Posted: Fri Nov 08, 2013 7:39 am Post subject: Jim Willie; gold price will double soon
Jim Willie has spoken again; when this guy speaks, you better pay attention, because he's extremely well informed and knows what he's talking about. He expects the dollar (and all other fiat currencies for that matter) to devalue vis-a-vis the gold price OVERNIGHT very SOON! (yeah, I know, he has a special way of writing, likes to lash out against anybody that doesn't "get it", and can be somewhat tedious, but there some true gems in this piece.)
From the article;
The United States has ushered in hyper monetary inflation with the series of Quantitative Easing programs, as in QE1, QE2, Operation Twist, and QE3. My belief is no longer than hyper inflation is inevitable, since already part of current policy now. Hyper-inflation is already here!
As a result of the hostile monetary war, the USDollar and its USTBond vehicle are facing not simply opposition, but broad-based earnest organized initiatives to avoid them. The goal is to replace them in workarounds. A reset is apparently near. The pressures to install a more fair, more just, and more enduring system is enormous, and will not cease. The demand is to bring back the Gold Standard, the equitable arbiter, the true enforcer.
The demand for Gold is inelastic. As price rises, so does demand. It is called Gold Fever.
Something big is near, as the tremors are being felt in every global corner, and every global market.
PARADIGM SHIFT ON GOLD
Paradigm Shift will be the climax crescendo to the entire currency market, its king gold included. The Gold price will someday before long enjoy a quantum leap upward in a global reset. The design and details are not for the common unwashed among us to be informed. We plebeians must plan and decide according to anticipated decisions which come. The great Global Currency Reset will come like a thief in the night. It is being demanded by a multitude of foreign nations, which are beyond fed up with US banker criminality and abused USDollar privilege. Foreign leaders are angry and motivated to produce change. The Voice has given several messages in the last couple months about enormous pressures by many nations. The Eastern nations hold a staggering amount of Gold reserves and USTreasury Bonds. They strive to bring about by force an overnight 50% USDollar devaluation. When the discussion turns to the impact on other fiat paper currencies, the conclusion is simple. All major currencies will likely retain their relative exchange rates. But they will all adjust to the 50% devaluation versus the benchmark currency: GOLD. What he is describing is a Global Currency Reset that features an overnight double in the Gold Price. The biggest loser will be the United States, the site of the greatest financial crimes and the location of the greatest abused privilege.
_________________ "A person hears only what he understands."
Johann Wolfgang von Goethe
Gold hit a 3.5 month peak on Monday as fears over U.S. economic growth
and a weaker dollar added to the metal’s safe-haven appeal, extending its
gains after rising the most in six months last week
Market sentiment towards gold has been positive since the beginning of the
year as weak U.S. and China economic data, and emerging market jitters
have taken a toll on global equities, spurring demand for bullion - often
seen at times of uncertainty as a safe haven.
Gold is up 10 percent this year after a 28 percent drop in 2013, while silver
has gained 12 percent. Investor positioning in gold and technicals seem
to suggest the upside could continue.
“We think near-term drivers for gold price would be (weak) U.S. macro
data and increasing portfolio allocation to gold for diversification,” said
Helen Lau, senior analyst at UOB-Kay Securities in Hong Kong.
Spot gold rose 0.6 percent to $1,326.40 an ounce by 0340 GMT, after
hitting $1,329.55 earlier in the session - its highest since Oct. 31. The
metal jumped 4 percent last week, its biggest weekly gain since August.
U.S. gold futures rose for a ninth session - their longest winning streak
since July 2011. Silver was trading up 1.6 percent near its highest since
“We are bullish gold, targeting a full retracement back to the $1,433 high
from August 2013,” said analysts at ScotiaMocatta, adding that there are
encouraging signs that silver has formed a bottom.
U.S. manufacturing data on Friday joined weak retail sales and employment
data in suggesting that cold weather had spurred a step-back in economic
growth early in the first quarter after a strong performance in the second
half of 2013.
In a sign that gold prices are expected to climb further, speculators raised
their bets in gold futures and options to a three-month high, according to
data from the Commodity Futures Trading Commission.
Regulatory filings also showed hedge fund Paulson & Co maintained its
stake in the world’s biggest gold-backed exchange-traded fund, SPDR Gold
Trust, in the fourth quarter.
Though SPDR Gold Trust's holdings fell 5.10 tons to 801.25 tons on Friday -
the first drop in three weeks - they have remained relatively stable
compared with last year's 500-tonne outflow.
Gold premiums in India, the world’s second-biggest consumer of the metal
after China, fell 17 percent on Friday to their lowest in four months as
buyers postponed purchases on speculation over a possible cut in import
The Indian government is set to present an interim budget on Monday, in
which many expect it to announce a relaxation in gold import curbs.
Expectations over a duty cut have increased since the leader of India’s
ruling Congress party, Sonia Gandhi, asked the government to review
tough import restrictions on gold that have crimped gold supply.
Last Update: Monday, 17 February 2014 KSA 09:44 - GMT 06:44
_________________ Minds are like parachutes.
They only function when open.
"Whether the West is right or wrong [on gold] is not the point.
"The point is there are 4 billion people in Asia who have got a very
old-fashioned view of gold, and they have become wealthy over
the last twenty years. And their view is likely to prevail against the
<1 billion of us in North America and Western Europe. I mean it
really is as simple as that. It's not a question of Austrian economics,
or Keynesian, or whatever. We're outnumbered.
"We're now out of control of the situation.
China is in control of the situation.
"And I think there are very good reasons why China wanted to do it.
I mean bear in mind that China has got $1.3 trillion dollars-worth of
"Now the idea that these are China's property is second to the fact that
treasuries are actually completely under the control of the US government.
You know, China couldn't access that if it wanted. If it wanted to sell it,
you know, there would be a bar put on it.
"So instead of that, actually, what China has is she's now got control over
the gold market. Not only has she accumulated for herself, between
herself and her citizens, a huge quantity, she has left the western central
bank vaulting system bereft of its gold. And it can switch the value at any
time it wants from its holding in US treasuries into gold just by jacking up
the price to $10,000. So the idea that as a major creditor of the United
States, China has got a problem is no longer true..... - Alasdair Macleod
A referendum will be held on Nov 30th 2014
in Switzerland with the following proposals:
- The Swiss National Bank is not allowed to sell any Gold in the future
- The Gold has to be stored in Switzerland
- Gold should at least represent 20% of the Swiss National Bank assets
Jeff Deist and Claudio Grass discuss :
- the uniquely Swiss mindset behind the upcoming Swiss gold referendum,
- how decentralization of political power is part of Swiss DNA;
- the huge geopolitical aftershocks if the referendum passes
— including the physical repatriation of gold to Switzerland;
- and how the Swiss people may be waking up to the sellout
of their country by the Swiss National Bank and the IMF.
_________________ Minds are like parachutes.
They only function when open.
More on the Swiss Gold Initiative(SGI), (see post above)
which continues to gain traction in the lead-up to the vote
at end of November '14.
Without any campaigning, the pro-gold side is already
neck and neck with the anti-gold Swiss Government.
If the initiative succeeds, it could destroy the Western
bankers' narrative about gold's "relic" status.
This Little Piggy Bent The Market
BY GRANT WILLIAMS OCTOBER 27, 2014
The official press launch of the SGI campaign was held this past week,
but AHEAD of that launch, a poll was conducted in 20 Minutes, a popular
German-language free daily newspaper published both in print and online.
The question asked was simple:
“How will you vote in the upcoming Save Our Swiss Gold referendum?”
The results were a surprise to just about everybody.
A total of 13,397 people were polled from all across Switzerland on
October 15, and the poll clearly demonstrated that already — without
any campaigning — there is a solid block of voters inclined to vote
FOR the initiative:
Well, it seems that good ol' Al is actually agreeing with the Swiss yes camp here, notice who it is he's talking to, the CFR, he wouldn't want to lie to these creeps;
It appears it is time for some Hillary-Clinton-esque backtracking and Liesman-esque translation of just what the former Federal Reserve Chief really meant. As The Wall Street Journal reports, the Fed chief from 1987 to 2006 says the Fed's bond-buying program fell short of its goals, and had a lot more to add.
Mr. Greenspan’s comments to the Council on Foreign Relations came as Fed officials were meeting in Washington, D.C., and expected to announce within hours an end to the bond purchases.
He said the bond-buying program was ultimately a mixed bag. He said that the purchases of Treasury and mortgage-backed securities did help lift asset prices and lower borrowing costs. But it didn’t do much for the real economy.
“Effective demand is dead in the water” and the effort to boost it via bond buying “has not worked,” said Mr. Greenspan. Boosting asset prices, however, has been “a terrific success.”
He observed that history shows central banks can only prick bubbles at great economic cost. “It’s only by bringing the economy down can you burst the bubble,” and that was a step he wasn't willing to take while helming the Fed, he said.
The question of when officials should begin raising interest rates is “one of those questions I cannot answer,” Mr. Greenspan said.
He also said, “I don’t think it’s possible” for the Fed to end its easy-money policies in a trouble-free manner....
"Recent episodes in which Fed officials hinted at a shift toward higher interest rates have unleashed significant volatility in markets, so there is no reason to suspect that the actual process of boosting rates would be any different, Mr. Greenspan said.
“I think that real pressure is going to occur not by the initiation by the Federal Reserve, but by the markets themselves,” Mr. Greenspan he said.
And finally - while CNBC's audience is told what a terrible thing gold is, "The Maestro", having personally created the financial cataclysm the world finds itself in following a lifetime of belief in fiat, Keynesian ideology and "fixing" one bubble with an even greater and more destructive asset bubble, has suddenly had an epiphany and now has a very different message from the one he preached during his decades as the head of the Fed.
Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments.
What Greenspan failed to add is that it is thanks to his disastrous policies (subsequently adopted by Bernanke and Yellen) that gold is the "place to put money."
After screwing up the economy as Fed chair he's back to his oiginal position on gold, the one he held before he was appointed. I wonder if the whole manipulation thing is coming to an end soon. _________________ "A person hears only what he understands."
Johann Wolfgang von Goethe
Some more truthful stuff from good ol' Al, in this case published in Ayn Rand’s “Objectivist” newsletter in 1966, and reprinted in her book, Capitalism: The Unknown Ideal, in 1967. Well worth the read, the desperate ongoing manipulation in gold explained by the maestro himself;
An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense — perhaps more clearly and subtly than many consistent defenders of laissez-faire — that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.
In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society.
Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.
The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization. If men had no means to store value, i.e., to save, neither long-range planning nor exchange would be possible.
What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible. More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term “luxury good” implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron.
In the early stages of a developing money economy, several media of exchange might be used, since a wide variety of commodities would fulfill the foregoing conditions. However, one of the commodities will gradually displace all others, by being more widely acceptable. Preferences on what to hold as a store of value will shift to the most widely acceptable commodity, which, in turn, will make it still more acceptable. The shift is progressive until that commodity becomes the sole medium of exchange. The use of a single medium is highly advantageous for the same reasons that a money economy is superior to a barter economy: it makes exchanges possible on an incalculably wider scale.
Whether the single medium is gold, silver, seashells, cattle, or tobacco is optional, depending on the context and development of a given economy. In fact, all have been employed, at various times, as media of exchange. Even in the present century, two major commodities, gold and silver, have been used as international media of exchange, with gold becoming the predominant one. Gold, having both artistic and functional uses and being relatively scarce, has significant advantages over all other media of exchange. Since the beginning of World War I, it has been virtually the sole international standard of exchange. If all goods and services were to be paid for in gold, large payments would be difficult to execute and this would tend to limit the extent of a society’s divisions of labor and specialization. Thus a logical extension of the creation of a medium of exchange is the development of a banking system and credit instruments (bank notes and deposits) which act as a substitute for, but are convertible into, gold.
A free banking system based on gold is able to extend credit and thus to create bank notes (currency) and deposits, according to the production requirements of the economy. Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security of his deposits). But the amount of loans which he can afford to make is not arbitrary: he has to gauge it in relation to his reserves and to the status of his investments.
When banks loan money to finance productive and profitable endeavors, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion. Thus, under the gold standard, a free banking system stands as the protector of an economy’s stability and balanced growth. When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold the economies of the different countries act as one — so long as there are no restraints on trade or on the movement of capital. Credit, interest rates, and prices tend to follow similar patterns in all countries. For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest paying banks in other countries. This will immediately cause a shortage of bank reserves in the “easy money” country, inducing tighter credit standards and a return to competitively higher interest rates again.
A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post-World War I type of disaster. The readjustment periods were short and the economies quickly reestablished a sound basis to resume expansion.
But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline — argued economic interventionists — why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely — it was claimed — there need never be any slumps in business. And so the Federal Reserve System was organized in 1913. It consisted of twelve regional Federal Reserve banks nominally owned by private bankers, but in fact government sponsored, controlled, and supported. Credit extended by these banks is in practice (though not legally) backed by the taxing power of the federal government. Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks (“paper reserves”) could serve as legal tender to pay depositors.
When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve’s attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain’s gold loss and avoid the political embarrassment of having to raise interest rates. The “Fed” succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930’s.
With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain’s abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed “a mixed gold standard”; yet it is gold that took the blame.) But the opposition to the gold standard in any form — from a growing number of welfare-state advocates — was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.
Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government’s promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which — through a complex series of steps — the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy’s books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.
_________________ "A person hears only what he understands."
Johann Wolfgang von Goethe
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