Quote — Robert A. Heinlein on Inflation

Robert A. Heinlein

Sci-fi Author Robert A Heinlein

The Dean of Sci­ence Fic­tion Robert A Hein­lein

Every Con­gress­man, every Sen­a­tor knows pre­cise­ly what caus­es inflation…but can’t, (won’t) sup­port the dras­tic reforms to stop it (repeal of the Fed­er­al Reserve Act) because it could cost him his job.”

© Copy­right MMXII RagingGoldenBull.com

Video — Paul Grignons What the Heck is a Bailout?

Paul Grignon has pro­duced anoth­er infor­ma­tive and some ways enter­tain­ing video about the mon­ey sys­tem called What the Heck is a Bailout?. This is only 9 min­utes long and well worth a watch to explain what these terms “bailout”, “debt” and “mon­ey print­ing” real­ly mean.

Also check­out his Mon­ey as Debt site and oth­er work and give him some sup­port if you can — we all need to play our part to help straight­en things out here…An impos­si­ble task I know…

© Copy­right MMXII RagingGoldenBull.com

All the Gold has Gone from Western Central Bank Vaults?

Eric Sprott of Sprott Asset Man­age­ment is one seri­ous play­er and you would do well to lis­ten to him when­ev­er he speaks.

 

The chief of Sprott Asset Management

The man him­self on Bloomberg TV

He was just on Bloomberg TV dis­cussing his recent­ly pub­lished paper to which the con­clu­sion is The West­ern Cen­tral Banks can­not pos­si­bly have any Gold Bul­lion left in their vaults.

The expla­na­tion is sim­ple — gold sup­ply has remained con­stant at approx­i­mate­ly 4,000 tonnes per year. This has remained con­stant since the year 2000 — no doubt about that. How­ev­er the annu­al amount that is being pur­chased on the open mar­ket is going up, with almost 500 tonnes over the amount mined in a year. So how his this pos­si­ble? Where is the extra 500 tonnes of Gold com­ing from?

Sprott alludes to the fact that the cen­tral banks are “lend­ing” it out for cash into the mar­ket. This should real­ly be called “sell­ing”, because this gold is nev­er com­ing back. The trick is in their accounts and book-keep­ing. The banks are enter­ing this as “Gold Reserves and Gold Receiv­ables” — Receiv­ables being code for we sold it, but we still want to keep it on our books.

If we were to try that kind of cheap trick we would be locked-up and they would through away the key…But a cen­tral bank? No prob­lem — That’s ok boys!

You need to watch this inter­view — there are a lot of good nuggets of info in there…

© Copy­right MMXII RagingGoldenBull.com

The First and Last Too-Big-To-Fail-Bank-Liquidation in History

Sign o the times - Lehmans going under

Lehmans Liq­ui­da­tion near­ly brought down the whole glob­al finan­cial sys­tem

There are plen­ty of things to be wor­ried about at the moment. Some­times it
is like the Case of the Miss­ing Cen­tral Bank Gold is pret­ty minor in
com­par­i­son. For exam­ple, the impli­ca­tions of the Lehman Broth­ers Event
are pro­found indeed.

The Lehman Broth­ers event was very unique indeed. One of a kind. It was the first, and the last case of a mon­ster bank being liq­ui­dat­ed and the cen­tral plan­ners soon realised that they had cho­sen the wrong path here. This one bank in 2008 almost brought down the entire sys­tem. If the rumours were to be believed then we were with­in hours of the col­lapse of the entire glob­al finan­cial sys­tem.

For the first time we could see the real and dec­i­mat­ed val­ue of assets dur­ing a liq­ui­da­tion sce­nario in the 2008 envi­ron­ment. Any­one who has been close to any kind of bank­rupt­cy or debt event knows that assets are worth noth­ing and no buy­ers. Cred­it sup­ply was seiz­ing-up and it was almost time for the end.

The Cen­tral Plan­ners watched and learned. If you notice, there have been many oth­er events, banks, coun­tries, and busi­ness­es like since Octo­ber 2008. But none have been allowed to fail. It would cause too much tur­moil and desta­bilise too much infra­struc­ture. The les­son learned here is that it would be much bet­ter to just kick the can down the road. The expres­sion that we have heard so often now. Keep the illu­sion going for a bit longer. But how much longer? Days? Weeks? Years? Cen­turies? This is where we must do our think­ing — how long have we got?

Greek austerity measure start to warm up

Greek aus­ter­i­ty mea­sure start to warm up

Reflect on all that has hap­pened since — Greece, Spain, Por­tu­gal, Ire­land, Italy, Dex­ia, Bankia, AIG, Fan­ny Mae, Irish Banks, Ice­landic Banks, North­ern Rock, and the hand­ful of banks that qui­et­ly fail every Fri­day after­noon in Amer­i­ca. All bar none, have been helped — no liq­ui­da­tion for them. It would be messy.

Wit­ness Mario Draghi and his print­ing press­es, EFSF, any­thing but actu­al­ly let the prob­lems die out. So we print more mon­ey, sell more bonds, and use the mon­ey to kick the can down the road again. But one day this will come to an end.

So I feel that we will not see any more BIG LIQUIDATIONS — They are just too dan­ger­ous — Let’s just draw out a long slow death instead.

This is the proof of QE to Infin­i­ty and beyond — Pur­chase your phys­i­cal gold now while it is still in the 1,700 USD range — In a few years most peo­ple will be locked out from buy­ing (if not already) com­plete­ly — buy sil­ver too. Buy BOTH, with both hands. Now.

Oh, an by the way — start think­ing, plan­ning, and tak­ing mas­sive action now — it’s the best chance of sur­vival for us and the peo­ple we care about.

© Copy­right MMXII RagingGoldenBull.com

Germany Wants (a tiny bit) of it’s Gold Back

Ger­many wants it’s Gold Bul­lion Reserves back.

German gold bullion coin

Ger­man gold bul­lion coin

Ger­many has the sec­ond largest gold reserves in the world. Or at least it should do. A quick look at the Wikipedia gold reserves chart shows that as of year end 2011 total offi­cial hold­ings are 3,396 met­ric tonnes of gold.

Gold Bul­lion Reserves of top 10 nations

The thing is, as with most cen­tral banks (that are not BOE, or Fed­er­al Reserve) some por­tion of these reserves are held off-shore. This is most­ly a rel­ic of Nixons tyran­ni­cal dis­man­tling of the gold stan­dard back in 1971 (August 15th — A very Black Day), when gold was actu­al­ly used for set­tle­ment, and if not shipped at least moved from one part of the vault to anoth­er (I kid you not).

Any­way, back to Ger­many. They want their gold back. Who wants their gold back? Good ques­tion, depends who you ask:

Here are the play­ers:

* The Peo­ple (Das deutsche Volk) — Would like their gold back
* The Bun­des­bank — Seem strange­ly ambiva­lent about the whole affair
* Ger­man Par­lia­ments Bud­get Com­mit­tee — pushed by the peo­ple to take action
* Ger­many Audit Court — pushed the Bun­des­bank to do some­thing by the Par­lia­ment
* Fed­er­al Reserve Bank of New York — claim it’s too secure to audit

After years (maybe decades) of ask­ing, they have got to the point that our good old friends at the Fed­er­al Reserve stat­ed that it would not be pos­si­ble

in the inter­est of secu­ri­ty and of the con­trol process”.

Excuse me?

Imag­ine going to your bank to get a bank bal­ance, ask­ing to see your safe deposit box (you do have one right?), or oth­er­wise access to your prop­er­ty and then being told — “No. In the inter­est of secu­ri­ty and of the con­trol process”. How would you feel? How would you react? What would you do next?

Ger­many is believed to have approx­i­mate­ly 2,000 tonnes (a lot) over­seas in for­eign cen­tral bank (evil corp) vaults: Fed­er­al Reserve, BoE, Bank of France. Notice a con­nec­tion between those names? Yeah, they are the so called *Allies* at the end of the 2nd World war (Rus­sia strange­ly miss­ing). How help­ful they were to pro­tect Ger­ma­nies Gold in it’s vul­ner­a­ble state after the end of the war. Here is an inter­est­ing pic­ture of US Sol­diers from 1947 in Ger­many get­ting ready to export that wealth — for safe keep­ing (for the record — Gen­er­al Pat­ton Third Army unit — 1947):

US Soldier in 1947 removing German Gold Bullion Reserves to America

US Sol­dier in 1947 remov­ing Ger­man Gold Bul­lion Reserves to Amer­i­ca

Res­o­lu­tion — It seems that the Bun­des­bank (prob­a­bly not the Ger­man peo­ple) are quite hap­py to work out the details off-line over time and deter­mine what to do next :

The dis­cus­sions have been fruit­ful and the Fed­er­al Reserve has expressed a com­mit­ment to work with the Bun­des­bank to explore ways to address the audit obser­va­tions, con­sis­tent with its own secu­ri­ty and con­trol process­es and logis­ti­cal con­straints.”

It also appears that they have lots of trust in their US com­pa­tri­ots:

had no doubts about our Amer­i­can part­ners, at no point in time. For us it’s a ques­tion of reg­u­lar­i­ty and how we’ll pro­ceed in the future”

Why?

With this much mon­ey at stake — how would you accept any­thing oth­er than an audit? The gold have nev­er been audit­ed once since it was moved to US. No won­der the Ger­man peo­ple are furi­ous about this — I know I would be.

In the mean­time the Bun­des­bank has come up with an incred­i­bly under whelm­ing solu­tion — repa­tri­ate 50 tonnes of their Gold every year for three year. Oh, so that would be a grand total of 150 tonnes…Leaving let’s see…2,000 — 150 is about 1,850 tonnes unex­am­ined, unau­dit­ed, and unproven. There is some­thing fishy going on here.

If you believe that the big guys (Fed­er­al Reserve, BoE, etc) real­ly do not have any gold left any­more, and let’s sup­pose fur­ther that the Bun­des­bank either know or sus­pect this, then maybe this is a “get me off the hook” move. This would give the Fed­er­al Reserve time to buy Gold on the open mar­ket and ship it back to Ger­many — a rea­son­able amount. The illu­sion is main­tained that all is well. I sus­pect this is what is going to hap­pen. Maybe even the Audit court, and the Ger­man Bud­get Com­mit­tee know this too?

Ques­tions to pon­der:
* If the gold real­ly is gone — where is it now?
* If the gold is gone was this done with or with­out the knowledge/permission on the Bun­des­bank?
* Which coun­tries will be next to move on this *touchy* sub­ject?

One oth­er thing — A sim­i­lar move has been request­ed in Switzer­land to repa­tri­ate their off-shore gold reserves. This will become very inter­est­ing because in Switzer­land the peo­ple have the right to a ref­er­en­dum (just need 50,000 peti­tion) on any top­ic they so wish.…Things should be hot­ting up soon…

Stay tuned, buy phys­i­cal gold and sil­ver, store it wise­ly, and start think­ing hard and deep, and take action…More about that soon

Ref­er­ences:
* http://en.wikipedia.org/wiki/Gold_reserve
* http://www.spiegel.de/wirtschaft/soziales/rechnungshof-fordert-bundesbank-zur-inventur-der-goldreserven-auf-a-862719.html
* http://www.businessweek.com/news/2012–10-25/new-york-fed-to-help-bundesbank-meet-gold-audit-requirements

© Copy­right MMXII RagingGoldenBull.com