Credit-Based Money System and the Plight of Un-rich Peons
March 31, 2009 by goldguru · Leave a Comment
George Ure of UrbanSurvival.com writes that the magic of just pounding money into the economy doesn’t seem to be working this time, and it reminds him of “the old engineering/design flow-chart joke that went around about 20-years back that had a place in the engineering process labeled ‘Insert Miracle Here’.” Hahaha! Good one!
Well, apparently he is not here to talk about what makes me laugh or how I pretend that I know anything about engineering, and says, “the Big Picture is that a huge concentration of wealth has been going on for decades, and the people at the top have stretched greed about as far as can be done before things blow up” which is about as pithy as you can get about the terrors of mal-distribution of wealth, a cancerous condition that comes from a huge, decades-long monetary and fiscal boom where all the money filters up the food chain because the wealthy are the ones who have the wherewithal to borrow all the money to buy all the government debt so that the government funnels more and more money to the rich via increasing interest payments because the government has to borrow more and more money just to offset the inflation in prices that the new money created, and why deflation of financial assets, in a big bust like right now, has, among its other beauties, the ability to correct this unhealthy imbalance.
I am sure that there are many of those who say, “What in the hell are you yammering about, you Stupid Mogambo Halfwit (SMH)?” which makes me realize that I need to make a quick notation in my notes that you called me an SMH, which will come in handy when computing your Final Grade and compiling the next volume in the “Official Mogambo Enemies List” series.
But in answer to your question, regardless of the rude way you phrased it that is going to cost you, the problem of mal-distribution of wealth is not just that a few very rich people own the vast majority of everything and the many, many of us in the grubby multitudes of common-clay peasant scum whose lot in life is to make scumbags and government scumbags (like Christopher Dodd from Connecticut – the state that keeps electing this horrid little corrupt mental pipsqueak, and which makes me figure that “Connecticut” must be an Indian word that means “unable to feel shame”) rich and make the other rich richer, too, while we “un-rich” own virtually nothing.
In case you were wondering, the multitudes of the un-rich include you, me, and everyone we know.
The kicker that makes it all so funny is that it is us un-rich peons that still owe all the money that the rich now own! Hahaha! That is the result of having a credit-based money; money only comes into existence if somebody borrows it, and money goes out of existence when the debt is paid, so that if the debt that created the money in the first place was repaid, there would be no money for the rich to have! Hahaha! WoooOOooo! Makes your head spin! Hahaha!
And what was bought, and is being bought, with all this money that the government is spending? Well, after decades of Congress spending its time finding ways of permanently compensating everyone who suffered either real or imagined hardship, or even inconvenience, through the simple expedient of borrowing the money and giving it away, a task made easy by the Federal Reserve creating the mountains of money and credit to make such reckless, insane government borrowing possible, it is not surprising, then, that Junior Mogambo Ranger (JMR) R. A. M. notes that, after looking at the budget of $3 trillion in budgeted federal spending for the next year, “almost 50% is entitlements and interest on our debt. Defense spending [is] almost 25%.”
Of course, 50% of the budget for entitlement spending plus 25% for military spending means that “everything else” must be 25%.
Desperate for some relief, I was at the SteveQuayle.com site when I idly clicked on one of their “Story of the Day” pieces, which linked to Marketskeptics.com. While I was waiting for my computer to load, the title came up on the bar of my browser, a feature that I apparently never noticed before, since as a husband, father and paranoid citizen afraid of the idiotic, homicidal, corrupt and criminal government, I take every opportunity like this to check what’s happening behind my back and sweep the perimeter for hostile threats of some kind to make sure something isn’t sneaking up on me, particularly the kids, who seem to understand (and understand a little too well to suit me) the significance of still being legally too young to be charged as an adult, if you catch my drift.
But it is not just the kids, wife, family, neighbors, government officials, random passersby and sometimes complete strangers who are openly hostile to me, but I blame the Federal Reserve for being the cause of all of our problems because it is the Fed that created too much money and credit, which financed the inflations and booms in the prices of stocks, bonds, houses and size of government, and thus they are my enemy, too, and I blame the despicable Congress for consistently allowing them to do it, and thus they are my enemy, too, and I particularly loathe the Supreme Court for allowing Congress to do it by, astonishingly, ruling, and then upholding that ruling time after time, to negate that whole part of the actual Constitution of the United States, Article One, Section 10, that requires that no state allow anything other than silver and gold to be payment of a debt, a simple-yet-effective circumscription which would have completely prevented all of the economic problems we have today, illustrating the genius of the Founding Fathers and the completely and utterly treacherous and traitorous idiocy of Congress and the Supreme Court today, a pox on all their houses!
Anyway, as I am waiting and pondering writing some hate mail to the Fed, Congress and the Supreme Court (“Dear Morons: Drop dead! Sincerely, Angry Man In Florida (AMIF)”), the title of the article came up on my browser bar, and I saw, with alarm, “Fed Planning 15-Fold Increase In US Monetary Base”, by Eric deCarbonnel which was so horrifying that I immediately thought it must be some kind of a joke, an outlandish editorial cartoon, or something equally fanciful.
Well, it wasn’t, and he calculates from official reports that if you define “cash” as the real monetary base of the USA available to the USA, then as of September 2008, it was a paltry $262 billion (30% of the Fed’s published $833 billion in actual cash, which is what you have left after subtracting the value of 70% of U.S. currency that is being held abroad).
This is pretty scary stuff, and I don’t understand any of it, but he goes on, “Now compare that to the projected US domestic monetary base for September 2009 which is $3,818 billion ($4,500 billion – $583 billion dollars circulating abroad) – $99 billion (other fed liabilities not part of the money supply).”
He says, “The fed’s planned balance sheet expansion results in a 15-fold increase in the base money supply” calculated as “$3,818 billion/$262 billion = 15-Fold increase in US monetary base.”
You can probably tell by the way my face is contorted in fear and how I keep nervously glancing out of the window at the Fabulous Mogambo Bunker (FMB) in seeming preparation of sprinting towards it in terror that this is the time to be buying gold, silver and oil with both hands, and if you are not, then, brothers and sisters, you soon will wish you had!
And that is what makes investing so easy! Whee!
This article originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a “uniquely refreshing” perspective on the global economy, investing, and today’s markets.
Credit-Based Money System and the Plight of Un-rich Peons
Gold Rises, but Down for March
March 31, 2009 by goldguru · Leave a Comment
Gold climbed Tuesday for the first day in three, but closed down for the month of March. A weakened U.S. dollar helped gold’s appeal Tuesday, although it could not boost silver as it fell below $13 an ounce. In other markets, platinum, crude and U.S. stocks inched higher.
In New York bullion trading futures:
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Silver fell 4.8 cents, or 0.4 percent, to $12.985 an ounce.
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Gold gained $7.10, or 0.8 percent, to $922.60 an ounce. Gold lost 2.1 percent in March, but gained 4.3 percent for the quarter.
- Platinum climbed $7.20, or 0.6 percent, to $1,120.80 an ounce.
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Harrison Presidential $1 Coin and First Spouse Medal Set
March 31, 2009 by goldguru · Leave a Comment
The Presidential Dollar and First Spouse Medal Set for William Henry Harrison and Anna Harrison will go on sale at the US Mint on April 7, 2009 at 12:00 Noon ET. Past releases for these interesting little sets have proved to be very popular.
Each set includes one 2009-P Uncirculated William Henry Harrison Presidential Dollar and one Anna Harrison First Spouse Bronze Medal. The coin and medal are placed on a custom designed card featuring portraits of the President and spouse. The sets are priced at $7.95 each.
The two coins included in the set are already (or will be) attainable through other US Mint products. The 2009 Uncirculated William Henry Harrison Dollar will be included in the 2009 Presidential $1 Coin Uncirculated Set which goes on sale later this week. It will also be included in the regular 2009 Mint Set, which should go on sale some time this summer.
The Anna Harrison First Spouse Bronze Medal is already available for sale individually, priced at $3.50. You can find this product on the US Mint’s website here. The medal will also be included in the 2009 First Spouse Bronze Medal Set, which will include all five of the 2009 First Spouse Medals. This product is slated to go on sale in the winter.
Despite the separate options, many seem to prefer the distinctively packaged coin and medal set and have been willing to pay up for some of the previously sold out sets. I wrote previously about the First Spouse Bronze Medals outperforming the corresponding Gold Coins. Many seem to have taken note of this and started paying more attention to the medals. Recently, sold out products containing the medals still seem to be appreciating, but not as much as some of the earlier issues.
The US Mint still has the two prior coin and medal sets available for sale, which feature Andrew Jackson and Martin Van Buren.
Gold, Silver & Platinum 2009 First Quarter Performance
March 31, 2009 by goldguru · Leave a Comment
With the first quarter at an end, let’s take a look at the performance of gold, silver, and platinum so far this year.
When putting the numbers together, I knew what to expect, but its still surprising to see where the final numbers landed. Gold, silver, and platinum’s performance relative to one another has basically been turned upside down from the 2008 annual performance.
| 2009 First Quarter Gold, Silver, and Platinum Performance | ||||
| 30-Dec-08 | 31-Mar-09 | Change | Percent | |
| Gold | 869.75 | 916.50 | 46.75 | 5.38% |
| Silver | 10.79 | 13.11 | 2.32 | 21.50% |
| Platinum | 898.00 | 1,124.00 | 226.00 | 25.17% |
For 2008, gold had performed the best with a gain of 4.32%, followed by silver with a loss of 26.90%, with platinum in last place with a loss of 41.31%.
As you can see the performance for the first quarter of 2009 has been the opposite with platinum performing best with a gain of 25.17%, followed by silver with a gain of 21.50%, with gold in last place with a gain of 5.38%.
Platinum and silver were in some respects recovering from the beating they took last year. Over the past several years gold has emerged as more of a steady performer, as compared to the more volatile performance of the other metals, commodities, equities, real estate, etc. It’s ironic that whenever a mainstream publication discusses the possibility of investing in gold, they never fail to caution about gold’s “volatile” prices.
At any rate, precious metals outperformed stocks for the quarter, mostly by a wide margin. The Dow, S&P 500, and Nasdaq lost 14.29%, 12.81%, and 3.07% respectively.
Read more….
Silver Coin Celebrates 50th Anniversary of Barbie™
March 31, 2009 by goldguru · Leave a Comment
Offering a piece that is sure to excite some young collectors as well as the more seasoned, the Perth Mint of Australia has released the 50th Anniversary Barbie 1oz Silver Proof Coin. This colorful limited edition commemorative silver coin serves to celebrate the ½ century mark of a doll that skeptics said would never sell.
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GoldSeek posts Fox News interview with GATA
March 31, 2009 by goldguru · Leave a Comment
1:48p ET Tuesday, March 31, 2009
Dear Friend of GATA and Gold:
Fox News interview with your secretary/treasurer.
http://news.goldseek.com/GATA/1238518335.php
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Help keep GATA going
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Chavez seeks Arab support for oil-backed currency
March 31, 2009 by goldguru · Leave a Comment
By Brian Murphy, Associated Press
DOHA, Qatar — Venezuelan President Hugo Chavez sought Arab support today for a proposed oil-backed currency to challenge the U.S. dollar in his latest swipe at Washington’s dominance in global financial affairs.
It’s highly unlikely Chavez will gain any serious momentum for his “petro-currency” proposal at a summit of South American and Arab League leaders, but it represented another attempt to undercut the dollar’s standing as the world’s leading commercial currency.
China has struck deals — most recently this week with Argentina — to conduct trade in currencies other than the dollar. Iran has proposed replacing the dollar with the euro or other currencies to set worldwide oil prices.
Mr. Chavez plans to visit both Iran and China following the one-day Qatar gathering, whose agenda focuses on trade issues but also touches on Arab worries about rival Iran’s growing influence in Latin America. Key oil-producing members of the Arab League, such as Saudi Arabia and Gulf states, have close ties to Washington and will almost certainly reject any plan to shun the dollar. But the summit kicks off another high-profile foreign trip for Mr. Chavez in his efforts to build economic and diplomatic links to confront the United States.
“A new world is being born. Empires fall. There is a world crisis of capitalism, it’s shaking the planet,” Mr. Chavez told Venezuelan state radio after arriving in Qatar.
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Ecuador’s Peculiar Gold Reserve Jump
March 31, 2009 by goldguru · Leave a Comment
Felix Salmon submits:
Matthew Turner points me to this rather interesting datapoint from the IMF’s International Financial Statistics for Ecuador. The country’s had 845,000 ounces of gold for as far back as the statistics go — until January 2009, when they jumped to 1.76 million ounces, and then February 2009, when they rose further to 1.93 million ounces. That’s an increase of 1.085 million ounces (or about 37 tons of gold) in the space of two months — which at present prices is worth almost exactly $1 billion.
Curiously, the national valuation of the gold reserves hasn’t risen much — from $734.7 million in December to just $804.2 million in February. Which implies that the huge jump in gold reserves might just be some kind of data-input error. But on the other hand, it coincides exactly with Ecuador’s decision to default on its foreign debt. Might the Ecuadorean central bank be trying to convert attachable assets into something it can safely store at home? And if the country’s gold reserves have soared this year, why hasn’t Ecuador’s valuation of those reserves increased proportionally? It’s all most peculiar.
Gold Rises in N.Y., Heading for Quarterly Gain; Silver Declines
March 31, 2009 by goldguru · Leave a Comment
By Pham-Duy Nguyen
March 31 (Bloomberg) — Gold rose in New York, heading for
a second straight quarterly gain, on speculation that a weaker
dollar will boost the metal’s appeal as an alternative asset.
Silver fell.
The U.S. Dollar Index, a six-currency gauge, fell as much
as 0.9 percent, halting a three-session rally. Gold and the
dollar are inversely correlated. . .
“For investors who are concerned about the long-term
prospects of the U.S. dollar, gold may be attractive,” John Reade, a UBS AG metals strategist, said today in a report. “In
an environment where the reserve currency of the world could
become shunned, gold could do extraordinarily well.” Gold futures for June delivery rose $2.80, or 0.3 percent,
to $920.50 an ounce at 11:27 a.m. on the New York Mercantile
Exchange’s Comex division. The most-active contract is up 4
percent this quarter, which would be the biggest quarterly gain
in a year.
Silver futures for May delivery fell 19.8 cents, or 1.5
percent, to $12.835 an ounce in New York. The price has jumped
14 percent this year, which would also be the biggest quarterly
gain in a year.
Gold and the dollar usually move in the opposite direction.
Gold has posted gains every year since 2001, and the dollar has
only risen in three of those years.
Devalued Currencies
Investors may also purchase gold as central bank policies
to ease borrowing costs devalue currencies, analysts said. Gold
priced in euros and pounds reached records in February. Gold
futures rose to an all-time high of $1,033.90 on March 17, 2008
and reached $1,007.70, the highest this year, on Feb. 20. . . .
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WeSizwe scoops ZAR 550m financing
March 31, 2009 by goldguru · Leave a Comment
New Jersey’s YA Global Investments agrees to three-year equity standby distribution facility for world class platinum project.
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