Posted on 04/19/2012 6:54:36 PM PDT by blam
No Way Back
By Frederick Sheehan
04/19/12 Gold and silver will both rise far above their current levels. “When” is unknowable. “Why” is due to the unremitting and insolent amorality of central bankers and their practices. If not Simple Ben at the Fed, his compatriots across the globe are a daily source of confusion, contradiction, and stupidity.
The stupidity may be real or it may have evolved from an unwillingness to think, as George Orwell wrote of Stanley Baldwin’s and Neville Chamberlain’s abdication of responsibility in the 1930s: “What is to be expected of them is not treachery or physical cowardice, but stupidity, unconscious sabotage, an infallible instinct for doing the wrong thing… Only when their money and power are gone will the younger among them begin to grasp what century they are living in.”
It is important — for those who care about the ascent of gold — to understand it does not matter why they are stupid. It matters that their stupor will continue until the current monetary and credit system is paralyzed. We can be sure of that. Orwell explained: “Clearly there was only one escape for them — into stupidity. They could keep society in its existing shape only by being unable to grasp that any improvement was necessary.”
The central bankers have no other policy than to support asset prices. They have elevated and taken control of markets beyond the point of withdrawal. There is no way back.
As discussed in “Peak Imbalances are Falling,” foreign central banks have bought over $5.5 trillion of US Treasury securities: the reason 10-year US Treasury bonds yield 2.0%. Interest rate suppression is also fundamental to Eurocrat domination. The two attempts at salvaging the European banking system (over one trillion euros lent by the ECB to European banks in December 2011 and February 2012) have failed. The stock price of Banco Santander, the Spanish bank advertised as not exposed to Spanish real estate, has fallen back to the level of mid-December 2011. The country’s banking system is kaput. Again, there is no way back.
Bianco Research in Chicago calculates the balance sheets of the world’s six largest central banks are now twice the size of 2006. With $13.2 trillion of assets, they will double their size again, if they can. For as long as they can, there will be times when confidence in Bernanke and Draghi knock gold and silver for a loop. At some point (“When”), the emperor will wear no clothes. Central banking currencies will be rejected. Gold and gold stocks (hang in there, any day now), will be the currency of choice.
In Frozen Desire (1997), James Buchan wrote: “I have watched the most able men and women in my generation, who might have created unexampled monuments in moral philosophy, mathematics, or engineering, waste their time in a prattle of non-accelerating inflation rates of unemployment… [E]conomics…has retreated into algebra. A profession that begins with priests [alchemists]…ends with hermits. Political economy is now, I suspect, in the same condition in which Scholastic learning found itself on the eve of the Discoveries.It is about to explode.
Gold yes, gold stocks no. Gold stocks don’t even go up 1:1 with gold much of the time, but on the way down, hey there’s your leverage.
Paper or metal?
Give me the metal every time. I am not a goldbug and I have always been suspicious of people who write opinion pieces that steer others to their product. I won’t fault much of their reasoning about the dollar though I still think other commodities are a better investment such as beans, rice, land, and ammunition.
Yep. I collect the kind of gold you can roll around in your hand, and admire the nice etching, and read the date.
I like the coins.
Again, for thinking and reasoning adults, there is no discussion to be had as to whether the crash, only when & the best ways to protect oneself and one’s family.
The consequences for picking the wrong method(s) are terrible to contemplate.
Anyone that isn’t frightened (I certainly am) is delusional.
Unfortunately, I know a lot of delusional people.
I suggest that you do some Googling on the phrase "DOW in gold dollars" ... it will help to break the spell.
I know plenty of delusional folks too!
I think the best thing you can do outside of living in a good location is stockpile food and have access to water that you can purify. We sold a beautiful house in the city and moved about 35 minutes away to rural acreage to start a hobby farm, orchard, and large garden. It’s hard work, but it’s also a great lifestyle for my family.
Although actual consumable commodities certainly have their value, they don’t do a very good job of conveniently storing high value. When you need portability, and consistent value over time, precious metals are hard to beat.
However, in the event of civil strife, socialist dictatorship and martial law, getting money out of the country would be a necessity. Bank accounts can be easily intercepted by the government; they have all our information. Getting metals out of the country will take some creativity.
“Ownership” of land is an illusion. You don’t own land, even if you have paid cash money for it and have the title. The government owns all land, and you rent it from them for whatever your property taxes amount to. Even so, the regulators can and will take it, with little or no compensation to you if it suits their purposes.
Land is only yours if you have the means - both legal and lethal - to defend it against any and all threats. When it comes to the government, your chances as an individual or family are slim to none. Look at Randy Weaver.
Sorry, but that’s the truth.
—Yep. I collect the kind of gold you can roll around in your hand, and admire the nice etching, and read the date.
I like the coins.—
Same here, but I just do junk silver. The rest I invest in tools for the farm: Land, buildings, tractors, literal tools, etc.
—Actually I don’t believe metals ever rise or fall. It’s currencies that rise and fall.—
That is exactly how I see it.
I have a stack of 10 morgan silver dollars I like to use as a prop. I tell people that in 1922 they were worth $10. In 1955 they were worth $10. In 1972 they were worth $10.
Today they are worth $240.
They will buy the same thing they would have at all those other times. In 1972 I could buy three or four gallons of gas with one. Now I can buy six. But the dollar has really collapsed against them. I can buy 24 of them.
—“Ownership” of land is an illusion. You don’t own land, even if you have paid cash money for it and have the title.—
I think it depends on where you live. I used to say that all the time. Then again, my friend in Seattle pays more in property taxes per MONTH than I pay for a farm an new home PER YEAR.
I could sell Chiclets on the sidewalk off and on and collect enough to pay my property taxes. So far, anyway.
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