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Currency War: 140 Years of Monetary History In Ten Minutes
From "why did Nixon sever the link between currencies and gold?" to "is war good for the economy?" Mike Maloney's tour de force through 140 years of gold, silver, and monetary farce is indispensable as major parts of the world enter a de-dollarization phase. As Jesse noted here, after listening to this presentation, one can surely understand why the central banks both fear and covet gold. It resists their wills, but has a natural tendency to be seen as money. Money is power, after all, and greed will too often refuse to relinquish any power or claim willingly, even to its own destruction. The American abuse of financial power for political purposes is causing a bifurcation in global finance, along the expected fault lines, and it will be interesting to see how that develops. Maloney's bottom-line, we are overdue for a new monetary system.
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Your opinion is irrelevant.
To the Asians it is money,and oil isn't.You can fight that if you want, but you
had best change your avatar to King Canute first.
They will never change their mind, but you will.
And we all know the golden rule.
Don't we?
Yeah. But for remedial education's sake...
He who has the Gold MAKES THE RULES.
I'm gonna need a bigger safe to store all this fuckin oil in.
Lol! You mean you can't carry 12-13 bbl of oil around with you but you can carry one OUNCE of gold? I need a day or two to digest that novel concept. That's heavy stuff you just flung on me.
Don't forget you'll need a copious amount of Sta-bil
That's why I chose gold and silver - same safe (size), MOAR content
What is it going to be used for. What VALUE does it posses that makes it different from a piece of paper with a picture of a dead president on it. Gold is worth something because people think it is worth something just like all other "money".
All value is subjective. Dead president paper has value because, ultimately, if you can't hand over x fraction of the value you create in dead presidents, your government will throw you in a cage, or seize your assets. However, when that government is no longer functioning, or has released some new currency, the existing stock of dead presidents' value vanishes.
Gold is valued in and of itself. Even though it's been officially demonetised, it still trades at high values. If it gets remonetised, its value will probably go up by a factor of ten. If it doesn't get remonetised, it's still a very, very portable form of value, with the lowest bid/ask spread of anything other than actual officially-sanctioned money. It has no counter-party risk, and you can hold in your hand. How much of this 'value' is purely psychological is hard to say, but then, as I've already pointed out, value is subjective to begin with.
All your arguments in favour of oil can be made of food, potable water, various tools... yes, fine, invest in them if you want. But there's very good reason to believe that PMs values are suppressed, whereas everything else is being propped up by 'wealth-effect' hungry central banks. I know which one I think has greater potential upside, as well as lower risk. Yes, if the Chinese, Arabs*, and Indians lose their appetite for PMs then the value will drop. Nothing in life is certain... not even ExxonMobil equity.
* yes, the people with the oil value gold... that in itself suggests a tie-in between oil's value and gold's value, doesn't it?
How many barrels of oil do you have stacked in your yard?
Oil Reserves...........the amount and grade can be manipulated. After the 40 days supply are used what then? I think the thought is that Gold is a proven item that holds all the requirements for Trade. Not like today and what has happened. Trust in the Government is GONE. As for the Gold.......whether it's there or over there doesn't matter . Who owns it? Not who holds it. Germany wants Theirs back......the Federal Reserve or the American Government will not send it back in which most think is a timely manner. Trust......No Friggen Way. Hang Them High, leave them and their eyes for the Crows.
As I currently understand it, the UN has been saying that weapons and illegal drugs are the two biggest businesses, which makes weapons and illegal drugs the two greatest forms of "money" ... more than either gold and/or oil. (But then, as my previous reply above stated, civilization has become runaway criminal insanities, and therefore, what makes the least sense makes the most sense.)
Do you always believe everthing the UN tells you?
Like those IPCC reports?
NO!
Which is why I explicitly mentioned that source.
Of course, the UN was set up the banksters, on the basis of hypocrisy. As far as the IPCC reports go, here is a link to the last 7 years of my attempts to figure out the relative truth regarding those reports: Humans blamed for climate change
In terms of reports being written, I would remind everyone that James Burke also addressed this 25 years ago when he said in a very dry serious tone "then, unfortunately, REALITY intervened."
THE symbol of REALITY intervening will be the disappearance of summer sea ice in the Arctic for those not fast enough on the uptake to understand that image of the Western Antarctic Ice Sheet (WAIS) that came out a month ago.
I would like to point out that the IPCC AR5, which will hopefully be completed 31OCT14, has been several years in the making (about six?) and also that there is no guarantee that there will ever be an AR6. While that prospect may bring cheers from ZH, one possible outcome of COP21 in Paris 18 months from now could be that the World Meteorological Organization withdraws it's co-sponsorship of the IPCC thereby delaying, compromising, or eliminating the production of AR6.
The politicians meeting in Paris use the framework convention and the IPCC reports to play "Let's Make A Deal". That makes me think it may very well qualify as a unitary mechanism but my understanding of that concept is still very poor. There is no other basis for making global deal regardless of the fact that the IPCC/UNFCCC may not be absolutely perfect. If certain players in Paris don't behave themselves a la Copenhagen, then they run the risk of having their precious little institution turned into an empty echo chamber for realz and that will herald the planetary scale civil war / cold war 2.0. Moreover, those players are going to get a shock when the deal isn't something that can be made a farce of like Kyoto. Let's call it "GAZPROM DUTY" industrial strength type deal ok? lol Anyway, the message will be clear: you can keep your little plutocratic toy but the bullshit has gotta go.
As you say, RM, things are getting worse faster, and a lot is going to happen in the next eighteen months including two melt seasons. I would bet the farm that every leader of every country on Earth is starting to have a few sleepless nights about Paris...
IPCC AR5? meh, no surprises there ; )
---------
p.s. thanks for reply on peak oil revisited. re-tooling isn't the end of the world. James Burke likened it to life in Petra (h/t Flak!), "lush... but limited."
p.p.s. Happy Father's Day Flakmeister! Guess I was right about TT afterall :(
Thanks... A belated one to you as well...
Merci Meister! Had the third best Father's Day ever! Long before I got interested in global warming I was into music. I thought the Jimmy Page avatar and his 'The Firm' album MEAN BUSINESS were appropriate for ZH lol
About this time of year in 1980 a bunch of us high school pals bought tickets to go see Bob Marley set for MLG October 6. When the sad news came, refunds were offered on the $9.55 (!) tickets but I decided to keep mine. Ten years ago it was lost to me (divorce is all fun and games till someone loses something like that!). I thought I'd given it to a friend for safe keeping but it disappeared and I eventually gave up thinking I'd ever see it again. Last night I got a message from him that he found it...
I always intended to offer it to the Bob Marley Museum and will be sure to do so very soon. In December 1999 at Massey Hall, I had it autographed by Chris Squire and Alan White. Yes had recently written a song dedicated to Bob Marley: "...now my children sing to me...",
The Messenger
Judging by the voiceHe was free to himself so real
We slaved ourselves to sacrifice
More than that we do not know
Then you hear him on the radio
He would play the sacred themes
That my children sang to me
Amazing as it seems
It was the answer to my dream
His heart that touches me
More than that I do not not know
Then I hear him on the radio
Remembering his every word
That my children sing to me
We have seen the world, this ecstasy
Now my children sing to me
This loving place, beyond belief
You got to stand stand to to together
Keep the message alive
You got to stand stand to to together
To keep the message alive
Spirit up moving, spirit up
Rhythm of sunfire
You got to stand stand to to together
Keep the message alive
Listening for his words
He would speak in ancient verse
So we mesmerize a way to go
Reaching out the universe
Reaching out the universal
Not afraid to learn new words
That our children sing to us
We have seen the world, this ecstasy
So his children bring to us
This inner peace, beyond belief
You got to stand stand to to together
Keep the message alive
You got to stand stand to to together
To keep the message alive
Spirit up moving, spirit up
Rhythm of sunfire
You got to stand stand to to together
Keep the message alive
One voice
One world
One touch
One life... truly, truly say it
One world... one voice
One touch... truly, truly say it
Some people realise
Some people see it
From the beginning
One world... one touch
One voice... one life
One touch... one voice... one world... one life
Why was Nixon impeached the forced to resign?
Move along...
English Please, no comprende.
Sorry, had to to read a couple of times
THEN forced to resign.
It's Friday, we've all had moar than legal (to drink/smoke)
The Quiet revolution has quite undone you .
http://andreswhy.blogspot.com/2014/06/the-quiet-revolution.html
Ellinor Ostrum would be amused at the puerile kicking and screamings .
$ lies
Why countries adopted fiat currency - because the U.S. bases were in Europe since WW2. The only country which did not take was the USSR, so it was destroyed with the help of a conspiracy inside. American agent was Gorbachev, whom was compromising that he talked about the location of partisans to German Nazi when he was 12 years old.
The Iron Curtain was coined specifically because the Soviet Union refused to accept fiat currencies.
Sorry for my English but i think you must to know some REAL facts
Kowalli. The Russians kept out Central Banks, Central Bankers didn't like that and years later had their chance. It's the same all over the world.............Central banks, Yes Your Country's , ARE NOT WORKING FOR THE GENERAL POPULATION>
Who do you think runs the Central Bank of Russia?
We know now about central mafia gangsters and what do you think we are gonna do? ^_^
Why countries adopted fiat currency - because the U.S. bases were in Europe since WW2. The only country which did not take was the USSR, so it was destroyed with the help of a conspiracy inside. American agent was Gorbachev, whom was compromising that he talked about the location of partisans to German Nazi when he was 12 years old.
The Iron Curtain was coined specifically because the Soviet Union refused to accept fiat currencies.
Sorry for my English but i think you must to know some REAL facts
The Ruble was unpegged from Gold after the Russian revolution. It's been nothing but Fiat ever since. I'm not sure you understand the definition of fiat currency. The Ruble is Fiat currency and so was the Soviet Ruble. Don't you know the hyperinflations in your history. Just last year you had 6.3% inflation.
http://upload.wikimedia.org/wikipedia/commons/thumb/0/03/Rouble-1961-Pap...
It's said from rus to eng - Ruble backed up by the whole property of the USSR. You know gold is property of USSR too.
It was not a fiat currency backed up by NOTHING.
So just shut up and fuck off. In USSR there was no inflation, there was a way different and better economic system. Jezz...
LOL. Well, US currency is backed up by the "full faith and credit of the United States of America." Try collecting from either the US or Russia when the shit hits the fan, comrade.
Actually not. I can't read those words on dollar, so it's fucking lie. dollar is federal reserv note - paper.
Words - US currency is backed up by the "full faith and credit of the United States of America" is a lie.
On USSR rubels was written -Ruble backed up by the whole property of the USSR. You can't read or what?
You can't see the difference? paper currency is a fucking document.
Gold back up - you can exchange for gold, Ruble backed up by the whole property of the USSR - you can exchange for property, full faith - you fucked up, federal reserv note - the same as fucked up.
USSR currency is not Russia federation currency , so - fuck off.
You americans morons, you can't study, you can't ever understand when someone tell you what's the difference.
Americans know nothing except their msm and don't want to study.
A Russian walks into a bank and approaches the teller.
"This 100 ruble note is shit. give me gold."
"Sorry, no gold today."
"Ruble say backed by property of Russia."
"Is true. Russia back ruble. Here you go."
"What is this...dirt?"
"Property of Russia. Thank you."
Countries adopted fiat currency ultimately for one reason only. So politicians can deficit spend to support their statist goals, and commensurately, so a handful of bankers and backers of bankers can make money.
Its no more complicated than that.
Mike states well why Nixon did what he did. He and the banker cartel knew they could not keep the ponzi going and growing if currency continued to be linked to PM.
Don't make the issue any more complicated than it is.
All the side-issue talk of why this war, and why that policy, and why banks did this and did that and when. All of it are just symptoms of the nature of the system. All of it is just cartel and politician stimulus-response based on how events that are uncontrollable by them unfold.
The Cartel-Politician cabal are architects of macro-level machinations. Detailed consequences of their policies are inconsequential to them. They will make adjustments to their actions when they do see things are not going in their favor. Nixon's action is just one glaring example. Another that comes to mind, only because I have be been reading a lot of interesting history as of late, is the great crime that Britain and the US committed in allowing the sinking of the Lucitania to get the US into WWII in Europe.
The only consolation I take about all of this insanity is that the younger crowd seems to be waking up.
According to Census.gov avg new home prices:
Yr 2000 690 oz gold / home
Yr 2005 660 oz gold / home
Yr 2008 325 oz gold / home
Yr 2010 218 oz gold / home
They didnt show home prices beyond 2010
Because of the uncertainty in today's market and the direction events might take the subject of "value and worth" continues to garner a fair amount of interest and remains relevant. History is chucked full of distorted markets, debts unpaid, promises unfilled, and bubbles.
These "interesting times" play havoc with the value of things and what they are worth. Like some of the cruel games children play you don't want to find yourself without a chair or holding the "hot potato" when the game ends. Below is the full article sporting a minor facelift and update.
http://brucewilds.blogspot.com/2014/05/value-and-worth-constantly-change...
I finally figured out what bugs me about Mike Maloney... It's not his over simplifications, it is that he's looking at the history of finance from an economic perspective as opposed to a banking perspective as a foundation for "making sense of it all" and predicting the future of banking. Finance and Economics are NOT the same thing. (FWIW I was a banker, not an economist, so I'm biased - get over it).
Even with a fixed and fully convertible gold standard there is currency fluctuation. One needs merely to look at the cross border interest rates and discounts on commercial paper (i.e. banking and duration mismatch). If one sticks to economic textbooks and theories they'll NEVER see it.
Starting with Germany 140 years ago is myopic (but does take more than 10 minutes). In order understand the modern history of money (and the clearing and settlement function of banks) you need to start with the DUTCH in the 17th century (Amsterdamsche Wisselbank), the birth and rise of the BoE at the dawn of the 18th century, and then the FED at the dawn of the 20th. There's a reason one of so many people's favorite boogeyman is called the Bank for International Settlements, settlements didn't and doesn't just have to do with the Treaty of Versailles.
The current "End-the-FED!" debate isn't anything new. It's a rinse-repeat rehash of Keynes v Hayek the better part of a century ago, which was a rinse-repeat rehash of Currency-Banking debates a century earlier.
The previous debaters weren't stupid (the victors weren't always honorable in there methods, but there were significant valid financial and political reasons as to why things developed the way they did. Looking to the future while ignoring the relevant history and the disciplines that determined that history (banking and politics) simply will not yield a correct predictive analysis of future developments. Government's have reigned in central banks and restored both gold backing and even convertibility countless times before, and done so in response the same structural issues that the banking system faces today, and yet we're still here AGAIN.
Sure, this time it's different...
Einstein had a term for such unfounded optimism and disregard for history.
Government's have reigned in central banks and restored both gold backing and even convertibility countless times before, and done so in response the same structural issues that the banking system faces today, and yet we're still here AGAIN.
Piece of cake? wow, so you're telling me there is a chance? that government will stop growing?
Einstein had a term for such unfounded optimism and disregard for history.
You mean pessimism?
Since despite every restoration of the currency... we are where we are -- the "fix" (and any victory over the banks) is fleeting.
So it's irrationally optimistic to think that a saner monetary order will carry the day. Such an order might make a guest appearance for a couple weeks or at most years, but the timing (and the taxes, or black market) have to be just right in order for the little guy to profit from the fleeting sanity/opportunity, and it means walking away from everything tha one has fought for at the most psychologically painful and counter-intuitive moment to do so.
Hell Urb,
As a banker you must know a bit about how a bank can whip up the value of $100,000 out a $10,000 deposit and create that value out of a data entry whereas Joe the plumber has to trade 2 years of effort to "create" that same amount.
I'd have to say that gives the banker a decided advantage over Joe while adding insult to injury by the fact of that counterfeit credit now has debased Joe's value of work by adding the counterfeit "labor" into the stream of money circulating.
I know you didn't invent the system but you can't be unaware of the fraud that has taken place.
It is what it is. Right? Inflation is a tacit admission that the dollar has been debased by X% .Without fractional reserve banking, this fraud could not be committed.
Fortunately, a bank cannot "whip up the value of $100,000 out a $10,000 deposit" despite what Mike Maloney says.
Some simple numbers:
US Treasury debt owned by the public 12.568 trillion (this was whipped up out of nothing, but it is actually larger than what follows)
http://www.treasurydirect.gov/NP/debt/current
M2 Money Supply 11.322 trillion
http://research.stlouisfed.org/publications/usfd/
And then for the Banking sector:
http://www.fdic.gov/bank/statistical/
Total Bank Assets: 13.854 trillion
Out of 5,809 institutions there are only 22 with assets in excess of 100B and only 4 with assets in excess of 1T
The concentration of fed funds bought & sold, repos & reverse repos, and derivatives concentrated in the top 4 banks dwarfs their already obscenely unethical and systemically dangerous 44.5% share of total assets
Total Deposits: 10.516 trillion (which is part of)
Total Liabilities: 12.196 trillion
Net Loans and Leases: 7.172 trillion
And then looking at the rest of the assets that comprise the 13.854 trillion: Loans & Leases 51.8%, Securities 20%, Cash 12.6%, Trading Account Assets 4.2%, FF & Reverse Repos 3.0%, Goodwill 2.5%, All Other Assets 5.9%
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Fractional Reserve is only a small part of the problem, but FULL RESERVE is a large of why the evil Rinse, Repeat cycle of failed reforms HAS NOT BEEN BROKEN every time it has been tried.
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The first step to break the cycle of evil is to break the MONOPOLY - this has to be done on a whole bunch of levels, some of which include:
1) Solely tying the money supply to the creation of government and bank issued debt has to go (which also addresses granting the banks a monopoly skim on the proceeds of money creation by the issuance of government debt), and allowing money to be created by the federal government borrowing needs to be completely eliminated.
2) Expanding the range of institutions participating in the creation of money (bring back the Subtreasuries, establish public banks at the State and Municipal levels, the establishment and licensing of commodity banks, and bringing certain types of NBFIs into the cycle without intermediary banks.
3) Creating the legal framework and mechanisms to allow digital money to exist outside of banks (if you have USD in ANY form other than paper notes- it exists ONLY at a licensed bank (regardless of whether this is supposedly segregated cash in a pension plan, a PayPal or equivalent account, even BitchCoin Exchange balances, these institutions all have to use intermediary banks).
4) Creating the legal framework and technical mechanisms required for "self-extinguishing money" (this is actually not THAT difficult as it existed in the pre-digital days of the real bills [receivables] trade, before even electric calculators).
5) Abolishing legal tender laws and the monopoly on issuance of bank notes by the Federal Reserve (this infringes on the contracting rights of private parties and prohibits competition among note issuers who might have a superior product - the notion that JPM and its toxic crap balance sheet creates notes that trade at par with my local CU and its mortgage based balance sheet is ludicrous).
6) Abolishing Universal Banks and developing specific regulations for Retail, Commercial, Investment, Custodial and Commodity banks as well as CUs.
7) Instituting effective concentration risk/market share caps - specifically the banking units of JPM, BoA, Wells Fargo and Citi must be broken up (this is in addition to revoking their authority to operate as universal banks, which necessarily involves commingling funds since money is fungible)
8) Fixing Fractional Reserve - worthy of and requiring an entire book in and of itself, particularly since the last time I checked the reserve requirement calculation regulations themselves were about 1000 pages. However, there are 2 critical points: 1) there needs a mechanism whereby liquidity CAN be injected into the system in times of crisis to facilitate clearing and settlement, and that liquidity is WITHDRAWN once the crisis passes (the abolition of legal tender laws and the creation of self-extinguishing money would facilitate this. 2) The type of reserve and its discounting must be appropriate for the type of bank and the services it offers - a situation which mandates negative absolute rates, regardless of inflation would be an unmitigated disaster and in addition to impoverishing the masses and some of the banks would then concentrate real wealth in the hands of those bankers that survive.
"Government's have reigned in central banks and restored both gold backing and even convertibility countless times before, and done so in response the same structural issues that the banking system faces today, and yet we're still here AGAIN."
The law of cycles never goes away.
Einstein's defining Insanity...............But what mainstreet sees is that YOU, a Banker. A person who is non productive yet controlling the flow of the spice of life, in all manners. The way Bankers create wealth out of nothing and take more than a fair share of Profits. Bankers who shut down businessess for their Pension funds or whatever profits they can STEAL. It maybe within the Laws BUT these laws were wrote by those in control, not those who struggle day in and Day out to feed their meager existance. A stroke of a pen can remove someones life's savings.......Yet you protect that? Do you not understand why the cheering errupts each time a BANKER "COMMITS SUICIDE"? We know that most bankers didn't do it willingly.
The Jewish People's due to religion were the first to practic Usary, and then Banking came next......Centurys later their skills became more ruthless and thru control (MONEY/Land/Businesses) passed down each generation to generation. This accumulation ensured the controls were firmly fixed.....
Now............The control of Banking, media, and thus Government thru laws have shackles on everyone. Even money (FIAT) is based on debt? WTF is that. See, we like to think that holding Gold/Silver is a storage of Value and when you work holding something of Value is more of a reward than working to hold someone's debt, understand?
The pendulum has reached the end of its swing, it will stop and some will not survive. The tide will then turn and a new system will evolve and due to the internet, truths see that leaders want a NEW WORLD ORDER. This will get shot down. The general Population will come to see that it is a slavery forced on us all and when you have nothing, you have nothing to lose..........I don't know who you have dealings with but many Bankers and their families will also end up in misery..........and justly deserved...........JMHO......
Do You Sleep Well ? As a side note, truth doesn't matter..........perception is the Driver. The IMF with it's Mercinary American Army will offer some protection, for a while but still like Rockerfeller we are human and DIE , some are willing to help that allong if given a chance. ;0)
It is perception (of the masses of the electorate) that has doomed every effort to restore backing to the various currencies in countries with elected governments worldwide for centuries.
The current "End the Fed" crowd is frankly less articulate and knowledgeable of banking mechanics than previous iterations of the "End the BoE" crowd. This is not an omen of successful or lasting reform.
The problem with the system is the existence and practices of a PRIVATE MONOPOLY of the [US] money supply, which operates in collusion with a network of other PRIVATE MONOPOLIES with similar strategic interests worldwide. CLEARING/DISCOUNTING and Settlement is a function of SUPPLY and DEMAND and is normally expressed through INTEREST RATES.
PRIVATE MONOPOLIES allow the banks to further manipulate interest rates on a longer term basis (as opposed to the lower-level daily LIEbor manipulations) through manipulation of the money supply to suit their own and the politicians' ends.
Maloney is looking at banking strictly from the perspective of a bank depositor, and not from the perspective of the banks themselves, much less the governments they are bed with.
Would a rational person propose change to the auto service industry based solely upon his experience/perspective as a consumer with his or her mechanic and his macro perception of the auto service industry? Such an approach ignores the operational considerations of the manager of his local garage, the corporate considerations of any other garages in the chain, as well the intricacies of the dealer and part supplier networks.
Maloney is looking at banking strictly from the perspective of a bank depositor, and not from the perspective of the banks themselves, much less the governments they are bed with.
Perhaps not in this 10 minute video. But watch episode 4 of his series. He makes damn clear who benefits from the banking system and its not you and I.
...but there were significant valid financial and political reasons as to why things developed the way they did. Looking to the future while ignoring the relevant history and the disciplines that determined that history (banking and politics) simply will not yield a correct predictive analysis of future developments.
Significant for whom? All this high-falutin talk about not understanding the history of why banks do what they do... Or that the issue is somehow too complex to resolve simply....Aaaaggghhhhhhhhhhhhhhhh!!!!
What I know and what I am intelligent enought to decipher is that I am getting F_____ and have been since I started earning a living....and actually prior to that as my parent's purchasing power eroded away!
The issue IS simple! Fiat currency is a fraud, a con. Fiat currency exists ultimately for one reason only: so politicians can deficit spend to support their statist goals, and commensurately, so a handful of bankers and backers of bankers can make money. The feel-good euphemistic goal of "price stability" is a sham. What these bastards count on is you and I continuing to bust our asses and keep on producing enough GDP to counter-act their inflation, so that prices "remain stable." The system works (for them) as long as you and I keep producing. The shady secret is that our purchasing power would INCREASE over time with a PM-backed money. They couldn't run the scam. And what limited supply of PM exists will ALWAYS be enough to purchase continued increases in wealth....at lower prices. Also, the limited availability of and ability to produce more PM ensures that any increase in supply of PM could NEVER outpace the productive capacity of free men in a free, truly capitalist, society.
You and I have been screwed. Get it in your head.
I WANT SOUND MONEY WHERE NO F'NG BANK CAN DESTROY THE FRUITS OF MY LABOR!
Jeesus, whatever the pitfalls of a AU-AG backed currency, I'll damn sure take those risks over what I've been handed for the last 60 years.
I AM PISSED. Stop the apologies and stop defending this insanity!!!!!!!!!!!!!!!!!!!!!!!
The quote I posted the other day was from the guy (anthropologist, bioligist, sociologist, but neither a banker nor an economist) who coined the term "survival of the fittest" and wrote State Tampering with Money and Banks after the THIRD suspension of convertibility within 15 years following the passage of the Peele Act.
Ignore history at your peril, you are doomed to repeat it. Even with the limitations of a mercantilist framework (which still secretly underpins the supposedly "monetarist" financial system) the 150 year old indictment of the banking system is more articulate and more accurate than anything being advanced today. If the opponents of the current system cannot step up their game to even the level attained 200 years ago, much less by Hayek and others 100 years ago, then the notion that reason and values might carry the day is laughable.
If economics and banking isn't your cup of tea, then I would recommend examining the process of money/capital flows from an industrial engineering or cybernetics standpoint. With the latter, one is at least prepared to take on the MIT central banker cabal in one of their alma matter's more specialized disciplines that actually helps understand why the cancer of the banking system has evolved the way it has.
BTW, I did watch episode 4 (which had a gaping flaw on par with "adult" AGW proponents who use this (or similar) misleading and fraudulent depictions of the process of forcing).
Lord Blackstone on fractional reserve banking at the beginning of the eighteenth century is as clear and concise as can be. The fact we still have it speaks to a different calamity, one that underlines the inability to change or work within the established systems.
You CAN'T change the system, we are powerless to do so. We CAN withdraw from the system and encourage repudiation of the law and State.
Unfortunately, this will create an unmanageable chaos and inflict terrible pain upon most people. There is a reason we have been put in this precarious position, to insure we never choose the return to a path of liberty. The promise of destruction forces us to choose slavery.
Not a new monetary system but removal of a criminal regime, then we throw them to the creditor dogs after we revoke their citizenship.
The doll liar and the McDonalds clown have a lot in common. Both are very sinister.
Well done. MM entire series is very good, even if you do not agree with his conclusion. My problem is he only sells gold and silver. How is he any different than a real estate broker or stock broker? I don't know like I said good info but in the end gotta use your brain and follow your gut on any investment.
Would you feel better if he also sold annuities?
Interesting Oil and Gold debate on ZH. Over the years I have heard many interesting responses why both are important….
I met an immigrant from Hong Kong who had become a IT manager at the bank I was dealing with. After lunch one day with this manager and others the topic of gold came up as we sipped the last of our coffee. When the manager heard our responses about gold he chuckled and said “…you in America see gold far differently than people in Asia do…we do not see gold as wealth…we look at gold as something light and valuable to be transported on your person to help you in your travel’s…for example when war comes to your village and you must quickly leave with little or no food…we know you will not be able to eat your gold as you run from this war…however it may get you at the beginning of the bread line to trade for food before others with no gold starve…” He convinced me I needed gold as a reserve.
I was at a SHARE conference in the mid 1990s for IT people using large IBM computers. At the end of the conference day I was at their happy hour when an old friend saw me and said “…join our gang...” He then introduced me to his associates at his new company Exxon. After some small talk I met the head of their IT (data base) group. He was interesting because he was a non-IT manager and had been all over the world. He and I hit it off because we found out we were raised only miles from each other and attended similar schools.
He said to me something that really stuck in my head (even through the drinks).
“…The idiots in this world at going to have a tough time of it this next century with oil…where ever I go I hear the same thing…no more cheap oil…no more cheap oil…Its going to become the currency, you know…I suspect wars are going to fought over this stuff (oil) when they begin to realize all the cheap stuff (oil) is gone. … Imagine just the affect on the U.S. if oil shoots up in price big time. Cheap oil has been the life blood of this country for 150 years but no one knows it…You drive on oil, your food is delivered on oil, oil heats many homes, etc….yet no one is prepared for cheap oil going away…” Well I listened to him. I have traded CL futures as a hedge ever since and have some alternative energy items in use.
I like where you are coming from Urban Redneck (OK - I have a banking background as well, so perhaps your perspective resonates), but I wrestle with where you are going, because my energy background tells me that this time it will not be the same, and in fact it will most likely not even rhyme (SLC). In all previous instances, there was the option of expansion in some other jurisdiction. Today we have both a limit to energy based expansion and no true alternative place that can be relied upon to grow, as all jurisdictions are essentially beholden to common globalized banking practices. The last time we backed away from the latter, we had this little altercation called the first world war (and to this day we are still arguing about why that happened - but that is another story); however, this will be the first time around for us in dealing with the former (not counting Easter Island and some other very historic or small enclaves - although if we are to use these examples as a guide - nothing good came of them either). It is for these reasons that I believe we will have a very difficult time managing the reset - hell, we cannot even sort out who gets to keep their wealth when a city or a county goes bankrupt - and those entities do not own national armies to make their point (well, they have armies of lawyers, but in a real mess, they would just be the first convenient targets - possibly third after politicians and bankers). Historically we have had safety valves to redirect the pressure when it rose too quickly, but today we have welded shut the relief valves and repiped everything back into the same pressure vessel. Not sure how we are going to deal with over pressure this time around - the vessel may shrapnel, and that will be messy.
Very messey should be expected. I contend the primary reason that inflation has not raised its ugly head or become a major economic issue is because we are pouring such a large percentage of wealth into intangible products or goods. If faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar. Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply.
The timetable on which economic events unfold is often quite uneven and this supports the possibility of an inflation scenario. A key issue being one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment or stop driving the twenty miles to work? Answer, it could be months before your car is repossessed so you buy gas. It is important to remember that debts can go unpaid and promises be left unfilled. Is this possible and if so where would that leave us? Chaos and major disruption would result from such a scenario. As we have seen from the economic crisis of 2008 and following many other unsettling developments legal actions can continue to drag on for years. More in the article below.
http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....
Absent a global command economy the big question is what price will it take to clear and settle future cross-border trade in trade in calories/btus?
With the continuation of unconstrained fiat currencies, the decreasing supply of calories/btus at a given price should demand a higher relative price (which would imply rising prices of those specific goods, irrespective of any inflation BLSing at the macro level).
If the suppliers of black/soft gold want yellow gold in exchange their goods, then a central bank would be suicidal to tie their domestic currency supply to a minuscule and diminishing supply of yellow gold, and those governments would very likely confiscate/tax yellow gold out of private ownership to meet the strategic imperative even absent backing their currency with it.
Given the high moment of inertia to reorging the whole global currency paradigm I think it's going to be very messy, which is why my savings are largely in geographically diversified physical gold (starting in LIRP and increasing the percentage through ZIRP and now NIRP), and why a significant portion of savings that are invested are allocated to mining and energy equities, but then I am too busy to trade in and out at the Berspanke/Yellen game of musical chairs which is tied to that moment of inertia.
But on the corporate side where I have numerous daily transactions and a huge monthly cross border trade settlements, I really don't see that gold is practical beyond the supply in the "petty cash" box, it is not likely to help me import a tanker car of diesel or export a container load of pineapples or industrial chemicals.
But on the corporate side where I have numerous daily transactions and a huge monthly cross border trade settlements, I really don't see that gold is practical beyond the supply in the "petty cash" box, it is not likely to help me import a tanker car of diesel or export a container load of pineapples or industrial chemicals.
Yes that is true...TODAY.
But after the Credit Bubble bursts Gold will, once again, be used as collateral as the trust in other Bank's solvency is in question and Credit Freezes.
With the problems in the rehypothecated Aluminum and Copper over in China (which is likened to the tip of an ever present iceberg of Derivative Credit Swaps exposure which is threatening the World Economic Titanic...now way too late to change course...with the consequence that a very small amount of surface area damage to the hull sunk that ship.) we are headed for a 2008 Meltdown redux.
I do not think that the pumps, after this crash, will be sufficient to reflate the ship as it takes on ever increasing volumes of liquid(ity). You know...Fluid dynamics and all o' that. So do tell me...How important is that supply in the "petty cash" box going to be post collapse? Will that "petty cash" box fit in the Lifeboat...as we know that most stewage class passengers are going to drown?
The petty cash is intended to cover payroll in a banking shock so people don't starve in the short term, nothing more. I certainly wouldn't try pay down the balance sheet debt to bankers with it (hiring a lawyer to fight the bankers... perhaps).
Most of our assets are capital investment -- machinery/vehicles and to a lesser extent land/buildings. The big unknown is buying diesel btus, which to some (limited) extent could be replaced people's excess calories (at least on the farming side), but more realistically inventory and work-in-progress already are and would continue be used to finance fuel and other prodcution expenses.
The challenge in this is how does one clear and settle the trade in the midst of a crisis? If some new system is not in place in short order, then the worldwide death toll would be expressed in billions, so when TSHTF and the corrupt politicians (finance ministers) and their bankers meet to impose whatever comes next-- what sort of compromise could they reach in short order? (Whether it would actually work, who knows?)
Gold (almost) always works on an individual level (with huge variance in the discounts), but going back half a millennium, the paper contracts to buy and sell goods internationally have usually been cleared and settled with another piece of paper, regardless of whether a gold standard is in place (this is actually why there is still currency fluctuation and arbitrage when everyone is supposedly on a fixed gold standard). Payments between governments are another matter, but then gold is the money of kings.
So what comes after fiat? There is a simple computer hack for that.
Is it true or false then that the United States is keeping 175,000 metric tonnes of Gold stored in The Bank of Hawaii?And can the President answer that question?
Obozo will release a press statement on that after his return from his alpha
centauri vacation.
Even though Hudes is crazy, and I am certain that she cracked due to the stress of her job at the World Bank, there is an element of truth to her story.
As to 175,000 Metric Tons of Gold in Hawaii...since that is equivalent to being 4000 Metric Tons less than of ALL OF THE GOLD EVER MINED throughout World History...I am sure that is an exaggeration and inaccurate...if not an outright delusion.
But I am also certain that the World Bank is not transparent...is extremely opaque...and has a lot of secret dealings to which Hudes was privy. All is not as it seems and crazies can sometimes be quite intelligent.
Just because I may be crazy does not mean that I am stupid. There is a fine line between Genius and Insanity and it is sometimes extremely difficult for most people...whom are neither Genius nor insane...to discern the difference as they, from experience, know nothing like it.
We are all interconnected for better or worse. A bad apple can spoil the whole basket. Welcome to the world our leaders have designed or allowed to form. Whether by design or merely as a byproduct of globalization we have weaved a web of financial transactions that circle the globe. Over the last several years as money was printed by the central Banks it was not contained in the countries where in was printed.
This money flowed across borders influencing and distorting markets and prices across the world. Some people have been calling for a "world currency" for years. the saying "one should never let a good crisis go to waste" means that a meltdown with high levels of fear would present a perfect opportunity and catalyst to advance this agenda down the field. Remember many people with agendas have a lot to gain when a major shift in the currency markets takes place. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/02/contagion-may-lead-to-new-world-c...
"The illusion of freedom will continue as long as it's profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way, and you will see the brick wall at the back of the theatre." Frank Zappa, 1977
A new global currency will also most likely come with a new world order.
Brought to you by "BUY GOOOOOLD"!!!! Sorry, but no country will ever return to backing their currency with gold. Its far too limiting.
Yup to "Its far too limiting" or probably better to consider it not malleable enough to create on the fly whilst stuffing your population in the process.
You do not press a button to create trillions of gold but you can do that with electronic fiat.
Currency is exciting when times are good.
Currency loses its thrall when it takes a wheelbarrow to carry your pocket change.
So even though gold is far too limiting for expansion, it provides food when others are hungry.
I knew a doctor who was in the process of escaping the clutches of the Nazis. He had already received word from the chief of police that the Getapo would be coming to his home. He and his family were able to get a ride in a cart because he had gold.
He was also able to purchase tickets on a ship leaving for Mexico because he had gold.
In neither case did the gold make him rich. But it made him free.
Sure Nixon took the US off the world standard / or all onto fiat. A bad move for populations, at that point the bankster class could bring into existence as much as they wanted with no metrics to observe what they were doing.
At that point Nixon also created modern day slavery where no matter how hard you work and not tied to race neither, by never being able to get in front you are a slave.
In addition if not able to get any assets the bankster class drives the poorest to nothing and where revolt and anger will eventually come from.
War will not be global or between nations neither but civil wars between asset and non asset classes within nations.
On the new currency, who the fuck you going to trust to bring it into being? Erm the US? Russia? China? EU? UK? Japan? ... or the IMF? World Bank? All corrupt, untrustworth and in it for themselves and for sure not through traiding fairly.
Not a chance dude, thats the scenario.
"is war good for the economy?"
The roaring 20's was a peacetime boom. The roaring 90's was a peacetime boom. Both ended in economic depressions.
What is good for the economy is bad for the economy. 100% of booms end in a bust.
There was a deep recession after WW1. There was a boom after WW2. After WW2, the U.S. was producer to the world, a situation that did not follow WW1. In the wake of the Vietnam War, the U.S. experienced major price inflation. The 1991 Gulf war was over quickly and did not have an appreciable effect on the economy. Each war has a unique effect on the economy, depending on its circumstances.
Wars, the favorite sport of monarchs, politicians and banksters are the cause of monetary inflation throughout history. They are good for war profiteers, but the general economy suffers as this is really just a variation of the "broken window" theory of economic growth. Wars are malinvestments of the most egregious sort... they produce no return, only enrich their promotors. Using a portion of your GDP to destroy the enemy"s GDP is not in any way accretive. Blowing up Baghdad and then rebuilding it was not in any way wealth enhancing, in fact it destroyed wealth. However with the current non_GAAP accounting methods... it shows up as real GDP.
Superb video to show "regular folks".
As is his whole series, including the following one, which is an excellent summary:
http://www.youtube.com/watch?v=iFDe5kUUyT0
Very nice, honestann. I am sending the link to 50 people on my "List".
In the mean time the Yuan-trading expansion continues worldwide.Add Vancouver and Toronto.http://www.bnn.ca/News/2014/6/12/British-Columbia-looks-to-create-offsho...