Today I was thinking about just how leveraged the system is. It is beyond fathomable. It is exquisitely leveraged. It is leveraged beyond reason. Let's compare!
Rome leveraged their system by never telling the commons the real amount of bullion in the Treasurie. Their system collapsed soon after. China tried to use paper as monie and their system collapse very quickly. The US banking system has lasted forty years off of paper, and we should be amazed. We should. That is an accomplishment. But it won't last. Lies don't. Not ever.
I spoke with a Russian the other day who lived through that collapse. He said this system has until 2015/ He couldn't quantify it, but gave comparisons. The way I look at it, this thing could sink any day, but I have thought that for a little over one year.
The people will go on not knowing, and that gives slack to the Fiat Ponzi. But when reality has precedent, which it always does, how can we just pretend? We can't. The real issue is oil production coupled with debt; debt equals gold reserves as gold is the underlying collateral. We will either see a huge deflationary collapse or a huge spike in gold.
If we see a huge collapse in gdp (etc) Ron Paul will become President. I will not pretend to know what the guys in the back room want, because they may want Paul to austerisize America, who knows. But I doubt that. What is likely is that Obama and Bernankje will unleash inflation sooner rather than later and 2012 will see gold rise along it's long term projectory.
Economics would say this is true, as Central Banks everywhere should come clamoring for the shiny stuff. Silver and platinum should follow, as they are real monie as well. Oil is needed for any economy, and its demand should stay high enough for it not to be bid to low, but there is that damn PPT and ESF, so who knows what the short term action will be. Long term, I think we know where the trend lies.