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Spelling Out The Big Reset
Written by LK in Hong Kong, Courtesy of Bullionstar Blogs
Spelling Out The Big Reset
As economies age, debt builds up. Advanced economies – those with the highest borrowing ratings by the reputable agencies they developed – have it clogging up inside all their arteries. The Big Reset will finally become inevitable, as has been acknowledged by the IMF head Largarde, mentioning the year 2020. But what must an Armageddon debt reset necessarily involve? Few have spelled it out, not even in the famous book with the same title “The Big Reset” by Willem Middelkoop.
Revision on money creation mechanics: unwrapping the meaning of ‘Reserves’
At the center of it all, wrapped by layers of secrecy and protected on the outside by purposefully confusing jargons is this concept of Reserves. Let’s understand it to mean ‘net worth’, ‘collateral’, or whatever a banking entity’s ‘really worth’, because what banking entities do, is to use this asset as backing to create instruments and derivatives, like loans, or even money, and expand the money supply. In long tradition, the ultimate reserve asset is of course gold. When the bank’s (or central bank’s) worthiness comes into doubt (like to many gold-deposit receipts flying around), people come for the ‘reserves’. If the reserves satisfy the claims, then it’s good.
In our fiat currency world since 1971, countries hold each other’s currencies as legitimate reserves. The country’s central bank can then go create the country’s own currency. The justification is simple: there is this unsaid assumption that when the worthiness of a country’s money becomes in doubt, one would not question the worthiness of the other currencies held as reserves, and, hence, as long as the country’s central bank can supply the ‘safe’ reserve currency to meet with the country’s currency being sold, all is well. As we approach it from this angle, we know to ask the question, “what then gives the other reserve currencies their value?” Note, this process enables country A to expand the money aggregate in foreign country B also, if only country B is happy to have currency A in its reserve to create some more currency B at will.
Money creation is a happy process. Everyone likes it, from businesses to banks to governments to the everyday wage earner who is happier even if his salary only rises by the same amount as inflation. And this is so even for our debt-money system, in which money is very much ‘loaned into existence’ as a debt is created. The temptation is strong, and this is fundamental.
As the Devil has it, there are two issues with this that are necessary consequences:
(1) With debt comes interest, and if one keeps expanding the borrowing, one day the interest requirement will exceed earning power, and this is where the ‘advanced economies’ are today.
(2) If the money supply grows faster than the amount of goods and services it can be traded for, this leads to inflation. It is important to have people believe that their money is good so they do not have the tendency to convert their money into real assets. Hyperinflation is the currency event in which faith is lost in money and when people rush to buy real assets, they find that there is not anywhere near enough physical assets to satisfy money claims.
Looping back to the concept of reserves, the central idea to a stable banking system is to have people believe that the reserve of the system is good – in sufficient quantity as an ‘end product’.
The Sure-fire way to Reset
Now, our ‘advanced economies’ have already passed the point where interest service is manageable. In an effort to perpetuate the illusion for as long as possible before stage (2) when the quality of the debt papers is called into question, our money masters have launched outright money printing to maintain service of debt interests. They cranked up the power of their mind-influencing machines, and will do “whatever it takes” to avoid their game being called. Clearly this can only exacerbate the onset of Stage (2).
“The Fed’s balance sheet is a pile of tinder, but it hasn’t been lit … inflation will eventually have to rise.”
- Alan Greenspan 25 October 2014, New Orleans Investment Conference.
The problem of a debt reset is not the wiping-out of creditors, but the destruction of currencies together with it. Without currencies, the economy cannot function with any efficiency.
Hence the sure-fire way to reset is to use an indestructible material that exists in fixed, limited quantity to act as reserve asset for money. Gold naturally fulfills this role in any and all precedent failure instances of money and it will work again. Once enacted however, liquidity condition will once again face hard constraint by the physical substance available. Any money printing will translate into a loss of value of each currency unit. Against a strict liquidity condition, life will be much tougher! But it will work.
One step short but keeping the benefits: the SDR?
International monetary expert Jim Rickards has a helpful way to visualize the evolution of financial crises in the West. He explains that every time a crisis breaks out, it is bailed out by the next bigger entity assuming the obligations, “kicked one level upstairs”, in order to avoid a default situation blowing a monetary hole threatening stability. For example, LTCM was bailed out by the banks. When banks get into systemic trouble, they’re bailed out by central banks and sovereigns. What now is the next level up above sovereigns? There isn’t any clear one.
One attempt at this short of going directly to gold might be the Special Drawing Rights of the IMF, claiming to be the super-national authority in charge. The SDR is by design and by hope a reserve asset. It only came to have this funny name by concession to the French in 1969 who did not want it called a reserve asset. As we now understand the nature of reserves, we know it has been the purpose and hope of its creators that when the whistle on fiat currencies blows, people can be convinced to accept this as having value, just because it appears to be issued and controlled by a cross-national group of men in suits. SDR would then be endowed upon obeying nations to be used for ‘good’ money creation. But what is the SDR? It is still a basket of the same fiat currencies.
So, we already see that this might only be the dream of hopeful men in suits and probably won’t work when it is most needed. Enter China and the RMB. The two questions are now:
a) Why does it have a better chance of working, and
b) What does China want?
The answer to a) is, as to what is different now, is that unlike the ‘advanced economies’, China is a creditor nation, and the World’s largest one. If it says okay, it probably is okay a long way already. Plus, China has imported a lot of gold, so it could make references to the gold anchor in ways that are helpful to its aims. By this chart, the gold content within China’s borders is more like 16,000 tonnes, twice as large as the largest official stockpile claimed by any single country (USA).
What can China want? By inclusion as a crucial component in the SDR, China gets a control on this international reserve asset, and by deduction, world money supply. The use of reserves is to legitimize money creation. Here is that immortal quote again from the very MA Rothschild himself:
“Give me control of a nation’s money supply, and I care not who make its laws”
It certainly is a very powerful position, although whether China has the ambition to rule the world this way is a different issue. But it is a more flexible possibility than the strict, full gold-fixed gold-backed and effectively gold only currency regime. Mentioned above, money creation is a happy process to all (except when it is collapsing), and often a useful one too.
If things will get so shockingly bad that this will not be enough to instill trust and confidence, the SDR basket may require a fraction of physical gold content. This may then have the appearance of a gold-backed money to most people like the strict, sure-fire solution, with a more subtle twist. The gold content requirement, will indeed hard-limit the reserve and money creation and bestow confidence. But with mutual agreement, the gold proportion can be more easily or very slowly relaxed, slowly and subtly diluting the SDR. Or, if China wants the money aggregate to expand, it can go ahead and post some of its gold. Its acquisition cost is cheap, below $1250 as we speak, well less than 1/10 of its future price when this will be needed. And China has been allowed to have plenty and plenty of this by the willing international community at the average pace of some 40 tonnes a week, every single week and for years on end.
Wiping out creditors by inflation is the easy part. Re-establishing money to restart the world economy is the harder one.
Remember:
“Whoever has the gold makes the rules.” – Wizard of Id, May 3, 1965 (a comic strip)
“Possession is 9/10 of the law”- adage / lawyer joke.
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War will be the great reset. SDR and Gold are but a dream.
Just have the Treasury print the $18 trillion in interest bearing banker sucking fake debt out and be done with it. That should help keep equities high.
Then send ISIS over to the Fed.
You mean, send them back to the Fed.
100 reserve gold banking is not necessary and neither is the SDR.
They are both choices given to us plebians by the elite... What about a gold standard that allows self liquidating credit creation?Thrid choice: The International Gold Standard with the Real Bills Doctrine!. Get rid of legal tender laws, open the mint to the public and restore the Real Bills Doctrine! There will be enough credit for everyone under a gold standard and wit won't be based on debt. 100 reserve gold banking is not necessary and neither is the SDR.
Theres more choices plebians. Research Real Bills.
Sashko
Martin Armstrong has proposed a debt-for-equity swap whereby all Treasury bills and bonds will be redeemed for coupons.
"In this case, we would swap out the federal debt of $18 trillion into coupons that are redeemable for the purchase of private equity. You would then take the coupons and invest in stock. Since large corps are buying back their shares now, they do not need the money. This will go to entrepreneurship starting up businesses or expanding small business. It would provide a stake in the nation for all for the lower class would actually become investors. The “rich” make money from investment, not wages.
Of course there will be people who criticize this idea. They have no practical solution for there is no other choice. You reach the point of no return. Governments are causing DEFLATION and destroying everything as they hunt money. That will collapse the world economy and they are TOO STUPID to comprehend what they are doing until it is too late. The hard money guys have already sent nasty emails, but their world is precisely what Germany is imposing in Europe. They are handing the people over to the bankers for go ahead, back bonds with gold and how do you pay your mortgage.
There is no practical solution and EVERY debt crisis has involved either a DEFAULT or some sort of haircut. Any way we slice it, the next downturn will present solutions that hand more money to the bankers and you will see revolution next time. We either seriously look at how to end this cycle of perpetual borrowing, or go build a cabin in the woods far from everything. We are rapidly reaching the point of no return."
http://armstrongeconomics.com/2015/03/30/28763/
It's an interesting idea.
Armstrong also proposes a new international currency similar to SDRs that all national currencies would float against, and that nations would use to settle international trade flows with.
FOFOA reckons the long term strategy for the reset has been to reset gold at $30 000/oz as a working model/figure.
Problem is, though, they've rubbished the asset so much trying to keep the lid on that the average western citizen has divested themselves of it.
So when the reset happens these poor bastards - who otherwise could have sold their wedding rings to pay off the maxed out credit card - will still be fucked over and not contributing to the consumer economy.
So all in all, the reset has to be accompanied by some kind of jubilee - not necessarily 100 cents ont he dollar - but just jacking up gold in and of itself isnt going to ameliorate the social upheval.
Fonz and William sitting in a tree, K-I-S-S-I-N-G, first comes love, then comes marriage, then they both go missing in the baby carriage.
While I don't disagree, I think our leaders/elite are too selfish and ... well ... frankly, psychopathic.
What I really think we are going to see is (1) they hang on to the old system and (2) debtors prisons/punishment.
It will just be the next phase of the strip mining and most people have no idea the sovereignty they inherited and will go along trying to stay one set of chains ahead of the gang.
I haven't given up on humanity, it has a kind heart most of the time, but it is also catfish stupid on average.
Regards,
Cooter
I've got a little disagreement with the premise of the article. I think China could stash enough gold to upset the reserve currency status of the US Dollar and replace it with gold, but I don't think they would technically control the world's money supply. That is the whole point of gold, it doesn't have to be managed by anyone. That is why the US defaulted on it in the first place! Sure China may have a head start by having more of it than other countries, but I don't think that means they control the world money supply. I welcome any comments telling me I'm full of shit as long as they explain why!
Midas, you are not full of shit, your analysis is good, just... incomplete
there is an alternative strategy that China could pursue: keeping gold as a threat, and elbowing the fiat unbacked Yuan as either a reserve currency at the same standing of the USD or more
see here: http://www.zerohedge.com/news/2015-04-09/why-brics-are-less-worried-abou...
if you are strong, you can pursue one strategy. if you aren't the strongest kid in the block, you have to pursue multiple strategies
the real monetary battle of the moment is being fought about IMF Reforms
out of the G8, seven want a reform. out of the G20, nineteen want a reform
do you read anything about that? no. zero. zip. nada
China is now putting up a Chinese-led "World Bank", the AIIB. that's the first shoe to drop. the next one... a Chinese-led... International Monetary Fund (IMF)
-----
btw, my nick is after the father of your nick, Gordias. So, in the best Star Wars Darth Vader voice: "Midas.... I am your father"
out of the G8, seven want a reform. out of the G20, nineteen want a reform
do you read anything about that? no. zero. zip. nada
source ?
winchester, what source would you like? you are having this news from Ghordius, who claims that you don't read about that here on ZH or much elsewhere
when I google "IMF reforms" google immediately offers an extension "IMF reforms US Congress"
if I look further, lots of articles telling the US Congress that it should not pass any legislation, even though the White House is pushing
here a Reuters article, for all it is worth: http://www.reuters.com/article/2014/12/10/us-usa-congress-imf-idUSKBN0JO...
so let's count: the BRICS want reform. the European partners want reform. the US Democrats are pushing for reform
Christine Lagarde even offered to belly-dance for the US Congress: http://uk.businessinsider.com/afp-imf-reforms-threatened-by-republican-e...
Sexy French Christine is of course after more power (and a chance to bellydance at her age). An IMF reform would mean more share capital
we Europeans are after a stronger, stouter IMF. the BRICS want more power, i.e. more shares, i.e. more voting power
of course if you read only articles telling you that the IMF is evil, then this is all a Big Cabal of Great Evil
nevertheless, the real danger is that after the great success China is having with it's AIIB... that the other shoe drops
the IMF is often called "American Taxpayer Money". less often, "... used to bail out megabanks from stupid loans"
nevertheless, a lot of the USD's power stems from the current IMF share and the IMF's role... according to The Rest Of The World
the Republicans in the US Congress seem to think otherwise. we'll see. but do note how this is discussed, in ZH and in American media
further, note how Greece paid up the IMF. whatever the Tsipras government wants, losing the Greek shares in the IMF is not among those wishes
Instead of the normal inflation of deflation (default) routes they might surprise us with something new. Here is a possibility:
http://www.debtcrash.report/entry/recent-trends-toward-the-e-dollar
When it comes down to it the E dollar concept is a form of financial repression which can't work in its current form:
http://www.debtcrash.report/entry/financial-repression-can-t-work-this-time
Thoughts?
Please explain how coupons that can be redeemed for private equity is different than money? Isn't that what a dollar is...a coupon to be traded for asset equity or whatever....or is it simply tradeable for stocks....more herding of wealth into the famous casino that will save us all?
I still argue that real wealth, real asset, is something more universally valued, something that has utility value beyond simple speculative trade. When all of our "assets" are trapped within this fiction "equity" theme, it has no REAL value, only some fleeting gambler's IOU.
Oldwood
You sir, have it right. The dollar is indeed a coupon. When our financial elite conjure money (purchasing power) out of thin air, while you have to earn it (from your time and effort) then only the willfully blind cannot see what fiat currency really is- a means to silently steal from productive society, in the present and from the future.
regards
K
It isn't as inflationary. Cash can be used to buy anything; these coupons could only be used to invest in businesses.
So if I understand this correctly, I would take my recently worthless debt instrument to someone who would willing trade me their "real" property for?
I am so confused. The value of everything is now demoninated in currency. If that currency becomes worthless, I'm going to take my wheelbarrow of worthless cash down and trade it for real estate? A reset must reset values and values are not determined by the color or print of the fiat but the confidence we have in it. How do you fix that without a "reset"of those issuing it?
1. Paper coupons for paper bills to buy paper stocks... seriously?
2. If you want an international SDR that all national currencies would float against it is called gold, oil, and firepower.
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com
Who's Winter?
whos hood, and how do u know what it tastes like?
who's up voting them?
Some rich guy, who pays at least $7k/mo for BJs.
7k a month whoring on MLK Blvd is doing a LOT of brotha's hoe.....
whoever downvotes the idea of war being the real reset and not some stockpiling of funds (gold) to pay for war, clearly doens't understand what the word 'reset' means.
mao did a pretty simple job explaining it. he never said politicla power comes from a stockpile of gold. it comes from the end of a gun barrel. but gold can buy plenty of gun barrels. it cannot however pull the trigger. you need blood sweat tears and NOW DRONES to do that for you.
don't worry about chinas gold. the west still has armies of robotics experts building the world soon to be greatest drone armies. i call them "THE SILICON HORDES"
2 things end friendships: money and woman.
You want to keep a good friend? Don’t involve the woman and leave the money part out and you’ll have friends for the rest of your life.
And if not, a war indeed starts and all ends.
And you’re right, a reset only means a war.
why? Because whatever we do, it’s the other guy who has done it and he’ll have to pay for our misfortune. In that way, we’re all just kids.
The problem is that the USA would now loose that war. Russia and China are already too strong. So a war would not be the desired reset for Western bankers, just a faster way of destruction. You know, every empire has its end. Nothing ever lasts forever. This "British" empire has run out of breath. It has been here too long already. Now the stars are shining for new kids on the block. I can see it now in the EU. Chinese companies spring up everywhere. We already keep finding nice brochures about beauties of China in our cafés when sipping our cofee in Central Europe (deliberately made by and sent from China). You can see that the Chinese are very very smart:-) They have already started their PR campaign in Europe. And people here are starting to warm up towards China, because in all this economic misery and austerity, China actually does something instead of just lending us money - it builds companies for us to work in. You just know deep inside that this is something that cannot be stopped. This is changing of civilisations.
Western cultures no longer have the will to fight and actually win a war, only start them and attempt to lead from behind, hoping to steer and minipulate others into doing most of their dirty work for them.They have discovered the costs are too high and the outcome too uncontrollable.
datura
China is indeed clever- I don't know about smart. First they cleverly bought American politicians- starting with the Clintons. And the Clintons shamelessly continue to shill for trinkets from foreigners.
Then China manufactured useless crap and sold it through Walmart, taking their profits back to China to build long lasting assets.
Now they are playing the "Realpolitik" game, watching the U.S. run around playing wack-a-mole in every corner of the earth, while China quietly but firmly gains more control in their own back yard.
and just think...anyone w/ money in the bankster system is considered a "creditor" to the bank. And the new "bail-in" bank rules deem a depositor as a creditor and the last in line to be payed back after the collapse and bail-ins.
The banksters are going to confiscate EVERYTHING still in their system when the SHTF and they flip the switch.
Get out of the bankster system. If anything, use it so minimally that you barely have any counter party risk.
Stack the fuck outta that silver phyzz...
Sit back, wait for the collapse, and get that popcorn popped while you watch the big show.
Sorry to be a party pooper but, popcorn ain't got no protein. I'm fixing wings.
I choose bitcoin because its last price was $243.78
1 bitcoin = about 1/5 oz. of gold.
$243 from $2,000 and with no fundamentals to anchor the price.
Yea, then there's the EMP attack that they keep hinting about.
Yawn , the bitcoin network is reisistant to multiple global EMP's. From that EMP / Carrington Event perspective you should worry more about the power grid going down , you would have much bigger things to worry about than bitcoin ie total extinction from over 400 nuclear plants spent fuel pools drying out and going up in flames.
It's bad enough to watch my government piss my money away. It's even more sad to watch someone else piss their own money away on something as worthless as shitcoin!
Come on man you're smarter than this!
DO NOT LET THE PSYCOPATHS DETERMINE THE TERMS AND CONDITIONS OF THE RESET UNDER ANY CIRCUMSTANCES......!!
That is THE SINGLE MOST IMPORTANT ISSUE that nobody is talking about... WHAT COMES AFTER and WHO is going to run it.
The forthcoming collapse cannot be avoided but repeating the same mistake over and over again with the same corrupt or incompetent kleptomaniacs (with the fake stupid looks on their faces) can.
So Bullionstar Blogs says buy gold. Really, that is a surprise... not.
That's the thing. Creditors are NEVER wiped out by inflation. They are saved by inflation. Creditors are wiped out by deflation, where the size of the loan is larger than the worth of the asset.
Humanity is saved by deflation and default.
.. and since the bankers don't give a fuck about anyone but themselves, inflation it is.
Deflation and inflation is bad for creditors.
In deflation, their collateral is diminished.
In inflation, the purchasing power of their principal, unless indexed, is eroded.
In hyper-inflation, their principal can be turned into confetti.
Nothing has to be done except to return to the people the right to decide what to use in exchange. They'll do the rest.
Even gold and silver only became money because they were uniform enough to be useful to states in payment of taxes. All gold is the same and equally valuable, assuming any given purity. (You assess taxes in livestock, you'll be sent the thinnest and sickest cows in the herd unless you hire tax farmers and pay through the nose for their services.)
Professor Emeritus Karl Marx posited revolution by the masses that would overthrow the Capitalist elites. As a orthodox Grumpy Marxist I want a revolution instead of an elites led currency reset. So, I agree that the soil of America must be replenished with the blood of tyrants and patriots in order to keep leadership on a straight and narrow path just like all the great mystics advocated. I think God would go along with this too. Moreover, the World's worst tyrant of contemporary times is the USA White House administration, Central Intelligence Agency, and Congress, bar none, Z/H.
NOTE: This is why I want Putin and the Russian Federation to nuke the USA back into the dark ages, eh. It's not that I don't love Americans, but more to the point, I don't really like tyrants, Mr. Bush.
parasite
"I'm here to kill you Little Bill, for what you done to Ned."
Unforgiven
"parasite"
Harold and Maude
Marxism....the ultimate in tyrannical murder. Much like any other radical "religion", live as their God commands or live with yours in the afterlife.
Are you going to free my soul Karl? Are you Karl, are you?
You don't like tyrants but you love you some Pooty Poot?
Spoken like a true Marxist...idiot.
You are grumpy because you are a Marxist. By definition
double post
So, if i understand the poster correctly the solution to the inevitable failure of debt based fiat currency is....
another debt based fiat currency?
QED, right?
exactly, because we have not invented anything else to balance a 7 billion people. you cannot make any system controlled by population for population.... this would mean chaos.
human principle is to get what the neightbor got. if you not force a hierarchy, this is chaos. unfair is feeled by anybody but better have unfair working system than nothing working at all.
why you think any smart ass go political asap after school... they know land fences of the sheeps.
what can happen is inplanable. clutch is off we roll free wheel .
FREE wheel is ideal, a real steal, with zeal.
I'll take any free association over any structured one controlled by murdering psychopaths.
"FREE" is the word they use when they are trying to fuck you. Is it me, or are we the stupidest creatures on the planet that we can't figure this out?
Isn't that what "bait" is?
A "free" meal on the end of a barbed hook?
In the early centuries of the East India Company merchants found the value of Silver increased tenfold by the time the sailing ships reached India and the spices bought and shipped home increased even more in value. Needless to say the metal drained from Britain to be replaced by consumables.
That is the big question in my mind. We trade gold (which cannot be consumed) for consumable goods. Someone ends up with gold, the other ultimately with nothing but a worn out or fully digested piece of shit. Obviously bankers fixed this by simply printing more gold to replace that which they had "eaten".
The EU is financially speaking a logical FALLACY.
YOU CANNOT HAVE A COLLAPSING CURRENCY AND NEGATIVE YIELDS.
PERIOD!
The implications of this "rationalizing" are simply indestricanly catastrophic...and I ain't talking merely financial.
That whole Continent is going to get blown to smitherines.
Perhaps imminently.
before collapse because no other choice, they try the mind/body control :
http://www.washingtonpost.com/blogs/govbeat/wp/2015/04/06/kansas-wants-t...
the idea is ok to me, you have no job i give you money do not waste it, use it to eat, not to go buy junk.
BUT the essence of the freedom, is to do what you want. in the respect of law of course.
from this statment, you have 2 results of this, people who cannot go without ebt, keep ebt using, at 25$/day and cheat to get what is forbidden, you fall in 1984 style behavior, the 1st who cross the road away from walk way if shot/jailed , whatever, and 2 ) if you cut the problem to its root " you waste money ? no more help ! " then you have no more social peace bought by the government, part of population riot and civil war comes to play.
problem : as i always said technology is our doom, a tool that mostly enslave us more that it freeing us. ( cf : apple watch, what condition of life you ready to go to pay a thing like this ? saw the people sleeping outisde the store for 2 days for the phones ? remember this ?
http://www.zerohedge.com/news/2014-11-06/welcome-post-obama-america-wher...
this happen also for food.
we are at a very critical stage, i cannot set a date, the phenomen is slow, daily. anyone's life here can go mad anytime, carefull.
The problem lies in two areas:
1) Printing, theft, by the banksters steals and destroys capital. It is the lack of capital that makes restarting things difficult.
2) Government that tries to continue to steal and plunder the people will inhibit Restoration of the underlying economy. This was most manifest during the 30s in the DC US, and the last century of Rome.
The banksters need to repay us.
The Yin and Yang of the destruction we find ourselves in is the plunder and violence of the banksters and their violence-puppets, government.
This has been their plan all along, they just needed the technology they didn't have until now. The next currency will be both global and digital. No hiding cash, or dodging taxes. They will no where every "dollar" is spent and/or collected, what was bought, what was sold. TOTAL CONTROL. Get out of line, and they will take you off line until you are back in compliance.
Every once in awhile some writes something I never thought of or ever read before. It is the reason I habitually read comments.
Your comment was it. Thanks for giving me something else to ponder.
Something else to Ponder? Man, you are upbeat, kudos to you. This is depressing as hell. My kids will grow up in a world where proper behavior is defined by beaurocrats. Where they spend their money, and on what. What activities they take part in. What they read, where they shop. Digital currency just completes the process that was started quite a while ago.We are simply in the illusory "still free society" phase before a crash that leads to desperation which leads to forfeiting total control of our lives.
It's a matter of time before we are taxed for buying the "wrong" food (according to the USDA) with the basis that it is not "fair" and will drive up Obamacare healthcare costs for everyone. We already have politicians weaponizing government agencies against citizens (e.g. IRS v. Tea Party).
I've found that assuming the evil worst of the ruling elite leads to 2 things: 1) people around me thinking I'm "a little off", and 2) unfortunately, being proven right.
Does this mean I will be able to carry all of my considerable wealth inside of my new Iwatch? Cool!!
But why do all account numbers end in 666?
because that's the number of his name
I watched a video ...the sweatbands the Jihadists wear, same as their green flag ...reading alah is great, is a snake shape with three little 6s inside the humps of the snake.
Three sixes on their forehead...weird.
Hope for the best--plan for the worst
Chris Martenson's guest Richard Duncan says we have at least 4 years once the FED starts QE4.
I'm going to graduate before I die. Whoopie.
Ooops I didn't listen long enough. His guest is a whack job that believes you can print your way to prosperity.
Ok ok dude says the US (if there were a us, he has been living in asia for the last 25 years) has a window thanks to the slave labor pool of 2 billion people that live on less than $3 a day.
Actually I don't believe anything Chris's guest says. He quotes government figures as if they meant something. Man o Man people that have money sure can be conned.
Now the stupid bastard is talking Republican / Democrat bullshit. I do like his ideas of giving money to corporations because I think I can get a solar company together on Q99X2 that the FED can fund during this "Window of Opportunity."
this is a crap article.i wonder how much money there is in a bearish gold newsletter?
the part it gets right is the gold underpinning of the next system in some form, at least for awhile, before they return to fiat.
there are no utopias in store. there will be distopia until the reset equalizes the world economies so that a shirt made in india costs the same as a shirt made in nyc but only madras cotton can be bought in india, true comparative advantage. that is the dream of the nwo. sounds great until the usa says it runs the show and shoots anyone in their way. that is why the framework of the new reserve currency will come out of the brics with china and russia (and eventually india) leading the way.
gold will go to the moon in dollars as the dollar becomes increasingly more useless.
I agree that we are going global sooner than later. The world currency will be crypto, and will fool everybody making them feel safe and private. This neo-feudalism we live in is just paradise for the elites. In the old days the peasants knew who the nobles were and where they lived. Today nobody really knows who is behind the curtains, so they don't fear pitchforks and torches anymore.
Restarting the economy is easy. You begin by funding all the people named Q99X2 first.
Now I'm being told that PMs are NOT the thing to be in during a deflationary depression. But what *is* then? I'm guessing cash, physical paper dollar bills. I know I sure do wish now that I had just hoarded physical cash intead of plowing most of it into PMs that lost most of their value at a breathtaking speed, essentially pauperizing me.
I understand your angst.
But I always ask myself, "Self...why does JP Morgan short paper PMs, yet they buy and store actually silver?"
Self answers..."What do they know that we don't?"
Jungle Jim, the fat lady hasn't sung yet
Do those who own casinos actually gamble??
You're not alone my fiend....
I wish instead of buying PM's in 2011 I'd have bought 9mm and .22 cal ammo by the basket.
What is the weight of one Bitcoin?
About 12 minutes I think.
"The problem of a debt reset is not the wiping-out of creditors, but the destruction of currencies together with it. Without currencies, the economy cannot function with any efficiency."
methinks the problem here is that there is a certain "American Gold Bug" gospel that has to be respected
the first recorded currency war was between the Athenian Empire and what used to be called Asia. silver versus gold
both are still valuable for themselves, even today. that silver won... well, gold had several comebacks, later
later currency wars did have their casualities in the form of fiat currencies being destroyed by hyperinflation and monetary unions breaking up
but for some reasons, the "American Gold Bug" gospel says "all fiat will be destroyed", paired with "in the same decade"
well, it is... a possible outcome. but it would be a completely new way of the resolution of a currency war. and, in historic terms, an amazingly simple resolution
history is messier and more complicated then that. why should be the future become... simpler?
The problem with a reset is
IT IS A DEFAULT OF OUR CURRENCY WHICH IS A DEFAULT IN THE CONFIDENCE OF THE WHOLE FUCKING SYSTEM!
How do you regain confidence? Not by printing pretty new script. By removing and holding those accountable who destroyed our confidence, including all the gamblers who thought they could make a living by skimming off of the backs of those who truly produce.
Face it guys. Those setting behind their computers, betting on the corruption, have played an instrumental role here. Few are innocent.
does a major war cover up economic disasters like the global economy we have today? it seems to me the people driving this gongshow bus have positioned themselves for the satus quo to be maintained and dont really plan on it being too extreme.
+1 just add a "shifting" before "status quo"
as my mentor used to tell me, radical, extreme solutions are what The Poor and The Powerless... wish for, dream of
a shifting, steadily changing "status quo" is what The Rich and The Powerful... work for, plan for, use and thrive on
major wars happen only when too many radical and extreme solutions are tried at the same time. from the point of view of the Rich & Powerful, those are planning failures
yes totally agree, they just position themselves in ways that maximise their gains and control. Back a while ago one of the elites (cant remember his name) was down here in Australia checking out production in their gold mine down here, dont know if his intention was to keep or sell the gold, but from the way he was talking he saw a good future for the gold mine. Also, Murdoch was positioning himself for a media takeover a while back, I didnt follow it up to see if he completed it. Our food processing sector, export infrastructure and agriculture sector have been bought up one by one, I'm probably wrong but I cant see them blowing the world up if this is the case, just strategic positioning in an evolving world.
You will remember that for many people, when they do not like the pending outcome, they toss the gameboard and become beligerent.
I think grade school analogies work pretty well in effort to understand the behaviors of the ruling class. Badly behaved kids with impressive vocabulary and ability to fabricate meaningless and unverifiable claims.
The problem lies in the creation and existence of debt and of interest on debt. Well that and men with guns.
Why is it that we get subjected to article after article based on the assumption that our financial system is basically sound and that all we need to do is cancel some debt to fix the problem. This is an idiotic proposition. Since it is the financial system that has led to the current situation a reset will only create a pause before exactly the same problem happens again. It is like cutting the leaves off a weed, rather than pulling it out by the roots. How about we have some intelligent debate about what a new system would look like?
I stopped believing this was about money a while back, to me its about control. By keeping society with a debt cannula in its arm, we are totally exposed, not unlike our dependence on oil which renders society legless in a short period of time. If sound economic measures were enacted, would TPTB (including govt) have control over us?
I agree with you. If you are interested a good book in this area is'Debt-the first 5000 years' by David Graeber.
Smart people understand that money is not real, but the title to the property and souls it buys is very real.
Power is the prize.
We all want to tell somebody what to do. This is how democracy gets its hold...promising one group they can command another.
Some will not be satisfied until they can tell us ALL what to do.
Luckylongshot- if article after article told you everything was shit and there was not going to be a recovery, let alone a booming economy over the next decade or so, and the only thing that will save your bacon is gold or silver, then what do you think you might do with what little currency you have left?
That's right! And that's precisely what TPTB don't want to to do because how can they possibly set up the next scam when they are running for their lives from peoples who wealth they just stole.
I would go and look at the history books to see what has happened under a gold standard. This would reveal that they never work for long because linking money supply togold supply is a recipe for depression and war. Then I would look at the times in history where humanity thrived and this would reveal that theese times were invariably when there was no usury and that means they occurred under a public banking system- then I would go and read Web of debt by Ellen Brown for a detailed explanation of why and how a new system could operate....and then I would go and buy gold and silver and wait.
I'm kind of hoping for a massive solar flare that kills the entire planets electricity for years. Then we would have a true reset and the population would decline in mass. The world (and the people left living on it; Could care less if it's me) would be much better off.
The 1% will survive.
The saying is "couldn't care less", if you could care less then you care. That was the easiest correction to your drivel.
The great reset is here. Look around and figure it out for yourself. The economy is gone, along with the working class, replaced by an ever vigilant government afraid of losing control while attempting to maintain massive taxes and a liberal agenda that no one cares about or can afford. It's here my friend, how it plays out will be intresting, if not downright violent.
Martin armstrong latest is about the reset. better have some coins
First The Great Leveling. And that's what is about to happen.
I have my own Federal Reserve -
Mostly Federal HST in 124, 147 & 230 grain. ;-)
A reset to a gold-backed currency makes too much sense to ever happen.
The US will nuke China and Russia before allowing a truly independent audit of our gold reserves.
Money creation is a happy process. Everyone likes it, from businesses to banks to governments to the everyday wage earner who is happier even if his salary only rises by the same amount as inflation. And this is so even for our debt-money system, in which money is very much ‘loaned into existence’ as a debt is created. The temptation is strong, and this is fundamental.
I guess as long a writers are clueless about what money actually is ... now, in the past, and in the future ... we're going to have nonsense articles like this.
Money is "a promise to complete a trade". It is created by traders.
Money "is debt". A trading promise is a debt until delivery.
Money is not about capital, it is about trading.
Money is extinguished on delivery of the trading promise.
DEFAULTed trading promises are recovered through equal INTEREST collections and extinguished.
Trading and investment are totally different things. Money originates with traders. It is only manipulated by investors.
Capitalism is "two years".
Fiat means "let it be done" or "it shall be". Wikipedia says "Fiat money is currency which derives its value from government regulation or law.". This is wrong on its face. Money derives it value from being accepted in simple barter trade. It is so accepted because, when properly managed, it is a perfect store of value, it is freely created by traders and it can be parsed or combined as need be. Supply and demand are in perfect balance ... it's the nature of a trade. It has no related commodity (which is subject to supply and demand) to be concerned about. The traders decide its value in their continuous dynamic behavior.
Government setting the value of currency (which is money which is debt) is a false concept. Our government tried to do it with gold. The unfairness of that became obvious from the disputes in the late 1800's about silver backed money vs. gold backed money. The futility of commodity backed money was obvious by the early 70's when it was abandoned. The commodity backing did not prevent the abuse (counterfeiting) that led the debasement.
If money was something of "intrinsic value", there would be no dispute over its backing. Any commodity should work. But it's really about who controls the commodity declared to be the backing of the money. Such control is being claimed and fought over by "investors, capitalists, and governments"... not by "traders". As long as money holds its value over the period of delivery on the trading promises, traders don't care about backing. Its very acceptance gives it its value. And protection from counterfeiting is all that is required. By the way, governments are counterfeiters. They create fake trading promises on which they have no intention of delivering.
Backing of money is a ridiculous question on its face. It is traders who create money. It is the trader's integrity and the marketplace itself that "backs the money". Money is just a certificate of a trading promise in the process of delivery. Once delivered, the money representing the promise is extinguished. If the promise is not delivered as certified, the DEFAULT is recovered with like INTEREST collections and is extinguished. This protects the other in-process trades. This guarantees the marketplace zero inflation by the relation: INFLATION = DEFAULT - INTEREST = zero. Traders who deliver on their promises enjoy zero INTEREST penalty. Really "irresponsible traders" are left to pay-day loans and pawn shop services ... high INTEREST "investors" who experience high propensity of their customers to DEFAULT.
Money allows simple barter to take place over time and space. It's just that simple. This is because, when properly managed, money is the most valued object of at least one party in virtually all simple barter exchanges.
All money we have ever seen is "improperly" managed. Our money has a 2% leak by intention and a 4% leak in practice ... that leak going to the benefit of the manipulators ... i.e. governments and investors and capitalists. Even with that guaranteed leak, our money is preferred as a trading object over any commodity. It's much more convenient ... and more fair ... and more efficient than using any commodity. When you have government taking over 50% of your productivity, what's another 4%? When using a commodity for money there is a minimum 10% leak just in the handling ... not to mention the distortions brought on by the varying supply and demand for the commodity itself.
Money is "a promise to complete a trade". It is created by traders, not investors and capitalists. To describe money otherwise is pure subterfuge. The purveyors of this subterfuge should be exposed for their real intentions. As they say, "follow the money".
withglee
"It is traders who create money." Huh?
It is the government that creates money (the medium of exchange) and it most often grants money creation to their ilk in the financial elite in exchange for political favors.
If 2 pigs equal 1 cow in a transaction and both "traders" agree that the trade equals $1000 FRN, the "traders" can't conjure FRN's into existence, only the all powerful state can.
All parties must agree that the face value of the "money" can be agreed upon- that $1000 is $1000 and not $900. And that the money has some sort of time value, a store of value, that won't be lost (at least in the short run).
If I am wrong, try creating your own money and find out how vigorously the government protects its monopoly on money creation (conjuring).
You are both wrong.
Money is not created. It is chosen.
It is chosen by those with something to trade, but for different purposes than they choose currency.
Both Currency and Money are for third party trade. The difference is time scale. I can trade labor for currency so long as everything I want (or ever will want) is available immediately. But it won't be. You cannot purchase future security nor retirement, nor vacations with currency. All of those presume a want that is not current, but is in the future.
For this reason people also desire MONEY...which has all the benefits of CURRENCY, but also acts as a store of value. You don't have to spend it immediately in order to get out as much as you put into it.
The Gold/Silver ratio applies to CURRENCY which is different than but related to money. CURRENCY can be anything. Money is only money if it is a store of value...otherwise whatever you traded to get it may as well have been given away. This is why the root word of CURRENCY is CURRENT... You only have to use it once. Not so money.
Here's a clue... any arbitrarily decided value is, by definition, NOT MONEY, but only CURRENCY...if that.
If its value is discretionary, then it is not a store of value.
Let's Review:
CURRENCY and MONEY are both for third-party trade. CURRENCY is chosen by two traders in a given transaction. MONEY is for third-party trade OVER TIME, and is chosen by MARKETS, by virtue of its capacity to store wealth.
For this reason, CURRENCY always has a lower value than MONEY...because you don't know what you can get with it a year (or week) from now. The difference is GRESHAMs Law... People will continue to use currency...but they will not hold it. For this reason money is always scarce...but currency is always plentiful.
You don't keep currency longer than you have to because you don't know if what it will be worth tomorrow is as great as what you traded to get it...so people will tend to spend all the currency they have for real things from paycheck to paycheck (sound familiar???)
Governments and banks like to set arbitrary values FOR CURRENCY in order to covertly steal wealth. That is literally the only purpose of government-defined currency. Yes, they have innumerable justifications of WHY they think themselves justfied to steal. Nevertheless, lacking that purpose, governments would be disinterested in defining currency.
Lacking that motive, banks would never engage in fractional reserves, but simply charge a percentage in return for their services of portability and security. And banks would have to PAY - seriously PAY - to entice people into money market investment services.
The whole modern conception of currency is only about one thing. It is about THEFT.
You are both wrong.
Money is not created. It is chosen.
It is chosen by those with something to trade, but for different purposes than they choose currency.
Money is "a promise to complete a trade". This is obvious from examination of a trade's three steps: (1) Negotiation; (2) Promise to deliver; (3) Delivery. In simple barter, steps (2) and (3) happen simultaneously on the spot. Money allows (2) and (3) to happen over time and space. Thus, money created by traders is obviously an "in-process promise to deliver on a trading agreement". The money is extinguished on delivery. The money did not exist before the trade and it doesn't exist after the delivery. But it does exist during the process of delivering on the trade. The trader's themselves "choose to use it", but that is irrelevant. They are never obligated to use it except under forced trading situations (like paying taxes).
The language on the FRN certificate "this note is legal tender for all debts public an private" has no effect whatever. Try to get your money in the form of FRNs out of a company like Fidelity Investments or even Amazon.com. Can't do it. Only banks, as our MOE's agents, must give you FRNs in payment of their debt to you.
Money, coin, currency, notes, accounting entries ... all are instances of the same thing ... debt ... an in-process trading promise. It's not a bad thing. When created by our US Government, they are counterfeit as they are guaranteed to be rolled over ... never repaid ... DEFAULT.
For this reason people also desire MONEY...which has all the benefits of CURRENCY, but also acts as a store of value. You don't have to spend it immediately in order to get out as much as you put into it.
There is no distinction, nor need there be a distinction, between money and currency. If the money you use is our currently mismanaged FRN MOE, you "will" experience a 4% leakage over time. You will experience no leakage over space, as long as the space is the USA.
Your confusion probably comes in thing gold or silver or even bitcoins are money. The distinction is in their creation. But when you realize that money exists to facilitate trade, not to "be" an item of trade, that you can easily see what is money ... and what is just stuff.
The major fallacy of bitcoin is that it tries to mimic the fallacy of gold and silver ... that being rarity or resistance to counterfeiting. Rarity is not a welcome attribute of any MOE. And resistance to counterfeiting can be achieved in more efficient ways.
"It is traders who create money." Huh?
Having trouble with the obvious?
It is the government that creates money (the medium of exchange) and it most often grants money creation to their ilk in the financial elite in exchange for political favors.
The government is just another trader. It promises to deliver services and build infrastructures. It promises to complete those trading promises through tax collections. It predominately DEFAULTs on those promises. Some of those DEFAULTS are mitigated by INTEREST collections. However, most aren't mitigated at all and the result is INFLATION. Since the government does this over and over again consciously, it is a counterfeiter ... not a trader. Any MOE "must" protect against counterfeits.
There is no necessity for a government to be the MOE manager. And just as there is no necessity to have just one insurance company, there is no necessity to have just one MOE manager. The marketplace dictates (though misguided governments continually try to interfere).
All parties must agree that the face value of the "money" can be agreed upon- that $1000 is $1000 and not $900.
All parties "will" ultimately agree implicitly. But the only "explicit" agreement is between the two parties in each specific simple barter trade. One thing that is obviously known is that two $500 can be substituted for one $1000. Other than that, the worth of those pieces of paper is in the eyes of the beholder ... who gauges that worth through experience, published prices, his wage trades, and their acceptance by other traders for things he perceives as equal in value, based on the number printed thereon. For it to work all traders must be confident there are no counterfeits (i.e. all money stands for an in-process promise to deliver on a trade). Such confidence is accomplished at the money creation stage through perfect transparency and complete rejection of anonymity. At the simple barter stage, where the certificates trade as the most desired of simple barter objects, anonymity is the rule.
And that the money has some sort of time value, a store of value, that won't be lost (at least in the short run).
Money only has time value through some form of deficiency. In a properly managed Medium of Exchange and a marketplace of only perfectly responsible traders, all traders promises are freely certified; all traders deliver on their promises (no defaults); no interest collections are necessary (to recover defaults). To the extent that that perfect situation doesn't exist, DEFAULTs are experienced; INTEREST is collected to recover them; and those "irresponsible traders" paying that INTEREST see it accumulate over time. Zero interest doesn't accumulate over time.
In a properly managed MOE, INFLATION is guaranteed to be zero by the relation: INFLATION = DEFAULT - INTEREST = zero. When INFLATION of the MOE is guaranteed to be zero, it is a "perfect store of value" over all time and all space. That guarantee is enjoyed by all holders of the money, be they perfectly responsible traders or irresponsible traders. Freedom from INTEREST collections, on the other hand, is only enjoyed by traders who "never" DEFAULT. It's an actuarial problem.
If I am wrong, try creating your own money and find out how vigorously the government protects its monopoly on money creation (conjuring).
That's like asking me if I don't believe protection rackets exist, try not paying the mob the protection money they demand.
Frankly, I have created money on many occasions. I have bought cars. I have bought houses. I recorded my trading promise with the MOE's agent (a mortgage or finance company). They certified my trade and gave the seller the certificates. He gave me the house and his part of the trade was finished. Monthly thereafter, I returned certificates as I agreed and they were extinguished. When I had delivered in total as I promised (and as monitored by the mortgage or finance company or collection agency), I was given a document that released the lien recorded by the county clerk. I filed that document with the county clerk for all to see. My trade was completed.
Unfortunately, we have a mismanaged MOE. While I have never DEFAULTed on any trading promise I ever made, I was forced to buy insurance against DEFAULT on my early payments (i.e. lump prepayment of anticipated DEFAULT in the form of mortgage insurance); I was forced to insure the property against destruction (though no property of mine, nor of my neighbors, have ever been destroyed); and I was forced to pay INTEREST in excess of my propensity to DEFAULT (i.e. non-zero interest). In the end, I bought the houses three times rather than the once which would have been fair and proper.
But, netting it all out "I created the money". Not only was there no capitalist involved, there was no capitalist necessary.
Keep in mind, a capitalist is just "two years".
I note, "Gold within its borders" is a very different quantity than "the official stockpile claimed by any single country".
The first is all inclusive.
The second has dual implications. Firstly, what if the official stockpile is not as claimed? Secondly, what if the majority of the amount in the country is totally unrelated to the claimed official stockpile, and in fact the officials have little or no knowledge of where that Gold is and who has it?
I note that the term "Keep Stacking" is a phrase formulated by native English speakers. Presumably this would be because someone who is not an official believes(ed) it is(was) beneficial to collect something to stack. And if the author's pronouncement that the current Gold price is fraction less than 10 of the real monetary value of Gold, then the percentage of population storing wealth in metals would be a non-issue. The issue is how much wealth they have there, not the numbers of people holding it.
I also note, people think that Bretton Woods was a Gold Standard. It wasn't. This lends credence to the author's claim that the IMF could be accepted given Gold backing. But then the author is also correct, that like Bretton Woods, the percentage thus backed is completely flexible, overtly and covertly such that any such presumed backing is is an empty presumption. Please note that over the course of less than 5 years Bretton Woods went from $33/oz to $42/oz to INFINITY/oz (because the law governing convertibility has not been repealed, only redemption persuant to it).
I take issue with the idea that everyone loves monetary inflation (money printing). This is untrue. Those who covet others' wealth love monetary inflation.
Those who have that wealth do not love money printing. It represents theft of the life they expended collecting their wealth - theft, or enslavement by any other name.
I also note that the author happily concludes that the facility of the 'Reset' - which he as EXPLICITLY DEFINED AS A RESUMPTION OF THE INLATIONARY CURRENCY REGIME (THEFT) AS OPPOSED TO ANY FAIRER ALTERNATIVE - is difficult in the inverse with the public knowledge of monetary matters.
He essentially said it is harder to con the People when they know The Con.
My problem is with the Con itself, not with the identities of those perpetrating it. Do I care whether I am robbed by an American in a suit vice a faceless international banker in a suit, vice a Chinese banker in a suit??? No. I do not. The issue is the theft, not the national identity of the thief.
That is what the currency regime is - a confidence game for the purpose of separating producers from the wealth they produce. The REAL effects, which he did not mention, are in the lost innovation and the foregone productivity that was impossible or inadvisable in an era of organized theft.
gcjohns1971: Your comment presents good logical realistic thinking. That being said, what do you have to say about how money comes to be?
If 2 pigs equal 1 cow in a transaction and both "traders" agree that the trade equals $1000 FRN, the "traders" can't conjure FRN's into existence, only the all powerful state can.
Money allows a trader to let the purveyor of pigs set his own frame of value and the purveyor of cows to set his. They don't have to agree. They don't have to be rational. They don't have to remain constant. Money is silent on those subjects. If the trade takes place, agreement is made on the value of an object as related to the money exchanged in simple barter, for that particular trade.
Money's responsibility is to be universally accepted over time and space; to guarantee zero inflation of the MOE itself over time and space; and to be freely created by traders; and for the supply and demand for the money to always be in perfect balance (it's the nature of a trade).
Money has no interest whatever in things like prices, GDP, interest rates, levels of employment, changes in political persuasions of the people, or almost anything else you can think of (most being current distractions about money). The trader who certifies his trading promise to be some number of money units sets its value with respect to his trade spanning time and space. It then goes out into the world and circulates as an item of simple barter, where each individual trade sets its value. Ultimately, he delivers on his trade and receives certificates which he returns and which our extinguished. If he trades wisely and efficiently, he may receive more certificates than he promised to return (he profits). Or he may receive fewer certificates (he loses). Or he may not ultimately get as many cows as he thought he would get for the pigs he traded (using money as the facilitating medium).
The important thing is, he, being a pig seller wanting cows, did not have to find a cow seller who wanted pigs.
It just doesn't matter to the MOE manager or the marketplace.