cRaCy.com
Whither Gold
From ZeroHedge.com an article by Antal Fekete
Whither Gold
Submitted by Tyler Durden on 02/11/2012 23:03 -0500
Bond Monetization Quantitative Easing
The prophetic words of Antal Fekete in his now infamous ‘essay’ on Gold are as relevant now (perhaps more so) as they were when he first wrote them 15 years ago – especially as the Euro-zone migrates from lossening fiat-money to quasi-money (greek pharma bonds for instance). While summarizing this must-read discussion of mainstream economic orthodoxy’s mis-teachings is impractical, his initial introduction sets the stage for what is to come: “The year 1971 was a milestone in the history of money and credit. Previously, in the world’s most developed countries, money (and hence credit) was tied to a positive value: the value of a well-defined quantity of a good of well-defined quality. In 1971 this tie was cut. Ever since, money has been tied not to positive but to negative values — the value of debt instruments.” After a brief, clarifying history of money, Fekete goes on to discuss the misnomers of currency depreciation, gold as wealth, the failings of kicking the can, quantitative easing, and finally in the misunderstanding of interest rates themselves – seeing them as nothing more than merely bribe-money, trying to persuade reluctant holders of irredeemable promises to hang on a while longer. Paradoxically, gold’s importance is growing while its dispersal from official hoards and the mines continues apace. Dispersed gold represents latent power, far greater in scope than its nominal market value, as sound credit can be built only upon a gold base.
Social Fractals and the Corruption of America
“There are two key social control myths in America: one, that everyone is equal before the law, and two, that similar fundamental opportunities are available to all.”
Great article by Charles Hugh Smith of oftwominds.com.
Social fractals and social control myths help explain the complete corruption of America.
Correspondent Kathy K. recently elucidated a powerful concept: social fractals. We typically think of fractals–structures that are scale-invariant–as features of Nature or finance. For example, a coastline has the same characteristically ragged appearance from 100 feet, 1,000 feet and 10,000 feet in altitude. It is scale-invariant, i.e. its characteristics remain constant whether it is viewed on a small, medium or large scale.
This is how Kathy described social fractals:
“This dishonest, self-serving individual behavior is a fractal of what is happening in our society at large: dishonest and self-serving people are extending and pretending, and their complicity keeps the system going.”
The concept of social fractals can be illustrated with a simple example. If the individuals in a family unit are all healthy, thrifty, honest, caring and responsible, then how could that family be dysfunctional, spendthrift, venal and dishonest? It is not possible to aggregate individuals into a family unit and not have that family manifest the self-same characteristics of the individuals. This is the essence of fractals.
If we aggregate healthy, thrifty, honest, caring and responsible families into a community, how can that community not share these same characteristics?
And if we aggregate these communities into a nation, how can that nation not exhibit these same characteristics?
If this is so, then how do we explain the complete corruption of America’s financial and political Elites? What else can you call a nation that passively accepts financial predation, looting, robosigning, etc. by protected cartels as the Status Quo but thoroughly corrupt?
There are three distinct but highly interactive dynamics in America’s social and financial fractals that have led to the nation’s corruption. We can think of these dynamics as feedback loops: positive feedback is self-reinforcing, negative feedback offers restraint and opposition. From Wikipedia:
Negative feedback is used to describe the act of reversing any discrepancy between desired and actual output. A simple and practical example is a thermostat. Biological examples include regulating body temperature and blood glucose levels.
Positive feedback is feedback in which the system responds so as to increase the magnitude of any particular perturbation, resulting in amplification of the original signal instead of stabilization. Any system where there is a net positive feedback will result in a runaway situation.
These dynamics also share certain characteristics of the dialectic method in philosophy, a system of reasoning through arguments and counter-arguments (thesis and antithesis) to reach a synthesis or new understanding. The Socratic method is to show that a given hypothesis leads to a contradiction that forces the withdrawal of the hypothesis as a candidate for truth.
The social fractal element is individual behavior: the actions we choose based on our internal values, emotions, worldview and goals, and our belief in social control myths. This is a powerful concept brought to my attention by correspondent Diemos, who cited these examples:
The untouchables in India are told that they deserve to be treated as outcasts because of their karma from bad deeds done in a previous life. Of course, in reality, they are no more or less deserving than any other human being of a good life but as long as they believe that they deserve their station in life they are less likely to agitate for changes that will impact the wealth of the ruling class.
In the US we’re told that an all-powerful, all-seeing, perfectly impartial free market gives everyone the wealth they deserve due to their own efforts. So if you’re poor it’s because you deserve to be poor and if I’m rich it’s because I deserve to be rich. So you’re more likely to accept your place in the Status Quo than if you believed that the division of wealth was more a function of an individual’s political power and ability to participate in various crony-capitalist schemes.
In all cases a social control myth is an idea designed to affect the behavior of the people who believe it to the benefit of the people who are promulgating that idea.
I had a devil of a time understanding economics until I understood that 95% of what gets said in the name of economics is a social control myth rather than science. Economics is actually pretty straightforward to understand once you strip out all the propaganda, self-serving rationalizations, wish-fulfillment and outright misinformation that passes for analysis these days.
There are two key social control myths in America: one, that everyone is equal before the law, and two, that similar fundamental opportunities are available to all.
…. complete article.
LO (not so) Loud
“The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title.”
- Anonymous
At the end of the day…
Copied in below is the latest update to the “Possible Solutions” page:
Here’s the bottom line – at the end of the day there is only one system that is going to work and that’s one where all ‘taxes’ are voluntary and targeted. The citizens of a ‘country’, ‘community’, call what you will, donate money to the causes that they wish to support, be it national defense, infrastructure, whatever. We underestimate the power and willingness of individuals to get things done for the greater good. As long as we have a system where wealth is extorted from the population by the threat of force we will have unending problems of compliance, enforcement and reliance. Furthermore we have entered a new age that will be dominated by the free flow of information. Transparency is mighty force in it’s own right. When we combine transparency with the threat of ostracism I believe we will be amazed at just how willing people and organizations will be to step forward to contribute to, and sacrifice for, a common cause.
How do we get from here to there? I have no idea. I guess we’re going to have to spend 40 years in a desert. I don’t think we can plot a course. It’s going to happen regardless, and it’s going to happen in it’s own way. The best we can hope to do is be as prepared as possible for the inevitable (to put it mildly) turbulence ahead.
Just watch the first 5 minutes…
… or more if you want. This vid says it all.
We have terminal cancer, but…
Note to self:
Write up a comparison between the state of a body infected with terminal cancer and the current political and economic state of our society.
I.E. (malignant infections/regulations throughout the body that ever increasingly impair the ability of those components to function in an efficient manner ultimately leading to complete collapse)
NOTE: “terminal” as in “there is no way to remove the infections since they are so completely embedded within the fabric/flesh that said removal would destroy the host”.
Bottom line: Sorry, but not even Ron Paul can save us now. We are headed for a complete reset.
However there is good news… Re-birth can be a beautiful thing!
Even when Ron Paul wins he comes in 2nd!
Fox news… “Fair and Balanced”. What a joke! See the Fox News caption below: “Paul surges into second in Iowa”. The actual result? Ron Paul got 23%. The Grinch came 2nd with 22%.
30 Major U.S. Corporations Paid More to Lobby Congress Than Income Taxes (2008-2010)
By ASHLEY PORTERO (ibtimes.com)
By employing a plethora of tax-dodging techniques, 30 multi-million dollar American corporations expended more money lobbying Congress than they paid in federal income taxes between 2008 and 2010, ultimately spending approximately $400,000 every day — including weekends – during that three-year period to lobby lawmakers and influence political elections, according to a new report from the non-partisan Public Campaign.
The Public Campaign, a non-partisan research and advocacy organization, reports 30 major U.S. corporations spent more money lobbying Congress than they did on federal income taxes between 2008 and 2010.
Despite a growing federal deficit and the widespread economic stability that has swept the U.S since 2008, the companies in question managed to accumulate profits of $164 billion between 2008 and 2010, while receiving combined tax rebates totaling almost $11 billion. Moreover, Public Campaign reports these companies spent about $476 million during the same period to lobby the U.S. Congress, as well as another $22 million on federal campaigns, while in some instances laying off employees and increasing executive compensation.
29 Major Corporations Paid No Federal Taxes, 2008-2010
Of the 30 companies analyzed in the report, which include corporate giants such as General Electric, Verizon Communications, Wells Fargo (WFC), Mattel (MAT) and Boeing (BA), 29 of them managed to pay no federal taxes from 2008 to 2010. Only FedEx, which raked in about $4.2 billion in profits during that period, paid a three-year tax rate of 1 percent — totaling $37 million — far less than the statutory federal corporate tax rate of 35 percent.
7 days before they shot him in the head…
Oh, and don’t forget the other guy that got it for getting it…
“Whoever controls the volume of money in our country is absolute master of all industry and commerce…and when you realize that the entire system is very easily controlled, one way or another, by few powerful men at the top, you will not have to be told how periods of inflation and depression originate.” – President James Garfield, 2 weeks before his assassination.
Bitcoin Bitchez!
The fiat currency system is going zimbabwe on us one way or another. Currently those that can see it coming are preaching the precious metals mantra from every rooftop. And they are 100% correct. Gold, guns, grub, gas… get ‘em while you can. We don’t know just how bad things are going get – will the banks survive? Will credit cards still work? We don’t know how bad it’s going to get, but my guess is that because no government is willing to do the right thing (because that would necessarily mean losing power) that they are going to drive the system right off the cliff.
When the Zimbabwe dollar was in it’s death throes, amazingly you could still use a credit card for some purchases – the only problem was that even to buy a few groceries involved numbers so big (with so many digits) that the card had to run through the machine multiple times. Inevitably there comes a point when the currency simply does not function as money any longer. Fortunately for Zimbabwe there was an alternative – the US dollar.
The question is this: What will happen when the last remaining viable currency of the world, the US dollar, collapses? Sure at some point something will replace it, but that won’t happen overnight. How will anyone be able to buy something on the internet when the PayPal, Mastercard, Visa, mother fuckers of the world meet their much justified death?
Bitcoin. Why? It’s not controlled by any central authority, there are no transaction charges (yeh, fuck you banker shits), virtually impossible to counterfeit, works anywhere in the world, cannot be printed by any government authority, and costs nothing to store and transport.
Sure, load up on PM’s, but I think BTC might be the currency of the future. By the way, although they are strictly digital in nature one can still get BTC coins, and what’s more Casascius (look ‘em up) just came out with a 1oz 10btc silver round.
Yeh, silver bitchez!!
The Real Bubble
Talk about not seeing the forest for the trees. We have experienced a bunch of bubbles, but what is always overlooked is the big picture bubble. We have been operating in GROWTH bubble for some 40+ years now. It’s quite simple – we create money by creating DEBT which is repayable with the original CAPITAL plus INTEREST. But how are we supposed to repay this ever increasing money supply when we always have to come up with more than the original amount loaned?
It’s simple when you look at an individual – you have to use the money to create additional value. Put another way, you have to grow the money. When one considers the national or even global perspective of this, it means overall GDP HAS TO GROW. Well it doesn’t take a genius to realize that nothing grows forever. At some point the growth stalls and down she comes. This is a big bubble. The endless creation of new debt has driven it to it’s limit. We just broached 7 billion people on the planet. You can only inflate a system so far before it pops, and we are in the beginning stages of the greatest pop in memory. If we had let the financial system implode in 2008, there would be tremendous worldwide pain, but perhaps we could have come through in one piece. But no, we propped it up and now have all but ensured that the collapse, when it comes, will be indeed be apocalyptic.
Whatever way it unfolds, one thing is clear – until we eliminate the debt based fiat currency monetary system, we will never be able to start rebuilding a truly sustainable economic system.
Do you realize just how messed up this is?
I know the bailout for the big banks is old news, but it continues to rankle and I feel compelled to try and point just how crazy the whole setup is.
Here’s the thing. It’s not just about the bailouts. It’s about the whole system of money creation. When the Fed decides to inject liquidity into the economy, the money can come from a number of sources… primarily taxes, borrowed, or the printing press. All three directly or indirectly amount to the same place – the pockets of those that actually pay taxes.
Ok, so after picking our pockets, what happens to the money? They give it to the banks. What do the banks do with it? They LOAN it to the public. However when I say ‘public’ we’re actually talking about mainly large corporations. That’s in a perfect world. A lot of the time they simply loan it back to the Fed and collect a a nice ‘little’ return on the interest, or they buy treasuries – same deal. Either way, WE are forced to give them money which, if things work the way they are supposed to, they then LOAN back to us and charge us interest for the privilege.
Basically the government takes our money at gunpoint and then uses it to enrich the banks and create more debt for which we, the original source of the money, are ultimately responsible. I don’t know how to make the absurdity of this any clearer. If they really feel compelled to go out and print or borrow money at OUR expense supposedly for OUR benefit then they would do better if they stood on the street corner and handed out $100 bills – or if Helicopter Ben literally flew around dumping billions on the populace. At least then the money would be injected directly into the economy without creating more debt. But of course that would side step the bankers.
And speaking of bubbles…
In 1999 the world population hit 6 billion people. This month we hit 7 billion. They say mankind has only been around for a blink of the eye when when one stands back to view the history of the world, yet that’s still thousands of years. But even more stunning is that this species that has now colonized almost every corner of the planet, and raped and pillaged the natural world, has grown by over 16% in just the last 12 years.
If that’s not a bubble ready to pop then I don’t know what is. But hey, worrying about overpopulation is so old fashioned, so 60′s, so boring. Who cares? Well, the truth is it’s at the root of every problem we face today so it’s a good news bad news conundrum. You might think that’s flippant, but think about it. Take the perspective of just about any living creature on earth and ask how they would feel about a sudden collapse of our species worldwide. Imagine being bonobo ape clinging desperately to life in the deepest most remote jungle in Africa, hunted for your meat, your society decimated and under attack from every direction, your species on the verge of extinction… how would you feel?
Spouting About Bubble Spotting
Pfft… people are saying gold is in a bubble. Well let’s see – which would you rather own, US treasuries or gold? Jim Grant said “Treasuries = Return Free Risk”. (I suggest you read that twice!) I guess you could say the same thing about gold but here’s the crucial difference: even if they are both in a bubble then after they crash, if you held treasuries you would be left holding a worthless piece of paper, but with physical gold you would left holding… er… GOLD!
The truth nobody talks about
All these windbag politicians (and the MSM) go on and on about how they know how to fix the economy. Meanwhile back at the ranch, apart from Ron Paul, not one of them has the guts to tell the truth… we either take our medicine NOW and drive the economy into a ditch, or we delay the inevitable kick the can off a cliff.
“There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises
Maybe it’s better this way (the highway off the cliff). At least we know that when we do finally emerge the entire corrupt bloated fluff stuffed system will be toast. Everything and anything guaranteed by a piece of paper will be worthless. We will have no choice but to learn how to survive all over again. The bad news is many won’t. The good news is that when any system is reset, typically, we keep the good stuff and shed the crap.
Whaaaat…TF (am I missing?)
Ok let’s see…
What is the primary long term problem we face today in the global economy?
TOO MUCH DEBT.
What is the Fed (and other central banks) doing about this?
LOWERING INTEREST RATES.
What effect does this have?
IT ENCOURAGES BORROWING AND PENALIZES SAVING.
WTF!!!! Of course it’s no surprise – we know why they are doing this, but where’s the outrage? That’s what gets me. We have 24 hour news channels yet the average person does not realize the extent to which they are being fleeced by the powers that be.
Felonious!
Account terminated??? Felonious uses a couple of ‘bad’ words and blam. So much for Google’s “Do no evil” bullshit.
A plunge in Devil’s Pool!
The following is quoted from a recent article by Dr. Steve Sjuggerud.
“Daddy, can you throw me, like you do in the pool?” my non-daredevil, eight-year-old daughter asked. “Sure,” I said. And I did. But the pimply-faced Lake Lure lifeguard went nuts…
Apparently, this is against the rules at the public beach here in Lake Lure, North Carolina. We were in chest-deep water, with a sand bottom that goes out for fifty yards. Nothing bad could happen.
A minute or two passed. “Daddy, can I climb on your back?”
“Sure,” I said. And she did. Uh oh! The pimply lifeguard went nuts again.
Apparently, little daughters on dads’ backs are against the Lake Lure rules, too. I was surprised. There was no chance something could go wrong.
She decided to get out of the water and go down the waterslide.
Remember… she’s no daredevil. Fortunately for her, this slide had no danger, other than the chance of a little water up your nose at the end. I started to walk into the water, to encourage her as she came off the slide for the first time.
The lifeguards waved me off. “You can’t be out here with us,” they said. Well, OK then. I watched from the other side of the fence. We left soon after.
Lake Lure charged our family a $50 entry fee to use this public beach. My $50 paid for those lifeguards to uphold Lake Lure’s rules, it paid their bosses’ salaries, and it paid whoever else sits around making up the rules.
Now check this out… (or just google “devil’s pool victoria falls”)
Get the picture? I don’t think any explanation is really necessary, although I would suggest that there is a lesson to be learned here regarding the true cost of government. Just look at the smile on those faces, the sparkle in those eyes.
Broad daylight fraud
I’m embarrassed. I’ve been around over 50 years. I’ve lived on 3 different continents. I majored in economics at university. And yet, until recently, I never realized that our (not so) modern day banking system is based upon legalized fraud. I mean I understood how the fractional reserve banking system works, but I never really questioned it. Like most, I just assumed that that is how the banking system works… end of story.
In case you are in the same boat as me, let me briefly explain. The history of banking goes back to the 16th century. At that time people used gold and silver coins as currency, but this got inconvenient – gold is heavy! It’s a pain to carry around. So some goldsmith had a bright idea – he said why not let me store your gold and I will provide you with certificates of ownership which you can then exchange for goods and services.
It worked great. However he soon noticed that at no time did everbody come and ask for their gold. This meant he could actually print more certificates than he had gold and silver to cover. This meant he could create his own money. We all know what the authorities call that practice today. If you or I try it we’ll be locked up in a cage by the powers that be.
So now that the goldsmiths had this great new way to get rich, what did they do with all that money? Well they lent it out, but of course it didn’t belong to the general public, it was their own money – even if it was fraudulently created. So they demanded interest on the loans. Not only did they lend it out to the public, but sovereign governments lined up too. It was a great way to fund wars and stuff like that.
The power and wealth this system gave to the goldsmiths basically allowed them to become what they are today – the big banks. They used their power to ensure that their system of fraud became law and that they were the only ones allowed to practice it. Fractional reserve banking was born, and today the banks rule the world.
All money is a promise? Oh yeah?
Fantastic interview – Max Keiser and Steve Keen. This one’s all signal… listen up!
A couple of signals:
1. The banks gambled and lost which resulted in vats of toxic debt. The government, acting on our behalf, bought the poison from them at 100% book value. Bottom line: We (you and me brother) are now the proud owners and on the hook for the debt while the banks wallow in our money and are back at it again – hanging out in the playground selling drugs to our kids.
2. “All money is a promise”. Steve Keen says the idea that we will pay for a book on Amazon by sending in gold coins is silly. So we will always have some instrument that acts as a ‘promise to pay’ even if we are on some type of gold standard. Well guess what… bitcoins are not a promise – payment is instantaneous, fee-free, and non-reversible. That’s an idea whose idea has come!
The government CREATES discrimination
Peter Schiff makes dozens of good points in this report, but in particular one regarding the way government anti-discrimination regulations actually backfire and have the reverse effect (in the last 3 minutes of the vid).
LOL
From a zerohedge comment on the Obama news conference…
“I’d rather have a bottle in front of me than a frontal lobotomy”
Also good for a laugh…
The cost of being oppressed
Stefan discusses the cost (and who bears the brunt) of regulation. Amazing stuff. Makes me sick to the stomach. We’ve created a monster that will defend itself to the death. It’s time we realized that. The system cannot be fixed from within the system.
