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Russell Napier Explains What's In Store For Gold If Cash Is Outlawed
By Russell Napier of the Electronic Research Interchange
Why we didn’t have negative nominal yields in the Depression and the end of QE
Oh the time will come up
When the winds will stop
And the breeze will cease to be breathin’,
Like the stillness in the wind
’Fore the hurricane begins ---
The hour when the ship comes in.
And the words that are used
For to get the ship confused
Will not be understood as they’re spoken,
For the chains of the sea
Will have busted in the night
And will be buried at the bottom of the ocean.
- When The Ship Comes In (Bob Dylan 1963)
The Napier Euro High Yield Capital Guarantee Fund (discussed in the November 12th edition of The Solid Ground) is almost ready for launch. It offers a unique combination of attributes to investors. It has significantly better risk/reward characteristics than both deposits and government debt securities. In short, it is a room full of Euro banknotes.
The launch of the fund will clearly mark the limits to monetary policy and thus the end to QE in Europe. The fund’s many attractive features include:
- a small negative yield (my fee), but it yields more than Euro bank deposits and most Euro denominated government debt securities.
- the assets are a liability of the central bank and not the commercial banks. While bank deposits, above the level guaranteed by governments, can be bailed-in and frozen during any bank reconstruction, the banknotes nominal value is assured by the central bank. The fund thus offers significant capital protection and enhanced liquidity to any bank deposit.
- unlike longer-dated debt securities of the government, the banknote will not suffer a loss in value should fears of inflation rear their ugly head. While the markets will begin to price future inflation into longer-dated fixed interest securities, the banknote holder suffers no loss at such apprehension. The fund would seek to move from banknotes should recorded inflation appear, as this would impact the real value of investments. The nominal value of the fund cannot decline if inflation expectations rise, ensuring significant protection compared to government debt securities.
- banknotes could be bid up, relative to deposits, as the authorities seek to restrict access. Last week Schweizer Radio und Fernsehen reported that a Swiss bank had refused to transform the deposits of a Swiss pension fund into banknotes and that the Swiss National Bank confirmed that they were against the hoarding of banknotes to avoid negative deposit rates. The ECB is just as likely to be against such bank runs as the SNB. Any move to restrict access to central bank liabilities (banknotes) and enforce the holding of commercial bank liabilities (bank deposits) is likely to lead to a premium of one over the other. Given the capital risk and lower yield on bank money, Gresham’s Law is likely to see banknotes becoming a store of value, while people seek to use the inferior bank deposit as a means of transaction. Banknotes traded at premiums to bank deposits, albeit in closed banks, in the US in the 1930s. A premium for banknotes would provide a rising nominal value for the fund.
- the fund would hold only Euro notes with a serial number beginning with X, the X denoting that these notes have been printed by Germany. Such notes could also be bid up relative to deposits and even other notes, should investors fear the demise of the Euro and the re-birth of the DM or a northern European ‘NEuro’. Should this occur, the nominal value of the fund would once more rise.
- a banknote owner will be able to shift capital to any jurisdiction where the Euro remains fungible. Restrictions on banknote withdrawals and transfers of deposits were imposed in Cyprus, as part of the plan to prevent the funding base of the Cypriot banks moving to other banks in the European Union. The ability to shift capital across borders, should such movement be outlawed, would likely lead to a premium developing for banknotes. Should this occur, the nominal value of the fund would, yet again, rise.
- notes would be held in denominations of 50 Euros. The authorities are already minded to ban the Euro 500 note (known by some as the ‘Bin Laden’ because it is known to exist but is rarely seen). It is rarely seen because the ‘Bin Laden’ is prized by criminals and those seeking to avoid taxation, meaning it’s increasingly likely to be recalled and abolished. Any ban on large denomination notes to combat illegal activity is unlikely, however, to affect the 50 Euro note given its key role in everyday transactions in Europe. Those bent on illegal activity may just have to get themselves bigger suitcases to stash their smaller denomination notes. A premium may develop for such notes, and such suitcases, and should this occur the nominal value of the fund would, you’ve guessed it, rise.
The fund produces an enhanced yield over bank deposits and most government debt securities, and cannot be subject to a decline in nominal value unlike bank deposits or government debt securities. In some fairly extreme cases it may even produce a capital gain relative to most money (bank deposits). The only likelihood of loss is in the case of an instant and material rise in inflation that would undermine the real value of the fund. However, unless such inflation developed virtually overnight the fund could be liquidated, without capital loss unlike government securities subjected to an inflationary shock.
The inflation protection offered by banknotes is thus significant given the current yield on government bonds. While government bond prices may rise somewhat further in a deflation, the banknote arbitrage opportunity suggests that the upside for government bond prices in a deflation is very limited. Government debt securities did not have negative nominal yields in the Great Depression despite gross deflation so why should they they have them now? Thus, those speculating on government bonds to see negative nominal yields go ever lower may not get the capital gains they think are coming their way. Banknotes may even perform as well in a deflation as government debt securities and offer much better protection should an inflationary future appear more likely.
Given this combination of risk characteristics, why would you want to own a government bond or a bank deposit when the Napier Euro High Yield Capital Guarantee Fund is available? (Before I am inundated with e-mails looking for a prospectus, I should point out that I am independent financial consultant and, am not regulated to look after client monies. Also, I don’t have a basement or a machine gun.)
The attraction of a banknote fund arises due to an arbitrage which creates a limit to monetary policy. It is that limit which contains the key information about financial market reactions for investors. QE cannot force the price of government debt securities much higher and yields much lower, as increasingly banknotes and even bank deposits become attractive to investors compared to government debt. A limit to QE is a big story.
Such an arbitrage opportunity would limit the profits one makes in such bonds during a deflation and both notes and deposits offer major protection from capital losses should there be a major change in inflationary expectations. This would be a world of deflation where the scale of negative nominal rates would have a floor. Indeed, bond yields could overshoot into negative territory and then rise into a deflation as the limits to negative nominal yields became increasingly clear. Thus the recent rise in the yields of Euroland government securities may not be a signal of inflation at all, but rather a realization that we have reached the arbitrage limits of how far yields can fall.
A world of less growth and deflation, but one where interest rates are clearly stuck in nominal terms, is a very dangerous world for equity investors with surprisingly few gains for bond investors.
Historically the shift from deposits to banknotes was associated with the fear of commercial bank insolvency or illiquidity. That was called a bank run. Today a bank run is the natural consequence of forcing too much central bank liquidity (bank reserves) onto a system which simply does not want them. A banker does not want to accept this short-term funding if he cannot lend the proceeds at a profit.
The only way for the banking system in aggregate to repel such funding is to offer interest rates on deposits (bank liabilities) which force investors into banknotes (someone else’s liability). Tighter regulation and collapsing long-term interest rates mean that profits from lending for Euroland bankers are increasingly illusory. Banks are keen to repel deposits given the lack of opportunity to use them. If QE reduces the banks’ ability to lend money and also creates an arbitrage from bank deposits into banknotes, will it reflate the economy?
If you think the answer is ‘no’ then European QE will have to stop with fairly negative consequences for the equity market and positive implications for the Euro exchange rate. Evidence of selling of government debt securities with negative yields is thus not necessarily a sign of inflation. A move to bank deposits or banknotes from government debt securities can instead indicate that the limits for QE have been reached.
The more investors focus on the limits to the scale of negative nominal rates, the more they focus on the failure of QE or on Ken Rogoff’s paper on killing cash: "Costs and benefits to phasing out paper currency By Kenneth Rogoff, Harvard University."
While he doesn’t quite label banknotes a ‘barbarous relic’, he comes pretty close. The direction of travel in seeking to ban the use of cash is the same as those who railed against gold as a form of money. Once gold was considered too hard a money for society but now paper may be too hard for us to bear. It seems we need the digital money of deposits that shrink when subjected by central bankers to the hot light of negative nominal interest rates!
If banknotes are outlawed you will be forced to hold money that is a liability of a commercial bank (deposits) and refused access to money that is the liability of the central bank (bank notes). You will be forced to accept the risk of losses on a bank failure and banned from an instrument which promises no adjustment in nominal value. Any such ban would have to be a decision of government and not of the central bank. This means we’ll all have plenty of warning that it is on its way! We will be forced by law to liquidate the Napier Euro High Yield Capital Guarantee Fund and return capital or watch the fund’s value fall to zero as it holds something which has been stripped of legal tender status.
Euroland is not the only place where the limits to monetary policy are becoming more apparent. In the JPMorgan Chase annual report President and CEO Jamie Dimon warned that banks are having to turn away even USD deposits. This analyst has now spoken with three investment managers who have been asked to close their deposit accounts with JPM. At this stage other bankers still offer positive nominal yields on bank deposits, but how long will that last as orphaned deposits roam the streets of Manhattan, like Oliver Twist, in search of somewhere they can call home? These orphaned deposits will put downward pressure on interest rates for large-scale depositors and eventually, even in the US, the much reviled greenback may be seen as a store of value relative to bank deposits or Treasuries.
So, should we reach the limits to monetary policy, what’s in store for that ‘barbarous relic’ sometimes known as gold? It would be a period of rapidly rising real interest rates, as a floor on negative nominal interest rates had been set in a period of accelerating deflation. This should be bad for gold. As The Solid Ground has argued before, the de-leveraging which always comes with deflation and falling cashflows would be very positive for the USD. This would also be bad for gold.
However, in such a world, zero-yielding gold would be a high-yielding instrument. If the authorities ever sought to restrict access to banknotes, then gold would suddenly find itself enfranchised as money for the first time in many decades. So, given the scale of these competing forces, it is just too early to say what might happen to the gold price, but the allure of gold will grow the more it becomes clear that central bank fiat has failed and the age of government fiat is dawning.
The time is ever nearer when the price of gold will rise in an era of deflation. In due course, though no time soon, the full force of government fiat will engineer a reflation, albeit one replete with the misallocations of savings and capital so beloved by the bureaucrat. Then the PhD standard, in which the value of money is linked only to the words of the over-educated, will have ended. The gold price will rise even further, ‘And the words that are used for to get the ship confused will not be understood as they’re spoken, for the chains of the sea will have busted in the night’. And that’s ‘The hour when the ship comes in.’
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Apple Pay can fuck off!
The machine must be starved.
Banning cash? not gonna happen.
It will put the CIA/DEA et al, out of business.
When "cash" is outlawed it will merely create a blackmarket, which in fact is a real economy based on unmanipupated (and uncontrolled by authorities/banks) real supply and demand.
You can't be serious!! Gubbermint coming to my 100 acres?
1. Put several jars with new pennies into your safe so the boots aren't disappointed when they pry it open.
2. After serious beat down, give them a few bars of lead that you had plated with 10carot AU.
3. Stash real shit in trees thereby nullifying detectors.
Problem solved!
As a consulting engineer, I've already got myself to start bartering for services. I can tell an injection molder I'll do work for them, based on getting a client to come to thier company. The black market is here and will only get more prevalent to avoid confiscartory taxes
I think this is almost, but not entirely, complete horseshit.
Not horseshit:
http://www.theguardian.com/media-network/2015/may/08/trans-pacific-partn...
And because not a fucking thing can happen that is not influenced by the fucking Israel Lobby:
http://www.globalresearch.ca/aipac-sponsored-fast-track-measures-on-beha...
Which is a continuing assault on the 1st Amendment. Though the settlements are illegal under international law, and US policy, however Potemkin, also regards them as illegal, it makes sense for the ZOG to pass laws preventing people from boycotting products made in those apartheid settlements, no?
http://mondoweiss.net/2015/02/behind-legislation-designed
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Point is, the TPP is worse than you think, not only in its own terms, but in terms of the manner in which it is being secretly passed and amended out in the open.
What I mean is, you have president hopey changey not hiding the fact that he is rushing to pass this thing without the american people 'finding out whats in it'.
- and Israel's lobby has been along every step of the way.
Nothing backs the banknotes and people will be using them to cook squirrel when the neocons get their war in Ukraine going.
Paper is over.
“then gold would suddenly find itself enfranchised as money for the first time in many decades.”
Well, not quite. Gold has been continuously used as “money” for thousands of years– but almost always available only to privileged assassins and thieves; all others had no legal access to it.
Still, Napier’s article is well worth reading. He’s one of the very few who understands – or is willing to discuss – that bank notes are liabilities of central banks; which means if central banks are bankrupt, their paper is worthless – whether bank reserves or bank notes.
And, he is correct: if bank notes are outlawed, gold and silver will become the circulating medium – not automatically, but – by necessity; and – not immediately, but – eventually; and by very costly mistakes.
Furthermore, providing a gold based banking service will have to be done by private individuals according the law of nature: the same law by which American Founders produced our Revolution.
I (and many others) had foreseen a separate market for paper PMs amongst the banks, and physical PMs for humans, but now we see the same may happen for physical cash??! I'll need to think on this.
At least it means competing currencies, always a good thing.
Huge cash reserves exist outside the US; drug lords in Mexico, arms dealers in Africa, these sorts of "business men" will be super rich.
The road to hell is paved with good intentions.
They say they are pushing for cashless in order to reduce crime. To some extent this will happen. But the top criminals wil become the institution.
The banks become the crime.
Anyone holding "huge cash reserves" is taking a big risk of its value going to zero, if this "cashless society" becomes a reality. Because if no one will accept U.S. cash for major purchases, what exactly will you do with it?
The issue is not whether the bank will provide cash from your account on demand, and it is not whether holding cash is theoretically illegal. The issue is where can you spend it, or deposit it somewhere it can be converted to another form. If the answer to that is "Nowhere" then you have a big problem.
What are foreigners, Bob? And where does the US dollar take it, if they are suddenly no longer free to use cotton-linen blend FRB fiat?
And for 25 points, what would Hernando de Soto posit develops if the US were to adopt a bifurcated currency policy?
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I've had banks take my money. I've had governments use banks to take my money. I've had banks tell me they couldn't give me my money "just then".
When someone deposits money in a bank it ceases to be their money, legally. The bank then owns your money, and you own subordinated bank debt.
No one has ever broken into one of my safes, much less taken my money from one of my safes.
What happens when they change the "money"?
Seriously.
They don't need to break into your safe, all they have to do is change the money.
It's the same thing.
Gold? I dunno.
Stuff, mebbe different.
Best of luck.
When you use plastic now at Starbucks you are paying HSBC and JPM and a bunch of other middlemen 2-3%
If government removes cash from circulation in the USSA, you just add the cartels to the middle men (remove a few others) and add another few percent in fees.
The downside is far less than in some Dodd-Frank bail in behind derivative holders and other senior creditors.
Ya, cash will become the "black market". There is always a healthy black market as an economy crumbles, like the late '80s Soviet Russia. Drug lords hold literally billions in cash and they already launder it. Wells Fargo and other banks have already done some laundering.
For a while many people will simply trade using cash and keeping it away from the banks as long as possible. That will last a while, but eventually there will be too little cash to circulate properly and then it will be reduced to collectors items.
I really think the whole thing will crash and/or reset before that. The forces of derivatives and other fraud assets behind the scenes are too big, yet I sill don't see solid evidence of a more honorable replacement.
Interesting times...
Thats if the government doesnt confiscate all the gold again like FDR did in the 30s to avoid the whole thing? http://en.wikipedia.org/wiki/Executive_Order_6102
Again, dollars are no longer backed by gold. They are backed by the taxing authority of the FedGov slave master. This means metal transaction taxes, like cigs and booze.
If it gets to the point where the government goes door-to-door confiscating gold, it's pretty much all over.
Here is what you will see in regards to 'cash' --
You still see at some gas stations where they give you a 5 cent discount per gallon if you pay with cash. You are basically getting a discount for the gas station not having to pay a 'cut' to the credit card company.
The change will be to invert that, such that you will have to pay 3% more if you use cash. This will take some giggling and taxing by government, but they won't care. To 'hide' it, expect to see prices creep higher to cover that 3%, then you will be offered a 3% 'discount' if you use the new government 'wonder card'. You are already seeing the huge shift from regular credit cards to debit cards and to prepaid credit cards. All government payments are electronic to your account, or are paid through EBT cards. With half the country on 'the dole', government can force those people into not using cash. And I already see gas stations offering discounts to people swiping one of their 'member cards' that are set up to track where and how much gas you buy. The pieces are converging to reduce the use of cash by making it MOAR expensive to use than electronic money!
Napier sure has written a lot of words about a hypothetical situation. Do I find a single sentence of it helpful?
Nope!
Heh, heh... When Cash is "Outlawed", only Outlaws will carry Cash?
Revision: There is a little bit of interest to this article; the part about the Euro 500 Note, the "Bin Laden", because it is so rarely seen. Reminds me of the old US $1,000 bill, out of circulation, but worth even more today as a collectible. Ha! The only fiat that has actually gained value, even though net value has declined.
"Sound money is a basic human right. And full ownership of the deposits by the depsitor is a human right. If people are forced to use private legal tender then the banks should be utilities and regulated accordingly." -- Alisdair Macleod, of the clan Macleod.
Now you are Talkin!
- "the banks should be utilities"
"Australia will be the first to introduce a compulsory tax on savings. This is the ultimate Marxist state for now anyone with spare cash is the enemy of the Conservative Tony Abbott government. What I laid out at the Solution Conference is the ONLY way out of this nightmare. It is time for people to start spreading the word and get behind changing the game plan while we still have a game in play. We have to stop this confiscation of all wealth and the continual borrowing and taxation. This will lead to the total destruction of Western culture for we are plagued by power hungry insane politicians who cannot see past their nose."
http://www.zerohedge.com/news/2015-05-04/war-cash-australia-leads-new-ag...
Yo, Simon Black, good luck storing gold in Chile or Singapore, if TPP goes through.
You're gonna need a better plan.
Once again the House of Lords and their Money Trust have Reared their Fuggly Heads.
Singapore what a British Colony so makes sense that Hong Kong and Asia would Join a USSR type Net on Money so their Ruling Class would be Protected from Competition from Upstarts.
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- There is something VERY UNAMERICAN about our US Leaders & Bank SYSTEM, and I feel Spindled, Folded, and Mutilated
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** Thanks to the House of LORDS & The Money Trust **
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A. They already have control over World Trade, sort of like the Spice Guild in "Dune"
B. They have Global Free Trade in Place and in action, they just haven't announced and finished off the Book Cover
C. Pretty Sure they see You and Me as Assets and Profit Centers, like I am not a number I am a Free Man seems a very British Statement
D. Only Question is if USA and UK/France every really had Successful Revolutions... I'm very CLEAR that Latin American never succeeded in their Revolutions
----------------------------------------------------------------------
- There is something VERY UNAMERICAN about our US Leaders & Bank SYSTEM, and I feel Spindled, Folded, and Mutilated
----------------------------------------------------------------------
--------------------------------------------------------
** Thanks to the House of LORDS & The Money Trust **
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Edit: had tech difficulties, so deleted extra lines
Seriously? Cash outlawed but not gold and silver?
Yes. Cash ban=bank bail in. Not enough gold or silver is held privately, to make it worthwhile. Same thing happened in '33. Silver was bypassed. That doesn't mean they won't tax metal transactions, if they get a chance.
This Video will show the Patriarchy or Matriarchy you can Expect if Cash is outlawed. Looks like a British Colonial Court Doesn't It??
http://libertyblitzkrieg.com/2015/02/24/video-of-the-day-watch-as-florid...
Will "Cash for Gold" shops become "Bank Credits for Gold" shops?
LOL
Who the fuck would be dumb enough to trade gold for "Bank Credits"?
Western Civilization is impossible without ample amounts of untraceable currency in circulation, the world would end, there would be riots in the streets, bootlegers running everything, guns on fire sale, children dealing drugs, it would be madness.
Untraceable currency (cash) is the only thing keeping civilization going. . .
If anything should be outlawed its counterfeit bank credit/depoist accounts . . .
Money and its competitors have a few roles:
are two of its main ones but some of the replacements do not perform all the roles.
Dollars could still be used for transactional value long after it has lost value as a store of value. You could argue that has already happened. Some people also use bitcoin in the same manner.
Gold could be the store of value and people transfer into and out of it based on their needs (legally or illegally) from dollars or whatever....
People will need to be smart.
I'll take my silver dimes and half dollars to Bartertown for gas & booze. They don't allow the feds to come into Bartertown!
If the authorities ever sought to restrict access to banknotes
they would definately restrict access to gold
Question for you goldbugs: what are the best individual coin/bar weights to be buying gold & silver in?
also, is there an optimum ratio of 1oz to 1/2oz to 1/4oz to 1/10oz to 1/20oz gold coins that one should have?
been loading up on 1/10th oz gold coins lately
thinking of them like 100 $ bills...easier to trade
the old lady got me a tanned moose scrotum tobacco pouch
full of small gold coins now...
Personally, I like US(my country) minted 1 oz. coins, or 'junk' silver coins. The new fractional oz. coins have way too much mark up on them. US minted coins are legal tender in the US. This means people are obliged to accept them, just like junk silver coins. It also means the acceptor can claim face value as full payment instead of actual metal content.
Not to split hairs, but it is my understanding that gold, and silver coins are lawful money in the US, a step above legal tender - since they are issued by the treasury.
Can an American take a capital loss by buying junk @ $15/oz, and then putting it on the books as the face value?
What if they issue a new dollar, say 1000 old dollars = one new dollar. then face value on your junk silver might be quite a good deal... and so could be a jar of pennies :-)
The answer to that question is the SHTF definition of wealth:
How much can carry with you at a dead run?
These are my choices for silver:
1964 Kennedy half dollars (90% silver)
Roosevelt Dimes 1946 - 1964 (90% silver)
Either of the above can be purchased as 'junk silver'. The condition of the coins you receive will not be too bad, as these are the last of the silver coinage and were not in circulation that long. If you buy something like junk buffalo nickles, you WILL get some real JUNK coins!
I've had good results dealing with APMEX, JM Bullion, and Kitco.
A coin value calculator so you can see how much over spot you're paying:
www.coinflation.com/coins/silver_coin_calculator.html
The 1 oz Gold Maple Leaf is a good value. The maple leaf is 24 karat gold. US gold coins are 22 karat. That doesn't make a big difference, but I just like having pure gold. If the price of gold skyrockets, 1 oz gold coins will be hard to trade for everyday purchases. Smaller denomination silver coins will work best. BUT, if you find yourself in a 'tight situation' with the authorities, one or two 1 oz gold coins could save yor ass. Or, say you or a family member needs a medical procedure - gold will get you to the head of the line.
Precious metals are an insurance policy. Don't dwell too much on the current prices. Take a deep breath and just buy! (Along with extra food, water, household products, and ammo.)
If you're buying precious metals to flip and sell at a higher price - you're doing it wrong. Buy precious metals to exchange for 'stuff' if things get bad.
EDIT: OOPS! Sorry! I was assuming you were in the US. Shouldn't have done that. This forum is international.
First they outlawed gold .... this time gold and silver .... but, not copper ! Brought to you by the Copper is money too institute .... you can hide it in the walls of your house ? I cede any remaining time I have to Yen Cross !
There used to be a fortune's worth of copper under the streets of New York, but in the past 25 years they have mined out much of it.
What's in store for gold is if the global conspiracy that manipulates your reality steps on its crank so badly that they give up a 1.5 century monopoly, gold will rise to $20k an ounce. On the other hand, if they merely shoot themselves in the foot, gold will rise just enough for morons to offer themselves up to the Aztec Gods.
Being right is a poor excuse for doing what makes money.
The problem is debt. Forcing everyone to cash would solve the debt problem.
Then again, maybe it's just about control.
Doesn’t banning cash transform credit/debt into the de facto ‘Unit Of Account’?
If so then, it will make the Fed, whose primary function is converting government checks/debt into spendable credit, obsolete as the very act of deposit creates the credit to pay in one step. There is nothing to settle, the check is paid in full upon deposit, and any bank can do that. Banning cash would totally eliminate government debt. What would they owe? It’s already paid in full at the moment of deposit !!
What value would a Treasury Bond held by any bank hold? They would no longer be I.O.U. Cash Dollars, they would no longer represent a government debt obligation, as any ‘Promise To Pay’ by government, is paid the instant the banks used it to create credit, paid in full.
With credit as the de facto ‘Unit Of Account’, any credit created by banks using Government Bonds, would have to be returned to the government with the bond as that credit is a product of the bond and is attached to the bond throughout its existence. No bond, no credit. This transforms banks into the primary debtors, effectively reversing the rolls of obligor and obligee.
Those fools in the banking system who are promoting the banning of cash are totally outwitting themselves as it will make all centralized banking with its attendant government debt obsolete, and place the banks who use Treasuries to create credit, in debt to the government!
Wow......
I think bitgold might become a good thing: accept and pay in gold up to 3 digits behind the decimal point. Redeemable with debitcard starting this summer and redeemable in gold. Might become a game-changer. Anyone ideas about this company?
“You can’t be serious!! Gubbermint coming to my 100 acres?”
So says “fjag”. At 15:48,
He, effectively, moved to the country, bought a cabin and stocked up on food, ammo, guns and PM.
He got suckered.
He forgot that during every social breakdown (and sometimes, before) there is a proscription: a time when natural leaders are exterminated, along with numerous other “trouble-makers”, dissidents, hoarders et cetera.
During the French slaughter (1792-4), Judeo-Bolshevik money-lenders withheld food from the market; they blamed shopkeepers, peasants (farmers) and hoarders for such shortages, seized their supplies and paraded them before a Revolutionary Tribunal before carting them off to the guillotine.
During the Russian mass slaughter, they did the same thing, only with a wider net: hooligans, speculators (those with property worth 10,000 roubles or more), anti-socialists, obstructionists, and saboteurs were added to their lists. Their property was seized, they were paraded before a Revolutionary Tribunal before receiving the shot in the nape of the neck.
You think it’s not likely here? Then, why is the Department of Homeland Security modeled after the French committees of terror, the Judeo-Bolshevik Cheka and the Nazi Schutzstaffel?
What does the DHS plan to do with 2-3 billion rounds of ammo… an amount sufficient to wage an Iraqi War, at its highest rate, for 25 years? Remember, so-called terrorists do not travel as armies; but, rather cells of 5-10… and the DHS needs 2-3 billion rounds of ammo for these tiny cells? Try again.
And, why is the DHS recruiting, training and protecting informers?
By the act of Congress that established the DHS a system was created by which informers could make false allegations against anyone they please with near-total impunity. Of course, such informers aren’t described as informers; rather they are given the title “submitting person” and the DHS Act provides that their falsehoods will never be examined by any court or legislature or law enforcement agency. The legislation even specifies how this immunity is obtained. The “submitting person” only has to give an “express statement” that his lies were “voluntarily given” and that he expected “protection from disclosure”.
Normally immunity is decided on a case-by-case basis by bureaucrats or prosecutors. But not here. Under the DHS Act, authority to grant immunity is given to those who provide false testimony. What more could as thief want?
It’s all there, in the act that created the DHS.
Rest assured, your name is on a list, and when the DHS knocks your door down, it will be too late.
There is a better alternative: we have to duplicate what American Founders did, minus their mistakes. (Complete article)
What is the lesson of real history here?
It is that those who prepare for social unrest are always among the first to fall in proscriptions.
The last stanza of When the Ship Comes In
Then they'll raise their hands,
Sayin' we'll meet all your demands,
But we'll shout from the bow your days are numbered.
And like Pharaoh's tribe,
They'll be drownded in the tide,
And like Goliath, they'll be conquered.
Gold is no threat to a cashless system, because those who understand honest money are few and far between.
Millennials have never seen a silver quarter, let alone a double eagle.
I checked with my lawyers at AK, AR, and Glock, and they said,"ney, ney," on the outlawing of cash and the taking of gold passing Constitutional muster.
Liberty is a demand. Tyranny is submission.
"If you don't have legal protection from AK, AR, and Glock, you are vulnerable."
Well let's consider who gets hurt. I could see a process where poor people flip out and get killed by the millions over a short 8 years, say 2016-2024 term of possible next president.
they thin the herd and then say "Who Knew" or maybe they allow Elites, Government Officials, and Judges to blackmartet some kind of payment like cash.
So who gets hurt? EBTs get passed around, but I think Cash is still king when you talk Blackmarket Labor, Pimps, Prostitutes, Child Abductions, Catholic Church and other Pedophile Networks, All The Street Drugs of which seem to be exploding in variety, Espionage Networks, all 17 Spy Agencies, All Blackmail Schemes that hope to succeed unless it is education, room & board for children of Officials, gratuities to Foreign Officials that the USA, IMF, WB, UK, France, China, Brazil, India, Pakistan, Russia want to Woo.
Advanced countries can find ways to bribe, but the little people can't trade favors down the road, not transferable,... could be Strong Arm Robberies for Jewelry and Home Break-Ins would Sky rocket... along with Chop-Shops and Car-Jacking.
The best size gold is 1/4 oz. Also gold 20 franc French or 20lire Italian are nice just shy of 1/5 oz.
All paper (or electronic on/off bits) financial transactions are promises. Physical gold and silver in your hand has no counterparty promises. Gold and silver are long-term money, no matter what promises you traded for it. Short-term fiat paper money (and electronic on/off bits) are short-term promises, customarily used as money at the present, but tends to lose value over time. What's so f**king hard to understand about that!
Gold. Been here since the beginning of time,,, even before government! Doesn't need legal tender laws to make it valuable. Doesn't need a high tech digital network to trade. Doesn't burn up in a fire, just melts but, retains it's value. It's just simple, easy to use money that cannot be created by a printing machine and which man has very little control over, which is why governments and banks despise you having it.
Of course they hold tons of it,,, which should give any thinking person pause when they call it a relic.
Exactly, do as they do, not as they say: "The PM bubble has burst, gold will fall to 800 and silver...." blablabla
The Euro High Yield Capital Guarantee Fund????? WTF? Is this guy nuts? Please tell me this is a joke. Wow! Earth to Napier!
I've posted all over the thread, and am just going to sum it all up here.
1) You guys keep saying "metal is money" like it's one of the fucking laws of physics. It's not. It's still fiat, because it only have value if people say it does (really, gold's not the most useful metal in the world by a long shot... it just happens to be scarce). It's all about perceived value, NOT intrinsic value.
2) Gold/silver backed currencies have been just as subject to manipulation as unbacked paper. Read your histories. If you think there's even the smallest chance of getting a currency that doesn't benefit the wealthy few and fuck everyone else, you're living a very rich fantasy life. Doesn't matter what it's backed with.
3) Confiscation will be largely successful; all they have to do is make a few examples. Even if they don't confiscate, they can still outlaw it's usage as currency. And don't even talk to me about balck markets when almost none of the poulace actually owns any physical PMs. The stuff has to be in widespread circulation to actually be useful. So realistically, they don't need to confiscate. The wealthy elites own most of the shit anyway, and if they outlaw it's exchange it'll just stay that way.
4) Of course, this also brings up the gun issue. Y'know, most gun owners have families. I'm a little disturbed by all the people here saying they'll duke it out with the jackboots; what part of your kids will be in the line of fire do you not grasp??? Given a choice between submitting and risking my kids lives, only one choice makes any kind of sense at all. Jesus fuck, people. A matter of principle is not worth getting your kids shot over.
To understand my thinking here you have to understand this: I believe that it is impossible to build a large, complex system that is not tyrannical... at leat at the present stage of human evolution. I also believe that our chances of getting away from large, complex systems are exactly zero. Yes, right now we are transitioning to a new paradigm, but I also believe that the present power structures will survive the transition and if anything come out the other side more powerful. I think we're fucked. Our task in the coming years will not be to win, but to survive. In the process we must remain as free as we can, teach our children to think, and start quietly building new societies in the cracks of the old, much like grass grows up through cracked pavement. It will take hundreds, if not thousands of years to succeed (i think it's going to take humans as a whole species getting smarter), but if we just get ourselves killed off by directly confronting an enemy who has us hopelessly outgunned we aren't going to do anybody any good. At times, surviving is going to mean submitting. Is ensuring a future for you children worth doing that? If your answer is no, than you are a seriously fucked up human being. I can't do my kids any good if I'm dead.
Whew, for a minute there, I didn't think the Pussy Brigade was sending a rep to comment on this article
Hope you, and your children, the best at the FEMA camps. When they start to get too full, I'm sure that someone will implement the "Final Solution" to thin out the camp populations. Many of us will not submit. We would rather die in the fight than to submit our families to a certain death and have been equiping and training to do so.
Keep in mind that such a struggle would not be between two opposing armies but between an agressor army and citizens determined to defend their own country, vis-a-vis Vietnam, Iraq and Afganistan. Those populations kicked the ass of the French (Vietnam) and American aggressors because they had a deep will to protect their families and nation.
Freedom is not free without sacrifice.
The peoples you describe were tougher than modern Americans, had more appropriate skill sets and lower expectations, and were more disciplined. This is not going to be another Vietnam.
My plan is to hide, not to fight. We will lose.
2hb - You are right about gold and silver - it's just a few thousand year old convention of using a scarce commodity that can't be easily counterfeited as a unit of trade. But gold/silver is not "fiat" in any sense of the word. After paper cash is outlawed and removed from circulation, it might be bullets that are used as "money". Whatever is used doesn't matter as long as it is not "fiat" (ie. TPTB doesn't control its creation or supply).
Did you ever wonder why the feds are buying billions of bullets including illegal-for-war hollow points -- maybe they're just stocking up on the new "currency"?
With regard to your outlook for mankind: most humans have always had the sheep mentality -- that's why the overlords/shamans/kings/dictators are able to keep us fearful and subservient. But it isn't etched in stone that the light of liberty lit by Franklin, Washington, Madison, et al will flicker out and die when the dollar dies. On the contrary, that will be when we tell the banksters to leave us alone.
Yes, the times they are a changin', and we puny ants are learning that we don't need them -- https://www.youtube.com/watch?v=8jkNNNRkYlM
A tiny, tiny percentage of the puny ants know that we don't need them. Not enough to matter. We, as a group, will never tell the bankers to leave us alone.
Stupid is as stupid does. You are flat-out wrong in some cases. You also make some valid points, but for all the wrong reasons (and you give all the wrong advice, either explicitly or implicitly).
#1: gold and silver are money because... well... go ask aristotle, he got most of the answer right. And yes, gold and silver (and platinum, and palladium, and rhodium, and fill-in-the-blanks) have real value, which means utility. And yes, that is utility to human beings, not angels, not ants, not aardvarks, not zebras. So yes, the value is contextual, but not illusory or fake. But most of all, as others point out, gold and silver are just popular goods for barter. And what is important about barter is... when a transaction is complete, the transaction is complete. No fiat. No fake. No fraud. No fiction. No fantasy. And baby... no fractional-reserve or counter-party risk. Oh, let me amend that... no counter-party at all. Clean. Simple. Complete. And over, done, finished.
#2: so-called commodity backed paper is fraud, and should never be accepted by any rational being. It is clearly a scam being established to implement fiat, fake, fraud, fiction, fantasy by means of fractional-reserve trickery and deceit.
#3: Probably. Maybe. But I'd say most holders of gold and silver (and platinum and other real, physical, valuable goods) won't be caught quite as "off guard" next time. Nor will they imagine that "the USSA is pure and clean and worth support" like they were last time. So I'd be willing to bet at least half the precious metals will NOT be handed over. And boy will those folks who refuse to hand it over be glad after a rather short period of time. Furthermore, gold and silver coins and bars do NOT need to be widely accepted to be practical. I ran an experiment before I escaped the evil empire, to see how much of my expenses I could pay for with gold coins. When I started, the answer was about 20%. Before one year had past, the answer was over 95%. And I was one individual, which is the extreme opposite of "widespread". Which leads me to believe gold and silver coins would become quite widely accepted if even 0.1% of people want to buy with them. Believe me... people with products to sell and businesses to run want customers, and will want them increasingly badly as the predators-that-be destroy the economy and tighten the fiat nooses.
#4: I have to agree with the notion that most people, including those who "talk big" about not accepting abuse from the predators-that-be, have no freaking idea how brutal and overwhelming their paid predator-thugs will be when the time comes. And unless they do wake up and take extreme practical measures to hide, evade, escape, vanish, disperse and put their relatives and friends out of reach (outside the evil empire an their "allies", hopefully), they will be mowed down in the coming extermination of individualists and liberty-advocates. BUT, I totally disagree with the notion that submission is superior to doing everything practical to evade the predators that their plans, and exterminate them when risk/reward is low enough.
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A large complex system is easy to exist without tyranny. The very popular and standard convention (thus "system") of voluntary exchange (barter) works just fine, and does not require, much less promote, any tyranny. What you should have said is this. "It is not possible to build a large, complex non-voluntary system that is not tyrannical". And of course that's true, because "non-voluntary" means "tyranny".
Your comment that "our chances of getting away from large, complex systems are exactly zero" are:
#1: utterly true, or
#2: utterly false...
... depending on what you mean by "our".
Throughout history humans have proved in every single case that humans do not turn back the forces of tyranny. The lesson is, human producers are much too docile, and they have not yet learned they must be at least as aggressive against human predators as the human predators are against them. Otherwise, human predators will always win... as they always have.
However, that is only the lesson for those "individualists" who attempt what is nearly a self-contradiction. That is, that is the fate of the approach I call "collectivist individualism". What does that mean? That refers to the very odd, very strange, almost self-contradictory notion that it is necessary to convince at least a majority of their fellow clueless human sheep to vote in "individualist candidates", and then cross their fingers and hope they aren't bought-off by the same corporate predators that control everything now.
The lesson of history is... that has never worked. And the lesson of human psychology and behaviorism is... that will never work on earth.
HOWEVER... the odds are vastly, almost infinitely better for individuals who think, plan and act on the basis of "individualist individualism". What does that mean? That means you worry about your own life, plus at most your family and close friends. And, in fact, you stop worrying about those of your family and friends who will hold you back from saving your own butt.
The lesson of history for this approach is... what? The lesson is the millions of humans who packed their bags and moved to whatever was the most practical "frontier" of their times. And that has worked very well for a large minority or small majority of the millions who took this "individualist individualism" approach. These are the folks we often tend to call "the best, brightest and bravest" in retrospect.
THIS WORKS. Or more precisely, this approach has reasonably good odds. And plenty good enough odds to take the risk. I know, because I took them over 3 years ago when I got the hell outta dodge (the evil empire), and moved to the extreme boonies in a foreign land in the southern hemisphere. For 3 years now I have lived 125km from the nearest human being and 250km from the nearest city. And my quality of life and my intellectual peace are far and away better than any previous time of my life. Far and away. And I'm just a single wimpy 5'5" 105 pound gal living alone in the middle of nowhere. It took some doing (over a period of about 12 months), but I am not self-sufficient. I could live comfortably for the rest of my life if the entire human race vanished and I could not buy or trade for anything.
And so, you are correct (given the common assumption that "individualism == collectivist individualism"), but you are totally wrong (given the uncommon understanding that "individualism == individualist individualism").
But let me be clear before you or others jump in and say something like, "but... but... I don't want to live in the boonies... and/or my family will never approve... and/or I don't want to leave my friends behind... and/or whatever spoiled brat pablum you wish to attempt on me". Because my answer to all of you is... fine, go down with the ship. But as you spiral down the toilet, or stare through the barbed wire fences of a FEMA camp, or stare at the muzzle of a gun in your last moments of life... remember --- you asked for this result. You saw what the predators-that-be are about, and you heard the warnings. But you decided you'd rather live in denial in order to justify taking the alternative... which certainly is easier in the short term, but horrific and terminal in the medium and/or longer term.
You advocate submission to human predators. I will say what others may not be so impolite to say to you. Which is, you are therefore an apologist for human predators, and you aid and abed and sanction human predators, and you deserve whatever horrors you suffer. Not because you don't take actions, but because you advise the wholesale submission of honesty, ethics, production and benevolence to the benefit of dishonesty, ruthlessness, destruction and malevolence. And there can be no forgiveness for that.
Oh, and by the way, you abused and doomed your kids too by making the choices you made and advocate. You are not off the hook, but sooner or later you'll be on one.
I don't advocate submission. I advocate keeping your head down and doing whatever it takes to NOT get shot and/or rounded up into the prison camps. We WILL NOT defeat the predators. We have to quietly build our new societies up through the cracks of the old; there is no other way. It's going to be more a matter of hiding than fighting. As you correctly stated, most people here are wildly underestimating how aggressive the enforcement forces are going to be when it comes down. They WILL follow orders, and they have us ridiculously outgunned.
But once the fiat they are paid with becomes worthless, will they still follow orders ? My guess is, not for very long.
You can't fight them, because you don't have the numbers of willing fighters required, and you don't have the resources, and you don't have the resources. And you won't be able to create new viable communities within the evil empires or allies either, because they increasingly dominated every tiny little aspect of life, and the masses will rat out anyone who they see try to evade. They are way, way, way too far ahead of you, and so the only viable solution for the next 2, 3, 4 decades is to get the hell outta dodge, where you can still live a successful life.
honestann: Stupid is as stupid does.
Quick question. How did "you" come into possession of the gold you are using as money. Once you trade it for stuff you really want and need, like food and shelter, how do you come into possession of more of it to trade for next month's food and shelter?
In this context it is not just you personally, honestann. It is everyone in the whole world. You, honestann, are proposing a framework in which the entire world will function.
Run the numbes. How can it work?
I traded almost all my gold for the physical goods and goodies I needed to create my self-sufficient digs. As I said above, I no longer need anything from anyone to live the rest of my life, and thus I need no more gold.
I produce my own food, I have my own water, I generate my own power, and so forth. As you know, I also have a few goodies that would eventually "run out" if everyone on earth vanished and took along every storage tank full of gasoline with them (namely, I'd eventually run out of gasoline for my airplane). But I don't need anything I don't have to survive. I have everything I need for the rest of my life.
It is easy to "run numbers". Do you create more than you consume? If you do, you survive without harm to others. If you do not, you cause harm to others or die.
Many pessimistic but honest people believe mankind can't survive without predatory behavior (or on a planet with dwindling resources), but that's wrong. Perhaps their main error is to grossly, enormously underestimate the quantity of waste and destruction humans live with every day. If productive humans did not tolerate human predators, life for the entire remaining population of earth would be quite easy, and life would be quite good.
What I will never advocate is a system that also supports human predators. They need to go. NO system can support them as they become more dominant, because they are inherent destroyers. And since virtually all humans prefer to perish than say no to human predators, humans are finished. Whether a few of us manage to escape and survive is unknown.
honestann: The best laid plans of mice and men.
Your concepts are not sustainable if they include gasoline ... even over the short term. Under the best of conditions it has too short a shelf life.
One thing you will quickly realize when your superb plan delivers you disappointment: It takes a long time to build good trading relationships and they require continuous attention. One slip or neglect can destroy them.
And as usual, you completely miss my point regarding gold as money.
Many pessimistic but honest people believe mankind can't survive without predatory behavior (or on a planet with dwindling resources), but that's wrong.
Only unrealistic people believe mankind will ever exist without people employing predatory behavior. The key to survival is minimizing others' predatory behavior and having defenses against it. All animals exhibit some level of predatory behavior ... especially when they are hungry or cornered. You're no different.
Of course it is impossible, even in the very best of circumstances, for a human population of billions to have exactly zero instances of predatory human behavior. I explicitly stated in my message that the quantity of human predatory behavior has grossly exceeded what can be offset and overcome by human productive behavior (plus the ratio is getting worse every day). And that is why humans are finished.
What lets the ratio get ever-worse is... the fact that human non-predators do not exterminate the human predators. Worse, they don't even understand the fundamental dynamic (human predators versus human producers). Which is just another reason to conclude humans are finished.
I guess you can't read. I don't need my airplane to survive, and I said that. In 10 to 20 years if all goes to plan, I'll prove I don't need anything from other humans or from planet earth when I and my collaborators leave earth forever. And good riddens (by which I mean humans, not earth (a wonderful planet in many ways, but far too much gravity)).
2BH says: "like it's one of the ... laws of physics. It's not."
I disagree with this statement. Perhaps it is not one of the laws of physics, but it is a direct outcome of the laws of physics.
Real money is energy, actual physical energy, not some sort of mystical concept, or else it is a claim on energy from some other source. All metals store energy to a greater or lesser degree, for example, it requires energy to refine iron or copper from ore, and the refining process converts the metal oxide into the higher-energy form of a pure metal. When iron later rusts or copper corrodes, it combines with oxygen and gives off the energy that it had stored.
Gold and silver store energy intrinsically due to their atomic structure, being relatively heavy metals, but not heavy enough to be radioactive. Gold is essentially unique in that it does not rust or corrode, and silver can be protected from corrosion with a reasonable level of storage and handling. But these metals provide actual storage of energy in their chemical and atomic structure.
The U.S. dollar has value because it is a claim on petroleum energy, or electricity. The usual rule of thumb has been 10 cents per kWh of electricity, although inflation may have changed this in the past couple of years. If the link to energy goes away, the dollar fails.
You lost me at "fund". Good luck beating silver, kid.
Cashless society... think 30-50 years from now... will we still have internet all over the place? I think we will not have the means and resources to keep the infrastructures intact over the long haul. A cashless society could well mean the death (or genocide) of 90% of the global population. Hmm...
30 to 50 years from now?
After Sept 15, 2015, [end of Jade Helm 15], we may have a different point of reference
Bitcoin ftw. (And some pm as a hedge against a severe collapse)
So we're going to be rid of bank created "money" which by it's very nature trails debt and interest... and replace with government created money which is debt free and carries no interest!!!
What's wrong with that... Nothing.
Almost as if it was designed ~ The truth is a powerful tool.
What does a process that "guarantees" zero inflation all the time everywhere and perfect balance between supply and demand for money ... all the time everywhere ... and free creation of money (trading promises) all the time everywhere ... what does such a process do to this strategy?
We are well on the way to outlawing cash. If the PTB are successful, the world will be a very different place.
http://www.globaldeflationnews.com/governments-are-secretly-preparing-to...
Watching what is happening in Greece and Cyprus is not comforting...
http://www.globaldeflationnews.com/more-proof-that-central-banks-have-de...
Does anyone think that the drug dealers will not be selling their product for gold!
GOLD IS MONEY just like water is wet
Great article! Thanks for posting. My only problem with it would be the author's assertion that QE would have to stop. Can't the bank just shift QE into a different sector of the economy? Free "money" for the slaves for a change?