Gold Bonds: Averting Financial Armageddon
It seems self-evident. The government can debase the currency and thereby be able to pay off its astronomical debt in cheaper dollars. But as I will explain below, things don’t work that way. In order to use the debasement of paper currencies to repay the debt more easily, governments will need to issue and use the gold bond. The paper currencies will not survive too much longer. Most governments now owe as much or more than the annual GDPs of their nations (typically far more, under GAAP accounting). But the total liabilities in the system are much larger. The US dollar game is a check-kiting scheme. The Fed issues the dollar, which is its liability. The Fed buys the US Treasury bond, which is the asset to balance the liability. The only problem is that the bonds are payable only in the central bank’s paper scrip! Meanwhile, per Bretton Woods, the rest of the world’s central banks use the dollar as if it were gold. It is their reserve asset, and they pyramid credit in their local currencies on top of it. It is not a bug, but a feature, that debt in this system must grow exponentially. There is no ultimate extinguisher of debt. In reality, stripped of the fancy nomenclature and the abstraction of a monetary system, the picture is as simple as it is bleak. Normally, people produce more than they consume. They save. A frontier farmer in the 19th century, for example, would dedicate some work to clearing a new field, or building a smokehouse, or putting a wall around a pasture so he could add to his herd. But for the past several decades, people have been tricked by distorted price signals (including bond prices, i.e. interest rates) into consuming more than they produce. In any case, it is not possible to save in an irredeemable paper currency. Depositing money in a bank will just result in more buying of government bonds. Capital accumulation has long since turned to capital decumulation... I propose a simple step. The government should sell gold bonds. By this, I do not mean gold “backed” paper bonds. I mean bonds denominated in ounces of gold, which pay their coupon in ounces of gold and pay the principal amount in ounces of gold. Below, I explain how this will solve the three problems I described above.I would like to Thank, James H. for making our first donation this year.
Military Helicopters Conduct Covert Exercises Over U.S. Bank Building
The Silver Bullet and the Silver Shield – Part 4. Silver Is The Indispensable Metal
[Ed. Note: Part 1. Part 2. Part 3.]
Portugal 10 yr bond at 15%/Private PSI deal in Greece a non starter/USA raises debt ceiling to 16.4 trillion
Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 49 minutes ago
Good
evening Ladies and Gentlemen;
Gold closed up today for the second straight day to the tune of $26.50
to finish the comex session at $1726.30. Silver followed her older and
wiser cousin by 61 cents to $33.70. Today is options expiry so this day
had saw some early resistance from the bankers but not much. Gold and
silver are being viewed as a safe haven with all the noise of sovereign
HUI higher but showing signs of selling pressure coming back in
Trader Dan at Trader Dan's Market Views - 2 hours ago
Take a look at the following chart and you will see what I am referring to.
The mining shares gapped up today on the opening trying to catch up a bit
with the overnight surge in gold and in silver but after that, most of them
went nowhere. That is not a bullish sign for continuing their move higher.
They did attract some dip buying later in the session but the shares are
reflecting a lack of confidence that the rally in the metals is going to
continue tomorrow. We will see whether or not they are prescient.
Re-Living The Fall Of Rome
Dave in Denver at The Golden Truth - 4 hours ago
*The Fed stating that it will keep interest rates exceptionally low through
2014 is a symbolic act, like Warren Buffett stating that he would like to
pay more taxes. -* The King Report
The topic for this post came to me from an exchange of emails with a friend
and colleague. After he had digested Obama's pathetic excuse for an
election campaign speech the other night and had figured out all of the
lies embedded in the rhetoric, he made the observation that "our problems
in this country are far worse than even we can imagine." The "we" being
the people who actually bother trying... more »
Fmr Federal Reserve Vice Chairman Alan Blinder discusses the Fed and FOMC on Capital Account
Republicans Demand Block Of US IMF Funding To Bail Out Europe
Which is why we were delighted that after months of modest confusion on the topic, the Congressional Committee on Financial Services (including subcommittee chairman Ron Paul), have demanded that not only Geithner make his stance on a US-funded IMF bailout of Europe crystal clear, but that they are openly opposed to "American taxpayer dollars being used to bail out Europe...through additional contributions to the IMF." We are curious to see just how Geithner will weasel his way out of responding to this: perhaps the only logical stall tactic is to reply that he will be busy helping Mitt Romney in his tax "revisions" over the next several months.
Stephen Roach Explains How The Fed Is Pulling The Wool Over Our Eyes
"Bernanke is betting the ranch
on open-ended QE and zero interest rates and it worries me" is how
Stephen Roach of Morgan Stanley starts this must-see reality-check
interview with Bloomberg TV's Tom Keene. The reason for his concern is
simple, the current Fed modus operandi is a framework for rescuing
economies in crisis but does little to sustain economic recovery. Roach
agrees with Cal's Eichengreen that the European and US central banks
are indeed in a policy trap, committed to a path of action that has to
be perpetually ante'd up to maintain the dream. With Europe in
recession already in his view, Roach does not expect the tough
structural action until we see greater social unrest or overwhelming
unemployment and reminds us of how close we got when Greece threatened
the referendum in the late summer. He goes on to discuss China
(positive on their efforts and 'solid strategy') and it's relative
success as a regime which he contrasts with our "central bankers who pull the wool over our eyes with ZIRP and magical QE".
Taking on the mistakes of Greenspan, letting capitalism go unchecked,
and his incredulity at the 'glide-path' charts we were treated to
yesterday by the Fed's bankers ('accountability'),
Roach sees the painful process of deleveraging from excess debt,
insufficient savings, and over-consumption as likely to take a long time
as we should not assume investment will be the driver as Obama goes
'protectionist' (in the SOTU) on our 3rd largest export partner - yes,
China.Financials Have Worst Day Of Year As Fed Is Faded
We
noted last night that heavy and large average trade size was going
through after the cash market close in S&P futures and it seemed
overnight we needed one more push to flush out some more chasers before
today's less than euphoric macro prints (aside from CFNAI's
market-centric index) stalled the Fed-induced excitement. Financials had their worst day of the year (worst performing sector 2 days in a row),
down just under 1% as did the Tech and Energy sectors as Utilities
were best once again. Volumes were up with ES at its 50-day average and
NYSE volume second highest of the year as ES (the e-mini S&P 500
futures contract) slid 20 points or so from opening highs up near 1330.
Equity and credit markets tracked on another closely all day (as did
broad risk drivers) with a last-30-minutes ramp (once again on high
average trade size) just for good measure taking ES back to Tuesday
after-hours swing highs. The late swing up looked like a
recovery from being modestly oversold relative to risk assets as TSYs,
FX, and commodities all trod water as stocks pulled up 5-6
S&P pts into the close. TSYs all rallied on the day with 2s-10s all
at week low yields and 30Y starting to catch up to the excitement at
the end of the day (though 2s10s30s remains notably 'low' relative to
ES currently). Gold and Silver continued to outperform (up around 3.5%
on the week) and Copper held onto its gains while Oil dropped back below
$100 after getting above $101 early in the day. The correlation of EURUSD and risk has re-emerged recently and post-Europe's close today, USD strengthened though EUR remained just above 1.31 as we closed.Presenting The Interactive "Wiggle-Room Index" Or Which Countries Will Be Forced To Bail Out The Developed World
Update: literally seconds after this article was posted, we receive news that the IMF will seek Saudi contribution to the European bailout fund. There you have it - you enjoy that implicit US protection Saudi emirs? It is about to cost you.While it is best to pray that NASA will find some very rich and not so intelligent life on Mars so it can bail out the world as it sinks deeper and deeper into a untenable debt hole (which somehow can be "filled" only by issuing more debt at least according to tenured economists at ivy league institutions), a strategy of planning for a realistic outcome may not be a bad idea. The question then is who in the world has some/any spare leverage capacity to incur even more debt and use the proceeds to fund a Eurozone-American-Chinese collapse. Enter the Economist's "wiggle-room index." The publication, best known for recently introducing the "shoe thrower index" (remember the Arab Spring and how Fed induced runaway inflation generated a "democratic" revolution across MENA?) has compiled a list of those developing world countries which still have capacity to provide credible global bailout capital (in fiat form of course - after all that is the only thing that the Ponzi understands) or as the Economist says, the "emerging economies that have the most monetary and fiscal firepower." So if you are on this list (ahem China, Indonesia and Saudi Arabia) - our condolences - you are about to be dragged into the epic slow-motion ongoing collapse of the developed world, kicking and screaming, with some 44 caliber persuasion if needed, but you will be there, before it all falls apart. The time to repay all favors to Uncle Sam is coming.
Has Bernanke Become A Gold Bug's Best Friend?
Below
we present the indexed return of ES (or stocks) and of gold over the
past 24 hours since the Bernanke announcement of virtually infinite
ZIRP, and the latent threat of QE3 any time the Russell 2000 has a
downtick. It is unnecessary to point out just when Bernanke made it all
too clear that the Fed has nothing left up its sleeve, expect to
directly compete with the ECB over "whose (balance sheet) is bigger,"
as it is quite obvious. What is not so obvious, is that for all
intents and purposes, Bernanke may have unwillingly, become a gold
bug's best friend, as gold (and implicitly silver) has benefited
substantially more that general risk. Much more. So for the sake of all
gold bugs out there, could the Fed perhaps add a few more FOMC
statements and press conferences? At this rate gold should be at well
over $2000 by the June 20 FOMC meeting. And yet it is not smooth
sailing: the time has come to watch out again for
potential CME margin hikes (or rumors thereof) in gold at any given
moment. After all, any increase in the price of protection against
central planning stupidity is "irrational" and must be promptly punished
by the keepers of the trillions in "stable derivative markets", who
are too busy to police the MF Globals of the world and instead have a
mandate of killing any PM price breakout.
by Mac Slavo, SHTFPlan.com:
While the National Association of Realtors says the real estate trend for 2012 will be one of “continued slow growth” as we saw in 2011, the reality is that there is no growth.
It’s so bad, in fact, that 2011 was the worst year on record for home sales. You read that right. The worst year since records have been kept – a trend we warned of back in 2009 when green shoots were reportedly popping up all over the country.
While the National Association of Realtors says the real estate trend for 2012 will be one of “continued slow growth” as we saw in 2011, the reality is that there is no growth.
It’s so bad, in fact, that 2011 was the worst year on record for home sales. You read that right. The worst year since records have been kept – a trend we warned of back in 2009 when green shoots were reportedly popping up all over the country.
Fewer people bought new homes in December, making 2011 the worst sales year on record.
The Commerce
Department said Thursday new-home sales fell last month to a seasonally
adjusted annual pace of 307,000. The pace is less than half the 700,000
that economists say must be sold in a healthy economy.
Read More @ SHTFPlan.com
from Tekoa Da Silva’s Bull Market Thinking:
A
few days ago I was lucky enough to share a phone call with Jeff Deist,
Chief of Staff for Congressman Ron Paul. We recorded a fantastic
interview, and I was able to ask Jeff his thoughts on how the U.S.
government is expanding legislative powers, why the American public is
finally getting behind Ron Paul’s message, and how largely unaware most
Americans are when it comes to the realities of the political process.
When asked why Ron Paul has become such a hit with Americans recently, Jeff said, “Well I think a lot of things have happened, first of all is that we’ve seen the deterioration of the economy over the last four years, the deterioration of the US dollar, we’ve seen increased amounts of Fed bailouts and Fed monetization of debt. We’ve seen the sovereign debt crisis in Europe…and we’ve also seen further futility in our wars in Afghanistan and Iraq. So I think you put all this together and people are starting to say, ‘Hey, a lot of the things Ron Paul has been saying, really for decades–but especially since 08′–have been proven correct’”.
Read More @ BullMarketThinking.com
A
few days ago I was lucky enough to share a phone call with Jeff Deist,
Chief of Staff for Congressman Ron Paul. We recorded a fantastic
interview, and I was able to ask Jeff his thoughts on how the U.S.
government is expanding legislative powers, why the American public is
finally getting behind Ron Paul’s message, and how largely unaware most
Americans are when it comes to the realities of the political process.When asked why Ron Paul has become such a hit with Americans recently, Jeff said, “Well I think a lot of things have happened, first of all is that we’ve seen the deterioration of the economy over the last four years, the deterioration of the US dollar, we’ve seen increased amounts of Fed bailouts and Fed monetization of debt. We’ve seen the sovereign debt crisis in Europe…and we’ve also seen further futility in our wars in Afghanistan and Iraq. So I think you put all this together and people are starting to say, ‘Hey, a lot of the things Ron Paul has been saying, really for decades–but especially since 08′–have been proven correct’”.
Read More @ BullMarketThinking.com
by Andrew Hoffman, MilesFranklin.com:
Back in August 2011, a whopping five months ago, I was AMAZED when the Fed outwardly expressed its FEAR of global economic COLLAPSE by announcing an extension of its “ZIRP,” or Zero Interest Rate Policy, until “at least mid-2013.” I have long espoused that Bernanke & Co. have never had a clue what they were doing, simply PRINTING MONEY in increasingly large quantities like his successor, Sir Alan Greenspan. Lucky for the “Maestro,” he printed money when there was still a buffer to do so, before DEBT SATURATION set in, commencing the inevitable END GAME of financial collapse and hyperinflation.
August 9, 2011: Fed Extends Super-low Rates Until 2013, May Use More Tools, 3 Members Dissent
Jim Sinclair invented the term “QE TO INFINITY” around five years ago, but Richard Russell had him beat when in 2002 he first penned the words “INFLATE OR DIE.” Both represent the same concept, the mantra that has guided my investment decisions for the past decade. Consequently, I have been 100% invested in Precious Metals for nine years, eight months, and expect this allocation to continue indefinitely, perhaps the rest of my life.
Read More @ MilesFranklin.com
Back in August 2011, a whopping five months ago, I was AMAZED when the Fed outwardly expressed its FEAR of global economic COLLAPSE by announcing an extension of its “ZIRP,” or Zero Interest Rate Policy, until “at least mid-2013.” I have long espoused that Bernanke & Co. have never had a clue what they were doing, simply PRINTING MONEY in increasingly large quantities like his successor, Sir Alan Greenspan. Lucky for the “Maestro,” he printed money when there was still a buffer to do so, before DEBT SATURATION set in, commencing the inevitable END GAME of financial collapse and hyperinflation.
August 9, 2011: Fed Extends Super-low Rates Until 2013, May Use More Tools, 3 Members Dissent
Jim Sinclair invented the term “QE TO INFINITY” around five years ago, but Richard Russell had him beat when in 2002 he first penned the words “INFLATE OR DIE.” Both represent the same concept, the mantra that has guided my investment decisions for the past decade. Consequently, I have been 100% invested in Precious Metals for nine years, eight months, and expect this allocation to continue indefinitely, perhaps the rest of my life.
Read More @ MilesFranklin.com
from TFMetalsReport.com:
I
wasn’t planning on making a new post this afternoon and time is short
but I feel that we must discuss the completely bizarre and somewhat
unprecedented open interest numbers in silver.
Yesterday, at about this time, I gave you this:
“Lastly, just a word about the latest OI numbers which were again rather eye-opening. As you surely recall, gold was down almost $14 yesterday. It appears to be a mass long-liquidation. HAHAHAHAHA! Suckers! The OI in the Feb12 fell by 18,000 contracts but only 9,000 rolled into April. The rest of them simply capitulated. Dweebs. They shoulda been reading more Turd! Clearly today’s rally is primarily due to those same “traders” rushing right back in. I expect a pretty healthy bounce in OI when the numbers are reported tomorrow. Probably something like 7000 new contracts.
Read More @ TFMetalsReport.com
I
wasn’t planning on making a new post this afternoon and time is short
but I feel that we must discuss the completely bizarre and somewhat
unprecedented open interest numbers in silver.Yesterday, at about this time, I gave you this:
“Lastly, just a word about the latest OI numbers which were again rather eye-opening. As you surely recall, gold was down almost $14 yesterday. It appears to be a mass long-liquidation. HAHAHAHAHA! Suckers! The OI in the Feb12 fell by 18,000 contracts but only 9,000 rolled into April. The rest of them simply capitulated. Dweebs. They shoulda been reading more Turd! Clearly today’s rally is primarily due to those same “traders” rushing right back in. I expect a pretty healthy bounce in OI when the numbers are reported tomorrow. Probably something like 7000 new contracts.
Read More @ TFMetalsReport.com
by Chris Powell, GATA:
Dear Friend of GATA and Gold:
Former Federal Reserve Chairman Paul Volcker today defended government intervention in the gold market to counter “exchange rate instability at a critical point.”
Volcker’s comments came in response to inquiry from the German freelance journalist Lars Schall, who noted GATA’s reference to Volcker’s expression of regret, recorded in his memoirs, about the failure of Western central banks to intervene to suppress gold prices during a currency revaluation in 1973. Volcker’s support of gold price suppression was cited by your secretary/treasurer in his address to the Vancouver Resource Investment Conference last Saturday:
Read More @ GATA.org
Dear Friend of GATA and Gold:
Former Federal Reserve Chairman Paul Volcker today defended government intervention in the gold market to counter “exchange rate instability at a critical point.”
Volcker’s comments came in response to inquiry from the German freelance journalist Lars Schall, who noted GATA’s reference to Volcker’s expression of regret, recorded in his memoirs, about the failure of Western central banks to intervene to suppress gold prices during a currency revaluation in 1973. Volcker’s support of gold price suppression was cited by your secretary/treasurer in his address to the Vancouver Resource Investment Conference last Saturday:
Read More @ GATA.org
from King World News:
With
gold, silver and oil on the move after the Fed announcement, today King
World News interviewed Rick Rule, Founder of Global Resource
Investments and one of the most street smart pros in the resource
sector. KWN reached out to Rick, who is currently in New Zealand, to
find out what his thoughts were on the Fed’s latest release and how it
will impact gold and silver going forward. Here is what Rule had to
say: “This development, Eric, is predictable and interesting. What is
useful, I guess, from a speculators point of view is the Fed has
introduced some certainty into the equation. What they have basically
said is they are going to continue this war on savers, which is what it
is, at least through 2015.”
Rick Rule continues: Read More @ KingWorldNews.com
With
gold, silver and oil on the move after the Fed announcement, today King
World News interviewed Rick Rule, Founder of Global Resource
Investments and one of the most street smart pros in the resource
sector. KWN reached out to Rick, who is currently in New Zealand, to
find out what his thoughts were on the Fed’s latest release and how it
will impact gold and silver going forward. Here is what Rule had to
say: “This development, Eric, is predictable and interesting. What is
useful, I guess, from a speculators point of view is the Fed has
introduced some certainty into the equation. What they have basically
said is they are going to continue this war on savers, which is what it
is, at least through 2015.”Rick Rule continues: Read More @ KingWorldNews.com
The
Navy is testing an autonomous plane that will land on an aircraft
carrier. The prospect of heavily armed aircraft screaming through the
skies without direct human control is unnerving to many.
[Ed. Note: Arnold explains Skynet]
by W.J. Hennigan, Los Angeles Times:
The Navy’s new drone being tested near Chesapeake Bay stretches the boundaries of technology: It’s designed to land on the deck of an aircraft carrier, one of aviation’s most difficult maneuvers.
What’s even more remarkable is that it will do that not only without a pilot in the cockpit, but without a pilot at all.
The X-47B marks a paradigm shift in warfare, one that is likely to have far-reaching consequences. With the drone’s ability to be flown autonomously by onboard computers, it could usher in an era when death and destruction can be dealt by machines operating semi-independently.
GRAPHIC: How the X-47B lands
Read More @ LATimes.com
[Ed. Note: Arnold explains Skynet]
by W.J. Hennigan, Los Angeles Times:
The Navy’s new drone being tested near Chesapeake Bay stretches the boundaries of technology: It’s designed to land on the deck of an aircraft carrier, one of aviation’s most difficult maneuvers.
What’s even more remarkable is that it will do that not only without a pilot in the cockpit, but without a pilot at all.
The X-47B marks a paradigm shift in warfare, one that is likely to have far-reaching consequences. With the drone’s ability to be flown autonomously by onboard computers, it could usher in an era when death and destruction can be dealt by machines operating semi-independently.
GRAPHIC: How the X-47B lands
Read More @ LATimes.com
from The Daily Bell:
World experts urge UN to take up mental health … Mental illness and drug abuse can wreak havoc in global societies and economies, and the UN General Assembly should devote a special session to the matter, global health experts said on Tuesday. Every country in the world is affected by the burden of mental, neurological and substance use (MNS) disorders, but often sufferers face discrimination and human rights abuse, said the article in PLoS Medicine. … Lead authors were Vikram Patel from the London School of Hygiene and Tropical Medicine and Judith Bass from Johns Hopkins School of Public Health in the United States. Investment is needed in three key areas, they argued: expanding knowledge about mental health disorders, better access to evidence-based programs of care and treatment, and protection of human rights. A list of key needs to be addressed and steps to take could be enshrined in a “People’s Charter for Mental Health” accounting for input from policy makers, families, researchers and other advocates. – AFP
Dominant Social Theme: The UN is the logical place to address the issue of mental health worldwide. When you need a problem solved, this is the place to turn!
Free-Market Analysis: So now the United Nations is to take up the issue of mental health on the way to creating a “People’s Charter for Mental Health.” But to us, this isn’t a necessary antidote to another case of universal human suffering. It’s merely the latest example of a fear-based, power-elite dominant social theme.
Read More @ TheDailyBell.com
Total Donations in 2011 $155.00 (6 Donors Thank You)
World experts urge UN to take up mental health … Mental illness and drug abuse can wreak havoc in global societies and economies, and the UN General Assembly should devote a special session to the matter, global health experts said on Tuesday. Every country in the world is affected by the burden of mental, neurological and substance use (MNS) disorders, but often sufferers face discrimination and human rights abuse, said the article in PLoS Medicine. … Lead authors were Vikram Patel from the London School of Hygiene and Tropical Medicine and Judith Bass from Johns Hopkins School of Public Health in the United States. Investment is needed in three key areas, they argued: expanding knowledge about mental health disorders, better access to evidence-based programs of care and treatment, and protection of human rights. A list of key needs to be addressed and steps to take could be enshrined in a “People’s Charter for Mental Health” accounting for input from policy makers, families, researchers and other advocates. – AFP
Dominant Social Theme: The UN is the logical place to address the issue of mental health worldwide. When you need a problem solved, this is the place to turn!
Free-Market Analysis: So now the United Nations is to take up the issue of mental health on the way to creating a “People’s Charter for Mental Health.” But to us, this isn’t a necessary antidote to another case of universal human suffering. It’s merely the latest example of a fear-based, power-elite dominant social theme.
Read More @ TheDailyBell.com
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