Leaders of two of the world’s largest criminal organizations the World Bank and the IMF gathered in Washington, D.C. last week for their Spring Meeting. The, on invitation, Financial Mob party was attended by all the usual suspects, central bankers, trade secretaries, finance ministers, policy wonks and assorted other rogues, braggers, and degenerates.
After the meeting the numerous pledges sounded nice enough: The Fed, the BoE, the ECB and the BoJ are together providing a massive “tsunami” of freshly inked currencies to their respective economies, hoping to prop up optimistic asset prices. However this rate of expansion is “unprecedented in world history” says Bill Bonner.
The Central Planners are at it again. Greasing the gears, feeding the engines, and racing towards the next crisis. The US plans to force overseas banks to hold billions of dollars more capital, have drawn a sharp reply from the EU’s top financial regulator, who warns it could “spark a protectionist reaction” and damage the global economy.
Michel Barnier, the EU commissioner responsible for financial services, is demanding that Ben Bernanke, the Fed chairman, to rethink his clampdown requiring banks such as Deutsche Bank and Barclays to park extra capital in their US operations. In a strongly worded letter, he argues that the Fed plans are a “radical departure” from past US policy and stands in “substantial contradiction” to efforts to harmonize global rules.
U.S. Treasury Secretary Jack Lew called for “universal women’s empowerment.” World Bank President Jim Yong Kim called for “universal education.” And the IMF’s Managing Director, Christine Lagarde, had ideas of her own: “What we need is a full-speed global economy,” she told the audience, “growth that is solid, sustainable, balanced, but also include and is very much rooted in green developments.” Why stop there? Why not promise free meals for the elderly, and winning lottery tickets for all unprivileged families, or high-speed Internet connections for the rest of Africa? It’s so easy to make growth pledges, to promise everything for nothing. The hard part however, comes in actually paying for it all. As everyone knows, free meals; free lottery tickets, and free high-speed Internet connections don’t come cheap!
Anyhow this nonsense talk comes from the Financial Mob who on their turn are ruled from behind the scene by the elite that apply their own secret agenda, to play the crisis to their liking, and that’s one Central Bank with a global currency, full stop. Meanwhile the world is heading full-speed in that direction:
“The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity.” Which naturally raises the question, who or what will serve as this global central bank, cloaked with the power to issue the global currency and police monetary policy for all of humanity? When the world’s central bankers earlier on met in Washington, they discussed what body might be in a position to serve in that awesome and fearful role. A former governor of the Bank of England stated:
“[T]he answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS… The IMF tends to express its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.”
And, if the vision of a global currency outside government control does not set off conspiracy theorists, putting the BIS in charge of it, surely will. The BIS has been scandal-ridden ever since it was branded with pro-Nazi leanings in the 1930s. Founded in Basel, Switzerland, in 1930, the BIS have been called “the most exclusive, secretive, and powerful supranational club in the world.”
For better understanding: In 1944, the American government backed a resolution at the Bretton-Woods Conference calling for the liquidation of the BIS, following Czech accusations that it was laundering gold stolen by the Nazis from occupied Europe; but the central bankers succeeded in quietly snuffing out the American resolution.
“[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”
The key to their success was that the international bankers would control and manipulate the money system of a nation while letting it appear to be controlled by the government. The statement echoed one made in the eighteenth century by the patriarch of what would become the most powerful banking dynasty in the world. Mayer Amschel Bauer Rothschild famously said in 1791: “Allow me to issue and control a nation’s currency, and I care not who makes its laws.”
Mayer’s five sons were sent to the major capitals of Europe – London, Paris, Vienna, Berlin and Naples – with the mission of establishing a banking system that would be outside government control.
The economic and political systems of nations would be controlled not by citizens but by bankers, for the benefit of bankers. - And so is it still today. - Eventually, a privately owned “central bank” was established in nearly every country; and this central banking system has now gained control over the economies of the world. Central banks have the authority to print money in their respective countries, and it is from these banks that governments must borrow money to pay their debts and fund their operations. The result is a global economy in which not only industry but government itself runs on “credit” (or debt) created by a banking monopoly headed by a network of private central banks; and at the top of this network is the BIS, the “central bank of central banks” in Basel.
“The prime value, which also seems to demarcate the inner club from the rest of the BIS members, is the firm belief that central banks should act independently of their home governments… A second and closely related belief of the inner club is that politicians should not be trusted to decide the fate of the international monetary system.”
“The BIS is where all of the world’s central banks meet to analyze the global economy and determine what course of action they will take next to put more money in their pockets, since they control the amount of money in circulation and how much interest they are going to charge governments and banks for borrowing from them…
“When you understand that the BIS pulls the strings of the world’s monetary system, you then understand that they have the ability to create a financial boom or bust in a country. If that country is not doing what the money lenders want, then all they have to do is sell its currency.”
“[N]ational banking systems are suddenly thrown into the rigid arms of the Basel Capital Accord sponsored by the Bank of International Settlement (BIS), or to face the penalty of usurious risk premium in securing international interbank loans… National policies suddenly are subjected to profit incentives of private financial institutions, all members of a hierarchical system controlled and directed from the money center banks in New York. The result is to force national banking systems to privatize…
“BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies… The IMF and the international banks regulated by the BIS act as a team: the international banks lend recklessly to borrowers in emerging economies to create a foreign currency debt crisis, the IMF arrives as a carrier of monetary virus in the name of sound monetary policy, then the international banks come as vulture investors in the name of financial rescue to acquire national banks deemed capital inadequate and insolvent by the BIS.”
“Reversing the logic that a sound banking system should lead to full employment and developmental growth, BIS regulations demand high unemployment and developmental degradation in national economies as the fair price for a sound global private banking system.”
And that is where the conspiracy theorists should come in. Why did the BIS not retract or at least modify Basel II after seeing the devastation it had caused? Why did it sit idly by as the global economy came crashing down? Was the goal to create so much economic havoc that the world would rush for relief into the waiting arms of the BIS with its privately created global currency? The plot stinks!
After reading this essay you must be shocked, and question what can I do to protect myself? There is one way left to go, and that is, change as much of your paper currency for the precious metals gold and silver, in coins, bars and bullion, which the financial mobs cannot alter to their benefit.
Panicked sellers, leveraged investors, and other folks who didn’t own gold with conviction supported the organized recent retreat in gold. But for people who understand that gold is essentially the only form of money that is nobody else's liability and protects against rampant money printing by governments, don’t sell anything, untill the crisis is over. The price decline was a healthy correction, and perhaps a gift if you were looking to acquire more.
According to the Financial Times, Asia has seen, thanks to this price decline, one of the strongest trends of physical gold purchases in 30 years. Hong Kong banks and jewelers don't have enough gold to meet demand. The gold exchange in Shanghai saw volumes hit a record on last Monday.
Gold traders in Asia said premiums have more than doubled in recent days, signaling demand far outpacing supply. While the government and market can move the price of gold, the value doesn't change.
Knowing what is going on behind the scene, at least you are warned. All efforts are made by governments to manipulate the public mindset with propaganda, distracting attention from what is really happening and keeping people obedient to let them admire their leaders who provide peace, and save the people from -terrorist- destruction. Of course all are lies just to keep you happy and quiet with empty promises. The government isn’t people’s friend when the hour of truth arrives. Keep your senses and set your own course for action.
By Peter B. Meyer – 3rd of March 2013
The economies of the EU are fundamentally broken. They require a restructuring ‘like turning around’ a failed company. Don’t believe this will happen and so there won’t be a recovery in the EU. Unfortunately, the good reports from Germany don't change the big picture either. The never-ending crisis keeps returning. Fear has found its way back into the markets, even more since the polarized elections in Italy. Both Berlusconi and Grillo ran anti-euro platforms, railing against ‘Brussels bureaucrats’ and ‘dictates from Berlin.’ Grillo has even suggested Italy should ditch the euro currency. Bersani vowed to work with the EU to reconcile Rome’s €2-trillion debt. Thus you see, the EU is not only broke but broken too, while a EU recovery in the near future doesn't seem feasible. All this contributes to the truth; the markets are beginning to turn dysfunctional.
The money system – the scales upon which the world’s market functions – is purposely being destroyed. The monetary signals that guide the markets – which are supposed to represent the supply and demand decisions of billions of people – have become twisted.
By Peter B. Meyer – 12th of December 2012
Debt only can be repaid if the economy grows. And as that is not going to happen, the road ahead will be problematic. Growth is over because consumers bought in the past on credit from the future and that future has arrived now. The population is graying, while older consumers spend less. EU leaders lack the courage to take the necessary steps required, which is cutting cost and reduce their expenditures. But politicians see this as political suicide. Their principle remains repairing what has been, but doesn’t exist anymore. The EU has become a fantasy, without rational thinking leaders unable to face the truth and act accordingly. What should be undertaken won’t take place at all.
There are no political solutions. The economic problems are bigger than any politician can solve. There's no way out. The size of the debt is increasing much faster than is GDP “growth” itself a phony baloney number that counts government spending as if it was real productive investment.
By Peter B. Meyer – 19th October 2012
Economic security is touted as a prerequisite for true freedom. There are two types of security, the certainty of a guaranteed minimum wage, and the guarantee of a good standard of living.
It is a kind of coercive measure that guarantee security, which has a pernicious effect on our freedom. It is a political intervention, which should protect against reduction of income. But changes in the economy may lead to unemployment. The pursuit of security through political coercion is the main cause of the current crisis and unemployment, which precisely has the economic uncertainty increased, due to government intervention in the planned economy. Our politicians are frequently talking about austerity measures that squeeze money out of the people to solve this crisis, and say more political intervention is needed for economic growth. These are totally the wrong measures; they will not work, as amply is demonstrated in Greece, Ireland and Portugal. What should be done is less government to reducing expenses and public debt, and no austerity for people that is contrary to economic growth. But these measures don’t benefit the purses of our politicians.
In a planned economy the government benefit certain groups or individuals with something guaranteed, that implicates these have a certain part of the total pie, making the remaining part relatively larger or smaller depending on the growth or decline of the economy. The real security is only offered by a market economy, namely offering a wide choice of possibilities to care for your own livelihood, which in a planned economy is increasingly lost.
The attempt to apply political measures in providing security has greatly changed society. Germany began the implementations of Bismarck’s ideas, and provided the model for the welfare state, meanwhile adopted by all western countries. The implementation was accelerated by the fact that socialists deliberately and openly disapproved of everything what economic risk entails, or profit generates to those who successfully accepted the risk.
The youth cannot be blamed to prefer the security of a well-paid job above the risk of being self-employed or being an entrepreneur. During many years new generations grew up in a world where the media and schools, entrepreneurs labeled as bad guys by declaring that making profit is immoral. The entrepreneur who creates work for hundreds of people was called an exploiter, but who in contrasts gave commands to the same number of people in the military, was covered with honors.
In a government-planned economy more security may emerge but it definitely gives less freedom to its citizens. Individual freedom is lost when the economy is hampered by various privileges. When for example, a minimum salary is guaranteed for everyone, without legal guarantees, other people may not get the chance to obtain a well-paid job. But nothing is more fatal than the present form of economic security, as touted by politicians that run at the expense of individual freedom.
Freedom is a valuable asset. One again must learn that freedom can only be acquired at a certain price and that everyone should be prepared to pay for his or her freedom to maintain and acquire it. "If a large part of someone’s freedom is exchanged for a little security, neither freedom nor security is deserved." as Benjamin Franklin once said.
(American politician 1706 -1790)
In order to create a better world for future generations, we now must have the courage to start with the change. The obstacles of the errors made, must be eliminated. Creative talents of the individual must be given a chance again. Simply create the conditions, which enable progress instead of forcing humans to progress. Who calls for more government action shows no courage. Neither do the people who promote the New World Order.
The louder is called for a planned economy, the more one is under the influence of the ideas that caused WWII, and a large part of the social disruption suffered nowadays.
‘Freedom for everyone' is the only true progressive political goal. The idea that the power of government should be limited was abandoned when governments came to power by the means of the majority. That is the problem of modern democracy. Not so much, democracy wouldn’t be a good thing, but that unlimited government power is wrong. People must learn to reduce the use of the majority rule. The essential issue is not who should rule, but what the powers of government should be.
The propaganda against the market economy has been most successful at universities. Entrepreneurship by individuals who are willing to engage in responsible risks should be encouraged. These are people who can live without financial security of any kind. At schools and colleges everything should be undertaken to let students accept the uncertainties in life, and to teach them how to deal with.
People must learn to act independently, being self-assured actively seeking growth opportunities, which are the most important characteristics of an entrepreneur.
Unfortunately, today in most colleges and universities students are trained within the framework of a general study curriculum related to competences and skills. Self-confidence is largely untaught instead of taught!
Looking for a market niche has more to do with feeling, unfortunately in most classes is taught to research and analyze the market only. Apple Computers’ co-founder Steve Jobs said in his recorded biography; he never wasted money on market research: "How can I get people’s opinion about something that is beyond their imagination?" It boils down to vision and passion, and the holy faith in someone's own idea.
The ability to learn large quantities of knowledge is nice, but that doesn’t make someone an entrepreneur. Contrary schools should be encouraging and developing the talent, added by an inexhaustible energy, ensuring the entrepreneur is always driven for achievement.
By Peter B. Meyer – 25th of September 2012
Inflation is worse than the financial crisis we are in today. Taxpayers’ money is spent for nothing; still no reform in sight. No jobs while businesses go bankrupt. Bankers that caused the financial crisis were bailed out with our money and left in charge, taking on more risks to collect larger bonuses. Eventually this crisis turns in a massive inflation, never witnessed before. The debt is structural; it’s irresolvable no way to repair this economy.
Credit expanded for half a century. Causing trillions of dollars worth of errors. Bubbles were built and remained unresolved. Exporting nations got into the habit earning from the U.S.A. and the EU of $3 billion per day. Those earnings provided much of the speculative capital that created the Bubble Era prices, with money that was kept too cheap for too long by our Central Bankers. This money has disappeared in thin air. There's not much chance that it will return anytime soon either. So this money won’t cause inflation, as we still are in a period of deflation.
Instead of a healthy new boom, the world is enjoying a sick echo of the previous economic era. Governments, led by the U.S. and EU, attempt to re-inflate the bubble with new money printing to stem the flood of budget’ overruns in the various nations, guarantees and giveaways equal to an entire year's annual output of the world's largest economies. Since every dollar/euro of this money is borrowed, consequently all this has to be withdrawn from the world economy at some point.
In fact, economists are already looking ahead to the moment when deflation fears give way to severe inflation fears. "Inflation Nation," is the title of an editorial in the International Herald Tribune a year ago. In it, Alan Meltzer, University Professor of Political Economy argues, "If President Obama and the Fed continue down their current path, we could see a repeat of those dreadful inflation years [the 1970s]."
Professor Meltzer reminds us that cutting off the inflation of the '70s weren’t easy. The feds turned the screws, and let the prime rate go above 21%. Of course, today's Fed has this information. And Paul Volcker, who was Fed chairman during that period, is now an economic advisor to Barack Obama. Still, "I do not worry about their knowledge or technical expertise," continues Mr Meltzer, "What I doubt is the commitment of the administration and the autonomy of the Federal Reserve ... Under Bernanke, the Fed has sacrificed its independence and become the monetary arm of the Treasury..."
"The Fed's job is to take the punch bowl away," said an Eisenhower era leader. But we have come a long way since the Ike and Dick Nixon years. This time, the inflationary party is likely to get out of control; happy days will be here for a while during deflation, and then some very sad days are likely to come with inflation.
When Paul Volcker in December of 2007 was interviewed, he said, "...when I look back on my lifetime, it is obvious that letting inflation get a little bit out of control and not dealing with economic problems effectively in the'70s led to a very uncomfortable crisis. We don't want to have to go through big recessions again to teach people fiscal responsibility. Instead, we should anticipate what needs to be done while maintaining the growth of the economy. And the threat will always be an unstable economy and an unstable currency. And that's not just destructive to economic life, but it can be destructive to America's position in the world, which to me is the greatest concern."
The question arises, how to prepare against this coming inflation? First calculate how much you’ll need, in average monthly expenses, and whether you use your gold or silver? Both can be used for food to any household or service payment. After all, nothing will escape rising inflation. Groceries, gas, oil, household items, car maintenance, eating out, pool service, doctor appointments, haircuts, pocket money for your kids, etc., etc.
The point is you probably may need more ounces of silver or gold to cover all the expenses than you initially think. The potential duration of high inflation eventually will determine how much physical bullion or coins are needed. Probably the duration will be much longer than you think, during the Weimar Republic in the 1930s it lasted two years, and thereafter came hyperinflation that
lasted another two years. Four years of high inflation together. Much gold and silver will be needed, depending on your budget. Above table offers an indication in Gold.
If your monthly expense budget is about $3.000/month, you need 45 ounces to cover two years of high inflation, and 90 if it lasts four years. The next table offers the quantities in Silver.
A $3.000 monthly budget needs 1,285 ounces of silver for one year or 3,857 ounces for three years. When the prices of these precious metals rise, it will be less, if you bought in the past. It shows; if you don’t save now in gold and silver, you’re going to spend a whole lot more later. What here is shown is the importance of gold and silver to protect your purchasing power related to your standard of living. See it as your private financial bomb shelter; the dollar, euro and all other paper currencies will be blown up around you, but your finances are protected.
And probably the amounts in above tables may be not enough, as additional and unexpected expenses always arrive too. It is sobering to realize, but deserves emphasis if this high inflation someday hits the economy. Anyhow make sure you do have a meaningful amount of bullion to withstand this tempest, which almost mathematically certain is to occur at some point in time. At least you now have an indication how much you’ll need.
By Peter B. Meyer – 31st of July 2012
Democracy is just a wealth-distribution, and ultimately wealth-destruction scheme that pits the taxpayers vs. the tax eaters. In the case of Europe, the Germans, the Fins and the Dutch produce and save, while Greece, Spain, Portugal and the rest consume. Eventually, a bankruptcy will bring to light the truth about democracy, which Hoppe explains as follows:
“It is nothing more than an especially insidious form of communism, and that the politicians who have wrought this immoral and economic madness and who have thereby enriched themselves personally, - never of course, being liable for damages they have caused! - are nothing more than a despicable bunch of communist crooks.” Hans-Hermann Hoppe (born September 2, 1949) is a prominent Austrian school economist
Friedrich von Hayek, another well-known figure in the Austrian school of economics, wrote in his seminal work the Road to Serfdom: "By giving the government unlimited powers, the most arbitrary rule can be made legal; and in this way a democracy may set up the most complete despotism imaginable."
It's hard to ignore Hayek's and Hope’s prescient warnings and words when you observe today’s political manipulations to keep the EU together and the Euro alive. Europeans are deceived in the hope one day a miracle is going to happen that makes the impossible possible and solves this crisis without pain and leaves the EU and its Euro in tact.
However, the Europeans are turning against its Elite austerity pushers. Sarkozy lost to the socialist Holande. The Dutch government of Mark Rutte handed in its resignation. The “technocrat” in Italy and the new government in Greece wonder how long they can hold on, while the Spaniards continue to live in pain under the draconian measures dictated by the Eurocrats.
As in Spain, Greece, Ireland, Portugal and practically all-modern countries, people wait for the government to figure out how to give them retirement incomes, healthcare, and full employment.
Of course, politicians cannot solve economic problems for the very simple reason: they themselves are the cause of them. Despite all the phony governments’ interventions the recovery is not coming and will not come either, because it is impossible at this stage of overflowing debt.
Recovery is impossible because this isn’t an ordinary recession it is a depression ‘the end of the economic road’. The world faces a huge solvency and not a liquidity problem. New money supply cannot restore health to sick loans and government bonds. The only way to restore solvency to the financial system is to deflate the economy or slash the amount of debt through mass bankruptcy.
Who set up the euro? Who set interest rates and lending standards? Who caused the bubbles by lending too low for too long? Who then ‘fixed’ the crisis — by lending more, at even lower rates, to the very financial institutions who had just proven such bad custodians?
Who spends more than he makes, year in and year out? Who promises even more spending — even as he is facing bankruptcy? Who counterfeits money — printing trillions of dollars and euros with nothing more behind them than the “good faith” and “full credit” of an insolvent bankrupt government? Who starts ‘wars’ that cost trillions of dollars and hundreds of thousands of lives, and then, standing over the wreckage announcing victory, and goes away?
The elite – the ONE % - are defending their turf by creating wars, unnecessary fears about terrorist attacks, instating security checks at airport the world could do without, global warming hysteria, uneconomic recycling of waste costing more than the conventional way, keeping-on more money printing until the bitter end, extending the pain, and causing extra expenses for citizens, but with the hidden purpose to create added income for themselves, in doing so unnecessarily extending the suffering for the populace.
An honest man knows better than to interfere in other peoples’ business. His own business is tough enough. He cares deeply about the things around him, and tries to make his world better in every way he can. But he would be embarrassed to pretend to solve other peoples’ problems. Even if he is only offering advice, he does so reluctantly, carefully, and tentatively.
If he is smart he knows that you can’t really make things better by bullying, deceiving and threatening people. An economy works best by doing the one thing that the fixers can’t allow — letting people make their own deals, find their own jobs, and solve their own problems. So really the truth must be camouflaged to let people believe government has everything under control. "Truth has to be repeated constantly, because Error also is being preached all the time, and not just by a few, but by the multitude. In the Press and Encyclopedias, in Schools and Universities, everywhere Error holds sway, feeling happy and comfortable in the knowledge of having Majority on its side." --Goethe
Although Goethe made his insightful observation two hundred years ago, his words hold more meaning today than ever in history. Error can indeed be found throughout stories in the mainstream press, in "official reports" and coming from the very mouths of world leaders, many "democratically" elected. But what even Goethe could not have predicted is the broad extent to which these errors are knowingly, deceptively and insidiously woven into our daily news, effectively subverting the masses and keeping them blind and apathetic to the empirically-driven motives of the world's elite.
Consequently: Governments’ planning and taxation is “the road to serfdom,” pretending “free markets” by giving bankers leeway to act recklessly, oligarchic, undemocratically. Governments are told to bailout the debt-ridden banks benefitting the wealthiest 1% layer of society, by shifting all the losses onto taxpayers.
Governments should act democratically by subordinating the banking and financial sector to serve the economy, and not the other way around as it is today.
Austrian economist Ludwig Von Mises wrote in relation to this crisis the following wise words: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner, as the result of a voluntary abandonment of further credit expansion, or later, as a final and total catastrophe of the currency system involved.”
Ludwig von Mises proudly called himself a liberal. He was the 20th century's great defender of capitalism and the free society. His book, Liberalism
first appeared in 1927 as a follow-up to both Mises' devastating 1922 book showing that socialism would fail and his 1926 book criticizing interventionism. It was written to address the burning question: If not socialism, and if not fascism or interventionism, what form of social arrangement is most conducive to human flourishing? Mises' answer is summed up in the title of his book, Liberalism
Latest Cartoon by Leon Kuhn: Government of the bankers
By Peter B. Meyer -13th of July 2012
The ability of modern representative government is that it cheats the masses into believing that they are insiders too. They are encouraged to vote and to believe that their vote really matters. Obviously, it matters not at all. Generally, voters have no idea what or whom they are voting for. Often, they get the opposite of what they thought they had voted for anyway. “Government is a phenomenon, not a system.” It is best understood as a fight between the outsiders and the insiders. The insiders always control the government, and use it to take control of the outsiders. Why do they want to do so? The usual reasons are Wealth, Power, and Status.” In short: Government is an institution wherein the “insiders” take the wealth, power and status from the “outsiders.”
the elected third president of the USA (1801–1809) said in 1802: "My reading of history convinces me that most bad government results from too much government." - "The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
Further: "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and institutions that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered."
A democracy is nothing more than mob rule, where 51% of the people may take away the rights of the other 49%. The experience of all former ages had shown that of all human governments, democracy was the most unstable, fluctuating and short-lived. Said John Quincy the sixth President of the United States (1825-1829). Yet the protection of the minority, most importantly the individual, along with his private property, is the basis on which the system of government is built.
Government may provide a useful, even necessary, function — such as keeping the peace and maintaining justice. They sometimes redistribute wealth among the outsiders. They sometimes claim to be acting in the name of the greater good, and often do not. But they always take wealth, power and status from those who are not among the insiders. The Romans already provided proof of this statement whereas power, prestige and wealth flowed back to Rome.
By giving taxpayers a voice in government, the Dutch and British democracies provided creditors with safer claims for repayment than did kings and princes whose debts died with them. But the recent debt protests from Iceland to Greece and Spain suggest that creditors are shifting their support away from democracies. They are demanding fiscal austerity and even privatization sell-offs.
The ECB and EU bureaucracy are now imposing a creditor-oriented austerity on Europe. Ostensibly social democratic governments have been directed to save the banks rather than reviving economic growth and employment. Losses on bad bank loans and speculations are taken onto the public balance sheet while scaling back public spending and even selling off infrastructure. The response of taxpayers stuck with the resulting debt has been to mount popular protests starting in Iceland and Latvia in January 2009, and more widespread demonstrations in Greece and Spain to protest their governments’ refusal to hold referendums on these fateful bailouts of foreign bondholders.
The financial sector has gained sufficient influence to use such emergencies as an opportunity to convince governments that the economy will collapse if they do not “save the banks.” In practice this means consolidating their control over policy, which they use in ways that further polarize economies.
The basic model is giving priority to bankers and leaving economic planning to be dictated by the EU, ECB and IMF, after previously the nation-states was stripped of the power to coin or print money and levy taxes.
The resulting conflict is pitting financial interests against national self-determination. The idea of an independent central bank being “the hallmark of democracy” is a euphemism for relinquishing the most important policy decision – the ability to create money and credit – to the financial sector. Rather than leaving the policy choice to popular referendums, the rescue of banks organized by the EU and ECB now represents the largest category of rising national debt.
The private bank debts taken onto government balance sheets in Ireland, Greece, and now in Spain have been turned into taxpayer obligations. The same is true for America’s $13 trillion added since September 2008 including $5.3 trillion in Fannie Mae and Freddie Mac bad mortgages taken onto the government’s balance sheet, and $2 trillion of Federal Reserve “cash-for-trash” swaps.
Barclays’ bank insiders setting Libor interest rates to suit themselves, rather than be determined by sellers and buyers, is the ultimate scandal. But this is more or less what one had expected in a world of manipulated interest rates, where those rates are set lower for banker’s own benefit. As a show of honesty both the Chairman and its chief executive have been ousted with “golden handshakes”. But isn’t manipulating interest rates lower exactly what all-central bankers the world over do? They think they have the right. They say it will help to stimulate growth.
Financial proxies euphemized as technocrats are dictating this. Designated by creditor lobbyists, their role is to calculate just how much unemployment and depression is needed to squeeze out a surplus to pay creditors for debts now on the books. What makes this calculation self-defeating is the fact that economic shrinkage – debt deflation – makes the debt burden even less payable.
The result has been junk economics. Its aim is to disable public checks and balances, shifting planning power into the hands of high finance on the claim that this is more efficient than public regulation.
Government planning and taxation is accused of being “the road to serfdom,” as if “free markets” controlled by bankers give leeway to act recklessly if not planned by special interests in advance, in ways that are oligarchic, and not democratic. Governments are told to pay bailout debts taken on not to defend countries in military warfare as in times past, but to benefit the wealthiest layer of the population by shifting its losses onto taxpayers.
The failure to take the wishes of voters into consideration leaves the resulting national debts on shaky ground politically and even legally. Governments may act democratically to subordinate the banking and financial sector to serve the economy, not the other way around.
Despite all the phony governments’ interventions the recovery is not coming, it remains the same deplorable situation as the last two years. Recovery is impossible this isn’t an ordinary recession. The world faces a huge solvency problem and not a liquidity problem. New money supply cannot restore health to sick loans and government bonds. The only way to restore solvency to the financial system is to deflate the economy or slash the amount of debt through mass bankruptcy.
Nevertheless the elite will continue to defend their turf by printing more money until the bitter end, count with a long road down and a lot more unnecessary suffering.
Note: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner, as the result of a voluntary abandonment of further credit expansion, or later, as a final and total catastrophe of the currency system involved.” Those are the words of Austrian economist Ludwig Von Mises.
By Peter B. Meyer – July 8, 2012
Bankers, Politicians, and even the Pharmaceutical industry, lies, deceit, corrupt, and rigged the financial system to satisfy their greed. Lining insiders’ pockets, and keep the outsiders - the hardworking citizens dumb. Society is rotten to the bone, half the people are broke and almost the other half doesn’t have the brains to understand how they are cheated.
The Central Bankers rigged the financial system for the last 40 years; when in 1971 the gold standard was abolished they created paper money backed on faith. Money without anything behind it, except the bankers themselves. They spoiled their reputation by rigging the Libor rate into a Liebor scam for the sake of their own greed. Their bonuses are sanctified! While ordinary people bail them out, via austerity measures dictated by unwise politicians, besides being ripped off too through inflation. Continuing the destruction of paper money that eventually slowly brings this monetary system to its end. As a consequence consumer prices went up many times during the period, while labour did not. Gasoline lost 90% of its 1970 value, while financial assets rose with inflation of the money supply. No wonder that the rich got richer. This monetary system creates ‘inequality’.
The Central Bankers shaped a credit-based economy, increased the supply of credit 50 times in the past 50 years. Leading to the problems the world faces today, without any or little real growth and wealth, but increasing high unemployment.
Central bankers today are seen as superheroes, able to push markets around with a single phrase. Ben Bernanke, Mario Draghi and all the others should better be seen as robbers defending markets from downturns to deliver capital gains. But in reality these superheroes are impostors. They have no superpowers, other than the power of mass delusion and destruction. The powers of Mario Draghi and the other central bankers in Europe are waning. Each new round of printing has less impact on markets. “This is a solvency problem, not a liquidity problem.” In other words, new money supply cannot restore health to sick loans and government bonds. The only way to restore solvency to the system is to deflate the economy or slash the amount of debt in the system through mass bankruptcy.
“The biggest fraud in economics is economics itself. The more efficient the economy is, the more people get with the least effort and expense of resources.” It makes no sense to waste trillions of Euros worth of resources just to “protect the economy.” The whole purpose of an economy is to create more - not to waste it.
The rigging is rampant apart from the LIBOR rigging by Barclays and cohorts, Spain and Portugal are leading the pack on another front: “European Banks are buying back mortgage-backed securities at distressed levels to bolster capital levels and ECB collateral. So far this year, Spanish and Portuguese banks have repurchased €8.4 billion in asset-backed bonds - more than double the level for 2011. They buy this debt at distressed levels, and then book capital gains on par with the discount.”
As an example, Spanish bank BBVA bought back €638.2 million of mortgage-backed bonds, consumer, and business loans, and recorded a €250-million-capital gain, according to a June 28 regulatory filing.
In other words, these banks buy back at huge discounts the bad debt they issued before the crisis. And with the ECB as a backstop, they can mark the debt back to face value and book capital gains, on which their bonuses are calculated. The impression is created; European banks are getting stronger now. But actually their balance sheets are loaded with more garbage debt. Banks buy these assets because they cannot raise money in the private markets.
Recently, the ECB has relaxed the collateral requirements; making it easier for banks to continue this financial rigging, to "improve" their balance sheets under protection of the ECB. And while the market may ‘recover’, European banks will be left with loads of awful assets. The European economy won't recover by adding more and more -of the same- debt into the system.
Eventually, after the reelection of Angela Merkel as Germany’s Chancellor in 2013, the ECB will start directly purchasing bonds, opposed to the loans it is making now.
What are the options for improvement out of this mess: For now it is austerity that produces “falling wages and a broadly recessionary environment that can last for decades, and can result in the near or total economic destruction of a nation.” At the other hand, default could be catastrophic too, causing hard times, and a near collapse of the economy, but shortens the period of hardship. Right now, central bankers are diluting the value of debt by pushing interest rates below the rate of inflation, and eventually end in default anyhow, unnecessary extending people’s hardship. A kind of “financial repression.” It’s an unspoken policy that has many other negative consequences too. So what is an alternative, since all attempts to “fix” the current system with more borrowing and printing are failing?
How about the classical gold standard, which stands out as the least flawed of all the systems ever tried. Each nation could choose to peg its own currency to gold at a price that allows for enough growth in bank reserves to greatly reduce the burden of public- and private sector debts.
“Re-pegging a currency like the US dollar to gold at the current price of about $1,550 has its pitfalls. Most notably, it would not deleverage an overleveraged banking system. But re-pegging the dollar to something like $10,000 an ounce might do the trick.”
Hedge fund managers Lee Quaintance and Paul Brodsky from QB Asset Management wrote a fascinating outline on the potential reintroduction of gold into the monetary system, while “simultaneously implementing what one might consider a debt jubilee.”
“Using the US as an example, the Fed would purchase Treasury’s gold at a large and specified premium to its current spot valuation. The higher the price, the more base money would be created and the more public debt would be extinguished. An eight-to-10-fold increase in the gold price via this mechanism would fully reserve all existing US dollar-denominated bank deposits (a full deleveraging of the banking system).” For a detailed explanation go to Zero Hedge site at this link
As an added bonus: Central bankers would no longer be viewed as superheroes! Just meager servants, pegging the money supply to gold and letting the free market determine the price of money. After all, history proved that central planning never ever has better worked over time than the free market.
For the time being expect conditions getting much worse in the financial sector, before a deleveraging gold standard system will be implemented. The end of the welfare state is near, giving something for nothing is attractive for politicians to be elected, but by now it must be clear that this ruins the people and their country. Important; to protect yourself and your accumulated wealth buy gold and silver at least now, as the price is relative low.
Tags: Libor rigging, Barclays fraud, corruption, gold standard, gold prices, collapse of welfare state, banking bonus, lies
By Peter B. Meyer – June 24, 2012
The western world economy is going to collapse, “we’re coming to the end of a certain monetary and political model that supports the over financialization of the world.” Change is due. But it is impossible to predict when the economy turns into a global disaster. It is like a broken bridge, you see the cracks, and you know the bridge isn’t safe, but it’s hard to predict when it will collapse. It could be imminent or take another couple of years, but the bridge will collapse that’s sure. And such is the case with our current economy.
In Europe, governments in 2000 collectively spent 44.8% of GDP. Today it is 49.2%, which is a huge increase. That’s not austerity, that’s stimulus. And as the phony austerity doesn’t work, new leaders want to try phony growth. Francois Hollande, France’s new president, says he will hire more government workers and spend more money to promote “growth.” He also says he’ll raise taxes on the rich to 75% of marginal income, up from 41% now, and increase the “wealth tax.” The retirement age increased by his predecessor Sarkozy to 63 will be reversed to 61. How he thinks you get real growth out of this foul mixture is an enigma. The government already directs and consumes half the nation’s output, while the economy remains flat. How will it do better with more money? Instead, the French will be wasting their resources, squeezing the most productive part of the economy, and becoming poorer. We live in a world of frauds and counterfeits.
"The financial markets... aren't relaxing their pressure on Spain. Doubts continue regarding the construction of Europe, about the present and the future of the euro," Treasury Minister Cristobal Montoro told the Spanish Senate during a budget hearing. "The ECB must respond firmly, with reliability, to these market pressures that are still trying to derail the joint euro project."
“When you look at the world’s problems in another light, literally, riots in the streets of Europe, the Middle East and elsewhere, it’s a sign that people collectively are sick and tired of traditional politicians and political models that take the road to national insolvency. The old guard hasn’t delivered on economic improvement, and in a wired world, people know it.”
In Europe, America, the Middle East, and Asia, the political and economic structures, are over due and will unfold in due course. Over the last 25 years, we've had a series of financial bubbles fueled by government spending and easy money. Governments (mis) used their power to print money to stave off financial devastation, and proclaim the economy is doing better.
Consider the 2000-2001 technology crash. The markets tanked. Investors got crushed. The economy tottered on the brink of total collapse. And what happened? In rushed the Central Banks with low interest rates, pumping money into the economy and fueling an unprecedented, and unsustainable, real estate boom. Of course, the real estate bubble burst, resulting in the credit crisis and sparking the global financial meltdown of 2008-2009.
But again, governments rushed in and saved the day, to get the picture: At least 43 countries from every corner of the globe pumped massive amounts of money into the global economy. Here are a few of the stimulus plans:
1. United States: $787 billion
2. China: $585.6 billion
3. Indonesia: $75 billion
4. Japan: $687 billion
5. Germany: $68 billion
6. Macau: $13 billion
7. Great Britain: $29 billion
8. France: $35 billion
9. Singapore: $13.6 billion
10. Australia: $26.5 billion
11. Saudi Arabia: $49.6 billion
12. Korea: $26 billion
13. Canada: $43 billion
14. India: $6.5 billion
15. Vietnam: $1 billion
16. South Africa: $7.9 billion
17. Ukraine $16 billion
18. Israel: $5.4 billion
19. Russia: $20 billion
Massive bailouts and trillions in stimulus funding prevented the global economy from collapsing. But the solutions were a band-aid that merely postponed the inevitable: a long and deep market slide that erased unprecedented levels of wealth from the global economy.
Of course, the government is portraying the bailout as successful. And sure enough, people are relaxing, even starting to feel confident again. Reports of economic strength are hitting the wires, and the market is climbing again. The party is over, and the bill is coming due. The same solution that has come to the rescue in the last 25 years is not going to work anymore. That's because world governments face an inescapable problem: They are simply out of money and no longer have the credibility to borrow! After spending billions to rescue the world in 2008-2009, there is simply nothing left. And everyone is starting to realize how dire the situation is.
The U.K. Telegraph: "China's leading credit rating agency has stripped America, Britain, Germany and France of their triple-A ratings, accusing Anglo-Saxon competitors of ideological bias in [favor] of the West."
Meanwhile Standard and Poor's cut the long-term U.S. credit rating of triple-A to double-A+ on concerns of the ongoing budget deficit and rising debt burden. And things are getting worse every day; the truth is the U.S. faces the very real possibility of a downgrade by another credit agency. In a recent statement Bank of America, Merrill Lynch said, "The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan" to cut the deficit. "Hence, we expect at least one credit downgrade in late November or early December when the super committee crashes." On the surface, the government continues to spark hope with reports of economic growth.
Back in the 1930s, Russian economist Nikolai Kondratieff produced a theory that explained that TRULY HARD TIMES come in broad cycles, or "Super-Bubbles. "These "Super-Bubbles" are typically made up of several smaller or "normal" bubbles. Kondratieff stated that economic cycles are more powerful than government. And that while the government can alter the impact of a smaller "normal" bubble, it is helpless in the wake of a true "Super-Bubble."
In other words, the government can control events for years, even decades. The government can postpone financial devastation, but it can't prevent it. According to Kondratieff, the government's act is a hopeless charade. The real economic cycle is going to run its course, no matter what the government does.
Real prosperity can't come until all the "poison" is out of the economic system. The result of underestimating these cycles is catastrophic, and a force much more powerful than any government can control. The government is helpless to stop the natural path of economic cycles. This is exactly what has been going on for the last 25 years. We've had a series of financial bubbles fueled by government spending and easy money.
The government has used its power to print money in order to stave off financial devastation. Trouble comes, when government prints money, pumps it into the economy, and the economy doesn’t get better. This is just a last-ditch attempt to prop up a private pyramid scheme in fractional-reserve money creation. Governments bailout the to too-big-to-fail banks, funded by the people. If we are funding the banks, we should own them; and our national currency – backed by a gold standard - should be issued not through banks at interest, but through our own sovereign government. But for now count with a total disaster, when the bridge finally collapses and nobody is around to save you. To save yourself, buy gold and silver to survive the coming dark days.
By Peter B. Meyer – 11th of April 2012
On the "long view" gold has increased in value for 11 consecutive years. No other widely traded asset has met that performance during the last 100 years. Gold is not an investment; buying shares of Coca-Cola, Mac Donald or an income-producing property rental are investments. Nonetheless Gold is "real money," and consequently a prime crisis hedge. One buys gold and silver in the hope never to have to use it, it is like fire insurance. This should people understand; gold is not a conventional investment.
Printing more money doesn't make more goods and services; it simply dilutes the value of existing goods and services among a larger number of dollars or euro’s, actually theft through inflation. Wealth doesn’t come from money but from the goods and services that money buys. While, the U.S. may have dropped the gold standard over 40 years ago, gold still is the one thing that every nation still has, even Greece today is holding gold. In fact, the bankrupt PIIGS countries have combined over $180 billion dollars worth of gold in their vaults. They may default on their debts. But will keep their gold ingots on the side for later. And with China focused to become the next reserve currency provider, India - the world’s largest democracy - is also setting the stage for a new “gold standard”.
If gold and silver were to collapse, say 40 - 50% down, it would be proof that our leaders are taking the right steps to get the economy on track. But politicians won’t become wise overnight all at once, while the first genius amongst them still has to stand up. So, to preserve your wealth, it’s still better to buy your wealth insurance in gold and silver.
But how to know you buy the real gold or silver, it is a matter of trust and integrity in the gold dealer’s reputation - the institution or business you buy from, opposing to irregular outlets where buying gold and silver could be a gamble. Before purchasing gold or silver, always trust your instincts. If an item looks suspicious or the price seems too good to be true, it probably is. But before purchasing an item it is vital to investigate and test the metals.
First, look for the markings. Jewelry made from precious metals requires to be marked for their metal content. On silver look for the number ‘925’ which indicates it is a piece of sterling silver with 92,5% silver content. At gold pieces look for 14K, 18K or 24K, this last figure indicates 100% gold content, and is very soft, while the lower numbers mean that the gold content is mixed with harder metal to make it more rigid.
Make a physical inspection, especially around the edges for changes in color that are indications for plated silver or gold. But further testing is required. Sterling Silver will easily oxidize and tarnish and turn black, which can be wiped off with a soft cloth.
Additional a strong magnet tells you whether the piece with the proper marks is really genuine. Precious metals are NEVER magnetic, neither are the hardening metals in jewelry, if coins or jewelry reacts on a magnet, for sure it is not gold or silver.
If a piece of suspicious gold leaves a blackish trace over an unglazed ceramic tile, than it is not genuine.
More complicated tests for professionals are the Archimedes Test, which is a density test, and the Nitric Acid test. If in this last test a drop of acid leaves a mark on the finish, than the item is not true gold or silver, if there is doubt the item is plated make a small scratch to see it the acid changes the color.
Gold is a commodity with the unique ability to represent tradable wealth. Where paper money and any other can be duplicated, gold cannot. Gold is also the most signaling instrument, to judge the value of the paper money system, which entirely is based on faith. Gold and silver may fluctuate in price, but don’t be put off by the price trend, particularly in a paper induced printing environment, ultimately the underlying fundamental trend won’t change direction, which is upwards.
Lastly, there’s no reason whatsoever to believe the never-ending decline of fiat currency is over. It is a 100% sure bet that the FED and the world’s Central Banks will continue printing money, they target officially 2% inflation, which doesn’t sound much, but means that future prices of anything are rising and becoming more expensive than they are today. In other words our leaders continue to manage the currency in a way that people lose 2% or more of the value of their wealth annually. So never sell your gold and or silver until a currency backed by a gold standard is implemented.
Tags: Gold, Gold Standard, value of gold, governments, Gold, Gold Standard, value of gold, governments, economies, gold trading, buying gold, selling gold economies, gold trading, buying gold, selling gold