Gold Commentary

One of the difficulties in attempting to cover developments in the global economy is that often there are flurries of news items which emerge at any one time, making it impossible to deal with all these events as they occur. So it is with respect to an announcement by the European Central Bank on July 20^th that Greek government bonds would no longer be “eligible as collateral.”

There are many interesting points for analysis here. To begin with, we see yet another example of these con-men using a slippery euphemism to hide the fact that that their paper Empire of Fraud is collapsing all around us. But there are also many nuances to this announcement, and as we know, when it comes to the mainstream media “nuance” is a non sequitur.

To place this announcement into some context, it’s first worth noting that this is the second time this year that the bankers have “suspended eligibility” of Greece’s bonds, with the last time being literally days before it defaulted on 75% of that debt. With that additional background, we now can fully understand what the ECB actually meant with its euphemism: Greek bonds are worthless.

In turn, this directly implies an even more dire reality: Greece has been declared bankrupt (for the second time in six months). Understand that there is only one small-but-significant step which separates an “insolvent debtor” from a “bankrupt debtor”. While bankruptcy is often inevitable for insolvent debtors, what makes such debtors merely insolvent is that creditors will still continue to extend them additional credit.

Conversely, once the debtor is cut off credit (and unable to pay its bills) then bankruptcy is instantaneous/automatic. Thus we have a cabal of private bankers simply decreeing that all Greek bonds are worthless and (as an inevitable consequence) Greece as a nation is bankrupt. Am I the only person who sees a problem with this?

Once upon a time, Western nations (and their peoples) enjoyed a concept called “sovereignty.” By no coincidence, we enjoyed our sovereignty during a period of history when we practiced a concept known as “the gold standard.” With any nation practicing a gold standard, no cabal of foreign bankers can simply decree that a nation’s bonds were worthless – because they would be backed by gold – and thus no cabal of foreign bankers could decree that your nation was bankrupt.

In other words, yet another of the many benefits provided by a gold standard is economic sovereignty. With it, economic sovereignty is assured. Without it, we are at the mercy of a crooked Banking Oligarchy which has committed more fraud (by dollar value) just in the last decade than all the fraud by all the rest of humanity throughout all of human history, combined. But this is merely a tangent to an even more interesting aspect to this story.

At the same time that Western bankers are in the process of re-elevating gold to its rightful status as the ultimate monetary asset, they have been forced to steadily demote and devalue various forms of their own (fraudulent) paper. Obviously with any con-men running a scam, maintaining confidence in the scam is of supreme importance – hence the original term: “confidence men.”

Thus the absolute last thing which the banking crime syndicate wants to do is to erode confidence in the very paper instruments which they use to commit their serial acts of mega-fraud, such as the $350 trillion LIBOR-fraud. So why are they doing this? The phrase “rats deserting a sinking ship” captures this dynamic quite nicely.

The banksters are decreeing that some of their paper is already worthless/near-worthless as an act of final desperation: acknowledging the worthlessness of some of this paper in order to avoid having the Sheep collectively realize that all of their paper is totally worthless.

International Commentary

As few people in our societies even know, all of the world’s governments have (foolishly) granted exclusive monopolies for the printing of all the world’s currencies (our “money”) to a cabal of privately-owned corporations called “central banks” – given that name because it is a cabal exclusively owned/operated by bankers.

Understand that the monopoly to print money is nothing less than a license for economic rape. These private banks lend us all the paper that they print out of thin air (at zero cost to themselves). The result is that after roughly 100 years of this economic rape we have (collectively) paid these banks $trillions in “interest” for nothing, and currently owe them $10’s of trillions for nothing. History’s single greatest act of legal theft.

Indeed, these bankers have stolen such unimaginably huge sums of wealth from our societies that the Thieves now voluntarily return most of the additional amounts they steal each year. There are two reasons for this act of pseudo-remorse. To begin with, with the Little People drowning in debt individually, and with our nations drowning in debts collectively; the Thieves were/are worried that their Victims might actually notice them sitting on top of their mountains of (stolen) money.

However the second reason – the real reason – is that the countless $trillions that these central banks have stolen from us are literally just the tip of the iceberg during their reign of legal-crime. This private cabal of central banks has not only been given monopolies to print money out of thin air for their own benefit, but thanks to the abominable euphemism which they call “fractional-reserve banking”; they are allowed to delegate their License to Steal to other private banks.

Specifically, for each dollar that the central bankers lend to their other banker-friends (at zero/near-zero interest rates); these private banks are allowed to print ten more dollars out of thin air, and lend them to the Little People (at higher rates of interest). Thus the central banks don’t mind returning most of the additional money which they steal each year, since their own thievery only represents 10% of the total banker-plundering of the wealth of all economies.

What is the inevitable result of a capitalist system where every new dollar that is used to fuel the economy is lent into existence? Debt Slavery: the ultimate goal of every (paper) fiat currency system.

There is now somewhere in excess of $200 trillion in debt sloshing around the global economy, most of that debt being totally fraudulent, in that it is interest paid to bankers (literally) for nothing. Somewhere around 25% of every dollar earned by all of our Western economies is now paid to these banker-parasites as interest on their fraudulent debts. The bankers would like to steal even more, but already all of our economies are teetering on the verge of bankruptcy.

Greece was already forced to default, and the U.S. (the world’s largest Deadbeat Debtor) is only able to ward-off debt-default by fraudulently maintaining its own interest rate at zero percent. Put another way, if U.S. interest rates had ever reached the same level as those which were inflicted on Greece by Wall Street’s economic terrorists; the U.S. would have defaulted even faster than Greece. It would have required the U.S. government to quadruple tax revenues just to pay the interest on its own (fraudulent) debt.

Having enslaved us all with debt thanks to being granted their License to Steal, history’s greatest thieves  are also history’s greatest hypocrites. Whenever one of our (subservient) governments has the audacity to actually suggest taking a closer look at the bankers’ Theft Monopoly; the Thieves look down their noses, point their fingers at us, and accuse of us “threatening their independence.” Yes, there is no one who places a higher price on his own freedom than the Slave Master. What about our independence?

The latest example of this supreme hypocrisy comes from (surprise, surprises) Benjamin Shalom Bernanke. Feeling especially pleased with himself after his two-day love-fest with the banker sycophants of the U.S. Congress; B.S. Bernanke chose that moment to launch yet another attack at Rep. Ron Paul – and his “Audit the Fed” bill.

Bernanke’s specific accusation? As paraphrased by the Corporate Media, Bernanke whined that “the ability to review monetary policy decisions…could compromise central bank independence.” This is by no means a new argument. Indeed, it is the Big Lie which the banker-thieves have hid behind for a hundred years – since it has never had a shred of validity.

The Big Lie is based on the artificial/arbitrary distinction of all economic policies as being either “fiscal policy” (the realm of government) or “monetary policy” (the realm of private bankers). The obvious fiction here in attempting to create some invisible wall between the two groups of policy-makers is that there is only one economy.

Gold Commentary

It’s easy to imagine readers glancing at this title and asking themselves “what possible relevance could this have with respect to modern markets?” Even if there was some relevance, “what could adult investors learn from this old children’s fable?”

To answer those questions properly requires first briefly summarizing the fable. We had a Great Race between a (quietly confident) Tortoise and an arrogant, condescending Hare. When the race began, the Hare immediately sprinted way ahead of the much slower Tortoise. However, over-confidence took over and the Hare began show-boating and goofing off, and the Tortoise caught up.

This caused the Hare to once again sprint to a large lead, before again succumbing to over-confidence. The pattern repeats itself, with the Hare eventually goofing off once too often – allowing the Tortoise to cross the finish-line first. The details of the fable are generally considered totally irrelevant with respect to the “moral” of this story: slow and steady wins the race.

It’s now possible to answer the questions posed in the first paragraph. What relevance does “The Tortoise and the Hare” have for modern markets? Throughout the entire history of human investing, “slow and steady wins the race” has been the dominant principle of investing…until the last 15 years. That marked the approximate turning point, from which time the fraud-peddlers of Wall Street and their accomplices in the Corporate Media have brainwashed the Investor Sheep into forgetting that basic principle.

Instead of “slow and steady wins the race”; these modern-day con-artists have programmed the Sheep to embrace a new mantra, their mantra: “bet on the Hare.” This massive paradigm-shift in global markets (and the global economy) becomes much more apparent when we shift from metaphorical analysis to specifics.

“Slow and steady wins the race” is the rational for two of the most time-honoured principles of investing: “buy and hold” and “buy low, sell high”. We know the first principle is dead, because the charlatans who manage most investing for the Sheep have explicitly proclaimed again and again (following the Crash of ’08) that “buy and hold is dead.” We can see that even the second principle has been de-programmed from the minds of the Sheep once we analyze what “bet on the Hare” actually represents.

In the fable, the Hare was both the clear race-favorite and capable of sprinting to large leads, apparently at will. Astute readers should now be able to figure out who these New Investors are who consistently “bet on the Hare.” They are the momentum-players (i.e. momentum chasers).

For the momentum-players, “buy low and sell high” is a principle which simply doesn’t exist in their universe. By definition, all momentum-players buy high: they jump on the bandwagon of asset-classes which have already soared in value; simply hoping that this momentum will last long enough for them to (a) make a profit, and (b) make an exit with their profit before the inevitable “correction” occurs.

Why did the Wall Street crime syndicate and the Corporate propaganda machine consider it essential to manipulate the Sheep from being buy-and-hold investors to momentum-chasing gamblers? The answer should be self-evident: it’s much, much easier to cheat gamblers than investors.

For those for whom this is not self-evident, I’ll elaborate. Buy-and-hold investors are comprised of two closely-related sub-categories. There are the “value investors”. These investors look at the present (discounted) value of a particular asset/investment, versus its current valuation. When the value of the investment seems to significantly exceed the current valuation, they buy.

The second group are the “fundamentals investors”. These investors look at the market/economic fundamentals for a particular asset, and when they perceive fundamentals which make it very likely/near-certain that an asset will rise in value over the longer term, they buy. More generally, both of these classes of investors are people who always “look under the hood” before they buy anything. Pretty hard to cheat such people.

Gold Commentary

In our daily lives, we learn that there are many immutable principles of cause-and-effect. Drop an object from your hand and it will fall down, not up. Throw a rock at a pane of glass and it will break. Put an ice cube in the sun and it will melt.

So too it is with the cause-and-effect known as dilution. Whether we are an adult buying watered-down booze from a bar, or a child buying a watered-down beverage from a lemonade stand; we immediately comprehend that diluting the product has reduced its value – and thus we refuse to pay the same price for it.

Similarly, should a jeweler attempt to tell us that (less pure) 10-karat gold is worth as much as (more pure) 24-karat gold, we would simply scoff at such nonsense and walk away. And as I have noted several times in prior commentaries, even the dim-bulbs in the mainstream media can grasp the concept that if a company prints up a lot of shares (and thus dilutes shareholder equity) that the value of its shares must decline.

Indeed, in the entire known universe we have only one example of an item which (supposedly) does not automatically decline in value as it is diluted: the bankers’ fiat paper currencies. In fact, we have no shortage of clueless scribes claiming that it is possible for these currencies to actually increase in value as they are being diluted. Search the phrase “U.S. dollar rises in value”, and you would acquire repetitive strain disorder before you finished reading all the idiocy on that subject.

Regular readers know that I have found this logical absurdity to be positively maddening. Suggesting that (any of) our incessantly-diluted paper currencies could rise in value is just as insane as suggesting that I could drop something and it would “fall” upward…at least at first glance.

Then it suddenly occurred to me that there was one (and only one) theoretically possible scenario where a good which is being diluted could rise in value: if it was already worthless before the dilution even began. Obviously something which is “worthless” cannot possibly decline in value, as a matter of definition. So even though there is no reason to expect a worthless item to increase in value (as it’s being diluted), since it’s impossible to decline in value then it becomes at least quasi-rational to suggest that it might appreciate in value (somehow).

There is no other possible exception to the principle of dilution: the only good which would not automatically decline in value as it is being diluted is a good which was already worthless before the dilution commenced.

This brings us back to the bankers’ paper currencies. Who is it that insisted that these paper currencies ever had any value to begin with? The bankers. Who is it that leads the media choir in talking about these paper currencies “rising in value”? The bankers.

When it comes to the near-comatose drones in the mainstream media (and their “experts”), it’s not too difficult to believe that they simply don’t understand that these paper currencies were worthless to begin with. However, when it comes to the bankers who created these paper currencies, it becomes much more difficult to believe that these charlatans haven’t known all along that they have been peddling worthless paper to the masses (as fuel for their infinite acts of fraud).

Gold Commentary

In Part I, readers had revealed to them the latest chapter in Western bankers’ newfound love-affair with gold. Indeed, as central banks around the world swap their own paper for gold at the fastest pace in history, it’s quite clear which monetary asset these charlatans really believe is a “barbarous relic.” After bad-mouthing gold for decades (and continuing to get their media trolls to attempt to frighten people away from gold today), we are currently witnessing history’s greatest “bash and buy”.

Both European banking authorities and those in the U.S. are now proposing reclassifying gold as a “Tier 1” financial asset. As was previously noted, this would have the effect of instantly making gold twice as attractive and twice as valuable to all of these large, Western financial institutions. What makes these developments especially interesting at the present time is that they are occurring at the end of another long period of sideways trading in the gold and silver markets.

Throughout this 10+ year bull market, these temporary periods of sideways price-action where the bankers are able to trap gold and silver within trading ranges have preceded the largest/longest rallies over the past decade – where gold and silver prices smash through all previous (nominal) highs. While the bankers are typically the last to notice and understand the consequences of their relentless manipulation, if you hit a dog over the nose with a rolled-up newspaper enough times, eventually the dog will get the message.

Thus the bankers themselves know their “fun” has nearly come an end (at least for an extended period of time), and they will have to once again sound the retreat on gold and silver prices. Being greedy (above all else), these banksters manage to be quite pragmatic: when they know that gold and silver are set to blast-off once again, many of them like to come along for the ride.

So, with a long period of sideways trading in the precious metals sector nearly at an end; with the bankers themselves in the process of reclassifying gold to make it much more valuable (for themselves); and with the bankers having a known tendency to switch sides and jump on the bandwagon (for short stretches); now is the time for all savvy precious metals investors to empty-out their bank accounts and sink every last dollar into silver and gold. Right? Not so fast.

There is, in fact, only one thing that the banksters like to do more than make money, and that’s to be able to make money while simultaneously whipsawing other investors (and hopefully totally destroying them). As a result, the banksters have come up with a particularly fun game that they like to play called Bait the Chumps.

It’s actually a really easy game to play when you are given complete and utter freedom by both government and “regulators” to rig/manipulate markets. First you target a sector with especially bullish long-term fundamentals – meaning that precious metals is the banksters’ favorite playground for this game.

Then, at a time when investors are already sensing that a rally is imminent you send out some really obvious “bullish signals”. Then you simply wait for the mice to take the cheese. Once the rodents have all latched onto their fromage, you spring your ambush. All the greedy, new “longs” who went out and leveraged themselves to the hilt on margin because they “knew” the sector was about to take off are instantly obliterated.

The downward momentum this creates then makes it possible to blow even moderately leveraged traders out of the water, and so the dominoes fall. With the whole market expecting a sector to “zig”, the bankers simply rig a “zag”. This is a classic win/win for these Vampires: not only do they get the tactile pleasure of destroying other investors, but the downward price action generated in the process then allows the bankers to do their own buying even cheaper.

Gold Commentary

Precious metals commentators (the legitimate ones) are continually striving to tear away the veils of deceit and propaganda, in order to present the global economy (and the world as a whole) in a realistic manner. This, in turn, is done in order to warn people of the grave financial/economic peril which looms ahead of us; thanks to the unholy alliance of unscrupulous bankers and corrupt politicians (and regulators).

It is a frustrating task. It is a fundamental trait of human psychology that most people expect tomorrow to be just like today. Couple that inherent defect in thinking with history’s greatest propaganda-machine, continually blaring to the masses an endless chorus of “don’t worry, be happy”; and the result is as predictable as it is tragic: hordes of lemmings blissfully marching toward the gaping chasm ahead.

This is why we continually look for opportunities to demonstrate how the actions of the duplicitous bankers are entirely contrary to their words, and thus reinforce the reasoning and analysis of commentators like myself. Recall how the bankers and their minions in the ivory towers of academia have spent nearly a century attempting to brainwash the masses into believing the absurd proposition that gold was/is “a barbarous relic”.

To reinforce this Big Lie, the bankers dumped thousands of tons of gold onto the market – gold that (ironically) was actually owned by these same legions of lemmings – because (amazingly) all of the peoples’ gold has been placed in the custody of this cabal of private bankers, the central banks. It was a strategy doomed to fail; because today they have no more gold to dump, and their Big Lie has been exposed. Now nothing remains except for them to attempt to (quietly) buy back  -- or simply steal -- as much of this gold as possible.

This task is greatly complicated by the fact that Western bankers cannot simply go out and re-purchase large quantities of gold on the open market, for myriad reasons (including the fact that gold-buying by other central banks is already soaring to record levels). To begin with, supplies of actual bullion are very tight. We can deduce this in various ways directly: the sixfold increase in the price of gold, the extremely abrupt end to Western gold-dumping, and the naked hunger which governments such as China and India are demonstrating in finding new supply-sources for gold bullion (i.e. ore that hasn’t even been dug out of the ground yet, let alone refined).

As Forbes Magazine tells us, there are also indirect ways in which we can deduce that actual supplies of bullion are extremely limited, such as the unscrupulous people who sell “paper gold” to Chumps, only for the Chumps to discover that they are holding all “paper” and no “gold”. Where did the intrepid sleuths of Forbes Magazine spot these gold-scammers? Halfway around the world in China.

There are a few preliminary points to make regarding Forbes’ “discovery”. First of all it is incongruous (bordering on outright absurdity) that these same Corporate Media talking-heads have spent literally decades scoffing at even the possibility of bullion-scamming of this nature taking place in New York and London; despite mountains of empirical evidence and even a bona fide whistleblower. Indeed, one of these New York fraud-factories has already been fined once for its own “paper bullion” escapades.

Yet here we have this (supposedly) prestigious New York financial publication pointing an accusatory finger halfway around the world, even though it openly acknowledges that “details are unclear how the scam worked”. Meanwhile, with 25% of Wall Street bankers being openly confessed thieves, the sleuths at Forbes Magazine claim to be totally unable to “see” manipulation and scamming taking place right outside the windows of their own head office – despite a trail of bread-crumbs so obvious that even Inspector Clouseau could get to the bottom of things.

Silver Commentary

I had the opportunity to listen to an inteview with noted commodities-guru Jim Rogers, which is never a bad investment of one’s time. Rogers is both very astute, and a straight-talker; two “commodities” which I’m sure that he would purchase if he could – since both are clearly in short supply in the 21^st century.

The central topic on the mind of Rogers’ interviewer was Ben Bernanke’s farcical testimony before the U.S. Congress. That love-fest had all the interrogative value of spending the day watching Sesame Street. Rogers was also totally unimpressed:

…Mr. Bernanke is going to print more money…I wouldn’t pay much attention to the man…He only knows one thing – and that’s what he’s going to do…

The interview then proceeded to Rogers’ specialty: the world of commodities. He remains totally committed to commodities over the long term, rightfully pointing out that as the global economy continues to be drowned in mountains of the bankers’ paper currencies, that these hard assets must soar in price – as all that paper collapses in value.

When asked to compare the different commodity sectors, Rogers was also unequivocal. He was most bullish with respect to “soft” commodities and industrial commodities, while less bullish on the monetary commodities: gold and silver (at the present time). It’s here that I’m going to dare to differ with Rogers to a degree.

I wouldn’t presume to contradict his long-term prognosis on the future of commodities, in a commodity-starved world. In fact I completely agree with him. However, it is over the short/medium term where I believe I detect a small inconsistency in his analysis of these markets.

The inconsistency lies in the fact that Rogers fervently believes (as do I) that we are on the verge of a Flight out of Paper. He ranked the various forms of these fraud-currencies, and said he expected the holders of this paper to soon begin an exodus out of the most-worthless of them – specifically noting the U.S. dollar.

He also observes that once this exodus starts that there will not be enough stable currency remaining in the world for all of the U.S.-dollar refugees (and other paper-holders) to find a home. This leads to the obvious question: where will all those other $trillions go?

Rogers’ implicit answer is that this paper will flow into his favored soft and industrial commodities. However this ignores a large and obvious practical issue: the absolute need for functional currency. Once we ditch the last of our banker-paper in favor of holding our wealth in some instrument which actually has value, we cannot simply all load up on commodities.

People are not going to go to their local shopping mall lugging bushels of wheat, barrels of oil, or truckloads of lumber in order to do their daily shopping. However, they will be quite happy to conduct their commerce using silver and/or gold coins, since as a species we have collectively had thousands of years of practice in using this only form of “good money”.

What we have here is the world’s foremost expert on commodities warning us that we are about to experience a shortage in a “commodity” with which our modern economies cannot function: usable currency. Then there is silver and gold. These precious metals have a 5,000-year track-record of being the world’s ultimate “safe havens”, because they are the only perfect form of money we have ever been able to devise.

US Commentary

Less than two weeks ago I wrote “Crash Warning.” It outlined the current economic parameters of the global economy and explained that we were careening toward a particular form of economic Armageddon which I believe was first described by John Williams of Shadowstats.com, when he coined the phrase “hyperinflationary depression” nearly a decade ago.

The debt-laden, fraud-saturated paper Ponzi-schemes of Western bankers are now all about to implode in a deflationary (debt-default) collapse – most notably all their fraud-bonds. Simultaneously, the rabidly excessive money-printing of these reckless gamblers is causing (and will cause) the prices for hard assets (i.e. assets which actually have value) to spiral upward, with the most likely final destination being hyperinflation.

Because that previous commentary was describing a global economic paradigm, my analysis was necessarily abbreviated with respect to the apex of all economic ills: the United States. In particular, I spent less than a paragraph discussing the collapse of the retail sector in the world’s largest economy -- a consumer economy.

Before we examine this train-wreck directly, let’s take a moment to define the backbone of this consumer economy: the American consumer. The two charts below should be very familiar to regular readers, and describe the American consumer in stark but precise terms: poor and/or unemployed.

[chart above courtesy of http://nowandfutures.com/index.html]

We see two things in the chart above on average American wages. First we see how (in real dollars) wages for the average U.S. worker have been falling steadily for more than 40 years. Those wages have now fallen by more than 50%, all the way down to the same levels as during the Great Depression. And we see how the U.S. government’s lies about inflation have almost entirely concealed this relentless collapse in wages. How convenient.