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Welcome to the New Dark Age

Guest Post by Hugo Salinas Price

The Powers That Be in the US and its allies seem to be committed to keeping the price of gold below $1320US/oz.

Is the US control of the price of gold bad for China? It would appear that since China is purchasing large amounts of gold, keeping the price from rising is in the interest of the Chinese.

Is the US control of the price of gold bad for Russia? It would appear that Russia has no urgent reason to see a higher price of gold.

Is control of the price of gold considered as a damaging policy by the Rest of the World? The Rest of the World does not seem to be particularly upset by the control of the price of gold.

Who is upset that the price of gold is so clearly kept down below $1320US/oz? Answer: the gold miners of the world and those who own gold as financial protection, as well as those who have long positions in the futures markets. All of these actors are limited in number, as contrasted with a world population of some 7.5 billion humans.

So it is evident that in reality there are relatively few parties – individuals and corporations – who care about the price of gold. For the vast majority of people in The West, the price of gold is of no concern whatsoever. Wealthy Chinese are buying gold, but they know better than to say anything about it, let alone complain about the low price.

Gold has been banished from everyday use, and can only be hoarded unproductively. Gold is going into hiding, as Professor Antal E. Fekete has pointed out. (See www.professorfekete.com)

This is not the first time gold has gone into hiding; gold went into hiding in the days of the collapse of the Roman Empire of the West. It is going into hiding again, in the present slow-motion financial collapse of the world.

The price of gold will enter a rising trend, no matter how violent the official interventions to control its price, because at the present low prices it will be impossible for the gold market to satisfy demand for gold from a largely silent minority of mankind that wants to own gold. When this happens, we can expect the criminalization of gold ownership, at least in some quarters of the world.

At some point, impossible to predict, the demand for physical gold will only be satisfied at increasingly higher prices.

Gold today has really only one enemy: the Federal Reserve of the US.

At about $1307US/oz, one US Dollar is worth 0.0238 grams of gold. That is to say, a little more than two-hundredths of a gram: 2.38/100 of a gram. At 0.02 gram per Dollar, the price of gold would be $1,555US/oz. (31.103 gr per ounce/0.02 = $1,555.15US/oz)

The Federal Reserve – and the US Establishment – are naturally worried that as the dollar becomes worth less gold, there may be a loss of confidence in the dollar in the world’s financial markets. That is a horrifying prospect for the Federal Reserve and the US Government, as the American Empire rests on two pillars, each of which supports the other: the Military and the Dollar.

If the Dollar loses prestige in the world and declines in value against other currencies, the Military loses force. If the Military loses force, the Dollar loses acceptance. If they go, the American Empire is over.

Russia and China are ambivalent about the Dollar. The health of their economies – such as they are – depends on a Dollar which maintains its value. So they are not going to challenge the Dollar by fiddling with the price of gold.

On the other hand, the American Empire is not behaving towards them in a friendly manner. For that reason, they will not be collaborating actively to suppress the price of gold.

Russia will not demand gold for its oil and gas; Russia does not wish to upset the apple-cart. China will not push for a higher price of gold, because it owns over $4 trillion in Bonds denominated in both Dollars and Euros (with minor amounts in other currencies.) China wants to use those Bonds to buy up resources all over the world, and has no interest in destroying their value.

So Russia and China are just going to sit back and watch the gold markets do their work, which will be inexorable.

Will Russia and China collaborate to establish a new Gold Standard for the world? Highly unlikely. The structure of their economies is built upon banking systems which carry out fractional banking and which are loaded to the gills with maturity imbalances: short massive amounts of deposits and long massive amounts of long-term loans. They will not change this system until it suffers a total collapse, and then they will strive to resurrect the same flawed system, because that is all they know how to do.

Russia and China are attempting to set up a rival to the IMF. To the IMF mess will be added the BRICS mess, with all the same wasteful “development loans”. I repeat: that is all they know how to do.

Gold and silver will never lose the powerful attraction which they hold for humans.

However, the use of gold and silver in a productive, free society based on property rights, and in its financial system, is a body of theory which is unknown to today’s rulers. The necessary knowledge was put aside to deal with the exigencies of WW I, which started just 100 years ago, and was never put to work again when that war was over.

At this point, it is as impossible to recover that knowledge and the spirit what went with it, as it is impossible to recover the spirit which created the Parthenon and the other marvels of antiquity.

“You are lost and gone forever,
Oh my darling, Clementine!”

I bid you welcome to The New Dark Age.

OUR TOTALITARIAN FUTURE – PART TWO

In Part One, I asked questions your keepers don’t want to answer truthfully, while providing the contextual setting for how our over-populated world is progressing relentlessly towards a future of war and totalitarianism.

Totalitarianism Now

“Where the republican or limited monarchical tradition is weak, the best of constitutions will not prevent ambi­tious politicians from succumbing with glee and gusto to the temptations of power. And in any country where numbers have begun to press heavily upon avail­able resources, these temptations cannot fail to arise. Over-population leads to economic insecurity and so­cial unrest. Unrest and insecurity lead to more con­trol by central governments and an increase of their power. In the absence of a constitutional tradition, this increased power will probably be exercised in a dictatorial fashion.” Aldous Huxley – Brave New World Revisited – 1958

         

Huxley wrote his dystopian masterpiece in 1931 before the rise of Stalin, Hitler and Mao and their murderous totalitarian empires, sustained by torture, mass murder, surveillance, and fear. Orwell wrote 1984 in 1948, after living through the nightmare of World War II and witnessing the malevolent systematic terrorism inflicted upon innocent populations by psychopathic tyrants like Hitler and Stalin. World War II killed 65 million people. Stalin’s purges killed 20 million Russians, and Mao murdered 45 million of his own people. It appeared that Orwell’s gruesome vision of a future of brutality, surveillance, and fear would come true.

Instead, Huxley’s vision gained ground in the post war world of cheap oil, mass production, consumerism, and TV advertising. It was found that government through terror works on the whole less well than government through the non-violent manip­ulation of the environment and of the thoughts and feelings of individual men, women and children. Propaganda, amusements, materialism, easily accessible debt, and relentless media messaging convinced the masses to love their enslavement and never dream of revolution. It worked as long as energy and debt remained cheap and plentiful.

The 4.4 billion increase (157%) in the world’s population since Huxley’s warning in 1958 is attributable to vast supplies of cheap easily accessible oil, natural gas and coal, which have allowed technological and agricultural advancements that have vastly expanded food production, water purification, global transportation, and medical advancements. With the peak in traditional worldwide oil production reached around 2005, and modest subsequent production increases obtained only by mining tar sands, fracking shale and drilling in deep water at much higher production costs, the era of cheap plentiful energy has come to an end.

Propaganda and storylines about vast reserves and energy independence fail to acknowledge the concept of Energy Returned on Energy Invested (EROEI). Once it requires investing more than one barrel of oil in energy to extract one barrel of oil, the game is over. We are approaching the limits of growth because our remaining energy resources will require much more capital investment and higher prices for companies to make that investment. Oil prices were $25 per barrel when George Bush and the neo-cons launched their Iraq Freedom campaign in 2003. Eleven years later, with U.S. oil production at 44 year highs and consumption at 2000 levels, a barrel of oil is over $100 per barrel. The combination of increased demand from developing countries, vastly higher production costs, and global unrest in the areas of the world storing “our” oil under their sand will put a floor on prices, with spikes upward as resource wars flare up around the globe.

It is not a coincidence that the world economic system collapsed in 2008 after oil prices topped $140 per barrel. World food prices also spiked to all-time highs in 2008. The surge in food prices in 2011 to new highs was the impetus for the Arab Spring and social unrest across the Middle East and Africa. The FAO World Food Index spiked to levels only exceeded in 2011 earlier this year. Oil prices have surged as high as $106 and have averaged over $100 in 2014. Do you think it is just a coincidence that social unrest across the Middle East, Africa, Asia and Europe has surged in the last few months? Rising prices and the increasing scarcity of food, water and energy resources push the desperately poor towards revolution.

 

Societal strife, economic decline, poverty, lawlessness, and resource deprivation in third world countries result in dependency upon a central authority to sustain the masses. In the poorest countries without a long history of democracy, the people turn to a strong leader to save them. Before long too much power is accumulated in too few hands and totalitarian regimes are born. The world is awash in the blood spilled by dictators (North Korea, Egypt, Cuba, Saudi Arabia, Zimbabwe, Iran, Tunisia, Syria, Sudan) and presidents in name only (China, Vietnam, Nigeria, Turkey, Ukraine, Venezuela, Russia, Argentina).

Dreadfully poor people with no hope for a better future turn to radical religion, extremist ideas, and psychotic leaders. A full belly trumps freedoms and liberties. It is not surprising that despots proliferate in the poorest countries with the highest population growth rates. The so called developed world in the U.S. and Europe had been able to sidestep and even take advantage of these developing countries until the 2008 financial collapse. The oligarchs have treated the third world as slave plantations to be reaped, plundered and pillaged. Their banker solution to a crisis caused by the fraudulent issuance of debt products has been to redouble their looting and pillaging campaign through the issuance of even more debt in order to further enrich themselves at the expense of the many.

Huxley saw it beginning to happen even during the late 1950’s:

“Meanwhile impersonal forces over which we have almost no control seem to be pushing us all in the direction of the Brave New Worldian nightmare; and this impersonal pushing is being consciously acceler­ated by representatives of commercial and political organizations who have developed a number of new tech­niques for manipulating, in the interest of some minor­ity, the thoughts and feelings of the masses.” Aldous Huxley – Brave New World Revisited – 1958

I think Huxley underestimated the lengths to which a minority of criminal wealthy bankers, their crony capitalist corporate co-conspirators, and feckless bought off politicians would go in their sociopathic manipulation of the masses to gorge themselves upon the world’s resources and wealth. In 1958 the manipulators only had TV in its infancy and independent newspapers published by journalists who attempted to report the truth. They’ve come a long way baby.

The Deep State, Silent Government, Oligarchs, TPTB, or whatever term you want to employ to our Brave New World Controllers have mastered the art of propaganda, manipulation, distraction, and social engineering to such an extent the majority of Americans have come to love their techno-narcissistic, debt saturated, welfare/warfare, surveillance state. When a minority of evil minded men gain control of a nation’s currency, own and control the few remaining propaganda news outlets, run the mega-corporations selling toxic poison processed food and iGadgets to the masses on debt issued by Wall Street banks, pay-off the politicians writing legislation and tax codes, and brainwash the youth through government controlled education, your Brave New World nightmare has arrived.

Huxley believed that over-population was not an immediate threat to the personal freedoms of Americans and Europeans due to their long history under democratic constitutions. Of course our national debt of $276 billion in 1958 was only 57% of our annual GDP of $482 billion. The population of 175 million could easily be sustained, with ample supplies of energy, food and jobs. The standard of living for families rose consistently and an economy based upon savings, capital investment, and producing things flowed wealth across all classes – raising all boats. Banks accumulated deposits from citizens and leant money to small businesses. There were no stock options, derivatives, stock buybacks, or trading profits. People borrowed sparingly and saved for the things they wanted.

Huxley predicted trouble by the beginning of the twenty first century if the population of the U.S. continued to outpace the available resources to support that population. He was right again. The party ended in 2000.The National Debt has soared to $17.6 trillion, or 104% of GDP in 2014. Why did the debt go up by a factor of 64 while GDP only advanced by a factor of 35? In 1958, prior to the blossoming of the welfare/warfare state, there were little to no unfunded liabilities. Today the total exceeds $200 trillion. A country adding debt at this astronomical rate is a country consuming far more than it is producing. Depletion of resources, overconsumption, and economic decline lead to debt expansion and centralized government control. When 20% of all households depend upon food stamps to survive, your country has too many mouths to feed and a failing economic system designed to serve the oligarchs and impoverish the peasants.

Consumer debt outstanding in 1958 totaled $48 billion, all non-revolving debt mainly for auto purchases. The credit card did not exist. Consumer debt outstanding today totals $3.2 trillion. Has this 6,667% increase in consumer debt benefitted the average person or Jamie Dimon and his ilk? Is it a rational choice of consumers in a free capitalist market or is it a result of coordinated actions by the banking cabal and their captured government benefactors to enslave the masses in debt while keeping them dumbed down and distracted by electronic gadgets produced in slave labor camps overseas under the guise of globalization? Huxley didn’t anticipate Federal Reserve bankers and cowardly captured politicians purposefully inflating away 88% of the U.S. dollar’s purchasing power as they expanded the welfare/warfare state through monetary manipulation, abandonment of gold backed currency and unfettered debt expansion. The result is real wages haven’t advanced in the last 40 years, while corporate profits reach record heights and a small cadre of oligarchs reap the rewards of debt enslavement of the many.

 

The Ponzi scheme system created by the invisible “leaders” of the supposedly free developed world required never ending growth to support the never ending issuance of debt in order to keep the fleecing of the masses operation running smoothly. This is where increasing population and resource depletion have thrown a monkey wrench into their printing press operation. The autocrats harvested energy and minerals resources from third world countries, while utilizing the catch phrase of globalization, as a cover for their wage arbitrage mechanism to continue their worldwide pillaging scheme. The Ivy League educated moguls are extremely smart when it comes to figuring out new and creative ways to screw the common folk, but their unparalleled hubris and arrogant disregard for humanity blind them to the ultimate consequences of their malevolent machinations. There will be blood and they will not escape unscathed. War is coming, but not the war they anticipate.

The definition of totalitarianism is a political system in which the state holds total authority over the society and seeks to control all aspects of public and private life wherever possible. Our two party farce of a political system is aligned to control our lives through laws, regulations, rules, bylaws, procedures, tax codes, taxation, inflation, and debt, enforced by government apparatchiks, bureaucrats, politicians, bankers, police state thugs, and when all else fails – the military. While the masses were distracted by facebooking, texting, twittering, instagramming, taking selfies, playing Words with Friends, engaging make believe enemies on their PS3 or Xbox, watching the Kardashians on one of their 700 cable TV stations, or shopping for Chinese produced crap at one of our 1.5 million cookie cutter chain retail boxes, those in control of this country covertly turned the nation into a surveillance state while militarizing local police forces. They know the endless growth story is over. Our oppressors fear the repercussions when the masses realize it’s all been a big lie and they are left impoverished and hungry. They are attempting to instigate foreign wars, while preparing for the coming civil war.

The confusion, chaos, mayhem and war currently shaking the foundations of our planet are a direct result of too many people jammed into too small of a space with too few resources and too few opportunities for economic advancement. Poor, deprived, hungry people with nothing to lose begin to lose it. Revolution, civil unrest, radicalism, the rise of extremists and despots, and totalitarian regimes are the result. The invasion of Iraq was about oil. The overthrow of Gaddafi was about oil. The ongoing attempt to overthrow Assad is about a natural gas pipeline to Europe in order to isolate the Russians. The Ukrainian coup is about Russian natural gas and oil. The sanctions and saber rattling over Iran’s nuclear program is really about their oil. The United States is utilizing their military industrial complex and CIA assets to instigate turmoil and war around the world in an effort to gain control over the dwindling energy resources in the Middle East and Africa. Russia and China are blocking U.S. efforts at every turn, as the world inches ever closer to a major resource war.

Huxley’s Brave New World dystopian America had a good run from 1950 until 2000. Our keepers kept us fat, dumb, distracted, and in debt up to our eyeballs. Since 2000 Orwell’s 1984 dystopian Surveillance States of America seems to be taking shape, under the watchful eye of our very own Big Brother, the NSA. Fear, punishment, slogans (See Something Say Something) and appeals to non-thinking patriotism have replaced freedom, liberty, individual rights, the Constitution, personal responsibility for our own lives and questioning authority. The propagandists created the War on Terror as a way to keep the ignorant masses fearful and cowering behind the skirts of Big Brother. The 2008 financial collapse was another crisis that couldn’t go to waste. The Federal Government has expanded the spending of your tax dollars by 40% since 2007. The DHS concentrates on the internal enemy – you. The military industrial complex creates new foreign enemy threats every day – Hussein, Gaddafi, Ahmadinejad, Assad, and now Putin.

The monetary and fiscal policies of the country have remained in permanent crisis mode because the Ponzi scheme can’t be maintained without a constant debt fix. As our permanent state of crisis devolves into war, our remaining liberties will be stripped away in the name of safety, security and unquestioned support of the state. Huxley knew that we would consume, obey and submit until dictatorship became almost inevitable. Will you sit idly by while a small cabal of power hungry men destroys our country? Will you send your sons off to wars manufactured by tyrants as cannon fodder to further enrich the military industrial complex? Will you make a stand when they begin to round up subversives, dissenters, and malcontents under the guise of protecting you from domestic terrorists? Will you choose liberty and freedom over repression and descent into captivity and totalitarianism? The choice is yours.

“But liberty, as we all know, cannot flour­ish in a country that is permanently on a war footing, or even a near-war footing. Permanent crisis justifies permanent control of everybody and everything by the agencies of the central government. And permanent crisis is what we have to expect in a world in which over-population is producing a state of things, in which dictatorship becomes almost inevitable.” Aldous Huxley – Brave New World Revisited – 1958

 

Are you a believer?

“One believes things because one has been conditioned to believe them.” – Aldous Huxley – Brave New World

Or a truth seeker?

“You shall know the truth and the truth shall make you mad.” – Aldous Huxley

LOOKING INTO THE ABYSS

Guest Post by Jesse

 

“We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.

Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K.”

Edward ‘Eddie’ George, Governor Bank of England 1993-2003

 

Yesterday I said,

“The capping in the metals is obvious.

There is no economic news or theory that is needed otherwise to explain it.

The question is how long it can last.”

Someone asked ‘why then is it happening?” I am sorry I had thought it was also obvious based on any number of recent posts.

The Anglo-American Gold Pool, and their coterie of client Banks, have made a policy decision to hold the price of gold and silver below 1300 and 20.

Why those particular levels?   Because any lower, and the miners would start going out of business, and the flow of physical bullion to the East might become unmanageable.   They are nice round numbers, with the obvious appeal to the bureaucratic mind.   Anything higher, or rather, with a more aggressive rate of ascent, and some of the natives might become restless, and the positions of some Banks might become untenable.

Their reasons are of course theirs, but I would imagine it is something along the lines of ZIRP, the TARP, selective justice, and the rigging of LIBOR and any other number of markets.

The preservation of the status quo becomes paramount to those caught in a credibility trap, and especially among those who have risen to great wealth and power through ‘extraordinary means.’

L’etat, c’est moi.

QUOTE OF THE DAY

“Under the gold standard, a free banking system stands as the protector of an economy’s stability and balanced growth… The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit… In the absence of the gold standard, there is no way to protect savings from confiscation through inflation”

Alan Greenspan – 1966

High Tide for the Dollar: Revenge of the Sith

Guest Post by Jesse

I have certainly considered this scenario many times, of how the dollar regime might evolve,  and the one discussed below remains one possible outcome.

There is an intense international discussion going on about the future of the international currency system, and relations in general.  I have referred to this generally as the ‘currency wars’ for some time.

Most Americans have yet to notice this, due in no small part to the silence of the mainstream media.   If the US and the BRICs cannot engage in a rapprochement over the future of the international monetary system, and keep pushing a hard line for a US dollar hegemony, then of course the BRICs may pursue those discussions by other means.

One way to do this would be to revalue gold at let’s say $10,000 per ounce, and use it to partially back their own currency, or currencies.  Bill Holter does a good job of outlining that in the article excerpted below.  The details of how that one might play out is certainly open to much debate.

The counter to this is force, which the US has been employing much more aggressively and pre-emptively of late than it otherwise has done in the post-Cold War era.

I had assigned this somewhat unilateral devaluation of the Dollar to Gold outcome a low probability, thinking that the US and its allies, Britain, Japan, and parts of the EU, would continue supporting each other’s currencies and policies of foreign exchange valuations through non-transparent swaps and buying, in a managed devaluation amongst themselves of course. But I thought they would at least open the door to allowing the SDR to be reconstituted with a broader basket of currencies and metals not under NATO control.

The events of late in Ukraine make me wonder if the negotiations have not broken down because the hard liners in the Anglo-American cartel have prevailed over those who might favor accommodation and compromise. When the coup d’état occurred, with the US involvement becoming known, I had one of those ‘WTF’ moments many of us had when the US made a hard right turn and attacked Iraq, seemingly out of nowhere as a response to 911.   Wow, where did that come from?

Certainly it must be obvious that the neo-cons are back in force in Washington, although the neo-liberal economists in the Obama cabinet are certainly capable of carrying the financial side of that American Century outlook.

This is not to say that Russia and China are in the right, or are ‘good.’  They have positions and the Anglo-American financiers have positions.  One can certainly debate the relative merits, but for my own case I wish to try and understand what is happening, so that we may best adjust to it and understand what is happening and why.

And it would certainly be difficult to give high marks to the Anglo-American elites for taking care of those at home, and managing the domestic infrastructure and prosperity.  As we see so often throughout history, this appears to be the case of an oligarchy versus another oligarchy, as they grow restless within their domains.

Therefore I continue to believe that we will see change, rather than collapse.  Although if I were writing a book, or selling my site for clicks, the temptation for blaring headlines of doom might be stronger.   Things change, and periods of change always invoke dire predictions and phantoms of doom.

I am more concerned about a union amongst the oligarchs and the rise of a global governance that is anti-human, to be frank.   But even that is most likely an outlier I would like to think.  Of more real concern perhaps are the unsuspecting believers and the gullible who may be proudly riding the gospel of prosperity, and a fascination for the trappings but not the substance of devotion, into the maws of hell, with ‘Lord, Lord’ on their lips.  But that is another matter for a smaller audience, and a preoccupation for some of us here.

So grab something solid and hang on.  I don’t know enough to be able to predict how this will turn out, and  anyone who might be able to do so realizes that the fog of war is descending quickly.   Predictions and guesses are cheap, and will become even more plentiful as things progress.  But knowledge is the coin of the realm.

There could be rough waters ahead, mateys. But one can always hope that cooler and wiser and stronger heads will prevail.  This will play out slowly, until something happens, and then events may being to move rather quickly.  Pray for the best, and prepare for the worst.

“Next Tuesday, Vladimir Putin will meet with Chinese President Xi Jinping, I believe that the odds are quite high that an energy deal will be announced where Russia will supply China with oil and gas and that infrastructure (pipelines) will also be built to the express exclusion of the dollar. Please understand that this is not a deal where a few million barrels of oil are sent and then get settled for, no, this will be a very long term partnership which is why the infrastructure will be built.

My intent was to explain that China has imported 1,000′s of tons of gold over the last several years and that they (even though their system is very highly leveraged just as ours) have prepared themselves for what is coming.  ‘What is coming’ is that China will have just as many massive defaults as the U.S. will …but with a “small difference.” I believe that China will mark gold up to an arbitrary number of let’s say $10,000 per ounce which will do a number of things. First, this will make China’s holdings worth much much more which can and will be used as collateral to steady their debt markets. This collateral will serve to re liquefy the banks AND back their currency should they wish to (I believe they do).

Another added ‘benefit’ is that this will expose the fact that the West no longer has any gold. The dollar will go into a spiral because not just ‘one lunatic’ like Saddam Hussein is proposing to no longer use dollars. No, we are talking about 2 major oil producers and our largest trading partner who may just be the largest economy in the world having eclipsed us. Another little tidbit is that these 3 taken together were for years the absolute arch enemy of the U.S. and now they are forming a unified triad where Russia and Iran can say, ‘Hey, you told us not to use dollars anymore, we’re just doing what you’ve told us to do.’  Talk about forming ‘policy’ without looking 5 seconds into the future, our sanctions would be the definition of this.”

Bill Holter, They Don’t Need Us, We Need Them

Read the entire article here.

NO MARKET MANIPULATION HERE – RIGHT?

I’m sure this is a coincidence. The Fed and their Wall Street puppet masters certainly don’t coordinate their buying, selling, and suppression of gold prices. That would be immoral and wrong, just like front running customers with HFT supercomputers. They would never do that. 🙂

 

WE’RE SURELY OUTSMARTING THE CHINESE

As the Federal Reserve, along with their Wall Street banker owners, in cooperation with Obama and his Treasury Dept., have been artificially suppressing the price of gold since 2011, someone has been taking advantage of the bargain prices. Do you think the brilliant Ivy League minds that caused two financial market crashes in the last 13 years have outsmarted those rubes in China? The fact that China ceased buying US Treasury bonds two years ago hasn’t worried the brain surgeons in the Eccles Building. They’ve got everything under control.

China wouldn’t be signing energy deals with Russia, buying up natural resources in Africa, making oil deals with Iran and buying up all the gold they can get their hands on because they are preparing for a dramatic change in the world currency regime. That’s silly. Those foolish Chinese don’t realize that gold is barbaric relic and that the fiat paper USD will always retain its value. Just because Janet prints $2.8 billion more of them per day doesn’t mean a thing. Faith in bankers will make everyone wealthy.

Those wily orientals don’t know what they are doing. 

THE U.S. IS LIKE A SHIP WITH NO LIFEBOATS

Excellent article from Hugo Salinas Price about the debased dollar, gold and the suicidal bankers who will destroy the world.

The Dollar Cannot Be Devalued and Suicidal Bankers

Hugo Salinas Price

“If the U.S. inflates and devalues the dollar, gold will go much higher in price”  Jim Rickards. (See here).

The last dollar devaluation took place under President Roosevelt in 1934, when from being worth 1/20.67th of an ounce of gold in 1933, the dollar was devalued to 1/35th of an ounce of gold.

The last opportunity for devaluing the dollar took place in August 1971, when the dollar was still pegged at 1/35th of an ounce of gold. Nixon took the advice of Milton Friedman and made the worst mistake in history; Nixon did not devalue the dollar as he should have done, but simply took the US off the gold standard, such as it was, and thence forth the US refused to redeem dollars held by Central Banks around the world at any price.

Since August 15, 1971, the dollar can no longer be devalued.

Since the dollar is the reserve currency of all Central Banks in the world, all other currencies – the euro included – are only derivatives of the dollar. The proof of this statement is that the value of each and every currency in the world is calculated in dollars,

The world’s currencies are devalued or revalued against the dollar in the world’s currency markets every day of the year.

There is a “Dollar Index” which shows a value of the dollar against a basket of other currencies. However, the currencies selected for the basket are arbitrarily selected and some relatively important currencies are not included in the basket. Besides this, the movement of the dollar in the “Dollar Index” cannot signify either devaluation or revaluation of the dollar, because the currencies in the Index are themselves undergoing either depreciation or appreciation in dollar terms, due to their own national circumstances.

The US cannot declare an official devaluation of the dollar because there is nothing against which it may devalue, or rather, it does not wish to recognize the existence of gold as money, against which it might devalue.

In order for the US to devalue the dollar effectively, it would first be absolutely necessary for the US government to establish gold as the referent for its value. The US government would have to declare that the value of the dollar is equivalent to a given amount of gold, and solemnly promise that that value will be upheld and made good by offering to buy any amount of gold tendered to it, and pay for it in dollars at a price slightly below the officially established price of gold in dollars, as well as offering to sell any amount of gold paid for in dollars, at a price slightly above the officially established price of gold in dollars.

Once an official value of the dollar in gold were established, it would then once again be possible for the US government to renege on its promise and devalue the dollar by establishing a new and lower value of the dollar in gold. In other words, the dollar must first of all be freely convertible into gold at an official rate, before any devaluation can take place.

As things now stand, it is impossible to devalue the dollar.

A rising price of gold does not devalue the dollar, because there is no official link between gold and the dollar. The world’s monetary and financial systems have no link to gold. Gold can be any price without causing any effect upon those systems. We have seen gold at $1900 dollars per ounce, and things were running just as they were when gold was $300 dollars per ounce.

However, the rising price of gold is a huge embarrassment to the US government not because it devalues the dollar (it does not do this) but because it provokes a loss of confidence in the dollar. When the dollar is seen as falling in value against gold, its fall causes investors to exchange dollars and other currencies for gold as a means of protecting wealth. The rising price of gold is a blot on the prestige of the US dollar and the prestige of the US itself.

The price of gold in dollars is therefore under strict government control. This fact, once derided as ridiculous, is increasingly accepted as truth by those interested in monetary matters around the world. The means for controlling the price of gold lies in the massive sales of “paper gold” which take place to suppress its price, as so many investigators have amply documented.

US monetary policy considers that the dollar is here to stay forever, and that gold is no longer – and never again will be – the world’s ultimate money.

The governments of several nations around the world do not share the same conviction with regard to the permanence of the dollar. China invented irredeemable paper money – which is what the whole world uses today – some one thousand years ago, and several dynasties of Chinese emperors learned to their cost that paper money always degenerates into simple trash.

The Chinese government knows that the dollar will not be around forever. China is purchasing enormous amounts of gold to add to their huge pile of US Bonds in the reserves of the Bank of China; the government of China is more enlightened than the government of the US, because it is encouraging the Chinese to purchase gold and silver.

The US government tells the world that it possesses some 8,000 tonnes of gold; the fact that it cannot deliver physical gold held for Germany’s account belies the assurances regarding the physical gold stock of the US.

The situation for the US – and for the world – is dangerous: the US is like a ship with no lifeboats, because it is presumed to be unsinkable.

The US and its allies are allowing the Chinese and Asia in general, to take possession of huge amounts of gold every year, while the US, the UK and Europe are drained of gold by shipments to the East.

The US evidently believes that the dollar is here to stay and that gold is just a passing fancy. This is classic hubris or arrogance.

When serious problems for the dollar surface – as they surely will – and the US has little or no gold to fall back on, the US with its back to the wall may become a very dangerous entity in the world. Would it be possible for those running the US to loose their heads and decide for a suicidal nuclear war in response to a desperate economic situation? Does the destruction of the whole world matter to men about to take their own lives? Do suicidal bankers worry about the fate of the world?

WHERE’S THE UKRAINIAN GOLD?

If gold is just a barbarous relic and not a form of currency, according to Bernanke, why so much secrecy and price suppression by the powers that be? Watch what they do, not what they say.

 

Was The Price Of Ukraine’s “Liberation” The Handover Of Its Gold To The Fed?

Tyler Durden's picture

A curious story, and one which should be taken with a mine of salt, has surfaced out of the pro-Russian newspaper Iskra, which reports – so far on an entirely unsubstantiated basis – that last Friday, in a mysterious operation under the cover of night, Ukraine’s gold reserves were promptly loaded onboard an unmarked plane, which subsequently took the gold to the US.

From the source:

Tonight, around at 2:00 am, an unregistered transport plane took off took off from Boryspil airport.

 

According to Boryspil staff, prior to the plane’s appearance, four trucks and two cargo minibuses arrived at the airport all with their license plates missing. Fifteen people in black uniforms, masks and body armor stepped out, some armed with machine guns. These people loaded the plane with more than forty heavy boxes.

 

After this, several mysterious men arrived and also entered the plane. The loading was carried out in a hurry. After unloading, the plateless cars immediately left the runway, and the plane took off on an emergency basis.

 

Airport officials who saw this mysterious “special operation” immediately notified the administration of the airport, which however strongly advised them “not to meddle in other people’s business.”

 

Later, the editors were called by one of the senior officials of the former Ministry of Income and Fees, who reported that, according to him, tonight on the orders of one of the “new leaders” of Ukraine, all the gold reserves of the Ukraine were taken to the United States.

Indicatively, according to the latest IMF figures, Ukraine’s official gold holdings are just over 40 tons, having doubled in the past decade:

 

 

So just more disinformation and propaganda surrounding the Ukraine, or something more? GATA has submitted an inquiry into the New York Fed to get official denial (because it certainly won’t get a confirmation) from the Liberty 33 folks.

Of course, the best source of validation, and refutation, of this story would be the people of Ukraine, alas since not even Americans are entitled to observe how much gold is in Fort Knox, somehow we doubt that the Central Bank of Ukraine will be any more lenient in providing visiting and viewing hours for its much more compact gold inventory. Especially since the local population is far more busy celebrating its “liberation” by western powers.

We hope, for their sake, they weren’t also just “liberated” of all their gold, which after a brief stay 80 feet below the surface at 33 Liberty, will promptly find its way either to the Bundesbank, or to the billionaire oligarchs, based either in London or elsewhere, and currently in charge of “post-liberation” Ukraine.

Finally, putting this into perspective, 40 tons of gold is roughly what China imports every ten days.

Of Paper Money, Digital Money And Gold

Guest Post by Hugo Salinas Price

The digital “Bitcoin” has bit the dust at Mt. Gox Bitcoin Exchange; over $400 million US has evaporated, or perhaps moved into someone’s pocket. The news is all over the Internet these days.

“Digital money” is accepted world-wide. There exists only a remnant of fiat paper money which is increasingly and deliberately made more difficult to use and transport physically. The reason being, that digital transactions leave a trail of information which governments use to control the behavior of their subjects (we can hardly call them “citizens” any longer) whereas citizens using paper money in their dealings leave no trail.

A bank in Mexico, of which I have personal knowledge, receives millions in dollar bills every week in thousands of individual money-exchange transactions. This presents a problem for the bank. Why? Because not one bank in the US will accept these dollar bills (mostly twenties) for credit to the Mexican bank’s account.

Apparently, it would be necessary to present a lifetime resumé of each of the individuals exchanging their dollar bills for pesos, in order to prove that there is no money-laundering going on. Impossible to do, what with the tens of thousands of transactions.

Only the long-established Mexican banks can remit their dollar bills for credit to the US, and then, only to Bank of America. The bank of which I speak is relatively new – though it has well over 12 million individual account holders – and Bank of America will not receive dollar bills from it. Other Mexican banks of recent creation are in the same fix.

All countries are engaged in hampering the use of paper money. Mexico is engaged in this process; otherwise, the Mexican monetary authority – the Bank of Mexico – would have intervened to assist the Mexican bank of which I speak, to remit its dollar bills to the US for credit to its account.

But, to return to the Bitcoin:

Bitcoin has received a great deal of media attention both in the US and around the world. This is quite suspicious, in my view. Of course, there is no way to prove that the Bitcoin has support in the higher circles of politics.

An interesting point about the Bitcoin is that it is so important for it to have a price in dollars; it has had various prices, all totally speculative.

I should like to point out that when real money – gold – was in use in the world, it had no price. All national currencies were only certain various amounts of gold, with various national names.

The Bitcoin as a “digital currency” is an example of the enormous confusion which reigns in the world, regarding what money is and must be.

Money – authentic money – must be the most marketable of all commodities. This is why gold is money! See here. Silver follows in second place.

The Bitcoin cannot be money because it is digital. Since it is merely a digit, which is as close to nothing as one can get, it cannot settle any debt.

The fact is that the world today is not in the least concerned with settlement. Enormous amounts of digital Bonds which promise to deliver digits, but with an interest rate attached, have accumulated as reserves in Central Banks of exporting countries. The Bonds, which are evidences of debt, are proof that payment – that is to say settlement of trade imbalances – has not taken place.

Settlement of international trade imbalances requires that something be delivered in payment, and that something can only be gold. (Silver has lesser value, but might conceivably be fit into settlement of world trade.)

Suppose that China should come into open conflict with its neighbor, Japan. Japan is an ally of the US. In such a conflict, the US might decide to freeze all Chinese dollar reserve “assets” for the duration.

With a few computer clicks in New York, China would find itself deprived of the use of some $1.3 Trillion dollars of its reserves, which are invested in digital Dollar Bonds.

This is a simple explanation of why the Chinese – among the most intelligent people on the planet – are buying gold hand over fist. Gold in the Chinese Treasury cannot be “frozen” in New York.

On March 4 we read that an advisor to Putin has recommended that Russia dump US Bonds in case of US sanctions against Russia, related to the Ukrainian affair. However, if Russia should attempt to dump US Bonds, it would discover that they had already been “frozen” in New York.

The Bitcoin must have a price, but cannot find it and will not be able to find it, for the following reason:

All digital currencies in use today have derived values. The fiat digital Dollar, for instance, has a value that derives, historically, from the time when the Dollar was 1/20.67th of an ounce of gold, and later 1/35th of an ounce of gold, and from that time to the present, a series of falling values which have each derived from a prior value by a series of devaluations.

The Bitcoin has no history, which is the essential element which makes all digital currencies acceptable, utterly false though they are.

The Bitcoin is simply a childish distraction for a childlike world population incapable of discerning falsity, much to the satisfaction of all the crooks, big and small, who prosper by scamming the public.

I remit to Von Mises, who stated that no fiat currency has ever been successfully introduced into circulation without a monetary value ultimately derived from when that currency was gold or silver money. Bitcoin does not fill the bill; it cannot circulate along with the established fiat currencies of the world because it has no history, no ancestry reaching back to its parent, gold or silver.