Tuesday, November 15, 2011

And Gold and Silver are being sold? Only to obfuscate the TRUTH.

"A truth's initial commotion is directly proportional to how deeply the lie was believed. It wasn't the world being round that agitated people, but that the world wasn't flat. When a well-packaged web of lies has been sold gradually to the masses over generations, the truth will seem utterly preposterous and its speaker a raving lunatic" … (Dresden James, Author)

A Truth That Won't Go Away
By Bill Bonner, for The Daily Reckoning
From 1791 to the present, they’ve gone up. Of course, there have been some major problems along the way, notably in the ’70s when it looked like the Fed had lost control of inflation. Otherwise, bond yields have gone down as prices have gone up.

Is it time for a turnaround? Maybe not just yet. We’re still in a Great Correction. Bonds should continue to go up — for a while. But just wait...this is a truth that won’t go away: US debt is expanding...as its ability to pay declines.

Meanwhile, the big trend for the US stock market is probably down too. Just a guess, mind you. Why? We’ve given you the reasons...but since you seem to have forgotten, we’ll give them to you again:

..After 60 years of credit expansion, credit is contracting. That means less household spending, which means lower sales and fewer profits

..A bear market began in January 2000. It never reached its rendezvous with a real bottom. Ergo, the ultimate bottom still lies ahead...

..Stocks rose since 1982...since 2000, they’ve been going nowhere. Now, it’s time for them to go down.

..Most of the ‘growth’ in the last 20 years has come from more and more debt at the household level. Now that debt is shrinking...growth should shrink too...

..There are 70 million baby boomers who desperately need to save money for their retirements. They used to borrow and spend...now, they will have to pay back and save.

..As credit grew, it took more and more credit to produce an extra unit of output. Adding more credit now will not help the real economy expand...

..The feds can’t engineer a recovery, because unlike a recession, the problem is not that debt is too expensive, but that they have too much of it already...

..As the economy softens, the feds take more and more of it into custody. The feds invest badly, leading to less real output...which must supports more and more zombies...

..The European economy is sliding towards another recession; this will hurt the US economy too...

..The whole world economy is weakening; it could drop into a worldwide depression...

..Higher, persistent unemployment undermines consumer spending...

..House prices are still falling, which will further reduce household net worth and reduce both spending and risk-taking...

..Energy use in the US is falling...more inputs of energy do not produce enough extra output to pay for themselves...

..But energy use in the emerging markets is increasing, supporting energy prices and putting more pressure on US household budgets...

..What else? Want more reasons? Stay tuned...

Mr. Bonner has just succinctly presented the simple fundamental reasons for owning physical Gold and Silver.  Which is probably why Gold and Silver are not being allowed to continue their rise higher.  A major wall has been set up at $1800 Gold, and $35 Silver by the pestilence we call the CRIMEX.

Bill Murphy at GATA refers to the actions of these toads at the CRIMEX as "Behavioral Finance".  This is where black is white, and white is black is the norm.  Gold and Silver go down when they should go up...Behavioral Finance.  One might best sum up the theory of Beahvioral Finance as "obfuscation of the truth".

Bill Holter had a bit of TRUTH for us last night at the Lemetropole Cafe:

The Super Committee Farce is next.To all; next Wednesday is the farce deadline for the Congressional "super committee" to come up with between $1.2 and $1.5 Trillion of cuts that were promised back in Aug. when the debt limit was raised. First off, this amount is basically a "ham sandwich" compared to what the real problem is. This $1.5 Trillion is over 10 YEARS so it amounts to a mere $120-150 Billion per year. To put this in perspective, we have already spent an additional $600 Billion+ in just over 3 months since the debt deal so the concept really is laughable. What is even more laughable will be if they cannot come up with the cuts!

Assuming that they do actually come up with a plan, I have just one question. What will "normalized" interest rates do to these plans? If interest rates were to rise to the lofty levels of say just 5%, how much is that on $20 Trillion (where we will be in less than 3 years) worth of debt? The calculator says...$1 Trillion per year...EVERY YEAR in interst alone! Heck, 5% on an additional $5 Trillion is $250 Billion which dwarfs these proposed fantasy cuts by the super committee. The immediate problem is that this fiscal wrangling will bring the U.S. back into the financial spotlight, something they can ill afford. Better to point fingers at European deadbeats so the world is distracted fom looking under our hood where the real problem is!

Yes folks, complacency abounds everywhere in the face of a 100% mathematically assured financial collapse that ends with new currencies being issued. It is only a matter of time and "how many zero's" are added to Gold and Silver's prices when the current currencies go the way of the Dodo bird. I just cannot fathom how anyone can miss this as it could not be more obvious. Governments far and wide including (especially) the U.S. have debt levels (denominated in already fake and worthless pieces of paper) that are unsustainable and cannot be paid back even with interest rates at zero. Factor in "real" interest rates that are not negative and the top blows off this baby!
Were the U.S. to back just it's debt held by foreigners, Gold would need to be priced at nearly $20,000 per ounce. If it were priced to back the admitted and "on the books debt", that number is over^$60,000, expand it to cover the "off books debt and obligations" and you arrive at over over $400,000 per ounce. Of course this assumes that we have the Gold that we say we do, ...likely or unlikely? Today's bond buyers are "investing" in entities that cannot be paid back in even the current worthless currencies, they will be paid back in EVEN MORE worthless (possible?) paper! It makes no sense. It is this very core belief, namely that "government bonds are the height of safety" that will be the undoing of the whole system. The "lunatics" (those who believe in hard and real currency) will finally get to run the asylum in a fair and just manner where "settlement" is actually real and accomplished for trade and payment of wages and debts! Regards, Bill H.

Gridlock on deficit panel looms over stock rally

And Gold and Silver are being sold? Only to obfuscate the TRUTH.

Why the euro crisis is an American problem
By David Frum, CNN Contributor
The European Union represents a bigger economy even than the United States. If the euro cracks, and euro-holding banks fails, the pain will cross the Atlantic, as the pain of the U.S. crash of 2008 crossed the Atlantic in the opposite direction.

European financial institutions may lose the ability to repay U.S. creditors, inflicting more losses on an already traumatized U.S. financial system.

Collectively, the eurozone countries are far and away the largest foreign investor in the United States. If the eurozone economies slump, Americans will find it harder to raise capital for new projects and businesses.

As a single economy, the EU is America's largest trading partner. If it buys less, American exporters will suffer.

This catastrophe could erupt almost literally at any minute.

And Gold and Silver are being sold?  Only to obfuscate the TRUTH.

European Debt Crisis Threatens the Dollar
By Ron Paul
The global economic situation is becoming more dire every day. Approximately half of all US banks have significant exposure to the debt crisis in Europe. Much more dangerous for the US taxpayer is the dollar's status as reserve currency for the world, and the US Federal Reserve's status as the lender of last resort. As we've learned in recent disclosures, this has not only benefitted companies like AIG, the auto industry and various US banks, but multiple foreign central banks as they have run into trouble. Nothing has been solved, however, by offering up the productivity of Americans as a sacrificial lamb. Greece is set to be the first domino to fall in the string of European economies at risk. Rather than learning from Greece's terrible example of an over-consuming public sector and drowning private sector, what is more likely from our politicians is an eventual bailout of European investors.

The US has a relatively small exposure to overwhelmed Greek banks, but much larger economies in Europe are set to follow and that will have serious implications for US banks. Greece is technically small enough to bail out. Italy is not. Germany is not. France is not. It is estimated that US banks have over a trillion dollars tied up in at-risk German and French banks. Because the urge to paper over the debt with more credit is so strong, the collapse of the Euro is imminent. Will the Fed be held responsible if the Euro brings the US dollar down with it?

The most disingenuous aspect of the narrative about the European sovereign debt crisis is that entire economies will collapse if more resources are not bilked from productive people around the world. This is untrue. Tough times are coming for the banks, to be sure, but free people always find a way back to prosperity if the politicians leave them alone. Communities within Greece are coming together and forming barter systems because they know the Euro is becoming unstable. Greeks are learning how to engage in commerce with each other, without the use of fiat currency controlled by central banks. In other words, they are rediscovering what money really is, and they are trading with each other in ways that cannot be controlled, manipulated, squandered, inflated away and generally ruined by corrupt bankers and the politicians that enable them. Farmers will still grow food, mechanics will still fix cars, people will still make things and exchange them with each other. No banker, no politician can stop that by destroying one medium of exchange. People will find or create another medium of exchange.

Unfortunately when politicians try to monopolize currency with legal tender laws, the people find it harder and harder to survive the inflation and taxation to which they are subjected. Bankers should take their dreaded haircut rather than making innocent people pay for their mistakes. The losses should be limited and liquidated, rather than perpetuated and rewarded. This is the only way we can recover.Government debt is often considered rock solid because it is backed by a government's ability to forcibly extract interest payments out of the public. The public is increasingly unwilling to be bilked to make bankers whole. The riots and the violence in Greece should tell us something about the sustainability of this system.

If we continue to bail out banks and bankers so they can continue to lose money, if we cavalierly put this burden on the taxpayer, it is all too predictable what will happen here.

And Gold and Silver are being sold? Only to obfuscate the TRUTH.

Decision Time For Europe: The Definitive Presentation On The Future (Or Lack Thereof) Of The Eurozone
From Zero Hedge
When dealing with the daily barrage of headlines from Europe, it is easy to get lost in the trees and forget what the forest looks like. That's perfectly understandable - after all, it is precisely the intention of the Eurocrats to confound everyone with noise, so any track of the fact that the big picture is unfixable is if not lost then promptly forgotten, with reactionary newsflow dominating the flawed decision-making process. Luckily, the fact remains that no matter what, no matter the scale of lies out of Europe, the problem still remains: the math just does not make any sense.

And Gold and Silver are being sold? Only to obfuscate the TRUTH.

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