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Patriotic or Idiotic?

A VERY SUBTLE FORM OF THEFT

by SIMON BLACK

Say what you want about him, but Bernie Madoff was a guy who knew how to keep the party going. For years, he ran one of the largest private-sector Ponzi schemes in history and always heeded the golden rule of financial scams: make sure your inflows are greater than your outflows.

He was finally done in when redemptions exceeded new investments. He didn’t have enough cash to pay out investors, and he wasn’t able to scam more people into paying in to the scheme. As a result, Madoff finally had to admit that the whole thing was a total fraud.

Governments around the world are in similar situations right now with their own public sector Ponzi schemes. Faced with failed auctions, declining demand, and rising yields, politicians are having to resort to desperate measures.

Like any good scam artist, they’re appealing to the masses first; all over Europe, governments are sponsoring new marketing campaigns suggesting that it’s people’s patriotic duty to buy government debt.

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Filed under economy economics politics Ponzi scheme Bernie Madoff financial scams governments politicians Europe US United States commentary patriotic duty government debt scam artist

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World's Central Banks Act to Ease Market Strains

Somehow you just know we are all going to be paying for this debacle  .  .  .  and soon.

Major central banks around the globe took coordinated action Wednesday to ease the strains on the world’s financial system, saying they would make it easier for banks to get dollars if they need them. Stock markets and the euro rose sharply on the move.

The U.S. Federal Reserve, European Central Bank, Bank of England and the central banks of Canada, Japan and Switzerland were all taking part.

"The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity," the central banks said in a joint statement. 

As Europe’s debt crisis has spread, the global financial system is showing signs of entering another credit crunch like the one that followed the 2008 collapse of U.S. investment bank Lehman Brothers. Banks are afraid to lend to each other, since no one is really sure what institutions are holding how much bad government debt.

Greece, Ireland and Portugal have all been forced to take international bailouts, and Italy, Spain and Belgium are seeing their borrowing costs rise sharply. Banks already had to agree to forgive 50 percent of the value of their Greek debt holdings — and many fear that other struggling European countries might also demand a so-called “haircut” on bonds.

A ratings downgrade by Standard & Poors for six major U.S. banks on Tuesday added to fears that Europe’s woes would hurt the entire financial system. If one or more European governments default, that would unleash a shock to the world’s financial system that at the very least would lead to recessions in the United States and Europe, severe losses for banks and a global stranglehold on lending.

The central banks agreed to reduce the cost of temporary dollar loans they offer to banks — called liquidity swaps — by a half percentage point. The new, lower rate will be applied to all central bank operations starting Monday.

Read more: World’s Central Banks Act to Ease Market Strains 

Filed under economy economics central banks Federal Reserve dollsr recession Europe eurozone crisis euro international bailouts politics bankers politicians news

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The Discipline of Government

Many economists believe the boom and bust effects of the business cycle can be largely smoothed over by government increasing or decreasing the money supply.

If this is true, the question we have to be asking ourselves is:

Q: How did we get into this predicament in the first place?

A: Our political masters have been printing our way to prosperity.

“Government intervention begets government controls and regulations.  When you replace the automatic workings of the gold standard with a government controlled fiat standard, you must regulate and control things like money supply and financial leverage, since the discipline of the market has been replaced with the discipline of the government.” Paul Nathan, paulnathan.biz

All we need to know about politicians is 1. It isn’t their money and 2. Nothing is more important to them then getting reelected. Asking for fiscal discipline from them is akin to asking John Dillinger to guard Fort Knox. In regards to Dillinger, Congress and Ben Bernanke’s actions we know what’s going to happen – Dillinger would rob Ft. Knox and both Congress and the Federal Reserve are going to create, give away and spend money in unbelievable amounts to keep the system afloat.

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Filed under politics government discipline boom and bust gold standard fiat standard politicians Bernanke Federal Reserve End the Fed Ron Paul for President

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Euroland & the Gold Rebound

By: Jim Willie CB, GoldenJackass.com                                                       Posted Wednesday, 12 October 2011

The harsh reality is that when Greece inevitably defaults, a string of bank failures will occur that hit Europe, London, and the US simultaneously. 

ENGINEERED GOLD DECLINE HALTED

This article would be remiss not to point out that history is being made. The COMEX has decided to raise margin requirements when a falling price is occurring, for both gold & silver. Normally, the opposite is the case. Notice no USTBond margin hikes, even though an asset bubble. If truth be known, the damage done to the Paulson Fund had a big hand in knocking down gold. Motive is painted on the walls. Policy is to tarnish the precious metals as the global monetary system continues to crumble, as the USGovt deficits head toward $2 trillion annually, and the USEconomy enters a recognized recession along with Western Europe, before renewed stimulus is attempted. With all the destinations staring the bankers and politicians in the face, they wanted the Gold & Silver prices to be pushed down. The next upsurge will be one for the history books. With new money heading to fill holes in the bank bond bailouts, the recapitalization of numerous banks, the economic stimulus, and the government debt monetization (led by the US), the debasement of major currencies will be astounding. The Gold & Silver prices will make strong new highs repeatedly.

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Filed under economy economics politics Europe euro eurozone crisis recession gold gold rebound economic stimulus banks recapitalization of banks debt monetization debasement of currencies politicians central banks renewed stimulus

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HOW BANKRUPT GOVERNMENTS WILL CONFISCATE YOUR GOLD

by SIMON BLACK · VIEW COMMENTS

The more signs I see, the more I’m starting to believe that we’re heading down a path where precious metals are once again confiscated, outlawed, or at least severely restricted in many countries.

Let’s start with the why. What possible sense would it make to reduce or restrict gold ownership?

Simple. The modern financial system is a complete joke. Money is conjured from thin air, backed by false promises from bankrupt governments. Then there’s the fractional reserve swindle, centrally planned interest rates, government-produced inflation, manufactured statistics, insane credit and sovereign debt bubbles, etc.

It’s a total fraud… and like any good con, it depends on just that: confidence.

In order for a system based on -nothing- to perpetuate, it’s imperative that it commands the confidence of the people within it. And people in rich western countries have been programmed since birth to believe that the colored pieces of paper circulating around in their economies are intrinsically ‘valuable’.

It’s funny, because developing countries already know it’s a scam. They don’t trust their governments, and they don’t trust those silly pieces of paper either. Out here in Asia is a great example– most of the region is very gold-oriented. They use paper as a medium of exchange, but it’s a cultural norm to save with gold.

In fact, when I walked into an Internet cafe earlier today here in Thailand, I noticed quite a few people at the computers checking out live gold charts (from Kitco).

People in western countries are just starting to get it… and as more people peek behind the curtain to see the true crimes being committed, the system will be finished.

The gold price is a constant reminder that the fiat financial system is a con job. And the higher the gold price becomes, the more people become aware. The political establishment will do whatever it takes to maintain the status quo, and it’s possible that precious metals restrictions will become a tactic:

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Filed under economy economics politics bankers politicians governments bankrupt governments gold confiscation of gold dollar US dollar honest money Ron Paul Ron Paul for President

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HOW TO EXPLAIN GREECE TO A COMPLETE IDIOT / POLITICIAN

by SIMON BLACK · VIEW COMMENTS

October 10, 2011
Bangkok, Thailand

Let’s pretend for a moment that Greece is a human being. I’ll call him George.

George is a hairdresser and makes $40,000 per year. George has limited assets. He has zero savings, no precious metals, and is way underwater on his mortgage. His credit card debt is over $100,000, and his bare minimum living expenses are $45,000 annually, over 10% more than he makes. George’s credit is pitiful, and he cannot obtain any more new loans.

George’s neighbor Hans has a big family. All the kids work hard and contribute to the family savings. Hans sees George’s plight and decides the neighborhood has to stick together; he starts loaning George some money out of his family’s savings, and eventually begins to take on more and more of George’s personal debts.

Many of the other neighbors– Luciano, Seamus, and Juan– are in the same boat as George: drowning in debt with massive personal expenses and no hope to pay them back.

Everyone is looking to Hans for help.  He’s the responsible one in the neighborhood. Now, Hans doesn’t want them all to go bust because he knows it would be bad for the neighborhood property values… but Hans’s children are balking at the prospect of working hard on their newspaper routes just so that George can keep his plasma screen TV.

Very soon, George is going to run out of options and will have to have a difficult conversation with his credit card companies. In the real world, there is no other choice.

In the pretend world of politics, however, European leaders have been able to convince everyone that it’s all under control. Never mind that the whole situation has completely fractured capital markets; traditional valuation metrics have taken a back seat to rumors of secret meetings and loud talk of bailout plans.

Think about it: Dexia passed summer bank stress tests with flying colors. A couple of months later it’s going bust. How can markets function without confidence in balance sheet accuracy? Or whether a government will even be around tomorrow? This is kind of a problem when sovereign debt is the cornerstone of the financial system…

And yet, stock markets worldwide surged today on the news of a European ‘pledge’ to help banks.

Do yourself a favor and stop watching their lips move. These ‘plans’ are nothing more than lies and misdirection. Just like our friend George, a Greek default has to happen.  Politicians can pretend whatever they want, but in the real world where we live, financial deadbeats have no other options.

Source: www.sovereignman.com/expat/how-to-explain-greece-to-a-complete-idiot-politician/

Filed under economy economics politics Greek default eurozone crisis stock markets politicians