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Dylan Grice Deconstructs The "Perpetual Ponzi Machine" Of Global Finance, Sees Gold At $10,000 In A World Of Dishonesty

Tyler Durden's picture




 

Everyone, especially various textbook "schools" of postmodernist Keynesianism which (in addition to apparently never having actually been in the real world) believe there is such a thing as a free lunch as long as a reserve currency can issue infinite debt, and stubbornly fail to see the creeping currency devaluation which ultimately represents itself in hyperinflation, should read the following note from SocGen's Dylan Grice who explains pretty much... everything, including why in world starved for honesty, gold is the benchmark, and is now worth $10,000.

Key extracts from: The market for honesty: is $10,000 gold fair value? (highlights ours)

Last week, the Swiss National Bank (SNB) pledged to buy ‚unlimited? amounts of foreign exchange to prevent the Swiss franc from further appreciating. In other words, it is willing to print 'unlimited? quantities of Swiss Francs, tolerating an 'unlimited' debasement of its currency. Why would the Swiss of all people, one of the world’s few remaining 'sound money' proponents make such a commitment? Because unlike its main ‘competitors’ in the market for currency (the major central banks), which are either debasing with abandon or looking as though they’re about to, Switzerland had been rewarded for its rectitude with an uncomfortable share of the world’s flight capital and a painful currency overvaluation. So the SNB has given up trying to be honest in a dishonest world.

So let me explain why I believe printing money to be a fundamentally dishonest endeavour. Think about how it works. When the central bank, at zero cost, increases the monetary base by 1%, where does that money go? Answer: into the market for government bonds. Since printing the money to buy government bonds costs nothing, government revenues are obtained ostensibly for free. Of course, it buys those bonds in the secondary market rather than from the government directly, and the pretense of an arm’s length transaction between government and central bank is thus maintained, with all parties claiming a separation of monetary and fiscal policy. But it’s only a pretense.

By issuing bonds to itself the government seems to have miraculously raised revenue without burdening anyone else. This is probably why the mechanism is universally adopted throughout the world’s financial system. Yet free money does not, and cannot, exist. Since there can be no such thing as a government, or anyone else for that matter, raising revenue "at no cost" simple logic tells us that someone, somewhere has to pay.

But who? This is where the subtle dishonesty resides, because the answer is that no-one knows. If the money printing creates inflation in the product market, the consumers in that product market will pay. If the money printing creates inflation in asset markets, the purchaser of the more elevated asset price pays. Of course, if the printed money ends up in asset markets even less is known about who ultimately pays for the government’s ‘free lunch’, because in this case the money printing sets off its own dynamic via the perpetual Ponzi machine that is the global financial system. The ‘free lunch’ providers will be the late entrants into whatever asset-bubble or investment fad the money printing inflates.

The point is we can’t know who will pay, only that someone will pay. Thus the government has raised revenues without even knowing upon whom the burden falls, let alone telling them. Compare this to raising explicit ‘honest’ taxes, which are at least transparent. We know who levied the sales tax or the income tax, when it was levied, when it is payable, and how much has to be paid. The burden of this money printing, in contrast, seeps silently into the  economy, falling indiscriminately but indubitably on unseen, unknowing victims.

The economic hardships this clandestine tax operation imposes are real and keenly felt. But because no one knows from where it comes the enemy is unseen. Thus, during great inflations, societies turn on themselves with each faction blaming another for its malaise: the third century inflation crisis in ancient Rome coincided with Diocletian’s infamous persecution of the Christians; the medieval European debasements coincided with surging witchcraft trials; the extreme Central European hyperinflations following WW1 saw whole societies blaming their Jewish communities. More recently, the aftermath of the historically modest asset inflations in the tech market and the US real estate market have seen society turn on "fat-cat CEOs" and "greedy bankers" respectively.

By now, some of you might feel this all to be irrelevant. Surely, you might be thinking, the plain fact is that there is no inflation. I disagree. To see why, think about what inflation is in the light of the above thinking. I know economists define it as changes in the price of a basket of consumer goods, the CPI. But why should that be the definitive measure, given that it’s only one of the many possible destinations in money’s Brownian journey from the printing presses? Why ignore other destinations, such as asset markets? Isn’t asset price inflation (or bubbles as they are more commonly known) more distortionary and economically inefficient than product price inflation?

I believe economists focus so firmly on product prices in their analysis of inflation not because of any judgment over the relative importance of one type of inflation over the other, but simply because CPI-type measures of inflation are easier to see. In doing so, they resemble the fabled driver who lost his keys one evening and was found looking for them under a streetlamp. When asked by his wife why he was looking there when he’d probably lost them further back, he replied “Because here it’s easier to see.”

We know that revenue cannot be raised for one person without costing someone else. We know that money printing generates revenue for the public sector. So we also know that money printing must be a tax. We know that the magnitude of that tax – the inflation rate – can be reliably measured by the increase in the rate of base money growth. Since we don’t know which markets new money will end up in or even when, we know we can’t reliably count on measures of inflation in those markets to tell us what the ‚inflation rate? is. Thus, the only reliable measure of inflation is the expansion of the monetary base. So to those who say there is no inflation, I give you the following chart.

 By now, the more polite economists among those still reading may be thinking something like: “What utter drivel you are full of Grice! When there is a recession/depression on and the pressure faced by an economy is deflation, which can become self-fulfilling, the only correct thing to do is to create inflation to protect jobs.”

To this I would reply that every right thinking person wants to see job creation. Those advocating the creation of inflation, or fiscal stimulus are doing so because that’s what the system of logic known as ‘theoretical macroeconomics’ teaches. Yet this system of logic with its deeply flawed epistemological foundations is what brought us here in the first place! The macroeconomic body of knowledge represents no such thing – a cacophony of faiths would be more accurate. The instruments and gauges it recommends policy makers rely on – CPI, trend growth, output gaps, NAIRUs, budget deficits, debt/GDP – are subject to such wide conceptual ambiguity, not to mention estimation error, as to render them utterly meaningless. The fact is the captains of our ship have no reliable gauges. They have no understanding of what a yank of this lever, or a push on that button will ultimately achieve. They just think they do. Intoxicated by trumped up notions of what they know and understand, the drunk driving of macroeconomists is what led us to where we are today.

Of course, this begs the question of why we continue to listen to them. I believe it’s for the same reason that Quintus Cicero thought his famous brother was such a successful politician two millennia ago: people prefer a false promise to a flat refusal.

Believe it or not, for all this talk of honesty and dishonesty I’m not actually passing any judgment on the ethics of this state of affairs. The simple fact is that as a species we’re liars. One of the most famous recent experiments was carried out by Robert Feldman who recorded students talking to strangers for ten minutes, and then asked the students to watch the recordings again, making notes of the number of lies they told. Fully 60% owned up to lying at least once, with an average of 2.9 lies (to be precise) told per person. As a species, our capacity for conceptual thought makes us better at it than other animals, but other animals do it too. When a Kildeer’s nest is threatened, it feigns a broken wing to lure its predator away. There are firm evolutionary foundations for the tendency towards untruth. However, societies work on trust too, and there are equally firm evolutionary foundations for honesty. I know honest economists, honest investors, honest journalists, even … deep breath … honest bankers. Indeed, there is a demand for honesty. There is a demand for honest brokers, fund managers, lawyers, dentists, doctors, plumbers etc. And there is a demand for honest currency.

That demand has overwhelmed the Swiss. But their actions merely narrow the universe of honest destinations for flight capital with which gold has historically competed. For gold has no export sector, no pop-economists to be swayed by, and no populists to pander to. Gold might be a mere lump of dense, useless shiny metal, but it’s one which crackpot central bankers can’t print. Indeed, benchmarked against the printing of The Ben Bernak, the price of gold at which the US dollar would be fully gold-backed is now $10,000. You might think such a ‘price target’ is far-fetched (and I might agree with you). But bear in mind that the last time honesty was perceived to be so scarce – in the 1970s gold mania – the dollar was over-backed by gold (see chart below). If it happened then, why not again?

 

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Wed, 09/14/2011 - 10:19 | 1668329 1835jackson
1835jackson's picture

"There are firm evolutionary foundations for the tendency towards untruth". What a fucking joke. We are fallen. We have fallen away from God's truth. Thus we are sinners and cannot know truth and tell it. Of course there are people who thirst for truth and honesty but our "base" is one of lies. Don't feed me that evolution bullshit.

Wed, 09/14/2011 - 10:24 | 1668358 Snidley Whipsnae
Snidley Whipsnae's picture

Jackson... I feel certain that somewhere there is a congregation waiting to hear your words of biblical wisdom... but, it isn't here.

Wed, 09/14/2011 - 10:29 | 1668388 lizzy36
lizzy36's picture

Hate to break it to you but "God's Truth" is also a lie.

A man made ficiton to allow sinners to feel superior to other sinners.

Wed, 09/14/2011 - 11:08 | 1668592 Idisq
Idisq's picture

love it

Wed, 09/14/2011 - 14:07 | 1669488 ZeroHour
ZeroHour's picture

Not sure what is meant by " "God's Truth" is also a lie", but...

Without GOD, how do you define "sinners"?

 

Without GOD, everyone can make their own rules, as in "murder isn't a sin, I say so", which then leads to the argument that since there is no sin, there can be no sinners.

 

Wed, 09/14/2011 - 14:13 | 1669520 mkkby
mkkby's picture

Lizzy -- A man made ficiton to allow sinners to control and exploit other sinners.

There, fixed it for ya.

Wed, 09/14/2011 - 11:02 | 1668557 Ponzi Unit
Ponzi Unit's picture

Take your phony superiority, jump out of a light plane with no chute, and wait to be raptured.

Wed, 09/14/2011 - 11:41 | 1668743 snowball777
snowball777's picture

Some say it's the only real evolutionary advantage conveyed by speech as humans conduct it
(by entertaining a theoretical cognitive space of shared context, some of which may be false)
as opposed to merely conducting otherwise encoded ritual (pack hunting, migration, etc).

Honey, do these vertical stripes make my ass look big?

 

Wed, 09/14/2011 - 12:24 | 1668910 JR
JR's picture

Your junkers, jackson, are so proud of being ignorant…like Obama.

Wed, 09/14/2011 - 10:19 | 1668330 ReactionToClose...
ReactionToClosedMinds's picture

.. another thank you to ZeroHedge to highlight Dylan Grice.

Anyone who speculates that we might be facing another Summer 1931 Creditstaldt collapse scenario today as true start of 1930s Great Depression (so many cross-over connectiosn from then to today ... gold, currency, econ fragility, Euro debt/reparations, geoploitics/world order changes, etc.) ... is worth reading closely.

For whatever it is worth ... my 2 cents ... the key is Goldman Sachs ....... as much bad press as they get/deserve ...... whether actually true or just perceived ... it seems they are positioned at each 'doorway' event ..... so that if you have insight on their 'true position' .... you will see what is about to unfold in the next frame.

maybe pretty obvious actually to most here ... but to function as a human being, I've just got to boil it down to ultimate simplicity if possible

Wed, 09/14/2011 - 11:16 | 1668609 reload
reload's picture

I think they just have so many placemen behind the doorways, that each time there is an `event` they say `open sesame` and bingo, the door they need to go through at that juncture is opened for them.

The only `insight` I have on them is not their `true position` but the fact that they have lost some very smart people recently who are not hanging around to see what happens next, and have simply had enough of the Goldman life. They are gone, and their carreer earnings have been metalised and stored in some rather private banking institutions.   

Wed, 09/14/2011 - 15:36 | 1669956 IQ 145
IQ 145's picture

I didn't even know he had speculated thusly; I have been pontificating thusly; I guess I would like his writings. His post here is extremely lucid and reality based; very refreshing. Where does one go to read the opus of Der Grice?

Wed, 09/14/2011 - 10:20 | 1668336 King_of_simpletons
King_of_simpletons's picture

Geithner: Economy in early stages of crisis.

http://www.realclearpolitics.com/video/2011/09/14/geithner_were_in_an_early_stage_of_a_crisis.html

What an arsehole.... From 'summer of recovery' to galactic fuckness.

Wed, 09/14/2011 - 10:45 | 1668472 SheepDog-One
SheepDog-One's picture

Right but everything is OK just as long as we can keep borrowing at 0% interest.

Yea this ends well, sure.

Wed, 09/14/2011 - 11:50 | 1668777 GoinFawr
GoinFawr's picture

hahahah! "galactic fuckness", stellar! 

Wed, 09/14/2011 - 11:54 | 1668791 NotApplicable
NotApplicable's picture

And it only took him his entire career to set it all up.

Wed, 09/14/2011 - 10:27 | 1668339 Denver768
Denver768's picture

The machines say pump, and the controllers are at the wheel.  No need to panic. Believe what we tell you...  As long as today and tomorrow is good, we're practicing sound money and banking ...wink, wink...   And despite record liquidity and cheap money, we've arranged with the Fed to give us more. QE3 is still coming, so we can gorge on that for the next 6 months.  Media buffoons and snoring masses, accept what we tell you... nothing to see here, move along, move along.

But seriously... nice read, thanks.

If all others accepted the lie which the Party imposed -- if all records told the same tale -- then the lie passed into history and became truth.   -- George Orwell, 1984

Wed, 09/14/2011 - 10:22 | 1668344 reader2010
reader2010's picture

If gold sits at $10K, using historical gold/oil ratio as a rough guide, crude should be priced at $1K a barrel. What about retail regular gas at gas pump??

Wed, 09/14/2011 - 10:28 | 1668384 Snidley Whipsnae
Snidley Whipsnae's picture

reader... for a rough estimate multiply times ten... = ~ $35

How many minimum wage earners will be driving to work with $35 gas?

Wed, 09/14/2011 - 10:31 | 1668403 reader2010
reader2010's picture

Holy shit! Weimar Amerikka, bitchez. Where is my fucking wheelbarrow for hauling gas cards?

Wed, 09/14/2011 - 11:06 | 1668582 Ponzi Unit
Ponzi Unit's picture

Snidley, minimum wage will be $35: isn't that the point of hyperinflation. I had a construction job for $3 an hour, uh, 43 years ago. Sheesh, I'm getting old.

 

 

Wed, 09/14/2011 - 11:27 | 1668689 reader2010
reader2010's picture

Good point. By then, $35 gas will have to have at least $6 more imbedded taxes making that $40/gallon gas.

Wed, 09/14/2011 - 10:25 | 1668359 PulauHantu29
PulauHantu29's picture

"Republicans on Tuesday night captured the New York City House seat vacated by scandal-scarred Congressman Anthony Weiner, winning a special election in a Democratic district that has grown disillusioned with President Obama and weary of the stagnant economy."

Mandate on Barry's policies? 2012 looking better every day!

Wed, 09/14/2011 - 10:30 | 1668399 SheepDog-One
SheepDog-One's picture

Yea, repub wins WEINERS district? Wheres this plan 'theyll run up markets and control shit and obama gets certain re-election guaranteed and then other stuff THEN happens'....I dont see it! Printing money is not buying anyone an election, people are PISSED OFF!

Wed, 09/14/2011 - 10:25 | 1668360 prains
prains's picture

Tanks,tanks and more tanks

Can't find any just yet, but saw two APC's yesterday fully loaded
And 200 miles from their base.

You can go GGG all you want Goldman has it won before it starts

Wed, 09/14/2011 - 10:25 | 1668366 fdisk
fdisk's picture

Stock Market down and GOLD down, seen a lot lately,

WTF is wrong with this picture? "$10K"? It's keeps dropping

even at these levels..

Wed, 09/14/2011 - 10:30 | 1668394 Sequitur
Sequitur's picture

Deflation. Pure and simple. People who can't afford their mortgage can't afford $1900 gold. Frankly I think Dent's analysis is spot-on (and I own physical, but recently took some profits).

Wed, 09/14/2011 - 10:38 | 1668440 SheepDog-One
SheepDog-One's picture

I know fdisk, I just dont see it! I hold a sizable amount of gold, but in a world where gold = "$10,000 LOLars" you wont want to be alive! WTF you'd have $40 gas, and no one would be able to get food because the dollar is worthless!

Oh yea, I hear people say under those conditions, then you'll trade with gold.....well can ANYONE show me today a grocery chain doing checkouts in gold and silver boulion?

I cant!

Wed, 09/14/2011 - 10:53 | 1668519 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Good point Sheep Dog.  I like 90% silver.  I "think" that it may be used as currency in a SHTF scenario but who knows?  Unless you want to buy a city, gold "may" not do you that much good during the crisis "but", it will retain your purchasing power until the crisis is over.  That's how I see it anyway.  As you know, we are in unchartered territory.  All I know is that I will hold physical silver and take my chances.  Actual barter items will probably be more liquid in a SHTF scenario than precious metals, me thinks.

Wed, 09/14/2011 - 11:11 | 1668599 SheepDog-One
SheepDog-One's picture

Hell if anyone knows gold, its Tuco!

Yea I agree, gold is for coming out on the other side, that could be many years away, or never.

Barter items for the apocalypse people should really take a close look at- Cigarettes, pints of booze, boxes of bullets, etc.

Wed, 09/14/2011 - 10:41 | 1668448 tmosley
tmosley's picture

What you are seeing is the price of little peices of paper with the word "gold" written on them falling.  This should not be confused with physical gold.

Wed, 09/14/2011 - 10:26 | 1668371 Gandalf6900
Gandalf6900's picture

there is one hellova rollercoaster out there today guys....mkts are swinging wildly

Wed, 09/14/2011 - 10:36 | 1668429 Snidley Whipsnae
Snidley Whipsnae's picture

"mkts are swinging wildly"

...and your hair is on fire.

Wed, 09/14/2011 - 10:28 | 1668381 Ye Ye
Ye Ye's picture

Chinese have stopped printing so vigorously lately.  Since PBoC is the real central bank pushing inflation and the gold price, PMs could have problems catching a bid in the near term.  PBoC will return to printing eventually, they have to create 25m jobs per year, but expect some volatility in the price for a little bit.

Wed, 09/14/2011 - 10:28 | 1668385 Caviar Emptor
Caviar Emptor's picture

We are rapidly approaching the state of "Peak BS".

Yes, I know, you skeptics can't believe that we could approach that state in this world, but there it is...They are simply starting to run out of excuses, explanations, cover-ups, diversions and lies to cover up that gaping hole in the side of the Ponzi bubble. 

When the rate of BS/nanosecond decreases for the first time, or the concentration of BS in bulltards/utterance, then you know we've seen the peak. It's coming

Wed, 09/14/2011 - 10:31 | 1668411 SheepDog-One
SheepDog-One's picture

Right, how many times are we going to stare into the gaping maw of total collapse every morning, only to be 'rescued' by another silly rumor?

 

Wed, 09/14/2011 - 10:37 | 1668435 Caviar Emptor
Caviar Emptor's picture

How many times? Answer: many. They're sly devils. And they stand to lose their status. 

It's interesting to note that when old, dysfunctional systems collapse the BS dries up and people start talking about things like honesty, fairness, and truth. 

Wed, 09/14/2011 - 10:41 | 1668451 SheepDog-One
SheepDog-One's picture

Many, or not many at all! WE dont know their plans, any day they can pull the rug out with a few mid east countries smoldering and radioactive. The game here is NOT perpetual teetering on the cliff edge, they WILL pull the rug out from everything at once, that is their endgame.

Wed, 09/14/2011 - 11:22 | 1668651 DirtMerchant
DirtMerchant's picture

"they" have only managed to suck out about 20% of the wealth, if rumors & innuendo allow "them" to continue grabbing/transferring more wealth, why pull the rug now? Do it 'til it don't work anymore. They will continue this until we say stop...via bank runs, refusing to pay taxes etc.

Ultimately we have the control to stop it, "we"(collective unwashed masses) just have wake up, understand there is a pervasive problem and realize we can stop it.

Wed, 09/14/2011 - 11:37 | 1668727 SheepDog-One
SheepDog-One's picture

Nah I dont agree, its pre-planned for a date, WW3 starts, this has nothing to do with 'markets' or them transfering wealth they already own ALL the wealth already. The only 'wealth' anyone else but the elite has is 'debt'. Money is not wealth, resources are, and the worlds elite controll all of it so this is all just a game to keep people quiet until they pull the plug. Could be a year from now, could be tomorrow, none of us know.

Wed, 09/14/2011 - 10:31 | 1668404 bob_dabolina
bob_dabolina's picture

HAHA

No

Wed, 09/14/2011 - 10:31 | 1668408 Enkidu78
Enkidu78's picture

I had a little money sitting in a bank since February... Yes I know a bank, I might as well leave my car unlocked in the street.  Well the bankers managed to throw away probably 10-15% of my purchasing power in Gold from Feb until now.  But I have seen the light and got it out the bank and converted it to physical.  I can tell you most people think im crazy here in the UK, they think Gold and Silver have peaked and are expensive.  Well come pay day I will be buying more and more and more until I can no longer with my public sector wage....

Wed, 09/14/2011 - 10:33 | 1668417 Snidley Whipsnae
Snidley Whipsnae's picture

"PMs could have problems catching a bid in the near term. "

bs... every offer is being bid... all gold coming to mkt is being bought...

Problem is, JPM/HSBC, bullion banks/central banks are dumping gold to maintain the price below $1,900... That was obvious when the Swiss pegged their currency to Euro and gold didn't move up.

Central banks are fighting gold tooth and nail... If gold wins those azz hats are out of biz.

Wed, 09/14/2011 - 10:35 | 1668423 bob_dabolina
bob_dabolina's picture

Whatever helps you sleep at night

Wed, 09/14/2011 - 10:56 | 1668533 High Plains Drifter
High Plains Drifter's picture

why would you say that?  for the sake of this discussion i am going to use  the term "central banks"  so....... central banks have most of the world's gold, so why worry. they got both sides of the argument covered.  this must put a end to any silly austrian economic discussions about the gold standard..........we don't need it and we don't want it and if we got it again, all it would mean is more of the same......

Wed, 09/14/2011 - 10:34 | 1668418 Fiat2Zero
Fiat2Zero's picture

As usual, Dylan Grice, hits it out of the park.

His ideas and writing are always a breath of fresh air.

Thanks for this Tyler.

Wed, 09/14/2011 - 10:36 | 1668428 fdisk
fdisk's picture

This is worse case scenario as COLD doesn't work as a hedge.

The only thing whats left is VIX..

Wed, 09/14/2011 - 10:36 | 1668431 doomandbloom
doomandbloom's picture

gold changes nothing.....it does for a few people who have been calling for gold for some time ( including me).

But that is just a perpetuation of the existing system...no real change ...

Wed, 09/14/2011 - 10:38 | 1668439 tip e. canoe
tip e. canoe's picture

The Emperor Wears A Golden Fleece

Wed, 09/14/2011 - 10:39 | 1668442 Caviar Emptor
Caviar Emptor's picture

On the contrary. It signals impending Big change. It means those in a position to do so see it coming

Wed, 09/14/2011 - 11:00 | 1668547 High Plains Drifter
High Plains Drifter's picture

keep preaching doom. hey i am a gold bug and a silver bug. but in the end, what does it really mean when i have no control over these commodities since the same people who got us into this mess also control both the markets, own most of the world's known gold and silver, and also own most of the world's means of producing said commodities. so i ask. what difference does it make. the only way to be free is to settle the lingering tribal issues once and for all. my grandfather told me one time. there is no such thing as equality. you are either over someone or they are over you. i submit that the man made a pierciing and illustrative comment about this world........... 

Wed, 09/14/2011 - 10:43 | 1668462 High Plains Drifter
High Plains Drifter's picture

http://www.youtube.com/watch?v=2Ui_Q4qBDJY

a song for timmie..........

Wed, 09/14/2011 - 10:44 | 1668467 lizzy36
lizzy36's picture

In the last 13 years, the whole world had been on the program of debasement and asset inflation/bubbles.

People don't want the truth. There was a moment after 9/11 and again 3 years when there was opportunity for truth. Both squandered.

Now we are "all in" in some sort of massive quadrupling down of 40 years of bad policy.

People don't trust politicians, and they are losing faith in the institutions that make up society. But except for a small minority they still don't want the truth. The kleptocrats know this, hence the quadrupling down.

As a collective we walk around in some sort of haze. Searching for meaning in our next great purchase. Judging one another as superior or inferior "us" or "them". All along pretending that the constructs are real.

Grice is fantastic, for merely pointing out that the paradigm under which all the policy is being conducted is itself false. And thus the policy that is flowing from this false construct cannot be corrective, but rather in and of itself adding to the harm.

Something that ZH has been pointing out for 2.5 years.

Wed, 09/14/2011 - 10:47 | 1668482 High Plains Drifter
High Plains Drifter's picture

i think it has been going on now for about 300 years. we are just "lucky" enough to be able to see it when it is on its last breath. what we will witness has never been witnessed in the history of the world...........

Wed, 09/14/2011 - 12:06 | 1668828 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Yes, I think we are here for a reason and it ain't to roll over!

Wed, 09/14/2011 - 10:48 | 1668493 Bastiat
Bastiat's picture

Well said, Lizzy.

Wed, 09/14/2011 - 10:46 | 1668475 Sudden Debt
Sudden Debt's picture

 

 

I actually blame EVERY politician!

THEY took the bribes!

THEY where the lobbyists sweethearts!

THEY allowed the people to be robbed FOR THEIR OWN PROFIT!

Bankers do what Bankers do and are allowed to do. You can't blame them from trying. I would do it to if it was legal.

IT'S THOSE WHO MADE IT LEGAL THAT SHOULD BE HUNG, SHOT, FRIED!

 

 

Wed, 09/14/2011 - 10:47 | 1668481 PivotalTrades
PivotalTrades's picture

Where is the infaltion?

Since the decoupling of gold and the US$ in my lifetime the infation has visited many places.

Int he 70's it was things, gold, oil, sneakers.

in the 80-90s the inflation resided in equity assets.

2000's the infation was in real estate.

Now the inflation lies in soverign debti ie UST and the like.

Next we will complete the circle and the price of things, gold and oil will feel the affects of too much worthless papper.

 Only government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless.

Milton Friedman

Wed, 09/14/2011 - 10:59 | 1668541 SheepDog-One
SheepDog-One's picture

You want to see where the inflation is? HERE-->

September 11 – Ten Years Later (Selected Statistics) « Across the Street

And its NOTHING like the 70's, or 80's. Gold is leading the pack, dollar is dead last. 

How people think $10,000 gold is a GOOD thing is beyond me.

Wed, 09/14/2011 - 10:49 | 1668488 bob_dabolina
bob_dabolina's picture

If Gold goes to 10,000 you don't want to be invested in it. You would want to be invested in guns/canned food/nuclear bomb shelter. Gold at 10,000 is indicative of complete social collapse and malaise.

This is just preposterous.

Wed, 09/14/2011 - 10:51 | 1668509 tmosley
tmosley's picture

Idiots said the same about $1000 gold and $2000 gold.  Idiots were wrong.  As usual.  But hey, maybe idiots can lie and claim that they made a 2000% return in a year by shorting an epic bull run, and other idiots will beleive them?

Wed, 09/14/2011 - 11:09 | 1668535 bob_dabolina
bob_dabolina's picture

"Infinite volatility with prices going to zero."

Isn't that what were preaching when silver was at 50 and making calls for $70 within the month?

You follow my trades or don't, I don't give a shit.

Wed, 09/14/2011 - 11:19 | 1668634 tmosley
tmosley's picture

So, have we not had high volatility, with prices falling from $50?

lol

And more lols that you are still trying to maintain the lie that you made some millions of dollars from 100K by shorting gold and silver over the last year, when they were up by 50 and 100% respectively.

Wed, 09/14/2011 - 11:37 | 1668682 bob_dabolina
bob_dabolina's picture

I've had many positions from FAZ, HPQ, WLT, TZA, /ES shorts (and longs), crude oil positions. Why do you make this ridiculous hyperbole that it was one trade in gold/silver? I know it's hard for you to understand seeing as you've never traded a futures contract in your life but /gc stands for gold futures, and the - sign behind it means I'm short.

I'm short right now, here I'll update it for you. 

http://tradeonfire.blogspot.com/

Let me know when the gold and silver prices go to zero like you prophesied .

Wed, 09/14/2011 - 11:46 | 1668761 tmosley
tmosley's picture

lol "I mad muny wit 3x inverse ETFs, hurp"

Sure you did, buddy.  Sure you did.  You must be a magical 9 sigma trader to have even broke even with that crap.

And you criticize people for being long silver during the same time frame.  How fucking stupid can you get?

Wed, 09/14/2011 - 11:55 | 1668796 bob_dabolina
bob_dabolina's picture

Ok little boy. Well you have a great day, I seriously have more important things to do today. 

Good luck with that cure for cancer you're working on while you're on financial blogs all day clutching your silver coins.

Wed, 09/14/2011 - 11:58 | 1668803 tmosley
tmosley's picture

Uh-huh, sure, whatever.  Careful not to get any fryer grease on your uniform.  Say "hi" to Ronald for me.

Wed, 09/14/2011 - 10:53 | 1668516 Bastiat
Bastiat's picture

The USD has lost 90% of its value since 1913 when the Fed was formed.  What on earth makes you think this can be stopped?  Fiat money is worth nothing when confidence is lost.  No amount of Weimar marks would buy an ounce of gold at the end.   Not at all preposterous;  disastrous, yes.

Wed, 09/14/2011 - 10:57 | 1668532 SheepDog-One
SheepDog-One's picture

The US LOLlar has lost a FURTHER 33% value just in the last 3 years!

September 11 – Ten Years Later (Selected Statistics) « Across the Street

REAL statistics they dont want you to see!

Wed, 09/14/2011 - 11:03 | 1668560 Bastiat
Bastiat's picture

Typo, sorry.  I mean 99% not 90%. 

Wed, 09/14/2011 - 12:15 | 1668873 NuYawkFrankie
NuYawkFrankie's picture

"LOLlar" - LOL!

Wed, 09/14/2011 - 14:35 | 1669640 mkkby
mkkby's picture

Yet since 1913 our standard of living is higher.  How do you explain that?  It doesn't really equate does it?

Wed, 09/14/2011 - 11:14 | 1668612 SheepDog-One
SheepDog-One's picture

I agree Bob, people root for $10,000 gold, but have no idea what a world looks like when 1 oz of gold is $10,000 supposed US Dollars. They can watch Road Warrior and get a good idea, although in reality it would be way worse. 

Wed, 09/14/2011 - 14:39 | 1669660 mkkby
mkkby's picture

Gold is up 6x over the last 10 years.  Food and gas prices are up maybe 30%.  So your assumption is really just that, an assumption.

Gold can go to any number and nothing else need follow.  Just like a nasdaq stock, it's just the lastest mo mo play.

Wed, 09/14/2011 - 11:11 | 1668600 riley martini
riley martini's picture

 The last time gold was 25% over the 200 day there was a sell off 2008 . Of course charts only tell you where we have already been.

Wed, 09/14/2011 - 11:16 | 1668615 SheepDog-One
SheepDog-One's picture

Yep, to give you an idea of what might potentially happen, all other things being equal.

In 2008 they had a USD 25 points higher, and plenty of market cushion to pull off their market plunge and bailout coup.

Not so much today.

Wed, 09/14/2011 - 11:21 | 1668611 bankruptcylawyer
bankruptcylawyer's picture

More recently, the aftermath of the historically modest asset inflations in the tech market and the US real estate market have seen society turn on "fat-cat CEOs" and "greedy bankers" respectively.

 

 

this is NOT the example of factions of society turning on other factions. 

 

the bankers ARE responsible for the interest bearing government guaranteed debt system, with government backing money for clunker programs, education of all ridiculous sorts, housing of all ridiculous sorts.---the creation of the GSEs, the creation of the thirty year mortgage ....

program after program of inflationary money creation where the debt securities created bear interest, demanding ever more printing of money to infuse into the economy. 

this is not scapegoating , in fact it's the opposite. the bankers deflect anger by supporting those racists scapegoating recent immigrants, muslims , blacks , jews, and the big one...terrorists. yes, terrorists are the problem. 

 

you have to be kidding me if you think blaming bankers is scapegoating. 

bankers ( and the lawyers and accountants and consultants and other mmembers of the professional corporate class that derive their money from the wall street money/debt fountain that spews enormous fees to all who lie and cheat ) are the problem. the banking system should be nationalized, the fed shut down and replaced with private state banks that CANNOT buy banks in operating in other states. glass steagal should be written into an amendment of the constitution--prohibitng any consumer deposit bank from engaging in anything appearing to be non-transpartent style speculating. and banks and anyone owning debt or stock in a bank should be barred from donating to financial campaigns at any level. if you want to get involved in politics, you should disclose all connections and investments in banks, all contracts for over 100,000 dollars publicly filed on their date of creation or otherwise uneforceable in a court. 

 

not unions, not teachers, not the healthcare system, not the military, not even the oil oligarchs ( who are deeply tied in with wall street ).

the bankers at the heart of this whole thing. fix that, and you can fix every thing else with due time. fix any of the other above mentioned problems, including grossly overinflated budgets, militaries, healthcare unions, pensions, social security etc...., and the bankers will soon reverse your gains. for example the republicans are talking about 'fixing' social security by privatising it. what they intend to do is fix it, by destroying it, and the destruction comes about by stealing whatever little is left of the social security program by funneling it to wall street where it can be picked apart with fees , fake deals, knowingly bad investments, etc....

if you want to fix social security by destroying it. just end it. don't privatise it. but again, IT'S THE BANKS, STUPID. 


Wed, 09/14/2011 - 11:58 | 1668805 JR
JR's picture

this is not scapegoating , in fact it's the opposite. the bankers deflect anger by supporting those racists scapegoating recent immigrants, muslims , blacks , jews, and the big one...terrorists. yes, terrorists are the problem. --bankruptcylawyer

Why did you exclude whites as the victims of rascist scapegoating…?

Wed, 09/14/2011 - 12:48 | 1668862 NuYawkFrankie
NuYawkFrankie's picture

Poooooooo........st O' the Day!

Absolutely pathetic & ludicrous  the way the writer - a bankster himself (or at least in their employ) - dredges up every persecuted minority he can think of, and then - by association - tries to squirm the bankstas into that unfortunate category!  GULP!

And then, just for good measure, in case anyone is still feeling a bit uppity, he attempts a body-slam with this corker: "The simple fact is that as a species we’re liars" OOh - that really hurt, Mr Grice.

My, my! How the rats are starting to squeal!

Wed, 09/14/2011 - 13:03 | 1669096 ChacoFunFact
ChacoFunFact's picture

Yes, indeed.  In all the things we describe, we merely only describe ourselves.

Wed, 09/14/2011 - 16:38 | 1669369 GoinFawr
GoinFawr's picture

Heh, indeud frankie;  until I came across the `Gold to da mooooon` clause I thought for a moment I might have been reading another of Niall Ferguson`s `Ode to a Misunderstood Bankster` compositions (Only the first page of the preface, of course, the whole tome would have to be a thousand pages cuntained in two volumes, with three complete lines dedicated to `mistakes` his hero `might` have made; the rest would be shameless obsequious fawning and boorish toadying).

Wed, 09/14/2011 - 11:27 | 1668683 paulie
paulie's picture

Don't forget that when a central bank prints new money in exchange for bonds, it demands that the bond interests be paid (it's in the nature of bonds).

Those very interests themself come back in the form of taxes (thus inflation or buying power reduction if you will).
We Italians know a few things about that.

Paulie

 

Wed, 09/14/2011 - 11:28 | 1668686 paulie
paulie's picture

double post

Wed, 09/14/2011 - 11:28 | 1668690 Mr.Sono
Mr.Sono's picture

gold/silver is the trend. we have currency wars at the moment. next will be trade wars, thats when gold/silver will shine. with all the drama in washington, i think if you don't hold physical, you will be f%cked.

Wed, 09/14/2011 - 11:33 | 1668709 Bastiat009
Bastiat009's picture

A currency should always be backed by something that is impossible to manufacture or produce in a lab and that doesn't spoil. Gold is a good option, isn't it?

Wed, 09/14/2011 - 11:33 | 1668712 FranSix
FranSix's picture

Looks like Realterm.de has a very accurate depiction of the Dax/Gold so far:

http://www.realterm.de/DAXinGold.php

Wed, 09/14/2011 - 11:34 | 1668721 Bastiat009
Bastiat009's picture

So the dude understand gold but works for SocGen and shorts paper gold for a living. He is either a liar or a crook.

Wed, 09/14/2011 - 11:37 | 1668729 Youri Carma
Youri Carma's picture

For the ones who mist it A Must See!

Mike Maloney on Debt Collapse & the Case for $20,000 Gold http://www.youtube.com/watch?v=tj2s6vzErqY

Wed, 09/14/2011 - 11:43 | 1668747 Catch-22
Catch-22's picture

If gold was priced not in dollars but in critical resources (e.g. fresh water, meat, grains...etc.), when that ounce of gold hits 10,000 dollars, you might find it buys you the same amount of resources it always did... wealth preservation. 

Wed, 09/14/2011 - 11:48 | 1668769 tmosley
tmosley's picture

Sort of.  When gold is as underowned as it is, and has been, those owning it for wealth preservation will find themselves on the receiving end of a nice windfall as owners of paper assets seek safety.  This can be seen in the fact that gold has beaten headline inflation (by far) and ShadowStats inflation (by quite a bit) over the last ten years.

Wed, 09/14/2011 - 12:07 | 1668835 Catch-22
Catch-22's picture

Agreed... that period of "correction", up to its legitimate value and subsequent stabilization, could be quite violent. Better to early than to late...

Wed, 09/14/2011 - 12:10 | 1668844 SheepDog-One
SheepDog-One's picture

I dont know tmosely, 'gold is under-owned'? Im wondering where theyre going to find a bunch of people who have not gotten on the PM bandwagon yet to suddenly see the light and start buying the coins for $2,000, $3,000, etc. 

Most everyone is now broke, getting by on credit cards.

What and who backs up a $10,000 gold price? Who are they?

Wed, 09/14/2011 - 14:09 | 1669500 tmosley
tmosley's picture

They don't need to buy a whole ounce, or even a half ounce.  As the price rises, smaller denominations will be made. Hell, APMEX is selling 1/10 oz silver rounds right now.  You can buy gold in gram denominations easily.  If you look hard enough, you can get 1/10th gram denominations.  Those will become more popular as the price rises.

If one out of ten Americans were to buy a gram of gold, that is more than 30 tons off the market.  If every American bought 10 grams (on average), that would be 3000 tons off the market.  That would skyrocket the price to $10,000 and beyond, unless central banks decided to try to supress the price some more and lose all thier reserves in the process.

Wed, 09/14/2011 - 11:47 | 1668765 JR
JR's picture

Dylan Grice says “no-one knows” where the “subtle dishonesty resides” in raising revenue ‘at no cost’ or who it is, that “someone, somewhere,” who has to pay.

Well, I know.

Ron Paul’s got it right: “The economic consequences of paper money in the early stages affects lower-income and middle-class citizens… A fiat monetary system allows power and influence to fall into the hands of those who control the creation of new money… The insidious and eventual cost falls on unidentified victims who are usually oblivious to the cause of their plight.  This system of legalized plunder (though not constitutional) allows one group to benefit at the expense of another.  An actual transfer of wealth goes from the poor and the middle class to those in privileged financial positions.”

Bernanke is robbing Peter on Main Street to pay Paul on Wall, particularly those savers whose seed money is being wiped out by negative interest “earnings,” those widows living on rationed food because the purchasing power of their life insurance nest egg is deteriorating, those “Social Security” recipients receiving back devalued dollars to pay for rising indiscretionary expenses, those broken families with two wage earners and children on the street, those unemployed Americans whose careers were destroyed through Fed-created globalization…

America has been hijacked, and it's no secret who did the hijacking.

Wed, 09/14/2011 - 12:02 | 1668819 stiler
stiler's picture

at the time of Noah's flood, everyone was looking for something solid, a rock or piece of solid ground, but found none. Same, symbolically, with today's scramble for gold. 

"In God We Trust" was put on our money so we wouldn't trust in it, because of its inevitable power to deceive deceivable hearts. Sheeple: it says God not Go[L]d. God's value is far above gold, but he is hidden from most. He is only revealed through his son, Yeshua (Jesus). You have to make the Great Exchange. He gave his soul & life so that you, receiving his, can be free.

Wed, 09/14/2011 - 12:16 | 1668875 JR
JR's picture

In the midst of the gathering muck and the pygmy voices who would squeak against the Creator of the universe, I am encouraged tremendously by your post.  “And ye shall know the truth and the truth shall make you free.” John 8:32

Wed, 09/14/2011 - 12:17 | 1668820 Zadok
Zadok's picture

 

So what are we going to do about it?

 

The first step to solving a problem is to define it.  What are you trying to solve?  This can be the most thorny proposition to achieve but any attempt to circumvent in a curcumstance where you actually want to solve the problem it will ultimately result in going back and doing it for real.  

Neutralization of individuals and thereby a group of individuals can be achieved very easily.  There are many techniques but one of the easiest is to provoke an emotion that clouds judgement and causes offense.  Getting that offended individual back on track can be exceedingly difficult and will try your patience.  

Without discipline and good judgement, we fall into the self-neutralization catagory without effort.  

What is the problem that we all seem to talk around?  Offenses of this and that are overwhelming but what actually needs to be solved?

Here is my problem statement proposal.  "We have lost the republic."

Sample subset statements supporting the root issue: We have lost common knowledge of what a republic is.  Government has devolved to institutional theft for self aggrandizement and wealth collection at the expense of the "sheeple".  

The next question is: "Do you want it back"

Followed by: If so, how do we go about it?"

Notice that the Federal Reserve has not entered into the question yet.  It appears to me to be that it is not part of the strategy but rather a tactical front used for what it can accomplish not what it is.  

Let's try to stay focused.  Statements that play to symptoms of the existing problems may be TRUE but are they USEFUL at this point in time?   Would they go away if we focused on the root of the problem.  If so and the symptom is not productive then let's not take it further and neutralize ourselves of the energy that could be better applied toward addressing the tactical tools (like the Federal Reserve) for the strategic purposes of recovering the Republic.  

I am appealing for some thought and emotional discipline toward goals we can all benefit from.  Let's not give our energy willingly to the opposition.  

Zadok

 

 

Wed, 09/14/2011 - 12:06 | 1668830 Belarus
Belarus's picture

Sometimes I wish ZH would put an open thread in between pieces for some of our OT drivel. Because what I want to say now is so obvious: europe closed and ramped higher. It looks like we're working with a one ramp at a time market. Now, like clockwork, S + P immediately starts to vapor rise. Already up well over 1.2% today from market lows. Expect a close well above 1%. 

Wed, 09/14/2011 - 12:18 | 1668884 steve from virginia
steve from virginia's picture

The Swiss establishment, "is willing to print 'unlimited? quantities of Swiss Francs, tolerating an 'unlimited' debasement of its currency. Why would the Swiss of all people, one of the world’s few remaining 'sound money' proponents make such a commitment?"

Because Switzerland rightly values Swiss economic activity more than it values an abstraction. 'Honest money' isn't a thing, it is no different from dishonest money and having 'it' accomplishes nothing more than deflationary recession.

Hard currency environments leaves a few folks with money and all with little else. 'Honest' money is too valuable to spend on anything. Business vanishes because there is no other activity but gaining money by money arbitrage. The losers in these arb trades go out of business.

It's clear smart Swiss are not concerned with money value that destroys Swiss economy.

Look to US economy and see the money value dynamic in action w/ 15% in poverty ...

Wed, 09/14/2011 - 12:23 | 1668907 msmith
msmith's picture

Completely agree that gold will eventually be at $10,000/oz some day.  It is only a matter of time.  However, here is an analysis of short term bearishness http://bit.ly/q03yyU.  Should be seen as an opportunity thougth.  Once the economy stabilizes and actually starts sustaining real economic growth, gold should explode higher.

Wed, 09/14/2011 - 12:24 | 1668916 Gold Man-Sacks
Gold Man-Sacks's picture

As Spock would say, "Fascinating."  Tyler, please post more articles like this one.

Wed, 09/14/2011 - 12:57 | 1669066 monopoly
monopoly's picture

Great refresher for us. And agree, sell my silver and gold for what?

Wed, 09/14/2011 - 13:22 | 1669233 maximin thrax
maximin thrax's picture

"Thus, the only reliable measure of inflation is the expansion of the monetary base. So to those who say there is no inflation, I give you the following chart."

I think we've already seen massive inflation from massive credit expansion in the past decade. That chart is indicative of money printing to bail out banks from losses on their bad loans, which is not inflationary, only counter-deflationary. It can't cause those things already bought on credit to rise in price retroactively. That's why home prices keep going down regardless of how much and often the banks are bailed out.

Government credit has expanded to make up for credit contraction elsewhere. The amount of government debt purchased with printed money has to be greater than the amount of defaulted loans in order for there to be a net increase in money creation from that printing. And if the printed money goes into a market such as commodities or RE then it only serves to inflate a bubble in that market. All bubbles burst, and with that comes wealth transfer. 

When a bubble bursts, the money injected into the economy that inflated the bubble is destroyed, and real wealth is transfered to the winners from the other actors who suffer the loss on the downside. If I was to print a billion dollars and spend it into, say, a ten billion dollar RE market, I can't help but to bid prices up 10% or so. And when all my money was spent, prices would then drop 10% or better as I leave. So my Billion might buy me $900 Million in RE after the dust settles.

However, the remaining 90% of the market who bought in at the same time would suffer the same drop, which could total as much as my gain, say $900 Million. So, all printing accomplishes in this example is transferring all the equity from the buyers in the inflated market (assuming an average 10% down) to the counterfeiter, me. It can't keep prices up unless the supply of money within a particular market is increased infinitely. And if defaults ensue due to loss of equity, money has to be injected to simply maintain prices or else supply overtakes demand when foreclosures are put on the market.

The printing by central banks is counter-deflationary. I'm not sure how that gets to hyperinflation without actual production loss leading to extreme scarcity of necessities. Bubbles instead tend to bring about malinvestment by encouraging increased production of those things in a bubble, leading to over supply, not collapse in supply.

Wed, 09/14/2011 - 13:27 | 1669261 Bob Paulson
Bob Paulson's picture

"By issuing bonds to itself the government seems to have miraculously raised revenue without burdening anyone else."

Go back to school, Grice. The government doesn't issue bonds to itself. Government bonds are sold to the Fed. The Fed is not the government. The Fed is not part of the government.

Wed, 09/14/2011 - 13:39 | 1669323 Dane Bramage
Dane Bramage's picture

Yet free money does not, and cannot, exist.

 

It really is that simple.

You don't get something for nothing
You can't have freedom for free
You won't get wise
With the sleep still in your eyes
No matter what your dreams might be

(unless you're a bankster, then it's all good)

http://www.youtube.com/watch?v=096LhjGNNCk

 

Wed, 09/14/2011 - 14:16 | 1669543 baltbear
baltbear's picture

:"Yet free money does not, and cannot, exist"
  Of course it does. It's called "inherited wealth."
Inherited wealth can be the road in front of the hospital, or the hospital itself, or the electric grid that supplies it, or the coal that powered the grid.
 :"Since there can be no such thing as a government, or anyone else for that matter, raising revenue "at no cost" simple logic tells us that someone, somewhere has to pay."
 Since the statement is a tautology, it is irrelevant, except as the pose of some girley-boy poser puffing up about the fact that while "trading" is a 0 sum game, "life" isn't.
 :"But who? This is where the subtle dishonesty resides, because the answer is that no-one knows."
  this is where the massive stupidity resides, because the answer is "the future." The future inherits the debt and the wealth simultaneously, returning the game to 0 sum.
  This obvious fact is noted in the Preamble to the Constitution of the United States, "upon ourselves and our posterity."
  :"Isn’t asset price inflation (or bubbles as they are more commonly known) more distortionary and economically inefficient than product price inflation?"
 No. Simply because "food and water" are "products" and oil and land are "assets," asset price inflation automatically creates product inflation. Marx, not Adam Smith, argued that this "double hit" meant that "means of production"--a catch-all term for "asset resources" needed owned by the state. So, the author is making a great Commie argument, to his own benefit.
  The actual distortion occurs through "measuring by comparative wealth" which is often miscalled "greed."
 :"We know that revenue cannot be raised for one person without costing someone else."
 Actually, nobody "knows that." It's just given as a rule when playing monopoly, the ultimate "comparative wealth" metapor. Somebody striking a claim to a gold mine, and thereby turning acreage into revenue has cost nobody anything--except other gold mines--until "the future" lays claim on the increased supply.
 :"the only correct thing to do is to create inflation to protect jobs.” is nonsense that requires addiction to goldbug bites to endure.
   Forced demand (borrowing demand from the future) such as the Interstate Highway System, and forced supply to shut up the private money sources (tax cuts used to pay off personal debt). That is, until the private money sources have a new way to con the consumer, in which case the inflation is "growth."
:"the drunk driving of macroeconomists is what led us to where we are today."
 Yes: Having this conversation via internet instead of horse-carried quill scratchings on vellum.

   "Gold" is no more real in any utilitarian sense than "faith and credit."
   Gold serves well in the same place as "inches." There are lots of inches in a house, and measuring every transaction in terms of them is essential in building the house. But the house is not the inches.

  

Wed, 09/14/2011 - 23:17 | 1671719 Fiat Money
Fiat Money's picture

 "Yet free money does not, and cannot, exist"
"Of course it does. It's called "inherited wealth."
Inherited wealth can be the road in front of the hospital, or the hospital itself, or the electric grid that supplies it, or the coal that powered the grid...."

BRAVO, Balt Bear!  It is AMAZING how DUNDERHEADED some of the comments here at ZH are.. even by Tyler this writer! 

     #1. The current "OF, BY, and FOR GoddamnSachs" administration   http://www.jewishvirtuallibrary.org/jsource/US-Israel/obamajews.html

is NOT  using "KEYNSIAN ECONOMICS" - they are  LOOT, PLUNDER, & SWINDLE AUTOCRATS, trying to, VAMPIRE SQUID fashion, SUCK AS MUCH national wealth into THEIR pockets, as they can get away with...  and (as a certain notorious "guillotine for financial terrorists!" financial advocate explains) they - the evil banksters - are TRULY INSANE with their own ARROGANCE and ENTITLEMENT, they are simply BLINDED to how disgusting, and treasonously economy-wrecking,  their ENTITLEMENT & revolving-door greed is. 

#2.  "MONEY" is nothing but an CLAIM ON WEALTH.  It is ONLY as GOOD a claim as the GOVERNMENT can make or enforce it to be. 

#3.  As you point out, we ALL benefit from INHERITED WEALTH - including the BUILDUP of national infrastructure, backed by TAXPAYERS & citizens,  over YEARS, decades, and centuries.  America's MILITARY BACKED CLAIM(s) to Mideast oil, are rooted in the SMUGGLING PORTS during the colonial/Revolutionary era, and, before that, to "Queen Elizabeth's Rogues" the PIRATES, SLAVE-TRADERS, and "Privateers", such as Sir Francis Drake & Sir Walter Raleigh (who founded Virginia) who prowled  "New World" and Pacific oeans looking for Spain's gold ships TO PLUNDER, and markets (then "white gold" sugar plantations) to sell their captured SLAVES to.

  ergo, IF the ELITES with their HOARDS of "money" are WRECKING the economy,  we may have to REDISTRIBUTE their wealth, to make it MORE productive. 

  THIS IS NOT AS RADICAL as it sounds - It happens EVERY DAY in "free market, capitalist" communities across America!  -  stop paying your PROPERTY TAX, even if your million dollar property is PAID OFF, the county will come in and AUCTION IT OFF in a tax auction - YOUR CLAIM to that wealth (property) is now NULL & VOID !!! 

 

Wed, 09/14/2011 - 16:56 | 1670301 GCT
GCT's picture

Ahh the good ole Gold debate.  I have been buying and selling gold and silver for over 35 years.  Made and still make some good profits over that time.  I treat gold as a commodity.  Yes I do have some I will not part with.  Alot of folks come here and talk about confiscations and this and that about PM's.  I have some good ole doom and gloomers and they luv dem sum gold.  They hoard it and buy some every month.  I always tell them the Governement does not have to confiscate gold this time they will just oulaw its use.

Tell me the world is coming to an end soon.  I ask them a couple of questions.  First is, so the whole world financial system collapses and governments have collapsed as well.  How much is your gold and silver worth now?  Most reply, they are not sure.

I own some farm land and raise produce and chickens and trade for them.  How much is your PM's worth now? 

Your starving as we all know the world collapsed and I have produce to eat.  I bet its worth all of your gold so you can eat! 

I am not dissing gold and other PM's but you need  to think about more then just those items.  You must be able to produce something for you to receive goods in return for your labor if the SHTF really did happen.  No your not going to come armed and take it as we have a good size farming community.  

Sun, 10/02/2011 - 08:38 | 1730529 Dry Drunk
Dry Drunk's picture

Grice, quote your brother. Rozeff worked this out in a much clearer way without the bullshit of self-grandtishment (sic), andwanting to look smart. Shit, burn witches but don't fuck with my believe in gold. Or my belief in honesty.

There is only one rule in life, and that is to "have the absence of resentment".

http://www.lewrockwell.com/rozeff/rozeff322.html

Do NOT follow this link or you will be banned from the site!