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JPM Eligible Gold Plummets By 66% In One Day To Just Over 1 Tonne, Total Gold At Fresh All Time Low
Zero Hedge ^ | 19 July, 2013 | Tyler Durden

Posted on 07/19/2013 2:15:15 PM PDT by Errant

For over a month, JPMorgan managed to mysteriously avoid matching up the gold held in its (world's largest) vault with the Comex delivery notice update. However, as of today, that particular can will be kicked no more. Starting yesterday, JPM reported that just under 12,000 ounces of Eligible gold (the same Registered gold that two days earlier saw its warrants detached and convert to eligible) were withdrawn from its warehouse 100 feet below CMP 1. But it was today's move that was the kicker, as a whopping 90,311 ounces of eligible gold were withdrawn, accounting for a massive 66% of the firm's entire inventory of non-Registered gold, and leaving a token 46K ounces, or a little over 1 tonne in JPM's possession.

Needless to say, today's massive move which increasingly puts JPM's gold holdings in the danger zone vis-a-vis future delivery notices which just refuse to stop, has pushed total JPM vault gold to a new all time low of just 436k ounces, or a little under 14k tonnes with just 12 tonnes, or 390k ounces, of Registered gold left and rapidly draining. And to think that two years ago around this time JPM had over 3 million ounces of gold in its possession.

Finally, those who believe there is a connection between the ongoing run on JPM's vault gold, the suppressed price of the metal, the redemption of Bundesbank gold, and the fact that 3M GOFO has now been negative for 10 straight days or the longest period in history it has been below zero, and indicating an unprecedented gold collateral shortage, you are correct.

Finally, putting it all in context, this is what 1 ton of gold looks like in the real world courtesy of Demonocracy:



TOPICS: Business/Economy; Chit/Chat; Conspiracy
KEYWORDS: collapse; economy; gold; goldgraphs; goldprice; jpmmorgan; physicalgold; shtf
Navigation: use the links below to view more comments.
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1 posted on 07/19/2013 2:15:15 PM PDT by Errant
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To: Errant

Coule be a Reflection of all the Gold coated Tungsten Bars that exist....


2 posted on 07/19/2013 2:18:10 PM PDT by GraceG
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To: Errant

YOU CAN’T EAT GOLD. THERE WILL BE TIMES WHEN GOLD CANNOT EVEN BUY FOOD. THOSE TIMES ARE A’ COMING.


3 posted on 07/19/2013 2:19:38 PM PDT by SatinDoll (NATURAL BORN CITIZEN: BORN IN THE USA OFCITIZEN PARENTS)
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To: GraceG
I pity the fools!


4 posted on 07/19/2013 2:21:16 PM PDT by Errant
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To: SatinDoll

http://www.biblegateway.com/passage/?search=Ezekiel+7:19&version=KJV

Ezekiel 7:19

King James Version (KJV)

19 They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the Lord: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity.


5 posted on 07/19/2013 2:22:13 PM PDT by F15Eagle (1Jn4:15;5:4-5,11-13;Mt27:50-54;Mk15:33-34;Jn3:17-18,6:69,11:25,14:6,20:31;Ro10:8-11;1Tm2:5-6;Ti3:4-7)
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To: Errant

In the charts, note that the precipitous drops coincide with zero’s reelection.


6 posted on 07/19/2013 2:22:43 PM PDT by matt1234 (The NRA: Redefining "Too big to fail.")
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To: matt1234
Wow!, Sure does!!

Reckon the well to do knew something most others didn't?

7 posted on 07/19/2013 2:26:06 PM PDT by Errant
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To: SatinDoll

I’m afraid you’re likely right about those times a’ coming...


8 posted on 07/19/2013 2:27:49 PM PDT by Errant
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To: Errant

they’ve been doing what they can to duress the price... unfortunately, the demand far outstrips their supply.

expect gold to start heading to $2000


9 posted on 07/19/2013 2:35:57 PM PDT by sten (fighting tyranny never goes out of style)
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To: Errant; Nachum

“DHS Insider – Watch The Metals, When They Dip Things Are About To Happen – The Next Economic Shock Was Coming And The Metals Would Be Taken Down In Advance Of That Event. Are We Getting Close?”
April 12th, 2013

Read more at http://investmentwatchblog.com/dhs-insider-watch-the-metals-when-they-dip-things-are-about-to-happen-the-next-economic-shock-was-coming-and-the-metals-would-be-taken-down-in-advance-of-that-event-are-we-getting-close/#j34CmU7YRBtBVEX1.99

Mention of July was specifically made in this article.


10 posted on 07/19/2013 3:06:17 PM PDT by combat_boots (The Lion of Judah cometh. Hallelujah. Gloria Patri, Filio et Spiritui Sancto!)
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To: sten

expect gold to start heading to $2000...

Try $600. The world is in a deflationary spiral. Watched China lately?


11 posted on 07/19/2013 3:20:57 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: politicket

“Try $600. The world is in a deflationary spiral.”

Did Bernake shut down the printing presses?


12 posted on 07/19/2013 3:26:18 PM PDT by ScottfromNJ
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To: Errant

Mr. T did have a great physique. It’s easy to overlook that, but he’s really a classic perfect old school muscle man.


13 posted on 07/19/2013 3:31:58 PM PDT by Jack Black ( Whatever is left of American patriotism is now identical with counter-revolution.)
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To: politicket

$2000 in current dollar valuation

if gold drops to $600, gas would drop from $3.80 to $1.90. I’m pretty sure that’s not happening any time soon


14 posted on 07/19/2013 3:32:44 PM PDT by sten (fighting tyranny never goes out of style)
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To: politicket
Try $600. The world is in a deflationary spiral. Watched China lately?

There can be no "deflationary spiral" till the world's central banks stop increasing the money supply. China has not -- what are you talking about?

15 posted on 07/19/2013 3:36:15 PM PDT by BfloGuy (The imposition of a duty on the importation of a commodity burdens the consumers. --Ludwig Von Mises)
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To: Jack Black
Saw him in person once. He seemed to be the type that got along with most everyone. He actually did assume a prone position and kiss ground, lol, after getting out of his twin commander.

Plus, from the looks of it, he now owns more gold than JPM!

16 posted on 07/19/2013 3:36:29 PM PDT by Errant
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To: combat_boots; All
I've been expecting a drop before the economy gets even worse. Not sure exactly how it will play out. That's why I believe in diversification. To that end, IMO, it's wise to own some PMs.

For the deflation theorists, this is a must listen interview of Harry Dent on Trunews.com last week: http://www.trunews.com/Audio/7_16_13_tuesday_trunews2.mp3

At then end, he even mentions $200. I own at least one of his books. Not too sure how accurate he will be this time. Everyone is predicting trouble ahead at least. So much depends upon what the central banks do. Keep in mind that the FED is in reality a private group of banks. It's in their ultimate interest to protect the only product they have (control of the money supply), regardless of pressure progressives put on them to continue the spending.

I think we're about to find out very soon who wins and who looses - that'll be most of us here probably.

17 posted on 07/19/2013 3:52:50 PM PDT by Errant
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To: SatinDoll
If food is ever so scarce that you can't buy it with gold, what in he k do you think you COULD buy it with? Worthless paper currency?

Anyone who sinks enormous amounts of savings to buy years' and years' worth of perishing food is not making a good investment. It only lasts so long....

18 posted on 07/19/2013 4:05:09 PM PDT by JustTheTruth
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To: politicket

Supply and demand for everything ultimately determines relative value. If necessary to prop up deflating bank asset values, central banks will print endless supplies of paper money whereas gold, silver, diamonds and other hard assets will remain scarce and tend to far out-value what streams from the printing presses over time. Every fiat currency over thousands of years has failed. The economic laws have not been repealed as digital fiat has replaced paper fiat.


19 posted on 07/19/2013 4:12:01 PM PDT by JustTheTruth
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To: combat_boots

That’s just plumb damn scary. Because it is happening.


20 posted on 07/19/2013 4:22:14 PM PDT by VerySadAmerican (If you vote for evil because you can't see evil, you ARE evil!)
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To: politicket

China continues to increase oil consumption, while we use less oil. Oil has been running over $108 per barrel.


21 posted on 07/19/2013 5:05:28 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of rotten politics smelled around the planet.)
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To: Errant
Reckon the well to do knew something most others didn't?

Yes, they did. They knew it was time to take physical possession and have been hammering redemptions ever since. Why do you think the Bundesbank was told that we would give them their gold over a period of years? I'm still convinced that a tunnel exists from the JPM vault leading to the NY Fed across the street.

22 posted on 07/19/2013 5:53:25 PM PDT by RobertClark (My shrink just killed himself - he blamed me in his note!)
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To: JustTheTruth

I’ve been reading a book, When Money Dies, written in 1975. It isn’t just about the economic collapse of the Wiemar Republic, but includes Hungary and Austria as well. If you can find a copy, and there is a more recent reprint available, you should read it. Paying billions of Marks for a loaf of bread says a very great deal about the wisdom having priorities straight.

White rice lasts for a very long time when properly stored. Beans, when properly stored, too, lasts a long time. Using these two items together boosts the available protein your body will absorb, but better yet they are a terrific base for adding seasonal vegetables, and meat, fish, and poultry in small amounts. Buying canned beef, chicken, fish, and ham (the last from Denmark is available at WalMart) can last longer than their ‘Use By’ date.

Having room for a vegetable garden makes sense, and a few hens (no rooster!) for eggs does too! Along with a hunting license and a fishing license, you’ll rarely be hungry and there are many places in America where you would thrive.

In France they use “intensive horticultural techniques” because house lots are small and every inch counts. Using the former flower and decorative planting beds is common as is composting for enriching the soil.

If you want to know more just mail me.


23 posted on 07/19/2013 6:36:15 PM PDT by SatinDoll (NATURAL BORN CITIZEN: BORN IN THE USA OFCITIZEN PARENTS)
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To: JustTheTruth

My father was eating C-Rations during the Korean War that were can twenty years prior...he lived. I had C-Rations in 1980 that were canned in the early sixties; I am doing fine. It depends what you buy and how it is stored. Rice last damn near an eternity if it is properly stored. I’ll let the preppers continue, but expecting food to last ten or fifteen years is not unreasonable.


24 posted on 07/19/2013 6:37:28 PM PDT by MSF BU (n)
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To: ScottfromNJ

“Did Bernake shut down the printing presses?”

The Fed doesn’t have a printing press. Exchanging treasuries for currency does not increase the money supply. Creating new debt does. The Fed does not sign promissory notes.

Watch China. Western Europe is already in deflation. Japan has been in deflation for decades. The US is in deflation that is being masked by the Federal government creating new debt as fast as it can - mainly through student loans.

Precious metals are a commodity - which generally fall significantly during deflation. Oil is the exception, due to unrest in various parts of the world.


25 posted on 07/19/2013 10:08:09 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: sten
if gold drops to $600, gas would drop from $3.80 to $1.90. I’m pretty sure that’s not happening any time soon

That's assuming oil isn't being impacted by civil unrest around the globe - specifically in Egypt right now.

However, you're correct that oil would drop in a normal deflationary environment that is free from the threat of war.

26 posted on 07/19/2013 10:35:51 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: BfloGuy
There can be no "deflationary spiral" till the world's central banks stop increasing the money supply. China has not -- what are you talking about?

The world's central bankers are not increasing the money supply - quite the opposite. That's why Western Europe keeps talking about having Eurobonds that act similarly to our Federal treasury notes.

The US is able to create vast amounts of new debt because of our Federal system of government. Western Europe has no such bailout luxury.

China is seeing their outstanding loans begin to decrease. This means that their money supply is decreasing - deflationary.

27 posted on 07/19/2013 10:39:37 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: JustTheTruth
If necessary to prop up deflating bank asset values, central banks will print endless supplies of paper money whereas gold, silver, diamonds and other hard assets will remain scarce and tend to far out-value what streams from the printing presses over time.

Central banks do not print money. They issue currency as a liability against assets of Treasury securities that they obtain from primary dealers. There is no "new" money created in this transaction.

New money is created any time a promissory note is signed. Shrinking debt and bankruptcy cause a decrease in the money supply - since all money is debt based.

People still think of precious metals the same as when money was not debt based - prior to 1600 in Europe.

There is nothing wrong with "fiat" currency - as long as the currency represents labor that has already been completed...instead of a claim on the future labor of others.

28 posted on 07/19/2013 10:44:50 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: familyop
China continues to increase oil consumption, while we use less oil. Oil has been running over $108 per barrel.

China's economy is slowing. They depend mainly on trade with Western Europe and the United States for survival. They're entering deflation along with the rest of us.

China will need to seek new trade with India and Brazil as part of the BRIC coalition. However, their products are too expensive for these countries, so China will need to devalue their currency to make this happen. Cheap Chinese junk will become even cheaper Chinese junk for us.

29 posted on 07/19/2013 10:47:57 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: politicket
Is that you Ben? lol

Central banks do not print money. They issue currency as a liability against assets of Treasury securities that they obtain from primary dealers. There is no "new" money created in this transaction.

This is partially true. Instead of printing "money", numbers are keyed into a computer that sends an encrypted data stream connected to another computer at a bank someplace, allowing that computer's accounting program to adjust the balance of available funds on hand for issue.

What are the assets these funds were issued against? Worthless government securities, themselves issued against previously issued worthless government securities never be repaid?

Just one example:

" During a 2½ year period starting at the end of 2007, the Federal Reserve provided more than $16 trillion in secret bailouts to banks and other companies around the world, according to a government audit of some of the U.S. central bank’s operations.

Fed Audit: Trillions For Foreign Banks, Conflicts of Interest

Others:
Wall Street Aristocracy Got $1.2 Trillion in Secret Loans
Government Says No to Helping States and Main Street, While Continuing to Throw Trillions at the Giant Banks

You write: "There is nothing wrong with "fiat" currency - as long as the currency represents labor that has already been completed...instead of a claim on the future labor of others."

Do the loans the Fed has made above meet that criteria? Has there ever been a fiat currency in the history of mankind that did not eventually become worthless? Look at this chart below of how much the dollar has depreciated since the Fed was formed at a secret meeting on Jekyll Island.

Do you really want to put ALL of your eggs in a basket guarded by these guys below? Speaking of that "basket", it's one so messed up, or messed with, it has NEVER allowed outside auditors to examine it.

Just sayin'...

30 posted on 07/20/2013 7:07:09 AM PDT by Errant
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To: familyop; JustTheTruth; BfloGuy; sten; ScottfromNJ

#30


31 posted on 07/20/2013 7:09:36 AM PDT by Errant
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To: politicket

I’m not sure I get your point when you write: “Exchanging treasuries for currency does not increase the money supply. Creating new debt does.”

Ok,but the Treasuries are new debt, aren’t they? And at this point the vast majority of them, especially the longer term ones, are bought by the Fed. So the Fed is enabling the creation of vast amounts of new debt. Not exactly a printing press, ok. But an effective currency debasement machine, no?


32 posted on 07/20/2013 10:52:11 AM PDT by Jack Black ( Whatever is left of American patriotism is now identical with counter-revolution.)
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To: Jack Black
I’m not sure I get your point when you write: “Exchanging treasuries for currency does not increase the money supply. Creating new debt does.”

I'm saying that people confuse "money" and "currency". They are not the same - even though most economic courses treat them as such.

In a debt-based monetary system, "money" is the total amount of outstanding physical and verbal promissory notes. Paying off debt causes a decrease in the "money" supply. Bankruptcy causes a decrease also, since the promissory note becomes void of future repayment. This is why a debt-based society must always keep creating new debt to replace old debt - or deflation happens. Vast amounts of new debt being created can create inflation. That's why the Fed always sets a nominal 2% desired "monetary" inflation rate. Inflation is really bad, but deflation is pure evil.

By the way. I'm not sticking up for the Fed. They are the personification of evil - and intentionally brought on the monetary crisis that began in 2008 by purposefully withholding debt creation. This is why the US government has been on an absolute tear to create new debt - since the major banks won't. This is also why both Demon-rats and Republicans allow it to happen, while the Republicans give lip service to debt reduction - which won't - and can't happen without an enormous deflationary spiral. We're stuck, and the primary dealer banks are causing it.

Currency is simply a physical (or electronic) means of completing trade. we use currency instead of money - mainly so that people never learn what money truly is. Things make a lot of sense if one can correctly separate the two ideas in their mind.

Ok,but the Treasuries are new debt, aren’t they?

Maybe...A lot of Treasury auctions are used to roll over existing Treasuries that are maturing. This does not increase the "money" (debt) supply. Any Treasuries that are sold as "new" debt do indeed increase the "money" supply.

And at this point the vast majority of them, especially the longer term ones, are bought by the Fed.

Many of them are. However, replacing Treasuries with currency do not increase the "money" supply - since no new debt is being created through the action. Also, the physical currency supply is not really increasing much either, since the Fed is just electronically crediting the Primary Dealers (who they buy the Treasuries from) accounts at the Fed. The Primary Dealers are just sitting on asset and doing nothing with it (except earning a tidy 3% for their "troubles"). You can easily see this by looking at the H.4.1 report that the Fed releases each week. Do a Google search for it.

So the Fed is enabling the creation of vast amounts of new debt. No, they're not through Treasury purchases. That creates no new debt al all. They do allow the US government to get further in hock by holding Treasury auctions periodically. Any "new" debt created out of these auctions (that isn't used to roll over existing debt) does increase the money supply - but not fast enough to account for the debt that is currently being destroyed through bankruptcy and payoff.

Not exactly a printing press, ok. But an effective currency debasement machine, no?

It's not a printing press at all. And there really isn't a debasement of currency, since we still have a problem (like the rest of the world) where our outstanding debt is threatening to go negative (reduction in the money supply). Take a look at the Fed's G.19 report (Google for it). You can see that the only real new debt creation that the US government has been effective at is student loans. There are now close to $1 trillion dollars of outstanding student loans. Stupid kids...these loans can't be released through bankruptcy. The average 2013 college graduate has around $35K in outstanding loans. That's average. Some have none, many have a lot more.

Sorry for the novel, but I try to teach people how to understand debt-based money, and why deflation is so dangerous.

The bottom line is that the large banks are deliberately causing this across the world (including China). The last time this happened at this level was the Great Depression - and the banks played both sided in the ensuing world war, becoming massively wealthy in the process. Bullets and bombs are expensive.

33 posted on 07/20/2013 1:14:49 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: jiggyboy; PA Engineer; blam; TigerLikesRooster; Cheap_Hessian; CJinVA; Jet Jaguar; ...

Goldbug ping.


34 posted on 07/20/2013 1:19:38 PM PDT by Jet Jaguar
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To: RobertClark

“I’m still convinced that a tunnel exists from the JPM vault leading to the NY Fed across the street.”

Probably true. Those rotten old downtown buildings have lots of tunnels and passageways. Anyway... JPM is the Fed’s designated senior agent in gold price suppression


35 posted on 07/20/2013 1:27:41 PM PDT by dennisw (The first principle is to find out who you are then you can achieve anything -- Buddhist monk)
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To: Errant
Is that you Ben? lol

Ben is an idiot. No, it's not him.

This is partially true. Instead of printing "money", numbers are keyed into a computer that sends an encrypted data stream connected to another computer at a bank someplace, allowing that computer's accounting program to adjust the balance of available funds on hand for issue.

Those numbers that are keyed into a computer do nothing to increase the money supply - read my previous posts on this thread. Also, do a search for - and read - the Fed's H.4.1 report The Primary Dealers are sitting on the electronic funds generated from the Treasury purchases. Now if they took those funds and began issuing loans agains them then I would agree - big problem. That's not what they're after though. They want deflation - where existing debt is harder to pay off, instead of inflation - where existing debt becomes much easier to pay off.

What are the assets these funds were issued against? Worthless government securities, themselves issued against previously issued worthless government securities never be repaid?

The Fed's H.4.1 report shows that the assets those funds were issued against are primarily US Treasury securities - along with MBS securities - and recently some foreign bonds, so that Western Europe doesn't implode too quickly into deflation. The banks want Europe there, just not through an uncontrolled crash.

US government securities are not worthless at all. They are a promise against your future labor - and the future labor of the rest of us. They are only as worthless as the result of your upcoming labor. :-) There are a lot of US Treasuries auctioned to roll over existing debt that is maturing. However, most of these securities are held by Primary Dealers (largest banks), and not the Fed.

Do the loans the Fed has made above meet that criteria? Has there ever been a fiat currency in the history of mankind that did not eventually become worthless? Look at this chart below of how much the dollar has depreciated since the Fed was formed at a secret meeting on Jekyll Island.

All loans are against the future labor of the entity signing the promissory note (or the future labor of others that the signee may control). Loans create economic slaves. That's why are debt-based monetary supply is so evil. It only exists through economic slavery (much of it done willingly - some implicitly, like US Treasuries).

A debt-based monetary supply must - necessarily - operate through the concept of gradual monetary inflation. Otherwise, monetary deflation can occur which will more quickly collapse a nation. Monetary inflation works on an exponential curve, so there will always come a point where the "knee" of the curve is hit - and the very real issue of hyperinflation becomes evident. That's why the large banks that control the economies of the world (through the central banks) will periodically crash debt creation. They typically do it after a short period of massive new debt creation (like the roaring 20's, and the early 2000's). This makes it so that they can grab the underlying assets when large numbers of entities go bankrupt - and then resell at a later time for large profit.

The world bankers are currently crashing debt. They are also creating instability in many regions of the world - which I believe will lead to war - which the bankers will fund both sides of (just as in previous wars in modern history).

After the world money supply has been sufficiently crashed (due to the debt exponential curve) , then things will start over - with gradual inflation and continued debt slaves...

"Fiat" currency is not evil. It has been used quite successfully in many parts of history. Look up "tally sticks" that were used in England prior to debt-based money being forced on them by William and Mary in the 1590's.

The important facet of "money" isn't that it be gold and/or silver. It's that "money" should only be created through labor that has been completed - not created through the promise of future labor. The large banks have forced the "Wimpy" economy on everyone - "I will gladly pay you tomorrow for the hamburger that I eat today."

No - I am not Ben. I passionately hate debt-base money...

36 posted on 07/20/2013 1:38:32 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: politicket

The gold market is extremely small compared to others. Maybe 5 billion or so. In a deflationary panic money can rush into it and send gold into orbit...DESPITE the deflation you are talking about. When people fear bank runs (on bullshit digitally notated US dollars) and defaults then gold is a safe haven. Perhaps not as good as FRNs or Euros under your mattress but in that league


37 posted on 07/20/2013 1:46:01 PM PDT by dennisw (The first principle is to find out who you are then you can achieve anything -- Buddhist monk)
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To: Errant
P.S.: I've been attempting to teach gold bugs since 2008 that gold and silver are simply commodities in a debt-based monetary system, and that they will not "take off for the moon". However, many don't understand fundamental economics, and keep buying the "falling knife" as it goes lower. I did purchase silver at $17 when emotions were running high - and sold everything at $40. Silver is now back to the 19's (and it's only there because of emotion).

Gold has dropped $500 dollars over the past number of months. It's not going to make anyone rich. Yes, it will "never be worth $0 - but you can can say the same thing about any commodity.

Remember when people used to clamor about how the US Dollar will drop to the level of toilet paper? Have you looked at it recently? The US Dollar Index is over 82 - and is only that low since it is weighted against the currencies of other nations - many of whom are in a worse deflationary situation than we are.

Look for the US Dollar Index to keep rising (into the 90's) - and for gold and silver to keep dropping (even though there will be a few minor rallies due to emotion).

One can either acknowledge deflation, or face it unprepared - not a good idea.

38 posted on 07/20/2013 1:54:02 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: politicket
Thank you for a well reasoned reply.

I just want to make a few, quick observations. First, I can't believe anyone could be so ugly to another as this: They are only as worthless as the result of your upcoming labor. :-) That's just downright nasty! lol

Ben is an idiot.

And you know this how??? :)

We agree on quite a lot. I think we only completely disagree on "Fiat Currency." Frankly, IMO, it IS evil. Its only redeeming quality is its utility, of which today, there are currencies (i.e., crypto-currencies) that offer even greater utility while having similar qualities of gold in relation to manipulation.

The important facet of "money" isn't that it be gold and/or silver. It's that "money" should only be created through labor that has been completed - not created through the promise of future labor.

I believe we agree here. Almost anything else, besides that which is created out thin air (i.e., fiat) can meet those needs, and ARE created through labor or discovery. Almost anything else is a better vessel for containing/preserving value, be that an actual person's labor, or in exchange for something else of value. I'm not against the idea of labor as a measure of value. Actually, I would consider it as a basic element in determining value. I'm not against debt, if secured by something of value, or threat of bodily injury. lol

I certainly acknowledge deflation. Been expecting it for sometime now as a major indication of serious economic problems just below the horizon, and headed out way. That said, I also look for continued QE, forced upon us by an out of control government. What we don't know is how TPTB will react, or handle this. Like you, I think war is a possibility.

Where I disagree with you - maybe - is holding gold through ups and downs. As someone gone Galt, I really don't own it for trading purposes. I have it for insurance - likewise food, protection, tools, and implements of production of necessities.

There are better means of exchange besides fiat. Means of exchange much less able to be manipulated by a few powerful who like most all humans, are unable to resist the temptations to cheat, or to take advantage of those blind to their machinations. Heck, they're even open about it, as the king of fiat, Mayer Amschel Rothschild infamously proclaimed, "Give me control of a nation's money and I care not who makes the laws."

Biblical Scripture even makes a distinction between "money" and "gold". The great danger in "fiat money", as we're seeing, is the ease at which it can be manipulated by a few, and by that virtue the manipulation or control of the many... currency proclaimed, "

39 posted on 07/20/2013 3:14:31 PM PDT by Errant
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To: politicket
Wow, you can readily tell when the "Age of Obama" began in this chart.

Source: http://www.marketoracle.co.uk/Article41377.html

40 posted on 07/20/2013 3:52:56 PM PDT by Errant
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To: politicket
China is seeing their outstanding loans begin to decrease. This means that their money supply is decreasing - deflationary.

Ah, but that isn't for lack of trying. The Bank of China is still cranking up the [figurative] printing presses, but the Chinese people just don't want to borrow. Ditto the Europeans -- why borrow when there's such a low prospect of profits?.

Nonetheless, just as in the U.S., where business won't borrow, either, the inflation will show up in assets: stock market, land, housing, art, etc..

We're a ways off from deflation. And I say that with disappointment. Deflation is a good thing -- it means the value of the currency is rising.

41 posted on 07/20/2013 4:34:59 PM PDT by BfloGuy (The imposition of a duty on the importation of a commodity burdens the consumers. --Ludwig Von Mises)
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To: Errant
Wow, you can readily tell when the "Age of Obama" began in this chart.

The following is not meant to defend Obama. He is a horrible president...

The Fed's ZIRP policies are not dictated by the US government. Instead, many of the government's actions are caused by the FED.

Also, don't forget that it was President Bush and the Republicans who partnered with the Demon-rats and got the first TARP bill passed.

What if you were president of the US and knew that you had two choices:
1) Keep debt levels somewhat low and see the nation go through a Greater Depression on your watch, or
2) Start creating new debt as fast as possible through all means at your disposal (after all, the US government is somewhat limited in its ability to create new debt, since it has to fund all loans that it originates). This would create the illusion that things are getting better, while making the entire citizenry even more debt slaves to the largest international banks.

Almost all politicians, Republic and Demon-rat alike will choose option 2. Bush did. Obama did. Remember "Cash for Clunkers"? Do you see all of the federally-subsidized road construction projects going on all over the US right now? How about all of the student loans that are being distributed like candy?

If I was president I would immediately seek to abolish the Fed, and have the currency of the US handled by the US Treasury - and not be debt-based. Currency would only be paid out and circulated based on the completion of underlying labor.

Of course, the international banks could respond to that by immediately shutting down their financial clearing houses and refusing to process any transactions. This would collapse the world economy overnight.

So...how much economic power does the president really have? The answer is: not much. The bankers control the game, and can take their ball and go home if we all refuse to play by their rules. That's a pretty bad place to be. We stopped being the "Land of the free" a long, long time ago - when we adopted debt-based currency.

42 posted on 07/20/2013 5:54:42 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: Errant

Thanks. Now, have a look at some nations with large populations per square miles that exist mostly on agricultural production and energy production without much manufacturing. Though some of those nations are communist/fascist, they don’t get enough revenues from those two sectors to support big governments. And the people of those nations live in squalor.

See where we’re going without a large manufacturing base? I don’t think many Americans are ready for that, even if the whole trip is a slow one. Most of those who appear to be ready for it are moving third world hordes into our country while complaining about overpopulation. We need new leadership, and the other end of the default process might be the way.


43 posted on 07/20/2013 5:55:52 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of rotten politics smelled around the planet.)
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To: BfloGuy
Good thoughts, but I disagree with many of them...

Ah, but that isn't for lack of trying. The Bank of China is still cranking up the [figurative] printing presses, but the Chinese people just don't want to borrow. Ditto the Europeans -- why borrow when there's such a low prospect of profits?.

There is always a market for people wanting to go into debt. The Bank of China does not issue new debt (and they don't print money) - they issue currency against Treasury securities.

The Europeans are in a very bad way. They're all stuck on the Euro - and yet there is no way to issue "federal level" Eurozone debt. They can only create new debt on an individual nation basis - and they don't trust each other to all work together in the seeking of that new debt. That's why we hear so much about the desire to create a "Eurobond" that simulates what we have with our Federal government issuing debt that promises the future labor of the individual citizens of the various states.

Nonetheless, just as in the U.S., where business won't borrow, either, the inflation will show up in assets: stock market, land, housing, art, etc..

How will this inflation produce itself? New debt issuance is struggling to stay ahead of the combination of debt repayment and bankruptcies. Monetary inflation is only possible through massive amounts of new debt. What happens when this stops? The equities market crashes and the US dollar index skyrockets - while gold and silver fall through the floor.

Many businesses aren't borrowing because they're scared and many of the rest can't qualify anymore.

We're a ways off from deflation. And I say that with disappointment. Deflation is a good thing -- it means the value of the currency is rising.

No, deflation is already here - being hidden by Federal debt at the level of 2 Trillion per year (even though they have instituted fancy bookkeeping in the last few years to pretend its not that high).

Deflation is a very, very bad thing. Buyers stop purchasing - knowing that the price on a widget will most likely drop some more in the coming days. Those with existing debt get slammed, as job losses mount, pay decreases, and work weeks shrink. They become trapped. Bankruptcies only add to the problem, by decreasing the money supply further. Everything feeds on itself - which is why it's known as a deflationary spiral. Japan has been trying to get out of theirs for 25 years...

Rising currency during deflation just means that the money supply is shrinking against a set of goods and services - making each unit of currency possibly purchase more. However, their can be segments of price inflation, as companies get to the point where they have cut everything to the bone - and can either raise prices in one last attempt at solvency - or go bankrupt.

44 posted on 07/20/2013 8:54:28 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: politicket

You are talking in circles. Central Banks DO create money. Not worth arguing that.


45 posted on 07/20/2013 9:40:56 PM PDT by JustTheTruth
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To: JustTheTruth
You are talking in circles. Central Banks DO create money. Not worth arguing that.

You're just plain wrong. Tell me how the Fed does that - and please be specific. You might want to utilize the H.4.1 report in your response, since it contains their weekly balance sheet.

46 posted on 07/20/2013 9:46:46 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: JustTheTruth

P.S.: I’d also like to hear specifically how I’m talking in “circles”? I think my posts have been pretty straight to the point.


47 posted on 07/20/2013 9:47:55 PM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: Errant
Related FR thread: BREAKING: Massive Fire Reported In The Basement At The JP Morgan Gold Warehouse . . .(truncated)
48 posted on 07/21/2013 11:33:29 AM PDT by matt1234 (The NRA: Redefining "Too big to fail.")
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To: MSF BU
but expecting food to last ten or fifteen years is not unreasonable.

You might need it....

...Obama issues an Executive Order to the Sun...

....to increase it's magnetic field....

and make a good crop of sunspots before elections in 2016....

(PhysOrg.com) -- Sunspot formation is triggered by a magnetic field, which scientists say is steadily declining. They predict that by 2016 there may be no remaining sunspots, and the sun may stay spotless for several decades.

The last time the sunspots disappeared altogether was in the 17th and 18th century, and coincided with a lengthy cool period on the planet known as the Little Ice Age....and lasted 400 years.

Good luck surviving with no electricity and GE modified seeds.

Read more at: http://phys.org/news203746768.html#jCp

49 posted on 07/21/2013 1:41:01 PM PDT by spokeshave
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To: politicket
There is always a market for people wanting to go into debt.

If the interest rate is low enough, yes.

The Bank of China does not issue new debt (and they don't print money) - they issue currency against Treasury securities.

Yes. That's called "making new money". Why the heck else would they do it?

That's why we hear so much about the desire to create a "Eurobond" that simulates what we have with our Federal government issuing debt that promises the future labor of the individual citizens of the various states.

When the bureaucrats in Brussels finally get the OK to issue Eurobonds, the last shreds of monetary discipline will be lost. That is, of course, what they want. The permission to print freely.

How will this inflation produce itself?

M1 has increased by 60% in the last three years. That's real money in circulation that the Fed has created or enabled to be created despite your insistence that it hasn't. Are you going to sit there and tell me that the stock markets aren't in a bubble?

Wish I'd had some real estate to sell you in 2007.

50 posted on 07/21/2013 2:52:33 PM PDT by BfloGuy (The imposition of a duty on the importation of a commodity burdens the consumers. --Ludwig Von Mises)
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