News & Analysis
If we add 200,000 jobs a month, will recovery take 7 years or 12 years? ... On Friday, we got the December jobs number: +200,000. That's good, but not good enough. I posted a graph from the Hamilton Project showing that, at that rate, the labor market wouldn't recover till 2024. But perhaps that's too pessimistic. The Economic Policy Institute took a look at the same numbers and concluded that a growth rate of 200,000 jobs per month would lead to a full recovery in seven years or so. That's nothing to celebrate, but it's better than the Hamilton Project's estimate of 12 years. It's also a bit odd: Isn't this a simple matter of taking job losses and dividing by monthly job gains? Well, no. The date of our eventual recovery depends on some crucial unknowables about the future of the American labor force. – WonkBlog Washington Post
Dominant Social Theme: This was a bad recession but it'll be all right soon.
Free-Market Analysis: We have learned that the US recession is over and that the only reason Europe is in trouble is because Southern European countries like Greece won't rein in their spendthrift ways. But as an alternative news site, we have never subscribed to the idea that what has occurred in the early 2000s is a merely a normal business cycle event.
In fact, we are on record numerous times as explaining that what has occurred in the 2000s is the END of the dollar-reserve economic system. If the cycle itself is left to run its course, gold looks (possibly) to finish above US$3,000 or US$4,000 (maybe US$5,000) and Western-style paper-money economies cannot stand that sort of strain, in our view.
Something will have to happen. This is why the analysis of dominant social themes of the power elite, which we regularly offer, is a useful tool in understanding the Way the World Works. The elites use fear-based promotions to guide the world toward global governance. US$5000 an ounce gold is likely intolerable to them.
It blows up almost every really important meme they've spent a century promoting. It blows up the central banking meme that the good, gray men in expensive suits can gently adjust and guide a paper money supply. US$5,000 gold will indicate that they cannot and that people have no faith in central banking or central bankers.
It blows up the idea that US dollars are a repository of value. If and when gold rises to a value equivalent to US$5,000, the US dollar will be seen truly as a kind of paper tiger, folding notes that are increasingly devoid of value. Why, in fact, would people want to hold notes that have been so thoroughly reduced? A high gold price will destroy whatever dollar-reserve (petro-dollar) credibility remains.
Finally, US$5,000 gold is a stunning repudiation to Western governance generally. The capstone of the modern money politics is the fiat dollar. For it to be devalued so radically will call into question the fundamentals of the system – not just the economic system but the larger configuration of the modern regulatory state.
Within this context, articles about jobs and economic recovery (like the one published in the Post, excerpted above) seem to us to miss the point. This is NOT a normal recession within a stock bull-market context but a vicious countercyclical bull market in precious metals that likely has three or four years to run.
The only way to stop the cycle from its completion is to confiscate gold or silver or do something else of a radical nature to ensure that gold (and silver) doesn't complete its run. This is not a new idea. From our point of view, World War II was at least partially caused by the inability of the power elite to damp the worldwide depression.
Notice that after World War II, the paraphernalia of world government was put into place – the UN, the World Bank, the IMF and then later NATO, Interpol and now the International Criminal Court. The implementation of all these massive facilities indicates that much more was taking place after Word War II than just a reset of what had gone before.
In fact, an entirely new economy was in the process of being developed. That's because the Depression had basically wiped out the old one. And we would argue that's what is happening today. The old dollar-reserve system is basically dead.
We estimated years ago that the financial crisis would cost the powers-that-be some US$100 trillion to fight. Such numbers sound impossible, illusory. But add up all the money poured into the system by different central banks around the world and we have a gut-feeling it already amounts to around US$50 trillion, maybe more. Heck, the Fed loaned some US$15 trillion IN ONE WEEKEND, from what we can tell.
These numbers, as we have long pointed out, have themselves killed the modern central banking system because they have been reported throughout the Internet. Not everybody is aware of them but millions of people are. Some of these millions, perhaps tens of millions, have lost their jobs and houses, and in some cases, their families.
It has occurred to these people that the system is neither rational nor beneficent. The idea that Ben Bernanke can loan trillions to colleagues while the average person is sinking into bankruptcy is not merely a casual observation of modern society. It is a rage-inducing phenomenon.
This is what will sink the system. This is the reason we've proclaimed it dead. It's the reason, as well, that the central banking system is set up with such mind-numbing bureaucracy and its every nuance is clothed in language that makes the eyes glaze over.
The idea is to hide the reality of what's going on in a blizzard of big words and statistics. Terms like "quantitative easing" come from nowhere into the modern lexicon. But in the past, such phraseology would find its home in a New York Times article. Today, these terms are all over the Internet.
It is the Internet and what we call the Internet Reformation that is fracturing the modern central banking economy. For the first time since the invention of global central banking about a hundred years ago, a free, untrammeled press has been able to comment on this "invention."
In fact, anyone who looks at the situation with a clear vision can see instantly that price-fixing the value and amount of money in an economy is BOUND to be distortive. Once one realizes the contradiction at the heart of central banking, the rest of the system begins to be comprehensible.
There IS no justification for it. It doesn't work and merely ruins the economics over time of those who engage in it. Worse, those intergenerational power elite families that have created the system and control it KNOW that it ruins economies. The POINT of central banking is ruination.
It cannot be otherwise. Those who control the printing of trillions can raise economies up until they crash. Then, by printing yet more money, they can buy up ruined businesses for a pittance. Eventually, the entire economy (not just the banking sector) belongs to them.
But national greed and rapine is not enough. The Anglosphere elites seek to impose this system worldwide. The New World Order, they call it. They will not be satisfied, apparently, until they control the world's money. This is not merely a hypothesis, either. Evidently and obviously, central banking has its own logic; the system is prone to collapse and needs to get constantly bigger in order to survive.
The system is also unstable within the larger business cycles it generates. This is because the imbalances created by fiat money build up until the system can no longer support itself. By this time, most of the major corporations are basically bankrupt. Absent the current system, nobody would lend to them because it is impossible to tell whether they are viable. Think GM.
For this reason, the powers-that-be must use extra-curricular methodologies to retain the system. War is perhaps the best (if not the only) method of maintenance. It is war that allows the elites to create the necessary social discipline that gives bought-and-paid-for legislatures the justification to insist on the militarization of society.
It is only through this militarization – by turning a collapsing economy into a command-and-control one – that the current power elites can continue to maintain their hegemonic grasp. Within the context of war, critics can be jailed, young men can be pulled off the street and made to work within a military context for a pittance and the larger corporate structure, with all its inefficiency and bloat, can be continually propped up for the "good of the nation."
This is likely what's happening now. The ridiculous – obscene – system, in which a handful control the world's wealth, is going to be sustained by mad, regional war, probably in the Middle East. The foundation has been laid by the phony war on terror and now economic totalitarianism is going to be sustained by a larger military conflagration, perhaps one that will begin with Iran.
It will be cast as a war between civilizations (between Islam and the West) but it will be no such thing. It will be far grubbier than that. It will simply be another desperate effort to maintain a failing monetary system within the context of saddling domestic populations with the authoritarianism of currencies they would otherwise reject.
Ironically, books may be written about the "struggle for freedom" that an upcoming war will entail. But those in the West who fight this war will be contributing to their own further enslavement. They will be dragooned into an epic struggle that probably end with some kind of world currency that will make their already miserable lives worse not better. Monopoly-issued fiat money is a curse.
We have gone to this length to set up a frame of reference for this Washington Post article. Treating the current leg of the business cycle as business-as-usual strikes us tendentious. The reality is that the system is collapsing and trying to figure out when the recession or when "business will get back to normal" strikes us as a questionable and even unnecessary exercise. Here's some more from the article:
Here's the issue: Before the recession, the economy needed to produce 120,000 jobs a month just to keep up with new entrants into the labor market. Lately, that number has been closer to 90,000. Part of this is that immigration has fallen and many immigrants are leaving. Part of it is that some workers are leaving the labor force — either they can't find a job and have given up, or they have decided to stay home with the kids or focus on other pursuits rather than take the sort of jobs they can get right now.
The question is whether the growth of the labor force bounces back or holds steady. And it turns out, this question matters a lot ... This is a case where a longer recovery could mean a better recovery. If we continue growing at 90,000 jobs a month, it likely means that many of the long-term unemployed never made it back into the labor force, and that the economy is producing less than it otherwise could.
It means, in other words, that the recovery is proving unable to reverse some of the deepest wounds inflicted by the recession. If we get catch-up growth in the labor market, that may push back the return of full employment, and it may even temporarily increase the unemployment rate, but it will mean we're seeing a fuller recovery.
This is surely a neatly reasoned argument but we would argue it is being applied to the wrong economy. The system is so sick it has needed trillions in interest-free loans and giveaways simply to survive. Nor has the system purged itself.
Most of the "jobs" that the Washington Post speaks of are actually employment measures that prop up the current dysfunctional economy. Union employment, public school teaching, legal positions, even medical berths all contribute to continuing the system as it is. And the current system is failing.
It is certainly a weird situation. The very jobs that people are so keen on realizing contribute in many cases to the demise of the culture in which they live and try to survive. This is because the power-elite has had the time and money to create an economy that supports the destruction purveyed by central banks.
One can continually try to calculate when and how Western countries emerge from the current travails. One can make statistical arguments for or against fuller employment. One can treat the current situation – as does the Washington Post – as one in which business-as-usual shall re-emerge sooner or later.
But for all the reasons listed in this article, we think this is the wrong approach to analyzing what is taking place. The current economic climate is an entirely artificial one. It is propped up by men desperate to hold onto what they have got – and who have proven in the past they will do anything - anything! – to retain the Money Power they believe is their birthright.
Conclusion: To talk about whether the American economy is capable of producing a given number of jobs within this context is in our view to have the wrong discussion at the wrong time. A bigger game is afoot. And that's the one we ought to be paying attention to.
Posted by speedygonzales on 01/19/12 01:26 PM
This website provides an inside look at complex global economic financial case situations based on inside information, anonymous tips, research, analysis and high-risk field work bringing answers to document difficult questions no official wanted publicly answered.
Click to view link
Posted by taxesbyanyothername on 01/15/12 10:27 PM
I foolishly assumed that you meant Charles Napier Kennedy, I apologize.
The laws of Muslim countries prohibit interest, that has nothing to do with their currencies. Anyone could make loans in those currencies at interest, it would just be illegal. That has nothing to do with the currency.
I still contend that an interest-free currency can never be anything other than a concept, despite the fact that currencies have existed, and do exist that no loans at interest have been made in.
As far as most DB readers being sympathetic to the Austrian School, yes we certainly are. That is because all of the other schools prove themselves wrong so frequently. It is quite difficult to prove just about anything.
I agree with you about the fact that interest often transfers wealth in perverse ways; it also often allocates capital in very efficient ways creating far more wealth than existed before. I have to think that eliminating interest would be deleterious overall.
Posted by Danny B on 01/15/12 11:56 AM
From Jeanna; Calvini "But this is the very essence of the banking industry, to make us all, whether we be nations or individuals, slaves to debt."
OK, so the banks want LOTS of debt. For what purpose? What is the end game? Lindsey Williams says that the U.S. WILL default this year. Whatever his sources, he has proven to be VERY accurate. So, just what will a default bring?
So, regulatory capture has the bankers running the show in D.C. Should the U.S. default, how will the bankers use their influence to get a payoff when GOV is broke??????
James Baker may have this very-important answer.
"Rothschild personally conducted the monetary matters and the creation of this WORLD CONSERVATION BANK. This bank would refinance by swapping debt for assets. A country with a huge national debt would receive money to pay off the debt by swapping the debt for wilderness lands."
Click to view link
This starts to make sense out of the big runup in debt. Also from the article.
"They're going to make their bad loans good by collateralizing them after the fact with all of this land and somebody is going to end up with title to twelve and half billion acres. They have multi-trillions of dollars upon which they can create currencies and loans and they're going to begin to barter and counter-trade and loan-swap against the United States. The World Conservation Bank is a scheme to monetize land. This will function as a world central bank and out of that bank there will grow a one-world fiat currency. "
So, the U.S. defaults. The bankers take the public lands. Did you ever wonder why we don't access the enormous oil reserves in Alaska? Did you ever wonder why we don't access the enormous coal reserves in Staircase - Escalante?
Agenda 21 is a publication from the U.N. detailing how man is to be squeezed into cities.
Click to view link
Can't have squatters on all that land that belongs to the bankers.
The U.N. also has programs to cut down on useless eaters who have weakened immune systems.
Click to view link
The out-of-control debt creation makes sense if the bankers can grab control of all the public lands. This would give them the leverage to dictate any currency system that they wanted.
Posted by memehunter on 01/14/12 02:23 PM
"You are asking NAPpy, to read everything written by three economists; two of which are dead and the third of which is old, and has written an enormous amount of material."
He doesn't have to read anything, but if he claims that my points about wealth transfer and increased capital costs are not true, then he should know that there is strong evidence showing just the opposite. By the way, Lietaer and Kennedy are still alive (not that it really matters).
"Most of which practically everyone who frequents the DB would disagree with"
Well, that doesn't prove much either way, does it, since we know that most DB readers are sympathetic to the Austrian School?
"I have to think that an interest-free currency is even less attainable than any of the utopian-la la lands ever come up with by these three writers or by anyone else. Unless your society is so small and stuck on itself that it's "currency" is a single unique item, which is traded back and fourth for things that are actually useful, then an interest-free currency is just a concept, and can never be anything else."
Interest-free currencies have circulated for centuries both in the West and in Islam (as documented by Summer). More recently, experiments such as Wörgl have apparently been successful. There are also several regional currencies which are interest-free (and "coercion-free"), such as Anthony Migchels' Gelre.
Posted by taxesbyanyothername on 01/14/12 01:36 PM
Let me see if I have this right. You are asking NAPpy, to read everything written by three economists; two of which are dead and the third of which is old, and has written an enormous amount of material. Most of which practically everyone who frequents the DB would disagree with; all so that he can comment on an "interest-free currency".
I have to think that an interest-free currency is even less attainable than any of the utopian-la la lands ever come up with by these three writers or by anyone else. Unless your society is so small and stuck on itself that it's "currency" is a single unique item, which is traded back and fourth for things that are actually useful, then an interest-free currency is just a concept, and can never be anything else.
Posted by memehunter on 01/14/12 01:14 AM
"I'm not arguing for a gold standard, I'm arguing for free banking."
I think you need to define exactly what you mean by free banking. From your comment, I am assuming that you are talking about a full-reserve, debt-free system.
"Compound interest would apply to each instance of a loan, and would therefore be self-clearing. The only way compound interest can be unstable is if the loan is not linked to real savings, like the current system. Stop conflating the current system with free banking."
Nappy, I wrote about the distinction between payable and unpayable interest.
However, if I understand your scenario correctly (full reserve bankings and money as "real savings"), I have a few questions:
- What happens if someone loans money to someone else using money he has already borrowed himself? This will introduce instability in the long term.
- Where does the money necessary to pay the interest appears in your case? From other customers using the same currency, right? So, even if this is "stable", it introduces scarcity and competition.
- For customers to have real savings, it means that they would first have to sell their products to the private bank in exchange for coins, or possibly to buy the coins with a different currency accepted by the private bank (this is the only way that money would first circulate in the community as "real savings", not as credit). Later, they might transact with each other, but not at first. This might work, but I'm skeptical as to how practical that would be, and it would take a long time for enough coins to circulate. This is an important point, because if customers first acquired their money as credit, then all money is initially circulating as debt and the system will eventually collapse in the presence of compound interest, free banking or not, gold or paper.
Read Lietaer, Kennedy, or Gesell before saying "not true", please. The transfer of wealth from the 80% poorest segment to the 10% richest segment of society and increased captal costs have been empirically demonstrated (which is worth at least as much as axiomatic deductions, see my reply to you on the "Austrian economics" thread).
"The transfer of wealth is from the bad entrepreneurs to the good entrepreneurs, an entirely fair transfer, and good for society at large."
This is a moral and ethical judgement. Again, you might want to read the authors listed above as to the effects of such a system: the scarcity and competition introduced by interest (people have to compete to find the money to pay for the interest) have far-ranging effects on the community, ranging beyond the "voluntary transaction" between two parties.
Again, I developed that point on the "Austrian" thread: voluntary transactions between two parties result in forced decisions on other parties. In this case, every loan with compound interest has indirect effects (mostly undesirable ones) on all other users of the currency, because of the added scarcity and competition it introduces among users of the currency. These ideas are well explained by Lietaer.
"Capital (savings to be leant or invested) is a good subject to supply and demand just like any other good or service. An increased capital cost means a higher interest rate. [... ] Compound interest is nothing more than the price bid and offered for available savings, determined on an individual basis, and is only the effect of a loan market, not a cause in itself. "
As I said before, "time preference", "human action", and other theoretical constructs, as valid as they may be, do not cut it in the face of the negative side-effects of compound interest on society at large (instability, transfer of wealth, added costs for everyone, non-borrowers included).
To counteract interest, the challenge is to introduce an interest-free currency in the free market (no "coercion"): it is likely that, if they have the choice, people will prefer to contract loans in such a currency.
Posted by NAPpy on 01/13/12 04:03 PM
"Under a gold standard, it's mostly "paper gold" that circulates... "
I'm not arguing for a gold standard, I'm arguing for free banking. Under free banking, even if gold doesn't circulate at the retail level, it still has to clear at the warehouse level. So, the gold reserves would only last to the extent that any given elite was productive.
Compound interest, under free banking, would not apply "in the long run". Compound interest would apply to each instance of a loan, and would therefore be self-clearing. The only way compound interest can be unstable is if the loan is not linked to real savings, like the current system. Stop conflating the current system with free banking.
"Moreover, it leads to a transfer of wealth from the poor to the rich and to increased capital costs which affect practically everyone in the society."
Not true. I have savings. My brother asks me for a loan to extend the capacity of his dental lab. I gain wealth through the compound interest my brother pays me for the use of my savings. My brother gains wealth through increased sales due to the expansion he gained from the use of my savings. In this voluntary transaction we both gained wealth--it was a win-win transaction. So, in this example, your idea of a rich/poor dichotomy is a false dichotomy. Neither my brother or I are rich, yet we both increased our wealth. My brother would not take the loan if his projection of profit from the expansion did not exceed the interest I want to charge. If he calculated correctly, the expansion would pay for the loan, making it stable and self-clearing. If he calculated incorrectly, I'd take his equipment as collateral and, again, the loan would be stable and self-clearing. Every loan made by a business undergoes a similar investigation, and will always clear, making all loans under free banking stable and self-clearing. The transfer of wealth is from the bad entrepreneurs to the good entrepreneurs, an entirely fair transfer, and good for society at large.
"... to increased capital costs... "
Capital (savings to be leant or invested) is a good subject to supply and demand just like any other good or service. An increased capital cost means a higher interest rate. Higher interest rates form spontaneously in a free market when there is a shortage of capital (supply goes up or demand goes down, ceteris paribus). Compound interest is nothing more than the price bid and offered for available savings, determined on an individual basis, and is only the effect of a loan market, not a cause in itself.
Posted by dotti on 01/13/12 10:48 AM
The link does not work unless you include the last several words.
Or you can go to King World News, Gold Blog, and click on the Rickards article.
Posted by dotti on 01/13/12 10:46 AM
Jeanna, thanks for the post--particularly for the quote. It is quite succinct and meaningful.
I agree with you that what seems disastrous to most of us, i.e., a financial collapse, will be useful to them in the intermediate to longer term. For those of us who are debt free, we may have a temporary respite from their machinations.
Regarding war and planning for war, I found the following quite interesting:
Click to view link$2,000.html
I have always considered Rickards to be a highly reliable source because of his experience and the contacts that I imagine him to have maintained.
Posted by Jeanna on 01/13/12 08:29 AM
Articles like this sidetrack from the real issue. The second "stated" purpose of the FED to be able to control unemployment is still being used by them to misdirect.
One of my favorite movie lines - Umberto Calvini, the Italian arms manufacturer in The International explains the "true" nature of banking and of power -
"The IBBC is a bank. Their objective isn't to control the conflict, it's to control the debt that the conflict produces. You see, the real value of a conflict, the true value, is in the debt that it creates. You control the debt, you control everything. You find this upsetting, yes? But this is the very essence of the banking industry, to make us all, whether we be nations or individuals, slaves to debt."
Debt gives them power. Their remedy is foreclosure. The system will fail. It is designed to fail, in order to give the bankers the power to foreclose, thereby transfering the peoples' assets to their accounts.
The next monetary system will be imposed after they have once again foreclosed on all debtors. A pattern they have use before. Wash, rinse, and repeat.
Posted by amanfromMars on 01/13/12 03:29 AM
Err ... ... here's the rotten toxic apple in that barrel of useless pork ... ... .. Click to view link
Is Uncle Sam in Negative Equity Imaginative Constructive Ideas Territory? And that is a rhetorical question so please don't be wasting your time and any brain effort to deliver a negative answer.
Posted by memehunter on 01/13/12 12:41 AM
N: "No matter how much gold one has saved, without central banking, you have to spend that gold in order to consume. Elites have huge consumption requirements--wars, tavistock, buying access to new industries, etc."
M: Under a gold standard, it's mostly "paper gold" that circulates, so the gold reserves can last a long time. Also, compound interest will ensure that the elites (who already own most of the gold) will keep control of the gold supply. Your argument is confusing central banking with the "gold/paper" dialectic, which was my point.
N: "Compound interest is a price applied to letting others use my savings. Earning a return on my savings is moral. Earning a return on money printed from nothing is the only instance where compound interest is immoral."
"The main tool of money power is printing money from nothing--fractional reserve lending."
M: This has been debated at length on the "Austrian economics" thread. Compound interest is not mathematically viable in the long run, with ANY monetary system (gold/ paper, fractional-reserve/ full reserve). Since you like geometry, you should understand this point. Compound interest is not viable even in a full-reserve banking system (I must insist). You can prove this for yourself relatively easily.
Moreover, it leads to a transfer of wealth from the poor to the rich and to increased capital costs which affect practically everyone in the society.
Posted by memehunter on 01/13/12 12:34 AM
DB: But you have also stated you believe that MORE government is an antidote to Money Power. Your comment, above, partakes of the same willful blindness ... Why you believe paper to be superior to gold and silver is beyond us. Why you believe more government is preferable to less government is equally incomprehensible. Etc ... More and more your positions resemble those of, say, of the Soros-sponsored Democratic Underground.
A complete (and probably intentional) misrepresentation of my positions. I said that Money Power is a more dangerous evil than governments (you can read again what I wrote). I never said that "more government is preferable to less government". This is a blatant lie from the DB (and it's not the first time).
I also never wrote that I "believe paper to be superior to gold and silver". Gold is excellent as a store of value. Gold combined with compound interest will still lead to a total hegemony by Money Power. Silver has a much lower stock-to-flow ratio than gold and, while it may play a minor monetary role in the future, is clearly inferior to gold with respect to the "store of value" function (and yes, the free market has come and would presumably come again to the same conclusion - nobody is "coercing" anyone into preferring gold to silver).
Reply from The Daily Bell
One chooses a philosophical anodyne.
You believe government is the antidote to Money Power.
You have stated it. Now, perhaps, you have second thoughts? ....
Posted by mcfrandy on 01/12/12 11:45 PM
Hey, I'm old enough to remember back to the Spring of 2009, when the Mockingbird media was assuring us (implicitly thanks to the new Obama presidency) that economic recovery was just around the corner.
That's one of the jobs of the Mockingbird media: Assure us that the economy is getting better, especially when a Democrat has the presidency. Needless to say, nary a word about how central banking causes the business cycle and prolongs recessions/depressions, since the central bankers own or otherwise have control over big media.
Posted by Questor on 01/12/12 07:02 PM
How many dollars Gold is actually worth is irrelevant. The amount of dollars needed to buy an ounce of gold will fluctuate irratically and irrationally until the world settles on Gold as the reserve currency.
Once that is established, we all have to step back, and watch as the market rather viciously sets what an ounce of gold will buy.
For instance, divide an ounce of gold into a thousand pieces we will call minums. Presume that Gold is what it is today, about $1650 an ounce. That places the value of a minum of Gold at $1.65. A loaf of bread cost me $5.49 at the market today. That equates to G3.27 in gold minums. Not difficult to transfer into, nor to understand.
However, the Central Banks that print money will be prevented from doing so in future, and all other Banks will be unable lend more Gold Minums than they actually have deposited. And that means that Governments cannot spend more Minums than they can collect, and purchasing political power through Lobbying, Bribery and Corruption will become very expensive to the powers that be, compared to what it costs them under fiat currency, which they can currently arrange to be printed as needed.
To me this is a wonderful possibility, though I dislike the chaos will ensue as the dollar goes through the roof against Gold, when Gold as the reserve currency will limit the financial shenanigans that the powers that be get up to. It will not stop them from stealing from the citizens of their countries, but at least everyone would know where they stood.
And sooner or later, the derivitives floating around the world will blow up in the investors faces, leaving a great many angry people holding worthless proofs of investment, like bonds, and treasuries, and stocks.
The people would get their reset, and the market could cope with the changeover to another currency, but when the knowledge sinks in to the common man how they have been ripped off, there will be blood.
I do not look forward to that.
Posted by JohnvdBrook on 01/12/12 05:21 PM
Today's jobless report cited 399,000 new jobless claims (seasonally adjusted). Like the inflation index, which omits energy and food costs, major expenses for most people, this figure is pure baloney. Actual new claims were 642,381, which is an astounding 242,000 more jobless than being reported. Our economy is in deep trouble, and the media is complicit in trying to hide reality from the populace.
Posted by Frank on 01/12/12 04:17 PM
Excellent article, but I don't see how you can point to any particular price of gold that the Power Elite don't want to see. They already tolerated gold to go from about $300 to $1600 over the last 10 years (and from $35 since 1933). I see no upper limit to what they will permit. If the paper money system implodes & the US Dollar becomes worthless, there is no upper limit on the price of gold. Of course, the government may at any time step in & try to confiscate the gold again. But with gold bought & sold on a worldwide basis now, it will be hard to do. I've read arguments for & against a possible future gold confiscation. I'm not sure which is most likely. Same thing goes for silver... no real upper limit & it was not confiscated in the past... just removed from circulation.
Posted by NAPpy on 01/12/12 04:06 PM
"Why would it be intolerable?"
Would you rather spend your gold reserves, or print money from nothing?
No matter how much gold one has saved, without central banking, you have to spend that gold in order to consume. Elites have huge consumption requirements--wars, tavistock, buying access to new industries, etc. Their gold reserves would dwindle fast. They'd soon have to earn a living like the rest of us. That's why central banking is a critical meme. Rising gold prices damage that meme.
Compound interest is a price applied to letting others use my savings. Earning a return on my savings is moral. Earning a return on money printed from nothing is the only instance where compound interest is immoral.
Austrian economics can be deduced, just like geometry. That makes it true. Keynesian assumptions (perfect information, perfect competition, etc.) have proved to be false assumptions. That makes Keynesian Economics false. You can have a dialectic between true economics and false economics, but why bother?
The main tool of money power is printing money from nothing--fractional reserve lending.
Posted by TimurTheLame on 01/12/12 03:32 PM
I become seriously irritated by any MSM article regarding promising labour statistics. The latest of course is the positive numbers in the US. Anyone who has critically studied and written about how they arrive at these phantom numbers has shown that any result can be arrived at by using statistical gymnastics.
This is not unlike publishing inflation data by using selective input. Do not include gas, food and electricity but select pineapples, crescent wrenches and i-pads.
The gorilla in the room is that no-one will explain just exactly where and how these jobs will come about. The halcyon days when a solid youth with just a high school education and no trade credentials could find good paying and secure employment in a factory have long since disappeared.
An answer of high tech or 'green industry jobs' as being growth industries cannot absorb the multitudes of unexperienced and mediocre people whose traditional refuge has long been off-shored.
But, if history is a guide, there is an answer. " You may not be interested in war, but war is interested in you" Trotsky
Posted by dimitri on 01/12/12 03:09 PM
The End will be when people laugh at anyone quoting gold in terms of dollars. Hopefully they will then quote gold in terms of gold or silver (or any other wampum in finite supply).