We’re a Long Way from the 1970’s
By Greg Hunter’s USAWatchdog.com (Updated)
Lots of people are comparing today’s gold market to the 1970’s. Gold shot up to nearly $200 per ounce and crashed 9 months later to near $100 an ounce. Of course, gold had an historic rise to $850 per ounce after that wicked pull-back. Some, such as economist Nouriel Roubini, say “the gold rush is over,” and the seventies are not going to repeat. The debt of today is greater by orders of magnitude from the 1970’s, and there is no end in sight. That means gold has only one way to go (in the long term) and that’s up.
We had a national debt of less than $1 trillion when Jimmy Carter left office. Today, it is nearly $17 trillion, and the so-called debt ceiling is going to need to be raised–again. Debt in the U.S government is exploding. So is debt in the rest of the Western World, just look at Europe and Japan.
Derivatives were virtually nonexistent back the 1970’s. Today, the official total of these debt bets is around $700 trillion, and some say it’s more than twice that much. Pensions didn’t have funding problems back then. Today, they are at least $1 trillion dollars in the red. You can say the same thing for student debt—also $1 trillion in the hole.
There are more than $12 trillion paper dollar assets (stocks, bonds and cash) held by foreigners outside the U.S. Meaning, you couldn’t control the selling in a panic. In the 1970’s, the U.S. was a creditor nation. Today, it is the world’s biggest debtor. The U.S. credit was stellar in the 1970’s. Today, it has already suffered its first ever downgrade, and ratings agencies are threatening more.
The manufacturing base was intact back then. Today, it’s been gutted and moved overseas. That is a real wealth generator, and there is no easy way to get that back quickly.
Although some states are better off than they were a few years ago, others such as New York, New Jersey and California are still $1 trillion in the red, combined. We had spending for the Vietnam War, but that pales in comparison to the money printing of QE. The Fed pumped out more than $16 trillion after the 2008 meltdown alone, and it is still pumping $85 billion out each and every month to prop up the economy. This action is what the Fed calls “open-ended.” Some say its QE to infinity because if and when it stops, the market will crash and interest rates will spike. Trillions of new dollars have been created and nothing is fixed. The problem is still so bad the government allows phony accounting. It has done so since 2009.
The economy is so fragile that fraud and crime go unpunished for fear of crashing the economy, this is according to Attorney General Eric Holder. Money laundering for drug cartels, LIBOR rate rigging, securities fraud, foreclosure fraud and naked short selling are a few of the ongoing and unpunished crimes floating the economy. The financial crimes committed in the 1970’s pale in comparison.
In the 1970’s, we had reporters investigating the White House. Today, we have the White House investigating reporters for doing their jobs. What Nixon did in the Watergate break-in is child’s play compared to the Obama Administration’s use of the IRS to target hundreds of groups considered political enemies. Let’s not forget the data collection on millions of Americans by the NSA and the brave souls that lost their lives in Benghazi. Revelations from multiple scandals seem to keep coming. This is, at the very least, a reflection of bad management of USA Inc. and not good for the U.S. dollar.
So, is the gold rush over? Not if you ask China, India, Russia and multiple hedge funds. Can precious metals prices still be suppressed and pushed lower? Yes, but only until the markets cannot or will not deliver physical metal. When that happens, there will be no more selling what you don’t have. It you want to sell 50,000 ounces of gold, you’ll have to produce it. The markets will be “cash only.” Then and only then will you get the true price of gold and silver.
We are a long way from the 1970’s. What is happening now has never happened in all of recorded history. No country has ever been more indebted than the U.S. Money printing has never been a coordinated global event. The risk to a black swan event such as nuclear war has never been greater in human history. So, when will the gold rush be over? The short answer: when there’s world peace and there is trust and integrity in the financial system.
Join Greg Hunter as he explains how we are a long way from the 1970’s.
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About the Author
Greg Hunter
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.
once again nice job! i think you covered it all. and you are 100% on. thanks again. it’s great to here real news, not sugar coated. you’ll never here 10% on your idiot box. hey, now i know why its called that. thanks again greg
Thank you Bob and Mike K.
Greg
GREAT POST!
Greg, your a busy man these days. Much appreciate all the hard work!
BIG Mahalo,
Troy
Troy,
BIG Mahalo back at you my friend!!
Greg
Troy,
Big Mahalo back to you my friend.
Greg
Greg you are absolutely spot on! In particular, your comment – “complexity breeds instability” – is fact; socially, economically, historically and mathematically. AND we are heading into complete CHAOS whence financial safety as represented by gold (silver and platinum) and personal safety as represented by guns (food and water) will have almost no upper bound!
Thank you Fraser!
We are a long way from the 1970s, but how close to 1984 are we?
great editorial Greg, you truly do get it, thanks for being a real journalist.
I’d say more, but I need to run to Wal-mart and get my mom a new pressure cooker, for her canning. They’re on sale, and the low price is a real bomb!!
Thanks
Your Friend in Liberty
Trap
Greg you continue to speak the truth in the face of media liars.
Here is one of the false reports on the front page of yahoo. The twist on how we are in a recovery is still in full stage denial of facts. I found the comments to have more truth then the article yahoo produced. Keep up the good work.
http://news.yahoo.com/more-americans-quit-jobs-sign-confidence-161601529.html
Thank you JC.
Greg
Greg, I’ve been buying physical for years now but it won’t do us any good. These evil people plan to collapse all physical currencies so they can go to an electronic currency that can be tracked and taxed. They will outlaw gold and silver and make all merchants use a machine that is licensed by the government to transact exchanges and record them. All electronic communication has been tracked for a decade and they know everything I’ve bought and sold online. That is why Obama needs a “National” security force as strong as the military (look it up on Youtube). You can’t fight that with AR-15s when they have thermal imaging and drones. The majority of Americans are asleep and only care about their stupid sitcoms. We are finished.
Man you are writing a Dream. I hope that they do illegalize it.
There will be the Black Market for Gold if the switch to an totally tracked electronic currency is foisted upon us. Then there is also an untraceable electronic currency, Bitcoin.
Gold Dealers will be like today’s Drug Dealers…Rich beyond their wildest dreams.
The Black Market Price for Gold will soar to extremes if the Government were to make it illegal. Why do you think that Illegal Drugs are so expensive? By weight they are the most expensive Commodities on the Planet. (Hint: It is not the cost of manufacture or processing.)
The Electronic Currency will not be worth anything. People will want to evade the Draconian Taxes which they have planned for the Muppets to pay for ObamaCare and the National Debt.
What will they use to evade those taxes? Gold and Silver, perchance??? Demand for Gold and Silver will soar through the roof when that happens as the US Dollar DIES.
Instead of smuggling Drugs into the Country there will be smuggling Gold out of the country. They do not have “Gold Sniffing” Dogs. Cars are made of METAL so Metal Detectors will not work.
And the rest of the World will not follow our lunacy. They will want the Gold. You can rest assured of that.
Of course, currently, you can already offshore your Gold legally. There are allocated Gold Bullion Banks. You might even want to prepare to offshore yourself…Emigrate to someplace under the Radar…like Argentina.,.as a Tourist. Jeff Berwick can help you out if you have the wealth and are so inclined.
If I were younger man with my knowledge I would probably go to Africa. They do not even have much Internet over there. That is a great opportunity for Startups.
Just take your payments in Bitcoin…like that of Drug Smugglers today.
I am sorry but they will criminalize it in order to control it. But they will not be successful at abolishing the Gold Trade anymore than they are successful in abolishing the Illegal Drug Trade. Actually they do not want to be successful. They make far too much wealth out of those trades.
Look at what happened to, er, I believe it was HSBC. The were caught red handed laundering Drug Money recently. Nobody goes to prison and the Corporation is given a paltry fine that was covered 100,000 fold by the profits.
It may be harder to trade Gold but the rewards will far outweigh the risks.
Welcome to the Underground Market…
In Nazi Germany it was Death to those caught dealing in Gold and Silver. That did not stop the Nazi Generals’ deposits into the Swiss Banks.
Stop fearing this…It is a wonderful opportunity.
I hear we are going back to the gold standard !
Greg,
Truly excellent analysis and very well done! You have provided a good summary of all the key drivers and mechanisms which are currently in play and captured all facts, figures and forecast potential outcomes.
Keep up the great work you are doing!
Pat
Thank you Pat and Brian for the comments.
Greg
Normally I would submit a comment where I just write out my thoughts as they were inspired by the story of the day here, the only editing I would do involved some spelling checks or that I used a word or two properly.
But now, in this day and age……..I guess we do not want to look subversive. I wonder how long it will take until just going out in public will make a majority of Americans feel pensive and guilty of something….by then it is way way too late.
It is a very good report.
The only thing I found missing was the tax squeeze being placed on working Americans, who are seeing the wages tumble in buying power as the government puts the squeeze on them in taxes.
The state legislature in my home state just passed a massive budget that includes new taxes in such an amount that it boggles the mind.
We are already one of the highest taxes states in the U.S., this pushes up higher on the ladder. But the state legislature also gave the counties authority to place a sales tax and my county is considering doing just that. I have the “privilege” to live in one of the highest taxed counties in one of the highest taxed states in the U.S., but also one the poorest counties in the state.
Financially we can’t “breathe” anymore.
The burden is getting so great.
Mix that in with all you told us about, and one wonders how the working man is surviving at all.
How are we surviving? By the skin of our teeth.
Greg, you (or the artist) left one important word out of the caption on todays cartoon; “Lying” (to). Since before day 1. Love your column; don’t ever stop your crusade. You are a jewel of the journalism profession.
Greg you seem to be the only reporter out there committed to telling the truth. The American people are living in a fantasy world. There is no way that the “Affordable Care Act” cannot help but implode whatever is left of our economy. When you expand the Medicaid program and offer subsidies to millions of Americans who cannot afford health insurance right now, and then bring in another 30 million people into a system that is already overloaded, something has to give. Couple that with over 24 hidden taxes that are being installed into the program, and you have a recipe for disaster. Here’s an example: If you have to have a hip replacement. You’d better plan on doing it now, because next year, you will be paying a tax on the implant that you use.
Honestly Greg, some days I feel like chicken little. People are either to busy making a living to listen, or simply don’t care about what’s about to happen. There is simply no way we can continue to raise the debt ceiling, and continue to print money month after month, without some type of economic pushback. It is mathematically impossible to get out of this debt bubble without a collapse. I am open for suggestions, if anyone wants to disagree. I was listening to Ben Stein the other day and he seems to think the economy is showing signs of recovery. Really? Well if that’s true, I guess uncle Ben can turn the press off. Right.
Thanks Greg for keeping us in the loop with reality.
That was succinct. I see Greg Hunter is as fed up with this immoral filthy system as so many others are. I remember the 70s. I was just starting out as a young guy trying to make ends meet. Inflation was rampant and wages stagnant. A new pinto could be had for %2,800 bucks right off the lot—WITH AC. This country is finished. We have been destroyed from within–and we let it happen. There are no jobs with any kind of future, they went to China. NAFTA. We let that happen as well. If this kind of rotten immoral filth was happening in the 70s, all of America would have marched on the capital. Not now. Americans have become the proverbial frog in boiling water. They don’t even know about Chem-Trails above their heads, and don’t care to know. Sickening to see America fall into a pit of decay–FROM WITHIN!!! When the economy crashes–it’s to late to wake up———
I see a lot of differing opinions on where the price of gold and silver are headed, but it seems to me the more logical opinions expect it to climb. I certainly don’t have any faith or trust in the stock market or bonds and treasuries. Savings accounts lose money to inflation. So, what’s left as a safe haven for peoples’ hard earned wealth? I think rental properties are a reasonable investment, but of course, that depends heavily on their location and the owner’s ability to maintain and manage them. Land might be a good investment, but it’s also location dependent and comes with taxes. If the land can be rented to a farmer, the tax rate might be less, and the rent should cover the tax bill. What else?
Corruption, lies and deceit are like cracks in a dam. The mightiest dam can support many cracks because it was built upon a strong (moral) foundation. However, when the cracks reach the foundation itself, nothing can stop what is to pass. We (collectively) are a mirror of those who perpetrate the corruption, lies and deceit – from every corner of society and political leadership. We are them, and they are us.
When a nation is in the process of decline, it typically begins to turn on itself – like a pernicious disease. Such is the station we find ourselves at now, but this is only the beginning.
Agent P,
This comment is magnificent and succinct! Well done sir.
Greg
Problems originated from politicians looking for cracks in the constitutional dam. Once found or devised, they thrust in pry bars of precedent and the rest is history.
C’mon Mr Hunter. You can’t be serious denegrating derivatives. I have made millions of dollars trading derivatives since graduating business school nearly 15 years ago. As for gold, you cant eat it although it is nice for jewelry. As for the national debt, it is only paper and bits and bytes on a computer server. To quote your own past vice president Cheney, “Reagan proved that deficits dont matter.” Paul O’ Niell still has a red backside over that one. Look, if someone wants to build wealth today, then more sophistacted trading strategies are required. People need to learn how to chart models and advanced finance techniques. There are plenty of opportunities to make money. Today, things are even better and more robust than at any time during the past decade and liquidity is quite ample.
Ravi,
If derivatives are so important then put them on a public market. Oh that’s right, there is no public market and no guarantees and no standards and when it all blows up again we will bail you guys out –again.
Greg
Agree with you Greg. Many of these investors are unaware of cognitive dissonance, and will deny the Titanic is sinking up to the moment they get soaked. Thanks for another informative post.
OK Ravi C, you’re bragging you “made” millions in derivatives. Good for you. Not good for all the savers,pensioners and taxpayers that had to bail you out. When not bailed out Goldman S, Morgan S, JP Morgan, BAC, C would NOT have been around anymore , nor would you!!! You would have lost all in non performing derivatives. And the whole world is chained because of these damned derivatives and the issuers of them (the mentioned 5 above own 90 %). So brag on you heartless greed and maybe Karma will serve you one day!
Greg I watch your video’s, just attended a meeting of Jim Sinclair in London, write my own blog about finances and precious metals; Just thought to copy your whole article on my blog because it describes exactly what is happening in this sick financial world. But.. I do not subscribe to your conclusion about peace etc. Mankind is evil and the powers that will be will do ANYTHING to suppress and control whatever they have “gained”!! regards Joseph
Thank you Joseph for the comment and the support! I have enormous respect for Mr. Sinclair!!
Greg
Ravi would like to see our country like his former, the rich and the untouchabels, but that wont happen here. Another Ravi or Rabi Batra once said quote “when the top gets to heavy the whole thing comes crashing down”. When that day comes Ravi lets see your toilet paper save you. PS> ARMA GETTEN OUTA HERE!
Ravi,
When all is said and done, all the millions made by “advanced finance techniques” are dependent on those swinging hammers and making things. The problem is there is now very little swinging and making. AFTs cannot advance on a debt based fiat economy dependent on money printing. Ravenous fowl picked the carcass clean long ago.
I lived in a corrupt police state such as the one we are beginning experiencing right now. People who say “I have nothing to hide so I am safe” are sooooo wrong. These very same people will eventually will become puns of the government and report their own brothers and sister for not obeying the government. Where I lived disappearances of friends and family members were as common as torture sessions. The surveillance, snooping and scooping trainings and torture methods all came from the CIA. These agencies create a wrong face of what Americans are/were. This power grab will not be settled without much bloodshed either government inflicted or through rebellions. When I look back to the way of life and the culture I lived in here 35 years ago and compare it to today, it truly breaks my heart. I escaped oppression and torture when I left my old country only to see it coming here, back to its home to roost. Where will our children escape to if we don’t stand against this creeping threat that almost everyone is oblivious to?
Maybe Bill Cosby has the answer, he said something like we should all be more like Muslims.
He also said there is no other group like Black Muslims, huh?
Might he be making reference to the so-called leadership in the Whitehouse?
http://video.foxnews.com/v/2472775306001/bill-cosbys-pro-muslim-post-causes-a-stir/?&
When the west started worshiping at the egalitarian altar, floodgates were opened. Numberless flocks of ravenous fowl came to the feast. Killing the host, the picked clean carcass can no longer nourish.
Greg: I cannot emphasize enough that the future of PMs, especially silver, will be centered around supply, or lack thereof, to feed the insatiable demand from the Mid East and Asia. Drastic decline of ore grades mined, the coming bankruptcy of 100s of miners, certainly indicates much, much higher prices. Silver, IMHO, will be the bigger winner, given its strategic necessity and price inelasticity. Five years ago, the USGS predicted that silver would be the first metal to disappear from the planet, probably within a 20 year period. What do you think the price will be in year 10, year 15, year 18, etc?
Police State-
I work strange hours and drive quite a bit. I drive older cars, anything dependable that I can pay cash for. Perfect setup for being profiled; if I was 6 months behind on a new beamer there would be no problem. I get pulled over often (have not had a ticket in 25 years) usually at night. Sometimes the leo will ask “Do you have ANY idea why I pulled you over?” read (can you help me incriminate you?). Sometimes I give him or her a puzzled look and say “is it because I have a box of donuts in the trunk?” But now I going to change that and say “Is it because I voted for Ron Paul?
You’er a good man John Galt!
Hi Greg,
There is a typo. It’s not $85 but $850
RM,
Fixed it. Thank you for pointing it out. I can’t believe I missed that!!
Greg
Thanks for laying it out there Greg…Always look forward to your updates…Thank you
Excellent!
thanks
Greg
Thanks for explaining the barrage of negative articles on PMs. People made a lot of money in 29 but when their bank collapsed they had nothing.
Thank you for adding this perspective DroidX-G.
Greg
Hi!, Patrons Of USAWATCHDOG. COM Et Al:
We are even further in my opinion from understanding the ordained price of gold; especially when we ignore what Marc Faber tells US @ The National Inflation Association’s website at the end of their documentary video: MELTUP. Faber says gold should be revalued not downwards but upwards to $1,000,000 per troy oz. By downing the purchasing power of gold holders the government and FED suppress the people from having their legitimate purchasing power in holding gold which is worse than Roosevelt’s gold confiscatin policies during the Great Depression. Thus the sheeple change their loyalty from gold into equities at the drop of a hat (opinion).
Furthermore, the gold miners are now being suppressed from receiving a legitimate price for their production of precious metals which will be needed to satisfy worldwide demands eventually; as people everywhere seek not just the protaction of precious metals but the multigenerational purchasing power we would all like to fulfill as our intent to fund future generations of mankind being and yet to be born. Gold miner operators and their employees are also like the rest of US taxpayers and so the kind of commerial price squeeze the paper gold market places upon their production of gold will be reflected not just in their abilities to pay income taxes but for also retail sales taxes. Out of work miners will be stressed to the limit to pay either won’t they but that seems to be the trend huh? Some commentators are relishing their postulates that many of OUR miners over the next few years will be out of business; at a time when we need all of them producing gold plus other miners not yet attempting to work for gold. This will discourage other potential entrants into gold mining in my opinion and thus making it significantly more difficult to bring gold to the table for retail sales. This could could even end up stressing the banks who are now unloading paper, fiat $’s into gold huh? If there isn’t enough gold on the market into which to dump their fiat values where will all the trillions of paper I Owe You Nothings go to roost? The only way for the market to realistically handle this phase of gold austerity in my opinion would be to raise golds’ price to infinity but with the caviet that the $ will become worthless which it already is in my opinion but that declaration of the $’s worthlessness at that time will not be limited to my opinion but the opinion of the world. Trillions of $’s are out there both domestic and foreign and what’s to eventually become of them? There is talk all the time these days about inflation vs. deflation but deflation isn’t just price devaluation/destruction but the absolute dissapearance of the effected currency instead. In the future, if the US $ continues to be used, will there be trillions, quadrillions or through a deflationary episode merely billions of $’s left in the entire world system for spending? Either way I say that gold will continue to be as it always has been and that is totally scarce. Paper money can be printed in abundance as world history teaches us but gold has always been and shall remain scarece. The countries of OUR world are creating an over abundance of paper money or I Owe You Nothings; while OUR gold miners who produce real, scarce money are being squeezed to death but why? It doesn’t really matter if we believe in Conspiracy Theories of not. The suppression of OUR gold miners is a fact of their life.
Some fools have written lately that gold has no intrinsic value and, if they are right instead of just plain dumb, then every wedding ring in existance that is based in gold are valueless? I’ll even bet that these foolish writers have wives some of them that bear gold on their fingers for which they each paid a handsome price; in order to impress the value of their love upon for their mates? As Thomas Edison once quipped: “Not one person on this planet knows even 1 millionth of 1% about anything!” These fools that write that gold has no intrinsic value know even less I think!
RUSS SMITH, CA. (One Of Our Broke Fiat Money States)
[email protected]
The thing that anti-gold bugs don’t recognize is that the real reason people buy gold is the fear of systemic risk.
If you debase the currency then it buys much less for everyday people and if interest rates rise so much as 2% then the servicing costs for Federal and State governments explode overnight, That is when you get bank runs and system failure, when people realize that the institutions are now powerless to enforce the normal rules and standards of society.
When these foolish economists talk about the seventies not repeating themselves they are quite correct for all the wrong reasons. In the 1970’s there were a number of solutions which could be effective since the debt level was not yet unsustainable–now it is and I see no fix that people will accept–short of massive tax increases and severely reduced services. That doesn’t wash in the “no responsibility society” No one votes for someone who wants to wreck a drunken party.
Well, we got what we wanted. Goldman Sachs now rules the World and we hang on every word they say but the fact is that despite their ramblings the problems have in no way been fixed.
Greg…It is far worse. You are correct. We would have lost the US Dollar had Volcker not allowed Interest Rates to float to 21%. But to do that today will make the Federal Government Insolvent.
The Price of Gold in terms of Dollars is a MOOT Issue.
I am currently running a Poll on the Gold Forum at Kitco.
I started the Poll at 2AM this morning. The Poll asks what is your Confidence in the US Dollar?
Most of the 83 responses so far are ranging from UNCERTAIN to Absolutely NO CONFIDENCE in the US Dollar.
The US Dollar is doomed. Confidence is waning and the collapse in value will happen exponentially.
We are in trouble on a scale unimaginable.
God Bless you and keep on exposing the truth.
Tall Tom
I Cor 13
Tall Tom,
I think a 6% 10-year Treasury would render the U.S. insolvent or deeply crippled. Thank you for adding your perspective.
Greg
Timely report, and guess what I just saw: http://www.washingtonsblog.com/2013/06/every-market-is-rigged.html
It’s entitled: Every Market is Rigged. How much lower can we go???
Hi!, Patrons Of USAWATCHDOG.Com Et. Al:
The whole economic system in my opinion folks is operating from the point of view of introspective economic duress. What would the American people for example do, if they couldn’t spend $’s at their grocery stores or gas statins but only silver/gold coins etc.? So, we the sheeple capitulate to this duress and we are now paying the price today and the price to come in the future huh? If we would have abided by OUR Constitution, we would have only had gold and silver coins to use as our money in the 1st place but we disregarded those Constitutional barriers, in order to occomodate OUR various wars and economic stimulus packages based on fiat money creation by the FED. which is like a Trojan Horse in OUR midst. Greg, do you still use the US $ likewise? My uncle O’Neal Smith told me years back he would buy gold and silver if he could use them to buy his gas and groceries but, knowing he won’t do that, he capitulates to the use of the STATE owned fiat money system which rules everyone (sheeple) by duress of the imposition otherwise of immediate impovershiment that everyone desires to avoid. As some have written: “these are iteresting times!” We will see how it all turns out, providing we live through it.
RUSS SMITH, CA. (One Of Our Broke Fiat Money States)
Russ, if anyone should come to your door warning you of a coming game changer, don’t shoe him away. He would like to hear just as much of what you have to say as you would like to hear, what he has to say.
Long ago some old prophet said, quote “Iron sharpens Iron”. Now’s the time to sharpen our swords for the coming battle, that wont be physical, but spiritual and we need all the help we can get. PS. I think it was Ben Franklin who said, quote, “Gentile men, If we don’t hang together we will most certainly hang separate.”
GREG FOR PRESIDENT………
Not for USA, but for MEXICO.
Saludos
Luis Chavez Romo
Queretaro, Mexico
Luis Chavez,
I’d better brush up on my Spanish. If I were President of Mexico I’d make silver the currency again and give people there real money again. Mexico had the most stable currency in the world for nearly 300 years because of silver. Mexico has lots of silver!!!. It went off the silver standard around 1913 and you see what happened. Thank you for your support!
Greg
Yesterday, Hugo Salinas Price came out with a new article on exactly this subject. I have followed Mr. Price’s thinking for more than a few years, and he has the gift of making the complex very simple.
Please feel free to check out his new article and enjoy: http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=213
Thanks, Greg, for all you do!
Dennis Johnson
Thank you for the comment and the content!
Greg
Is history repeating?
If one compares Germany of the early 1930s to this country since the turn of the century(2000) there are some frightening parallels. On February 27, 1933, the German parliament (Reichstag) building burned down due to arson. The next day President Hindenburg signed the Reichstag fire decree effectively eviscerating the civil rights of the German population. The next week on March 5th Hitler and the Nazi party received 44% of the vote in the presidential election.
It took Hitler about two weeks and some Nazi bullying to get the Reichstag to pass the Enabling Act which in essence gave Hitler dictatorial powers. This was also the beginnings of the concentration camps system that was first used to hold political adversaries and opponents.
If one compares events here we have to start with the tragic day of 9/11/2001. Shortly after the PATRIOT ACT was passed, very much comparable to the Reichstag fire decree in effect. One must remember this was the second go around for the PATRIOT ACT as it did not gain passage after the Murrah building in Oklahoma City was destroyed in 1995. To date we have not seen legislation that would give dictatorial powers to the president but they are chipping away at our constitution and bill of rights with laws such as Obamacare and the 2012 NDAA which gives the president the ability to detain American citizens designated as terrorists indefinitely.
If one is well versed in history these machinations should not come as a surprise. For it was American industrialists and the bluest of blue chip American companies that assisted in preparing the Third Reich for what would become WWII. We are talking about companies like Ford, General Motors, ATT, ITT, Dupont, IBM and of course Standard Oil among many others. In fact Standard Oil merged with German conglomerate IG Farbin just after Germany invaded Poland in 1939 yet backdated the documents to appear as this was done before hostilities began.
Henry Ford was a favorite of Hitler and his portrait hung in the entry of one of Hitlers summer homes. The Luftwaffe could not of gotten off the ground without Std Oils formula for tetra-ethyl lead, a key component in aviation gas needed to run high performance air craft engines. There is anecdotal evidence that wolf pack submarines were refueled from Std Oil tankers. And of course to a country like Germany that has major coal deposits but little in oil Std Oils patented coal to liquids had to be a big assist. It was ITT who helped develop the Fock Wulf 190. It was IBM whose technology kept track of who populated the camps among other administration duties. Matter of fact our US ambassador to Germany, William Dodd noted this activity and stated in 1937,
“A clique of US industrialists is hell bent to bring a fascist state to supplant our democratic govt. They are working closely with the fascist regimes in Germany and Italy. I have had plenty of opportunity from my post in Berlin to witness how close some of our American ruling families are to the Nazi regime. Certain American industrialists had a great deal to do with bringing fascist regimes in Germany and Italy. They extended aid to help fascism occupy the seat of power and they are helping to keep it there”.
Unlike the Bolshevik revolution before where the Federal Reserve and City of London directly contributed, this time there was a bank set up to assist the Third Reich in financial needs. This bank was Union Banking Corp set up in 1924 by the Harrimans, today known as Brown Brothers Harriman. Sometime shortly after that there was a merger with a Dutch bank controlled by Fritz Thyssen, a German industrialist and early admirer of Hitler. Other early contributors to the cause were Henry Ford and George Herbert Walker, an investment banker in St Louis who later would oversee Union Banking Corp and hired none other than Prescott Bush, our last presidents grandfather to run Union Banking. George W’s father was named after after his dad Prescott’s father in law, George Herbert Walker.
With the revelation of history current events start to make sense. It is not by accident our system of government has begin to take on a fascist hue. Fascism is the merger of large corporations and government. In this case the large corporation at the center is our private central bank, the Federal Reserve. One could say we have the best government funny money can buy!
The difference between Germany an the US is we condemned Germany to fascism resulting in the rise of Hitler. Fascist America is the result of Godless, lawless public officials taking a big @%&! on revolutionaries and founders graves and using the constitution to wipe their ^@$$.
Steve McQueen Stated in The Thomas Crown Affair, money isn’t funny!
Extreme solution #1:
Organize a mass exodus to an agreeable Country that would welcome productive free people & become the “New America” based upon our Founder’s principles.
Civilizations have migrated for freedom since the beginning of man.
Extreme solution #2:
Organize a mass exodus to States that believe in & will enforce our Constitution with political leaders who will be tried for treason if this oath is broken.
No secession needed. These States will succeed & the rest will collapse under their own weight.
Now that’s how a “free market” truly works.
Your unmoving position on the direction of the gold price is obviously not waning Greg despite what the price is doing.
As far as I am concerned the only thing that matters is the actual price because that is what determines whether I make money on the deal or not.
So let me simply devils advocate here for a minute.
Anyone of us can make predictions but the truth is that no one really knows what is going to happen in the future.
On 28 November 2012 you wrote in relation to the Mr Harris interview:
Yra Harris is called a “trader’s trader.” He says the latest deal on Greek debt is just “pretend and extend. . . . The real problem is Spain because they’re big, they’re in debt and they have 27% unemployment.” Everyone in the Western world is dealing with the sovereign debt mess by printing money and suppressing interest rates. Harris predicts, “As long as real yields are negative, of course, gold is going to go up.” Harris is afraid inflation could get out of control and says, “It’s like being a little pregnant, you can’t really control it. Nothing destroys democracy like inflation–end of story.” If Democrats and Republicans can’t reach a deal to avoid the so-called “fiscal cliff,” then Harris contends, “Deflation . . . is bullish for gold because everybody knows what the central bank will do to answer the call . . . the Fed will become that much more aggressive.” No matter what, Harris is betting that “gold will be higher by the end of the year.”
I do hope Mr Harris did not bet his entire investment stake on that prediction because he could not have been more wrong – at least up to now.
I am sure people who paid $1650-1800 an ounce for gold are not feeling that great right now but when gold was at those prices they were all being “told” to buy because it could only go up even as it was declining. I remember one guy who came on this site late last year and said he had paid USD 1750 an ounce for his gold stake and “hoped” it would go up. The problem is I have never seen “hope” work that well as an investment strategy.
I guess to them gold was a guaranteed no loss investment that only ever traded on the basis of actual fundamentals and never, dare I say, on speculation or anything else. Unfortunately markets are not priced based upon on pure logic.
Again – all that matters is the price not what you would want or like or think it should be.
I am reminded of some sometimes quoted lines from the distinguished John P Hussman:
“I don’t care about the price, just get me in!!”
“It’s a healthy correction”
“See, it’s already coming back, better buy more before the new highs”
“Alright, a retest. Add to the position – buy the dip”
“What a great move! Am I a genius or what?”
“Uh oh, another selloff. Well, we’re probably close to a bottom”
“New low? What’s going on?!!”
“Alright, it’s too late to sell here, I’ll get out on the next rally”
“Hey!! It’s coming back. Glad that’s over!”
“Another new low. But how much lower can it go?”
“No, really, how much lower can it go?”
“Sweet Mother of Joseph! How much lower can it go?!?”
“There’s no way I’ll ever make this back!”
“This is my retirement money. I can’t afford to be in the market anymore!”
“I don’t care about the price, just get me out!!”
No I do not know what the future price of gold will be – but then nor does anyone else anymore than they can tell you what the price of iron ore, coal, or corn or what the level of the S&P 500 index is going to be in a year or 2 years time. They will tell you, of course, that they can predict the future and ask you to invest on that basis.
One thing I do know. All the spruikers who were telling people throughout 2012 that gold was going to be much higher as of June 2013 – and that was the vast majority of them – got it very wrong so now they trot out all the excuses. (I have heard all the “excuses”). If only this or if only that, it’s being manipulated etc etc ……but that does not help the poor souls who took their advice and are now very much in the red.
There are plenty of people spruiking gold now as ever but of course many of these people make a living selling it in various forms to retail investors. When it is your business to make dollars selling the metal you are not going to do anything other than talk it up are you?
People need to be careful and cautious with all of their investments. There are no guaranteed no loss investment markets. All have an element of risk and, as of now, the gold market is not an exception.
Cameron,
This might be hard for you to understand but this is not a simple money making trade. Trading is your mentality and there is nothing wrong with that. But you are all about the price of something and I am all about the value of something. If you lose money in a year you are devastated because you are a trader. Long term investing is accumulation, and I know that is hard for a trader to understand. You are ignoring the $85 billion printed each and every month because you are making money on trades. Even though you know this is the only thing propping up the market, you don’t care as long as you make money on the trade. What you are doing in this historic time is akin to jockeying for a better cabin on the Titanic. Gold and silver are a protection and insurance play. By the way I do not sell precious metal or investment of any kind. You say, “I am sure people who paid $1650-1800 an ounce for gold are not feeling that great right now.” I say, “What about all the people who bought at $300, $400, $500, $600, $700, $800 …you get my point” You can make anything look bad if you frame the debate that way. The ONLT reason why the stock market is back to where it was 5 years ago is the Fed money printing. Gold has kicked Warren Buffets ass in the last 10n years and Buffett got a gigantic government bailout. So, please stop with the trader talk. Thank you for your comment and good luck trading on the Titanic.
Greg
In regards to “Trading on the Titanic”…I will trade you my First Class Suite for your Stowage Cabin.
Wait…What do you mean my First Class Suite is Under Water? I will have a talk with Captain Bernanke about this.
It…it…it is appalling to be treated in this manner!!!
Laughing out loud, Greg. That was picturesque…quite good.
Thank you Tall Tom. I was trying to make my point and have some fun doing it. Happy you appreciated it.
Greg
Good on ya mate! Couldn’t have said it better me selves!
Greg for whatever its worth, I am seeing a lot of defaults on mortgages right now. We have a real estate investment company that focuses on single family homes. What we are finding is that a lot of people are borrowing their equity out of their homes just to stay afloat. The defaults have shown a sharp increase over the last 18 month. I’m not sure what is driving this, but I suspect inflation is being to catch up with spending for most consumers. Could this be another housing bubble? I don’t know. But it sure is alarming to me that this is happening, when considering that the MSM is peddling the idea that the housing market is on the upswing in full recovery mode.
I thought you’d want to know. Thanks Greg.
Jerry,
It was just reported this week that foreclosures are moving back up. I think you real world reporting matches the latest real news. Thank you for your comment.
Greg
Quite riviting Greg. You are a true asset to this country as it is people like you that make a difference. Keep it coming and thank you for your hard work.
Thank you Alaska Mike for your kind words and support.
Greg
Greg. I cant see the video anymore.
Disregard comment. It was the hackers after me again. I must believe there government employees…lol
There is only one way to regain control of the country. SIT DOWN. all workers just stop working. find a new way to live without using the fed dollars. when the gov shuts down the sheriff takes control of there cities. Open, and seen by all elections to restart the (Republic).
Replace judges, mayor, governors, congress, president, and all on the inside. corruption is way to established to change without extreme measures. every country will do this eventually. Either by choice or by force.
Here is the definition of Irony . I just finished reading an article about the United States supplying the “rebels” of Syria with weapons . The same rebels Senator McCain was photographed with ( You know the one with the known kidnapper in it) The same rebels that I read about 3 months ago (The Al Nusra front) who the Associated Press ran an article about “Merging with Al Qaeda” . Yup those rebels . Now we’re being told that we must find a balance between liberty and security by the President and his NSA buddies because of those same “Freedom haters” . That’s the definition of irony (Or insanity)
Good Job Greg Hunter
Snowden/Manley 2016 !
Thank you Nathan!
Greg
Greg,
The only thing about energy and technology is energy is useless if there is know economy to make use of it. Technologies are great if you get lucky outdoing Asian and Indian students who approach academia like winning the Super Bowl. If your one of the few who takes out a student mortgage then gets lucky landing a tech job then break out the champagne – your now qualified for a corporate cubicle putting together EDs for sterilizing wages.
Dwain,
Thank you for your comments.
Greg
Back in the 70’s and early 80’s, no one thought the debt levels in that time could be sustained yet here we are. As a percentage of GDP there have indeed been worse situations in history for other countries, that’s not to say that the US debt will not keep soaring for it surely will. You have to decide if you will live your life trying to fit your investments with your beliefs or if you will be objective and make money instead. Yep, gold has a 5,000 year track record, but that does not mean it will not have 5 or 10% pullbacks. 5% of 5,000 years is 250 years. Let’s say it is mired in a 2% pullback of only 100 years, but you are unfortunate enough to be living during that time, for you don’t live to be thousands of years old. How much then are your beliefs worth, maybe not a whole hell of a lot? That’s where objectivity and controlling your losses comes into play. Any market period does not care how emotionally sure you are of how it SHOULD be doing.
A bungee cord can only stretch so far than snap, you lose an eye or your wife. Like Cramer said Friday. Come Tuesday and Wednesday, helio Ben, better start back peddling.
If he doesn’t convince everybody, that, this economy isn’t going anywhere soon. That, he likes a little stagflation and the spigots wont be turned off, ever. If he cant convince them, then all bets will be off and it will be ugly. He cant let this economy recover, or get any worse (the dreaded deflation)! If it goes either way, up or down, you traders, the (gamblers), will destroy it. Cramer, knows it and Bernanke cant do anything about it, except trudge along between inflation, deflation and we all know he cant do that, (stretch it), forever, snap! When toilet paper has more value than dollar bills, then the end will come. This world as we know it will be out of business and well all be stuck in the toilet, in de basement. Extra, extra, read all about it, traders and banksters, with the most toilet paper, won! Were all, all, in deep, deep, deep, do do. PS. Where did Jim Rogers Move? ARM A GETTIN out ah here! Honey grab the Morgan’s! Pray it doesn’t snap in the winter time. R.I.P.
Scavenged to bone, carcass economies no longer nourish. Quick, fly in the “Fed peckers”. Pounding rapidly, virtually depleted marrow cavities are divvied to exploding ravenous flocks.
Greg you say the following “The Fed pumped out more than $16 trillion after the 2008”. As I understand it, the Fed creates U.S treasury instruments, bond, notes, etc. So, isn’t the U.S. taxpayer on the hook for the interest payments on that debt? And, why isn’t that part of the national debt of 17 Trillion?
Bruce,
Some of the $16 trillion was paid back but because you cannot audit the Federal reserve who knows. Some of this is no doubt “off balance sheet” and some is wrapped up in their bond portfolio and some was just given away. The reason why I am so vague is you cannot audit the Fed (as I said). So you really don’t know what’s going on. The only reason why we know this is because of the one time audit Senator Bernie Sanders put into the 2010 Financial Regulation Bill. Here’s the link from Senator Sanders Senate web site that tell about the one time Fed audit in 2011:http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3 I hope this help explain it.
Greg
Gold and silver are stores of value for all other forms of wealth. When all paper currencies are gone and all goods and services are repriced in G & S, then and only then will the metals be at there true value.
Greg, thanks for your reply. Following the thread of this unaccounted for money, it would be necessary for the U.S. government to hide, off balance sheet, interest payments on debt that was issued by the fed and hidden from the public. I’m aware that the claim is made that the Fed and the taxpayer were paid back, but what was paid (again a mystery as to how much) was with worthless paper the banks created e.g. mortgage backed securities.
I enjoy your show a great deal BTW.
Thank you Bruce!
Greg
Greg … Everything that Roubini seems to say about gold is in context to his perception that gold is a hedge or a store of value but not necessarily a form of currency. It’s a blind spot , IMO. We have to remember that back in the 1970’s the USD (floating) was still “cutting its teeth” in terms of getting “market traction” in order to enter its ultimate role as a real-time measure for the return of gold-as-money in real-time. Gold has always been a great store of value or a hedge but had a tendency of falling short of being a great currency because of FIXED values and a lack of flexibility where its liquidity is concerned. What’s now new for gold is that very liquidity that it lacked in years gone by. Keep in mind that gold’s monetary liquidity is the product of (weight x trade value) in terms of “economic coverage”. We’re now here thanks the age of information and real-time system development which has now extended itself to include currencies and gold. We don’t have a monetary problem in respect to design …. simply a grass roots marketing challenge, one to give thanks for !
You cannot pour new wine into old wineskins.
im thinking maybe the years and decades we have lived thru of accelerating world debt against the enforced paper/digital coin of the realm, and in the forefront, the us dollar, world reserve currency is acceptable to the vast majority of the populace because the notion is that even now it is too big too fail (be repaid)
but can be ‘floated’ along indefinitely, at least long enough for the lifespan of those who believe that this enforced reserve current system of paper/ digital credits can be worth more sometimes, thru the manipulative actions and austere rhetoric of the powers to be, of even crashing gold/commodities for a spell, and the other times, most times, the paper/digital promises will be worth less, and that’s ok to trade around, would be the common assertion. Where I differ, and is why I hold fast to hard assets, gold and silver, and real things, is because I don’t just think the current system of dollar credits will just continue to be worth less, I believe the ever present danger is for the dollar to be worthless, like in 0…..already has lost 95 to 97 % of the purchasing power since 1913, now only just 100 years…somebody would need show me, what is to stop the rest of the erosion, and especially under the worlds 21st century debt melt ups! im thinking 1 + 1 still equals 2…..
Excellent report, Greg. Thank you for this valuable information.