Monday, April 4, 2016

Jim Rickards joins the world of conspiracy factists.

Seeking Alpha has an article out which touts Jim Rickard's book, "The New Case For Gold".   In it he discusses how he thinks that the US has physical possession of a lot of gold but that little of it is actually ours.  He then goes on with talk about a gold suppression scheme.
Of course there is no "new case".  Nothing has changed.  There is nothing new under the sun except the history you don't know.  We live in a fractionally reserved economy.  Many people claim ownership of this or that even though they don't really own it.  You can probably count yourself among that group in some form or fashion.  Do you own your car?  Not if you owe money on it you don't.  If you don't have the title then you clearly don't own it.  And your house, do you own that?  Not if you owe money to the bank!  Even if you have paid 90% of the mortgage, the bank still has that house on their books as an asset. 

What will happen if you stop making payments on your 90% paid off house?  Will they say, "well, you paid most of it off therefore we'll just forgive the rest"?  No, they won't.  If you stop paying they will first send you gentle reminders about it followed by not so gentle ones.  Then their lawyers will send you intimidating letters followed by threatening ones.  And then they will follow though on those threats if you don't pay.  At some point the court will send you a letter saying that your house is being repossessed and it will ask you to leave.  If you fail to, the police will threaten to move you out.  If you resist them they will hurt you or kill you in the process of evicting you depending on how fervently you resist their orders. 

So we all live in a fractionally reserved asset market which is made possible by the ridiculous, liberal notions of fiat currency and especially fractionally reserved banking.  This being the case, is it really a conspiracy that our government has lent out all our gold and is just holding onto the physical for someone else's safe keeping?  It's not a conspiracy at all.  It's policy!  The fact that the people have been led to believe that we own all this gold is another matter completely.  The government, when comes time to fess up, will use lawyers to explain how it never said we didn't have currency swap agreements in place that encumbered our gold with claims against it.  It will say that we still own the gold but that we also own claims against it.  It will be a fine line of legal bullshit but you have to be a child not to see what is coming.  The government cannot game the gold, it can only game the paper currency and so of course it has thrown in with the fractional reserve crowd.

When I hear Trump speak, and when I hear him talk about the debt and how badly Mexico and China and everyone on the face of the Earth has screwed us, I smell the seeds of default.  Trump has filed for BK 4 times and he is not ashamed of it.  He claims it is a common business decision saying, "I used the law four times and made a tremendous thing. I'm in business. I did a very good job."  Of course, what is "the law" but a set of rules imposed by the powerful upon the weak for the benefit of the powerful and then enforced by a violent and corrupt group of POLICE Enforcers?  Smedley Butler was right: War Is A Racket, but so are government controlled laws.

Folks, we defaulted on our debts to the world before.  What do you think it was when we closed the gold window?  It was the most massive sovereign default in the history of man.  No, the common man did not understand it as such but the facts are the facts.  We told people to accept our green paper in lieu of physical gold for trade.  We told them that if they ever lost confidence in us that they could bring truckloads of the green paper to our gold window and dump it out front and we in turn would hand them pallets of gold bars.  When they took us up on that notion, we said "just kidding suckers" and closed the gold window in their faces.  They couldn't do anything about it because the US had the military.

I want to go on record here and now saying that if Trump is elected his job #1 will be to find a way to default on our $19 trillion in debt in some form or fashion.  He's going around telling people he will do it in 8 years all the while his tax cuts will run the debt up another $24 tn over the next 20 years.  The only way he can achieve debt reduction is to do it the good old fashioned Trump way: to default on it.  He will call it "a deal" and he will say "I used the law to free us from this debt and made a tremendous thing. Global sovereign governments are essentially businesses. I did a very good job.".  But it will be a deal that others can't refuse, just like the mafia.  Refuse the deal and then you have to deal with threats from the US military and it has a bad track record of killing anyone who disagrees with "the deal".  As I mentioned many times, Trump is no conservative.  It's just that standing next to Hillary, Bernie and most of the GOP field, even a 60s flower child looks conservative by comparison.

Of course, the proliferation of nukes means that the US only has the advantage in conventional war.  We should not take it for granted that there will be no nuclear push back to a global default.

When it all comes slamming down, and it will some day, the liberals who wanted to have all their dreams fulfilled today, before they worked to earn the stuff, will be the loudest and most angry because their lives will collapse the most.  Conservatives who actually own physical money (gold and silver coins) will eventually have their (our) day in the sun, even if it is an artificial sun of 50 nuclear warheads going off in key cities around the world.

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