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Letters by a modern St. Ferdinand III about cults

Gab@StFerdinandIII - Plenty of cults exist - every cult has its 'religious dogma', its idols, its 'prophets', its 'science', its 'proof' and its intolerant liturgy of demands.  Cults everywhere:  Islam, the State, the cult of Gay and Queer, Marxism, Darwin and Evolution, 'Science', Globaloneywarming, Changing Climate, Abortion....a nice variety for the human-hater, amoral, anti-rationalist to choose from.  It is so much fun mocking them isn't it ?

Tempus Fugit Memento Mori - Time Flies Remember Death 

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Tuesday, July 19, 2011

Gold and Silver will explode.

The consequences of having little children like Obama run your world.

by StFerdIII

 

Natural laws. Causes and effects. Put little children like O'Clowna or existentially tortured and challenged socialists in power and the results are all too predictable. Spending, bankruptcy, inflation, and the acceleration of gold and silver prices. Buy gold, buy silver and hold. They are at bargain levels right now.

In a recent column by Ambrose Evans-Pritchard in The Telegraph he points out:
World Bank chief Robert Zoellick said it was time to "consider employing gold as an international reference point."  The Swiss parliament is to hold hearings on a parallel "Gold Franc".
A new Gold Standard would probably be based on a variant of the "Bancor" proposed by Keynes in the late 1940's.  This was a basket of 30 commodities intended to be less deflationary than pure gold, which had compounded in the Great Depression.  The idea was revived by China's central bank chief Zhou Xiaochuan two years ago as a way of curbing the "credit based" excess.
Mr. Evans-Pritchard also quoted the chairman of Britain's largest pure gold listing, Petropavlovsk, as saying:
'
It is very scary: the flight to gold is accelerating at a faster and faster speed.  One of the big US banks texted me today to say if QE3 actually happens, we could see gold at US$5,000 [per ounce] and silver at US$1,000.00.  I feel terribly sorry for anyone on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money.'”

QE3 will happen. The US central bank is a political tool. O'Clowna et al use it to 'stimulate' the economy, when supply side economics, a 30% reduction in spend and proper interest rate levels would turn the US back into an economic engine of growth. But there are too many votes to buy, and too many union workers to fund to do any of that.

The fiat currency regime is dead for a number of reasons. There is not enough real metal to back up the paper in circulation. Welfare statism or socialism destroys the paper's value over time by increasing debts and taxes and stimulating inflation. And monetary policy in which zero interest rates are used forever to stimulate some economic activity further debase the currency. The fiat regime's death has nothing to do with trade imbalances, trade deficits or other such ancillary flows. It's death is a fiscal and monetary phenomenon – and both of these stem from political choice. You elect idiots. You get bankruptcy.

Bye bye Euro. Does Europe have $ 5 Trillion to spend ?

It has been estimated that a 3.5-trillion-euro (US $5.0 trillion) rescue fund would ensure the survival of the euro and the Eurozone.  But where is that money to come from?  The combined annual Gross Domestic Product of the two largest countries in the European Union, Germany and France, is US $5.9 trillion and the total GDP of all the countries of the European Union is US $16.3 trillion.  There is no way a rescue fund of the size necessary could be established without essentially printing a massive amount of euros, thus creating hyperinflation and a collapse of the European monetary system.”

O-Clowna's anti-growth policies and adolescent posturing:

...the Obama regime refuses to control its unsustainable spending and pursue pro-growth policies to eliminate the nation's massive deficits.  Therefore the Federal Reserve is hinting at starting up the printing presses again.  The last effort at this myopic policy (Quantative Easing Part II) only succeeded in ramping up inflation worldwide, fomenting global anger at the United States resulting in a flight from the dollar, and creating a stock market and commodity bubble. 

The Obama administration and the Democrats in Congress are still in the "high school hi-jinks" mode of playing one-upmanship games with the Republicans by trying to embarrass and intimidate them, as winning at politics by any means possible is paramount in their fevered imagination.  The so-called debt ceiling negotiations are a deliberate circus being orchestrated by the ringmaster: Barack Obama.

Consequences:

In response to the debasement of the US dollar and the potential collapse of the euro, many of the emerging nations of Asia are also operating under a loose monetary scenario.  Most now have negative real interest rates, such as China where inflation is running at 6.5% per year yet the one-year deposit rate is just 3.5%.  The same is true in India and many other countries including the United States.  Thus more citizens, if they can, are turning to gold or tangible property.”

Buy Gold:

China, therefore, has doubled its gold reserves in the past two years and there is active discussion in Beijing that the country should immediately embark on a program to increase those holdings by a factor of eight rather than buy paper IOUs from potentially bankrupt Western nations.  Russia, India, the Persian Gulf states, the Philippines, and a variety of other nations have also embarked on a gold-buying binge. Slowly but inexorably, the world is edging toward a quasi-gold standard as it become evident that most of the West and Japan have reached a debt saturation point and can no longer continue to debase the major reserve currencies without devastating consequences.”

The Euro will sink. The EU political project should thankfully implode. The U$ might survive but it will be as a diminished currency reserve. Gold and silver are sure bets for investors who will want to ride out the coming debt-collapse storm. Electing children to run complex economies is never a good idea.


 


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