Here’s Peter Schiff of Euro Pacific Capital pointing out that the recent positive GDP numbers indicate that America is spending money – money that is just created by the Fed. The GDP “is goosed.” If the Fed decides to take all that easy money away, the propped up markets – stocks, housing, etc. – will collapse. This, combined with the fact that most people don’t see the value of gold in this environment, makes Schiff even more bullish on the metal.
Here are a few interesting videos by YouTube’s belangp. The first one shows how the US economy is not getting better as the government’s massaged statistics try to portray. Instead, it’s so bad that only the Fed is left to buy up US debt as other nations are backing away. Are the elite preparing for a global reset?
And this third video explains further how gold flows between oil producers, bullion banks and miners. It also gives a great discussion regarding GOFO (Gold-Forward) rates and what they mean to the gold investor.
In this audio clip from Physical Gold Fund, James Rickards of Tangent Capital talks about the Fed’s alternatives in 2014 and how they may carry out their tapering plans. Rickards reviews the Fed’s actions, and how they’ve been unable to attain their specific goals, the forces of deflation versus inflation, as well as affects of nominal GDP growth in lieu of real GDP growth. He also discusses gold and gives some interesting comments regarding why he holds it, how much of it should be a part of any investment portfolio, and its current trading environment (specifically, that the current set-up could yield a major short-squeeze opportunity). Listen to mp3 audio.
And in the following Bloomberg interview, Rickards talks more about gold and how even though 2013 has seen a bad year for the metal in paper terms, there is still major demand for obtaining gold in physical form. Physical gold has been leaving the GLD ETF and going straight to China. That the central banks have to drain the ETF in order to get the physical metal shows that there is very little of the stuff available elsewhere. This is a must watch interview with James Rickards.
This documentary by the Renegade Economist reveals the cycles that all the empires of the world have followed and how they all eventually fail. The current disparity between the very rich and the very poor is but one indication that today’s western empire, led by the U.S. is approaching its end.
James Rickards, author of Currency Wars, gave the following presentation at The Future of Money 2.0 in Bratislava, Slovakia on September 26, 2013. A week later, Rickards gave the same presentation, though significantly abbreviated, at the Casey Research Summit in Tucson, Arizona. In the presentation, he covers:
- US Defense Department’s exercises in financial warfare.
- Historical currency devaluations by countries to gain trade advantages.
- Historical examples of re-establishing a gold standard after a currency collapse.
- The current situation of Inflationary and Deflationary forces working against each other – an unstable situation.
- Irving Fisher’s (and later Milton Friedman) theory of economics (Quantity Theory of Money … M x V = P x Q).
- QE, Operation Twist, etc. have had no affect because money velocity is not responding. 2014 may bring efforts to put money directly into the hands of the people (e.i. Tax Cuts).
- Complexity Theory may provide a better model for the Fed, as it shows that the economic system has become increasingly more interconnected across sectors. It actually predicted the 2008 collapse and, unfortunately the model is even more densely integrated today, indicating a worse crash ahead.
- The potential remedies the Fed or the IMF might enforce in response to the next collapse.
Grant Williams is a strategy adviser for the hedge fund, Vulpes Investment Management in Singapore, as well as the blogger behind the popular Things That Make You Go Hmmm…. In the following video, Williams reviews the disconnects between the economic realities that exist in today’s world and the rosy pictures painted by governments, central banks and the main stream media.
- Williams’ problem #1: The disconnect between fundamentals and equity prices.
- Williams’ problem #2: The paradox behind China’s mysterious GDP growth during a time of reduced manufacturing, shrinking demand for raw materials and declining imports/exports
- Williams’ problem #3: How is France able to sell its sovereign bonds at such low interest rates when all indications of its own economy are performing like those of the European periphery?
- Williams’ final problem: The difference between the “Gold Price” and “The Price of Gold”
In the end, the laws of mathematics cannot be subverted by governments or central banks. Central banks’ zero percent interest rate policies are damaging:
- In the short term through the confiscation of savings and the forcing into riskier investments in the search for yield
- In the long term by suppressing market volatility, which must be reconciled at some point
Mathematics, rightly viewed, possesses not only truth, but supreme beauty – a beauty cold and austere.
– Bertrand Russell
- Do the statistics and reports generated by the government help anyone determine the real state of the economy? GDP, CPI and Unemployment reports “mean something, but they don’t mean what they say it means.”
- A economic system based on fiat/paper money has never lasted in the past. Ever since 1971, when Nixon closed the gold window, the resources of the country have been used unwisely, investing in programs that destroy the country’s wealth. In order for real economic growth, this practice must be changed so that resources are invested in initiatives that build wealth.
- The outcome of the presidential election will not alter the current course. Instead, the election is basically a contest to determine which group of ‘zombies‘ will get government sponsorship. A Romney win will ensure the military industrial complex stays in business, while an Obama victory will further the social/welfare state.
- The government employing stimulus as a policy to help the economy is ridiculous. Again, it doesn’t help the overall economy generate wealth, it only serves those favored cronies with close ties to those in political office.
Casey Research provides a lucid interview with David Stockman, former Reagan administration budget director and author of The Triumph of Crony Capitalism. Stockman explains that in today’s economy, companies are reporting profits today that are “based on a debt-bloated economy that isn’t sustainable.” Furthermore, “This market isn’t real. … the 2% on the 10 year, 90 basis points on the 5 year, 30 basis points on the 1 year – those are medicated, pegged rates created by the Fed, and which fast money traders trade against as long as they’re confident the Fed can keep the whole market rigged. Nobody in their right mind wants to own the ten year bond at a 2% interest rate, but they’re doing it because they can borrow overnight money for free … put it on Repo, collect 190 basis points on the spread and laugh all the way to the bank.”
“The Fed has destroyed the money market, it’s destroyed the capital markets. They have something you can see on a screen called an interest rate – that isn’t a market price of money…. that is an administered price that the Fed has set and that every trader watches by the minute to make sure that he’s still in a positive spread. … You can’t have capitalism if the capital markets are dead, if the capital markets are simply a branch office (a branch casino) of the central bank and that’s essentially what we have today.”
The 12 members of the FOMC are the western world’s Monetary Politbureau – “monetary central planners who are attempting to use the crude instrument of interest rate pegging and yield curve manipulation and essentially buying debt that no one else would buy in order to keep this whole system afloat. It’s Ponzi Economics!!”
“We have around 6 months left of trading in Western markets to protect ourselves,” according to Raoul Pal, founder of Global Macro Investor and former Goldman Sachs hedge fund manager. “The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives.” See entire presentation below.
It’s now more important than ever to protect your hard-earned wealth from being destroyed by inflation or even outright theft by financial and government institutions. Please see our Protect Your Assets series to learn about ways to secure your wealth in the coming economic collapse.
Dr. Paul Craig Roberts served as the Assistant Secretary of the Treasury under President Ronald Reagan. He should know a thing or two about U.S. economic policy. In this brief and simple article, he explains how government statistics on inflation, housing, employment and GDP have consistently under-reported actual data.
“In place of recovery, we have hype from politicians, Wall Street, and the presstitute media.”