GATA is the Gold Anti Trust Action committee.Its charter is to expose the global activity by central bankers regarding gold price manipulation whose purpose is to convince the unsuspecting public that fiat currency has actual value and to litigate against these activities.Today’s post by Chris Powell is the summation of many of his past posts.That makes it a bit long but it also allows you to grasp things in a single reading instead of getting bits and pieces at a time. http://www.gata.org/node/9545
Chris’ conclusion is that the gold price suppression scheme is more than just that.It is in effect a truth suppression scheme which degrades the morality of society.It is ultimately a battle between good and evil.Think about it for a second.Who is getting ahead in this world - good, honest, hard working people or dishonest con men and bankers who add no real value to the economy?How long will good men sit by and just watch others get ahead by doing the wrong thing?How can that not have an effect on people’s actions?It is very difficult to get what you deserve from your hard work when you are competing with con men and liars.It should be obvious that good men are tempted to do the wrong thing just because others that are doing it seem to be getting away with it.
Of course the problem with sitting idly by is that the immorality spreads like cancer.Look around the world where people are fire bombing their police and chasing their governments out of the country with pitch forks.This is the eventual outcome for us all if don’t actively work to expose and oust the liars and the crooks and to decry their behavior as immoral and socially unacceptable.Failure to stop them means that good lives will be ruined and quality of life will be diminished for everyone.Iceland told its creditors to buzz off.Their sins were small enough in the grand picture that there were no serious repercussions.Will the US get the same consideration if it has to admit that it is bankrupt and must default on its debts to China and others?Maybe.But then again it might turn into world war 3 and this time we will not have the moral high ground as we did in prior world wars.
The global money scam is stealing the morality of our children as they learn from our corrupt examples and it is stealing their opportunity for prosperity.The global gold suppression scam is about much more than money or the spot price of some metal.It is an attack on the very soul of our nation and upon the souls of all the nations of the world.
Japan currently has a debt to GDP ratio of over 200%. Generally when 3rd world nations hit a debt to GDP of 120-130% the creditors get very nervous. But Japan was too big to fail and so the credit just kept rolling.
Every one of these individual debt Ponzi schemes that we see happening globally has its own slant and its own reason why "it's different for us this time". All off that is just marketing cover for the con job - they are all just different incarnations of Madoff. Japan's story is that they owe much of the debt to themselves and that somehow makes it OK. Balderdash! Japanese people are now beginning to retire in droves. Since labor is the source of all new value creation in an economy and since old people in retirement don't work but still continue to consume, it's pretty clear that Japan is in deep trouble. How are these people going to eat and otherwise live when they have retired and the government defaults on their promised payments? Japanese people seem to believe that its government has deep pools of money someplace with which to make those payments. Perhaps the retirees believe that young people will support them through increased taxation and massive inflation. Good luck with that. The young people of Japan will figure out that the prior generation is stealing from them and they will eventually revolt just as is happening in other places around the world. It doesn't take too much imagination to see that Japan has become the land of the setting sun.
Egyptians are telling their repressive, despotic leaders to get the Hell out or else face hanging in the streets (or whatever the modern equivalent might be in Egypt).Clearly, Egyptians looked at what happened in Tunisia and said “if they can do it so can we”.The infectious spread of social mood is a basic tenet of herding theory.
As you can see from the map below where I have scribbled the borders of these 2 nations in red, this is an area of the world where significant government-ending social upheaval could have global implications if it were to bleed north into Greece (where rioting is already happening) or Italy (hotbed of Euro debt crisis) or east where it could affect middle east oil production.
If you watched the video at the above link then you heard the talking head Hillary Clinton, our beloved Secretary of State, chattering away about how Egyptian authorities should allow peaceful demonstrations. She also suggested that authorities not try to block communications such as social media sites which are being used to organize protesters, etc.Yes, America, the shining beacon of economic stability and human rights, is again preaching to others to do as we say and not as we do.We like to preach austerity and good economic practice to others even as we run a global credit Ponzi scheme.And in light of recent legislation to shut down the Internet in case of “emergency”, Hillary is again exposed to be just another useless mouthpiece for more double standards by US government.
Why is government so keen to put measures in place to bring down the Internet on command?Simply because government hacks know that their main control over the people stems from having a few well funded, well organized people at the top controlling a large, disorganized, infighting group of sheeple which make up the herd.Government knows that the Internet has some amazing qualities that are to be feared by despotic and corrupt ruling elite, especially as their scam begins to become well understood by the masses.Firstly, the Internet completely erases the barrier to rapid information sharing.All you have to do now is post the location of the “rally” on a central site somewhere and 50,000 emails will automatically be sent to people telling them when, where, and why to attend.These emails and tweets go directly to the handheld phones that everyone now has.The recipients can then decide for themselves whether to attend or not.What a difference that is from word of mouth organization methods or of organization that requires members to call each other on the phone, etc.
The second worrisome quality of the Internet is its ability to depersonalize and compartmentalize the message.It has always been difficult for an individual to speak with authority to large crowds without benefit of some bully pulpit which affords him some status that makes him worth listening to by the herd.In person, grass roots message dissemination is just too easy to disrupt, too easy for the opposition to create noise and distractions. It’s too easy to turn into a battle of personalities. It’s too easy to divert off topic.The herd cannot move in a single direction if there is too much confusion and the elite rulers have been leveraging this fact throughout the history of man.
However, if the message is given via a web site or by a twitter feed or by an email then it becomes depersonalized and the audience is compartmentalized.The communication and organization dynamic is no longer one to many but rather one to one, but the one to one is repeated thousands of times in parallel.The Internet gives grass roots organizers the efficiency of being able to speak to many people at once AND the effectiveness of speaking to people one on one.That, and that alone is why legislation is being crafted giving government power to shut down the Internet on demand should the need arise.
They can pitch it as any number of other things but at the end of the day it is just another herd control mechanism being put in place by ever more concerned elite as they watch their credit Ponzi weaken.The ruling elite are smart enough to look at riots in Iceland, in Greece, in Ireland, in Tunisia, in Egypt and elsewhere as risk factors for similar outcomes that we likely face here in the US. So far things are great here in the US aside from the occasaional assassination attempt on sitting Senators. But what happens when we can no longer find suckers to loan us money for nearly zero percent on the short end of the curve where a big part of the debt is clustered? And what happens when Bernanke’s money printing operations finally come home to roost in the form of massive inflation that threatens the ability of people to maintain reasonable lifestyles? The riots in other countries are all related to that kind of economic break down. We are not there yet because we are a bigger economic flywheel than they are but our day is coming.
The recovery is clearly a combination of the unholy trinity of regulatory forbearance (AKA ignoring the rules and pretending nothing is wrong), borrowing to stimulate, and printing from thin air to stimulate when we can’t find suckers to loan us money. Yep, that’s what I call a recovery all right. So everything is back to normal folks, nothing to see here. Move along now and above all, have confidence in the safety and soundness of our economic and political system.
The likes of what is passing for an economy has never been seen before. It is a huge experiment in the art of confidence games. These banks are reporting phantom interest as if it were really being paid to them when they in fact already know that payments have been cut off and in many cases that someone is selling crack out the back door of the house when they are not ripping the copper wiring and pipes from the walls to sell for $4.20 a lb scrap. Sooner or later the banks will have to restate earnings or they will have to take a massive impairment charge to make up for this scammery. Of course they will already have paid themselves bonuses for doing so well and that money will never be clawed back. Ignoring the problems will not make them go away. It’s almost as if someone is trying to ensure as bad an eventual outcome as possible. Nobody can say when or how it will happen but everyone should understand that payment will eventually have to be made by someone. You can’t just continue to kick this kind of can down the road forever. When gas hits $6 a gallon a few years from now you will know where the payment came from – right out of the buying power of your pension, 401k, annuity, salary etc. The con men clearly plan to try to inflate their way out of this mess and nobody seems interested in stopping them.
Anyone who knows markets knows that volume changes precede price changes because volume implies supply and price is a function of supply and demand. The demand for homes is not going to go up just because so many people are now trying to sell. In fact, this generally leads to a lack of demand because people start to get very picky about what they buy when the selection is so great. Higher supply in the face of lower demand = lower prices, period.
When you see so many begin to head for the door it is not wise to stand in the way. The Australian housing market is going to crash and so will the Canadian housing market because the prices for these homes were bid up using credit provided by fractional (fictional) reserve bankers to real estate speculators, not from real money actually earned by people who just wanted shelter. High levels of credit were ridiculously justified for Aussies and Canadians because these commodity producing nations are benefiting from China's commodity buying spree which itself is just an attempt to get rid of dollars before they become worthless. It was also driven by China's ridiculous speculative building boom which will also go bust.
China has been taking increasing steps of late to fend off credit availability in order to halt the growth of its housing bubble and this will eventually result in a collapse of commodity buying from Australia and Canada. It has to because all the credit speculation has brought forward so much demand.
When we see the Aussie/Canadian housing markets rolling over it is the market's way of telling us that it believes China is running out of ability to buy their commodities (and thus for Aussies and Canadians to make their ridiculously high house payments). Once this happens the next logical step is for the Chinese real estate bubble to collapse with a very loud thud. I believe that this event could turn out to be of major concern for the whole world because, unlike relatively rich Americans, Europeans, Aussies, and Canadians, the Chinese people will not see the collapse as an "unfortunate economic event" like more economically secure people might be able to do. For many millions of poor Chinese it could easily become a matter of life and death as their wealth collapses and they can't afford food. Yes, even the poor people of China have been pooling their funds to speculatively invest in housing. If starvation of the poor becomes a real threat then they will have nothing to lose by storming the halls of government and hanging their leaders in the streets. To prevent their own demise, the Chinese government may have to take steps to appease the people when civil unrest reaches a critical stage. Such steps could affect the whole world - like going to war, etc. It would be very easy to vilify America for everything and a starving population will gladly enlist in the military if it means some daily rice. I am not predicting this must happen but folks who rule this out have their heads in the sand IMO.
This kind of dynamic is exactly what we have to expect for allowing the scam of fractional reserve banking to exist.
"I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency[Dave:including the issuance of credit which spends just like currency in the market place], first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
-- Thomas Jefferson -- The Debate Over The Recharter Of The Bank Bill, (1809)
I’ve always said that its easy to be charitable when you are rich and have all of your needs fulfilled. As the money runs out I expect a lot more people to sound like Mish who is already beyond political correctness and well into early rage. Bottom line is that there simply won’t be much sympathy for people who got used to getting massively overcompensated relative to their actual contribution to society.
Now, I know some people will take offense to that because we have been socially engineered to think about firefighters and policemen as “heroes”. The propaganda around that has been ridiculous over the years and I suspect it will come out some day that public unions were behind it with big spending in order to justify spiraling salaries, benefits and ridiculous pensions. To be fair, firemen and policemen do important jobs in society. But are they any more important to the proper function of things than any other job? I really don’t think so.
For example, in 50 years I have never needed the service of a fireman and I have never called the police to come protect me. It’s nice to know that they are there but they are more like insurance than some actual daily need. On the other hand, I have used the output of roofers, steel workers and many other types of low paid workers many times. To me they are more important than police and firemen.
Imagine if there were no roofers in the world. You and your family would have no protection from the rain or the sun or the heat or cold. Millions of people would die each year from heavy weather without roofers keeping us safe! It would be very easy to build a lengthy argument as to why roofers are “heroes” and thus deserving of incredible pay and benefits. But roofers don’t work for the government and thus they have no government employee’s union set up to extort money and benefits from taxpayers (who are complacent and thus to some extent deserve the fleecing we get). Because of this roofers are paid a modest wage relative to police and firemen.
OK, OK, but firemen and policemen put their lives on the line for us everyday and thus deserve a huge price premium, right? If you believe this then you are a victim of social engineering and union propaganda because the truth is that roofing (and many other mundane blue collar jobs) are actually more dangerous than being a fireman and garbage collection is more dangerous than being a policeman:
Why do we never hear the full facts? Because government is gaming us and it is not in their interest to tell us the truth. The truth is only coming out now because the credit used to fund all of this excess is running out. It is all part of the healing process even though it is being billed as a crisis. The laid off, able bodied, young fireman in the first link would do well for himself to stop begging and to go get a roofing or garbage collection job.
Got an hour to invest in your own future? If so, this interesting video will probably be educational on many fronts. Lebed’s stuff always appears a bit more dramatic than many people think it should be but I think that at some point within the next decade (perhaps a good deal sooner) there's a better than even chance that his drama might actually turn out to be understated. If you choose to watch it then note he is calling for immediate hyperinflation which I think cannot happen as long as housing prices are still falling (and they most certainly are). But after they do bottom then there is no doubt that we will see massive inflation (10-20% per year) or hyperinflation (20-200% per year) because money printing is all that the fiat currency con men really can do once the people are taxed to the limit. When people see money getting printed like that they lose confidence in the currency and begin to look for ways out. Is it any wonder that the price of gold went from $35/oz in 1971 to $1350/oz today? In case it's not immediately obvious, this has far outpaced the Dow Jones Industrial index even when dividends are factored in. Gold is the escape hatch.
For people who are still putting money into a government controlled retirement account, think for a second what those levels of inflation will do to your savings. Right now you can still take your money out by paying taxes and a 10% penalty (with other necessary preconditions). Sooner or later the government will cut off that avenue of escape and that will be a major sign for me that massive inflation is very near. I say again, retirement accounts are the only significant remaining source of wealth in this country now that housing equity has gone bust and so the government will at some point have to confiscate them in some form or fashion just like Argentina and many other governments have done in the past. They will do it in the name of your safety but it will be handing the keys to the hen house over to the foxes. The easiest way for them to do this will be to lock you into the account and then inflate the buying power of it away.
Underpinning my views is the fact that the national debt has gone exponential:
It was allowed to do this because all of the safeties and restraints on economic prudence were completely removed when we left the gold standard in 1971. You can clearly see how the debt took off after that event from the following graph. I am disinclined to believe that it is a coincidence that the debt began to unveil itself as an exponential function so shortly after that event occurred. I just don’t think that we get 30 years of a certain behavior (1940-1970) changing so rapidly unless there is a good reason – some sort of trigger:
A closer inspection reveals the sad truth that exponentially higher debt is being required simply to maintain the status quo. We do not have exponentially better anything (infrastructure, education, health care, etc.) because of exponentially higher debt. We just have massive government that cannot exist as it has been without taking on ever higher debt. The following chart overlay is good evidence of this. The spikes represent recessions and the dips represent recoveries and even boom times.
We had several rapid recessions just after leaving the gold standard but since then recessions happened about once every 10 years or so. From 1965 to 1980 it didn’t take much government stimulus/intervention to recover as you can see from the slowly rising debt chart for that time period but as time went on it took exponentially rising debt in order to maintain the one recession per decade frequency. I have to ask whether we ever really got out of a recession if we had to use the national credit card to do it (i.e. jobless recovery). It looks to me like we’ve just been kicking the can down the road for several decades now but that exponentially rising debt will soon put a stop to it. We are at a point where if the artificial stimulus even flattens then it will whack the economy like nobody living has ever seen before.
One of the big lies we are told is that during bad times the government has to borrow and stimulate - Keynesian style - in order to keep things humming but that we shouldn’t worry because when good times come we can pay it back. The government thus represents itself as a giant economic shock absorber. Unfortunately, it is the big lie because the economy is so much bigger than the government is. The truth of my statement is right there in the data. 1995-2000 was the dot bomb boom fueled by Greenspan removing all the safeties and limitations from the fractional reserve banking system. As a result, credit based money was flowing. Boondoggles were flowing. Anyone with a pulse could get a business loan. Credit induced corporate profits were flowing and salaries were skyrocketing leading to a massive short term tax windfall. It was such a massive (albeit unsustainable) influx of tax revenue that it even allowed President Clinton to take a victory lap for having a balanced budget. Think about it. Dot bomb was wild economic times like we may never see again in our lifetimes and the best we could do with all that additional tax revenue was to barely keep debt constant for 3-4 years. So much for paying it down in good times. This is not a shock absorber, it’s a one way ratchet. It’s a bold faced Keynesian lie.
Of course, a fair economic analysis shows that all that really happened was that banks and corporations took on the debt instead of the government and the housing bubble was blown up. When all of that bad debt failed it simply reverted to the government anyway. So truthfully, banks and corporations can be thought of as having held onto the government debt during those years but in reality it was always destined to be government debt because otherwise the associated corporate defaults would have scared creditors away from the USA. In other words, it was a financial shell game of “who owns the debt”. It was always government debt in disguise. Clinton's loud talk back then about never having deficits again was just more substance-free political posturing and grandstanding. Clinton was a class A con man.
The most important aspect of this exponential debt expansion is NOT that the debt is getting very large but rather that it is approaching a breaking point (whatever that may be) a LOT faster than most people understand. It is the time aspect we should be most concerned with. Chris Martenson totally gets it and he has a great website that explains the coming changes. He explains the time aspects of exponential math with a story that goes something like this:
Imagine a big water pipe that feeds a football stadium. The pipe is about to spring a leak that will get exponentially worse over time. Imagine that when the leak starts it will drip one drop of water the first minute, two drops the next, 4 drops the minute after, doubling each minute without limit. This is an example of exponential growth. Now imagine that you are chained into a seat at the very top of the water-tight stadium. The leak begins dripping exactly at .
Here’s the question: How much time do you have to free yourself from the seat and leave the stadium before the water reaches your seat at the very top? Think about it for a moment. Is it hours, days, weeks, months?
The answer: You have until exactly . It takes this exponentially growing water leak less than 50 minutes to fill a whole football stadium with water. That may seem impressive but the really important part of the lesson is that at 12:45 the leak has only filled 7% of the stadium. This leads you to think that you have hours and hours of time left before you are affected so you don’t work as hard on escaping as you should be doing. Unfortunately, the nature of exponential functions means that the stadium fills up only 4 short minutes later.
When you see someone who is supposed to be an economic authority say “I never saw it coming” you can bet that exponents were involved in the math somewhere. The time to think about this stuff is now because when the problems arrive they will do so relatively suddenly, Madoff style.
Bottom line is that our debt cannot go up exponentially forever yet at this point it must go up exponentially in order to maintain the status quo in this country. What cannot happen will not happen. At some point it will become impossible to continue the exponential debt increase and it will result in a huge economic crash because government spending is just too big a part of our economy to live without at our current level of consumption. Government itself is a bubble that is mathematically guaranteed to burst.
