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Steen Jakobsen Warns "Things Are About To Take A Different Turn In 2015"
This article is based on an interview conducted by Claudio Grass, the Managing Director of Global Gold based in Switzerland, with Mr. Steen Jakobsen. Mr. Jakobsen is the Chief Economist and Chief Investment Officer at Saxo Bank, where he has served for a total of 14 years, including two years where he left to act as Chief Investment officer of Limus Capital. He is a renowned economist and trader with more than 25 years of experience in the fields of proprietary trading and alternative investment. The topics covered in the interview range from monetary policy to business cycles and precious metals.
Current monetary policy has made the public more aware and more critical of Policymakers
Mr. Jakobsen previously described the western central banks’ policies of quantitative easing (QE) as “unconventional”. He has always made an analogy that doing quantitative easing and easy monetary policy is like breaking your arm: putting a cast on it protects the arm from further damage, but keeping the cast in place for 5 years results in a loss of 90% of muscle power which is exactly what quantitative easing does to the economy. He points out that there is no empirical or practical indication of any link between low interest rates and easy monetary policy and the ability to regenerate growth. According to Jakobsen, growth is driven by the optimism and willingness to invest in real people and real jobs. What QE does is simply that the individual gets paid through and by the virtue of quantitative easing with paper money. Bonds can be bought with zero interest and houses are acquired with a yield less than 1.5%. This situation creates bubbles and makes the business cycle worse. Jakobsen argues thisis ironic because this whole exercise from the central bank, of course, is meant to minimize and counter against the downswing in the business cycle.
People are becoming more critical of our current monetary system. In the past six years, central banks have promised us growth within six months’ time. They and the whole monetary and financial system have lost credibility. The banks’ profit to GDP is the highest in history in an economic environment where we have the highest amount of unemployment since WWII. There is something very wrong with the way the system works and this is all due to the overemphasis on trying to minimize the business cycle. The real conclusion of QE can only become visible if we experience the full business cycle. In Jakobsen's view, we have never been allowed to have a down cycle since 2008. But now, there is finally going to be a down cycle because central planners can’t print more money. As Jakobsen puts it: “Now is the time for the real economy to take over”.
Jakobsen is a firm believer in the business cycle, and sees a seven-year cycle in play. The last peaks in the cycle were in 2000 and 2007. Before that, it was in 1993, and before that, it was in 1986. There are exactly 7 years between the peaks and the lows that followed and that is why he is so optimistic about 2015. We will see a new low for everything next year, which could trigger a significant improvement towards year-end. Mr. Jakobsen believes that things are so bad they can only get better. Take Russia, for instance. Today it is minutes, maximum days away from having capital restrictions. Capital restrictions are also in place in Cyprus and in Iceland. This suggests that the world is turning inwards and not outwards. But, according to Jakobsen that creates more crises and not less crises, and that is good news!
The West is over-indebted, growth is near zero and there are no growth impulses on the horizon. There are not many options left. Politicians would prefer to create inflation. But Jakobsen believes the only solution is haircuts. The investor will take a loss but everything will be better the next day. He clearly and firmly believes that a haircut for Greece and a haircut for Portugal is exactly what they need because underneath all of this, their competitiveness is now at a level with Germany for the first time since the introduction of the Euro. He goes on to explain that they have taken the internal devaluation, but they are still being front-loaded with interest on debt which they pay off in the first six months of every year.
Central banks understand that interest rates cannot go up. At zero interest rate you can carry debt for a long time. But Mr. Jakobsen argues that the real challenge is if the central banks become successful in raising interest rates. That, he says, will cure everything. However,every single goal stated by central banks and policy makers actually makes things worse. According to Jakobsen, what needs to happen is to have low interest rates for a considerable time and have the real economy take over. If the haircuts do not take place, the world will face a huge risk where a collapse in the long-term debt cycle would take place.
Focus on the micro-level!
From a business cycle point of view, Jakobsen believes there could be a potential recovery. He says:
“As you know, I go to over 30 countries and what really makes me positive is that wherever I go, whether Argentina, South Africa, Australia, Indonesia, wherever, I always meet smart business people, people who want to do the right thing, people who work hard. And this is in countries which are perceived to be negative on a macro-scale. So, what I am really arguing for is different, I think on the micro-level. I think entrepreneurs on an individual basis are strong enough and know what to do in a crisis and do what is right, maybe not the first day but over time you will. So I think the seven-year cycle is more relevant for me, because I think it takes seven years, maybe four years for all the policy mistakes to run out of steam and then the real economy takes over. It is really my firm belief in the little guy, the little business man, the SMEs. Don’t forget, if you have a debt, someone else has a credit, right? Of course, what we’ve seen over the business cycle is that the total levels of society remain the same but if the levels come down through the haircut, we will be in a better position.”
Jakobsen is famous for his many travels and describes himself as a “traveling economist”. He is quite positive about what he has seen in 2014. Although he has always been perceieved as “negative” in recent years, it appears this is the first year where Jakobsen is being perceived as naively optimistic. His observation is that people are willing to sacrifice for the first time after six years in this business cycle. The huge number of elections in 2015, with the UK being the most prominent one, as well as Sweden, Greece, Turkey, is going to have a huge impact. People are not going to vote for their money but where they want their society to go, he says. There is a discrepancy in a social sense, i.e. in the non-ability to accept the inequality in society.
Mind how Jakobsen focuses on the business cycle and the micro-economy activities, rather than macro economy and policy making. Jakobsen considers 2014 as a big micro-year and it has been confirmed by all the people he met. He is very clear on the point that government and central planning is not helping the world. To illustrate that, he explains his Santa Claus anecdote which he always refers to in his speeches towards the Christmas season. In it, he explains what he writes in a leter to Santa:
“Dear Santa Claus, I will be a good guy next year, despite being fifty years old. I’ll be a good guy next year, just grant me one wish: I want you to take all the world’s politicians. I want you to take all the world’s policymakers. I want you to take all the world’s chief economists like myself and then I want you to make a call to the Prime Minister of Australia and I want you to borrow a big plot of land. You put in golf courses, tennis courts, nice restaurants, swimming pools, hookers, whatever all these guys always use anyway. And then I want you to seal this place for four years and I promise you, Santa Clause, the world will be growing at 3.5% with 1.5% inflation. Unemployment will nowhere be higher than 1%. And the world will be better off. And my proof is always 2 things: Belgium was without a government for two years. Every macro indicator improved during those two years. And the other one is the US during the Clinton administration. Clinton was president for eight years. Except for smoking cigars, he didn’t do anything politically because he was in no position to challenge the Congress, which means he had a lot of ideas but never implemented anything. So he had eight years of doing nothing. And that is the only time since WWII that the US had a budget surplus. If you ask me to become president, I will promise one thing and one thing only: I will promise you, I will not do anything for the four years I’m in office. I will help you go sell your stuff, I will help you talk to people, I will meet people on the street, but I will have no initiatives. And I will make one law clear: For every new law I introduce, should I introduce a new law, I will take away two old laws.”
Gold will likely go higher in 2015
Being the Managing Director of a bullion service provider, Claudio Grass explains that gold is one of the safest assets. In contrast to most other assets, it is something that has been highly valued for thousands of years and if owned and stored correctly lacks any form of counterparty risks. Gold is a form of monetary insurance, especially in the current environment. What is Steen Jakobsen’s take on this viewpoint? In fact, he partly agrees. As an economist and as a practical guy he has a hard time with the argument of having the safest storage of value in an asset you dig out of the ground. As an economist, he would rather invest in people and in things one believes in than in gold. But having said that, of course the reality is that gold is the one asset that survived over time and throughout history and not only decades, but centuries and thousands of years. So he buys the argument.
Does Jakobsen own gold? “Absolutely”, he says, explaining he does so because of the need to own gold as an insurance. There are going to be serious questions raised to the central banks and the role they play in the economy today. Effectively, the central bank bosses are the generals of the economic wars through the currency devaluations we see. It is easy to find things to dislike in the currency space but it is very difficult to think of things to be long, except for probably the Swiss Franc, gold and maybe once in a while the Norwegian Krone when it is very weak. Gold always becomes a first refuge and a solid one.
When it comes to gold manipulation, Jakobsen admits not being a fan of conspiracies. Having done this job for 30 years, he argues that at a certain time of the day you can place EUR3 billion and it doesn’t move the market, and another day you can place EUR20 and it can move 5 figures. According to Jakobsen, it’s all a function of liquidity. Do the central banks buy and sell? Absolutely. Do the minters and producers who have the inside scoop take the opportunity to make some extra money, that absolutely too. However, Jakobsen, based on his long experience, argues that “over time, justice prevails in the sense that gold eventually will trade at a price that is relatively close to the market forces”.
On the matter of the referendum on the Swiss Gold Initiative, which was rejected, it is Jakobsen's belief that it is irrelevant how much gold is held by central banks. He argues that if the vote had gone the other way, it would have raised the question whether the central banks should back more of their money with gold. The price actually showed it was irrelevant. People expected gold to sell off dramatically as the votes came through. But it didn’t. We should not confuse the need to hold physical need with some form of a gold standard, says Jakobsen, explaining that there is a practical reason why someone wants to be long gold. What has really depressed the gold price was the low inflation and the strong Dollar which, according to Jakobsen, will be turning in 2015.
Jakobsen argues that in the current economic environment that what a metals trader needs to focus on is deflation. When deflation bottoms out, which is something likely to happen during Q1 of 2015, it will be the biggest buy signal for metals. Jakobsen's base scenario is that Q1 and Q2 will become the worst part of the business cycle with the lowest inflation expectation, the lowest growth, the lowest ability to do anything and increasing volatility at the same time. But he believes that as this low energy, as these low interest rates and as the terms of trade for Europe improve, we will see a better second half than we’ll see a first half. And underneath that, the inflation expectation should pick up. Jakobsen sums up his outlook for the near term saying:
“I think right now, gold is overall driven by a strong Dollar and negative inflation expectation. I think both will very much stabilize by the end of December and as we come towards the end of Q1 we’ll see very clear signs that the crisis is getting deeper but that inflation expectation is coming back. I am increasing my exposure into metals and commodities; I am already quite exposed to commodities through aluminum and mining. I’ve been buying very slowly into mines. I think actually metals, mines and people's real jobs are coming back. And that is good. Low demand is good for inflation… so for the first time in many years I’m actually seeing a better end to next year than I am seeing an end to this year.”
This full interview is available her in the newest Global Gold Outlook Report.
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They can always print more money.
Exactly. They will just quit telling us they are doing it.
But, as Argentina shows, they can only hide it for so long. Same with Venezuela. Then come the hard capital controls. Soft ones are already in place.
Fundamental Law: "If something cannot continue forever; it will stop."
We know the current trajectory of the creation of money and credit (i.e., 'debt') cannot continue forever (or even much longer) on a finite planet with a finite population and finite resources.
The only remaining question is when does it stop.
First and foremost, gold and silver are money.
They also act as insurance.
Make no mistake. TPTB are going to use every trick in the book (and new ones) to take privately held gold back in their hands.
You don't think they have to at least a certain amount? How has the Federal Resrve not been audited? WHy does JPM have access to the NYFRB's gold vaults via underground corridors? Does China have the public gold in their treasury they say they do? GLD?
Where's Z gold, Labowski?
His seven-year business cycle is all very well, but his history is based upon a system in which the dollar's role as reserve currency was secure. The threat to that premise makes projecting anything based on the past 70 years a very sketchy game...
goldhedge-good comment, yes we will be watching. every trick; outright control, just like guns. anything that is a threat to liberty or their control...
Of course they can and will print Moar so called money
~"He points out that there is no empirical or practical indication of any link between low interest rates and easy monetary policy and the ability to regenerate growth."~
My, how succinct. Kind of says it all.
Tomorrow?
Steen Jakobsen and Saxo Bank are gold bugs. This article is merely wishful thinking on their part. They could have written this anytime since 2009.
They do not have any knowledge that you do not already have.
So what are you suggesting? BTC which isn't manipulated, just hacked. In Russia they went for furniture as a store of value while the Ruble fell.
No big turning point in 2015.
Except for oil, steady as she goes.
There are countless cases of governments printing their currency into oblivion.
Printing currency is one thing. Getting it into circulation is another. Until we get rid of the credit money/fractional reserve banking paradigm, nothing will change.
If we are going to have fiat, why not have the respective treasury spend it into circulation? That is the basis of social credit. The banks won't like it so that is why we don't have it.
Because the plebs will realize that they can vote themselves benefits, the politicians will realize that they can vote themselves benefits and power and the banks will figure out some way to take advantage of it, and it will be abused. If it can be printed, it will be abused in a very bad way. You can take that to the bank.
Can it be anymore harmful to society at large that the curent system?
I agree that it has the potential to run amock but safeguards could make such a plan workable.
So many ZH'ers are really just statists who've grown to love QE and BTD, the last thing they want is an end to the status quo.
You know who you are, and you're no different or better than Bernanke, Yellen, or even Dimon.
Kinda like how they said QE ended yet the market rallied 7 days in a row, up over 1100 points??? From just "investors" moving in with all that money on the sidelines we always hear about? Even though every fucking penny has already been thrown in and margin debt is at its highest levels in history? Yea, O fucking K.
As my mammy always used to say, "You gotta believe if you want to receive".
Of course she was talkin' bout Santy Clause, but it could work in this case.
Ins't it funny how you never see Santa, Satan, nor the chairsatan of the FR in the same place at the same time, ever?
Ain't that some fucked up shit? I liked the article but I completely disagree with this dude about markets not being manipulated. You'd have to be a complete window licker to ignore the piles of evidence supporting manipulation. In America, you get to believe anything you want- and ignore all evidence to the contrary.
Um yeah, they already have.
The Baltic Dry Index is telling them they can't. When all else fails the US Government will cut taxes and reduce regulation. I expect that to happen right before or after Walmart and McDonalds are bailed out.
Zentral Bank von Metropolis is knocking...
Things will continue to get worse until the people scream and beg for change. Then TPTB will implement their changes, most of which will be about centralizing authority and control.
I don't think so. Like the difference between a recession and a depression.
Recession=public lose
Depression=bankers lose
Collapse=everybody who cannot figure out how to do things for themselves (and barbarians) looses, including bankers and the lion's share of the public.
A good example of which appears in the final few chapters of Atlas Shrugged.
[Editorial Note (for the benefit of LTER): I am not endorsing Rand's philosophy; merely pointing out her vision of the coming future collapse seems eerily prescient...]
Rand lived it in USSR before coming to US.
Atlas is a great morality play ,,, however "We The Living" is the most depressing and realistic look at life in the future (assuming continued progressive control) that you can find..
Banksters don't lose, they start wars.
I'd like to see a banker in a war. Probably shit itself.
True but they use "our boys" to make them rich...natl veterans day should be renamed natl cannon fodder day.
Spoke to a veteran the other day while doing a pre-employment psychological screening. Asked him to tell me what he knew about the bill of rights. He knew enough. Told him a time may come when he has to choose between his oath to uphold the constitution or obey his superiors. We got into a discussion of the totalitarian nature of the government. He told me something very heartening - that many active duty military are questioning the direction the government is going, and the motivations of our 'leaders.' Let's hope that this continues and increases. That moron Obama, with his stupid speech to the military at Christmas, may be just what we need. He's so fucking insulated and out of touch that the more he talks the more they'll realize they're getting fucked over.
That must have been some interview. As a small biz owner, I´m interested in hiring people with good brains and who are qualified, but never relm into the political/religious beliefs. That seems to be relevant in your line of work though. I wonder if he was hired.
The first few batches who went to ME believed it. Subsequent batches very quickly figure out it is BS.
Young men would get better jobs if there were any. This may be one reason an actual economic recovery is so actively prevented.
I'd give ya a green arrow just for your handle- but the comment might be even better.
You have obviously never heard of the shitgum battalian nor the nailgun brigade. Word is they have a high velocity air to ground missile but it is limited to urban areas with high rise buildings.
There will be no screaming until credit is maxed. People will just keep lowering their expectations. F'rinstance, a gallon of organic milk and a dozen organic eggs is about $12 US. Wealthier folks will spend their cards full, then choose cheaper options. Poorer folks will spend their WICs on the cheaper options. The aggregate health of the society will descend. Medicine insurance will become more inaccessible until the birth rate needs to be kicked-up by hyper-sexualizing our children.
Most of this has already happened.
I was going to say that this has already happened haha.
That might work except for the fact that abortions are still easily accessible.
And, don't even get me started on the morning after pill.
I believe that with over 50 million abortions since Roe vs Wade I think the intent was to encourage the native population to stop reproducing so that the PTB could replace them with a more compliant imported 3rd world population.
I've known girls who've taken bc after they got preggo so to miscarry.
Once Detroits start becoming commenplace, and pensions are slashed to a pittance of what they were before, then the howling will be loud, and the pain, legendary.
~"Things will continue to get worse until the people scream and beg for change."~
No, things will continue to get worse until the Bond bubble pops, (because the governments won't and can't give up printing). Then eveyone will scream and beg. But by then it will be way too late. Plan accordingly.
If they can print, so can we. Fight fire with fire.
Quality Dollar and Euro notes delivered to you in the mail.
Features:
Watermark Control, BackLight Print check,Touch Pad Control, Holograms
HD Printed With Cotton Paper (€)
1)Download the Tor browser https://www.torproject.org/download/download
2)Open a Bitcoin account
3)Join one of the top 5 Tor markets http://www.deepdotweb.com/
4)Get your notes
30 units of €20 for €240 (€600) or 50 units of €20 for €375 (€1000)
1 unit of $20 for $6.50 or 40 units of $20 for $190 ($800)
5)End up exposing yourself to .mil, .navy and a shitload of coders who dominate The Onion Routing.
Bingo. I've been a big fan of Tor, but it's clearly been compromised and there's all sorts of strangeness in the exit nodes these days. I've avoided it for more than year now because at this point, it's just being used as a honeypot by TPTB to find out who the bad sheep are.
You only worry about a DARPA project only after it starts behaving oddly?
I'd rather invest in a bull shit, but not in Bitcoin.
BTC is very useful. Manure is also useful. But unlike crypto, there are seasonal limitations on the effectiveness of bullshit.
http://www.amazon.com/Four-Season-Harvest-Organic-Vegetables-Garden/dp/1...
4 season gardening. manure creates hot beds.
Perfect poo-parry!
Yes, but if the grid goes down, you can still get manure!
Bitcoin only needs to be held while your order is in escrow which is a matter of hours. You are exchanging dollars or Euro's for discounted dollars and Euros.
Bullshit
Warm weather = fertilizer
Cold weather = fuel
Bitcoin
Electric on weather = hackable, limited audience, has many dependencies
Electric off weather =
This has nothing to do with investing in Bitcoin. You are only using it as a transaction medium as you transfer your Bitcoin back into Dollars or Euro's.
We are providing value to our customers. This is not a scam. We have hundreds of reviews on our page that you can read.
Yep, nothing like a positive glowing review on a website to get one to drop one's pants and take it in the rear voluntarily.
There are competing marketplaces user ratings. Then there is vendors within the markets with user ratings. Its called a free market. If you don't believe in free markes then stay away.
Dark Net Markets Comparison Chart - This chart integrates marketplace data with our Hidden Marketplace List ratings, along with uptime status data provided By Dnstats.net and creation dates from Gwern.net.
http://www.deepdotweb.com/dark-net-market-comparison-chart/
Thank you but not interested in any electronic currency.
Hilarious that not only most ZH tools can't understand bitcoin,(it's the blockchain, stupid), they can't even fucking read that he was just talking about using bitcoin to buy conterfeit fiat on the darkwebs
granted, the past year the darkwebs have been honeypot central (the previous year they were getting their honey ready.. the gov can be slow to things..)
Why buy 50 units for 375 when you get 80 for 380,makes no sense
240/30=8
375/50=7.5
Volume discount.
When i was young we sold mackerel roadside 2 for $3 or 3 for $5 ....most people took 3 for 5 and in 4 years we only got called on it once.
The central banks are the CUNTS that keep wanting MOAR, as they keep advertising and throwing in cheap fiat. One day, soon enough those holes will be plugged.
sounds like ex wife #2
Sounds like all wives after a few years behind them.
Has Steen ever been right on anything?
His most recent prediction from a few months ago was that the Euro would be trading at $1.40.
He speaks to my heart, but my mind knows he is consistently wrong.
I'm not arguing, but I seem to recall he's the first one who said a gallon of petrol and an ounce of silver are intimately linked. In other words, there's an underground economy with an actual basis in reality.
Look for this to be happening more often.
Gas Station in Oregon started accepting junk silver as payment in 2011.
I love junk silver.
The taste of it, the smell of it, the thousands of hands who've touched it over time. In fact, I broke my own genitalia when I dove naked into a sea of it supplied by Tulving. I hold Scrooge McDuck and the Disney Corp to blame.
Free Advice: Don't jump on your metal with a boner.
You cannot blame Scrooge on that one. He used 24k gold and you used junk silver. Seriously, what'd you expect?
I saved this article from June of this year, where Steen asserted that equity markets would drop 30% by the end of 2014. At the time, the Dow was at 16,700. A 30% drop would have put the Dow at 12,000.
The Dow finished the year at 17,800.
http://www.zerohedge.com/news/2014-06-02/steen-jakobsen-expect-30-stock-...
Needless to say, Steen was about as wrong as a person could be. In fact, in the interview, he goes out of his way to point out that while he's not necessarily sure about the magnitude of the drop, he's extremely confident about the timing.
So he's either totally worthless as a forecaster, or secretly selling his book. In either case, I no longer take any predictions by him seriously.
Deflation bottoming out by Q1 2015 is a pretty bold call. And it won't take long to confirm.
Me thinks the yanky dalla and gold will rise together.
That's only part of the story. Real people and real jobs that provide an actual benefit and produce actual wealth. This requires another thing too: Energy.
Pfft. We have all the energy we need. Tell the galley slaves (prisoners) to row faster!
The gold commodity cycle seems to be pointing to higher gold prices in 2015.
I thought Japan loaded up the printing press to buy what ever they want(including the Dow). Facing the REAL economy would be a nightmare. There would be NO more retirements, pensions, charitable institutions, artistic support(anything that is non profit) etc. etc. Money earns nothing now. I am 55 and I remember since I was 5 my parents taking me to the bank to deposit my Xmas and birthday money so I could earn interest. Interest has always been part of my life. The deflationary aspect of NO interest is numbing. There is no way to counter act it. Fixed investments pay nothing so people have no source of income stream without work. I think this is unprecedented and Hugely deflationary because the majority do not have what they used to spend. Add a lacklustre job market to No interest and a crashed Dow/S&P, the economy would be dead beyond belief. It started to feel that way in January of 2009 until QE.
And they're going to taper QE now that the banks are fully capitalized. And things will get worse until the people scream for change.
It's only deflationary for you and the other plebs. It's inflationary for bankers' accounts. It is the theft of the value of your FRNs.
B B But....But Martin Armstrong said that .....
You mean Martin "Jeffry Christian" Armstrong?
The un-fed is not going to stop intervening in the market place, they will not step aside and let it unwind. They are in waaay to deep to even think about going in that direction. Not that they have ever thought about that anyway.
Does anyone seriously think that they will stop their maddness and ultimate distruction of the financial system? That ship sailed a long, long time ago.
This delusional group truely believes that they are the masters of the universe and can not lose. We, at some point will see the biggest cluster fuck that has ever been experienced, and in their minds it sure as hell will not be their fault!
FUBAR
When you were a kid, you probably got to play with a top. Now, as that top spun, it started to process more and more, and sometimes it would go on long past the point that you thought it could remain standing, yet it would go on for a bit longer. Did you ever try to correct that procession by poking at the top? If you did, you probably noticed that it just made it worse. The funny thing with gyroscopes (a top is a sort of one,) is that they react by wanting to move 90 degrees to the direction of the force, or torque, applied to them. It is not intuitive, but you can go get yourself a gyroscope and test it yourself, and sure as shit, it behaves in that way. (I recommend one of those little toy ones with a fly wheel in a frame that you wrap string around and let it rip.) In reality, the best way to stop the procession is to stop the top and spin it again.
This bitch is really starting into the procession phase, and the fed will probably expect the top to move in the direction that it applies force, not perpendicular to it.
Not to be a noob, but I believe its called "precession"
Spinning top precession.
note to self... Mon am
order cigars and bullion
check bildge pumps...
No need to check the bildge pumps. I'm sure they're fine and you won't have an unfortunate accident.
A serious fallacy working in our favor is that there is only ONE banker class...
I am beginning to believe that people will no begin to accept the "harshness" of the Austrian cycle. They have realized that the suppsedly softer cycle of Keynesianism has raped them without any niceness.
They are now thinking "How bad can Austrianism be???"
The difference between Austrian and Keynesian is that the Austrian version is over relatively quickly while the Keynesian's form a line and continue to rape you for years on end.
Eventually you develop Stockholm Syndrome and begin to believe it was all your fault in the first place.
Stockholm syndrome, Enabling black victimhood, even bankster envy.
All come into play.
But once people start looking at the bankster class, the truth will start working its way in...
Bitcoin is dead!
Gold is driven by the unwillingness of central banks to allow gold to be what it is and the stupidity of the western world sheeple that believe the drivel that they are being told about what money is.
The author if he doesn't get that is at the very least naive.
Another one among many of really bad things that are happening or about to happen: http://eyeofvigilance.us/?p=7794
55% of doctors (some of whom are highly experienced) are getting out of medicine. Woe to the masses.
Steen Jakobsen? Really, why does anyone believe what a Tribe members says?
The more I read the less I know ...
Anyway, the Fed, and the US government know that the reserve status of the dollar is the cornerstone of The American Empire. Since everyone must have dollars to buy anything from oil to shoes to access to Hollywood movies, you displease the masters in DC they can make your life msierable through sanctions and other monetary punishments. If people have a viable alternative, our ability to control them (power) is diminished dramatically.
It is not a conspiracy, it is the the JOB of the fed to defend the dollar, which automatically means they are always at war with gold: "Gold is the Enemy", Paul Volker.
The only form of money that can comete with the dollar is gold, because it simply transcends all the controls the US government would seek to put on it. The US cannot restrict your access to it: you can get it from anybody who has some. You can transact with it without anyone knowing, and the trasnaction is clear. Two countires that don't trust eachother cannot pay debts with their fiat money, but they can with dollars or gold. Or if one of the countries is the USA, the gold is the only trusted currency.Take Russia for example. They have brought DC down on themselves an have trouble getting enough dollars to support their global imports. However, they can transact in gold and US has no recourse. You can threaten others not to do business in gold, but who will know? Most dollars exist as bank credit money, and there is a record of every trasnaction onthe bank's books. But oil for bars, bars for food, and who's the wiser? And nobody has to hope the russians will make good on a debt, or maintain the value of their currency. The deal is done: FULLY CLEARED.
This is why gold is so important, it is the ONLY form of money that self-clears. So in times of universal trust, gold sits in vaults looking silly. But when that trust is gone, all of a sudden gold looks really smart. It seems extraordinary, but the Nazis could buy things from allied corporations during the war. But only with gold; nobody would grant them credit or take their DM.
As for reserves, small or unstable countires will have trouble gaining anybody's trust. However, if they have a gold reserve their fiat has a floor. So gold reserves act as collateral to fiat's intrinsic indebtedness. But in the Great Game of Geopolitics, nobody trusts anybody 100%, so every country needs gold reserves to back up their currency and international credit rating.
To talk about business cycles at this point is silly. We are way beyond where they are relevant. That's like trying to collect on your investments with Madoff a year after he went to jail. Ponzi schemes do not lead to down cycles. They lead to bankruptcy and death. But, if I may for the moment speak for Tyler, you haven't lived until you stop fearing death. Take your hands off the steering wheel, for the car is already fully out of control.