Loading ...This example is today universal. Every nation on earth has
a central bank except Andorra and Monaco. Monaco has a casino
instead. Andorra has sheep, but at least only the sheep get
sheared. It is different for the rest of us.
It has come to my attention the Treasury has made a change that may be significant in it’s meaning. The individual limit on buying I-Bond (interest adjusts upward with inflation) has always been $30,000 per year. They have quitely lowered it to $5,000 per yr. effective Jan.1, 2008. Not a word in the papers or on the news. Why?
I believe they are about to be forced to acknowledge the real rate of inflation rather than their low manipulated number or face law suits on their bogus numbers. This would blow the lid off SS raises and various labor contracts and feed inflation - Maybe this even gives the Fed cover to raise rates and save the dollar. Other possibilities or reasons for the Treasury to do this ???? Need to know! I just know it is not to benefit us citizens! Deadeye
A deluxe contribution you’ve made to our TENT with that post. I will be listening to it again.
Thank you so very very much!
JBI
A worldwide reversal or just a global dead cat bounce? Started last night in Asia, with the Hang Seng Index closing in the green after being down more than 2% and encouraging the entire region. Tonight the bounce or reversal continues, but I, for one, am not really that impressed yet…….
Asia/Pacific Region………..
finance.yahoo.com/intlindices?e=asia
~ ~ ~ ~
Aussie GOLD stocks…….
The Precious Metals…….
www.gold-eagle.com/intra-daykit.html
……..a must to highlight the recent superstar:
~ ~ ~ ~
And the US $$$$$$$$ - is that it for the “Kaplan” rally?
JBI
1-i don’t do options just futures contracts but i’m really perplexed why he should pull bs because a delevery is another fee/commis etc. [get a broker who knows how to take orders]
2-refer to 1 but when contract delivery is taken yes payment in full [always have the proper amount of cash in your futures account if anticipating delevery]
3-your price was locked in on the excersise of the contract and that is the price you pay or offset it for profit/loss if you prefer plus additional fee/commission.
4-yes an entry and make sure its in your ’segregated account’ and not in a ‘non-segregated account’ and also a copy of the cert reflecting the serial# total weight, fine weight [melt] and purity [9950-9999] and smelter [jm eng etc]
if he can’t or won’t comply get a new broker. remember he works for you not the other way around!
5- your here on the goldtent where else. 
also dave silver is extremely bulky and heavy and a pain to store in 1000oz –65+lbs bars…bah. certs are fine for now and converting to gold physical in the future is really easy and a joy to store under the 3rd shrub next to the 4th palm tree over the east/west corner of the saltpond. [gg]
hope this helps a tad, wj
Thumb’s UP! Thanks for Russell’s comment and your chart.
I say we get Irish a PLATINUM bayonnet to lead with in his CHAAAAARGES!
JBI
PS - I thought Dr Ron Paul was SUPERB on Beck’s show, but I have already had to much wine to elaborate.
p.s. right now I’m trying to digest Maya’s (21:18) by Gary North on the “trapped banks”. A complicated investment world we have here.
….when he reads your book….he’ll pick you…….when you get to the White House…remember your friends at the Tent eh?
Man, you must have read my kind. I was just about to send you a post before, suggesting you join me in watching him on channel 29. Glad to hear!
JBI
yes i’m watching it too. had to find my de-programed ch 29 though. [g] wj
messaging has become more focused and consistent. His themes are constant and unwavering, unlike certain others 
The hope is that the revolution he has started does indeed go for the 30-4-50 year period. Only way it will turn the tide. But Ron is 72 - who’s gonna carry the mantle after him? Who would be his running mate? I know, I know - win the primaries first, get the big momo going and then deal with such things. Still, he is a very lone voice in the wilderness. As I noted earlier, who else in this mess has a coherent worldview and an understanding of the constitution and its real value to us Americans.
To me, where Paul was a shining star tonight was at the very end, where he took the people task about freedom is not freedom without a moral people, without people who also understand self-government and personal responsibility. He laid it on the line, and referred back to Ben Franklin: freedom and liberty pre-supposes a moral people, who know the difference between right and wrong, and grasp firmly that the responsibility for their lives rests with…the individual.
I appreciate this discussion regarding further holding of gold stocks.
I’m a little surprised that nobody at least as far back as the last few pages has mentioned Monty Guild’s comments on JSmineset today. I have to admit they they left me somewhat dazed and confused. I’m confused half the damn time anyway, but in a nutshell I’m trying to figure out if I should be holding any gold stocks. Monty said we’d have deflation which would affect all commodities and he carefully didn’t mention the pm’s. I would tend to agree with what ment said about holding producers which I suppose means the larger caps. That being said, if Monty is right about market direction then my assumption is that he is implying gold stocks get hit too? Hard to believe they could get hit alot more but I thought that about tech stocks too. JDSU comes to mind.
Some positive stuff happened today on the HUI bouncing off the lower channel on North’s chart. Gold is holding up well, as is silver. The problem I have is that lingering fear that these stocks have yet to de-couple from the broad market as they did in the early stages and frankly I scared sh#tless that if the broads tank, we could see them go too regardless of what gold does. Clearly I need to lighten up because I ain’t sleeping.
Any additional thoughts? I’m surprised JS didn’t address Monty’s comments.
…..will link it under Editorials for reference….
It seems that many of the hard money persuasion are split on whether we will see a deflationary or inflationary outcome to the current credit crisis. Although it may seem to be a paradox, deflationary pressures are going to cause monetary inflation and it’s resulting rise in most prices.
Definitions are in order as well as a brief examination of our current money system. Inflation being an expansion of the money supply which results in higher prices whereas deflation is a contraction of the money supply with the consequent falling prices in terms of the money which is being deflated.
It is important to grasp the fact that money is created, in our modern fiat world, by being loaned into existence. This process creates an attendant amount of debt which must exceed the actual money supply because of interest obligations. It is this higher level of debt which constantly threatens to consume MZM ( money at zero maturity) and lead to a deflationary spiral. This system requires the monetary authorities to find new borrowers in order to expand the money supply and keep the deflationary pressures in check. If all debt was to be repaid, both private and public; all the cash in circulation would end up in bank vaults. This is the greatest flaw to our modern debt based money and is why it is unsustainable over the longer term. Currently a global crisis of confidence is occurring as financial institutions are inundated with non performing debt in the form of structured investment vehicles (SIV’s). As this debt is either frozen or written down in value it exerts a huge deflationary pressure which, paradoxically; is going to lead to inflation and resulting higher prices.
Those who advocate for a deflationary outcome often cite the example of the first great depression and the Fed’s low rate policy having little effect. ‘Pushing on a string”, is how they describe the unwillingness to borrow and put more money into the system. This was in spite of favorable interest rates and a Fed eager to extend credit. The only other tool the Fed had at it’s disposal to counter the deflationary pressure was the act of buying debt from distressed institutions and effectively monetizing it. Monetizing was actually done by both the Fed and the Bank of Canada, however; the amounts were very small relative to the overall debts. There were limitations to monetization that do not apply to the current system.
Aside from government debt, which was considerably lower in the late twenties; debt from that era was connected to tangible collateral. With a currency that was redeemable in gold, loans had to reflect that inherent value in the form of liens on real property. This created an issue with monetization because to do so would entail an actual transfer of property. How would folks have reacted had the Federal Reserve System started to come into possession of all the delinquent mortgages or enterprises in America in the 1930’s? Such a transfer of real wealth would have laid bare the complete and utter fraud that the money system represented after it’s severance (for Americans) from the gold standard in 1933. There is a very important difference now that is often overlooked.
Today we see great amounts of debt that allude to some tangible value yet are in fact clearly separate from such. Collateralized debt obligations (CDO’s) and/or mortgage backed obligations (MBO’s) are the best example. These are typically the problem component in most SIV’s which have infected global financial institutions. The recent ruling in an Ohio court in which Deutsche Bank was unable to repossess delinquent properties because they were unable to prove they held the actual title raises a salient point concerning a good deal of modern mortgage debt. Securitization has detached mortgage debt from it’s collateral or actual property. This may seem a disaster for the banks who hold such debt but it allows central banks to purchase this debt without having to evict delinquent occupants or otherwise take possession through an actual transfer of title.
Deflationary pressures are going to grow only as more debt is written down or completely off from lenders’ books. Central banks that have been providing liquidity by giving short term loans for ever increasingly questionable debt (Repo’s) are now poised where they can actually buy such debt outright. This would restore solvency to many troubled institutions and negate any remaining moral hazard on future loans. There is another source of money and inflation that many now view as a huge threat to the global financial system.
There have been a whole new set of financial products created which offer insurance against defaults and the resulting rate spreads due to perception of risk. These are what we know as over the counter derivatives. They are not regulated and many are valued based on models rather than actual market trades. The current notional value of these instruments is staggering. There are those who argue that these instruments represent a serious threat to the well being of the global financial system. That is true only if the institutions that offer them would be forced to meet their counterparty obligations should they find themselves on the wrong side of a multi billion dollar bet.
Instead one should view these instruments as a conduit to provide money to financial institutions who have utilized them as insurance against, among other things; deflationary forces. Central banks will continue to lower the threshold of qualified paper taken initially on repo’s then monetized until they actually become the “counterparty of last resort”. The inflationary implications are staggering and there can be no other recourse.
You can in fact push on a string where there is no resistance on that string such as in space. The resistance in the form of collateral transfer has effectively been removed and as long as the establishment can maintain inflationary expectations; people and enterprises will continue to borrow and spend. The result of fighting deflationary pressures will ultimately lead to hyper inflation. It is unlikely that the economy will experience any real growth in such an environment except in the realm of government statistics. The threat of real deflation will wane as the money we use will cease to be created as a result of being borrowed. Lending will continue but the financial institutions that offer loans will do so with fresh cash they have received from the sale of worthless debt as well as the monetizing of derivative obligations they or their counterparties hold. This is the new reality of the global financial system. Deflation or the fear of deflation is something that will be trotted out or sold to the public as a form of spin to prevent wholesale flight from respective currencies when it suits the establishment to do so.
Jack Fortin December 2007
Jack is both a long term member of the Cafe as well as a GATA supporter. His hobby is motorcycling as well as safety training for new riders. He currently operates a gold and silver exchange in Red Deer,
Alberta, Canada.
www.jaxville.com