|A Weekly Newsletter for Sunday, April 29th, A.D. 2012
||Between Friday, April 20th, and Friday, April 27th, the bid prices for:
|Gold rose 1.2 % from $1,642.00 to $1,662.80
Silver fell 1.3 % from $31.70 to $31.27
Platinum fell 0.5 % from $1,577 to $1,569
Palladium rose 1.0 % from $674 to $681
DJIA rose 1.4 % from 13,050.80 to 13,228.31
NASDAQ rose 1.9 % from 3,011.72 to 3,069.20
NYSE rose 1.4 % from 8,036.97 to 8,151.91
US Dollar Index fell 0.7 % from 79.27 to 78.75
Crude Oil rose 0.9 % from $103.80 to $104.75
|Remember, over the past 70 years, the purchasing power of the dollar has fallen by about 98%. That’s not just evidence of persistent inflation—it’s evidence of governmental intent. The government wants inflation.
1) Inflation stimulates the economy. Inflation diminishes the dollar’s purchasing power and produces “cheaper dollars”. Lured by the promise of inflation, the public borrows and spends like drunken sailors because they expect to be able to repay their debts with “cheaper dollars”. Result? The economy is stimulated to go faster and grow.
2) Inflation reduces the national debt. Cheaper dollars allow the government to repudiate part of the national debt. If the government borrows $1 trillion and then causes 50% inflation, it can repay the $1 trillion but that $1 trillion will have only two-thirds the purchasing power of the $1 trillion that was originally borrowed. By means of inflation, government can reduce the real debt and rob its creditors.
You own bullion gold and silver as insurance against inflation risk and as a medium of exchange.
You own numismatic gold and silver as insurance against inflation risk and an investment for rarity and gold content free of confiscation under current law.
Evidence is mounting that you’d better actually have your gold. That is, take actual possession . . . and take responsibility for keeping your gold in a place where you can see it, touch it, weigh it and access it whenever you like. In truly difficult times, the only gold you can count on is the gold you hold in your hand . . . or at least within your reach
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Going Too Far
Edited by Alfred Adask
Last December, the US gov-co enacted the National Defense Authorization Act (NDAA). This act ignited much controversy by allowing the indefinite detention of American citizens without judicial process.
Less appreciated was the NDAA’s proviso for imposing economic sanctions on Iran and its trading partners. These sanctions include the power to prevent Iran’s trading partners from accessing US financial institutions.
The gov-co presumed that the world would be so terrified by the thought of being unable to trade with the US, that the world would abandon Iran. However, some nations need Iranian oil more than US dollars and are therefore beginning to buy crude oil from Iran without fiat dollars and even pay with gold.
Some believe that when the NDAA becomes effective (June 28th), China (the world’s second largest economy) will begin paying for Iranian crude oil with gold.
The economic implications are enormous. The political implications are greater. I suspect that the NDAA is evidence that the almighty forces of American empire have finally gone too far.
When it comes to investing, laughing, gambling, or playing football, we all have a pretty good idea of when to start, but not many of us know when to stop. We almost always stay too long or go too far. Sometimes, we won’t quit until we’re beat down and bloody.
Why do we go too far?
Usually, it’s because we passionately believe in our dreams and personal “vision”. We believe that “quitters never win” and “victory isn’t the main thing, it’s the only thing.” We believe that we’re heroes and it’s our manifest destiny to win. Blinded by such beliefs, we ultimately lose.
For example, when we’re shooting dice and we’ve made six consecutive passes (and doubled our money every time), we’re certain that God, fate, or Lady Luck wants us to win even more. So we bet again, expecting to double our wealth again. Except on the seventh pass (or the tenth, or even the third) reality intrudes, we miss our point, our “dream” dies—and we lose it all.
Not knowing when to quit destroys both gamblers and empires.
For example, if Hitler had brains enough to quit when he was ahead, he wouldn’t have ruled the world, but he might’ve ruled Europe and lived to a ripe old age.
Instead, like most “world conquerors,” Hitler was blinded by his own “vision” of the future. Result? The 1,000-Year-Reich lasted twelve years; Hitler committed suicide; and the German people who shared Hitler’s “vision” plunged into chaos and national division.
Every leader or nation that succumbs to the siren song of “world domination” is destroyed by their own hubris. They never know when to say “enough”. They always go too far—and then they perish.
The Soviet Union sought to “rule the world”. The Russians believed their own propaganda. They meddled around the globe and, like damn fools, ultimately invaded Afghanistan.
Afghanistan had been invaded by Alexander the Great, Genghis Khan, Timu, the Mughal Empire, and a Russian Tsar. Invaders might hold Afghanistan for a generation, but no one has permanently conquered Afghanistan in several thousand years. Nevertheless, the almighty Soviets tried.
The Soviet’s invasion of Afghanistan contributed to their national destruction. Driven by their vision of “world communism,” the Soviet Union went too far, spent too much, then collapsed, disintegrated and disappeared. They didn’t know when to quit.
Without the USSR, the US became the world’s only super-power. Determined to turn that advantage into another “American century,” American neo-cons fomented wars with Iraq and Afghanistan. The gov-co determined to give Afghans and Iraqis a big dose of “shock and awe”. Gov-co presumed that Iraq, Afghanistan and the rest of the world would be so impressed and intimidated by US military might that they’d all agree to kiss our fine, American butts.
Well, guess what? Our vaunted “shock and awe” was insufficiently shocking and awesome. Instead of quickly crushing our enemies (“Mission Accomplished!”), we became trapped in a decade-long conflict. But we weren’t trapped by the Afghans or Iraqis. We were trapped by our leaders’ “dream” of the US gov-co as an unbeatable 21st century version of imperial Rome. We were trapped by our gov-co’s refusal to admit reality.
Result? We’re enjoying another “peace with honor” moment (similar to our exit from Viet Nam) complete with huge debts, national humiliation and rising international contempt. Like the craps shooter who bet it all on making his seventh pass, we’ve come close to losing it all. Gov-co didn’t know when to quit, so it went too far. Almost.
Unfortunately, that message hasn’t yet reached the neo-Nazis in Washington DC. These Nietzschean “supermen” are still determined to impose their will and vision upon the world. Like all empires, the US empire can’t give up the dream and therefore can’t know when to quit. Like all empires, the US is heading for the inevitable SHTF moment when the whole country—even the gov-co—finally admits we’ve gone too far.
The imperial presidency of G.W. Bush invaded Iraq in A.D. 2003 under the pretext of destroying Iraq’s (non-existent) Weapons of Mass Destruction. The real reason was to stop Saddam Hussein from selling Iraqi crude for currencies other than fiat dollars.
Think about that.
We invaded a foreign country and caused the deaths of several hundred thousand Iraqi’s because Iraq dared to sell its own crude oil for currencies other than dollars.
Our invasion of Iraq was unjustified and clearly a manifestation of an imperialistic “vision”. It was an attempt to preserve the fiat dollar as the world’s reserve currency and to advance global government and the New World Order (N.W.O.).
The Iraqi invasion failed to accomplish those objectives.
And our invasion of Afghanistan? Like the other super-powers who’ve invaded Afghanistan, our invasion also failed.
Can you think of an example of the national hubris that inevitably afflicts all would-be “world rulers” that’s more exquisite than a decision to invade Afghanistan?
Apparently, there’s something about Afghanistan that draws fools like flies. In fact, it appears that before a super-power self-destructs, they first invade Afghanistan.
The failed Iraqi and Afghan invasions dissipated much of our military resources. Gov-co learned from its mistakes and won’t be dumb enough to invade another Middle East country with foot soldiers. We might bomb ‘em, but we won’t put boots on the ground. At least not too soon.
But not to worry. Don’t forget—the “masters of the universe” who run our gov-co are so much smarter than everyone else that they need not rely on the brute force of infantry troops to impose their will. They can also conquer the world with the sophisticated application of economics.
For example, back A.D. 1973 (two years after the dollar became a pure fiat currency), the world’s bankers established the “Society for Worldwide Interbank Financial Telecommunication” ("SWIFT") as a worldwide means to implement international trade. In combination, fiat dollars (A.D. 1971) and SWIFT (A.D. 1973) provided the spine for “global free trade”.
The US gov-co exercises a disproportionate influence on SWIFT. Therefore, although gov-co lacks the military resources to invade Iran and bend her to gov-co’s will, she can still be brought to her knees by restricting her access to SWIFT.
See, the gov-co knows that the world is dependent on fiat dollars and SWIFT. Therefore, without access to SWIFT, Iran can’t sell its crude oil on the international market. The resulting economic strain will break Iran.
More, under the NDAA, any nation that dares to trade with Iran in currencies other than dollars, will (in part, by means of SWIFT) lose its access to US financial institutions and US markets. No nation would dare risk losing their ability trade with the world’s #1 economy.
Therefore, knowing Iran and the world was dependent on SWIFT, the gov-co could use SWIFT as a weapon.
Well, nice theory. Nice vision and dream. Except there’s a couple of problems.
First, if fiat dollars were still the only “world reserve currency,” it would be hard for any nation to enter into international trade without dollars. But the dollar’s status as “world reserve currency” has been compromised. Alternative (and superior) currencies are now available. Nations like China (2nd largest economy), Japan (3rd largest economy), Brazil (6th), Russia (9th), and India (11th), are entering into bilateral trade agreements to swap goods without the intervention of fiat dollars. Insofar as the world doesn’t need fiat dollars, the world doesn’t need SWIFT. Trade might be easier by means of SWIFT, but trade without SWIFT is possible.
Second, the world was much surprised to see that SWIFT (advertised as a means to ease “global free trade” and increase each nation’s profits) could be used against individual nations as a weapon. As a result, alternative, non-weaponized trade mechanisms are being improvised—especially by the BRICS (Brazil, Russia, India, China and South Africa)—to supplant or replace SWIFT.
Insofar as the world does not depend on SWIFT, SWIFT can’t be a weapon.
Third, from the perspective of the N.W.O., the loss of fiat dollars as the world reserve currency is a serious setback—but it would be catastrophic if the world abandoned all fiat currencies.
The New World Order is built on Baron Rothschild’s dream: “Give me control of a nation's money and I care not who makes the laws.” There’s no way to control the issue of real money (gold and silver) among independent nations. Global government is impossible if world finance depends on gold.
However, with fiat currencies, it’s relatively easy to use central banks to issue fiat currency and thereby overpower “those who make the laws”. With fiat currency, you can rule the world.
Global government depends on fiat currency.
Ideally, the N.W.O. would be based on a single, fiat currency. The fiat dollar was envisioned to eventually fill that role. Saddam Hussein impaired that “vision” by selling Iraqi crude oil for euros.
But the loss of fiat dollars could be overcome by the establishment of a new-and-improved fiat currency issued by the IMF or World Bank. The loss of fiat dollars could even be overcome by the imposition of several “regional” fiat currencies (one for Europe, another for Asia, a third for North America, a fourth for South America, etc.). The visionaries of the N.W.O. would triumph—provided that the world remains dependent on fiat currency.
In AD. 2011, the US and EU imposed economic sanctions on Iran. Iran ignored them. The “masters of the universe“ might’ve just dropped the issue, but noooooo. The “masters” doubled-down and in December the US enacted the NDAA which authorized further economic sanctions on Iran and its trading partners.
In January of this year, Iran responded by announcing that it would sell its crude oil to India for gold. Not fiat dollars. Not fiat rupees; not fiat euros. Gold.
Damn . . . now, that was serious.
If the world starts trading in gold or silver or anything other than fiat currencies, the New World Order dies. If the N.W.O. was smart, it might’ve cancelled all economic sanctions against Iran, welcomed Iran back into the family of fiat-currency nations, and thereby averted the mortal threat posed by the sale of crude for gold.
But, like all “world conquerors,” the N.W.O. (US., EU and central banks) has a “vision” which it won’t surrender until it’s handed its head. Therefore, last March, the N.W.O. did not (could not) know when to quit and instead “doubled down” by restricting Iran’s and its trading partners’ access to SWIFT.
Result? China—the world’s second largest economy—may be forced to start trading gold for Iranian crude oil after June 28th.
If so, the gov-co’s hubris may not only have accelerated the demise of the fiat dollar—it may have crippled all fiat currencies. The gov-co may have forced the world’s return to gold. If so, the gov-co/N.W.O. may have finally gone too far and precipitated its own self-destruction.
If China starts paying gold for crude, the price of gold must rise, and the purchasing power of dollars must fall.
If China pays gold for oil, China will need more gold. That doesn’t merely mean the price of gold will rise on COMEX, it means that China will also request to be paid in gold for its products. China may offer a “discount” to those who pay with gold as compared to the price paid by those who continue to trade in fiat currencies—including the dollar.
A domino effect may ensue. The nations which trade with China will recognize that they can get better deals by paying in gold than in fiat dollars. The world’s demand for gold will rise. Every nation will seek payments in gold for its products so as to have gold to pay for Iranian, Indian or Chinese products.
As more nations trade in gold, the international demand for fiat dollars will fall. Under the principles of Supply & Demand, the “price” or perceived value of fiat dollars will fall.
No one knows. But consider this:
As measured on the US Dollar Index, the dollar’s purchasing power fell from 125 in A.D. 2000 (when Iraq started selling its crude for euros) to less than 80 today. That’s a 36% fall in 12 years as measured against six other fiat currencies that are also falling in value. The truth is that the fiat dollar has probably lost at least 50% of its purchasing power in the past 12 years.
If Saddam Hussein’s sale of Iraqi crude for mere fiat euro’s in A.D. 2000 precipitated the fiat dollar’s value to fall by 50% over the next twelve years, we can expect that the sale of Iranian crude for gold to have an even greater effect.
The big question is not “How much will the dollar decline?” but “How fast?”
The loss of 50% of the dollar’s purchasing power over the past twelve years has been discomforting, but endurable. The loss of another 50% over a period of, say, two or three years would be much harder to endure. Food and gas prices would double. People living on pensions and welfare would see their standard of living cut by half. The resulting economic and political chaos could be dangerous.
Why might all this happen? Because the gov-co has gone too far.
Finally, as the international demand for gold increases, that demand won’t be for “paper” gold. The demand will be for physical gold. The “paper” gold dealers who’ve shorted the market to suppress the price of gold will suffer huge losses. The ability of financial institutions to manipulate the price of gold will end. We might soon see a true free-market price for gold that could be twice, three times, maybe more, greater than today’s price.
With the invasions of Afghanistan and Iraq—and with the current attempts to control Iran’s oil sales—the gov-co appears to have forced the world to return to gold as the world reserve money. If so, the gov-co has finally gone too far and may be on the brink of disintegration and disaster.
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