 Gold =
Wealth Cash = DEBT!
Alex
Wallenwein
November 22, 2004
You can hold a lighter
under a one-ounce gold bar for hours, or until it runs out of
gas. Nothing will happen. Now try the same thing with a bundle
of $100 bills.
That's an apt representation
of the permanence of gold wealth versus paper-wealth. (It is
also what the current US administration and the US Fed appear
to be doing to the dollar right now).
For some very strange reason
people think that having a lot of "money" means they
are rich.
If they only knew!
What they are missing is that
what goes under the name of "money" these days is nothing
but debt piled on debt. The only reason people with money think
they are "wealthy" - is that the law dictates that
you cannot refuse this debt in "payment of all debts, public
and private."
So they get to live like people
of true wealth.
Who pays for that? The entire
world is paying for that by increasing its risk of a total financial
meltdown.
Indeed, thanks to what is know
as "legal tender laws" (laws by which the government
declares that paper slips with certain ink patterns on them can
be substituted for real money without actually being lawful money
themselves) people can actually buy things with paper, and get
to call what they buy "their own." But that doesn't
change the fact that what they earned and what they used to pay
for those things is nothing more than evidence of a debt.
And that debt can never be
repaid.
It's a strange thing to notice
that, despite the old maxim that "the law never lies,"
the legal tender laws do lie, in a sense. For, even though the
law calls paper-cash a "payment for debts, public and private,"
common sense tells you that debt can never be payment for anything
- except maybe in some twisted legislator's or world banker's
mind.
But that's how twisted the
world of money has become. Ever since bankers decided to do Karl
Marx' bidding (or maybe he did theirs?) and helped to utterly
debauch the world's currencies, this is how things have been.
Bankers accomplished this initially
through the institution of fractional reserve banking, and secondarily
through divorcing the money concept from any notions of intrinsic
value whatsoever. But lest we blame our problems exclusively
on others, we "the People" must acknowledge that the
ultimate factor in helping them accomplish this was our own laziness,
ignorance, and a totally misplaced trust in elected officials.
The definition of money includes
three functions: money is said to function as (1) a unit of account,
(2) a medium of exchange, and (3) a store of value.
Modern fiat creation and management
has utterly destroyed money's store-of-value function and replaced
it with - a legally enforced lie.
Want a to know what Karl Marx
meant when he called for the "debauching of all currencies"?
(One of his favorite planks in the Communist Manifesto he helped
write). Here it is. You are staring it right in the face. It's
a world-wide "fait accomplis."
Do you believe that Communism
is dead? It is - in a way. But actually, it is not dead. It has
only been discarded in its original incarnation of the same name
because it is no longer needed. Why not?
Communism is no longer needed
Because it has fulfilled its only real purpose: the utter debauching
of all currencies in circulation!
A very good argument can be
made that all of the other so-called aims of communism were just
a ruse - red herrings to ensure that people's attention was turned
elsewhere while the real fraud happened right under our very
noses. And now it's too late
- or is it?
Legal tender laws are the lynchpin
for the subversion of the money concept by organized officialdom.
They state that you cannot refuse to accept paper-cash in return
for something you offer to sell, or in settlement of a debt.
But what they do not say, however,
is that you cannot accept anything else in payment if you and
your buyer agree, or if you and your seller agree (if you happen
to be the buyer in a transaction). So the door to real money
is still wide open.
And that is the way out of
this conundrum.
The Way Out
If you and the other party
to a transaction agree, you are free to accept or offer whatever
you want in the exchange. This is called the right to contract,
and it is constitutionally protected - at least here in the United
States.
As the dollar completes its
inevitable descent into the netherworld of official shenanigans,
you and I are left to try and figure out what we can do to protect
what we have worked for all of our lives. If we stay within the
confines of what is considered "normal" and "safe"
by most investors today, we find ourselves up a certain creek
without a manual propulsion device - and what will happen to
us will be neither "normal" nor "safe."
Just consider the following:
- Retirement funds already had
to be bailed out by "the gub-mint" - that means, by
your tax dollars, and this will become quite a regular occurrence
in the years to come.
- Interest rates are so low
now that people who "save" have become the butt of
jokes at the water fountain at work. "Stocks and bonds is
where it's at, buddy!" is the usual mantra and, if you are
a little bit more nimble than most, maybe some currency trading
or other forms of speculation will be what occupies your mind.
- As a result of an unprecedented,
credit-fueled real-estate boom in the past decade, real estate
is enormously overvalued these days unless you can buy it at
fire sale prices in an area where even a recession will still
see considerable development.
- Stocks have never re-touched
their high from late 1999, and continue to knock their head against
a declining ceiling.
- Long bonds are in danger of
total subversion by our esteemed Fed governors who have vowed
to buy long term US debt instruments (treasuries) into eternity
if conditions should require it (i.e., if already low interest
rates, paired with reluctant demand, make further credit-binges
impossible). As a result, the Fed must buy long-term treasury
debt to put a lid on long rates so that the economy can be prevented
from going into cardiac arrest.
The latter is called "monetizing
the debt, which is nothing new, except that it hasn't really
been done on a large scale where long term treasuries are concerned.
If the Fed really does that, the money supply will balloon out
of proportion (the money to buy this debt will simply be "printed"
- created out of thin air and then loaned to Congress in return
for interest payments).
In the face of a shrinking
or stagnant economy, this will cause price inflation across the
board. Unfortunately for our banker-geniuses, that price-inflation
will undermine real demand for bonds (inflation eats up the fixed
future returns on treasuries as the currency's buying power decreases
over time), which will force the Fed to buy even more bonds if
it wants to succeed - and that will drive this vicious cycle
even deeper into the ground.
Add to that the by now famous
"euro vs dollar" effect (international dollars returning
home as the world dumps dollars and buys euros), and you have
a very nice recipe for a US economic disaster. Let the whole
mess bake in the oven of competitive currency devaluations, and
you get a delicious lump of "recession pie" in record
time.
It's literally a "passing
of the baton" from the former world-economic engine (the
US) to the new one - China!
Is it a coincidence that the
new economic power house is still nominally communist? What a
scathing irony it is that this nominally "communist "
new China is currently a lot freer economically than we are here
in the US - thanks to decades of intrusive over-regulation of
all aspects of our lives in this country. (Did you know that
communist China has had an income tax only since 1980, and still
has no inheritance tax?)
After you carefully consider
the alternatives that paper-debt instruments masquerading as
"money" provide to the owning and saving and spending
of real gold, please go ahead and make up your own mind.
While the power-cabals that
surround and permeate international politics and banking subject
Americans to the monetary version of Chinese water-torture (a
painfully-slow death of your own currency), you have the means
for escape at your disposal, right here, right now: a private,
parallel, physical gold, silver, and maybe copper, bullion currency.
A Private, Parallel, Physical
Bullion Currency
Yes, I know. You heard me say
that before.
A few people are currently
in the process of creating a system that will make it commercial
suicide for merchants and service-providers to NOT accept
either this new physical (or existing digital) private bullion
currencies for their goods and services in the future.
Once a large chain store company
does accept this private currency - actual physical gold and
silver - from its customers, and once customers have an easy,
safe, and most of all convenient way of exchanging their paper-debt
into real wealth (not science-fiction, just a matter of logistics),
a nuclear-style chain-reaction will be set in motion.
Before long, no merchant or
service provider will be able to afford not to accept and offer
this alternative. Soon, as the dollar keeps being inflated out
of any semblance of value, people will demand to get paid in
bullion by their employers, which will force employers (not by
force of law but by the desire for commercial survival) to offer
bullion payments to their employees. This can be done per online
gold transfers to eliminate worries of getting robbed on the
way home on pay-day.
Government fiat can then freely
compete with real money. I know, I know. It will be no contest
for fiat - but at least they will have a chance to prove that
the theories they have so far imposed upon all of us by force
of law can hold any kind of water.
If their theories are correct,
then all of us "gold-fanatics" will have egg on our
faces and the governments and bankers of the world can triumphantly
(and at last truthfully) proclaim that their way is best. But
if not, then they are out of the money-business and the freedom
loving people of the world will be truly "free at last."
Will the forces of paper give
up so easily, though?
Probably not. They will fight.
They will crank up their propaganda machine.
They will make you believe
that earning, saving, and spending bullion is "unpatriotic,"
that it amounts to "aiding and abetting terrorists"
(an appropriate trial-balloon has already been launched when
it was announced by all news outlets that Bin Laden promised
"gold" to terrorists doing his bidding) or that people
who use bullion are "tax cheats" because gold-cash
can be hidden easier from the government than paper-cash (especially
after the introduction of universal RFID tags in bank notes).
That latter one will be an
exceedingly interesting debate, though, because it is becoming
more and more widely known that the US government itself is and
has been the greatest "tax cheat" in history - by deceiving
people about the
true nature of the income tax.
The forces of make-believe
may also resort to outright force: confiscations, legal and administrative
harassment, etc. - but so what? Since when has freedom ever been
"free"?
Maybe in the past we could
get away with sending our young ones into battle to stay free,
but this "war" will be fought closer to home. It will
be fought right in your living room where the TV blares, at the
newspaper stand where headlines command obedience to a deceptive
system, in the workplace where your co-workers will think you
are nuts until they see their own stash of cash dwindle to nothing
in buying-power (by daily comparing prices in cash vs. gold at
the supermarket check-out counter).
If we are not willing to incur
that little bit of an inconvenience (after all, we are not sacrificing
our lives in doing this), then we do not deserve to live in even
a nominally "free" country. Maybe then we should just
invite Fidel Castro to come in and rule us. After all, didn't
he get the Nobel Peace Prize some years back? Communist dictators
and dead Palestinian terrorist figureheads are all the rage these
days, it seems.
But then again, maybe the world's
central banks are much more pro-gold than they have let you and
I suspect so far?
We know this much: If they
had really tried to sell gold into the ground and "kill"
it forever, if they really had such an aversion and such a lack
of use for gold as they have tried to convince us during the
nineties, they would have sold all of that "dead weight"
many, many years ago.
But they did not.
In fact, all of them were able
to hold on to quite considerable portions of their gold. Maybe
they shifted it around a lot. Maybe the gold has changed hands
from one group of central banks to others. And, even if they
did sell it all: the more gold is in private hands, the better,
in my view. Let "the basturds" eat their paper!
The Switches Are Set
Undoubtedly, the switches for
a much lower dollar, and thereby much higher gold, have officially
been set. The last bit of confirmation we needed for that was
contained in Greenspan's remarks last week that other nations
may not be willing to finance our deficits forever and may want
to switch out of the dollar into another currency.
- The Russian central bank has
announced that its euro-stash grew from 10 percent to
a whopping 30 percent of official reserves between mid-2003 and
now.
.
- China says it wants to jettison
dollar-assets and buy other assets. It has used some of its dollar-surplus
to acquire Canadian gold mining properties of late.
.
- India, too, says it wants
out, and India is super-rich in gold.
.
- Argentina has boosted ("diversified")
its reserves by 40 tons of gold since the beginning of this year.
.
- The gold price in euro-terms
show signs of taking off.
.
- Muslims have long advocated
a return to gold. They now have the gold dinar in place. They
don't need to buy dollar-debt to stay competitive with their
exports as the Asians do - because their product (oil) has no
competition.
.
- The Bank of Japan has allowed
its officials to remark that they, too, want to shift more assets
to something other than dollars.
.
- The ECB has so far resorted
only to verbal intervention and has resisted the member-nations
cries for lower rates to prop up their underperforming economies.
.
- The Chinese are moving closer
to their WTO deadline for letting their currency float. They
will likely do it in stages, so they are forced to start rather
soon.
All of the signs are now pointing
in the same direction. The question is:
Why?
Why is there all of this official
agreement right now? It tends to make me somewhat suspicious.
- Is it because they want to
shake out the dollar-shorts (and gold-longs) once and for all
by making the trader-herd stampede right into this new trap and
then reverse course, swallowing all of their anti-dollar (and
pro-gold) betting-power?
.
- Is it because the world has
agreed to let the dollar fall by the wayside?
.
- Is the US "in" on
this game, or are they fighting it by pulling a Judo-trick on
the euro?
.
- Is the US power structure
just helplessly watching this process, and then trying to "save
face" by faking agreement when they really have no other
choice?
.
- Is this tacit agreement evidence
that the euro's structural pro-gold nature is now coming to the
fore as anticipated? (No, the euro is not "backed"
by 15% gold. It simply values its gold at market levels rather
than the stupid "official" US gold price of roughly
$42.222 per ounce)
.
- Have the world's central bankers
un-hobbled the gold price as a necessary (albeit painful) condition
for being able to drive the dollar into the ground?
Questions, questions. These
are hard questions to answer without more evidence where things
are moving. But however that may be, currently at least gold
is moving, and moving very fast, and in the right direction.
During last winter, gold shares
were pulling the gold price up, then peaked first, and soon started
dragging it down. So far this year, physical buying is still
leading the shares. That tells me that this year's buying is
far less speculative even though the acceleration is even steeper
than last year's. Gold has cleared the formerly almighty $430
hurdle with nary a whimper of resistance.
And something tells me it will
get steeper, yet.
The G-20 nations - incredibly
including the Europeans - have just expressed the equivalent
of 'no concern' over the falling dollar. We may see $500 gold
before the year is out!
Got gold?
Nov 22, 2004
Alex Wallenwein
Editor, Publisher
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Alex Wallenwein writes the Euro vs
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