US Commentary

If ever we needed proof of the saturation-level brainwashing to which the Western masses are now subjected (and to which they have succumbed), there is no clearer evidence than the U.S. Treasuries market.

The U.S. economy has never been less-solvent in its entire history, meaning that U.S. Treasuries have never been less valuable. The new supply of U.S. Treasuries grossly exceeds any level of paper the U.S. has ever pumped into global markets before, meaning that Treasuries have never been less valuable. And yet we see (alleged) buyers being permanently willing to pay (by far) the highest prices in history for these mountainous stacks of paper.

However, this is just the beginning of the absurdity here.  We’re told that the U.S. government can continue to obtain these record prices despite the fact that the two largest buyers of Treasuries over the past decade (China and Japan) have virtually stopped buying. Indeed, for more than a year China has been a net-seller of Treasuries. This collapse in demand also implies the lowest rather than the highest prices in history for U.S. Treasuries.

Amazingly, we have now journeyed beyond absurdity. With U.S. Treasuries interest rates having literally dipped into negative numbers on several occasions already, absurdity becomes insanity: “buyers” supposedly paying for the privilege of lending money to the U.S. government.

Under the best of circumstances this would be perverse and insane. Borrowers do not get to charge lenders interest when they borrow their money. Indeed, the simple fact that this point even needs to be made – to an adult audience – is proof of how this saturation propaganda has effectively rendered the majority brain-dead.

Lenders do not pay interest to borrowers when they lend them money.

This is a tautology of commerce which is true under the best of circumstances. However we are far from “the best of circumstances.” The United States has never been less solvent, meaning its bonds have never been worth less (worthless?). And now we have the ultimate insanity.

We have the Treasury Department announcing it is formally structuring its bond auctions to make it easier for “buyers” to pay negative interest rates (i.e. pay the U.S. government in order to be allowed to lend it their money). The King of Deadbeats, the most insolvent nation in all of history, has announced that it is now expecting lenders to line-up in order to be allowed to pay the U.S. government for the privilege of lending money to it.

In short, the U.S. Treasuries market is already totally perverse. There is not even a hypothetical universe we could construct where this would be a rational, legitimate market. The only parallel I can think of is a fable I heard long ago about “The Mythical Land of Us”.

The Land of Us was a rather dreary place. It was composed entirely of two groups: a small number of rich Hogs and a huge herd of poor Sheep. Inexplicably, it was the sheep themselves who always chose the Hogs to rule over them.

The Land of Us became such a dreary place entirely because of its Golden Rule (one of the first laws created by the Hogs): “All of the Sacrifices will be bestowed upon the Sheep, and all of the Privileges will be imposed on the Hogs.” The Sheep agreed that this seemed like a very equitable division. [Did I mention that the Sheep weren’t very bright?]

However, even the fat Hogs weren’t smiling these days as The Land of Us had a very serious problem: it was deeply, deeply in debt – in fact hopelessly insolvent. Worse still, there were practically no revenues coming into the Hogs’ coffers. The Sheep had nothing left to tax, while naturally the Hogs paid no taxes (as per the division between “Sacrifices” and “Privileges”).

An emergency Council of the Hogs was convened to discuss this crisis.

Silver Commentary

For several years I have been touting silver’s unique anti-microbial properties. Out of the nearly infinite list of technological/industrial applications for silver, it always seemed inevitable to me that this one use would ultimately become our single greatest need for the Metal of the Moon.

That suspicion/fear could, in turn, be traced back to a single threat which has loomed in an ever larger, ever more-menacing manner: Super-Bugs.  This is the colloquial name given to the bacterial monsters we have created through the reckless, excessive, and simply idiotic manner in which our species has over-used its single most-important medicine: antibiotics.

This is not a new issue, and so most readers are already familiar with the path that led us to what the World Health Organization is now openly labeling as the world’s “post-antibiotic era”. For those not already suitably terrified by the ominous meaning of those words, read this quote from WHO Director-General Margaret Chan:

“Things as common as strep throat or a child’s scratched knee could once again kill.”

This is not hyperbole, as Chan’s warning has already gone from mere theory to actual fact. A chilling article in Bloomberg identifies two terrifying features of this newest and most-deadly Super-Bug. First of all it is completely invulnerable to any/all antibiotics in existence. That alone places it in an almost unique category of killers.

However it gets much worse. The Super-Bug is described as “highly sexed”. Translation: it can (does) merge itself with virtually any bacteria – including the most common species on our planet – and instantly transform those previously treatable bacteria into Mutant Super-Bugs, themselves. E. coli bacteria, cholera bacteria, even the (benign) microbes in our soil can all be transformed into Super-Bug killers. Bacteria which already outnumber our species by billions-to-one can (will?) become legions of nearly invulnerable killers.

Fortunately, while our collective idiocy has now permanently robbed our species of its most potent protection from this potentially deadly menace, our ingenuity has provided us with a means to mitigate this medical catastrophe: silver anti-microbial technology. While the relentless over-use of antibiotics has ruined their effectiveness, other scientists have been systematically designing silver-based applications to protect us from these killers.

It is important for readers to understand that these silver-based applications are preventative in nature, rather than being treatments for bacterial infections which have already taken root. In other words, silver protects us from bacteria through the creation of silver-based coatings or ionic compounds which can be blended into various (inorganic) substances. Thus we can create anti-bacterial clothing, anti-bacterial upholstery, anti-bacterial plastic and stainless steel surfaces, etc., etc.

Why hasn’t science focused on this approach sooner, rather than its complete over-reliance on antibiotics? Taking the treatment vs. prevention dynamic to an extreme, it’s obviously cheaper and more efficient to treat individual pockets of infection with drugs than to create an entire “anti-bacterial world” around us.

However, antibiotics are neither cheaper nor more efficient when they simply cease to function, bringing us back to silver. Given the significant increase in the price of silver over the past decade, many readers may erroneously view the creation of a (partial) “silver shield” around us as prohibitively expensive.

International Commentary

As Western economies and Western societies continue to deteriorate, I find myself frequently appalled but rarely surprised. Thus it was a refreshing change to be “surprised” by this weekend’s Greek election – made even better by the fact it was a pleasant surprise.

The Western mainstream media had told us to expect the two rancid, Establishment parties in Greece (PASOK and New Democracy) to maintain their grip on power by circling the wagons and forming a Coalition of Convenience, to prevent the possibility of any real change. The script had seemingly been written.

PASOK and New Democracy would unite to serve the bankers and continue their Friedman Austerity: stomping on the poor and middle class to preserve the wealth and privilege of the aristocracy. As they finished the destruction of Greece’s economy they would also complete their own self-annihilation. This would have then set the stage for a real “election” in Greece (i.e. an event where “change” was an option).

PASOK and New Democracy would vanish into political oblivion. A clean slate of political parties would emerge with a “radical” agenda: placing the interests of the Greek people ahead of those of Western bankers and their own Oligarchs. However that’s not what happened in this election.

Either Western media misrepresented Greek voter sentiment in their pre-election predictions, or (being a part of the rancid Establishment themselves) they simply failed to understand it. Greek voters, after being subjected to two years of political/economic rape, advanced the timetable.

They “squeezed” PASOK and New Democracy in the same manner those two traitor-parties had been squeezing the people on behalf of the Oligarchs. Despite the full weight of the Greek Establishment making a last, desperate attempt to maintain the (corrupt) status quo; the voice of the Greek people was heard.

The effective winner in the election was the SYRIZA Party, which translates literally as “Coalition of the Radical Left”. This simple translation tells us all we need to know about how far the Western political pendulum has swung to the right.

Representing the broad majority rather than the privileged few is now a concept of the “radical left”. That principle used to go by a much more general label: democracy.

Eliminating corruption and restoring faith and trust in government is now a concept of the “radical left”. That principle used to go by a much more general label: justice.

Placing feeding the people ahead of making interest payments to bankers as a political priority is now a concept of the “radical left”. That principle used to go by a much more general label: compassion.

The Western propaganda machine has wasted no time in cranking-up its media megaphone to maximum decibels. “Beware the Rise of the Radical Left!” shriek its fearmongers. It is a strategy doomed to failure. Demonizing the concepts of democracy, justice, and compassion as principles of “the radical left” will only complete the isolation and political disconnect of the Western Establishment.

This is how and why we continue to see cycles of revolution, whether by sweeping changes via the ballot box or more forcible means of political reform. The privileged Establishment self-destructs as it severs all connections with the people (and the real world) and retreats to its ivory towers.

“Let them eat cake,” suggested Marie Antoinette. “Eat more austerity,” sneered PASOK and New Democracy. The message of these modern Fascists was harsher, but the separation from reality is the same.

Gold Commentary

The talking-heads in the mainstream media spend so much of their time talking out of both sides of their mouths that they have clearly become oblivious to the extent of that double-talk. This is the only rational explanation as to the insistence of the mainstream media in repeating the same self-contradictions.

In this case I’m referring to media double-talk regarding their reporting on the precious metals sector, and most particularly their totally perverse coverage of the precious metals miners. The contradictions should be obvious to any/all investors who watch this sector closely.

On the one hand we have the media endlessly bashing these miners as “under-performers”. Despite the (supposedly) “high” bullion prices we’ve seen in recent years just look at the charts, shriek these bashers. Yes, when we look at the results from our (totally manipulated) markets, it is clear that (mysteriously) these miners are in the midst of their second Depression in five years – in the middle of one of the longest, strongest bull markets in history. Of course the myopic media notices nothing unusual about that.

However, the propagandists couldn’t be content to leave their sabotage of the miners at that level. Out of the other side of their mouths we hear voices like Bloomberg. Inserting the stiletto, it proclaims in its headline:

Barrick Leads Miners Spending Faster Than Earnings Rising

Ouch! The message from that stab-in-the-back is clear: these miners are money-losers…but hold on a second. Weren’t these same propagandists telling us (again and again and again) that these miners should all be drowning in profits from the “high” bullion prices they crow about (as they warn us repeatedly about a “bubble”)?

Methinks I see a contradiction here. Either these miners are reaping “high” prices for their gold (and silver) and thus raking in windfall profits; or, they are struggling in just attempting to stay afloat – as low bullion prices mean they are unable to offset spending with revenues. Both of these things cannot be true at the same time.

The Depression being experienced by these miners is real. As a shareholder in these companies I can vouch for that personally. Thus if we accept the market evidence at face value (and ignore overwhelming evidence of rampant manipulation), the message the market is sending is unequivocal: bullion prices must rise substantially merely to make this sector sustainable over the long term (let alone ever reaching the lofty status of a bubble). This brings us back to the reporting of the media propaganda machine, and their incessant fear-mongering that the precious metals sector (gold and silver) represent asset bubbles which investors ignore at their peril.

How can the precious metals sector be in a “bubble” when prices aren’t high enough to even sustain the sector over the long-term? How can the precious metals sector be in a bubble when investors are holding (on average) only about 1% gold/silver in their portfolios, versus the historical average of 5% to 10%? How can the precious metals sector be in a bubble when gold stockpiles are declining and silver stockpiles are nearly exhausted? As a matter of arithmetic every commodities bubble must be characterized by an upward explosion in inventories.

In short, we have this market demonstrating all the surface indications of a sector in a Depression, yet we have the mainstream media incessantly referring to the depression-conditions in this sector as a “bubble”. It is one thing to be merely mistaken. That can be dismissed as incompetence.

The consistent, perverse manner in which the media reports on this sector in referring to a Depression as a “bubble” cannot possibly be explained as mere incompetence. Reporting the exact opposite of the truth on even a single occasion implies dishonesty rather than innocent mistake. Incessantly reporting the precise opposite of the truth can only be regarded as a campaign of lies.

International Commentary

In Part I, I rebutted one of the great myths of the mainstream media: that the terminal debt-problems facing Western economies are/were the consequence of reckless spending. I pointed out how the reality was that in fact we were in the midst of the worst revenue crisis in the history of our economies, and then in Part II I described some of the symptoms of that crisis.

The conclusion to this series will focus on how we can begin the healing process from this massive hollowing-out of our economies, and why the appropriate solutions are nothing more than a function of simple arithmetic and the most basic principles of economics.

In 2005 and 2006 we were subjected to the worst of B.S. Bernanke’s lies: that the U.S. housing bubble and the endless $trillions of Wall Street Ponzi-schemes which had been based upon that bubble represented a “Goldilocks economy” – where U.S. house prices and U.S. markets were just going to keep going up and up forever. Months later the whole, fraudulent house-of-cards came tumbling down.

For the edification of Mr. Bernanke and all those who still mistakenly follow his preaching, I will describe what a real “Goldilocks economy” would look like, and how it would function. To begin with we need to quickly rebut another of the popular myths of the media propaganda-machine: that advocating economic policies to promote a healthy middle-class is “socialism”.

Roughly 2,000 years ago (and more than 1,500 years before the birth of socialism), Greek philosopher Plutarch informed us of something which was already “old news” at the time of the Roman Empire:

An imbalance between rich and poor is the oldest and most fatal ailment of all Republics.

Was Plutarch some sort of closet, leftist ideologue who had somehow managed to travel back in time to the ancient past? Hardly. Like many of the classical Greek philosophers he was simply proficient with two age-old tools: logic and arithmetic. Indeed, most of the reputable elements of modern economic theory are nothing more than a fusion of simple arithmetic and common sense.

Any/every healthy economy should have a wealth-distribution curve that looks almost exactly spherical in shape: widest around the middle, and narrowing at the most-rapid rate as we approach either extreme. In other words, a healthy economy is one where the vast majority of citizens are solidly established at a middle-class level of existence. As stated previously, favoring a strong, healthy middle-class has absolutely zero to do with ideology and everything to do with arithmetic. To demonstrate this we need to again resort to the starting point of all analysis: definition of terms.

What is a “healthy economy”? Obviously to attempt to answer that question succinctly requires a general answer: a healthy economy is one which provides the optimal balance between savings and consumption. How do I justify my definition? Too much consumption is unhealthy. Not only does that necessarily imply insufficient capital for investment/development, but excessive consumption leads to numerous unhealthy consequences. To begin with, economies overheat.

When you have the maximum amount of consumption dollars flooding into an economy, inventories are drawn down, sparking prices to move higher in an inverse manner (the basic principle of supply and demand). Over-consumption (as we have seen vividly illustrated in our own economies) leads to excessively high inflation, asset bubbles, and (in the extreme) excessive personal debt – as consumers spend more than 100% of their discretionary dollars.

It is a basic fact of arithmetic that the poorer the individual, the greater the percentage of every dollar they hold that is spent. This is one facet of the basic economic principle known as the “marginal propensity to consume”. Despite the intimidating label it is nothing but an expression of a simple, unequivocal fact: by definition the poor have no excess wealth – and thus each dollar they obtain is spent.

For this reason, we would not want to structure our economies to cause all of those consumption dollars to flow into the hands of the poor. While such policies would be extremely stimulative, they would literally be “too much of a good thing”. Of course, if the poor had all the money they would no longer be “poor”, but since it’s Monday morning I’ll side-step that logical paradox and simply stay focused upon the general principle.

At the opposite extreme we have the wealthy. If the “problem” with the poor is that they spend too much, then you don’t need to have the gift of prophesy to be able to predict the problem with the wealthy: they spend too little. As people become wealthier and wealthier, even though their total consumption may continue to increase in absolute terms, the percentage of each new dollar of wealth that they spend steadily declines. They inevitably begin hoarding wealth.

Gold Commentary

Gold is a barbarous relic.

Even most ordinary people who rarely pay any attention to topics in the realm of economics will be familiar with this expression. Like most of the Big Lies from the media propaganda machine, our governments have made sure that most of us have heard this one enough times to have it burned into our psyches.

As with most of these Big Lies, this too is a blatant perversion of the truth. It will come as no surprise to gold-bugs and that dwindling minority who advocate sound monetary policies that the reference to gold as a “barbarous relic” was made by the one-and-only John Maynard Keynes. It was from Monetary Reform, a book Keynes published in 1924 – and it was a reference not to gold itself – but to the gold standard:

In truth, the gold standard is already a barbarous relic…

Thus the original reference was made by the most infamous paper-printer in all of history, desperately searching for some insult he could hurl at the gold standard in order to attempt to make his monetary nonsense sound appealing to the Sheep – i.e. the global economics community.

For those not familiar with the mechanics of national economies, the gold standard has often been referred to over history as “the Golden Handcuffs”. How did it acquire this intimidating nickname? Because it absolutely limits our governments from any extreme/insane fiscal or monetary policies without the consequences of those policies being immediately known to the general public.

A government trying to run huge deficits (like the U.S. government was doing during the Vietnam War), would quickly see its “bank account” (i.e. the national gold reserves) quickly evaporate as paying for those deficits emptied the government’s Treasury. Thus ultimately the primary reason that a gold standard is despised (or rather feared) by all the charlatan money-printers like Keynes and the deadbeat governments of modern Western economies is that a gold standard forces governments to pay their bills.

However, the fear/hatred of the Money-Printers and Deadbeats toward the gold standard doesn’t end there, it only begins. By definition, a gold standard bases all new currency creation on one’s national gold reserves. Thus these Handcuffs also prevent Keynes and all his central-banking ilk from allowing the printing presses to run wild with new money-printing – quickly destroying the value of any currency with dilution. So in addition to forcing governments to pay their bills it also forcibly prevents them from excessive money-printing. Two strikes against the gold standard.

There is yet a third category of social miscreants who fear/despise a gold standard even more than the charlatan economists and deadbeat politicians – the thieving bankers.  The bankers use excessive money-printing as their primary means of stealing all of the wealth of an entire society. Three strikes against the gold standard!

The mechanics are simple arithmetic and thus totally incontrovertible. When you recklessly dilute the nation’s currency at a rate of more than 10% per year (i.e. the 10+% “inflation rate” for the U.S. as calculated by John Williams of Shadowstats.com), but you only pay people near-zero interest rates on their savings then these people are effectively becoming 10% poorer each year with respect to those savings.

Into whose pocket does all that money disappear? The pockets of the Thieving Bankers, who are legally allowed to print-up all this “money” for themselves absolutely for free. This act of theft; the largest, most blatant, and most pervasive form of theft in the history of the human race has been given an innocuous euphemism by the bankers, and their minions in the media propaganda machine: “fractional-reserve banking”.

International Commentary

In Part I it was necessary to spend most of my time/energy dispelling the fiction from the mainstream media that the debt-crisis afflicting most major Western economies is due to government over-spending. As I demonstrated with a combination of unequivocal charts, clear logic, and simple arithmetic; the U.S. economy is clearly in the grip of the worst revenue crisis in its entire history.

In Part II, I will explain why we can safely conclude that other Western nations are also facing a revenue crisis rather than their insolvency being due to excessive spending; and then along with that I will describe how this collective revenue crisis has emerged across the West.

To begin with, readers must understand that economies are dynamic entities, constantly evolving in response to the policies bestowed/inflicted upon them. This means that only dynamic analysis (i.e. analysis which accounts for change) can ever yield useful conclusions and policies.

What do we get instead from the mainstream media and their “experts”? A diet composed of 100% static analysis. It is simplistic, one-size-fits-all dogma – which never, ever accounts for change in our economies. The classic example is the Keynesian idiocy that governments can permanently run deficits (i.e.  never fully pay their bills), and that somehow this can lead to long-term prosperity.

Those who actually understand the concept of dynamic analysis would require only two words in rebuttal: “compound interest”. The chart below illustrates the long-term harm that has occurred to the U.S. from allowing the static dogma of Keynesian economics to be wrapped around the dynamic U.S. economy like a straitjacket.

At the beginning, Keynes’ static, run-up-the-credit-card mentality for economic management works great! In fact it keeps “working great” right up until it becomes time to start to pay the bills. Indeed, the Keynesian mentality is no different than that of the binge-drinking alcoholic: it’s not the “drinking” that is the problem, it’s the hangover.

In the minds of the Keynesians it’s not the “borrowing” that is the problem, it’s paying the compound interest on that debt. And so these frauds simply constructed a static economic model – where none of that compound interest is ever paid.

Any idiot knows that running-up one’s credit card could never, possibly be a recipe for long-term prosperity. “It’s different with national governments,” countered Keynes, and all the vacuous minions who have followed in his footsteps. Yes, it is different. Nations can run up much bigger bills, for much longer periods of time than any ordinary individual could ever get away with – but not forever. The binge-drinker must finally sober up. Ultimately “any idiot” would know that eventually those bills have to be paid.

International Commentary

While some may argue my criticism of the insipid mainstream media is too extreme, my rebuttal is simple: “don’t shoot the messenger.” It’s not simply that these media drones are wrong consistently – indeed, almost unfailingly – but in many instances their reporting on issues is literally 180 degrees opposite to the facts.

There can be no more obvious example of the mainstream media’s inability to distinguish “black” from “white” than its utterly worthless reporting on the debt crisis sweeping across Western nations. Not only have they been unanimously incorrect in identifying any of the causes of this debt-crisis, but these dolts can’t even manage to describe the problem correctly.

In this case it is necessary to put the proverbial cart before the horse. First I’ll show people what the Western debt crisis is really all about. Then once the problem is clear it will be much easier to understand/accept the real causes.

Sadly, while is truly a “Western” problem it will have to be illustrated with U.S. data, due to the lack of availability of “real dollar” data for other Western economies. It is ironic that the U.S. – which has both pioneered and perfected lying-with-numbers with its official statistics – is now the only place to obtain realistic (i.e. “real dollar”) economic data in many important categories.

This is due entirely to the tireless efforts of John Williams of Shadowstats.com, as well as the efforts of less-visible sites and individuals who have built upon that body work. Williams produces the only data on U.S. inflation (and many other key statistics) using the same methodology for each year’s calculation.

Conversely, as I have explained on previous occasions the U.S. government is continually “moving the goalposts” with its statistical lies. It is continually changing the methodology of its calculations. Not only are these “changes” comprised of ever more dubious/absurd “adjustments” and “assumptions”, but this intentional deceit is compounded by refusing to update old data with the new methodology – the only possible means to produce consistent measurements.

Instead, the U.S. government’s statistical liars simply string together these disconnected series’ of calculations – thus literally comparing “apples” to “oranges”. We can see not only proof of the deceit, but a clear indication of the motives for these lies when we examine charts which include both the official government lies along side data produced from Williams consistent (and statistically valid) methodology.

The two charts below not only demonstrate unequivocally that the Western “debt crisis” is a revenue crisis (not a “spending crisis”), but we can clearly see the efforts of the U.S. government statisticians to hide the true nature of the crisis – by creating phony data to suggest we are experiencing a spending crisis instead.