The Assault On Gold

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Paul Craig Roberts
Infowars.com
April 5, 2013

For Americans, financial and economic Armageddon might be close at hand. The evidence for this conclusion is the concerted effort by the Federal Reserve and its dependent financial institutions to scare people away from gold and silver by driving down their prices.

When gold prices hit $1,917.50 an ounce on August 23, 2011, a gain of more than $500 an ounce in less than 8 months, capping a rise over a decade from $272 at the end of December 2000, the Federal Reserve panicked. With the US dollar losing value so rapidly compared to the world standard for money, the Federal Reserve’s policy of printing $1 trillion annually in order to support the impaired balance sheets of banks and to finance the federal deficit was placed in danger. Who could believe the dollar’s exchange rate in relation to other currencies when the dollar was collapsing in value in relation to gold and silver.

The Federal Reserve realized that its massive purchase of bonds in order to keep their prices high (and thus interest rates low) was threatened by the dollar’s rapid loss of value in terms of gold and silver. The Federal Reserve was concerned that large holders of US dollars, such as the central banks of China and Japan and the OPEC sovereign investment funds, might join the flight of individual investors away from the US dollar, thus ending in the fall of the dollar’s foreign exchange value and thus decline in US bond and stock prices.

Intelligent people could see that the US government could not afford the long and numerous wars that the neoconservatives were engineering or the loss of tax base and consumer income from offshoring millions of US middle class jobs for the sake of executive bonuses and shareholder capital gains. They could see what was in the cards, and began exiting the dollar for gold and silver.

Central banks are slower to act. Saudi Arabia and the oil emirates are dependent on US protection and do not want to anger their protector. Japan is a puppet state that is careful in its relationship with its master. China wanted to hold on to the American consumer market for as long as that market existed. It was individuals who began the exit from the US dollar.

When gold topped $1,900, Washington put out the story that gold was a bubble. The presstitute media fell in line with Washington’s propaganda. “Gold looking a bit bubbly” declared CNN Money on August 23, 2011.

The Federal Reserve used its dependent “banks too big to fail” to short the precious metals markets. By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Federal Reserve was able to drive the price of gold down to $1,750 and keep it more or less capped there until recently, when a concerted effort on April 2-3, 2013, drove gold down to $1,557 and silver, which had approached $50 per ounce in 2011, down to $27.

The Federal Reserve began its April Fool’s assault on gold by sending the word to brokerage houses, which quickly went out to clients, that hedge funds and other large investors were going to unload their gold positions and that clients should get out of the precious metal market prior to these sales. As this inside information was the government’s own strategy, individuals cannot be prosecuted for acting on it. By this operation, the Federal Reserve, a totally corrupt entity, was able to combine individual flight with institutional flight. Bullion prices took a big hit, and bullishness departed from the gold and silver markets. The flow of dollars into bullion, which threatened to become a torrent, was stopped.

For now it seems that the Fed has succeeded in creating wariness among Americans about the virtues of gold and silver, and thus the Federal Reserve has extended the time that it can print money to keep the house of cards standing. This time could be short or it could last a couple of years.

However, for the Russians and Chinese, whose central banks have more dollars than they any longer want, and for the 1.3 billion Indians in India, the low dollar price for gold that the Federal Reserve has engineered is an opportunity. They see the opportunity that the Federal Reserve has given them to purchase gold at $350-$400 an ounce less than two years ago as a gift.

The Federal Reserve’s attack on bullion is an act of desperation that, when widely recognized, will doom its policy.

As I have explained previously, the orchestrated move against gold and silver is to protect the exchange value of the US dollar. If bullion were not a threat, the government would not be attacking it.

The Federal Reserve is creating $1 trillion new dollars per year, but the world is moving away from the use of the dollar for international payments and, thus, as reserve currency. The result is an increase in supply and a decrease in demand. This means a falling exchange value of the dollar, domestic inflation from rising import prices, and a rising interest rate and collapsing bond, stock and real estate markets.

The Federal Reserve’s orchestration against bullion cannot ultimately succeed. It is designed to gain time for the Federal Reserve to be able to continue financing the federal budget deficit by printing money and also to keep interest rates low and debt prices high in order to support the banks’ balance sheets.

When the Federal Reserve can no longer print due to dollar decline which printing would make worse, US bank deposits and pensions could be grabbed in order to finance the federal budget deficit for couple of more years. Anything to stave off the final catastrophe.

The manipulation of the bullion market is illegal, but as government is doing it the law will not be enforced.

By its obvious and concerted attack on gold and silver, the US government could not give any clearer warning that trouble is approaching. The values of the dollar and of financial assets denominated in dollars are in doubt.

Those who believe in government and those who believe in deregulation will be proved equally wrong. The United States of America is past its zenith. As I predicted early in the 21st century, in 20 years the US will be a third world country. We are halfway there.

Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously the editor of the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.

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51 COMMENTS

  1. Assaulting gold? Is this for real? If anything the Fed is gifting goldbugs with cheaper gold if you go for this notion. Rather since the U.S. isn’t on a gold standard why would the Fed care what the price of gold is? Is gold so special a commodity that it never, ever goes down in price? C”mon.Clover

  2. Bumping this back up to see how things have gone since. So, the assault on gold has continued since this article was written. Lately the price has bounced around $1380 minus a little at times, until this morning’s rise to the current price of $1416. Oddly, coin premiums are up, and the usual sellers aren’t selling. On the paper market, as a general rule, those who have gold aren’t selling and those who are selling have no gold. Naturally, contracts are still coming mature for delivery, but that’s in the actual real world physical market. The paper hustlers will never deliver an ounce, because they don’t have any.

    Is anyone here still watching? Did anyone sell their gold or silver? I didn’t sell anything but some scrap I got in a deal with some coins, though I haven’t added much in the way of silver and gold coins.

    • Jim Rogers: ‘Nobody Gets Out of Tthis Situation Until There’s a Crisis’

      “FM: So what is your opinion on the current state of the gold bull market. You’ve said repeatedly that you expect it to go much higher this decade. How do you see it right now?

      JR: Unfortunately from my point of view, and I own gold and haven’t sold any, we are in a long overdue and much needed correction. The anomaly was that gold had been up 12 years in a row. That’s not normal, typical action. It’s abnormal, which worries me and should worry all the gold bulls. It has now corrected for some 18 to 20 months now. I find that encouraging. I mean, I don’t know, because I’m not a very good market timer, but I do know that most corrections go on long enough to scare a lot of people and scare them out of their positions, and that’s what I would expect to happen.

      I’ve had people write to me and say: “gold cannot go down 30%”, and I say: “turn on your computer. It’s there.” There are a lot of mystics that are still true believers. Until it scares a lot of people the correction is not over. I would certainly like the correction to be over this afternoon and see gold go to $2,000 or to $3,000, but that’s not reality.” …

      http://www.safehaven.com/article/29984/jim-rogers-nobody-gets-out-of-tthis-situation-until-theres-a-crisis

      And, me? I funded a dental assistant’s tile floor purchase and bought some truck repair parts. It’s amazing how fast money goes POOF!

      • I don’t pay a lot of attention to Rogers because he’s looking at trends and playing the paper markets. That isn’t me and I have no frame of reference for what he says. The overall correction he’s talking about hasn’t been 30% of the $1700 that was the norm for 2 years, it’s 30% of the short term pushup in ’11 to $1917.

        Your larger expenditures, like mine, probably wouldn’t buy his cigars for a day. I can’t even relate to what he’s saying and it has no bearing on anyone who doesn’t shuffle paper and electrons. That’s not meant as a dig at Jim Rogers, it’s just that I’m not in his league and don’t ever see myself as being in it.

        • “I can’t even relate to what he’s saying and it has no bearing on anyone who doesn’t shuffle paper and electrons. ”

          I don’t see it that way at all.
          Seems to me it has a bearing on everyone, small or large. He seems pretty plain spoken to me, too.
          I have absolutely no understanding of your comment, “I have no frame of reference for what he says.” That’s very strange.

          Who isn’t looking at trends?
          How can anyone Not be looking at trends?

          I don’t see him as being in any particular ‘league’ with regards to the subject at hand. I.e. rice is rice and green beans are green beans. They have a market price.

          • I have no frame of reference for what he says because he’s talking about gold on paper, not actual gold in his possession. He’s talking about rice futures, not bags of rice in his possession. Yes, Rogers is not only in a different league from me, he’s playing a whole other game from me, and probably from you, too though I don’t know what you do for a living.

            I don’t pretend to understand what he’s saying. He’s the guy who made George Soros a billionaire by playing the same game as any other paper hustler. I don’t understand his reasoning and don’t try to. I don’t need to know what he knows because it does me no good in the business I’m in.

    • Premiums make adding more difficult at present. It just pushes averages up while spot prices are sliding down. And nobody wants those to cross.

      • “Premiums make adding more difficult at present.”

        Are premiums going up for everything, or is it you’re just limiting yourself to a particular form, shape or size?

        Seems to me, scrap would be basically constant. 1/10th on the other hand,..well.

        • I don’t own a pawn shop or a cash-for-gold place so my access to scrap is rather limited 😉

          Although I’ve wondered about walking into a cash-for-gold place and asking if they’ll take cash for gold 🙂

          Pretty much premiums are up on most everything as far as I can tell, but I don’t pay much attention to bars and rounds.

          • I am not sure, but I think in a store located in the state I live, buying scrap would be sales taxable. At 10% that wipes out any savings.

          • “buying scrap would be sales taxable”

            Oh, mang. That sucks. …Are you sure?
            My state gets small plus today.

          • Brent and DS, premiums, exist because the coin, bar, etc. has been refined to a certain purity and tested. By accepting the premium, the seller is guaranteeing the purity and weight.

            On “cash for gold places”, they are all subject to federal precious metals laws as well as state and local laws for precious metals. Local laws almost always have restrictions on where the scrap can be sold, and requirements that any precious metal bought as scrap be held for varying periods of time before being “scrapped out” . LE agencies can come into a gold buying venue at any time and demand buying records under the pretext of looking for stolen goods. The records had better cover everything in the safe, or there are some very substantial penalties.

            DS, jewelry stores are the very last places to ask about buying gold. Jewelry store owners are as notorious for crookedness as used car salesmen. Coin stores will usually have a goldbug or two around, either the owner or an employee and they can usually shoot you straight about gold and silver.

            Brent, “cash for gold” buyers are subject to some heavy taxes and fees, but sales tax isn’t one of them, except in the case of jewelers who resell jewelry they buy as scrap. Only a jeweler tries to claim that there’s a premium on jewelry, because they sell karat gold with stones at a markup far above the actual precious metal value. There’s actually a scale for discounting scrap karat gold because it has to be refined before it can be made into resellable forms of bullion.

            The actual gold content of scrap varies by karat stamping and even within a karat specification. 10k is supposed to be at least 41.7% gold, 14k 58.3%, 18k 75%, etc. Refining the scrap is costly, and so is manufacturing rounds and bars.

            Buying and storing scrap gold as an investment isn’t practical, because you always sell at a discount under spot or you pay to have it refined or pay to have it assayed. Among alloyed gold items, only gold coins of known purities are accepted at bullion value + coin premium. Scrap doesn’t have the same advantage.

          • I think all gold and silver not a government issued coin is taxable in Illinois if purchased in state. I may be wrong.

            Ed, I was joking. I know they won’t sell gold at those places. I alsoknow how scrap works having had a close up look at the pawn business some many years ago.
            🙂

          • Ed wrote, “jewelry stores are the very last places to ask about buying gold”

            Not all jewelry stores are the same. YMMV.

            Ed wrote, “Buying and storing scrap gold as an investment isn’t practical, because you always sell at a discount under spot or you pay to have it refined or pay to have it assayed.”

            That’s not entirely true either. Again, YMMV.
            Also, I’d never call it an investment.
            …You buy under spot, you sell under spot, and you trade or barter.

            BrentP wrote, “I think all gold and silver not a government issued coin is taxable in Illinois if purchased in state. I may be wrong.”

            I think you are.

          • Some people say if you use gold or silver to purchase something you get a discount. Kind of like how some merchants give a discount if you pay in cash instead of with a credit card.
            What stores? I don’t know.
            I have seen signs on tables that say they take gold or silver. Not common, sure, but it’s done.

            Here’s an example of a grocery store accepting silver as payment, do they have a premium and do they take gold too? I don’t know.

            First Grocery Stores Begin To Accept Silver
            https://www.youtube.com/watch?v=aWJoJxMXuU8&feature=related

            I read a suggestion somewhere online, offer your mechanic (or whomever) a choice of: cash, gold or silver, and see what they decide? YMMV.

            @BrentP, one thing I wondered, if they do tax gold & silver in Ill. do they require a photo ID to purchase, is it applicable only to residents? … Laws change, but probably not in Illinois.

          • (35 ILCS 110/3-5)
            Sec. 3-5. Exemptions. Use of the following tangible personal property is exempt from the tax imposed by this Act:
            (4) Legal tender, currency, medallions, or gold or silver coinage issued by the State of Illinois, the government of the United States of America, or the government of any foreign country, and bullion.

            (35 ILCS 115/3-20) (from Ch. 120, par. 439.103-20)
            Sec. 3-20. Bullion. For purposes of the exemption pertaining to bullion, “bullion” means gold, silver, or platinum in a bulk state with a purity of not less than 980 parts per 1,000.
            (Source: P.A. 91-51, eff. 6-30-99.)

            So my memory was a bit off, but correct for this discussion.

          • I only bought silver and gold retail in person once. Eagles BTW. No ID. At a local jewelry store. My first purchase so I had no trust except over the counter at the time. Premiums were higher than alternatives of course. Since then I’ve dealt with one of the bigger dealers. They proven themselves trustworthy so that’s what I do.

            The tax is based on the form of the gold and silver. So I doubt ID would be required. The retailer would just charge sales tax as is done on other items. No tax on eagles from the US mint.

          • Well, OK . My mileage does indeed vary because I’m in the business and have been for 10 years. Jewelry store owners are the last people I’ll do business with. Maybe they’re not all the same, but enough are thieves, or too stupidly greedy to deal with that I don’t waste time fucking around with them anymore. Now, actual jewelers are a different story. Bench jewelers are craftsmen and several are long time business associates of mine.

            I have to know this stuff for a fact and I have to be right about it or risk being robbed and jailed. Y’all can speculate and josh because you’re just doing it in an online discussion. What I know cost me years and quite a bit of money to learn, and I make a living with the knowledge. Forgive me if I just keep bumping along doing it my own way.

          • The Jewelry store I went to was one location of a local chain that is on the US mint’s dealer list. Or at least was at that time. Other family members had done business there so I bought my first US Eagles there. I found lower premiums elsewhere, but their premiums were not out of line for over the counter brick and mortar operations.

            They weren’t just some random place. Give me some credit in checking whom I do business with here….

          • I do give you credit, but I was replying to D/S’s comment about jewelry stores. My comment about jewelry stores had to do with doing any kind of scrap business with them. That’s the business I’m in, scrap gold and collectible coins. All of that kind of dried up when the assault on the gold spot price started.

            Jewelry stores are pretty much like used car lots, they’re going to sell jewelry for many times its value. Diamond rings are one example. A jewelry retailer will have an I-1 diamond that he paid about $800 for, and set it in a 14k ring with a little over 1 dwt. of 14k worth, at most $45. He’ll sell it for $4k and will refuse to buy it back a year later for more than the wholesale value of the stone.

            For my own gold stash, I stick to US gold coins made before 1933. The eagles are fine, and the fact that they come in fractional sizes is good too, but aside from the 1/10 oz. size I don’t have them offered to me very often.

          • Ed wrote, “Jewelry stores are pretty much like used car lots, they’re going to sell jewelry for many times its value. ”

            I wasn’t talking about new jewelry, or even slightly used jewelry, just scrap. Times, they are a changing, and jewelry stores are changing too. They have to compete to stay in business. Many buy scrap when they didn’t before. Or at least they didn’t have signs on their buildings saying they did. Some will sell it too.
            No doubt many jewelry stores are rip-off places, not all are.

            I still appreciate your input Ed. No insult intended. Just discussing the matter.

            I stop by estate sales on my way to and from, it’s been a couple of years since I saw anything more than silverware being sold at one. I think they are selling it elsewhere before the sale. Again, YMMV.

            Auctions are another option. I’ve watched people bid against dealers and come out ok. This website ain’t bad for finding auctions: auctionzip.com

            Why would you stick to US gold coins made before 1933?
            I’ve read many articles discussing how it’s better to avoid any kind of numismatic value on a coin.

            This seems like a good perspective too:

            Wearing your precious metals. A fashionable, smart option.
            http://thesurvivalmom.com/2013/05/27/11786/

            Insert image of FerFal selling a link or two from a chain to buy some groceries, here x.

    • I’ve been taking advantage of these “Low, Low Everyday Prices!” to up my stocks of Au/Ag.

      I’ve discovered it’s the absolute best way for me to save money. I don’t trust the market–at all. The Wall Street crime gang’s game is a casino at best–and a shady one at that.

      But if I keep cash, I’m tempted to spend it.

      Funny thing happens when you start investing in gold and silver–physical gold and silver.

      I become Scrooge McDuck. Can’t stand selling the stuff; it’s like a taint on my character, something shameful. “You actually sold some gold??” I mean, what fool would do such a thing?

      It’s given me a discipline in saving I’ve never had before. And I believe it will allow me to buy my family a very nice small ranch or farm one day, too…or at least a plane ride out before the DHS comes to put them in a FEMA camp 🙂

      • Heh, Scrooge McDuck. I like that.

        “… it will allow me to buy my family a very nice small ranch or farm one day, too…”

        That’s a nice thought to end the night on. If only…

        “…or at least a plane ride out before the DHS comes to put them in a FEMA camp.” That’s not so nice a thought to end the night on.

        I was thinking it would at least allow one the ability to eat. Something other than bugs.

        “… it will allow me to buy my family a very nice small ranch or farm one day, too…”

        That’s a nice thought to end the night on.

        Viva La ReLOVEution!

        P.S.
        A professional gave me a copy of the DVD, ‘What in the World are They Spraying’ today and told me to watch it and make copies and distribute them to friends. Finally! Someone else notices too.

  3. Thoughts on gold and humanity – Hugo Salinas Price

    The supply of gold is largely misunderstood. According to MSM, gold supply is what is mined every year and brought to market – about 2,500 tonnes.

    This is a big mistake. The supply of gold is calculated at about 170,000 tonnes, made up of virtually all the gold ever mined since mankind took notice of its existence as shiny yellow pebbles in sand “placers” in riverbeds. Every ounce –every gram – of this supply is owned by someone, either a person or an institution.

    This brings up another point, which I have never seen mentioned: since every gram of gold in existence has an owner, then the effective world demand for gold is 170,000 tonnes, and increasing every year to take up all 1.5% additional production offered for sale. This is an undeniable fact, because when you own something, you are exercising a demand for it. When you no longer demand something, you either throw it away or sell it. A gold owner who no longer wants to own gold, for whatever reason, will instantly find a buyer because gold is the most marketable commodity that exists. No amount of additional gold can exceed demand and bring down the price, because every one of the present owners wants more gold, and the number of those who would like to be owners of gold is practically the whole human race!

    170,000 tonnes of gold – the figure is an approximation, as no one really knows with any certainty how much gold there is in the world – have to be passed on from one generation to another by their owners, millions of human beings. Some gold is owned by institutions and of course can be retained for years by these entities, but the greater part of gold in existence is in the hands of individuals.

    During the past one hundred years gold has been going into hiding. Humanity has fallen into an anti-human condition of servitude where humans do not receive the treatment that they deserve, from their rulers. Rulers there have always been, and despite the arguments of the anarchists – people who explain that we really don’t need rulers – we probably always will have rulers and the ruled.

    It would be an inaccurate description of the condition of humanity in the 19th century, to say that it was lovely and splendid in every sense. But one thing we can state is that during that century the world saw more progress toward a life of increasing prosperity and ease, than in any other period of history. This was because governments around the world, generally speaking, knew that there were limits to their sphere of action and that people were human beings, and not cattle to be numbered and manipulated, ostensibly “for their own good”. You did not even require a passport, to travel around the world.

    Wickedness there has always been, but in the 19th century we saw, again generally speaking, that around the world there was respect for what I would call the humane political economy. This involved respect for private property; respect for the Rule of Law; respect for inviolability of a man’s home. Everything that we think of as civilization is involved in the humane political economy, and that included respect for the institution of money as gold and silver.

    In the period between the world wars, there was still a residue of respect for human beings. In those years the schooner “Yankee” sailed from Gloucester, Mass. on four world cruises, captained by Irving Johnson, accompanied with his wife, “Exy”. Young men and women had their fathers pay for their cruise around the world as crew on the “Yankee”. Ports around the world welcomed them with open arms, not an enemy in sight. Those were dream days! A close friend of mine, Harry Wright, had the privilege of enjoying one of those memorable circumnavigations.

    What a great and dreadful change has come over humanity, and in what a short time it has taken place! Governments around the world have assumed a new and fearful aspect. Gold cannot be used as money. The Chinese government is actively urging the Chinese to acquire gold and silver for their savings, a sign of wisdom on the part of the Chinese government; however, gold is scorned and feared by most governments; some may even resort to prohibition and persecution at some point, later on. Gold is not allowed to perform its useful function for humanity, as the ideal means of exchange.

    If humanity has thought fit to value gold and accumulate it from the dawn of history, our modern-day governments, especially Western governments, do appear incredibly ignorant and arrogant in their attempts to banish gold from the monetary and financial scene, and more than that, to attempt to erase gold from human memory. With a stock of 170,000 tonnes and growing, held mostly by millions of individuals, governments are not at all likely to succeed in this pathological attempt to deny human nature, any more than they would succeed in attempting to banish sex.

    Humanity’s 170,000 tonne hoard of gold is constantly migrating from one owner to the next, as one generation is succeeded by another. A small part of this migration takes place through the Exchanges where gold is bought and sold, but most gold is transmitted from one owner to the next in a secretive manner.

    On the Exchanges, the price of gold is manipulated and vastly understated by the nefarious interference of Western governments colluded with the bankers that deal in bullion. The collusion is indispensable in order to maintain the illusion that the vast amounts of Bonds sold by governments have any value. Every rise in the price of gold is a virtual discount on Bonds, corporate and governmental. The danger perceived by governments is that the increase in the price of gold may at some point direct all investors to gold rather than Bonds; a very real danger indeed, for the sellers of paper Bonds.

    A small part of the supply of 170,000 tonnes comes on to the Exchanges by reason of those daily changes of ownership and from miners who have to sell their gold; it is this gold that is used to manipulate the price of the total supply.

    The huge total supply is not participating in the market at all. The vast majority of owners refuse to part with their gold at the ridiculous prices assigned to the metal; forgetting this fact, MSM wrongly concludes that what the miners must sell every year is the “supply”.

    However, it is not only a question of a higher price to bring the total supply – or at least a considerable part of it – to market. The deeper question is: if the owner is to part with his gold, what can he expect in return? Can he expect to recover his gold if he invests it? Certainly not! Then why part with it in the first place?

    The world has come to a bankrupt, dead end in political economy. The ideas which have prevailed for the last hundred years, can find their origin in the idealistic thinking of Plato, who wrote the most atrocious, inhumane book on political economy back in the 4th century B.C.: “The Republic”. He was the original Leftist. Leftists since his time have learned nothing and continue to present themselves as “idealists”. By “idealists” they mean that they propose a world which would suit them, albeit it means plain slavery for their victims. They are the habitual “improvers”, who want to improve things – using other people’s money, of course.

    I remember a conversation with a journalist who was a Leftist. I noticed he didn’t wear socks – I guess he thought wearing socks would brand him as “bourgeois”. I told him I thought the organization of an ant-heap was somewhat similar to his idea of a well-organized society. He answered me that “Yes, human beings should learn to behave like ants and bees”. I said, “But humans are not ants or bees”. He responded, “But that would be the best organization.” Plato would have loved him. Such are Leftists.

    These people have captivated the world’s imagination, in spite of the dreadful results of their ideas in actual practice. The politicians and bankers are in their thrall, and humanity pays for it all in increasing woe.

    Politicians and bankers are not thinkers. Politicians have one single aim in mind – reelection. Bankers for the most part (99.99%) are employees, most of whom do not think much, if at all.

    Back in the early 70’s, when Mexico was in the throes of a bout of leftist interventionism, with a government soon to go bankrupt, I had a conversation with an American banker friend. After he had two martinis before lunch, I asked him: “Why does your bank continue to lend money to the Mexican government? Don’t you see what this government is doing?” He answered me with unforgettable words: “To make a buck, Hugo. To make a buck.”

    The amount of paper Central Bank International Reserves, excluding gold, back in 1971 was $50 billion dollars. On the 18th of January, 2013, the amount totals $10.933 trillion dollars – an increase of over 201 times in 42 years. “To make a buck.”

    The greater part of the world’s supply of gold – 170,000 tonnes – will remain in hiding until the world’s rulers decide to become humane.

    Is there a chance that may happen? It could happen if some rulers heading nuclear powers were bright enough to cast off the truly silly and obstinate policies of the present majority, turn their attention to building a framework of political economy in accord with the requirements of human nature (which is precisely what the Founders of the USA put together) and give up on “improving” conditions by making them worse with paper money.

    “Hope springs eternal in the human breast…”

    • Fantastic stuff Tor! Thanks for sharing. My thoughts exactly, put in much more eloquent terms.

      If I’m asked “are you for a pure gold standard?” my reply is simple; only if it’s not coercive. I want total freedom in monetary matters as in all others.

      Let people CHOOSE what they’ll use as money freely. No more legal tender laws; they’re inevitably used to subsidize criminal banking…such as what we have today, the fraud of “fractional reserve” banking. It’s theft, pure and simple.

      If people want to use Bitcoins, pieces of paper, tally sticks, or gold, I don’t mind. I’ll accept what works and can’t be stolen by State grifting; mostly gold and silver but I’m open to anything.

      Just don’t dictate its terms to me!

      Government is the utopian delusion–not freedom. I’m finally at a point where instead of defending libertarian ideals, I’m on the offensive. I blew up at a “liberal” at work this week; he said I was “idealistic” and I retorted very forcefully that HE was delusional, that his system was intrinsically immoral. That his “ideals” kill people by the hundreds of millions, that they’re delusional. That freedom builds prosperity, adheres to reality, and generates peace.

      I can’t wait for the next argument with an anti-gunner, where I can properly place the blame for every mass shooting on HIS idiotic ideas!

      Getting angry and righteous is so liberating!

      • 1500 years ago, 1 gold dinar bought 2 heads of goat.
        Today 1 gold dinar buys 2 heads of goat.
        1500 years ago, 1 silver dirham bought 1 head of chicken.
        Today 1 silver dirham buys 1 head of chicken.

        During good times, with good government, it is conceivable that people come out ahead with paper money. These are not those times. The natural increase of wealth is devoured by ravenous governments. When one new thing is invented, two old things are destroyed or forbidden.

        The nation-states are in a race to the bottom to see who can take the most wealth and forbid the most discretionary spending, until we are all little more than drones in a human hive.

        Each gram of pollen we collect is paid by the hive with a slave certificate saying that some other drone will have to also trade his future pollen with the hive before we can convert the slave certificate into something we want.

        In 1910 the world used the same money system that had been in place for 1500 years. Bubbles arose here and there but overall the system was healthy. In the human hive, pollen collected was traded for a precious metal commodity, you traded your labor value for metal value and that was the end of it. Commodity for commodity.

        A new honest system would be one where whoever has the sovereigns(precious metal coins) has sovereignty. So if Bloomberg and his NY nanny fascist communist alliance has precious metals worth 20 trillion dollars, he can command his domain and economy with however many people want to remain in Manhattan and be a part of it. No sovereigns, no vote.

        Casting a vote in a democracy is about as meaningful as spending carnival tickets you won at the carnival. There are no meaningful votes or prizes.

        Hugo Salinas Price – 3rd Riba* Conference

        Basically, he is assisting Malaysia, Indonesia, and other Muslim countries in offering silver money in parallel with their current fiat systems. This gives every man a way to protect his wealth, he can limit his exposure to fiat dollars. Sound money is much more vital to freedom than firearms. What can we do to a bankster with a AR-15 that will return our stolen wealth us?

        *1.7 billion muslims are forbidden to use currency with Riba (money that experiences inflation or charges interest is forbidden to them)

  4. I look to the animal world, the 4-legged Anne Franks, for guidance. The SHTF for a lot of them every day. Squirrels have learned to deceive humans and other animals as a precaution.

    The rodents put on elaborate shows of deceptive caching to thwart would-be thieves. This behavior actually increases during lab experiments where squirrels observe humans stealing their peanuts.

    Knowing the intentions of the Wealth Assaulters, it seems wise to follow our animal brothers. Just like squirrels, we should construct coded three-dimensional maps to help us recall the various places we bury and stash our nuts and other wealth.

    http://www.storeguns.com/mono-vaults/gun-storage

    – – – – – – – – – –

    Gary the Goat Just Wants To Live

    Gary the Goat Escapes Fines or Jail for Eating Grass

    • dom I’ve been buying gold/silver with every spare dollar since 2006.

      I’m sitting on some cash right now, waiting to pick some more up. Timing it is impossible; I just buy when I have the money.

      Here’s what I think is happening: all fiat currencies–and that’s all of them–are in a race to the bottom. They’re all printing, because the Rothschilds own them all.

      But in a colony of lepers, the dollar has the most fingers left. As Europe implodes, people flee for the “safety” of the leprous dollar.

      Hence, you see what you see today–gold/silver decreasing in dollar price, the dollar strengthening against other currencies. It’s like a hundred skydivers falling to earth; the dollar’s going to hit just like the others, it just jumped out of the plane a little later.

      I suspect that strengthening trend will continue for a short while; perhaps even a few years.

      But it WILL end.

      The scariest way it will end is when the dollar loses its reserve currency status. Already many countries–including the BRICS–are trading internally with their own currencies. When more oil producers start selling oil for not-dollars, watch out! A tsunami of dollars will repatriate to America, and inflation will go ape-shit.

      THAT’S when gold and silver will soar.

      Ever wonder why they were so hot to attack Iraq and Libya? Yeah…both were selling oil for not-dollars.

      Can’t have that.

      This government is so screwed; and I think they know it, judging from their panicky reactions.

    • On gold & silver: I’m trying to convert as much as I can to tangible assets (everything from ammo to land). Silver and gold are only valuable if people accept them as a medium of exchange. They may not. The metals themselves have little intrinsic value beyond their scarcity and luster. I mean, what can you (as an individual) actually do with a silver or gold ingot?

      I think I’d rather have a cache of supplies to ride out the storm.

      • Silver has more value as a medium of trade but only once things have settled down to where anyone would want it. In the midst of calamity the only things that matter are food, shelter and the means to protect both. Precious metals don’t make for good bullets but they can, at least for now, buy them.

        • A bank run has no direct relationship to hyperinflation. Basically every bank is insolvent, and if everyone tried to withdraw their deposits at the same time the bank would quickly run out of money. This is the basis of fractional reserve lending. The banks can legally create money based on keeping a “fraction” of what they lend out available for demand deposit withdraws.

          Bank runs can happen for any reason. In fact, I was very surprised we didn’t see them in large numbers in 2007 as banks became completely insolvent in every sense of the word. I guess because they were able to dump bad mortgages off in CDOs to Fannie and Freddie. You’ll remember that the popping of the real estate bubble was a deflationary event, but I was ready to pull my meager assets out of banking system just because of the uncertainty.

          The best explanation of fractional reserve lending can be found here: http://vimeo.com/20860383

          Of course, the modern George Bailey would have worked a side deal with Mr Potter to make sure he’d be taken care of on the back end, and would have skipped town with his gold digger wife until the whole thing blew over!

      • Eric, agreed–first take care of the primary “G’s”–Guns and Grub. Then add the third “G”–Gold.

        Silver might become a medium of exchange. Gold will preserve wealth through the calamity, and enable you to buy real assets at a fraction of today’s price on the other side.

        During the Weimar hyperinflation, whole hotels were sold for a few ounces of gold. If you’ve kept your wealth so preserved, you might set yourself up for generational wealth during the recovery.

        But I wouldn’t buy an ounce until I had firmly secured food, water, weapons; barter supplies like alcohol, lighters, toilet paper, and a dozen other things. Antibiotics and other emergency medical supplies; it doesn’t take much to learn basic wound care and suturing techniques.

        Also agreed–the “value” of precious metals is almost entirely imaginary…though silver had indispensable industrial uses, gold less so.

        That said–they’ve been true money for at least five thousand years. Humanity settled on them for their very simple virtues as means of exchange–portability, divisibility, recognizability, scarcity, and uniqueness. Platinum, palladium…hell osmium could fill the same roll. But we’re not an entirely rational species and Au/Ag have slipped into the roll of “money” ably.

        • meth, I’ll trade you a 10 pound home grown ham for a 100 ct. bottle of 250mg Keflex. No, I don’t need any gold, just some good antibiotic. I’ll trade a sharp, single bit ax with new handle for 40 rds, 5.56X45.

          • Hey, eight. The pharmacist wants 1 dwt of gold for the keflex. You can trade meth a ham for the gold……… That’s how it works in case meth doesn’t need meat or an ax.

          • Ed, the pharmacist is a fool but that’s ok. Next week or the week after somebody will trade the gold if he still wants it rather than food. Meanwhile I’ll be trapping deer and hogs and keeping my ammo dry for those 2 legged varmints…..unless they get caught in the traps. Think I’ll go fishing for supper.

          • Maybe he is. He traded something he couldn’t eat for something else he couldn’t eat, but what he traded for, he’ll use to buy something he may not be able to trade for otherwise.

            Unless we’re all in the same boat as the group of pilgrims caught in the snow at Donner Pass, trade is going to be conducted for things other than food or tools.

          • Ed, there is wisdom in what you say. I don’t look forward to either situation….but in the meantime, I’ll be in the barn forging plowshares into swords….or the equivalent thereof. I worry only about that time up to my being et.

          • ” I worry only about that time up to my being et.”

            Ahaha. Remember that line in the book “Centennial” about the trial of Alferd Packer? The judge said something like, “Alferd Packer, you voracious, maneating son of a bitch. They wasn’t but 6 democrats in this county and here you’ve done et three of them.”

            Remembering the “Alferd Packer Memorial Cafeteria”. ahaha

          • Ed, to add irony, the only two people convicted of cannibalism in the US were named Alferd and Albert. No wonder I hated that son of a bitch highway patrol I grew up with named Albert. The parts store owner named Alferd overcharged me but did extend credit. Well, we all have to do what we think we have to do. I just have four words for those who would rob me “come and take it”.

    • Dear Dom,

      The recognized experts, Marc Faber, Jim Rogers, Peter Schiff, et al, do NOT consider gold “overvalued” or “in a bubble.”

      Most of the Austrian School oriented financial gurus think gold will go to five or six thousand dollars an ounce when the SHTF.

      So gold at its current price of approximately 1600 US/oz is NOT “too high to buy.”

      Meth is right. Timing is impossible. Buy now.

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