Technocrats Continue Turning Fiat Into Property As Global Financial Crisis Continues
Susanne Posel Dec 14th, 2012
December 14, 2012
The European Central Bank (ECB) is setting the stage of a complete financial collapse of fiat currencies across the globe. Joining in the scheme are other technocratic institutions such as the Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan and the Swiss National Bank.
Under the guise of preventing a system failure during the global financial crisis, there will be “an extension of the existing temporary US dollar liquidity swap arrangements until February, 1 2014.” This action allows the central bankers to liquidate currencies under their jurisdiction “should market conditions so warrant.” Under this plan, euros backed by nothing can continue to pour into the system throughout the Eurozone “in addition to the existing liquidity-providing operations” in the US. This liquidation will take place “until further notice.”
The ECB Governing Council will oversee the operations of this scheme along with the other technocrats involved. The schedule of liquidity operations will “repurchase transactions against eligible collateral.”
The technocrats are posturing themselves to destroy all fiat currencies in order to make way for a new global currency under their complete control.
True to the intricate plans of the technocrats, the UN has proposed a complete overhaul in the report entitled, “Adapting the International Monetary System to Face 21st Century Challenges”.
They call for a “more intense debate on and reforms to the international monetary system imply that the current system is unable to respond appropriately and adequately to challenges that have appeared, or become more acute, in recent years. This paper focuses on four such challenges: ensuring an orderly exit from global imbalances, facilitating more complementary adjustments between surplus and deficit countries without recessionary impacts, better supporting international trade by reducing currency volatility and better providing development and climate finance. After describing them, it proposes reforms to enable the international monetary system to better respond to these challenges.”
Earlier this week, the Fed announced more stimulus admit the looming fiscal cliff, unemployment and strategic inflation caused by QE3. More bond buying is taking place, which means the Fed continues to become America’s biggest land owner.
The third round of quantitative easing enacted by Ben Bernanke, chairman of the Federal Reserve Bank is nothing more than a massive land-grab in the domestic US by the technocrats under the guise of purchasing the mortgage-backed securities through the Federal Reserve to alleviate the pressure the banks are feeling from the bait-and-switch they caused.
Essentially, as the Fed buys the mortgage-backed securities, the central bankers will now own all those properties which were bundled and securitized. The experts are still coming to terms with how many homes, small business, small farms and other lands were mixed-up into this Ponzi scheme. The sum total numbers of victimized Americans are continuing to rise and are currently unknown. However, it is clear that as this monster grows, it will be the Federal Reserve at the helm, making sure that more Americans are displaced and foreclosed on.
Quantitative easing and its effects, according to the Bank of England, benefit “mainly the wealthy.” This plan boosts “the value of stocks and bonds by 26 percent, or about $970 billion.” It is understood that quantitative easing incites “social anger and unrest.”
Herman Van Rompuy, president of the EU said: “Even if the worse of the eurozone crisis is behind us, much still needs to be done. But all the hard work is beginning to pay off. A lot has been achieved over the course of a year.”
The technocrats, after having destroyed Greece financially, are in the process of a buy-back program in which Greek banks will become further indebted to the central bankers until they are complete stripped of sovereign debt (when the leaders of the nation had over the country to the banksters).
The ECB agreed to give any nation in the Euro-Zone a bailout if they agreed to hand over the country to them under the guise of “new rules and conditions when applying for assistance.”
Greece is very attractive to the technocrats. The nation has massive untouched resources of gold, oil and natural gas – literally under the feet of the Greek people. With Greece slated to be the biggest producer of gold in 2016, the motives behind the bankster’s coercion of the Greek government into sovereign debt begins to make sense.
The Greek government agreed to the technocratic demands for sovereign debt in exchange for the bailout which will push the Greek economy further down with more fiat pumped into the system. Meanwhile, the citizens of Greece will lose their independence, benefits and become serfs to the central banking cartels.
Greece has large deposits of gold. The Canadian based Eldorado Gold Corp (EGC) is more than willing to be part of the creation of gold mines in lieu of the financial collapse in Greece. Along with the Australian-owned Glory Resources, EGC is hoping their efforts will add 425,000 ounces of gold (worth an estimated $757 million) to the institution that ends up controlling Greece’s finances.
Other resources in Greece which places the nation in the hands of the banking cartels are the substantial sub-Mediterranean natural gas and petrol fields at the precipice of the country. Controlling Greek energy exports would be extremely profitable for the technocrats. Numerous European-based corporations are bidding to have contracts for the extraction of these resources.
The Swiss Federal Institute (SFI) in Zurich released a study entitled “The Network of Global Corporate Control” that proves a small consortiums of corporations – mainly banks – run the world. A mere 147 corporations which form a “super entity” have control 40% of the world’s wealth; which is the real economy. These mega-corporations are at the center of the global economy. The banks found to be most influential include:
• Goldman Sachs
• JPMorgan Chase & Co
• Vanguard Group
• Deutsche Bank
• Bank of New York Melon Corp
• Morgan Stanley
• Bank of America Corp
• Société Générale
Using mathematic models normally applied to natural systems, the researchers analyzed the world’s economy. Their data was taken from Orbis 2007, a database which lists 37 million corporations and investors. The evidence showed that the world’s largest corporations are interconnected to all other companies and their professional decisions affect all markets across the globe.
Statistics: Posted by yoda — Sat Dec 15, 2012 10:55 am
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Fiat Currency and the Emerging Police State
by John Rubino on October 14, 2012 ·
Our transition from more-or-less free country to police state is accelerating. The NSA’s Utah data mining facility, ever-tighter restrictions on offshore accounts, the Internet “kill switch”, the Patriot Act’s many assaults on the Bill of Rights, the militarization of local police, the spread of drones for domestic surveillance; each has a role in the high-tech updating of a very old idea: that the state is paramount and the individual a slave to public order and national power.
But why is this happening now, rather than in 1950 or 2050? The answer is that we’re reaping the whirlwind that always accompanies fiat currency. We created a central bank in 1913 and freed it from the constraint of gold in 1971. Give the government or the big banks the power to create money out of thin air and you eventually get a dictatorship. “Eventually” just happens to be now.
Laissez Faire Books’ Wendy McElroy covers some of the theory behind this idea in a recent review:
Paper Money = Despotism
“Fiat” is money with no intrinsic value beyond whatever an issuing government is able to enforce. When it enjoys a monopoly as currency, fiat inevitably turns the free market functions of money inside out. Instead of being a store of value, the currency becomes a point of plunder through monetary policies such as quantitative easing. Instead of greasing society as a medium of exchange, the currency acts as a powerful tool of social control. The second harm is far less frequently discussed than inflation, but it is devastating. The personal freedoms that we know as “civil liberties” rest upon sound money.
In his classic book The Theory of Money and Credit (1912), the Austrian economist Ludwig von Mises argues, “It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically, it belongs in the same class with political constitutions and bills of rights.”
A key reason Mises viewed sound money as a necessary protection of civil liberties is that it reins in the growth of government. When a government prints money without the restraint of competing currencies — even if the restraining “competition” is a gold standard — runaway bureaucracy results. Wars are financed; indeed, it is difficult to imagine the extended horrors of World War II without governments’ monopoly on currency. A white-hot printing press can finance the soaring numbers of prisons and law enforcement officers required to impose a police state.
Floods of currency can prop up unpopular policies like Obamacare or the War on Drugs. That is why government holds onto its monopoly with a death grip. In The Theory of Money and Credit, Mises observes, “The gold standard did not collapse. Governments abolished it in order to pave the way for inflation. The whole grim apparatus of oppression and coercion, policemen, customs guards, penal courts, prisons, in some countries even executioners, had to be put into action in order to destroy the gold standard.”
Another way a currency monopoly threatens civil liberties is by permitting government to monitor virtually all transactions through the financial institutions with whom it maintains an intimate partnership. Total surveillance is a prerequisite to total control, which is what the government wants to establish as quickly as possible. For example, prior to establishing the Suspicious Activity Report (SAR) in 1996 — a form that financial institutions submit to the U.S. Treasury — banks were required to automatically report any transaction over $10,000. Now any activity deemed “suspicious” is vulnerable.
The monopoly facilitates a vicious attack on privacy and has become a main building block of the American surveillance state. As libertarian Mark Hubbard stated, “Civilization is a movement toward privacy, a police state the opposite, and tax legislation has become the legislation of our new Big Brother states.”
Much of the tracking is a pure money grab, but it is also an attempt to ferret out and punish “unacceptable” behavior, like dealing in drugs or politically dissenting. Indeed, it is criminally naive to believe the government will not use these massive and valuable data to target its critics. Thus, people can be discouraged from speaking out. Controlling the information, however, means controlling the currency. Otherwise, anyone could mint gold coins in the middle of the night and release them covertly into the wild.
I was going to start this article with a sentence like “Every time you turn on the news there’s another story about the growing intrusiveness of the US surveillance state.” But that’s not actually true. When you “turn on” the news, which is to say watch it on TV, you see little or nothing about this. It seems that all those “corporate media” complaints are accurate. America’s evolving police state infrastructure is one of the biggest stories of this lifetime, yet the mainstream news organizations seem to be ignoring it.
Now that we’ve created the infrastructure, all that remains is for some desperate/corrupt future leader to flip the switch. From that moment on, every communication in and out of the US will be captured, logged and mined, and each citizen will have a growing file that details their social, professional and financial activities. The state will set about silencing all emerging threats through intimidation, financial pressure (our hyper-complex tax code will be weaponized and turned on anyone who speaks out), and, when all else fails, the designation of dissenters as terrorists and their imprisonment without trial. All the tools are there, just waiting to be used.
In this scenario, social media will useless as a counterweight to Big Brother. When every communication is monitored, an attempt to organize a protest via Facebook will just create a list of people to be rounded up.
Can dystopia be avoided? Short of electing Ron Paul on a platform of tearing it out by the roots, it’s hard to see how. But McElroy does have one suggestion that’s aimed at the heart of the fiat currency dictatorship: end the state money monopoly and let other currencies circulate:
Yet the best solution to the harms caused by fiat is often dismissed even by staunch free market advocates; namely, allow the private issuance of money that freely competes with fiat as currency. This would involve removing all prohibitions, other than fraud, abandoning monetary controls such as legal tender laws and all reporting requirements. In turn, this might well eliminate the Federal Reserve, although people would be free to accept whatever money they wished.
The currency monopoly is vital to both the rise of a police state and the targeting of individual civil liberties. In arguing for a free market in currencies, it is important to claim the moral high ground by stating and restating what should be obvious: Civil liberties require sound money. And nothing ensures the quality of a commodity as surely as competition.
Statistics: Posted by yoda — Sun Oct 14, 2012 7:56 pm
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How Fiat Money Has Depressed Living Standards – 9 July 2012
Breaking the link between the Dollar and Gold Bullion has had a marked effect on American standards of living…
WHAT DO living standard look like measured in gold? asks Nathan Lewis at New World Economics.
This is something I’ve been mentioning a lot recently.
The chart below shows the US government’s own statistics on the median male full-time income in the US:
I use this because it compensates for a lot of things that have been going on, such as increasing female participation in the workforce, changing demographics or family size, or greater/lesser part-time work. These are "real" statistics, which means that it has been adjusted by the government’s version of price statistics – which have been buffed and polished to look as good as possible. If the price statistics showed an additional 1% of price rises per year, over forty years, this chart would look a lot worse.
The interesting thing here is how there is such a definite inflection point, right where we go from a gold standard system to a floating currency system. A lot of other things have happened over that time, but we don’t see any other major inflection points. You might think that the 1990s were really good for people, and the 2000-present era has been not so good, but oddly enough, there’s no particular difference you can see on this graph (although maybe the government is monkeying the statistics more aggressively in 2000-present to make it look that way).
This is one reason why I think that the transition to funny money in 1971 is probably the most important long-term event for middle-class prosperity in the United States.
You can also see how the US middle class steadily prospered in the 1950s and 1960s, despite the various ups and downs of the economy, not to mention social turmoil, of that time period.
Here is the same information, but here portrayed in the value of the median income in terms of ounces of gold. This is not so weird, because the US used gold as the universal standard of value for 182 years, until 1971. So, I’m just being a traditionalist here. This chart is plain ugly, which is why, I think, that even though we have transferred from a one-income household to a two-income household, the average American family still can’t afford today what one median income could buy in the late 1960s.
Here is some long-term data, the per-capita GDP as measured in ounces of gold. Any GDP statistics from before 1950 are highly suspect, and that is especially true of figures from before 1914. So, consider this suggestive rather than definitive. It tells much the same story.
I smoothed things out a bit here by looking at average growth rates over forty-year time periods. Was the average American better off (as measured in per-capita GDP in gold ounces) than they were forty years earlier. You can see that, even despite hardships such as the Civil War and the Great Depression/World War II, the average American was consistently better off than they were forty years previous. The Great American Wealth Generation Machine kept on ticking, even after huge setbacks.
We haven’t had any Civil-War-scale disasters since 1971, but the funny-money environment has nevertheless disabled the Great American Wealth Generation Machine. The average American is now, for the first time in US history, consistently worse off (by this measure) than they were forty years ago.
Statistics: Posted by yoda — Tue Jul 10, 2012 12:37 am
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Kevin Kerr: No matter where you live or travel — America, Europe, Asia, South America, China, etc. — you use fiat currency, at least in one form or another.
Paper money (whose value is dependent on governments and not tied to any fixed standard such as gold) is just a fact of life.
Our wealth and financial health are determined by the amount of money in our investments, bank accounts and other holdings. But the influence goes beyond a government’s regulations, laws or other decrees.
That is, they are subject to the daily fluctuations and whims of the currency markets. And lately, those fluctuations have been volatile … to say the least.
We’ll talk about how to best protect yourself from the unavoidable dangers of fiat money in just a moment. But first, let’s take a look at just what happens when paper money goes up in smoke (and why it happens).
Graveyard of Currencies
You might have become very nervous watching your personal holdings evaporate as the underlying fiat currency — whether it’s the euro, U.S. dollar, yen, pound, franc or most others — loses value.
Around the globe, investors are scrambling to move their hard-earned wealth into a safe harbor that will provide them with real, tangible assets. It’s a simple fact that fiat currencies have proved to be relatively short-lived, and this tends to make them a very poor investment, by historical standards.
A study you might find intriguing was done on 775 fiat currencies by DollarDaze.org. In this study, it determined that: “There is no historical precedence for a fiat currency that has succeeded in holding its value.”
The study showed that 20% failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation and approaching one of the other outcomes.
Not a pretty picture at all.
In fact, the report showed that the average life expectancy for a fiat currency is 27 years, while the shortest lifespan was about one month.
History Repeats Itself, Repeatedly
One of many historical examples we can look at is from an empire that thrived … one that grew to incredible wealth and prosperity. Then corruption, greed, arrogance and, above all, currency devaluation caused its eventual fall. (No, I’m not talking about the U.S. dollar — not yet, anyway!)
I am, of course, talking about Rome, where the denarius was the currency of choice. And while Rome didn’t actually have paper money, it’s still one of the best examples of the debasement of a currency gone awry.
The denarius was the coinage of the time (at the beginning of the first century A.D.), and it was essentially pure silver.
Around 54 A.D., Emperor Nero was in charge, and the coins were reduced to approximately 94% silver. Fast-forward to around 100 A.D., and the silver content was down to just 85%.
The devaluation pattern continued after Nero, because each emperor liked the idea of devaluing the currency in order to pay the bills and increase his own wealth. This appealed to them more than actually paying those bills.
So the ugly pattern continued and, in 244 A.D., Emperor Philip the Arab had the silver content dropped to 0.05%. Around the time of Rome’s collapse, the denarius contained only 0.02% silver. The coinage was virtually worthless and basically nobody accepted it as a store of value or trusted medium of exchange.
The story of Rome is far from unique. We have lists of fiat currencies that today are simply a bad memory. One of the most stunning examples is the German Weimar Republic mark.
Inflation got so bad during this period in Germany that citizens were using stacks of mark notes to heat their fireplaces.
The tale is in the tape if we look at the historical timeline of exchange rates for the German Weimar mark to one U.S. dollar.
April 1919: 12 marks
November 1921: 263 marks
January 1923: 17,000 marks
August 1923: 4.621 million marks
October 1923: 25.26 billion marks
December 1923: 4.2 trillion marks
Given the underwhelming track record of fiat currencies, it’s clear that, on a long-enough timeline, the survival rate of all fiat currencies drops to zero. So investors are starting to realize that the only true safe haven for their hard-earned wealth is diversification … namely into the precious metals.
In ‘Gold’ We Trust
The full faith and credit of the United States simply doesn’t give the global financial markets the warm, fuzzy feeling it used to. In addition, euro-zone investors and consumers have certainly had their faith rocked by the eroding value of the euro. And around the world, fiat currencies have been shaken to the core by devaluation, low or no interest rates, and out-of-control debt and borrowing.
Not only is it no wonder that we are seeing gold and silver rise in this environment, but it is also likely that we are only at the very beginning of this cycle. This means gold and silver have much further to go.
Plus, we are seeing more and more active buying out of China, and the Year of the Dragon will surely support even more buying than usual.
The biggest surge in buying is going to be from investors who have always shied away from precious metals and have finally realized that, in today’s world economy, it’s imperative to have some exposure to precious metals — even if it’s just as a hedge for your fiat currency holdings.
Bring Your Paper Money to Life
Whether you’re a new or experienced investor in the gold and silver arena, I suggest creating a basket of different holdings in gold and silver.
Actual physical bars and bullion are certainly an element you want to consider. I suggest avoiding coins (numismatics), as this can require special knowledge and, while it can be profitable, it also carries additional costs and risk.
Key mining stocks should also be a part of a core protective portfolio, so you should consider picking two to five major gold producers with good infrastructure, mining sites and cash flow. Stick with bigger names and buy on dips.
A few key gold and silver ETFs are worth examining and adding on pullbacks, like the SPDR Gold Trust (NYSEArca:GLD) (on which we currently hold call options on in my Master Trader service), the Market Vectors Gold Miners ETF (NYSEArca:GDX) and the iShares Silver Trust (NYSEArca:SLV).
The bottom line is that the money we have in our pocket is simply paper with ink and some pictures and promises. Having something tangible that you can hold in your hand as a real store of value can be very comforting and profitable, indeed.
The question you must to ask yourself is: Can I afford not to take action on this currency risk any longer? The time has come, and I’m sure you’d rather do it now — before the next fiat currency funeral takes place!
Statistics: Posted by yoda — Fri Feb 03, 2012 2:13 pm
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Embry – This Gold Smash Will Pass, the Case for Fiat is Zero
With near panic in the gold and silver markets, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management to get his take on where he sees gold, silver and the mining shares headed. When asked about the action in gold, Embry said, “You’re always surprised at the viciousness of a decline like this. I mean this all started in the wake of the failed European Summit. At one point, after the initial communique, gold shot up to $1,760 and now it’s roughly $200 lower. The reality has barely changed, but the perception of the reality appears to have swung dramatically.”
“People are now fussing about deflation and Europe is going to go down. If you actually think about that for more than two minutes, you realize it’s just going to lead to massive amounts of papering over because there is no other alternative. They (central planners) are not going to voluntarily accept a 1930s style deflationary collapse of the economy. The only antidote to that is immense amounts of money creation and that’s what’s going to happen.
Right now people are sort of looking the other way (towards deflation) and they are wrong. I had been on KWN earlier saying sentiment was very negative, which I took as a strong positive for an eventual rise in the market. But now it’s gone from negative to literally being suicidal. I just can’t believe people’s attitudes.
This goes back to one of my long held beliefs; reality moves very little, but perception swings wildly. Perception has swung from the idea that we were going to skate through this with more money printing, to being deathly afraid the thing is going to collapse.
A collapse of the system would actually be very good for gold for the simple reason gold would be required to back up the new currency. In that environment, it would be disinflationary, the gold shares would be spectacular like they were in the 1930s….
“The other thing I’ve always said is you can’t have leverage in the gold space because it’s so rigged and they are always going to get you. What seems to be the right action, at any point in time, can be reversed in a heartbeat by another attack from the anti-gold cartel.
Investors should be buying these beaten up gold and silver stocks. This is one of the great trades that you could possibly make. The algorithm trading has pushed a lot of legitimate holders to the edge by the price action, which has created forced margin selling. It’s creating remarkably cheap stocks.”
When asked about silver specifically, Embry stated, “The physical silver market is as tight as can be. The people who are short the paper market (in silver) are bankrupt, almost to a man. Consequently, their actions are not those of rational men, they are those of desperate men. JP Morgan is trying to protect their short positions and so this move down has a very finite life.
So you are going to have days like this and I still say silver will be $60 within the next three to six months. As much as I love the gold story, the silver story is much stronger because of the lack of above ground supply. In the future, there won’t be enough silver to fill the demand for investment purposes and the price is going to go berserk to the upside.”
When asked what he would say to calm the nerves of gold and silver investors globally, Embry remarked, “As I’ve said all along, if you don’t like gold and silver, you like the prospects for fiat paper currency. With a world that’s tens of trillions of dollars in deficit and can’t service the existing debt, the case for fiat paper currency is zero. You can’t make a case for it.
So on that basis gold and silver, which is the real money, can only do one thing in the future and that is move higher. I’ve been through this so many times with these guys (the cartel) who can take the gold market apart and scare the life out of most humans, and it’s just noise. It’s gone on over and over and over again. In the end this will pass like they all have and gold will move on to new highs.”
Statistics: Posted by DIGGER DAN — Fri Dec 16, 2011 4:01 am
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