Mr King Had 300 Tons Of Gold. After Selling 1,350 Tons, He Still Had 300 Tons Of Gold.

Video Rebel’s Blog
The following are a few examples of the New Math as practiced by the banking elite.
Mervyn King was until just recently the Governor of the Bank of England. In April he sold 1,350 metric tons of gold to drive down the price of gold. But after selling all of that gold, he still had 300 tons of gold. How was this possible? He sold gold on deposit from foreign countries and from bullion banks. A bullion bank can lease gold from the Bank of England or the Federal Reserve and sell it 3, 4 or even 5 times. Of course if the price of gold goes up, then they are technically obligated to replace the gold which is why they needed to drive the price down.  
After the Germans asked the French, the English and the Americans to return just 350 metric tons of their gold on deposit at those central banks, they were told it would take 7 years to return it. We learned why it would take so long when French soldiers invaded their former colony Mali which had just discovered a large high grade gold deposit. The trouble was that the people of Mali had wanted to sell their gold to the Chinese at the highest price. But fortunately for the banks the government had just been taken over in a coup by a general who had been trained at Forts Benning and Huachuca in the USA. And then Al Qaeda showed up threatening the takeover of the entire West coast of Africa. This is the same Al Qaeda that invaded Bosnia, Libya and Syria for the NATO imperialists. That these people practice cannibalism and kill unarmed women and children is of no concern to their paymasters in NATO. Now they are helping the bankers steal Africa’s gold which is what the British and French armies had done in the 19th and 20th centuries.
There are other examples of new mathematics being demonstrated by the bankers.
Every year the banks launder a trillion dollars a year in drugs and illegal weapons sales. A $20 bill weighs one gram. A trillion dollars in $20 bills would be a pile of 50,000,000 Federal Reserve Notes and would weigh 50,000,000 grams or 50 metric tons. One metric ton weighs 2,204.6 pounds. Asia Times magazine said that the banks launder 500 billion dollars in political bribes every year. That would be another 25 metric tons for a total of 75.
Does anyone imagine that there is some elderly Sicilian mobster from central casting who is wheeling almost a ton and a half of $20 bills into banks around the world every week of the year without the financial regulators finding out what he was doing?
Another example of new math applied to banking is the sentencing of common criminals versus what happens to bankers. It is  as if a bank robber was caught, paid a thousand dollar fine from the million dollars he just stole and was allowed to keep the other $999,000. Bankers have been proven to rig interest rates and sell fraudulent mortgages. In fact Matt Taibbi in a now famous 14 page article in Rolling Stone magazine said he had 27 examples of rigged markets when he said the Conspiracy Theorists were right. I would love to see a comedy skit in which the cops catch bank robbers coming out of a bank with the loot. The bankers count the loot and pay a 1% fine which goes to the city hall slush fund allowing the criminals to walk away freely with 99% of the loot and no criminal indictment. That is the way America’s justice system actually works.
I would like to cite the US budget and America’s 17 trillion dollar debt as a final example of the New Math.
Dr Jim Willie has a PhD in statistics from Carnegie Mellon. He said that we have no justice system to prevent a bank which functions as one of the 21 primary dealers in US Treasury bonds to sell counterfeit bonds to the Federal Reserve.  He said in the video below that WTC Tower 7 had the evidence of 2.3 trillion dollars in fake Treasury bonds from J P Morgan which were destroyed on 911.
This is a separate issue from the bankers looting federal spending in departments ranging from Housing to the Department of Defense. HUD lost 77.2 billion dollars in the last two years of the Clinton administration. On 9-10-2001 Donald Rumsfeld said that he could not trace 2.3 trillion dollars in DOD spending.
Let’s more closely examine the combination of the bankers ability to steal from federal spending and to sell fake Treasury bonds which the Federal Reserve must redeem so we can determine the real burden banker criminality has put upon our federal budget.
In June of 2010 approximately 17.3 billion dollars (at a rate of 4 billion dollars a week for 4.3 weeks) was stolen from unaudited government spending. But for the sake of believability I will cut that estimate by 3 billion down to 14.3 billion dollars. This helped run the deficit up from 53.7 billion dollars to 68 billion. So the Treasury in June of 2010 had to raise a total of 68 billion including the 14.3 billion of missing federal funds. The New York FED and the primary dealers sold a total of 211 billion dollars. If you subtract the 68 billion actually needed from the 211, you get a total of 143 billion dollars the bankers pocketed from the sale of phony Treasury bonds. Now go back and add in the 14.3 billion to the 143 billion and you get a total of 157.3 billion dollars the bankers stole in just one month from you. So what are you going to do about it?
If you add in the 6 trillion dollars we have spent on wars for Israel since we let them do 911 and get away with it, you are talking about most of the total of 17 trillion dollars in US federal debt. And the rest of the 17 trillion can probably be attributed to the right granted to the banks under the Federal Reserve Act of 1913 to charge interest to us on money they have created out of nothing.
This is the New Math as practiced by the bankers. I will conclude by quoting something I have had to say before.
The Fundamental Fact of Your Existence as a modern man or woman is that the bankers of New York and London want to reduce you to Debt Slavery.
Accept that fact and move on to the solution.
That is their plan for you.
What is your plan for them?
Author’s Notes:
Video: Monsanto + Google + Bilderberg = End of Humanity
http://vidrebel.wordpress.com/2013/05/27/video-monsanto-google-bilderberg-end-of-humanity/
Israel Shahak: The Laws Against Non-Jews In 2 Minutes
http://vidrebel.wordpress.com/2011/11/18/israel-shahak-the-laws-against-non-jews-in-2-minutes/
How And Why An American Military Coup Could Save The World
http://vidrebel.wordpress.com/2013/04/25/how-and-why-an-american-military-coup-could-save-the-world/
An 11 Point Program to Stop This Depression And End The War Against Us
http://vidrebel.wordpress.com/2013/06/26/an-11-point-program-to-stop-this-depression-and-end-the-war-against-us/
The Twelve Steps Of Gentiles Anonymous
http://vidrebel.wordpress.com/2013/01/20/the-twelve-steps-of-gentiles-anonymous/

During The Best Period Of Economic Growth In U.S. History There Was No Income Tax And No Federal Reserve

The Economic Collapse – by Michael Snyder
How would America ever survive without the central planners in the Obama administration and at the Federal Reserve?  What in the world would we do if there was no income tax and no IRS?  Could the U.S. economy possibly keep from collapsing under such circumstances?  The mainstream media would have us believe that unless we have someone “to pull the levers” our economy would descend into utter chaos, but the truth is that the best period of economic growth in U.S. history occurred during a time when there was no income tax and no Federal Reserve.   
Between the Civil War and 1913, the U.S. economy experienced absolutely explosive growth.  The free market system thrived and the rest of the world looked at us with envy.  The federal government was very limited in size, there was no income tax for most of that time and there was no central bank.  To many Americans, it would be absolutely unthinkable to have such a society today, but it actually worked very, very well.  Without the inventions and innovations that came out of that period, the world would be a far different place today.
It is amazing what can happen when the government just gets out of the way.  Check out all of the wonderful things that Wikipedia says happened for the U.S. economy during those years…

The rapid economic development following the Civil War laid the groundwork for the modern U.S. industrial economy. By 1890, the USA leaped ahead of Britain for first place in manufacturing output.
An explosion of new discoveries and inventions took place, a process called the “Second Industrial Revolution.” Railroads greatly expanded the mileage and built stronger tracks and bridges that handled heavier cars and locomotives, carrying far more goods and people at lower rates. Refrigeration railroad cars came into use. The telephone, phonograph, typewriter and electric light were invented. By the dawn of the 20th century, cars had begun to replace horse-drawn carriages.
Parallel to these achievements was the development of the nation’s industrial infrastructure. Coal was found in abundance in the Appalachian Mountains from Pennsylvania south to Kentucky. Oil was discovered in western Pennsylvania; it was mainly used for lubricants and for kerosene for lamps. Large iron ore mines opened in the Lake Superior region of the upper Midwest. Steel mills thrived in places where these coal and iron ore could be brought together to produce steel. Large copper and silver mines opened, followed by lead mines and cement factories.
In 1913 Henry Ford introduced the assembly line, a step in the process that became known as mass-production.

When hard working, industrious people are given freedom to pursue their dreams, great things tend to happen.  The truth is that we were all designed to create, to invent, to build, and to trade with one another.  We all have something that we can contribute to society, and when families are strong and the invisible hand of the free market is allowed to work, societies tend to prosper.
It is not a coincidence that the greatest period of economic growth in U.S. history was between the Civil War and 1913.  The following information comes from Wikipedia…

The Gilded Age saw the greatest period of economic growth in American history. After the short-lived panic of 1873, the economy recovered with the advent of hard money policies and industrialization. From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita, despite the panic of 1873.  The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled.

Wouldn’t you like U.S. GDP to double over the course of a decade now?
So why don’t we go back to a system like that?
In 1913, the Federal Reserve and a permanent national income tax were introduced.  Today, the unelected central planners at the Federal Reserve totally run our financial system and the U.S. tax code is about13 miles long.  The value of our currency has declined by more than 96 percent since 1913, and the size of our national debt has gotten more than 5000 times larger.
Meanwhile, control freak bureaucrats seemingly run everything.  Almost every business decision is heavily influenced either by taxes or by the millions of laws, rules and regulations that are sucking the life out of our economic system.
My favorite example of how suffocating red tape in America has become is the magician out in Missouri that was forced by the Obama administration to submit a 32 page “disaster plan” for the rabbit that he uses during his magic shows for kids.
It is no wonder why we don’t have any economic growth.  The central planners in the federal government are killing our economy.
And the central planners over at the Federal Reserve are killing our financial system.  In school we are taught that the Fed was created to bring stability to our financial system, but the truth is that they have been responsible for financial bubble after financial bubble, and now Federal Reserve Chairman Ben Bernanke has created the largest bond bubble in the history of the world.  When that thing bursts, and it will, we are going to see financial carnage on an unprecedented scale.
Unfortunately, the truth is that the Federal Reserve never has been looking out for the interests of the American people.  It was created by the big banks and it has always worked very hard to benefit the big banks.  During the Fed era, the big banks have become the most powerful economic entities on the entire planet.  Our entire economy is now based on debt, and the big banks are at the very center of this debt spiral.  The following is an excerpt from a recent article by Paul B. Farrell…

Today’s world includes four Wall Street banks each with assets over $1 trillion, each more than Goldman. Plus eight other big global banks each have over $2 trillion total assets, including, among the 100 largest, Barclays, HSBC, Deutsche, ICB-China and Japan’s Mitsubishi.

Yes, this new world is changing fast. Back in 2008 the world’s financial banks were in ruins. Wall Street sunk into virtually bankruptcy. Goldman and its Wall Street too-big-to-fail co-conspirators had trashed the global economy, triggered a virtual depression, and Wall Street’s casinos lost over $10 trillion of Main Street retirement funds.

And as we saw back in 2008, the Federal Reserve is going to do whatever is necessary to prop up Wall Street.  Most Americans never even heard about this, but during the last financial crisis the Fedsecretly loaned 16 trillion dollars to the big banks.  Those loans were nearly interest-free and those banks knew that they could get basically as much nearly interest-free money as they wanted from the Fed.
So how much nearly interest-free money did the Fed loan to normal Americans?
Not a single penny.
That would be bad enough, but it is also important to remember that since 2008 the Fed has actually been paying banks NOT to lend money to the rest of us.
What is it going to take for the American people to start demanding that the Fed be abolished?  They are absolutely destroying our financial system.
Meanwhile, the central planners in the Obama administration have been doing their part as well.  During the second quarter of this year, the number of Americans working between 30 and 34 hours per week fell by146,500.  During that same time period, the number of Americans working between 25 and 29 hours rose by 119,000.
Why is this happening?
Well, the Obamacare employer mandate will apply to workers that work at least 30 hours each week, so employers are starting to cut back on the hours their employees are getting in order to comply with the law.
But this is just one example out of thousands, and most Americans already know that the U.S. economy has been crumbling for many years.
In fact, things have gotten so bad that even 53 percent of all Democrats believe that the American Dream is dead even though Barack Obama is residing in the White House.
But this is just the beginning.  Things are going to get much, much worse.  We are going down the same path that Greece has gone, and the unemployment rate in Greece has just hit a new all-time record high of 27.6 percent.
That is where the U.S. is headed eventually.  Decades of very foolish decisions are catching up with us.
The primary reason why all of this is happening is debt.  As a society, we simply have way, way, way too much debt.
The biggest offender, of course, is the federal government.  Since 1970, federal spending has grown nearly 12 times as rapidly as median household income has, and since the year 2000 the size of the U.S. national debt has grown by more than 11 trillion dollars.
When government debt gets too large, it has a profoundly negative effect on an economy.  The following is an excerpt from an outstanding article by Lacy H. Hunt, a Ph.D. economist…
*****
Here are the studies, starting with the one with the broadest implications:

1. “Government Size and Growth: A Survey and Interpretation of the Evidence,” from Journal of Economic Surveys. Published in April 2011, Swedish economists Andreas Bergh and Magnus Henrekson (both of the Research Institute of Industrial Economics at Lund University) found a “significant negative correlation” between size of government and economic growth. Specifically, “an increase in government size by 10 percentage points is associated with a 0.5% to 1% lower annual growth rate.”
2. “The Impact of High and Growing Government Debt on Economic Growth: An Empirical Investigation for the Euro Area,” inEuropean Central Bank working paper, Number 1237, August 2010. Cristina Checherita and Philipp Rother found that a government-debt-to-GDP ratio above the threshold of 90-100% has a “deleterious” impact on long-term growth. Additionally, the impact of debt on growth is nonlinear – as the government debt rises to higher and higher levels, the adverse growth consequences accelerate.
3. The Real Effects of Debt, published by the Bank for International Settlements (BIS) in Basel, Switzerland in August 2011. Stephen G. Cecchetti, M. S.Mohanty, and Fabrizio Zampolli determined that “beyond a certain level, debt is bad for growth. For government debt, the number is about 85% of GDP.”
4. “Public Debt Overhangs: Advanced-Economy Episodes Since 1800,”by Carmen M. Reinhart, Vincent R. Reinhart, Kenneth S. Rogoff, Journal of Economic Perspectives, Volume 26, Number 3, Summer 2012, pages 69-86. The authors identified 26 cases of “debt overhangs,” which they define as public-debt-to-GDP levels exceeding 90% for at least five years. In spite of the many idiosyncratic differences in these situations, economic growth fell in all but three of the 26 cases. All of the instances, which lasted an average of 23 years, are included in the paper. They found that average annual growth is 1.2% lower for countries with a debt overhang than for countries without. The long duration of such episodes means that cumulative shortfall from the debt excess—i.e., several years in a row of subpar economic growth—is potentially massive.

*****
But it isn’t just federal government debt that is the problem.  The rest of us have way too much debt as well.
If you can believe it, the ratio of private debt to GDP was 273.3% for the twelve months ending in the first quarter of 2013.
That is an astounding figure.
And as Hunt explained, having too much private debt is also very bad for an economy…

In Too Much Finance, published by the United Nations Conference on Trade and Development (UNCTAD) in March 2011, Jean Louis Arcand, Enrico Berkes, and Ugo Panizza found a negative effect on output growth when credit to the private sector reaches 104-110% of GDP. The strongest adverse effects are for credit over 160% of GDP.
The second is the 2011 BIS study authored by Cecchetti, Mohanty, and Zampolli. They found that private debt levels become “cancerous” (in BIS economic advisor Cecchetti’s own words) at 175% (90% for corporations and 85% for households)—just slightly more than the UNCTAD study.

When you add our private debt to GDP ratio of 273 percent to our federal debt to GDP ratio of 101 percent, you get a grand total of 384 percent.
This is how we have funded the false prosperity of the past couple of decades.  Essentially, we have been putting our good times on a credit card.
And as anyone that has ever tried to live on credit knows, the good times eventually run out.
But this is what the Federal Reserve was designed to do.  It was designed to get the U.S. government trapped in a debt spiral from which there would never be any escape.
It is not an accident that our national debt has gotten more than 5000 times larger than it was when the Fed was originally created.  This is what the bankers wanted the system to do.
They wanted a system that would extract wealth from all of us through taxes, transfer it to the government, and then transfer it to them through interest payments.
We never needed a central bank, we never needed the IRS and we never needed an income tax.  America would be doing just fine without any of them.
But instead, America chose to go down the path of collectivization and central planning, and now we are heading toward the biggest economic disaster in the history of mankind.

Credit Outbids Cash = Resource Wars

by Charles Hugh-Smith
There are real-world consequences to over-issuing credit and currency.
Creating credit is the same as printing money when interest rates are zero. If I borrow $1 billion at 0% from the Federal Reserve (because I’m a Too Big to Fail bank, for example), it is functionally equivalent to printing $1 billion in cash currency because the credit costs nothing.
Let’s say there is a .25% interest rate cost and printing cash also costs .25%. The carrying costs of both are trivial.
As a result, those with access to cheap credit have the equivalent of a printing press. I illustrated this recently with an example of three traders entering a trading fair: Trader 1 only has cash that has been earned and saved; Trader 2 has access to leveraged credit (i.e. borrowing $100 based on $10 of cash collateral) and Trader 3 has a printing press that creates cash currency. The Financial System Doesn’t Just Enable Theft, It Is Theft (July 31, 2013)
As a result, Traders 2 and 3 could buy a lot more real-world goods at the fair than Trader 1, enabling the two traders with essentially unlimited credit/cash to reap enormous profits on carry-trades and other speculative trading.
Longtime contributor Harun I. recently pointed out an even more destructive consequence: resource wars.

Not only can trader 2 and 3 purchase more goods than trader 1. Trader 2 and 3 have no limit on what they can bid and therefore can price trader 1 out of the market completely. This can and does lead to economic warfare and control over states that have to import the majority of their food and/or energy.

This is a profound insight. Let’s take two states, both of which issue credit and currency. The first is the U.S., and the second is a beleaguered state (State 2) with too much public and private debt and little collateral (for example, gold reserves) to back its currency.
The second state can issue as much currency and credit as it chooses, but the value of that capital falls in direct proportion to the quantity issued. Those sellers who accept this credit or cash as payment for real-world goods have little trust that the money issued by State 2 will retain its current purchasing power in the future. As a result, there is a huge risk premium priced into the trade, and relatively few traders will accept the risk of trading a potentially worthless currency for their scarce resources.
For whatever reason (and there are more than one), the trader trusts that the U.S. dollar will retain its purchasing power long enough for the trader to trade it for some other asset or form of capital, or even hold it as collateral for future loans.
Harun’s point is the U.S. can outbid State 2 for oil or any other resource because it’s essentially free for the U.S. to issue credit and cash. The price for the resources in U.S. dollars will soar in a bidding war, and while the U.S. can simply issue more credit/cash, State 2 is rapidly impoverished as the cost of essential resources rises.
Eventually this leads to a bidding war for trust: Whose credit/cash will be trusted to retain its purchasing power? There is a grand irony here, of course; as issuers of credit/cash attempt to debase their currency to boost their exports, their debased currency buys fewer real-world resources.
In a global credit crisis created by the over-issuance of credit/debt, which currencies will lose trust and which will gain trust? Those which retain or gain trust will enrich the issuer and those who lose trust will impoverish the issuer.
Nations that lose this bidding war for trust may reckon it’s “cheaper” to wrest control of the needed resources by force rather than go through the arduous steps necessary to rebuild lost trust in their credit and currency.
In sum: there are real-world consequences to over-issuing credit and currency.

How Homeschool Led 17 Yr. Old to Question Money System – Elijah Johnson Interview

Elijah discusses the typical day in a homeschooler’s life, his plans for the future, and whether he believes homeschool is in danger here in the United States.

Dr. Doom Warns Of Major Market Crash This Fall: “20 Percent, Maybe More”

He made the crash call ahead of the 2008 crash, and predicted the market turn-around in 2009 to the exact day on which it happened.
Now Dr. Marc Faber of the Gloom, Boom and Doom Report is warning of an imminent stock market meltdown yet again.
Based on analysis of current stock market prices and the overall value of stock market indexes like the S&P 500 and the Dow Jones, Faber warns that, while we are seeing near all-time highs, the valuations are nothing but conjecture.
Looking at the makeup of the major indexes, it’s clear that their high values have become dependent on a small number of companies. A peak into what’s happening behind the scenes,however, shows that scores of other companies are being crushed because of weak earnings and a poor forwarding looking economic outlook.
This, according to Dr. Doom, is remarkably similar to what we saw in the days and weeks leading up to the 1987 crash.
It’s a recipe for disaster.

[In 1987] we had a very powerful rally, but also earnings were no longer rising substantially and the market became very overbought and the final rally into August 25th occurred with a diminishing number of stock hitting 52 week highs. In other words, the new high list was contracting and we had several breaks in different stocks.
And if you look at the last two days, it’s remarkable.
We’re close to the all-time highs at 1,709 on the S&P [500] and yesterday and the day before there were 170 new 52-week lows.
That’s a very high figure.
…
[By the end of this year I see the market closing] lower than today.
Maybe 20%. Maybe more.

For those invested in stock markets, it may be time to take a short break. Based on recent earnings, current economic sentiment, and continued degradation in national employment figures, there is a serious disconnect between what Wall Street wants you to think and what’s actually happening on Main Street.

This may not be the “collapse” that the U.S. government has been preparing for, but a stock market downturn of this magnitude could well wreak havoc all over the world, and for all we know could be the trigger for widespread calamity.

Just as we saw in 2008, when the selling starts, the panic follows. This means that investors will sell everything in sight first, and ask questions later. The effect, should markets slide, will be a price drop in just about every asset linked to paper trading markets, including gold, silver, commodities, tech, and retail. Even ammunition and firearms companies, which have seen huge demand in recent years, will likely take a hit.

Nothing will be spared when the herd goes into panic mode.

Federal government twice as bankrupt as Detroit

Detroit declared bankruptcy a few days ago.
I’ve written for years about how Detroit should serve as a stark warning to Americans who believe in liberal social policies, like highly progressive taxes and expensive social safety nets.
These socialist programs don’t cure income inequality. They merely destroy wealth by reducing incentives for building businesses and encouraging dependency. That’s why societies with lots of government spending typically have few civil institutions and a small middle class.
Here’s the message our politicians on both sides of the aisle seem to miss: Fifty years ago, Detroit was one of the largest and wealthiest cities in the world. Nearly 2 million people lived there, and it enjoyed the highest per-capita income in the United States.
Then, in 1960, everything changed.
Liberal Democrats came to power (and have held power since). Their ideas about using the government to build a “Great Society” – using the government to provide a cradle-to-grave social safety net – have slowly transformed Detroit from the wealthiest city in America to a hellhole.
Detroit’s population has declined by almost 70 percent since 1960. Roughly half of the people who remain are functionally illiterate. More than 60 percent live below the poverty line. And roughly half of all adults don’t work. Only about one-third of the city’s ambulances are in working order. Almost half of the streetlights don’t work. It takes the police an average of 58 minutes to respond to emergency calls. The violent crime rate (no surprise) is five times higher than the national average.
Why are most of America’s big cities strongly liberal, while virtually the rest of the country leans conservative? Find out in this jaw-dropping WND special report, “URBAN WARFARE: How the left has destroyed America’s greatest cities.”
It is shocking to realize that only 50 years ago, Detroit was the shining example for the world of capitalism and civil society. It doesn’t take long to destroy wealth.
Now consider this: Detroit went bankrupt with total debts of around $20 billion. That’s roughly $28,000 per remaining citizen. That’s nothing. The debts the U.S. government has amassed over the same period (the last 50 years) are vastly larger.
Today, all Americans owe more than $16.7 trillion on the federal level – that’s nearly $54,000 per citizen and nearly $150,000 per taxpayer. How many Americans do you think realize that our federal government is twice as bankrupt as Detroit?
Detroit is a living case study of why government efforts to redistribute wealth don’t work. But instead of recognizing any of the lessons of the catastrophe, Obama promises more of the same policies!
Meanwhile, his government is in far worse shape than the city. The only real difference is the president and the federal government are still able to print their way out of trouble, using the Federal Reserve’s ongoing manipulation of the U.S. Treasury market.
But no nation in history became wealthier by printing money and buying its own government’s debts. In every case, inflation soon destroyed the economies and wiped out private savings. Rates on the U.S. 10-year Treasury bond have recently moved from 1.6 percent to 2.6 percent – in the face of continued Federal Reserve buying of $85 billion per month.
The dream that the government could provide prosperity to the residents of Detroit has come to its inevitable end. The dream that the federal government can provide prosperity to the entire country is even more delusional. And it will come to a far worse end.
Printing trillions in new dollar bills to facilitate the madness won’t prevent the inevitable bankruptcy of our country. It will merely gut the middle class of its savings and its wages first.
Believe me, this will come to pass. It will not take another 50 years. Maybe 10.

Gold Markets Get Strange – Is Economic Danger Near?

image source

Brandon Smith
Activist Post

Traditionally, metals markets are supposed to be a solid fundamental signal of the physical and psychological health of our overall economy. Steady but uneventful commodities trade meant a generally healthy industrial base and consumption base. An extreme devaluation was a signal of deflation in consumer demand and a flight to currencies. Extreme price hikes meant a flight from normal assets and currencies in the wake of possible hyperinflation.

This is how gold and silver markets were originally designed to function – however, I welcome you to the wacky world of 2013, where bad financial news is met with the cheers of investors who believe stimulus will last forever, where foreign investors dump the U.S. dollar in bilateral trade while mainstream dupes argue that the Greenback is invincible, and where everyone and their uncle seems to be buying precious metals yet the official market value continues to plunge.

Is this weird? As Bill Murray would say: “Human sacrifice! Dogs and cats living together! Mass hysteria...!”

The reason our entire fiscal system now operates in a backwards manner is due to one simple truth - every major indicator of our economy today is manipulated by our central bank, which uses its printing press to prop up everything from equities to treasuries to municipal bonds. They openly admit to it. They are proud of the fact. They swagger about as if they are the heroes of the day. They act as if we should be thankful. But what is reality here?

First, let's lay out some very straightforward undeniable facts about our economic situation that no one with any intelligence could argue against:

Fact #1: Our Economy Is Supported By Federal Reserve Stimulus

For the past few years, the Fed has created dollars out of thin air to fill the debt void in corporate banks, in U.S. Treasury Bonds, in city and state municipal bonds, in stocks, and even in foreign banks in the EU. Former Federal Reserve Chairman Alan Greenspan and current branch head Richard Fisher have both admitted in mainstream interviews that stock markets are essentially sustained by the central bank, and that this has been done to give people the psychological illusion of economic health. This stimulus has been relatively constant in one form or another, from TARP bailouts to QE1 to QE3. Fed interest rates on bank lending have been artificially reduced to near zero, meaning international banks can borrow money from the Fed (which it creates from thin air) at almost no extra cost. The fiat is flowing nonstop.

Fact#2: Our Economy Is Addicted To Stimulus

Anytime the Fed suggests it might end or “taper” stimulus measures, the stock market takes a dive. Anytime there is a semblance of good economic news, the stock market takes a dive. Anytime conscientious government representatives (what few there are) suggest that uncontrolled Fed printing is dangerous and should be stopped, Fed or Treasury officials claim that without such stimulus measures, everything will collapse.

http://www.couriermail.com.au/business/breaking-news/no-rate-rise-on-horizon-bernanke/story-fnihsevj-1226681221841

Anytime there is detrimental economic news in the mainstream, the stock market rises as investors take bets that the Fed will continue stimulus for just a little longer. I think it is safe to say that it is a fact that our financial culture has become utterly addicted to money printing from the Fed.

Fact #3: Stimulus Has Done Little Or Nothing To Improve Our Economic Situation Since 2008

Where are the tangible benefits of the Fed printing bonanza? Yes, our debt crisis has been stretched out for a few extra years, but has it been solved? Of all the trillions in national debt accrued through government spending, where has the money actually gone?

Have lending standards been relaxed, and are private loans (not corporate loans) anywhere close to pre-2008 levels?

Have real jobs with sustainable incomes actually been created? Or, have millions of full time high paying jobs been replaced with low hour low pay wage slave jobs? Is the Labor Department counting temp-jobs with three month turnovers created by big box retailers like Walmart as real jobs? (Hint: The answer is yes.)

http://blogs.reuters.com/great-debate/2013/07/12/walmarts-fear-of-commitment/

Has the housing market actually improved, or, are private owners disappearing as big banks and corporate investors swoop in to snatch up insolvent properties for pennies on the dollar and then putting them back on the market as rentals? (Hint: The answer is an emphatic “yes”)

http://dealbook.nytimes.com/2013/06/03/behind-the-rise-in-house-prices-wall-street-buyers/?_r=0

Is the stock market really on solid footing, or, if stimulus stops, will it completely implode?

What has stimulus actually accomplished other than sacrificing the stability of our currency for the sake of five years of financial doldrums?

Fact #4: Stimulus Cannot Continue Forever

This is one fact the average mainstream financial analyst does not seem to grasp. I hear the argument that foreign exporters need the U.S. and the dollar, and that they will “never” dump the greenback. I'm sorry to have to break it to those folks, but they are ALREADY dumping the dollar in bilateral trade with each other. China, the second largest economy in the world, the largest exporter/importer in the world, and the largest foreign investor in U.S. dollars and treasuries, has been slowly but surely removing the dollar as the reserve currency in most of its international trading:

With Russia...

http://www.marketwatch.com/story/china-russia-to-drop-dollar-in-bilateral-trade-2010-11-23

With Germany...

http://www.reuters.com/article/2012/08/30/germany-china-yuan-idUSB4E7JG00D20120830

With Japan...

http://www.google.com/hostednews/afp/article/ALeqM5jhqaTaT7LRk2gYyD05lmLJMDLJtQ?docId=CNG.78782f3a5fba2c9a595e61ea288f1c19.371

With Australia...

http://www.theaustralian.com.au/national-affairs/foreign-affairs/pm-set-to-sign-china-currency-deal-in-boost-to-exporters/story-fn59nm2j-1226609244139

With Brazil...

http://thebricspost.com/brazil-china-sign-deal-to-trade-in-own-currency/#.Uf9VW23J7af

I could go on and on and on. The latest news announces that China has just signed a new deal with Russia supplying China with 25 years worth of petroleum, and this oil will NOT be purchased in dollars, meaning the Greenback's status as the petrodollar is being openly challenged:

http://www.forbes.com/sites/kenrapoza/2013/06/22/russia-inks-big-china-oil-deal/?partner=yahootix

Foreign investors are moving away from the dollar. This is a fact, and it will inevitably lead to the end of the dollar's world reserve status, and thus, the end of the dollar as we know it. Stimulus, at that point, would be useless, as our currency's overall value crumbles and the Fed is forced to hyperinflate just to pay the bills. Stimulus will end, one way or another, and when it does the results will be the same; moderate to severe collapse followed by skyrocketing prices on all goods. The longevity of the event will depend on how it is handled.

Gold And Silver Go Three Dimensional

As I pointed out earlier, metals markets are supposed to reflect certain fundamental trends in our fiscal system. However, as has been thoroughly documented, international banks like JP Morgan and companies like the CME have gone far out of their way to manipulate PM markets. JP Morgan has been caught red handed using coordinated short positions to force silver down. Gold and silver certificates (otherwise known as ETF's) have been issued by banks for literally tons of metals that don't exist. There is no vault where these metals are held. JP Morgan's physical holdings are limited, and when they finally run out, the scam will be exposed, and the ETF market will go down like the Hindenburg.

Official market prices for gold and silver have seen a heartbreaking drop in the past few months, yet, foreign central banks around the world are buying like they know something average Americans do not. China is set to become the largest holder of Gold reserves in the next two years:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/21_China_Will_Have_Worlds_Largest_Gold_Reserves_In_2_To_3_Years.html

Russia continues to stockpile gold every month for the past nine months:

http://www.reuters.com/article/2013/07/26/cbank-gold-imf-idUSL1N0FW0TC20130726

Sales of U.S. Mint gold and silver coins are hitting record highs in 2013:

http://www.bloomberg.com/news/2013-06-05/u-s-mint-gold-silver-coins-sales-may-rise-to-record-this-year.html

So, if demand is high, and purchases are high, then why is the market price on metals going down? I believe this conundrum has much to do with something I warned about years ago as a sure signal of coming economic breakdown; namely, the decoupling of Paper Metals from Physical Metals.

Investors are beginning to shun ETF's and fake gold and are beginning to buy only physical holdings. The official market value is based almost entirely on the flow of ETF's. People stop buying paper metals, and paper metals go down. But, this is absolutely no reflection of the real value of physical coins and bars on the street. This trend is dangerous for the manipulation game headed by giants like JP Morgan. The more physical gold investors buy, the less they have to back their fake ETF's. Eventually, they will be exposed, and metals trade will break through the 2 dimensional world of paper trading into 3 dimensional physical supply and demand.

This is probably why JP Morgan has suddenly announced that the bank will be leaving commodities trading entirely:

http://www.moneycontrol.com/news/commodities/jpm-exits-commodities-what-next-for-wall-street-refiners_927342.html

The news come conveniently as multiple large banks including JP Morgan come under scrutiny by regulators for everything from energy price manipulation to shadily run “metals warehouses”:

http://www.reuters.com/article/2013/07/30/us-supervision-hearing-congress-idUSBRE96T0WA20130730

Both China and Russia have begun discussing a new Bretton Woods-style agreement which would back the Yuan with gold and change the very fabric of the international monetary system. This concept falls right in line the developing nations' demand for a replacement of the U.S. dollar, and, the IMF's new Special Drawing Rights currency, which is partially valued in gold, and backed by the IMF's unaudited gold hoard:

http://rbth.asia/business/2013/07/17/china_reportedly_planning_to_back_the_yuan_with_gold_47997.html

JP Morgan fleeing commodities markets? Paper gold decoupling from physical gold? China and Russia suggesting a new Bretton Woods? Is this a signal for something monolithic on the horizon for the global economy? If there is a sudden shift by developing nations away from the dollar and towards a basket currency system partially valuated in gold, this would be disastrous for the American fiscal structure. I have been tracking the slow dump of the Greenback since 2006, and I have to say, I've never seen escalation like I have seen in the past year. If foreign central banks are planning to drop the dollar as the world reserve, their behavior in metals markets suggests they may be ready to act soon.

You can contact Brandon Smith at: brandon@alt-market.com Alt-Market is an organization designed to help you find like-minded activists and preppers in your local area so that you can network and construct communities for mutual aid and defense. Join Alt-Market.com today and learn what it means to step away from the system and build something better.