Category Archives: paper money

Gold Will Not Be Available At Any Price

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In one of my previous blogs, I stated that gold does not need the dollar or any other currency, but the dollar needs gold to be the Reserve Currency or Official Currency of the World. Without the connection to gold, a Fiat Currency is a useless piece of paper that is imposed on the people by legal tender law. No other currency can be used in the US except the Dollar. The Bretton-Woods Agreement made the Dollar the official currency of the world with the convertibility of the dollar into gold at 35 dollars an ounce. All trade in the world was conducted in dollars. The US became Master of the World.

In 1950, the US had twenty thousand tons of gold and the rest of the world had very little. The gold reserves of the USSR were secret, but Western Intelligence analysts concluded that they were significant. By 1968, the run on the gold was significant, and in 1971 President Nixon defaulted on the US gold obligation of 35 dollars for an ounce of gold. Very significant events took place after the US defaulted. The War of October 1973 started between the state of Israel and the Arabs, which Israel would have lost without US help. In 1973, OPEC, the Organization of the Oil Exporting Countries, was formed with the help of the US. The US was the godfather of the OPEC, and OPEC promised that the dollar would be its’ official currency. The price of oil was encouraged to rise many, many fold. Third World countries went into massive dollar debt buying needed oil. Inflation ensued, followed by high interest rates imposed by Paul Volcker, the Federal Reserve Chairman.

So far so good. The US economy boomed due to the growth of debt. The Crash of 1987 did not matter. In 1989, Communism disappeared, the USSR collapsed, and Japan, the economic power house, went into irreversible decline, which continues to this day. The 1990’s were characterized by the plunder of the Russian Federation under the leadership of Yeltsin. In 1998 occurred the Russian default. The Stock Market boomed, not because of the NASDAQ dot com bubble, but because of the plunder of the Russian Federation by the West with the help of the Russian-Jewish mafia. Vladimir Putin is appointed Premier of Russia by President Yeltsin and the US stock market took a plunge, because the plunder of Russia was about to end.

The economy was on the skids, so  September 11, 2001, happened, but we do not know for sure who is really responsible, but it was good enough reason to declare the War on Terror to revive the economy. Osama bin Laden and his people were blamed. Osama was in Afghanistan, so Afghanistan was bombed and invaded. The Afghani War continues to this day with no end in sight. After the invasion of Afghanistan, the opium trade boomed as production rose from 96 tons annually under the Taliban to over 6000 tons presently and that is more than a several trillion dollar business, the biggest business in the world denominated in US dollars and controlled by the US. (The US dollar is not only the Petro-Dollar but also the Narco-Dollar.) In 2003, Iraq was invaded and Saddam Hussein hanged, not because of weapons of mass destruction but because Saddam refused to sell Iraq oil for dollars. The war in Iraq still continues; the War on Terror keeps the Western Economy alive.

In 2008, due to subprime mortgages and too much debt, the Stock Market and financial markets everywhere faced serious collapse. Under the leadership of Hank Paulsen, the US Treasury Secretary, the system was propped up. By 2011, gold went up to over 1900 dollars, and silver went up to near fifty dollars. After the economic debacle of 2008, the US and the World has been enduring negative energy flow. There is no real economic growth in the US, but statistically there is a concocted growth. Europe is just as bad, if not much worse, and Japan is dying. China is in a precarious situation as well. Third World countries are in depression or even super depression. Eastern Europe is similar. Russia is suffering, but is self sustaining, with very little debt and is the cleanest shirt in the laundry…

Non Western Central Banks are buying and hoarding gold by the tons. Some Western countries are repatriating their gold. People all over the world are buying physical gold and silver. People who buy physical precious metals do not sell them unless forced by circumstances. OPEC is in disarray, many members are selling their oil for other currencies such as the Euro and the Yuan. The dollar is still important but no longer absolute. The world is de-dollarizing. A point will be reached when there will be a panic for buying of gold and no gold will be available. Gold trading will be closed and gold will not be available at any price. The well being of countries such as the US will be changed for ever. Only time will tell.

 

 

The Precariat Class

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In my previous posts I stated that the economic system of the US is based on three pillars of paper, and all three are based on debt. The three pillars of paper are the dollar, the bond and the stock market. If one falters, all three will collapse, and the economic system which is so blindly venerated will collapse. The capitalist system of the West has become totally parasitic, and it no longer can  grow  at the rate that is needed to sustain itself. The debt or usury rate has to grow. Every year the growth of debt has to be much bigger than the previous year. If debt grows but not as fast as in previous years crisis develops which may lead the system into total collapse. This is happening right now.

The Western economic system since 1980 has had no real growth. Immense debt growth has been used to claim that there was real growth. Reaganomics was the last “hurrah.” The middle class has collapsed because the good jobs have disappeared. Now we have three economic classes in the US: the ownership class {one percent], the overseer class {five percent}, the Precariat class {ninety four percent}. Precariat means uncertain in Latin. Ninety four percent of Americans live in great uncertainty, hence, the Precariat Class.  The country is decaying: infrastructure, education, health, housing. The Precariat class senses that there is something profoundly wrong with the country, and that it will get worse. No recovery but great upheaval is awaiting the country.

Quo Vadis Gold?

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Gold is a symbol of power and truth, and yet it is suppressed. The reason gold is in jail is so that the dollar is  free to be the official currency of the world. It is not only essential that gold stay in jail, but that the dollar be convertible into gold at the lowest price possible. The Modus Operandi to keep gold suppressed is  called “paper shorting” of gold. Capping the price of gold has enabled the Federal Reserve to reduce interest rates to near zero and to indulge in quantitative easing to prop up stock markets, bond markets and the economy without endangering the supremacy  of the dollar.

To keep gold suppressed is very expensive and limiting. Let me explain. Physical gold must be available at whatever price the paper shorts of gold set through their daily trades for those individuals, organizations, or countries who want physical gold. The cheaper the paper gold, the cheaper will be the physical price. So, countries like China, India, Russia, Iran, and others are accumulating gold at an incredibly cheap price. Gold is leaving the West and going to the rest of the world. Gold must be available for the dollar to be convertible. The point will be reached when gold will not be available at any given price and the dollar will lose its convertibility into gold; financial panic will ensue

Before gold availability is finally exhausted, the US policy is to destroy the economies of the rest of the world. Russia was first in the line of fire because of the Ukraine. The US engineered the collapse of the price of oil and the value of the ruble. They tried sanctions and that didn’t work because Russia is only getting stronger. They tried to destroy China by collapsing their stock market and so far the results have been inconclusive. However, they have been quite successful in destroying the economies of the Third World. By increasing the buying power of the dollar, they have increased the debt burden of the Third World, hence collapsing the price of all their commodities. The Third World has less money to buy manufactured goods from China and Europe, so China and Europe in turn slow down, which further collapses commodities. So the whole game becomes a vicious circle to the down side. Most Third World countries are in a depression. But gold availability to support the dollar is reaching the exhaustion point. In order to maintain dollar dominance, interest rates have to be increased.

The Federal Reserve has no choice to do this in order to be able to defend the dollar in the future, irrespective of what interest rate increases will do to stock or bond markets. The high yield bond market is already collapsing because liquidity is drying up. The official story is that the FED wants to normalize interest rates but in reality they want to create “Volcker Momentum*” and increase the interest rates to as high as they can go. Gold will rise because it will no longer be available at these low prices to support the dollar. Gold will go as high as it will go. To support the dollar, the interest rates will rise to as high they will have to go. These will be events that have no parallel in human history. Only time will tell.

 

*= Volcker momentum is my expression. Paul Volcker was a Fed Chairman from 1979 to 1987. He increased the interest rates to near 20%, so he could reduce the inflation rate to below 5% after the US went off the gold standard in 1971 under President Nixon. My thesis is that to support the dollar to be convertible to gold, gold price in dollars must be suppressed. Gold must be kept in jail. However, this is very costly, because Gold is leaving the West and going to the rest, China, India, etc. Soon, there will be no physical Gold at such cheap prices. Presently, Gold and Silver are very cheap, so the US must increase the interest rates to protect the dollar in the future. Hence, “Volcker Momentum”

Dollar vs. Gold II

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In my previous posts I stated that gold does not need any paper currency, but that the dollar needs gold. The dollar has to be convertible into gold, because the gold price world wide is quoted primarily in dollars, and that’s due to the dollar being the official currency of the world. Everything in the world is traded in dollars. Just imagine the power that the US possesses by owning the official currency of the world, so it goes without saying that the US will do anything in its power to retain that authority over the financial system of the world; it will even resort to war.

The key to financial world domination is not the petro-currency status of the dollar but its relationship to gold, Nature’s Money. The Bretton Woods agreement of 1944 made the dollar official currency of the world. The dollar was pegged at 35 dollars an ounce of gold, and the rest of the world’s currencies were pegged to the dollar. The US would keep the gold and print the dollars, while the rest of the world would keep the dollars in US Treasury Notes. The US had free use of their hard earned money, the perfect scam. General Charles de Gaulle immediately saw this for the scam that it was and took action. He exchanged the French dollar surplus for gold, as was allowed by the Breton-Woods Agreement. Run on gold began, in 1971, President Nixon closed the gold window. This is how the dollar became the “Petro” currency. Nixon told OPEC to increase the price of oil as much as they could but make sure it is traded in dollars. Surplus dollars flowed into US Treasuries, more than ever before, and the US got free breakfast, lunch, and dinner. This policy continues to this day…

The Crisis of 2007-8 was very severe. It nearly collapsed our entire economic system. Massive infusion of artificial money {printed dollars} only managed to prop up the system, and did not ultimately save it. The System barely meanders. A series of quantitative easing was introduced, QE I, QE 2, and QE 3. No real improvement. QE 4 is coming down the road. During the crisis, gold rose from around 250 dollars in 2001 to 1920 in 2011. Interest rates went down to almost zero. There was the danger that if the price of gold went any higher,  that dollar would not be convertible to gold. If that had happened, the Capitalist System would have collapsed. Something had to be done.  “Paper shorting” of precious metals was begun. The dollar can only have validity if it is convertible into gold.  Presently, the convertibility of dollars into gold has a severe price. Dollar surplus countries and individuals are buying gold on the cheap.

Gold, presently, is in backwardation. Individuals and countries are paying higher prices for gold delivery now than in the future. Shortages of gold availability are coming. The price of gold may sky rocket over night. By shorting paper gold the monetary policy of the US is extremely tight. It is in essence destroying the economy of the world. Increasing interest rates is sheer lunacy. Gold, silver, platinum, and palladium will demand their rightful value which is precious. They will be not be available in any currency at any moment. The rush for Nature’s Money, gold, will be the beginning of the end of the Capitalist System, as was the rush for gold the beginning of the Capitalist System, and when Christopher Columbus first “discovered” the “New World”. If the World survives, a totally new age will begin. Only time will tell.