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Guest Post: On Gold, A Cracked Dam, And The Fed's Small Thumb

Tyler Durden's picture


Submitted by Brian Rogers,

We get some rules to follow
That and this
These and those
No one knows

We get these pills to swallow
How they stick
In your throat
Tastes like gold
-Queens of the Stone Age

Real growth vs. the illusion of growth
Understand the short video below and you will understand what I mean when I say that the United States of America (and the rest of the world for that matter) has not fundamentally grown much at all over the last 40 years. 

We have instead replaced fundamental growth with the illusion of growth brought on by constantly increasing the monetary supply, aka, inflation.

Usually, when a good or service is dramatically increased, it's price will fall.  Too many cars manufactured?  Prices will fall.  Too many new houses?  Prices will fall.  You get the idea.  Good ol' laws of supply and demand. 

But laws, especially economic ones, can be broken or at least bent for extended periods of time.  Too many dollars produced?  Rates should rise.  But that didn't happen.  Quite the opposite.

Despite the dramatic increase in the amount of dollars circulating since 1971, interest rates in the US have fallen.  Exactly the opposite of what the laws of supply and demand tell us should have happened.  How was this possible?

It's good to be king
The dollar is the world's reserve currency.  This means that the rest of the world buys and pays for things in dollars rather than their own local currencies.  This situation, brought to us by the winning of World War II and dominating the Bretton Woods Conference, created a convenient and almost constant demand for dollars. 

This constant demand for dollars has somewhat offset the constant creation of new ones.  Not entirely, of course, we have experienced periods of great inflation like 1973-1980, for example.  But the point is, our inflation has generally been much lower than anyone would have expected because the rest of the world has continually lined up to buy more dollars.

This has led to one of the greatest periods of sustained asset price appreciation in human history.  The period of time from 1980 to today is often-times referred to as the 30-year bull market for bonds which is another way of saying that rates have been falling for about 30 years now.

With rates falling for 30 years, every asset which is priced off of interest rates, which is basically everything, has gone up in price.  Bond math 101 says that as rates fall, asset prices rise.  Rates rise, asset prices fall.  Easy peezy.

But like any good Ponzi scheme, even this one has a limit and investors briefly approached it in 2008.  When it looked like our global banking system was going to collapse, investors started dumping everything in site, essentially a de facto rejection of dollar based assets. 

Houston, we have a problem.

The dam has cracked and the Fed has a small thumb
And what happened when the world stopped demanding as many dollars in 2008, aka deflation?  Why Benny Bernanke and the Inkjets at the Fed picked up the ball and started buying US credit (dollars) using... wait for it, wait for it... dollars they created out of thin air.  Lovely.

But the world is slowly waking up from it's 40-year slumber.  The money printing is starting to create inflation which is ravaging countries all over the world.  Interest rates are starting to rise and as mentioned above, asset prices are starting to fall.  With the owners of these assets sometimes having borrowed heavily to buy them on the assumption that they will always go up in price, even a small drop in price spells death.

Fiat currency, legal tender laws, fractional reserve banking and reserve currency status are a legal license for those that control the currency to steal from those that do not.

Alas, this terrible system is finally coming to its' inevitable end.  And good riddance at that.

The death of fiat money will be the best thing to happen to human freedom and liberty in over 100 years. 

However, you must realize that the deflation associated with the collapse of the dollar-based fiat monetary system will wipe out decades worth of false asset price growth in a very short time.  Think days or months.

Gravity is a real bitch
Bonds, stocks (particularly banks and leveraged companies), commercial real estate, residential real estate, auto prices, factories, etc., will be obliterated.  All of this is priced off of the "risk free rate" - the Fed manipulated Treasury rate - and all of these assets will collapse in price once the dollar is finally rejected as the world's currency, rates start to rise and the global monetary system enters the Great Reset, aka the Death of the 30 year bond bubble.

How far could these assets fall?  No one knows but think about this, in 2008 stocks fell over 50% from current levels while the existing corrupt system survived.  Where would it have fallen without the Fed pumping trillions into the banks that they could then pump right back into the market?

Real estate has fallen over 30% nationally with the government continuing to print, buy and lend to anyone with a pulse to prop the market up.  Where would housing price in the absence of taxpayer funded FNMA/GNMA/FHLMC easy credit, mortgage tax deductions and new home buyer credits?  I'm not sure but I certainly think we are going to find out in the near future.

How low can you go?
When the dollar loses its' primacy, it's not a stretch at all to imagine stocks falling much, much farther than their 2009 lows.  Any stock with too much leverage could suddenly find itself bid-less.  Think S&P 500 between below 500. 

Think commercial and residential real estate falling another 50-75%.  Imagine the vast majority of real estate transactions being done for cash, no mortgage financing.  What is the cash price for real estate today?  Who knows, but certainly a far cry from today's.

Bonds will be wiped out.  Institutional investors could avoid bonds altogether for years as rates continue to leak higher.  The PIMCO's of the world are scrambling to put equity units together to catch their panicked clients exiting bonds.  My old boss Billy G sees the writing on the wall.

Was your grandfather lazy?  Mine wasn't.
Think these downside scenarios are crazy?  Think about this: the fiat money binge dates back officially to 1971 when Tricky Dick removed the final vestiges of the gold standard.  In 1971, the S&P was at about 110, today it's around 1,400 or growth of well over 10x.  The median US real estate price in 1971 was about $26,000. Today that same number is about $155,000 or growth over 5x.

Now ask yourself this, as a country are we really 5-10x more productive than our grandparents?  Because productivity - doing things faster, smarter, cheaper and better - is the only way to generate real, fundamental growth.  Otherwise we're just creating credit and pretending like it's growth.

Now perhaps we are a bit more productive than our grandparents - computers, the Internet, global communications, more efficient vehicles, etc... - but 5-10x???  No chance.  I had the privilege of knowing my grandfather quite well and believe me, I am definitely not 5-10x more productive than he was (truthfully, it's probably the reverse).

What is the silver (or perhaps golden) lining you ask?

Countries will still trade with one another simply because the survival of their people (the seat of power for any government, even the Chinese) depends on it.  With the dollar being trashed and every other fiat currency with it, which is all of them, countries will turn to trade with the one currency that cannot be debased and has thousands of years of history backing its primacy. 

Gold.  Gold, bitchez.
Gold will be the surviving currency that will rise dramatically in value until a new global currency regime can be established and agreed upon.  Most likely years.  Bretton Woods was a relatively quick process, but remember, the US won the war so we made the rules with very little debate.  Things certainly won't work that way next time.

So while the coming deflation via rising rates will ravage the value of dollar-based assets (the aforementioned bonds, stocks, commercial real estate, residential real estate, auto prices, factories, etc...) gold will at a minimum hold your purchasing power and could very will rise many times from current levels. 

Then, in the heat of the deflation, when everyone you know is selling everything they own to simply stay afloat, you buy.  Sell your gold and buy.  With both hands.  Aggressively.  Greedily.  And if a bank will extend you credit based on your gold holdings, take it and buy with leverage.  You will be creating generational wealth.

Good luck and think long and hard about what you own and what's happening around us.

And now, without further delay, the video that got this whole rant started:


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Sun, 04/01/2012 - 22:30 | 2308678 Ellesmere
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Sun, 04/01/2012 - 22:35 | 2308692 flacon
flacon's picture

Just wanted to point out that in 2008 gold dumped along with everything else. But I also should say that it was the PAPER price of gold, not gold itself. 



Sun, 04/01/2012 - 22:41 | 2308706 Dr. Engali
Dr. Engali's picture

That's to be expected in the liquidation process. The paper price of gold also recovered and gained after the liquidation stopped. We are still waiting on stocks to make it to their old highs. Which in my view they won't make it.

Sun, 04/01/2012 - 22:49 | 2308721 flacon
flacon's picture

Would you say that it is important to hold some of your wealth in paper rag money, because the last thing we will want to do is sell our gold/silver when the paper price tanks.... Best to already have that paper on hand for a few months.... Anyone care to comment on this?


FOFOA also believes the paper gold will tank for a while before it is revalued signifantly higher. What if it takes a year or more for them to come up with the new gold-backed paper money? Can we hold on to our hoard that long and still survive without having to sell it?

Sun, 04/01/2012 - 22:59 | 2308735 Dr. Engali
Dr. Engali's picture

I think it's important to have paper money for the liquidation cycle. My view is that we will have a cycle like 2008 where everything will happen real fast. That will be an opportunity to grab more precious metals. This time though there won't be an asset price recover because the dollar will be toast. I may be wrong but that is how I'm playing it.

I'm a big fan of FOFOA. I agree with his thesis, except for his Euro support. As far as holding on to my gold my thoughts are that silver gets me through the crisis and gold transfers my wealth.

Sun, 04/01/2012 - 23:08 | 2308761 LowProfile
LowProfile's picture

I took a page out of Kyle Bass' book.  Other than day to day expenses in the bank account, I keep a few months supply of silver on hand, a month's supply of paper on hand, and I keep another month's supply of US currency on hand...

...In physical US nickles.

I think the Euro will survive, for the reasons FOFOA outlines.  However, I think it will have stiff competition from a yet to be released Asian currency (or perhaps currencies).  The dollar may well be forced to adopt a 15% MTM like the Euro just to be accepted.

Mon, 04/02/2012 - 00:27 | 2308859 Pinto Currency
Pinto Currency's picture



We have chaos approaching and the concept of selling gold at the bottom of a perceived deflation to buy assets is not good advice.

Be careful out there as we do not know the future.

Mon, 04/02/2012 - 00:32 | 2308867 LowProfile
LowProfile's picture

There will be ample time and opportunity to exchange gold for other assets.  It will make perfect sense to do so when you do.  No hurries, no worries.

Mon, 04/02/2012 - 00:38 | 2308874 Oh regional Indian
Oh regional Indian's picture

From I now understand, Gold is not for the proles at all. It will (does) have value to CB's, but for reason's few understand, it's about how "Currency" is created in the first place. I'd highly recommend the CAFR website and the work of Walter Burien for anyone wondering.

They CAN and WILL confiscate and it's legal (though un-lawful, it is completely LEGAL, BIG DIFFERENCE).

Homework to be done people, it's definitely not as simple as making a choice to Go Phyzz!



Mon, 04/02/2012 - 01:06 | 2308903 LowProfile
LowProfile's picture

I took a glance at that link and dude...  Nothing personal, but seriously:  You need to lay off the reefer.

And if you think there will only be "official" channels to buy and sell gold, you need to lay off it permanently.

Keep your body lean, your blood clean, and your mind keen. -H. Rollins

Mon, 04/02/2012 - 01:48 | 2308946 Oh regional Indian
Oh regional Indian's picture

LP, there is no time for ordinary/linear/circular thinking anymore. None. 

Take a linear mind into the current, completely non-linear world and one is basically screwed.

People are provng Newton and Einstein to be complete nincompoops and you want to believe GATA's storyline on Gold?

Who be this Rollins you quote?

Good luck.


Mon, 04/02/2012 - 02:42 | 2308987 Western
Western's picture

Based on your comment regarding gold confiscation.


Who's going to come and confiscate this gold? Who will the government pay and what will their contract look like;


"Hi... ummm, well we need you to go confiscate this valuable money, and we will pay you in this worthless money.... please give us the REAL money when you finally to get it from the clutches of these smart, fast moving, gold loving people and please give it to us, make sure you don't keep any for yourselves now, heh heh *cold sweat* "


Yeah, that's why I really don't give a fuck. There was a time when people took care of their own problems and we're fast coming up on that era again. The government will be too busy wanting food and energy and good PR to care about gold from the people. Path of least resistance.

Mon, 04/02/2012 - 04:49 | 2309030 LowProfile
LowProfile's picture

He'll give some bla bla bla about taxes...  Not realizing that every country, around the world, would need to be on board with enforcing every other country's tax laws on gold...

Mon, 04/02/2012 - 17:11 | 2310789 AustriAnnie
AustriAnnie's picture

The problem is, however, that those sent to confiscate will see the value in keeping some of the loot confiscated.  

TPTB cannot confiscate it all (since when can they do anything effectively?  see the war on drugs or the war on terror for examples).

However, the damage that is done by "good citizens" who turn their neighbors in, or law enforcement that pocket some of the gold they confiscate, is not to be ignored.  Other regimes have maintained a broad reach of power by "empowering" local law enforcement to steal directly from the people to their own benefit.

Ultimately the machine breaks because it cannot pay wages to its enforcers.  But that can take a long time. 


Mon, 04/02/2012 - 04:49 | 2309029 LowProfile
LowProfile's picture

ORI, use whatever thinking you want, as long as it's CLEAR.  Yours clearly isn't.

Enstien?  Yeah, he screwed some things up.  Newton?  Seriously now...

And Rollins?

...Are you finally getting what I mean by your needing to clear up your fucking mind, my friend?!


Mon, 04/02/2012 - 07:14 | 2309108 JOYFUL
JOYFUL's picture


I checked out the same link and thought it was freakin brilliant! Because he comes at the issue from a different direction, or using another way of thinking does not impute any lack of clarity...on his part.

Enstien?[sic] Yeah, he screwed some things up.  Newton?  Seriously now......

Ok, let's get Master of the Mint,in 1717 Newton overvalued the guinea, changing the English system from bimetallic to gold, and the destinies of millions as well. His unworkable and artificial fixing of the gold\silver ration to a static formula is remarkably similar to his fixation and failure on alchemically changing base metals to gold...the whole effort constipated and midas-like...xactly what ORI referred to in his blog entry as the "curse of Midas"...from that point on England went into an aggressive program of accumulating gold, territorial possessions, and societal decay, now coming to ultimate fruition right in our own times, as Englishmen are marginalized and render impotent spectators in their own country by means of the same juvenile hoarding and acquistive greed that ORI warns about in his post...the failure to adhere to the masculine principle.

use whatever thinking you want, as long as it's CLEAR

 dear Friend ....He did....just what you asked of guess what?

yur smug mockery of his contribution here is so ironically hollow  and without merit that I strongly urge you take your own advice re clear thinking before further embarrassing yourself- clarity bein in the eye of the beholder, right now yu be lookin more like the  proverbial bagholder than the oracle of common sense you presumed yurself to be! [Stephanie Cooke - What Makes the WORLD Go Round...]


Mon, 04/02/2012 - 08:17 | 2309183 Pope Clement
Pope Clement's picture

Thanks ORI and Joyful for the ass paddling of a rather arrogant poster. It's not what you know but what you think you know that makes us embrace foolish notions; and due to the nature of our seeming Jaynesian linguistic consciousness it is not easy to determine which is which?

Mon, 04/02/2012 - 08:13 | 2309176 Absinthe Minded
Absinthe Minded's picture

Now I remembered why I don't click on Google links, they don't let you back out of their page. On an Ipad that's the only way you can go back. Fuck Google and their double click fuckin' bullshit! What kind of a fuckin' name is Google anyway! Fuckin' world dominating bunch of assholes.
/rant off

Mon, 04/02/2012 - 09:08 | 2309279 blunderdog
blunderdog's picture

Sounds to me like iPad's suck.

Mon, 04/02/2012 - 08:20 | 2309187 Schmuck Raker
Schmuck Raker's picture

"Henry Rollins is [a much respected] American singer-songwriter, spoken word artist, writer, comedian, publisher, actor, and radio DJ."

-Wiki link:

[edit - Schmuck R]

Think of Zappa with more anger, or Jello Biafra uncensored.

Mon, 04/02/2012 - 09:11 | 2309288 blunderdog
blunderdog's picture

Hank's cool, but he's not near as smart as Frank or Jello.

Mon, 04/02/2012 - 11:38 | 2309723 Freegolder
Freegolder's picture

At least you're not trying to flog shares in ORI PlC today you luna-tic.

There is out there, then there is this guy.

Good for a laugh though, thanks.

Mon, 04/02/2012 - 12:12 | 2309810 Freegolder
Freegolder's picture

How about explaining WHY you think they will, rather than just spouting?


Come on smarty-pants.............why?

Mon, 04/02/2012 - 00:19 | 2308848 johnu1978
johnu1978's picture

Buy silver, it's on sale!!!

Primitive Skills Classes

Sun, 04/01/2012 - 23:35 | 2308799 lookma
lookma's picture

FOFOA also believes the dollar paper gold will tank for a while before it is revalued signifantly higher.


What if it takes a year or more for them to come up with the new gold-backed paper money?

It won't be gold backed.

Can we hold on to our hoard that long and still survive without having to sell it?

I see you enjoy shadowboxing the apocalypse and wandering the land. 

Mon, 04/02/2012 - 01:08 | 2308904 LowProfile
LowProfile's picture

Mayor of Ottowa, eh?

Hope he gets re-elected.

Mon, 04/02/2012 - 15:44 | 2310437 AlvarezEarnestine7
AlvarezEarnestine7's picture

my best friend's sister makes $63/hr on the computer. She has been out of work for eight months but last month her pay was $18250 just working on the computer for a few hours. Read more on this site...

Sun, 04/01/2012 - 22:30 | 2308680 fonzannoon
fonzannoon's picture

everyone seems to be devaluing. Why is it always about the dollar when everyone is trying to win the race to the bottom?

Sun, 04/01/2012 - 22:49 | 2308726 tempo
tempo's picture

Three thoughts..First the worldwide labor glut creating good paying jobs at Foxconn paying $1.25/hr can't be good for the highest cost, most regulated, most entitled economies in the West. Second, the inability to control reactor #2 in Japan (www, resulting in the increasing radiation levels in the USA will be a BIG problem. Third, the Central Bankers have circled the wagons promising to print, flood, lie, etc will delay but not stop the eventual adjustments (deflation, default, war?).

Sun, 04/01/2012 - 22:52 | 2308728 UP Forester
UP Forester's picture

Don't worry.  It won't matter who's on the bottom of the pile under the cliff, it'll just matter who's smart enough to pull the golden ripcord.

Sun, 04/01/2012 - 22:34 | 2308687 Tsar Pointless
Tsar Pointless's picture

I find this post...quite bullish, actually.

Sun, 04/01/2012 - 22:37 | 2308690 DoChenRollingBearing
DoChenRollingBearing's picture

GOLD is King!

Recent submissions at my blog:

"Review of Barron's -- Dated 2 April"

"Marginal Utility and Gold"


Sun, 04/01/2012 - 23:21 | 2308783 SilverIsKing
SilverIsKing's picture

Ahem....I beg to differ.

Sun, 04/01/2012 - 23:43 | 2308809 DoChenRollingBearing
DoChenRollingBearing's picture

Ha ha!  Very good.  + 1

Sun, 04/01/2012 - 22:35 | 2308691 slewie the pi rat
slewie the pi rat's picture

a crAckED




Egypt’s Muslim Brotherhood Nominates President Candidate

Sun, 04/01/2012 - 23:08 | 2308765 LowProfile
LowProfile's picture


Sun, 04/01/2012 - 22:38 | 2308697 Dr. Engali
Dr. Engali's picture

I love a post that has the words " gold bitches"

Sun, 04/01/2012 - 23:04 | 2308754 r00t61
r00t61's picture

Not only that, he spelled it the ZH way.

Sun, 04/01/2012 - 23:06 | 2308760 Dr. Engali
Dr. Engali's picture

Yeah nd I just noticed that the damned auto spell on my phone spelled it the "right way" . Fuckin stupid ass smart phone.

Sun, 04/01/2012 - 22:43 | 2308711 wee-weed up
wee-weed up's picture

Unfortunately, as long as the dumb Euroweenies keep fvcking themselves in the arse, the dollar will remain strong.

Sun, 04/01/2012 - 23:38 | 2308802 hedgeless_horseman
hedgeless_horseman's picture long as the dumb Euroweenies keep fvcking allowing themselves to be fucked in the arse, the dollar will remain strong.

Tim Geithner and company for the mother fucking win.

Sun, 04/01/2012 - 22:43 | 2308713 Born Right the ...
Born Right the FIRST Time's picture



Cuz it,s all I got 

Sun, 04/01/2012 - 23:16 | 2308766 Vint Slugs
Vint Slugs's picture

You'd better get thee some gold, 'cause you've backed the wrong horse if you think that silver will save your bacon in the Great Crisis.

Silver's going to show you that it's just another commodity when we get down and dirty in the next 2 years.  Answer me this - how is it that silver, with a "structural production/consumption deficit" that's been ongoing for more than 20 years, at its 2011 peak could not even exceed its nominal 1980 peak price?

When you finally figure out the answer, then you and the rest of the silver simpletons here will stop that "silver, bitchez" stuff and start deploying your assets rationally.

Sun, 04/01/2012 - 23:32 | 2308797 UP Forester
UP Forester's picture

Two words, learn 'em well:



Sun, 04/01/2012 - 23:39 | 2308806 SilverFocker
SilverFocker's picture

Talk about a "simpleton"..........only a ass crack would make that sound, and only a moron would miss the principle behind the silver price.

Sun, 04/01/2012 - 23:46 | 2308816 DoChenRollingBearing
DoChenRollingBearing's picture

@ Vint

Best to be diversified, even in PM holdings.  I own some silver and platinum.  Gold is the $-value bulk though (75%).

Mon, 04/02/2012 - 00:35 | 2308870 Neoteny
Neoteny's picture

Good question, Trav...thanks!

Why is it that silver did not break its 1980 nominal high?


Something definitely fishy about that. Lunacy, no doubt.

Meh, silver is just a commodity cuz there isn't enough left to make it money.

And besides, Fofoa and his other friend say so all the time by bashing good ole Bix
or Jason, even big Ted. So it must be true. Silver is just prettier aluminum.

And no, no, no - silver is not manipulated at all. Normal price mechanism. You can't prove it anyway. The CFTC would have certainly said something by now.


Cuz, it's perfectly reasonable for a dirt-ball 'commodity' to have only 2
banks as the ONLY sellers to thousand on the long side.

Dumb ass naked monkey fuck spending too much time staring at the sun. Beat it.

Mon, 04/02/2012 - 02:11 | 2308968 UP Forester
UP Forester's picture

Calling him Trav?



Mon, 04/02/2012 - 04:19 | 2309016 mick_richfield
mick_richfield's picture

ZH people will eventually develop their own language that no one else will be able to understand.

"Why do they call unpopular people 'Trav' ?"



Mon, 04/02/2012 - 01:31 | 2308934 Prometheus418
Prometheus418's picture

The concept of what is rational depends on what game you are playing.  I get that some percentage of the people who read and post here are obscenely wealthy by the standards of the area I live in, and are going for the power of kings in this move- but for the rest of us who are of more modest means, the silver play is completely rational.

If you are not a big player, the spot price of gold is completely irrelevent- it's not a market that is kind to small retail investors.  You can buy at a premium, and sell at a loss- that's about the only play.  Private transactions tend to be too small for Gold payment, unless you are purchasing a newer car or a piece of real estate.

For the rest of us, it's silver.  While the whales and the sharks fight things out, and gold is a myth to those in the middle and lower classes, people will remember clearly enough that silver is gold's sexy cousin, and it's perfectly rational to believe that while the big guys fight it out on top of a mountain somewhere, the farmers in the valley will be accepting silver coins- not because they're better or worse than gold coins, but because that is what is available and reflects a useable level of value that won't get your skull smashed in with a brick when you present it.

For my part, I have three small children to feed- they could care less if I have gold or not.  They want food in their stomachs and shoes on their feet- and silver can do that, while gold would just make targets of us.  

Tell you the truth, I don't just dislike gold- I hate the stuff.  I would have loved to make the play from 2001 to present, but if I had, I'd be selling with both hands right now and converting to silver.  Sadly, I did not do that- but I do have a respectable stack of 90% and Eagles.  You may be a big enough fish to turn your gold into a seat at the oligarch's table, and if you are, it makes sense to stump for the stuff.  But if you don't, they will kill you and take your gold, or cause you to bury it deep and wait out the storm- maybe for the rest of your life.  Your grandkids might realize the gains from it, and maybe that's what you are looking for- but it sure won't save you in a year or two.  At best, it'll paint a target on your forehead.

Furthermore, I buy the logic that most of the gold is held by banking cartels and central governments.  These are the people I want pushed out of the seats of power- not the ones I want to suck up to.  I don't want to deal with the banking families or the government- I want to be free to deal with the farmers, the miners, and the merchants in my area.  And when the storm finally reaches my remote neighborhood, I can only hope and plan for a situation where we can close our gates and live modest, honest lives outside of your sick and corrupt system.  You may be planning for your grandkids to own castles because you bought gold- but around here, our grandfathers hid their old silver for a rainy day- and the clouds are rolling in.

I don't think this is going to end the way that you traders think it will.  It'll be what it'll be- but if I have my say, and I intend to make a run at it- all the palaces are coming down, and we will return to lives more suited for human health and real happiness.  A big part of that is going to be tearing all those who profit from the misery and enslavement of others off their pedistals- and I regret to say that those who realize outsized gains by speculating on gold are going to be on that list.  I've been reading this site for years, and many of the commentors are no better than those who man the desks at Goldman Sachs.  Clutch your shiny, shiny gold and hold it to your chests while you can, because the common folk are building a silver army, and sooner or later, you'll be hearing our footsteps.

What did you think the increase in ammunition sales was about?

Mon, 04/02/2012 - 04:55 | 2309033 LowProfile
LowProfile's picture


tell you the truth, I don't just dislike gold- I hate the stuff.

That's irrational.  You may want to examine that.

But if you don't, they will kill you and take your gold,

I dare anyone to try that.  Because I was part of that ammunition 'surge'.

or cause you to bury it deep and wait out the storm- maybe for the rest of your life.

You assume they will take over the world?  Then we have bigger problems.

Furthermore, I buy the logic that most of the gold is held by banking cartels and central governments.

Then you are seriously confused, because 80% of the world's gold is privately held.

Get you some.

Sun, 04/01/2012 - 23:27 | 2308792 silverdragon
silverdragon's picture

Yep, Silver Bitchez!

Sun, 04/01/2012 - 23:47 | 2308818 lasvegaspersona
lasvegaspersona's picture


If you own silver and no gold you owe it to your future to read FOFOAs well reasoned thoughts on silver. I got switched to gold a year ago and...we will see won't we...time will tell

Sun, 04/01/2012 - 22:46 | 2308718 casey13
casey13's picture

The S&P will fall in terms of what?
Gold probably. The US$ they can create as many as they want.
The value of fiat money is a sliding scale.   

Mon, 04/02/2012 - 00:16 | 2308844 tictawk
tictawk's picture

if credit dries up, the Fed's ability to print does not matter because there is no one who will borrow.  The banks may have the ability to lend but if business conditions are bad and high quality borrowers are not available, the money just sits in the bank.  Our credit system proliferates not just because of availability of bank credit, but because of willing borrowers. 

Mon, 04/02/2012 - 04:57 | 2309035 LowProfile
LowProfile's picture

Dude, the goverment will borrow and the Fed will buy it and then the government will spend it.

The issue is how long people (China and the oil producers) will go on accepting it for real stuff if they continue to print.

Mon, 04/02/2012 - 17:53 | 2310983 AustriAnnie
AustriAnnie's picture

You assume they will print and try to use the bank lending process to distribute the fiat?  There are other ways they can get the fiat onto the street.  Money "just sitting in the bank" is the bankers' welfare.  The money flowing through gov't subsidies/gov't lending programs/entitlements are the sheeple's welfare.

Secondly, I don't see people on a large scale refusing credit offered to them.  Are people truly less willing to borrow now than they were before?  If anything, the worse things get the more debt many will take on, because they see no other option, and because the precedent has been set that default is an easy option. And in the face of money printing, it seems to me that many will be willing to borrow because they will assume they can pay back the debt with worthless dollars (those who actually plan to pay it back).

When credit dries up and the Fed resorts to direct printing, who cares about "willingness to borrow"?  The sheeple will have their hands out and the money will get distributed via entitlements, and fake "lending" where everyone knows the borrower won't pay back (e.g. student loans).

Everyone is a willing borrower if paying the debt back is optional.  And since when has our credit system depended on "quality borrowers"?


Sun, 04/01/2012 - 23:32 | 2308722 GoinFawr
GoinFawr's picture


Entirely Off Topic, but this is just another reason that Canuckean politics are so much more entertaining than anywhere else. Here is what you get when you recherche 'Justin' , avec Canada. (Ne 'Justine Beiver' pas, c'est Canadienne, oui?)

Justin Trudeau (who won his seat by a mandate from the masses), who's father was that famous Prime Minister, but who's Liberal party is currently not doing so well.... loses Katimavik... goes up against a First Nations 'Progressive Conservative' Senator (an appointed gov't position); some might say that there can be no such thing...Brazeau got ten pounds on the Liberal to boot.

These two mean it. "Big long legs and one big mouth, the hottest thing from the North to come outta the South..."-The Cramps

Kid's got a mean left jab. Oh wait, he's 40...must be something in the water

Mon, 04/02/2012 - 11:14 | 2309642 oddjob
oddjob's picture

Just what we need, a spoiled child of privilege returning to continue his fathers' gross mismanagement.

Wed, 04/04/2012 - 10:12 | 2316165 GoinFawr
GoinFawr's picture

I suppose that's a fair point, not that either of the two parties you lot keep electing have ever done a good job of keeping the books in the black, but IMO skinny little Justin hardly looked 'spoiled' or 'privileged' stepping into the ring against someone handpicked to be a supposed 'ringer'. You should be so tough toff.

Sun, 04/01/2012 - 22:51 | 2308725 AUD
AUD's picture

We have instead replaced fundamental growth with the illusion of growth brought on by constantly increasing the monetary supply, aka, inflation.

Despite the dramatic increase in the amount of dollars circulating since 1971, interest rates in the US have fallen.  Exactly the opposite of what the laws of supply and demand tell us should have happened.

This constant demand for dollars has somewhat offset the constant creation of new ones.

Still with the quantity theory huh?

Sorry, the value of something is not derived from its quantity, rather its quality. The quality of US & most if not all nations debt is shot. What we have is the biggest & most irrational credit bubble or financial mania in human history.

And in the case of money, "the laws of supply and demand" do not tell you what "should have happened". Money is the one & only thing that you can never have enough of. Infinite supply of government obligations can meet infinite demand, if those government obligations are 'money good'.

A credit bubble can inflate beyond all reasonable bounds, & then double.



Sun, 04/01/2012 - 23:00 | 2308741 i_fly_me
i_fly_me's picture

 ... "Sell your gold and buy.  With both hands.  Aggressively.  Greedily.  And if a bank will extend you credit based on your gold holdings, take it and buy with leverage.  You will be creating generational wealth."

Which you should then store in GOLD so we don't have to go through all this again.

Mon, 04/02/2012 - 00:02 | 2308834 lasvegaspersona
lasvegaspersona's picture

yes! a wealth asset for the ages. FOFOA has changed my game plan. I will not rush to 'sell at the peak' but rather allow gold to equilibrate. Then depending upon my age, aggressiveness, and just mood, I'll deploy as I see fit.

Mon, 04/02/2012 - 02:37 | 2308983 ffart
ffart's picture

You're letting some anonymous internet blog guy make investment decisions for you. How's that any different than listening to Erik King/Jim Sinclair, etc.?

Mon, 04/02/2012 - 02:47 | 2308989 Vic Vinegar
Vic Vinegar's picture

It's no different.  Just as it is no different than listening to Cramer or investing based off of a penny stock link from Yahoo Finance.

Follow your heart, spacemonkeys!  Gold is money.  The rest is bullshit.

Sun, 04/01/2012 - 23:02 | 2308753 q99x2
q99x2's picture

With the power recently seen by the FEDs passing NDAA, Rolling out TSA and DHS just don't see gold as anything other than a liability unless it is held outside of the US.

Sun, 04/01/2012 - 23:06 | 2308763 UP Forester
UP Forester's picture

Sure.  It'll be easier to defend in Switzerland or Mauritania, and they wouldn't say "Possession is 9/10ths of the law"....

Mon, 04/02/2012 - 00:27 | 2308862 i_fly_me
i_fly_me's picture

When it becomes relevant, the TSA and DHS will be impotent along with the rest of the bankrupt government.  Look at Ireland.  Activists there are refusing to pay the new property taxes because they know the government is broke and cannot project the power necessary to forcibly collect them.  (see:  When this all finally blows up, and it surely will, the feds won't be able to pay to get the troops back home to this country much less pay them to come take your gold.


Mon, 04/02/2012 - 01:17 | 2308919 TruthInSunshine
TruthInSunshine's picture

There was a time when Americans would choke the ever living shit out of TSA rent-a-cops if they dared to molest their children, consequences be damned.

Mon, 04/02/2012 - 04:59 | 2309036 LowProfile
LowProfile's picture

We may well see that again.

Mon, 04/02/2012 - 08:56 | 2309244 i_fly_me
i_fly_me's picture

That's why I don't fly anymore ... I don't want to end up in prision for choking out a screener.

Mon, 04/02/2012 - 05:44 | 2309052 Clashfan
Clashfan's picture

TSA and troops are very different.

Mon, 04/02/2012 - 08:27 | 2309192 i_fly_me
i_fly_me's picture

Sure they are.  I would be afraid if our troops deployed against us.

Sun, 04/01/2012 - 23:05 | 2308757 dr.charlemagne
dr.charlemagne's picture

the author is a bit of dim bulb. While this analysis touches on some interesting points, it is fundamentally confused. Interest rates are down because an expanding monetary base makes dollars cheap. More dollars are available, therefore less cost to borrow. Supply and demand.

Mon, 04/02/2012 - 04:49 | 2309028 taeonu
taeonu's picture

Interest rates are down because the Fed hands out free money to banks to buy the bonds at low rates and then the Fed exchanges those bonds for the toxic assets on banks' balance sheets at 100% of their fictitious value.


If interest rates were based on supply and demand, then wouldn't rates have skyrocketed during the 2008 collapse when banks were claiming to be illiquid [actually insolvent] and money/credit was unavailable?  Instead that's when rates were lowered.  If interest rates where based on supply and demand, what exactly would the Fed do?  Their job is to manipulate interest rates in favor of the banks.

Sun, 04/01/2012 - 23:13 | 2308769 honestann
honestann's picture

Gold will be the surviving currency that will rise dramatically in value until a new global currency regime can be established and agreed upon.Gold will be the surviving currency that will rise dramatically in value until a new global currency regime can be established and agreed upon.

Are you kidding me?  Finally get off the poison of fiat currency... then turn around and voluntarily hand our lives, liberty and prosperity back to the predators-that-be and predator-class again?  Are you completely stark raving insane, or what?

Mon, 04/02/2012 - 00:55 | 2308891 skepticCarl
skepticCarl's picture

Honest Ann, you are right on.  The gold bugs imagine the devaluation and demise of the dollar as a rapture, kinda like those loonies who climb some mountain, waiting for the space ships to carry the true believers away.

Banks, currencies, governments and empires have failed, routinely, around the globe for centuries.  They just reinvent a fiat currency and start over.  Is there one country, like Russia or Argentina after their bond defaults, or crumbled empires the the United Kingdom after the two world wars, that adopted gold as a currency? Get real, gold bugs.  Love your gold (I like mine) but don't expect some bright new tomorrow without bankers, politicians, and charlatans.

Mon, 04/02/2012 - 02:26 | 2308978 Boxed Merlot
Boxed Merlot's picture

Isn't that the point of the IMF?  I mean it has very significant physical reserves that theoretically are not associated with a single geopolitical nation / state.  It is the closest entity that could float hard / independent currency without the encumbrances of elected / appointed governmental personnel. 

Oh yeah, that's who appoints the IMFs officials. 

Mon, 04/02/2012 - 07:39 | 2308981 New World Chaos
New World Chaos's picture

There will be nothing democratic about it.  The Illuminati will stack every committee of every international body, especially the IMF.  The IMF will create a "gold-backed" world currency and the Rothschilds will try to bribe their pet politicians to transform all peasant debts and national debts into this new currency- sanctity of contracts be damned.  They decide which contracts are sacred.

The gold backing may even be real at first.  This would suit their purposes because it would effectively draw the gold (and other real stuff) into the system as debts are paid or foreclosed on.  Gradually, by the miracle of compound interest, the puppetmasters will drain the little people of their physical gold and all other real assets, and then we will be off to the races again with bailouts and currency destruction.  When anyone complains, the Beast will print money to pay its cops.  This is why it is important to: 

  • Never accept the world currency for honest work- go on the dole if you have to.  It will collapse the system sooner.
  • They may make it very difficult to live an honest life without their currency.  Choose a country where the "Bear Grylls retirement plan" and the "three hots and a cot retirement plan" are bearable.
  • Never, ever sell gold for the world currency.  Trade it for something of practical value.
  • Default early and often.  Unless you need to build a little history to get a huge credit card limit.
  • Hang treasonous politicians who would pimp you out to the Rothschilds.  This can also be a good way to default.
Mon, 04/02/2012 - 11:28 | 2309691 tamboo
tamboo's picture

rapture in argentina:


Despair in Once-Proud Argentina - OMINOUS PARALLELS


"The desolation of that day, neighbor vs. neighbor over hunks of meat, suggested how profoundly the collapse has altered Argentina. Traditionally proud, Argentines have begun to despair. Talk today is of vanished dignity, of a nation diminished in ways not previously imaginable. "


cant happen here eh?

Sun, 04/01/2012 - 23:14 | 2308772 Vint Slugs
Vint Slugs's picture

Who's Brian Rogers and what's his claim to fame?  There's nothing new in this entire article.

Sun, 04/01/2012 - 23:52 | 2308824 jimmyjames
jimmyjames's picture

Who's Brian Rogers and what's his claim to fame?  There's nothing new in this entire article.


I don't know about that--it's all new to me-because almost everything he claims is assbackwards--

Mon, 04/02/2012 - 15:38 | 2310410 The Disappointed
The Disappointed's picture

Maybe Brian Rogers is John Galt's new pseudonym?

Sun, 04/01/2012 - 23:23 | 2308785 monopoly
monopoly's picture

The thought of selling our gold, wow, that is not even on my radar, so far out. I guess before we start to sell, we have to stop buying. That is not going to happen any time soon either.

Sun, 04/01/2012 - 23:28 | 2308793 infiniti
infiniti's picture

"When the dollar loses its' primacy"




Long US Dollars and mortgages.

Sun, 04/01/2012 - 23:40 | 2308807 silverdragon
silverdragon's picture

Surely the question is what will be backing up the new world currency? Will it be a basket of Gold and Silver? Will it be more broad and include Rare Earth Metals? Will it also include copper? Will it be tied to a basket of G20 currencies? Will the Renminbi, Euro, Dollar and Yen all be tied to the new world currency at a fixed rate like the HKD to the USD with a small band of movement avaialable? Will the Reminbi become the dominant currency as they are the largest exporter and all trade that they do will be in Renminbi?  Will the new world currency be linked to a basket of the BRIC/Euro/Dollar and Yen currencies?

Mon, 04/02/2012 - 00:13 | 2308842 lasvegaspersona
lasvegaspersona's picture

I doubt the world will tolerate  another fiat reserve currency. Possibly one that trades freely in gold but why give China the same advantage the USA has had (abused) for the past 40 years.

Mon, 04/02/2012 - 01:20 | 2308921 skepticCarl
skepticCarl's picture

LasVegas, you doubt the world will tolerate another fiat reserve currency?  There are more than 190 countries in the world today, most of which have seen their currencies devalue to zero.  The new currencies, to my knowledge, have all been more fiat currency.  Perhaps someone in the ZH audience will dredge up some obscure kingdom that uses PM's, but I doubt even that.  The world reserve currency will simply be that which is most utilized.

Mon, 04/02/2012 - 04:17 | 2309015 Mitzibitzi
Mitzibitzi's picture

While you are quite correct, the reason every new replacement currency has been a fiat one, is because it's HAD to be, by necessity. It would be impossible for any country to issue a convertible gold-backed currency while ANY other major country retains a fiat one. The fiat users (or usurers, to be more accurate) would drain the gold away as fast as they were able. It's happened before.

The only way we're getting currency actually backed by gold, and convertible INTO gold at any bank that holds a reserve, is if it's a global common currency, IMHO. And if we have that, TPTB have won the game. The IMF, World Bank or some newly created NGO will be the ones to implement it, so it's doomed to disintegrate into backed-by-bullshit fiat within seconds of issue. What we should do is pick some random Credit Union out of the phone book, hand them the keys to the vaults where the tungs.. err.. gold is stored and let them get on with it. But we won't. Rich people want to stay rich and they HAVE to steal from the rest of us to do that. Any fair and honest system will bleed the wealthy, not the poor. And that can never be allowed to happen. Ever. As long as these bastards have even a pinkie fingertip's worth of control of the direction of the juggernaut, we're screwed. It must collapse totally and fully and the existing rich must be allowed no role or place in the new system. But that ain't gonna happen, cos they're rich! And they'll bargain with, bribe, baffle, and outright buy anyone necessary to stay on top.

Sun, 04/01/2012 - 23:44 | 2308813 Poor Grogman
Poor Grogman's picture

Some folks are still stuck in the deflation inflation debate
Which is a bit like the blue vs red party debate.

They are two sides of the same coin they feed off each other, one couldn't exist without the other.

Inflation of a credit bubble creates deflationary pressure ( as debt has to eventually be repaid or default occurs)

This process in turn creates inflationary response from the C/Bs who print to offset the deflation.

Each time this cycle repeats the C/Bs tell us that " it must never happen again".

However... Something has changed since 2008. Now some sheep are awakening to the real game. Survival instinct is kicking in and they realize that they don't want to be shorn like that again. Nor do they want to put the future of themselves or their loved ones at risk anymore by playing at the rigged casino.

It gets harder for the PTB just as it is hard to run a casino if no gamblers show up.

Loss of faith in the "House rules" is the first step. ( this is already happening)

Next act however is the really interesting part...loss of faith in the currency.

If history is any guide ( is there any other) this loss of faith could happen rather quickly and will also take most people by surprise.

Prepare accordingly.

Mon, 04/02/2012 - 00:09 | 2308840 tictawk
tictawk's picture


@ Poor Grogman

"Next act however is the really interesting part...loss of faith in the currency."

No it is loss of faith in Debt of the fiat currency.  Why?  because people start to realize that the govt will print with abandon. 

So as debt collapses, i.e. principal value of the bond depreciates.  This means market interest rates will rise and force the defaults across a broad spectrum of assets.  The dollar is simply the most liquid part of the debt ponzi and its buying power will appreciate as there will be a scarcity as mass defaults occur with higher interest rates. 

Mon, 04/02/2012 - 00:20 | 2308849 Poor Grogman
Poor Grogman's picture

Interest rates are at virtually ZERO this is an artificial construct.

I would say that the market has lost control of the FED, not the other way around.

The only solution if you are are the "market " is to stop using the currency..

That.... is how I see the market eventually winning.


Mon, 04/02/2012 - 00:45 | 2308883 LowProfile
LowProfile's picture


So as debt collapses, i.e. principal value of the bond depreciates.  This means market interest rates will rise and force the defaults across a broad spectrum of assets.  The dollar is simply the most liquid part of the debt ponzi and its buying power will appreciate as there will be a scarcity as mass defaults occur with higher interest rates.


As interest payments cannot be made, debt is monetized to make interest payments, cash is spent by the government, the dollar loses it's value as cash floods the system, people abandon the dollar (and dollar-denominated debt-assets, e.g. treasury bonds, which the Fed buys), cash flows into ever-increasing hard assets, and whoooosh... The market eventually clears, at much higher fiat prices.

Hyperinflation is in essence a political/social even, not a monetary event.

Mon, 04/02/2012 - 01:00 | 2308897 Poor Grogman
Poor Grogman's picture

Thats pretty much how I see it.


But then again...I'm not an economist...

Mon, 04/02/2012 - 05:02 | 2309039 LowProfile
LowProfile's picture


Thats pretty much how I see it.

 But then again...I'm not an economist...

...Which is why you see it!

Mon, 04/02/2012 - 01:17 | 2308918 silverdragon
silverdragon's picture


Sun, 04/01/2012 - 23:50 | 2308822 the grateful un...
the grateful unemployed's picture

puhleeze i feel like James Dean in Rebel W/O a Cause. the rules of supply and demand are the opposite of what everyone is saying!! the more of something there is the more people want. issue more stock people want it. gasoline is available, yes, natgas is not available, (relative to gasoline) so forget it!! iphones are available we want them, no iphones who cares? you're making me crazy, one of you says something then the other one says something else, then you both change around!! back in the 80's Reagan said debt is a good thing, the more debt we issue it means more people want that debt!!!

Mon, 04/02/2012 - 00:17 | 2308846 Freddie
Freddie's picture

Rebel w/o is pretty sad when you have 30 year old actors playing high school kids.  I am still amazed some people think it was great film.

Mon, 04/02/2012 - 02:14 | 2308970 Likstane
Likstane's picture

Did you see it at the theatre or on TV?

Mon, 04/02/2012 - 05:25 | 2309046 Moe Howard
Moe Howard's picture


Rebel Without a Cause - Released 1955

Natalie Wood = 17

Sal Mineo = 16

James Dean = 24 [The "Old Man" died at 24]

WTF you talking about Freddie?

Mon, 04/02/2012 - 00:09 | 2308839 ceedub
ceedub's picture

How much gold will one need to transfer generational wealth?

For a college student its kinda hard to have over an oz of gold sitting around doing nothing while paying bills.

Mon, 04/02/2012 - 00:22 | 2308853 lasvegaspersona
lasvegaspersona's picture

Unfortunately not all will be able to take advantage of what is coming. In fact it will be bad for most people. It has been when most of the 30 or so fiats have collapsed in recent history.

"In the book "When Money Dies" (Fergusson 1974 I think) a few who had gone through the hyper I experience in Lithuania tried to play the bribery for cheap loan" caught though..

It is always a time of large wealth transfer.

Mon, 04/02/2012 - 01:08 | 2308905 silverdragon
silverdragon's picture

Buy silver it will do better than gold as it has 10,000 industrial uses and its cheaper. Not suggesting you sell your gold but all future buys should be silver.

Mon, 04/02/2012 - 02:38 | 2308984 Uchtdorf
Uchtdorf's picture

You have some options, don't think that you don't:

1. If you feel certain a major economic breakdown is coming, you can put college on hold for now and start working to obtain the funds you need for metal purchases. Of course, you also need beans and band-aids, etc.

2. Convince your parents to grab as much as they can. Then help them defend it.

3. Buy silver instead.

Mon, 04/02/2012 - 00:23 | 2308852 imsaul0968
imsaul0968's picture

The reason the world doesnt take gold serious is because of wackos like this and their end of the world crap. 2008 was the 100 yr storm, its over, we saw the worlds central bank responses, deflation will not be tolerated so turn your focus from the death of society to what works when the world has no choice but to keep printing, thats a better, more palatable reason to own gold and that will help broaden the addressable market, caus the end of the world gang is barking up the wrong tree and scaring off would-be investors

Mon, 04/02/2012 - 00:31 | 2308865 lasvegaspersona
lasvegaspersona's picture

You assume that buyers will drive gold higher. Have you considered the impact of large holders refusing to part with gold?

Mon, 04/02/2012 - 00:42 | 2308876 boogerbently
boogerbently's picture

That's how I see it!

They will tie currency value to gold, then run up the price of gold.

Mon, 04/02/2012 - 00:48 | 2308888 LowProfile
LowProfile's picture


The reason the world doesnt take gold serious is because of wackos like this and their end of the world crap.

The reason Asians, central banks, and informed individuals (who are steadily buying gold) don't take you seriously is because you're illiterate and ignorant.

Mon, 04/02/2012 - 00:58 | 2308894 silverdragon
silverdragon's picture

Call it, like it is.

Mon, 04/02/2012 - 00:59 | 2308896 bshirley1968
bshirley1968's picture

No, it won't be the "end of the world" but you and everyone else with THINK it is the end of the world.  The tesion in the air right now is so thick you can feel it.  EVERYONE knows something big is about to happen.  What it will be is the great unknown, but we know some major winds of change are about to come down the pike and it ain't gonna be pretty!  So you can poo-poo the gloom and doom talk all you want to but you had better saddle up and fasten that seatbelt because we are in for a "bumpy" ride.  I know when you add 2 to 2 you get 4.....EVERYTIME!  And when you do the things that our "leadership" has been doing for years now, you get the same results.....EVERYTIME!  Results like civil unrest.  People scared of their own government and governmnets afraid of their people that leads to interal distrust followed by loss of freedoms resulting in civil uprisings.  Results like financial collapse.  When the greed runs unchecked and unpunished and the foxes are guarding the hen-house......the chickens get eaten.  Until one day the chickes realize there are 100,000 of them for every 1 fox and turn the tables.  Like when common sense people just want to live their lives, raise their families, and be left alone.  They don't want it all or to rule the world but just to live at peace with the ones they love and yet a huge portion of society won't leave them alone but finds ways and pass laws to squeeze them just a little bit more each year until the reach the breaking point.  Results like a world war because the system needs to be reset and the bankers need a scapegoat to blame the world's problem on before everyone wakes up and realized they are the parasites of society that cause 90% of all the problems.  Someone much wiser than all of us once said, "The LOVE of money is the root of all evil".  Lay that line over the current world condition and you will know Who was and is right.  Caution! Bumpy ride ahead.

Mon, 04/02/2012 - 01:41 | 2308937 aleph0
aleph0's picture



Excellent description ... of the reality.


The hope that it "could" be different this time ... is the Internet , which , as man-to-man communication system, has certainly woken up most folk. It's no wonder Govts. ( not just O + "Kill Switch" ) are afraid .



Mon, 04/02/2012 - 01:54 | 2308953 MeelionDollerBogus
MeelionDollerBogus's picture

2008 was a stiff breeze. The real storm comes when debts all default because they exceed the production capacity of the entire planet.

Mon, 04/02/2012 - 00:37 | 2308872 oogs66
oogs66's picture

The guy who wants 1 grain of rice on first space of chessboard and doublr it on next piece and so on knows the outcome too - but still gets killed rather than rewarded

Mon, 04/02/2012 - 00:45 | 2308884 skepticCarl
skepticCarl's picture

This article sounds like a rant from one whose cost basis in gold is at or above the current POG.

Mon, 04/02/2012 - 00:49 | 2308886 essence
essence's picture

The author strikes me as rather naive. Perhaps he's younger, whatever.

Oh, don't get me wrong, the thought of real money prevailing, the fiat ponzi scheme and central banks control failing is most appealing. However between here and the promised land is quite a distance.

Let me remind him that ever since 2008 the (elite hijacked) federal government has gone all out to save the TBTF banks and the industries surrounding them. Recently gov has beefed up their arsenal with the NDAA and other acts meant to usurp the U.S. Constitution and give the powers that be a free hand. The ease of which these measures passed shows just how compromised Congress is. All of these actions point to a doubling down effort meant to support the status quo to the bitter end.

Even the FBI has been compromised as evident by their recent moves critical of use of cash. Expect this to intensify as anyone seeking to escape being herded into government monitored, electronic fiat transactions will be branded as a terrorist or tax evader.  

The fact of the matter is that the elite controlled Government/Central Banks are supporting stock,bond and real estate prices. There's no end in sight to this. Any resistance will be met with invasion/harassment/repression/propaganda/sanctions  etc.

Deflation .... in your dreams.  The government will keep printing (with a gun to everyone's head to force acceptance) until they have the next scheme lined up. At that point expect the bottom to fall out of the economy and financial world with the masses of sheeple clamoring to be saved. Then, surprise,surprise ... it will just so happen that government/status quo has a successor system lined up (just like the Patriot Act lying about unused for years before suddenly being trotted out).

My litmus test for all developments now is to appraise it as a further consolidation of power by the elites or not. Regardless of the venue, i.e. the EU, UK, USA or worldwide,  have a look and ascertain whether power and control is being further consolidated by an unaccountable, non-transparent select few or if it is something otherwise.



Mon, 04/02/2012 - 01:25 | 2308928 The Alarmist
The Alarmist's picture

Not to mention recent backing of movements to take out leaders of countries that are trying to move their central banking away from dollar-based reserves and trade.

Mon, 04/02/2012 - 00:53 | 2308890 silverdragon
silverdragon's picture

The Arabs and Jews love gold, so do the Russians, Indians and the Chinese, actually can't think of an Asian country that doesn't love gold. 

The world loves gold as it does silver. We are all just gunna keep buying.  We wont be selling anytime soon.

If Europeans and Americans don't get some, then I guess they miss out.


Mon, 04/02/2012 - 00:56 | 2308892 shitting_alpha
shitting_alpha's picture

Your notion that "we" are not producing 5 to 10 times more than "our" grandfathers is groundless, subjective, and therefore absurd.  There are almost twice as many human digestive tracts on the planet now than there were 40 years ago.  Most of these digestive tracts are connected to other body parts which result in a multitude of transactions requiring the use of money.

Hint:  x > 10.

Try  Actually review some data before spouting, and maybe try a remedial math class or perhaps the Khan academy.

Finally, half of your "real money" that is produced every year is worn by people.  HAH!!!!  What a great idea for a monetary system.

Let's back money with grillz next, bitchez!!!


Mon, 04/02/2012 - 01:23 | 2308925 icanhasbailout
icanhasbailout's picture

remedial math class being suggested in your post is at least 10x the irony that my grandfather could produce

Mon, 04/02/2012 - 01:20 | 2308917 JOYFUL
JOYFUL's picture

I knew that ZH would not let the 1st of April go by without at least one gag sure nuff, here it be!

Gold.  Gold, bitchez.   ...Gold will be the surviving currency that will rise dramatically in value until a new global currency regime can be established and agreed upon...countries will turn to trade with the one currency that cannot be debased...Then, in the heat of the deflation, when everyone you know is selling everything they own to simply stay afloat, you buy.  Sell your gold and buy.  With both hands.  Aggressively.  Greedily.  And if a bank will extend you credit based on your gold holdings, take it and buy with leverage.  You will be creating generational wealth.

And so we enter the dream world rabbit hole of the 'gold hoarder' - a place where every one else is dropping like flies, but the savvy goldbug finally reaps the rewards of their infinite patience and probity...a place where, somehow insulated from the effects of societal collapse all around them, the newly made magnate waves his magic wand of power to create the correct conditions of stability and control in which he may enjoy these fruits!

And as quick as you can say Presto!...there will be no threatening hordes of hungry citizenry searching about for scapegoats and suspects, no reconstituted governmental groups reordering post collapse society into a new tool for their own aggrandizement and profit, all that remains is a golden glow of limitless horizons for the gold hoarder....a veritable end of the rainbow for the lucky leprechaun leaping with laughter under fortunes' magnaminous gaze!

Oops!...bubble bursting time...

I hold gold, because it is a store of wealth, proximate to what would represent, in a free society, the means I have with which to interact with those around purchase the tools for creating food, clothing, energy, or buy articles of necessity for health and security,  and those luxuries I deem important to my identity. But only proximate. Because I live in an other than 'free society,' and am likely to do so for the rest of my life. Governments have, and will continue to have, the means to devalue gold and anything else tangible or intangible - people have, and will continue to have, the propensity to defraud others instead of working productively to enrich themselves and the society they are members of. Those tools of trade which my gold represents are not hoardable, to be used for acquisition of other's assets under duress or distress - that is bankster mentality...which will engender bankster bizness and the dictatorship of kapital at the expense of mine and mine neighbours health and welfare, and our childrens' futures.

I hold gold because it represents my chosen means of investing NOW, in the society I wish to see created, later, post collapse; by choosing wisely where, and with whom to invest that wealth, I do not just purchase the means of creating my personal security and sustainability, I am casting my vote much more truly than in the fraud democracy sense of citizen enfranchisment. Gold is giving me protection against currency debasement, short term, not long term, for my use in the now, not later, because gold will be the plaything of the hegemonists as long as we who hold it choose to imitate their thinking...and watch it turn to Fool's Gold.

There's nothing unique to the message of the Christian faith that hasn't been repeated in the wisdom of all other cultures - Buddhist, Confucian, Muslim, Hindu, etc.,...only when we live for others around us are we truly alive...that doesn't mean self-sacrifice and muddled wooly socialistic claptrap, but hard headed recognition that wealth, to be real wealth, not poison, must continually circulate, for money is indeed the lifeblood of society...those who truly hate our freedoms are those who would stop up that free flow for their private gain.

"Generational wealth, huh?" The only thing we truly can pass on to those who follow is the acquired wisdom of the ages which we took as the capital to start out upon our own path, and added to along the way through the choices we made. Gold, bitchez...use it or lose it.




Mon, 04/02/2012 - 01:53 | 2308954 Lost Wages
Lost Wages's picture

Ay chihuahua. If God or Jesus existed, they wouldn't give a hoot about your pathetic wealth. They would read your comment and look at you with pity.

Mon, 04/02/2012 - 04:42 | 2309024 JOYFUL
JOYFUL's picture

I am forced to defer to your wisdom on such metaphyscial matters, as it appears you travel in much higher circles...and to take it on faith that your comment relates in some mysterious way to my own.

I find it endearing that those who doubt the existence of "God or Jesus" are often the quickest  to offer an opinion as to what these non-entities can be expected to do or say...funny that, teleologically speakin...

Please come again!

Mon, 04/02/2012 - 06:05 | 2309061 Moe Howard
Moe Howard's picture

Good point.

Mon, 04/02/2012 - 01:21 | 2308924 Kina
Kina's picture

I think he was meaning are we 5-10 times more productive. Value.Output per person 5-10x more.


If we are no more productive than our grandparents but have 5-10x purchasing/borrowing ability then eventually the market becomes saturated, the number of available geater fools falls, as everybody is borrowed to the max.


The global economy has emphysema, it needs a double lung transplant.

Mon, 04/02/2012 - 03:02 | 2308995 jack stephan
jack stephan's picture

Everyone is so serious, especially the first page.  Dont you know your just screwed (sorry in the nicest way possible), its like the shit sandwich but with the more bread saying........Its a hunch, gut check, judgement call, a  birds eye view calculated risk, broad strokes over time, a fancy guess.  I think metals better than nothing, time will be very cruel to america, life will become cheaper and the stories sicker.  Do the best you can with your two hands.  The rest is bigger than you.  I don't give a shit how much payola you got in digits, paper, guns, oil. or whatever.   Expect unpredictability over time now the rest writes itself, do the best you can with what you have ...........................bitchez  and bowlegged bitchez too

Mon, 04/02/2012 - 03:48 | 2309009 silverdragon
silverdragon's picture

TPTB just need a reset so they can grab more power and more wealth. They still need some middle class and working class and poor to rule or how boring would it be. If they killed all us sheeple off and the only people left were the billionaires there would be no bragging rights. If they snatch all the wealth and we all were left with none there would be no more thrill of the chase.

Buying silver and gold keeps us in the game.  Probably good to have some land that produces stuff as well.

Mon, 04/02/2012 - 04:47 | 2309027 Shazam342
Shazam342's picture

So if prices collapse,  to what level do they stop collapsing? Do prices collapse to the price levels of 1971 (USD)?...1933(USD)?

Mon, 04/02/2012 - 06:55 | 2309094 Zero Govt
Zero Govt's picture

they collapse until some point some people start saying "i'm buying"

the usual pointer is blood on the streets and half the banking industry down the toilet

Mon, 04/02/2012 - 14:11 | 2310159 Shazam342
Shazam342's picture

So in a nutshell, there is no way to predict this then-no theories.

Mon, 04/02/2012 - 05:36 | 2309050 Moe Howard
Moe Howard's picture

More whatever.

Here are the facts:

Like most people on here, I have a little excess capital, meaning I earn more than I spend.

I want to save some for the future.

Stock market rigged.

CDs no return - loss due to inflation, as are all other lessor things like savings accounts.

Real Estate [homes and commerical] will continue to drop in value except farmland, which is going into a bubble, not suitable for investment, value will be taxed away.

Silver and Gold = storing excess captial for the future, a bridge or a vehicle for that purpose. Buy everything in the bad times because I have PMs? Isn't that what the Joos did in Germany, didn't the Germans take back their property less than ten years later, and send the manipulators to the camps? This part of the Nazi story is always left out, how the Joos got the stuff in the first place. As I am not a Joo, I won't be using my PMs to put people out in the streets, etc. I don't want to be the new Elite.

 I will be using it to help carry my family through the bad times.

Mon, 04/02/2012 - 05:37 | 2309051 suckerfishzilla
suckerfishzilla's picture

Platinum is ten times more scarce then Gold and it's cheaper.  duh

Mon, 04/02/2012 - 05:54 | 2309055 Moe Howard
Moe Howard's picture

Platinum is an industrial metal; the value closely follows industrial output, primarily automobiles as it is used in catalytic converters.

It is not a traditional form of money. If a way is found to eliminate its use in catalytic converters, the price would drop even further.

There have been some breakthroughs in that direction the last two years.

Mon, 04/02/2012 - 06:44 | 2309085 AmazingLarry
AmazingLarry's picture

Non-productive assets in the age of non-productivity. Brilliant.

Mon, 04/02/2012 - 06:52 | 2309090 Zero Govt
Zero Govt's picture

Banking in a nutshell

Mon, 04/02/2012 - 06:52 | 2309089 Zero Govt
Zero Govt's picture

We can only hope for the best (gulp!)

..pass the valium dipped popcorn

Mon, 04/02/2012 - 07:12 | 2309099 Monedas
Monedas's picture

Argentina Peak Oil !  The Argentina has not been a good neighbor with anyone !  Ask Uruguay, Chile, etc. ! They are Italians who speak Spanish and want to be English !  It's pretty complicated !  If the Falkland Islanders want to "twist the knife" a refinery in Montevideo !   Monedas  2012  Comedy Jihad Falklands Junket Tour

Mon, 04/02/2012 - 07:20 | 2309117 cerberus57
cerberus57's picture

I'm not sure if anyone asked this but...who's to say this won't happen?

I mean, basically, if the dollar falls then wouldn't that mean the end of American power as we see it?

I just don't believe this will happen in my life time... 30 years old.

But how or who could possibly concieve a plan to undermine the Dollar if we have the strongest military in the world. China can't even keep up with us in terms of military. Didn't Ghadaffi try this?

I just don't see this happening anytime soon at least until a new military world power is able to take the US down. And I for one will not allow that. I enjoy my rights and beautiful Anglo - American women...

Mon, 04/02/2012 - 09:30 | 2309333 bshirley1968
bshirley1968's picture

"if the dollar falls"  Where have you been?  The dollar is falling.  It is only in the last 10 years that it has picked up enough speed to get the attention of large segments of the population.  Don't be foolish because you are in denial.  A person may no be able to "see" how flipping a switch sends electricity to a filament in a bulb or the chemical process of a florecent light but that doesn't keep them from turning on the switch and using the light.  "In my lifetime"  We have done more in the last 100 years than was accomplished in the previous 2,000 years.  The speed of things has picked up.  In world history, the US is an old empire and when considered at what speed with which events take place in our day, we are due for a challenge and the decay is well underway.  Just sayin'.

Mon, 04/02/2012 - 07:42 | 2309133 Monedas
Monedas's picture

An Empire was thrust upon us !  The dollar has served us well during our stewardship of the stupid, socialist world !  We've pretty well played the Ponzi scheme out....and milked it pretty good....I might add ! Nothing is existing international monetary waiting in the wings....bring it on....what's the problem ?   Monedas   2012    Comedy Jihad American Optimism Tour

Mon, 04/02/2012 - 07:58 | 2309159 I should be working
I should be working's picture

I agree with the direction of your prediction, but not the magnitude.  The S&P 500 going below 800 for a prolonged time period is not going to happen.  You can easily rationalize this in terms of inflation.  In 1971 the S&P traded at 140 in dollars, but the dollar today is worth maybe 10% of what it was worth then.  Thus I would argue that 1400 is about equal to inflation for the past 40 years.

However, we are currently in the 3rd bubble.  The first was the tech bubble, the second was housing and now we have a government debt bubble.  2008 should have created a generational buying opportunity, but the Fed did everything it could to manipulate prices up.  Look at, notice every 30 years (early 1920's, early 1950's, early 1980's and should have been early 2010's) there is a period of low CAPE P/E that lasts 3 years or so.  That is a generational buying opportunity.  

We have pushed our coming buying opportunity into the future with insane government spending.  You will know the current bubble is over when the government is forced to balance its budget.  Until then hold stocks/gold (inflation).  When the government spending starts to come down sell the stocks hold cash/long bonds/gold (deflation).

And I would say if you see a chance to buy stocks with the S&P in the 900-1000 range I would take it, but if it is a generational buying opportunity don't expect to make money quickly (ie this is a long term investment, right now everything is speculation).  The baby boomers will finally capitulate and the younger generation will be too busy paying off student loans for years. Expect a Japan-like market crash followed by years of sideways trading (2008 until now).  Then you will be investing, not speculating.

Mon, 04/02/2012 - 08:40 | 2309213 rsnoble
rsnoble's picture

Not sure if this will be the greatest thing for freedom or not, maybe after the smoke clears?

I'm sure the assheads already know what's coming. Gold is bad. But their fkn mattress is probably full of it.

I've been saying for a while that when it goes it will be fast, all the news assholes will have never seen it coming. You'll just wake up one am and the headline news will read "US collapses overnight".  Fkn bastards.  You think they give a fuck about us?  They're doing everything they can to position themselves to stay in power and not doing anything to warn the people.  All they can think about is power and crowd control. Rather you eat or not who gives a shit.

Mon, 04/02/2012 - 08:42 | 2309216 spanish inquisition
spanish inquisition's picture

deleted.... went to get more coffee

Mon, 04/02/2012 - 09:28 | 2309322 nah
nah's picture

life is but a series of helecopters

Mon, 04/02/2012 - 10:08 | 2309441 CuriousPasserby
CuriousPasserby's picture

But how will there be both massive devaluation and massive inflation? Aren't they then opposite?

Mon, 04/02/2012 - 11:59 | 2309778 bezell
bezell's picture

History says "EVERY EMPIRE HAS TO FALL!!! so lets face it guys America is not what it used to be say twenty years ago. The $ is falling and the prices are rising. It wont happen overnight but the wheels are set in motion

Sun, 05/20/2012 - 13:38 | 2445323 whoknoz
whoknoz's picture

the Lone Ranger had it all...and he choose silver bullets..

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