Posted on 01/21/2013 8:19:53 PM PST by blam
Why Owning Gold Is Absolutely Essential – Charles Ponzi Meets Cassandra
Commodities / Gold and Silver 2013
Jan 21, 2013 - 05:12 PM
By: DeviantInvestor
One fine day on the streets of Washington D.C. the ghost of Charles Ponzi struck up a conversation with the ghost of Cassandra. He was a charming devil and assumed she would find him irresistible so he began with “It is ironic, I think, that I am a thief, while you see and speak the truth, but the people believe me and scorn you.”
Cassandra was not impressed and replied, “It is true. Most people would prefer a charming falsehood to the severity of truth. Since no one believes me anyway, you might as well tell me what scam you are currently promoting. I am truly interested. Please, do tell.”
Never one to miss an opportunity, Senator Ponzi replied, “I am finding great success with central banking, paper money, and ever-increasing debt. Frankly, they are an easy sell, and people come to me begging to be part of the scam. It has been quite profitable so far and looks to be good for a long time.”
Cassandra starred into the distance and saw a vision of something disturbing but decided not to mention it as nobody was interested in the truth anyway. Frankly, this was depressing, but she was used to the curse that prevented her visions from being understood. “And what else are you working on?”
Chairman Ponzi then smiled and said with obvious satisfaction, “Derivatives on European debt have proven to be a far better investment than expected. My friends and I have made $Billions on these pieces of paper. Actually I lost count – we might be into the $Trillions by now. Regardless, these and other derivatives have been huge winners.” He looked so smug that Cassandra wanted to scream the truth, but she merely smiled and fed his ego. “Yes, I see that it has been a grand success to date and that you have been very well compensated. What other schemes are you working?”
Representative Ponzi told her, “The deficit spending thing is doing well also. We take money that we collect in taxes plus we borrow a bunch more, and then we spend it on some really cool stuff, plus we buy votes and wars and a great retirement system for us, and then we lean on Wall Street, military contractors, oil companies, and Big Pharma for more contributions, and it works out really swell for my buddies and me. Every two years we do it again, but even bigger.
Cassandra looked away for a few moments to settle her stomach, saw another vision that involved a tsunami of dollar bills and some future unpleasantness (she preferred understatements) and could not stop herself from looking Representative Ponzi in the eye and saying, “You can’t spend money you don’t have without consequences. That scam cannot continue forever. Eventually disaster will strike.”
Representative Ponzi was supremely confident when he stated, “You are becoming rather tiresome, but I’ll give you a short lesson in politics. First, nobody wants to hear that this grand scheme will ever stop. Second, it has lasted a long time, so why shouldn’t it work for another 100 years? Third, nobody jumps off a moving gravy train. Fourth, people can’t see what they don’t want to see, so almost everyone will ignore your visions and the truth.”
Cassandra had heard it all before. She has seen empires rise and fall, huge armies that conquered all in their path but later collapsed, mighty kings who inspired people with impossible dreams and soon afterward all were destroyed, countries that spent themselves into insolvency, and worst, her beloved Troy had been destroyed by greed, arrogance, love of power, and massive delusions. Mr. Ponzi and others like him had worked their destructive magic countless times in the past, and she expected his kind would persist for many more years.
Cassandra was sick of the ghost of Charles Ponzi, regardless of what charming and smooth-talking form he took. She took a red pill and began to fade away as she called out to him, “It will only last a short while longer. Beware …” And then she was gone.
Mr. Ponzi was pleased to be finished with her annoying visions, briefly wondered what she had been about to say, and then popped a blue pill along with a healthy slug of whiskey and thought about other scams he could sell.
In the distance he thought he heard someone yelling, “Print more money, nothing can go wrong, it’s all good.” It sounded right to him, but it was nap time and he wanted to continue his dream of perpetual wealth without effort, cause without effect, and more for everyone, especially himself. It was a satisfying dream. He smiled contentedly, loving the illusions provided by the blue pill and feeling both important and invincible.
The ghost of Cassandra smiled from a distance and waited for “It came to pass” in the 21st century. She thought it would not be a long wait.
BTTT
Freebieism is winning converts.
OPM semionars are even back in force.
What it said on a Federal Reserve note, Series 1950B (emphasis mine).
If the FRN was redeemable in "lawful money", where does that leave FRNs?
You do NOT want to keep your gold in a safety deposit box, however. Way too easy for the government to get their hands on it there.
The physical gold you can successfully accumulate and hide is that much less money the government can steal from you.
That alone is worth the “investment”.
That's always possible, but there may be ways around that. For starters the Chinese and other producers will only take gold. So there will have to be middlemen to take your gold and give them gold and the middlemen can bribe the PTB. The gold can have nominal numismatic value and be exempt from the confiscation. Or the government may not be around by then. Or simply don't sell, just keep it as insurance.
“it will be confiscated”
Which is exactly the reason not to let the tyrants confiscate our defenses.
First, you don’t tell the feds you have the gold.
You hold the gold and your defenses for survival in the chaos that soon follows attempts at confiscation.
Your error is projecting all scenarios to the survival mode.
The present use of gold or of gold mining securities is not related to the end of the world. The use of gold is the same as real estate or other hard assets. It is a store of value that will weather the devaluation in the currency.
If one has no investments in anything, there is no need to consider gold
Yes, there are lots of scenarios. One of the most likely is that the rest of the world won’t take dollars but ask for gold instead. Even a very ragged global trade system would allow you to exchange your gold for imported goods, just takes a few middlemen who want a cut. Don’t expect full price however.
Then there is silver. Silver can be used to fill in the low level gaps.
However....
The personal level transactions are inconsequential when compared to the international trade settlements. That is what is at issue. The reason for the gold at the Federal Reserve in NYC is to facilitate trade. In days gone by when it was time to settle international accounts, say between America and Sweden or such, the gold would be removed from one country’s area of the vault and moved to the others. Appropriate entries would be made on ledgers and it would start all over again.
I don’t know to what extent this swapping gold from one room to another still occurs, but suspect it has lessened to the point it doesn’t really exist. What moves from place to place now are electrons. Digital zaps move instantly across oceans from one ledger to another. The number of the transactions can not really be measured. The ledgers are the store of wealth so long as the trade system functions.
The end solution may very well be an internationally accepted measure providing some measurable substance to the value the electrons. This measure will be used for trade, between nations and banks and perhaps corporations. Gold will likely be involved as a basis
Footnote......
The advent of Paypal for international trade settlements allows a customer in say Italy or Saudi Arabia to buy goods on Ebay from a Hong Kong vendor and avoid all the hassle of dealing with certified checks or letters of credit or such. Paypal provides electronic ledger for use on small scale transactions for the global masses.
You can check out what Milton Friedman had to say about gold and silver. You might already know it. That gold (coins) was used to settle between bankers and for commercial transactions. But for everyday transactions silver coins were used by the commoners.
Silver coin was circulated more and used more in America and has usually been the case historically. If gold takes more of a monetary role (gets monetized) so will silver and the gold/silver ratio will get lower. But when paper currencies look good and ascendant and gold looks pathetic, then silver gets de-monetized and its worth reverts back to industrial uses
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