle diplomacy and ME Templar state of Israel and Egypt (Sadat) phony handshake; then petrodollar hegemony. All steps, one by one, down that road to collective deperdition.

And, that is something no Hubristic Oligarch, who feels he can "stuff it down their throats" of all deviants in his own camp, (the French gold nostalgists), could imagine will be his own inexorable destiny; just like for the Comnenos of old. 

WHO ME? end up in the dustbin? You must be joking...

Sat, 11/30/2013 - 20:21 | 4202645 rubiconsolutions
rubiconsolutions's picture

One of the biggest war criminals in American history. Read the book "The Trial of Henry Kissinger" by Christopher Hitchens. It doesn't surprise me that he wanted to raid gold holdings.

Sun, 12/01/2013 - 02:14 | 4202871 sgorem
sgorem's picture

"Specifically, this is among the top secret paragraphs said on a cold night in March 1968"......kinda on the subject, but I was a freshman at  College on the night of March 1968, and the only thing gold I was seeking was Alcapulco Gold. Funny how anything Gold is always in great demand...........just sayin'.

Sun, 12/01/2013 - 05:05 | 4203171 diesheepledie
diesheepledie's picture

Kissinger - One of the greats. It's a shame that we haven't seen statesmen of his caliber since. I just wish he was as young and vital as he was then. He would straighten things out.

Sun, 12/01/2013 - 13:18 | 4203629 bozzy
bozzy's picture

Kissinger - piece of shit. Kissinger associates is responsible for more reassons why peaple want to kill Americans than anyone else in modern history.

Sun, 12/01/2013 - 07:03 | 4203201 Svendblaaskaeg
Svendblaaskaeg's picture

"to sell string we must destroy rope"

Sat, 11/30/2013 - 16:02 | 4202248 stinkhammer
stinkhammer's picture

henry sleezebag

Sat, 11/30/2013 - 22:39 | 4202859 Jumbotron
Jumbotron's picture

This never gets old......nor not instructional

https://www.youtube.com/watch?v=NKkRDMil0bw

"The world is a business Mr. Beale"

 

Sat, 11/30/2013 - 16:03 | 4202254 greatbeard
greatbeard's picture

It would be nice to be holding a substantial amount of physical when/if the whole thing blows sky high but none are blessed/cursed with eternal life.  The can kickers are controlling the game and running up the score. The good guys are getting their asses handed to them.  Nothing like being on the losing end of a 70-0 home coming game.

 

 

Sat, 11/30/2013 - 16:42 | 4202333 LetThemEatRand
LetThemEatRand's picture

The big question for me is -- are we in the 4th with 30 seconds left, or is the score 70-0 in the first half?  A guy can still sell beer to the fans if it's not yet halftime.  If the game's almost over, well then....

Sat, 11/30/2013 - 17:19 | 4202398 Ignatius
Ignatius's picture

With bitcoin nipping at gold's heels I expect the Chinese to start supporting the comex gold price.  They've made a long term decision to hedge their dollar position with gold and they'll defend it.

Sat, 11/30/2013 - 22:13 | 4202831 Mine Is Bigger
Mine Is Bigger's picture

They are still buying.  And they still have a lot of dollars.  So, I think they will continue to manipulate comex prices and buy physical gold.  Thus, I suspect the gold price will remain low for some time to come.

Sun, 12/01/2013 - 00:22 | 4203024 Ignatius
Ignatius's picture

I hear ya and you've got a logical response, but there has to be some concern that a crypto-currency is outrunning their store of wealth, gold hedging plans.

Sat, 11/30/2013 - 17:57 | 4202456 greatbeard
greatbeard's picture

>> are we in the 4th with 30 seconds left,

What's it matter when the time keeper is owned by the opposing team?  I feel like I'm stuck in groundhog day with 1,500 contract slam downs being the reoccurring morning dream/nightmare.

 

 

Sat, 11/30/2013 - 17:04 | 4202371 RafterManFMJ
RafterManFMJ's picture

Yup I gave up buying phys and started buying fizz-local brew pubs to be specific.

Sat, 11/30/2013 - 19:42 | 4202603 DaveyJones
DaveyJones's picture

ah microbrew

the other physical gold.

7% makes you feel like 1 

 

Sat, 11/30/2013 - 21:34 | 4202764 Rock On Roger
Rock On Roger's picture

beer, weed, and gold

i'll never mold

Sat, 11/30/2013 - 17:09 | 4202380 seek
seek's picture

It's easy to lose when your team is the only one playing by the rules.

Sat, 11/30/2013 - 17:19 | 4202399 WmMcK
WmMcK's picture

+1 none are blessed/cursed with eternal life.

Very true, however, life will go on for who i leave my physical to long after I'm gone.

Sat, 11/30/2013 - 16:07 | 4202261 ebworthen
ebworthen's picture

Yet another reason to buy and hold in your physical posession - Gold.

Sat, 11/30/2013 - 16:10 | 4202267 quasimodo
quasimodo's picture

Why does it seem like these old fuckers just linger on

and on

and on

 

Die already? WTF?

Sat, 11/30/2013 - 16:12 | 4202271 CH1
CH1's picture

And Soros with him.

Sat, 11/30/2013 - 16:23 | 4202294 greatbeard
greatbeard's picture

Long as we're rounding folks up, let's toss the Koch (sucker) Brothers on the pyre.

 

 

Sat, 11/30/2013 - 17:56 | 4202455 Seahorse
Seahorse's picture

And Murdoch too.

Sat, 11/30/2013 - 18:24 | 4202490 greatbeard
greatbeard's picture

>> And Murdoch too.

There's a reason the fabled fires of hell are so vast, they need to be to handle all the worthy candidates.

Sat, 11/30/2013 - 19:44 | 4202605 DaveyJones
DaveyJones's picture

don't forget Greenspan. At least he looks the oldest

Sat, 11/30/2013 - 20:16 | 4202640 artless
artless's picture

People, Greenspan over Murdoch in a heartbeat.

Murdoch's just a flea. The others are mother fucking destroyers.

 

Sat, 11/30/2013 - 21:21 | 4202735 roadhazard
roadhazard's picture

And the Koch Bros.

Sat, 11/30/2013 - 18:20 | 4202483 ParkAveFlasher
ParkAveFlasher's picture

T H E Y  E A T  B A B I E S.

Sat, 11/30/2013 - 19:38 | 4202599 jimmytorpedo
jimmytorpedo's picture

And they eat the future productivity of the babies that they are too full to actually eat.

Really, how man babies can you eat in a day?

I would say two max.

But you can eat the future productivity of at least 300 000 a day.

Sat, 11/30/2013 - 19:02 | 4202549 SMG
SMG's picture

I think the Oligarchs have access to some life extension technology being withheld from the general public.   Read an article the other day said with current breakthroughs 150 years old might not be out of the question.  Of course a stake through the heart might put an end to this particular evil.

Sat, 11/30/2013 - 23:25 | 4202932 Fred Hayek
Fred Hayek's picture

When you never had the conscience and feelings of a human being you seem to be able to put off the much lesser transition, for you, of dying.

Sat, 11/30/2013 - 16:11 | 4202269 Motorhead
Motorhead's picture

Three cheers to the Carlyle Group!

Sat, 11/30/2013 - 16:16 | 4202272 falak pema
falak pema's picture

Hahaha; Dear Henry exposes himself finally, in all his "uber alles" Metternichian Hubris  to the pages of history;  what Jacques Rueff his enemy in terms of financial construct, (as IT IMPINGED THE GEOPOLITICAL CONSTRUCT of Dear Henry when he backed BW revoke), announced in his ominous treatise "the Monetary sin of the West", (Rueff was an old school Austrian; gold bug), is now proven right; albeit in the light of neo Keynesiansim and neo Friedmanianism gone totally bonkers since 1971- ratcheded up in 1982 deregulation.

The tenants of Dear Henry's thesis must go the whole HOG to defend the undefendable; aka fiat QE infinity and ZIRP, so that Dear Henry's Pax Americana world and TRILATERAL, alliance concocted after the Chinese ping pong game, now leads the Western World to what Constantinople suffered under the Comnenos : counting how many angels (beneficiaries of Obamacare) could balance on a pinhead (unlimited federal deficits)....

Thank you Dear Henry for going the whole hog in your Metternichian logic; which is more Machiavellian than anything else as its SELF FULFILLING.

Ding Dong GOld. 

Sat, 11/30/2013 - 16:25 | 4202298 Goldilocks
Goldilocks's picture

Crawl back into the hole from which you came: asshole.

Sat, 11/30/2013 - 16:25 | 4202300 Xploregon
Xploregon's picture

Seeeee.....I told you so!

Rat Bastards!

 

Sat, 11/30/2013 - 16:37 | 4202325 jeditolstoy
jeditolstoy's picture

Buy gold and silver now, while it's cheap. Use the Fed's manipulation to your favor. If they're going to screw with the free market, use it against them. Buy only physical. It's really quite easy to do once you find a good gold/silver shop. Put it into your routine. If you can't afford gold, buy silver. Every 2 weeks I drive down to my local shop and buy what I can-- whether it's gold, silver rounds, junk silver, etc. Now it's part of my routine. If it's not part of your routine then you'll not do it, and be part of the sheeple.

Sat, 11/30/2013 - 17:13 | 4202386 Seasmoke
Seasmoke's picture

I agree of course. But I must ask, why do GOLD shops continue to sell at lower prices ??

Sat, 11/30/2013 - 17:53 | 4202452 jeditolstoy
jeditolstoy's picture

Simply put, it's because that's where the 'market' is for gold. It's the same reason why banks can sell CD's, or any other debt instrument for that matter, at such low rates. Rates should should be higher, if we lived in a free market, but rates are artifically low. In a word, everything is manipulated by the Fed.

Sat, 11/30/2013 - 19:50 | 4202609 DaveyJones
DaveyJones's picture

Right on, I feel the same way about food. Food and currency are close cousins. Every day, or at the very least, once a week, buy the real stuff - not all the fake poisonous shit. Maybe store it. Teach other people about it. It is valuable, it has always been valuable. And that knowledge and possession hurts the evil ones.   

Sat, 11/30/2013 - 20:50 | 4202681 jeditolstoy
jeditolstoy's picture

Agreed. When I go grocery shopping once a week I buy 3 cans of organic food, ideally without the toxic lining. Then I make sure to cycle my cans.

Sat, 11/30/2013 - 16:50 | 4202345 debtor of last ...
debtor of last resort's picture

Owning gold and silver in the poorer parts of the future world; the west, is not a bad thing. You are the new upper middle class in due time. Stop whining.

Sat, 11/30/2013 - 17:01 | 4202366 diogeneslaertius
diogeneslaertius's picture

in a related story, i am still a low-brow conspiracy theorist, even in 2013 as they dismantle whats left of their old bases.

Sat, 11/30/2013 - 17:06 | 4202373 Ima anal sphincter
Ima anal sphincter's picture

POS extraordinaire.

Sat, 11/30/2013 - 17:09 | 4202381 aleph0
aleph0's picture

So Ferdinand Lips ( Gold Wars ) was right on the nail.

.... and did the Chinese get this memo earlier than us ?

Certainly looks like it.

Sat, 11/30/2013 - 17:08 | 4202383 Sufiy
Sufiy's picture


Gold Manipulation - Kissinger: "Why is it against our interest to have gold in the system?"


We continue our research about the Gold price suppression: who is doing this manipulation and why. With Bitcoin crossing $1000 and other crypto-currencies going parabolic we can see the hunger for the FIAT alternatives. We think that despite all very positive developments introduced by Bitcoin it is in a Bubble stage now due to its unbelievable vertical rise. Its bust will bring attention back to Gold and Silver and next step will be the introduction of crypto-currency backed by Gold - it will be the real game changer.   So far China is using all these games with Gold price suppression to accumulate Gold and this year we see the record buying. Announcement of its Gold reserves can bring the very sobering reality to the financial markets. China will not accept Bitcoin for its Treasury redemption and it is not going to increase its reserve holding any more. US Dollar is losing its Reserve Currency of choice status and all recent "flyover games" just confirm U.S. financial vulnerability in line with Sirya and Iran developments. http://sufiy.blogspot.co.uk/2013/11/gold-manipulation-kissenger-why-is-i...

Sat, 11/30/2013 - 17:15 | 4202387 dick cheneys ghost
dick cheneys ghost's picture

does the US have the gold that they claim to own??? This is the $17 trillion dollar question

Sat, 11/30/2013 - 17:24 | 4202410 Seasmoke
Seasmoke's picture

No way in Hell. 

Sat, 11/30/2013 - 17:31 | 4202417 dick cheneys ghost
dick cheneys ghost's picture

I tend to agree.......if the US has 8100 tons of shiney, would not they be the biggest beneficary of Freegold???

''It turns out you see, that the USA would be the greatest beneficiary of this Oil and Gold revaluation/re-pricing. There is NO loser in this scenario. Gold has made winners of us each and everyone. It has burnt paper, revalued real assets, crushed debt, freed nations and peoples from future-generations of extreme debt slavery/repayment. Unless, of course......''

http://lcn.freedgold.com/2012/03/how-irans-oil-is-set-to-reveal-true.htm...

nice blog Pete!!

Sun, 12/01/2013 - 03:18 | 4203136 Rock On Roger
Rock On Roger's picture

'thought of value' says it all

USA Sucks

There is no fucking value.

 

Stack On

Sat, 11/30/2013 - 17:31 | 4202416 RumCurrency
RumCurrency's picture

Based on the conversation I just read, if there is gold in the vaults, they probably belong to some other entities or have already been sold into the exchanges on paper at least.  Maybe if enough people demanded physical delivery from COMEX, we could see how much physical is truly available.

Sat, 11/30/2013 - 19:05 | 4202553 StillSilence
StillSilence's picture

That question may be worth a quarter quadrillion or so.

Sat, 11/30/2013 - 17:15 | 4202391 uno
uno's picture

thank god we gave them (NSA) internet, (NSA) cell phones tech, and Microsoft (NSA) OS, otherwise the rest of the world would think the US are assholes.  Oh and Germany your gold is almost ready, stop calling

Sat, 11/30/2013 - 17:17 | 4202394 RumCurrency
RumCurrency's picture

"Mr. Rush: We have about 45 billion dollars at the present value—

Mr. Enders: That's correct.

Mr. Rush: And there's about 100 billion dollars of gold.

Mr. Enders: That's correct. And the annual turnover in the gold market is about 120 billion."

So basically their strategy was to flood the market with gold?  I don't understand how that would demonetize gold....  Anyone know how that works?

Sat, 11/30/2013 - 17:19 | 4202402 Sufiy
Sufiy's picture

More to the picture:

 


Government Interventions In Gold Market: "The Double Face of Gold" 

We have the second part of the interview with Dmitri Speck revealing the ongoing Government interventions in the Gold market. This view from Europe on the Gold Cartel and Government Interventions in Gold market is particularly important now with the announced investigations in the Gold Market manipulation by German and UK financial regulators.

 

http://sufiy.blogspot.co.uk/2013/11/government-interventions-in-gold-mar...

Sat, 11/30/2013 - 17:22 | 4202406 Seasmoke
Seasmoke's picture

He does it all for Israelhole. 

Sat, 11/30/2013 - 17:48 | 4202409 Teddy Tenpole
Teddy Tenpole's picture

 

 

Kissinger helped father the petro-dollar.  He was an evil cunt then and he's an evil old cunt now.  The expansion of "Isreal" and/ or Zionism is not Jewish -- The Rothschild Family incorporated Isreal as their own vehicle.  It's a corporation essentially.

THEY are the problem for ALL Of US!  As noted on another thread here, these 'Jews' were actually behind the Nazis.  Jews have been murdered by these evil fuckers who mask themselves as Jews!

India could be a wealthy nation but not under American rule.  China has awakened and really sees the light. 

I want us to win but not with these evil world order bastards in charge.  America should be eliminating their scourge but instead they have infiltrated our country, done away with the constitution and are now looting the single greatest achivement of ourtime -- an independant and FREE middle class.

Yes, I am fuckin' angry!!!

An entire generation has stood by knowing in their heart that it' wrong... and that is the ploy that these fake Jews use, greed.  Because they are greedy rats and they know how to spread it.

Say what you want you stupid fuckin Doomer Boomer Douchebags but if your generation would look in the mirror and come to grips with the sloth we could start to beat these scumbags back.

Of course they surpress gold, it's real! 

Obama isn't even American!

The Fed isn't a governement agency!

Isreal is not a country!

Those cunts in Saudi Arabia are the among the biggest oppressors of humanity on earth!

911 was not only the False Flag to begin the fake war ('On Terror') and reduce our rights but it was the bigget bank heist in history as hundred of billions in isued but not certified Treasuries were 'cleared' with the system down!

Ya Kennedy fucked every chick that could breathe but he knew who these rats were, listen to his speeches!

We own the gold in Fort Knox and it should be accounted for.

Whoa, I lost it there...

 

jut sayin'

 

 

Sat, 11/30/2013 - 17:56 | 4202454 The Abstraction...
The Abstraction of Justice's picture

They damn themselves when they do not speak out against the crimes of their own kind. There is no equivalent to Johnathon Swift or Charles Dickens in the Jewish Canon. What you get is immigration and torture porn dressed up in S&M outfits.

Sat, 11/30/2013 - 21:28 | 4202750 SMG
SMG's picture

You know I often think to myself it would be great if there were an organization or political party that targeted issues that would depose these evil "rats".  Like getting rid of debt money the Fed, and making government debt a capital crime.

Problem is, they infiltrate, confuse, lie, murder to put a stop to any of that.

I want to stop it, wish I knew what to do.

Widespread education of what's really going on would be a great first step.

 

Sat, 11/30/2013 - 17:27 | 4202411 max2205
max2205's picture

You can't even buy a $2 whore with a bit coin. What good is it?

Sat, 11/30/2013 - 18:39 | 4202510 dark pools of soros
dark pools of soros's picture

right now you can buy over 550 $2 whores with one bitcoin

Sat, 11/30/2013 - 23:32 | 4202952 Fred Hayek
Fred Hayek's picture

Try leaving a bitcoin on the dresser afterward.

Sat, 11/30/2013 - 17:46 | 4202422 Teddy Tenpole
Teddy Tenpole's picture

 

 

...it just hit me -- "Occupy Fort Knox".

 

Sat, 11/30/2013 - 18:04 | 4202465 ljag
ljag's picture

Sorry teddy but it already IS occupied........with nerve gas

Sat, 11/30/2013 - 19:37 | 4202596 Peter Pan
Peter Pan's picture

The vacant space in Fort Knox (Or Fort Knix) could solve the problem of homelessness.

Sat, 11/30/2013 - 18:00 | 4202460 TrustWho
TrustWho's picture

At least we know Bernanke was just speaking the company line when he told congress gold was not money. When you have a deceitful institution, perjury is a crucial element of the job description. 

All PhDs are getting divinity degrees, except your really hard sciences....I HOPE! Imagine, they are strapping you into the first space capsule going to the moon and they tell you to not worry, because the great economist, Ben Bernanke, has modelled all the parameters of the flight and everything knowable is controlled and we are comfortable with our assumptions. With economics, there are two totally different schools of knowledge and we still trust these guys who openly print money as a normal policy tool? The Wizard of Oz is looking like a strong, wise leader beyond the abilities of Bernanke or Yellen.

How long has the Fed been fighting deflation? And the Senate committee bowed to the queen Yellen because any questions might support paranoid conspiracy theories, so they gave her a pass. GIVE ME A BREAK!!!!!!

Sat, 11/30/2013 - 18:15 | 4202477 Peter Pan
Peter Pan's picture

Henry Kissinger will not die until the end of the world because not even the devil is game enough to claim his soul.

In fact this is why the end of the world is being postponed.

 

Sat, 11/30/2013 - 22:36 | 4202862 DaveyJones
DaveyJones's picture

fuck, it all makes sense now

Sat, 11/30/2013 - 18:27 | 4202494 ZeroPoint
ZeroPoint's picture

And you thought Ender's game was a 2013 science fiction movie...

Sat, 11/30/2013 - 18:41 | 4202515 dark pools of soros
dark pools of soros's picture

movie was solid..  was a tough book to adapt and they pulled it off as well as you could expect

 

would of made a hell of a series on showtime, etc

 

 

 

Sat, 11/30/2013 - 18:43 | 4202517 ILikeBoats
ILikeBoats's picture

Mr. Enders: It’s against our interest to have gold in the system because for it to remain there it would result in it being evaluated periodically. Although we have still some substantial gold holdings—about 11 billion—a larger part of the official gold in the world is concentrated in Western Europe. This gives them the dominant position in world reserves and the dominant means of creating reserves. We’ve been trying to get away from that into a system in which we can control—

 

How does it allow them to "create reserves"?  Fractional gold banking (which is essentially FRAUD) appears to have been around for a while, yes?

Sat, 11/30/2013 - 18:57 | 4202534 auntiesocial
auntiesocial's picture

you are not a unique snowflake.

Sat, 11/30/2013 - 19:10 | 4202557 it aint easy
it aint easy's picture

Ya can't spell demonetizing without demonizing.

 

Also, it's a new vööööld order.

Sat, 11/30/2013 - 19:42 | 4202604 Peter Pan
Peter Pan's picture

Just like you can spell "Im Jim Demon" from the name "Jamie Dimon". 

Sat, 11/30/2013 - 19:21 | 4202578 ILikeBoats
ILikeBoats's picture

It is clear, this Enders guy was a bagman for TPTB: http://en.wikipedia.org/wiki/Thomas_O._Enders . Note how he served under all the different Republican and Democrat admins.

Sat, 11/30/2013 - 20:25 | 4202652 artless
artless's picture

Wow, I'm stunned this Enders guy is another one of those guys who have never done an honest day's work in his whole life.

Just cannot believe it. Go figure.

Sat, 11/30/2013 - 20:02 | 4202614 putaipan
putaipan's picture

what's scary is the ol' evil fucker was right about gold and oil ... and he didn't leave food out of their plans.

edit- i leave zh and the 1st link i stumble across-

http://www.theorganicprepper.ca/gmo-rat-study-retracted-by-new-journal-e...

Sat, 11/30/2013 - 21:42 | 4202776 Paracelsus
Paracelsus's picture

Re Henry Kissinger: Don't forget the bit about Cyprus.....

Not too many people on that island willing to cheer for that guy.Wonder why?

Sat, 11/30/2013 - 22:18 | 4202836 holdbuysell
holdbuysell's picture

And Bernanke finds the metal puzzling in his public testimony.

What an absolute crock.

Sat, 11/30/2013 - 22:50 | 4202883 JailBanksters
JailBanksters's picture

Why was Kissenger never on trial for War Crimes, oh that's right he Jewish.

Sat, 11/30/2013 - 23:05 | 4202908 therevolutionwas
therevolutionwas's picture

speaking of Kissinger, look up Kay Griggs, a marine col's wife. who among alot of other folk, talks about kissinger..., a sick, sick man.

Sun, 12/01/2013 - 00:08 | 4203012 resurger
resurger's picture

damn!!!!!!!!!!!!!!

Sun, 12/01/2013 - 01:19 | 4203068 carlin401
carlin401's picture

IMF, Kissinger, and NSA, and Bitcoin

A family made in Heaven

Cashless 'Kissinger Mark"? Anyone see that coming? Bitcoin could provide the technological leap to apply banking to sommark innovations rfid tattoo. In fact, some claim that the NSA created bitcoin for that very purpose, in conjunction with Monsanto (whose name equals 666 in base 6 English Gematria), will control the buying and selling of food, even wiping out liberty gardens from the air by spraying Roundup. A nightmare scenario or is this the New World Order that Henry Kissinger (whose last name equals 666 in base 6 English Gematria) has been raving about? I believe the connections speak for themselves. Monsanto shares two board directors with Lockheed Martin and this is a massive problem. It all boils down to state's rights and eventual secession and independent constitutions if the feds stop taking care of the states. The states are to take care of the people and the people's government is to protect the states. It's that simple. When they stop protecting them, the house of cards will fall.

Sun, 12/01/2013 - 05:30 | 4203177 JPMorgan
JPMorgan's picture

The scam that is the paper gold market will end when the west fails to deliver physical en masse one after the other.

When that happens the east will be declared the new masters of gold.

Sun, 12/01/2013 - 08:59 | 4203255 pcrs
pcrs's picture

Will they now be debating how to kill the cryptocurrencies ?

Sun, 12/01/2013 - 10:21 | 4203300 JPMorgan
JPMorgan's picture

Dunno they probably like the idea on some level that the same people that were buying gold are now moving into crypto currency (it releases the pressure a little).   

And it also works towards their agenda of a cashless society.

But call me old school I still like to own and hold things that are physically tangible that can be traded for goods and services long after the lights go out.  

Sun, 12/01/2013 - 12:10 | 4203475 pcrs
pcrs's picture

There is a point to that, but you can't leave the country with your gold if governments get too tyranical to bear. You won't get past the scanners at the airport.

Sun, 12/01/2013 - 13:27 | 4203653 TheMerryPrankster
TheMerryPrankster's picture

Don't use airports? These sort of problems are solveable.

Sun, 12/01/2013 - 09:54 | 4203284 tony wilson
tony wilson's picture

these old vampyre satanic cunts rely on blood tranfusions from kids not the neck sucking type.

proper hospitals all nice and private.

different flavors calm docile child blood or the favorite child in fear they just love those terror hormones that get released during those rituals.

feel free to neg but the fact is this happens.

Sun, 12/01/2013 - 13:26 | 4203650 TheMerryPrankster
TheMerryPrankster's picture

Thanks Tony, How is this germane to the discussion at hand?

Sun, 12/01/2013 - 10:39 | 4203336 justsayin2u
justsayin2u's picture

One SDR = 0.66$ today (2013)

One SDR in 1969= 0.889 grams of gold or 0.0286 oz of gold

S&P500 in 1969 = 92$

Market price of gold is 1252$/oz today

.889 gm gold = 35.8$ today (2013)

S&P today  = 1805

1) The dollar is not a store of value.

2) gold is a store of value - (35.8x increase over 1969)

3) Stocks are a store of value - (19.6x increase over 1969)

The US government and the Fed work together to screw the average citizen by contunually devaluaing the dollar through defecit spending which helps the govvies (they spend the new debt money first) and serves up devalued fiat to those downstream  - suprise suprise suprise

 

Sun, 12/01/2013 - 12:33 | 4203529 pcrs
pcrs's picture

The SDR is certainly not a store of value

Sun, 12/01/2013 - 12:19 | 4203493 Sufiy
Sufiy's picture


Gold Catalyst: Dollar survival behind US-China tensions


  There are no bears left in the equity markets and no bulls are left in GoldBitcoin is rising to the sky and FED has found the youth portion secret: the more you print the better it gets.  Only question is left why China, India, Turkey and Thailand are buying record amount of Gold this year? Now we have the answer and it is spelled out by Press TV this time.  Please keep in mind that it is Iran network, but it is exactly the most important part of this message - who is now talking about it. http://sufiy.blogspot.co.uk/2013/12/gold-catalyst-dollar-survival-behind...

Sun, 12/01/2013 - 16:01 | 4203970 Sufiy
Sufiy's picture


FED "Operation Twist": Bitcoin Crashed To $820 from $$1120 on BitStamp


Welcome to the adult world of the alternatives to FIAT currencies and "End The FED" fighters. Please never mix again the religion and Investment Valuation.    In a thin Sunday trade - before the Chinese market opens - Bitcoin has collapsed from $1120 to $820 at the BitStamp today. You still can buy with Bitcoin a few copies of the very important book for all Bitcoin "investors": "Extraordinary Popular Delusions and the Madness of Crowds."   We congratulate all traders, who has sold it higher than their purchase price. You are welcome to follow us with other 100 Crypto-Currencies now, but better watch Gold and Silver in the next few days. http://sufiy.blogspot.co.uk/2013/12/fed-operation-twist-bitcoin-crashed-...

Sun, 12/01/2013 - 20:26 | 4204783 RMolineaux
RMolineaux's picture

I believe Zerohedge misunderstood the thrust of Volker's communication in his first quote above.  By inserting "(ZH:  USD)" Zerohedge seems to see an equivalence between Special Drawing Rights of the International Monetary Fund and the US dollar.  Such was not the thinking at the time.  Volker recognized that the extraordinary economic expansion of most countries during the period from 1944 (Bretton Woods) and 1968 was attributable to the stable, predictable world monetary system then in force, and was desperately looking for ways to continue that stability in the face of trade imbalances which threatened to deplete the entire official gold stock of the US.  The concept of the SDR was an attempt to maintain stability while expanding world liquidity by, in turn, expanding the ability of the International Monetary Fund to provide emergency loans to countries in temporary difficulty because of trade imbalances.  The SDR was proposed as a way of expanding the role of gold, not diminishing it.  A small devaluation of the US dollar from 35 to 36 dollars per ounce of gold was attempted, but was insufficient.  Finally, in 1971 Nixon finally decided: "screw youse all, you're not getting any more of our gold.   You will have to keep your dollars and use them as your official reserves."  This was, of course, an extreme breach of faith on the part of the US.  But the rest of the world had no choice but to accept, and suffer the consequences of the inflation that the US embarked upon during the 70's.

Sun, 12/01/2013 - 22:34 | 4205236 The Econ Ideal
The Econ Ideal's picture

The USD's reserve status has indeed lasted much longer than many predicted. Having said that, we have seen more rhetoric and action against the USD in the last 5 years than in all the years from 1968-2008 combined. Likely the history of the USD will follow that of the Sterling - plan accordingly, and take advantage of disinflation if it happens. 

As for the events leading up to 1971 - the "Great Society" was a massive contributor. The U.S. was already bankrupt and never again able to follow a standard, unless it had a considerable rearrangement of "priorities." Current and future generations are paying/will pay the bill. 

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