The European Banking Saga has to do with two things that are very interconnected. Those two things are - 1) The sovereignty of the States and 2) the gold reserves of the States. These two are connected because the gold is the money supply, and without it, the States would be broke and at the will of any bank that has gold.
This is not necessarily true. Money is not needed to achieve given rights and abilities. There is likely a parallel universe where no one cares about gold and silver and everyone works for the benefit of society. But here, now, money is important to the people of earth. We spend 40, maybe 50 hours a week at jobs doing things to create enough wealth to meet our goals. It may seem silly from afar, but this is what we do.
The wealth that people have is often stored in a cashe. Most people have chosen to keep their hoard in the form of stock cerificates, bonds, and cash. People also enjoy having deeds on structured land. Not many people own gold anymore, but there is one entity that does - the Central Banks.
It is the greatest misnomer in finance and economics right now: that we are no longer on a gold standard. The Central Banks of the world use gold as collateral for their loans; the use it to balance their liabilities by spinning it from a reserve to an asset. Gold very much backs the financial system, thus why it increases in price while fiat is printed.
The gold is held as a certificate at the Central Banks, essentially on loan from their Treasuries, who have the gold held at Forts like the Citedel and Knox. The custodians have not been audited for decades, by the way. The certificates may one day leave the hands of the Central Banks, but for now, the Banks act as the owner of the reserves.
Europe's case is similar, as to join the Euro reserves were pledged as collateral. As the banking crisis worsens, it is my thought that the European Central Bank is asking for more and more gold in exchange for all of these bailouts. This way they have something to balance their books.
One must ask, 'Is this crisis purposeful?' Was this crisis started with intent? This could be the case. It may be that The Central Banks, hoping to create a New World Order, have suckered in the States of the world to give up their gold. If the States give up their gold they have given up their money supply. If they have done this, the States have ultimately given up their power to govern themselves as sovereigns, because they will become reliant on the Central Banks for all things 'money'.
Friday, June 29, 2012
Wednesday, June 27, 2012
Helicopter Ben
Stories are allegories. The purpose is to paint a picture; to give a
narrative; to show someone what happened or what will happen through a
lens that can be understood by each person. This is an artful way of
making a point. In Ben Bernanke's case, when it comes to the policy he
sets, he does just that.
Around a decade ago, Bernanke gave his now infamous "Helicopter Speech" where he alluded to throwing money from helicopters. What everyone has recognized is that he is throu¥wing money. What many have missed is the fact that he said he would do it from helicopters. Why not a plane? Why did he choose a helicopter?
The monied elite have certain codes they use. They think it gives them power. They think it gives them power to tell the world their plans because if the people of the world allow it then the people are not to blame; just as the case of a vampire being asked in, if you hear what their plan is, and you do not challenge it, you have allowed it, and the blame rests on you for being complacent.
The word helicopter was used because Bernanke insinuated that he would keep the economy in a holding pattern while the plans were laid. Like a helicopter, stocks, bonds, and fiat would hover at certain prices, elevated high enough to keep the status quo, but not too low to crash. He would stay in this holding pattern where he would throw his dollars around. This is the code that he gave you, and this is what he is doing.
Bernanke is making his helicopter hover by issuing just enough debt, and although oil and precious metals and some commodities have risen, pensions and other programs have risen too because he has kept stocks up. Bonds are not returning much but because they are going for a premium it is keeping the market liquid. Since fiat is valued against other fiat it is hard to tell that all fiat has been losing value, which is why pricing it in gold is inportant. Yet since most do not price it in gold and price it in Euros or other fiat, the dollar also remains high.
It may seem perplexing that the dollar has kept value through a time of massive debt, but the price (P*) is measured by the supply multiplied by the volacity. The price would fall if both the supply and the volacity were high, but since corporations, such as private and Central Banks have been sitting on cash, the dollars are not moving. This is why the dollars price (P*) has remained elevated, and also how Bernanke is able to remained hovered above the world, spilling more and more cash from above - because the percieved price of the dollar is held constant due to his alchemist powers of creating money and keeping prices high.
Around a decade ago, Bernanke gave his now infamous "Helicopter Speech" where he alluded to throwing money from helicopters. What everyone has recognized is that he is throu¥wing money. What many have missed is the fact that he said he would do it from helicopters. Why not a plane? Why did he choose a helicopter?
The monied elite have certain codes they use. They think it gives them power. They think it gives them power to tell the world their plans because if the people of the world allow it then the people are not to blame; just as the case of a vampire being asked in, if you hear what their plan is, and you do not challenge it, you have allowed it, and the blame rests on you for being complacent.
The word helicopter was used because Bernanke insinuated that he would keep the economy in a holding pattern while the plans were laid. Like a helicopter, stocks, bonds, and fiat would hover at certain prices, elevated high enough to keep the status quo, but not too low to crash. He would stay in this holding pattern where he would throw his dollars around. This is the code that he gave you, and this is what he is doing.
Bernanke is making his helicopter hover by issuing just enough debt, and although oil and precious metals and some commodities have risen, pensions and other programs have risen too because he has kept stocks up. Bonds are not returning much but because they are going for a premium it is keeping the market liquid. Since fiat is valued against other fiat it is hard to tell that all fiat has been losing value, which is why pricing it in gold is inportant. Yet since most do not price it in gold and price it in Euros or other fiat, the dollar also remains high.
It may seem perplexing that the dollar has kept value through a time of massive debt, but the price (P*) is measured by the supply multiplied by the volacity. The price would fall if both the supply and the volacity were high, but since corporations, such as private and Central Banks have been sitting on cash, the dollars are not moving. This is why the dollars price (P*) has remained elevated, and also how Bernanke is able to remained hovered above the world, spilling more and more cash from above - because the percieved price of the dollar is held constant due to his alchemist powers of creating money and keeping prices high.
Tuesday, June 26, 2012
Here Comes July
Is the whole system going to collapse next month into a pile of burning rubble? Probably not. But July has some very scary problems to deal with, and if there is one thing the politicians can't do it is solve problems.
Europe will have the largest debt roll of the year, and this being a year of massive debt, it is likely their largest ever. The US is headed for another debt debacle, what pundits are calling the Fiscal Cliff. On top of these problems the "First World" will dig their hole deeper by flexing on Iran and cutting their oil supply. All Sovereign Nation-States are broke because they were taken over by Central Banks in the name of the science of economics which dictates to spend fiat cash at the behest of growth. The growth was always unsustainable because resources are finite and the price rises when supply drops. The cliff is different from any fiscal cliff, but it is a cliff none the less.
In the face of the turmoil lies precious metal. Banks hold gold to balance their books. Silver, which has similar properties to gold, is an industrial juggernaut. Same with platinum. These minerals define money, and the banking class understand this. They will likely be the only asset to benefit from here on out. This is all why I think there is a big price swing to the upside for PMs in July. Look for gold to move back to 1800 by the end of the month. The move will not stop there, and likely continue from here on out, as there are no solutions other than to let that which lies in bank vaults all over the world revalue to stop what indeed would be a massive impolsion of the financial system.
Europe will have the largest debt roll of the year, and this being a year of massive debt, it is likely their largest ever. The US is headed for another debt debacle, what pundits are calling the Fiscal Cliff. On top of these problems the "First World" will dig their hole deeper by flexing on Iran and cutting their oil supply. All Sovereign Nation-States are broke because they were taken over by Central Banks in the name of the science of economics which dictates to spend fiat cash at the behest of growth. The growth was always unsustainable because resources are finite and the price rises when supply drops. The cliff is different from any fiscal cliff, but it is a cliff none the less.
In the face of the turmoil lies precious metal. Banks hold gold to balance their books. Silver, which has similar properties to gold, is an industrial juggernaut. Same with platinum. These minerals define money, and the banking class understand this. They will likely be the only asset to benefit from here on out. This is all why I think there is a big price swing to the upside for PMs in July. Look for gold to move back to 1800 by the end of the month. The move will not stop there, and likely continue from here on out, as there are no solutions other than to let that which lies in bank vaults all over the world revalue to stop what indeed would be a massive impolsion of the financial system.
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