Never have so few plundered so much from so many (Winston Churchill on the Federal Reserve System)
“I have 100% confidence in being able to control things.” Ben Bernanke
“My models didn’t work!” Alan Greenspan
When a country wants to create some currency, the government sells a bond to their central bank. The central bank writes a check against a zero balance in their checking account for however many dollars, euros, yen, or whatever the government wants, and it buys the bond. The currency has now sprung into existence, and later can be used to redeem the bond. Therefore, the bond is an IOU for the currency. But since the currency is also a claim check to redeem the bond when it matures, the currency is an IOU for the bond. Get it? No, me neither. If YOU did that, you would be accused of fraud. Welcome to the rabbit hole, welcome to our fiat-based, debt soaked monetary system.
Gold is not necessary. I have no interest in gold. We’ll build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration. That’s the bastion of money.~Adolf Hitler
There are about three hundred economists in the world who are against gold, and they think that gold is a barbarous relic – and they might be right. Unfortunately, there are three billion inhabitants of the world who believe in gold.~Janos Fekete
Read–Financials: Opportunity or Value Trap on 13 August 2008. Mr. Montier does a good analysis at trying to find a margin of safety in banking stocks on the eve of the 2008/2009 credit crisis.
Thank you for your prior comments on the introductory chapter. My main takeaways were: 1. many liked the commentary in the case study and 2. Perhaps break up the large intro into smaller sections.
And when the money failed in the land of Egypt, and in the land of Canaan, all the Egyptians came unto Joseph, and said, Give us bread: for why should we die in they presence? For the money faileth.” –Genesis 47:15 King James Version
We’re in the midst of an international currency war.” Guido Mantega, Finance Minister of Brazil, Sept. 27, 2010
I don’t like the expression….currency war.” Dominque Strauss-Kahn, Managing Director, IMF, November 18, 2010
Before you sell your stocks, buy gold, and huddle in the basement with your canned food and ammo cans, none of what you read below is inevitable. I post this to make you aware of what is going on and to encourage you to learn about money and credit. Turn off your TV and read. We may be entering the end of one monetary regime and the beginning of another, though the process may take several years.
Note that the period from 1971, when President Nixon severed the last anchor to gold, to today is an unusual period in monetary history. Compare these 43 years to the thousands of years where money had some linkage to an object(s) of intrinsic value like gold, copper, or silver. Listen to Nixon’s excuses for his actions–blame the “international speculators” instead of his government’s wildly inflationary policies.
The Book, Currency Wars, The Making of the Next Global Crisisis one that I recommend. See more: http://www.currencywarsbook.com/
What does this have to do with today? Warning bells are ringing: Cypriot_Bailout_Sends_Shivers_Throughout_the_Euro_Zone. On the one hand, people should be aware of how banks are inherently bankrupt under today’s current fractional reserve banking system and loss of their savings would teach a lesson. However, to simply change the rules of the game with a sudden theft by bureaucrats devastates savers who may have had nothing to do with the crisis and are the ones whose savings are crucial for the economy. If you think U.S. is different from Cyprus, it’s not. $400B per year goes from depositors to banks via the Fed zero rate policy. See how the Fed devastates poor savers and those on fixed incomes (an important read): Senate-Testimony-Hearing-Rickards-03-28-12
Wake up! SYDNEY (MarketWatch) — Asia stocks reacted badly on Monday March 18th to details of a bailout of Cyprus over the weekend — with U.S. stock-index futures and the euro also sharply lower — as investors fretted about the potential implications of a decision to levy private bank deposits.
The Euro Has Brought Central Planning and Destruction
The Euro has succeeded in serving as a vehicle for centralization in Europe and for the French government’s goal of establishing a European Empire under its control—curbing the influence of the German state. Monetary policy was the political means toward political union. Proponents of a socialist Europe saw the Euro as their trump against the defense of a classical liberal Europe that had been expanding in power and influence ever since the Berlin Wall came down. The single currency was seen as a step toward political integration and centralization. The logic of interventions propelled the Euro system toward a political unification under a central state in Brussels. As national states are abolished, the market place of Europe becomes a new Soviet Union.
