Gold Will Win Money War
By Greg Hunter’s USAWatchdog.com
It was recently reported that countries like China and India are going to buy Iranian oil with gold. Jim Sinclair of JSMineset.com said this week, “The implications of China paying for Iranian oil in gold is the most important event in the modern history of gold.” He also said that gold could go to “$3,000 per ounce” as nations around the world revert back to gold as the only form of payment “free of liability.” (Click here to read Jim’s complete post.) There is nothing short of an epic battle quietly going on between real money (gold) and paper money (the U.S. dollar). In the end, the real thing will win out. Today, Jim Willie of GoldenJackass.com explores the battle lines and explains the global money war. Please enjoy.
US Dollar VS Gold: Epic Money Battle
By: Jim Willie, Guest Writer for USAWatchdog.com
The so-called Global Financial Crisis is a term so widely used that it has earned its own acronym of GFC. When first seen, it seemed like girl friend club or some such, since many friends use GF loosely to refer to sweethearts. The GFC is falsely named, since it is more accurately described as a global monetary war with the USGovt vigorously defending its franchise in the USDollar for crude oil and trade settlement, and for bank reserves management. Take either away, and the other departs quickly, leaving the United States vulnerable to a quick ticket to the Third World marred by price inflation and supply shortage, even isolation in ring fences. On its own devices, the US is in as bad shape as the worst of the PIGS nations. The USGovt debt is above 100% of GDP finally. The annual deficit of $1.5 trillion could not be financed in normal methods. So the USFed is the adopted buyer of last resort, purchasing over 80% of new and recycled US debt issuance. The Interest Rate Swap tool acts like a hydraulic howitzer, in pushing down the long-term interest rates by creating false artificial demand. Without the IRSwap contract, a Morgan Stanley specialty, the US interest rates would be 6% to 7% just like Spain and Italy. The USTreasury Bond is not a safe haven, but rather a place where Weimar printing press operations persist, where decisions like SWIFT code rules are enforced like a illicit weapon, where billboards are painted to attract embattled investors of impaired toxic sovereign bonds from Southern Europe to retreat to the supposed safe haven of USTBonds.
WEAPON FOR INFLICTION
The USDollar has become the Weapon of Mass Self-Destruction. Three years ago, the Jackass made a statement frequently, that the first nations to depart from usage of the USDollar for exclusive trade and reserve bank operations will be the leaders in the next chapter. That list of insurgent nations is being defined right here and now. Those who remain committed to the US$ in trade and banking will put themselves at risk of systemic collapse and on a direct path on a slippery slope to the Third World. As the pace of capital destruction continues from the US$ conduit, lifting the cost structure as the debt monetization continues, the global economy will continue to falter. In the West witness the economic recession. As the USGovt raises the pressure on rebels on the world stage that refuse to comply with the USDollar Club, supported by the USMilitary that seems never to question the wisdom of directives from on high, the stress level to the entire global financial and monetary system is shaken severely. In the East witness the stall from the Western drag. The biggest blind spot among economists, whom the Jackass has unabashed bold disdain toward, has been that the ultra-low near 0% official rate has been the steady persistent cause of capital destruction and a guarantee for recession.
How tragic that economists cannot comprehend either capital formation or capital destruction under their arrogant noses! They talk of tax tweaks, of currency manipulation charges, of stimulus packages that lack effective elements, of focus on the wrong sides like consumption and retail spending. They focus on soft fluff such as inflation expectations, when the Treasury Investment Protection Securities are actually monetized by fresh money output in QE sidebar programs. No protection there! They focus on a CPI distorted to the extreme, as though it contained a shred or legitimacy. The frequent calls for more USFed bond purchases is heard, as if it is the core cure for financial market stupor. The QE bond purchases are the cancer in the body financial. The US economists are a lost bunch. The USEconomy is not the site of capitalism and economic development. It is the site of the Fascist Business Model put to practice, where preservation of large corrupted insolvent banks is given a national priority, where liquidation of insolvent broken systems such as certain financial markets and big banks is avoided at all costs. The US is the site of chronic asset collateralization and credit extension in order to support consumption to the point of systemic breakdown. Home equity raids were followed by home foreclosures, a shock to the clueless economist crew. Economists have litlte comprehension of economics, as seen by the clown hack Paul Krugman receiving a Nobel Prize. He is the absurd foppish captain of a doomed ship, elevated before its sinking. The USGovt debt, like most US State debt, like most big US bank balance sheets, like Fannie Mae debt, like AIG debt, is unsustainable, broken, in a process of collapse, all supported by the constant and high volume output of the monetary press managed by the US Federal Reserve.
Gold is becoming the Device of Financial Self-Determination, since it is free from debt and counter-party risk. The value and role of Gold has become well recognized in the last few years, especially since the financial crisis broke wide open in the summer 2007. It seems strangely obvious that Gold is money and the USDollar is not. As money flees for safety in Europe, England, and the United States, the story not told is that the monetary system is crumbling. The process has been underway since Greece broke down in December 2009, following the Dubai World debt bust. For two years, the Hat Trick Letter has been warning that Greece was simply the much smaller opening act. The real climax events in Europe would be Italy and Spain, whose government bonds are also captive wards of the Euro Central Bank state. The EuroCB acts more and more like an elite independent state, even with occasional defiance to the Germans and their Bundesbank stellar central bank, chock full of integrity, expertise, and tradition. Unfortunately, the Bundesbank signed on with the European Monetary Union as the Clydesdale horse without a side horse partner of equal strength and durability to pull the Euro stagecoach. Therefore, the ill-designed team in front steered left into the ravine. Next comes the abyss without the horse of Teutonic breed at all.
The major players of the world have three major complaints on USDollar management:
1) unilateral decisions to conduct debt monetization by the USFed (debased)
2) bond fraud centered on mortgage securities, exported globally (cancer)
3) endless war with ulterior motives too numerous to specify (aggression).
The USFed never consults with victims of its monetary policy. They are scolded by them instead, after reading of the next Quantitative Easing initiative. In the real world, QE never ended. It became Global QE, appeared as Operation Twist deviously, and lately in my opinion is basically QE to Infinity. When the Dollar Swap Facility unleashed $3 trillion in loans to rescue the many broken big European banks, the impact on Chinese reserves or Brazilian reserves or Russian reserves or Korean reserves seemed very secondary and unimportant in the large scheme to preserve the USDollar Franchise system. It is breaking apart. The USFed unleashed another $2.5 trillion onto the domestic banking system, mostly to Wall Street. The debasement effect has been staggering and deeply damaging.
When obvious bond fraud in the multiple $trillions occurred, some expected justice. Not the Jackass, who noted that all prosecutions were outside Manhattan, and that within Wall Street only patsies were selected for prosecution to make an example and to establish a facade for taking firm action. The credibility of legal remedy is absent. The greater hope has centered upon the many investor lawsuits against the Wall Street banks. They will continue forever. No justice will come to the US bankers for their unprecedented white collar crime that has contributed to the systemic failure of the nation. Only with tribunals after the default.
The war front is hardly defensive in nature. It is more offensive with hidden motives. This is a delicate topic. All too often a motive has to do with preserving the USDollar usage or to obtain gold in large volume. The Libyan liberation seemed to put Qaddafi away, but the national treasury in 144 tons of gold bullion still resides in London. The conditions for its return to Libya in my view will never be met. Call my cynical, when my preference is pragmatic realist. The Iran sanctions and saber rattling are 95% about protecting the USDollar, and 5% about their nuclear refinement development. A much bigger risk was the missing former Soviet warheads, but the USGovt made no rumblings about it on the global stage 10 to 15 years ago.
The Global QE (aka QE to Infinity) put into first gear the backfire against the US. Nations around the world resented higher food, commodity, and industry input costs. On June 28th, the SWIFT bank code law goes into force to obstruct transactions. The abuse of SWIFT codes against enemies and allies alike has taken the backfire into second gear. Big strategic mistakes are being made. The G20 nations have a brain trust in the BRICS core, which has decided to pursue an alternative method of trade settlement. They describe a method to satisfy trade obligations and payments. They describe a departure from exclusive US$ settlement. They actually are working on a rival SWIFT code system from Asia, without the name. It will soon match the Western SWIFT system stride for stride in rivalry. Bigger bank centers in Asia will arise, including perhaps maritime insurance, as crippled Lloyds pulls out. Soon expect to see an Eastern SWIFT system, that China hints might be gold-backed. The main body of trade to test the new system will be on crude oil sales. The entire trade settlement system on bank payments is on the verge of a major schism, a split away from the US-dominated methods.
The several bilateral Iranian oil deals pushed the movement toward a more organization system in a backfire against the United States. The USGovt has effectively accelerated the global response to replace the USDollar in trade settlement. The misguided SWIFT weapon usage encouraged several US allies to entertain the new Eastern alternative, so that at a later date it will be embraced and used more widely. The poor chess move by the USGovt on the table sacrifices the queen. It is unclear what the next move will be to put the USDollar in checkmate. It could be a Saudi announcement to accept non-US$ for oil payments, but alongside the continued US$ usage. After all, the sand empire sitting on crude oil has new protectors in China & Russia, rendering the US a marginalized bully. The end of the Petro-Dollar will be the coup de grace for the USDollar exclusivity. The writing is more clearly written on the container vessel walls crossing the oceans than ever in the last four decades.
SHOCK & AWE INSIDE CENTRAL EUROPE
HAT TRICK LETTER NEWS FLASH: a German banker contact informs that as a result of a high level meeting in Germany (not in the news), a decision has been made for France to exit the Euro currency first. They are ordered out. Regardless of whether Hollande displaces Sarkozy for the president post, the French have been instructed as to how business will be conducted. No other information, like whether France will revert to the Franc currency and not risk a severe Latin Euro devaluation after Germany and Netherlands depart. My impression is that Germany will launch a new currency very soon. Perhaps they wished for France to take some of the attention and to begin the chaotic process. The contact has consistently stated that France would not be included from the new Nordic Euro, an exlusive core group of Central European nations that qualify by having a current account surplus. French debt is too great, and likely to soon expand much worse. He said France would become a ward of the German state, with dictated policy and direction. Bear in mind that Germany owns of 90% of the French Govt debt. It remains to be seen whether France will assume the lead position among the PIGS, whose nations will all go adrift. Rumors of a Latin Euro Central Bank located in Marseilles were once spun.
Sorry, Bob Chapman. This is not simply from one of your subscribers. The subscriber took it from an unique sole news flash in the April Hat Trick Letter, taken and reported without attribution. It seems to be a common research and editor tool for the International Forecaster, and the main reason why we do not share newsletters anymore. This example is not the first, not the second, not the third, not the fourth, not the fifth time of occurrence. We analysts in the gold camp share, stick together, and form a team. Some are not team members when they consistently engage in the sleazy practice of intentionally avoiding attribution where due. The Jackass has been guilty of minor infractions like snagging a great graph and writing over a copyright or website URL address. But the Prudent Squirrel and others forgive me. When it comes to an analytic point of importance, never does the Jackass take it, claim it, or avoid attribution. Citations abound in my reports. Oftentimes, analytic points are shared as they come to the surface, and attribution is not required. It is a difficult task, a frequent challenge for the Jackass as editor, to give attribution and credit where due.
A major reliable long-standing source of information on Central Europe and gold trades has provided me with information on France. One is left with conjecture, speculative analysis, and deep challenge. My belief is that France has been offered something important, like financial support in return for leading the broken chaotic Southern European nations. France might start a Latin Euro Central Bank soon with some measure of German support. Ambrose Evans-Pritchard mentioned this concept a year ago. Its credible merit will be revealed soon. France resembles the nations of Italy and Spain far more than Germany. With the socialist Hollande taking over the reins of power, expect much larger deficit spending, higher bond yields, more strains on their economy, even the flight of capital, possibly bank runs. Then it will be obvious that France is the King of the PIGS. Germany might also have wanted to put France in the spotlight, while the German industrial leaders and bank leaders forge their next big accord and create an alliance more formally with Russia and China. An eastern-based barter system is in the works. The G20 non-US$ payment system will establish much of its manifested workings, with wiring and linkage to be made known as the months pass.
SHOCK WAVES IN FOREX
Enormous shock waves are coming to the Euro. More questions are raised than answers, many dealt with in the Hat Trick Letter. Will Spain and Italy revert to the Peseta and Lira former currencies, or stick together during assaults? Will Greece revert to the Drachma and defy the bankers who woud lose bigtime? Will the Germans unleash their bank bailout and invite the separation from the South, sure to topple numerous big European banks? What timing will come for the new Euro Mark currency to be launched by Germany? Will the new Euro Mark (or Nordic Euro) currency be a primary vehicle to settle trade with Russia? Will the Euro Mark have a gold component? How long before the Chinese Yuan is made fully convertible? Will the convertible Yuan be an advertised precursor for a gold-backed Yuan, used in G20 trade settlement? Will it be the basis of the new Eastern SWIFT bank system? Will the Yuan be the new basis for Eastern trade settlement? Will the Russians take advantage of the controlled storm surge and announce their own backed Ruble currency, perhaps backed by gold, silver, oil, and natural gas? Will the Arabs exploit the timing and announce their long desired Gold Dinar?
To be sure, a group of simultaneous new strong currency alternatives for trade settlement will ensure their survival and successful launch. They would benefit from critical mass and absent isolation. They do not wish to become victims of their own success, with rising exchange rates and consequent damage to export trade. The US relies upon renegade nations not going it alone, suffering the harmful effect of a better currency. If done together, the new launches would act like a strong broad well fortified craft and not a floating raft. The outsiders looking in will be the United States and England. Expect Australia to sign on with China, a major trade partner and owner of port infrastructure Down Under. Since heavy importers and exporters of toxic bonds, the US & UK will struggle to bid up the new Euro Mark, the new Chinese Yuan, and possibly the new Russian Ruble and new Gold Dinar. The certain death knell for the USDollar will be the acceptance on non-US$ payment for Saudi crude oil.
REBIRTH OF EURASIA
Germany has decided to look Eastward, and to cut some ties with the US & Anglo platforms that are unmistakenly breaking down. The Eastern Alliance has been cited in the Hat Trick Letter scribbles several times. The German engineering expertise, financial acumen, and organization skills have been put to work behind the curtains, free from US/British sabotage. They are working to create an alliance that brings to bear the profound Russian commodity, mineral, and energy resource wealth together with the vast Chinese wealth and factory persence. Many projects are in the works, but train lines from Russia to Germany. The oil pipelines are nearing completion, for energy delivery to Central Europe. The three nations will serve as the core to the alliance, which has been given assurance by the Persian Gulf nations to hitch their wagon at the appropriate moment. Recall the April 2000 conference where the Arab billionaires signed on to have Russia & China their regional protectors. It is all coming together. The USGovt sanctions against Iran have pushed the pace of the process. With the Eastern SWIFT payment system among banks, the foundation has become more concrete suddenly. As it slams into place on the global financial landscape, the shock waves should deliver tremor episodes to the USDollar and its corrupted custodians. Witness the early birth pangs of Eurasia, which has not been a cohesive force since the Ottoman Empire. History is coming full circle.
GOLD CONSOLIDATION ENDING AGAIN
Like a tired saw, the gold price is consolidating after several weeks of price firming, having adjusted to yet more shocks of naked short ambushes. The after effects of MFGlobal linger, rendering great harm to the integrity and function of the COMEX. Many firms are legally prohibited from participating in risk hedge management at the COMEX, since accounts were stolen by JPMorgan and no hint of either prosecution or remedy is apparent or likely. The after effects of the huge February 29th naked short ambush also linger. Over 630 million ounces of paper silver were dumped on the COMEX in a single hour on that day, which will go down in history, under COMEX corruption as a chapter. The volume of silver exceeds global mine output in a full year. So a message to those hare brained analysts who claim (earth to Bob Moriarty at 321GOLD) that the precious metals market can never be corrupted or manipulated or intervened to the point of chronic distortion, the message is to wake the hell up.
The new paradigm shift is very much at work in the gold market, silver too. The gold cartel pushes down the PM prices with naked short ambushes, no collateral posted, grossly out of proportion with economic need or mining firm hedge practices, enough to engineer a 8% to 12% price decline. Limits are enforced of 1% gains but 10% swoons. But the Eastern Coalition, not to be confused with the Eastern Alliance, continues to push down the gold price in order to execute some important very high volume purchases. The coalition is comprised of a handful of extraordinarily wealthy Eastern families with heavy motive to disrupt the balance of banking power dominated by the New York and London crowd to the point of chronic hegemony and abuse. They had a $50 billion infusion last November to move the bullion metal out of cartel banks methodically. The coalition pushes down the gold price in order to conduct raids on the gold cartel member banks, exploiting their vulnerability with respect to margin calls on sovereign bond positions and currency positions. The UBS example several months ago was a textbook raid that has been repeated. My open guess is that the next victims are Royal Bank of Scotland, Barclays, JPMorgan Chase, Bank of America, and Citigroup. Keep in mind that UBS is not a minor player, but one of the two giant Swiss banks which sold out to the Wall Street and London banksters long ago. The Swiss banking system is far weaker than is widely known, the object of major lawsuits.
Unique retaliatory treatment is reserved for Citigroup, as a result of special thefts committed against a certain family behind the coalition. This story will develop over time. Information sources are less generous on details, an indication of the gravity of the situation and imminent important events to come. The gold wars are central to the global financial war in progress, with a great many sides and numerous arenas. Stratajema, you can crawl back into your hole, or else share your rich sources.
Gold & Silver are each in a long-term consolidation. The gold pennant pattern is more intermediate. The silver pennant pattern is more long-term. Great metal shortage, huge investment demand, and pursuit of safe haven will drive prices much higher. The epic battle between paper gold and physical gold never results in paper victory in the final battles. This chapter of history will be no exception. Resolution will be an upward move in price. Remember the primary engine for the Gold Bull market is the negative real interest rates. The true inflation adjusted rate of interest (whether FedFunds or USTB 10-year yield) are running in the minus 8% to minus 11% range, since price inflation is in the 9% to 11% range and the USEconomy is stuck in a recession of minus 2% to minus 4% steadily, like in quicksand. It foretells of tremendous price gains for gold. The mainstream financial press is desperate to sell a wrong-footed story, for the sixth year in a row.
The USDollar appears to be topped out. As it falls, the global cost structure will be lifted again. Most commodities are priced on a US$ basis. Big challenges are in force against the global reserve currency. Aggravating the effect is the chronic high oil price. The Iran effect is felt, not going away, only to grow worse as the backfire backlash develops into new platform systems. See the Hat Trick Letter in the April edition for much greater details on all these critical matters as history is being made. Sadly, the history is the final chapter of the USDollar and its written epitaph. Americans appear to be the least informed on current events and risk levels. Many will see their life savings, their pension plans, and other valued assets suffer great loss since they have not put in place protection from the imploding beleaguered USDollar. The lost value of their homes is but the beginning of their great loss. That warning has not been heeded effectively by the majority of the masses, who qualify as sheep. Steps are difficult to make, but they must be made. Gold & Silver offer the best such protection in the form of bars and coins, kept outside the US and UK, the axis of fascism.
Jim Willie writes an investment newsletter. I have been a subscriber in the past and found it to be a very good investment tool. I am not getting compensated in any way to say this.
If you are interested in subscribing click on this link: http://www.GoldenJackass.com/subscribe.html
If you want to check out the free section of Goldenjackass.com click on this link: http://www.GoldenJackass.com
Greg actually I read your site every other day. I like you however, I see a trend. You are a right wing site. I am not a democrat. You had to use labels. So why do you assume I am a democrat? Do you hate democrats?
Who started the banker bailouts ? Bush Jr. Yes you say you see no difference between the two, but, yo attack this president, you never say anything about the Tea Bag Party that is destroying this country, in congress, and the morons who support their evil ways.
I would like to see you report on the dangerous game the repubs congress is and has been playing. Like student loans, more tax breaks for the very wealthy, cutting SS/medicare. and the wars of forever , including the drug war.
I would like to see a more balanced approach. Like mn says below he stopped reading after you got on the birther thing. Yes it was a bad post. that happens. Still will read you and post once in a while. Peace be with you as well Bro!
Greg, I do write a blog but hence it is on sports. Cannot be serious all the time. I am a caregiver for my critically Ill SON. Cuts will hurt him immensely, now I pay taxes and like you want to see it well spent. Not Wars, Not Bailouts, but, to help our fellow citizens. Are you against that?
What about raising taxes since your reaction was to cut cut cut. I would like to know how you feel.
Peace do not get so angry! Life is way too short. I hope we can converse civilly, btw , what would you call yourself, liberal, independent, conservative (which I think you are) progressive, or what Gerald Celente calls himself a Progressive/Libertarian, (Me). Peace Bro.
How bout this for a guest writer from the future.
Today,(sometime in the not so distant future) after several years of fighting off the inevitable economic collapse, America is bankrupt. I am happy to report that the country was able to continue all social programs so badly needed by so many of Americas poor and needy and no tax breaks were given to the wealthiest of Americans to fund these programs.
Unfortunately, due to the current BANKRUPT status of America, there will be NO social programs today, tomorrow, nor any day in the future. Everybody will now share in the fairness of national poverty with no one making any money and no taxes being collected from anyone. It is said that cuts could have been made in some of the social programs that would have helped us avoid total collapse, but now everyone gets to know what suffering is all about. Now we can get busy finding someone else to support the country.
This just in. No one is available to step in at this time to bail us out or fund the social programs. Wish there were some rich people we could tax now. Good night America.
Greg says: “The country needs to reach a consensus and stand together.”
Correct you are Greg.
I’ve written 2 different pieces the last couple of weeks strongly urging you, Czzi, Jim Willie,Jim Sinclair, Karl Denninger, Max Keiser & many others to stop sitting around, self organize & step up & Lead as Leaders should.
I didn’t send out either Email I wrote because they became to long winded.
Yes the poor kids will likely be screwed out of the school lunches, but as Jim Willie points out above we are all being screwed by these Wallst London Banker’s Scams.
Willie points out that we have to have our investment, labor & asset increase at least 10% or more a year just to stay even.
If you have 1 million $$$ in the bank today in 10 years time @ zero % interest your 1 million $$$ will have it’s value completely wiped out by inflation.
But maybe it won’t matter in 10 years as many will likely be dead anyway from the toxic poisons in the food, water, air, medicines, the Jap/GE nuke plant messes & the strong likelihood of the US/Israel starting a nuke war with the rest of the planet in order to try to save their position of power.
The Tea Party people & the Occupy Wallst people share many common concerns.
But since they are completely out of time to argue both sides had better set aside that blue team/red team crap, their differences & step up to the plate & be Leaders!
I just wait for that day while I hold my breath. LOL;) Sarc off.
Oops, sorry about the math typo.
1 million @ 0% & 10% per yr inflation you lose half the value.
As Maggie Thatcher said: The trouble with Socialism is that eventually you run out of other people’s money. Now czzi, where is my free breakfast, lunch, dinner, education, housing, make-work job and medical care?
Oh sorry forgot you don’t care about the common/little poor people in your OWN country! I worked in the school system and have seen kids going hungry. Go VOTE for these scum again you and your inhumane readers!
czzi, read Atlas Shrugged and then look in the mirror to see where your philosophy will takes you. In reading the book, or reading the todays news, one has to remind themselves which they are reading. The news doesn’t tell you the ending, the book does.
I stopped reading the blog for awhile after your post on Obama’s birth certificate, but anyway, glad to see you get back to economic discussions.
Just read that Apple has $110 billion in cash. It’s an American company and as much as I think the economy is going to get worse, America is still the best of the worst (when you compare it to the rest of the world)
nm – Apple may well be an American company (and granted, a successful one at that), but over here they are accused of hiding behind Ireland’s 12.5% corporate tax rate, as well as the British Virgin Islands to avoid the heftier 24% tax of the UK mainland. It’s estimated that Apple has made £6Billion in revenue in this country, but the tax man got only 0.17% of that.
It is too early to tell what is really going on. I doubt Apple is lying to the taxman, as much as they are using every possible legal loop or manoeuvre to pay less.
To my mind that almost makes them as guilty as the banksters and politicians we love to hate.
I would ask you only one question- where (as a US taxpayer) do I come into the debt of the poor or their children?
If I want to feed needy children, then I can from the goodness of my heart but not at the tip of the Roman spear.
I know, you’ll say, I don’t care about the poor. It doesn’t matter if I care or don’t care. I still fail to see how and why I came to be in debt to them.
Wow, you appear to be pretty angry. Maybe throwing a garbage can through a store front window would help.
You mentiond you worked in the school system. I have found the following to be fairly accurate…..those who can, do. Those whow can’t, teach and those who can’t teach, teach others to teach.
Hang in there Greg. A lot of people can’t stand the truth. Even after the coming storm blows their world to flinders, they will still be blaming the weather forecaster for being so negative.
Jim Sinclair has been right on the money for 10 years now.
Great piece by Jim Willie, I follow him quite closely on various sites. Very colorful (and sometimes inflammatory) but he calls it like it is. And he always has solid backing for his stories.
The potential for France to be the leader in the demolition of the Euro was surprising but Jim lays out an interesting case. The markets had priced in the Greece debacle, but I don’t believe that they’ve priced in the Euro disintigration. No matter who leaves the Euro first, I believe that it will go through the global economy like a magnitude 10 earthquake. It will be unannounced, and it will happen very quickly.
Thanks as always for bringing in great perspectives.
I always thought GFC stood for Global Fried Chicken.
This article, by Jim Willie, is very interesting because it highlights what is happening in the world of financial positioning. It makes since that other governments would want to get out from under the failing policies that have been foisted on them by the Federal Reserve Bank and American foreign policy. As major economies of the world form cooperative financial agreements; the United States will certainly suffer negative results.
The government of the United States may be relegated to third world status incorporated under the banner of the United Nations with no national sovereignty. There are factions in, and out of the United States working hard to make the loss of our sovereignty a reality. However, it has the strongest military to rent to the highest bidder.
The real problem that presents itself to “We the People” is…where does that leave us? Who will be governing and what will “We the People” have to submit too? Will North America survive as a blended Canadian, United States and Mexican economy (The Canusican Region)?
The issue of whether the economic downfall of the United States is the fault of Republicans, Democrats, Independents, Tea Party, or any other political group is irrelevant: the fault resides with “We the People.”
Thank you, Mr. Willie for the education and insight into the political-economic realities of the world.
Picked up $2500.00 more in silver yesterday. The coin store owner asked me “What did I know that he didn’t”. I wish I could explain it Greg.
If he doesn’t know then there is no help for the rest of us. There is so much anger in some of your previous post. It is just one more sign of the times when so many can’t make sense of what’s going on. People look at the news like they look at religion. They want some one to tell them everything is going to be OK just like some worshipers want a preacher to tell them they can live their life anyway they please and still get into heaven. Unfortunately, surviving this economic collapse and salvation takes personal commitment and sacrifice to succeed. People don’t want to hear that. They want a pill or something that makes everything all better. You’re a good doctor Greg, and though most don’t want the prescriptions your giving you have to stand behind your training and call it like you see it. Those of us in post opp have taken the medicine and are getting better. Keep up the good work and stay focused.
It was recently reported that countries like China and India are going to buy Iranian oil with gold.
This is just a breath of fresh air, America not in control of another countries money supply or how they can spend it. Whether it be right or wrong for the intended use is not my point. My point is: the USA is not the owner of the world, someday the citizens who think they are, just might wake up and join hands with the rest of the world. Um…. imagine that, we might all get along someday. Wish it be more than a pipe dream. You too Greg?
I read you all the time Greg on Jim Sinclair. What a dreamteam you gentlemen have! I liked the Willie Article, it puts together a lot of fragments of knowledge I have seen lately. Couldn’t help but read your exchange with Czzi and I asked myself who are these kids? Or more critically who are their parents that under the Food Stamp President these children must still be fed three squares at school? Reminds me when I was young, someone gave me a piece of that Welfare Cheese. It was very good! So I asked my mother couldn’t we get some of that cheese. Her instant demeanor was so full of exasperation, I needed no answer. “Don’t tell your father about the cheese, we do not take welfare.” However I will say we ate a lot of squirrels. Today the whitetail deer are thick in that state and one would have provided the protein of fifty squirrels and rabbits. To me, its like this Czzi, you either GIVE them chicken nuggets (no chicken involved)and make them welfare and prison material or you teach them to survive and thrive. I bet the parents of those kids got either a charity or government freeloader ride to nowhere and the repeat of another generation is what you get. As it turned out, I never needed the cheese.
I want to thank you for posting the analysis done by Mr. Willie. It was an eye opener for me as a non-economist. Most of the recent news coming across the globe, regarding tectonic changes in replacing the US dollar as the reserve and/or petroleum dollar currency were here brilliantly summarized and the negative consequences for the USA are clearly defined.
I am a regular reader of your fine writings and I enjoy them very much, but I do not post my comments too often.
I would like to make a statement about the school lunch program even though it has nothing to do with the article. Yes after 3 years of being unemployed I recieve food stamps and medicaid for my kids. I will be 49 soon and have worked since I was 14. I go to the V.A hospital for my medical if I need to so I do not need Medicaid. (4 years active duty and 2 years active reserves). My freind works at the school that my kids go to and they said that without free school lunch program most of the cafeteria workers would be out of a job. Maybe that is why some do not want it cut. As for the foodstamps, they could cut it in half and you could eat quite well. For example, a family of 3,(this is me I am talking about so the numbers are factual)will receive 525.00 a month for food. I can feed me and my kids for under 200.00 a month easily. I think the real problem is WHAT you can or cannot buy with them. For example you can’t buy a mutivitamin but you can buy candy bars and chips,coffee,sodapop and other things you don’t need to keep from starving. So just by changing what you can buy would save much cash for the U.S. I never thought I would be on foodstamps.
Dear Greg, I’, a French Italian double national, and I very much do represent the average “non core/PIIGS” citizen, although I had the chance to work and travel abroad: EU non core people are CLUELESS of the fact they are trapped in a hard currency that has been designed without a formal and bespoken exit mechanism, and BTW without a rating agency…
All this id deemed in a simplistic way as “the founding fathers knew we would have found a solution down the way after giving birth to CEE/EU Union – EURO, etc.”. Reality is we’re trapped in a bad design currency, with no last resort lending in sight (assuming this was a soultion, at list short term)and we are to find the way out very hard an challenging in the next 10 years or so, if we do not get to be the next japan
Your sincerely, lou
When the Saudi’s trade oil in other than dollars it may be in their best interest to not advertise the fact oublically. It certainly would not be in the US best interest to admit to this either.
Good evening Greg, I want to add that many people don’t look at how inflation effects the budget. We get lost in the number and looking at the cuts in a linear fashion. When accounting for inflation what or “how much” can be purchased or services provided for.
This is not the greatest example but look at the SNAP program. when it came into existence in 1984 the $2000 cap on assets. this has never been adjusted for inflation and the cost of food, fuel, rent and other services have increased with inflation yet the asset cap remains the same. If adjusted for inflation the asset cap should be about $5500! That would mean large numbers of more people would qualify for the food stamp program. The asset cap has never been changed and has a value of only $750 in 2012 inflation adjusted dollars.
Ok, now go back and look athe cuts and add in inflation…..
for a something to double in size there is an easy formula
the “% of growth” divided into “70” will give you the number years it takes something to double.
so we have a 10 year budget.
The rate of real inlation of say 5 percent
so, 5% growth divided into 70 = 12 years
so, in 12 years prices will have doubled because of inflation..
I am pretty sure I am right… for a great video series to watch about energy, population and how the expoential function works in real world applications…
This is great and advise everyone to look at it…
Long day .. it is 14 years…. have a great night!
I saw where the U.S.A. was headed towards financial insolvency over 30 years ago, after the multi-adulterous, War Criminal, wife and political party swapping Ronald Reagan nearly tripled the deficit. Taking the country from being the #1 creditor nation to #1 debtor one in less than 8 years. While raising taxes 7 out of 8 years as president.
What I find ironic is that Paul Craig Roberts “The Father of Reaganomics” likes to lay claim to now writes articles that run contrary to his actions when a part of the most convicted Felons to operate the Reagan White House. Yet many mentally-challenged American minds can’t seem to recall this hypocrisy.
Where was the “Tea Party” anger while this was happening? It’s rather late in the game to be expressing such frustration at the federal government today, when its effectiveness would have been far more applicable 3 decades ago. But Americans were too caught up in the false economy that was created from the “Reagan Revolution.”
Americans only have themselves to blame for the predicament they now face. As the saying goes: “America has the government it deserves.” Voting into office people who did not have their constituents in mind, but only enriching of themselves.
As the BRICS nations continue to move away from trading in $’s, will accelerate its decline of being the world currency. As soon as the SPP Agreement between Canada, Mexico and the U.S.A. consolidates, you can expect the Amero to replace the $ as its trading currency. Just another step towards a “One World Government Order”, when the Banco will become the world’s currency.
Gold has been money for 5000 years….I bet it will be money 5000 years from now!
Greg, great article. I see the U.S., the people and the MSM do not believe that America is sliding towards third world, but your posted article certainly has the facts that in fact it is. There is more to the slide than the article states and our politics of special interest played a big role as well during the last 30 years for the decline. Special interest has created debt & sent our jobs overseas making other countries stronger at our expense are among some other factors of the decline. The real premise of the article as I see it is that this is the new norm, a malaise of growth and a decline in world status of economic power, and an overall change of world stage players, a paradigm shift, of which the U.S is powerless to turn the tide. The U.S. is not exempt to global and historical forces even if CNBC spouts otherwise. Whatever the reasons are the U.S. and its global influence is losing ground and one can see the new norm everywhere if one just looks around and lets there eyes see and the ears hear. The changes are pandemic and are felt in every family; example, maybe our children will decide not to get a college education if their friends can’t find jobs who already have a degree, etc. I also see this country like the Titanic after the crash into the iceberg when the band played on and people continued to dance until it turned over on its side. Its a shame such a great nation of good people who simply were lead by special interest politicians who sold us out. Your work is greatly appreciated even if too late to change anything I am afraid.
Why are YOU so one sided, why not post what your repuglicans are up to? Like this story from truthout.org
House GOP Would Kick 280,000 Children Off School Lunch Program To Protect Tax Cut For Millionaires
By Guest Blogger posted from ThinkProgress Economy on Apr 25, 2012 at 4:30 pm
Our guest blogger is Melissa Boteach, director of Half In Ten at the Center for American Progress Action Fund.
House Republicans recently proposed cuts to nutrition assistance that will kick 280,000 low-income children off automatic enrollment in the Free School Lunch and Breakfast Program. Those same kids and 1.5 million other people will also lose their Supplemental Nutrition Assistance Program (formerly food stamp benefits) that help them afford food at home.
Ten years’ worth of these nutrition cuts could be prevented for the price of one year of tax cuts on 3,340 multimillion dollar estates that House Republicans are protecting in their budget.
On April 18 the House Agriculture Committee passed a bill cutting over $33 billion from SNAP over the next decade. About one-third of these cuts ($11.5 billion) comes from putting restrictions on “categorical eligibility,” a provision that enables states to better coordinate between programs and improves access to assistance for low-income families.
By restricting this provision, the bill would kick an average of 1.8 million low-income people a year off of food aid and end automatic enrollment in free school meals for 280,000 children in struggling families.
The Republican budget sells this bill as an effort to “reduce lower‐priority spending” to avert military cuts that will otherwise take place in January 2013 due to the debt deal agreed to last summer. But when it comes to reducing the deficit, it’s clear the House would rather ask low-income kids and families struggling against hunger to foot the bill than asking multimillion-dollar estates to pay their fair share.
Case in point: As part of the 2010 tax-cut compromise, House Republicans insisted on including a tax cut on multimillion dollar estates, adding an estimated $11.5 billion to the deficit this year alone. That’s the same amount they’re now claiming is necessary to cut from low-income families through these restrictions.
By making it more difficult for low-income schoolchildren to access school breakfast and lunch, this bill will likely increase child hunger, which is associated with worse educational outcomes and higher long-term health costs. Both of these trends affect our economy and our deficits over the long run.
We should reconsider reduced spending on “lower priority” items — a.k.a breakfast, lunch, and dinner for low-income children — and instead adopt a deficit-reduction approach that asks everyone to pay their fair share—including multimillion-dollar estates.