Key Resistance Broken To The Upside

Have you seen video out of Greece lately? They're throwing more molotov cocktails than rocks now. I would suspect the law enforcement that have these raining down on them would tell you it's already hitting the fan. The people appear to be very unhappy. I"ve heard the suicide rate is up 54% compared to last year and many more people are eating out of garbage cans.

 

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"What's our purpose in life. Why are we here?".....Calvin
"We're here to devour each other alive"......Hobbs

Isn't variety the spice of life? Anyway, how hard is it to add someone to your ignore list? Besides derailing posts, we're all guilty of hyjacking, going off topic, imposing superfluous repetition to gain the upper hand, rediculing others for their most simplistic mistakes and the list goes on and on....

I gotta stick up for Wolfe, he deserves some compassion for being Canadian.
And so I crashed this thread on his behalf.

And hey, what's with all those stupid smilies........off with their heads!!!!!

 

Your first point is an equivalency fallacy. The NY Times is dependant upon a huge amount of advertising from F500 firms, all of the TBTF banks, and advertising from Wall Street firms. As an example. It's the same reason that CNBC isn't impartial either. It should be noted, as an example, that in MF Global's bankruptcy filing, CNBC was listed as a creditor of over 1 million dollars.

On your second point I completely agree. I never said that Zerohedge was the end all of information. I listed it as an information source along with the advice for looking up Nigel Ferage's speeches on youtube. The two are unrelated yet one can start to put together the pieces when you notice they don't contradict each other. People can choose to stick their heads in the sand as I don't care, but I posted what I did for those that do.

My personal opinion is that the mainstream news media does a complete disservice to the American people. Their motivations are to protect their advertisers and parrot the elite without question lest they loose access. Their actions prove this to me. Of course everyone else will have to decide this for themselves and that first step involves acceptance of what I've said here.

 

Being a person who never (and I mean never) watches anything (and I mean anything) on CBS, NBC, ABC, Fox, CNBC, CNN, MSNBC, Fox News, etc., I would suggest if you want objective, informative news reporting, choose from the following:

PBS News Hour
The Daily Show
The Colbert Report.

With the last 2, you even get the added benefit of humor.

 

Gold would have to be revalued in an apocalyptic way to make it worth something substantially more than 1.3% of the Greek public debt, in "fiat" terms or not.

 

Its the second one that really has the most firm validity. Mining is very energy intensive, so long term the value of PM is a function of energy costs. In a way you can consider PM to be "condensed energy" in a way. Since this creates your incremental costs for production, long term it will provide you your base in pricing absent major market actions.

Not saying your first part is invalid sir, I am just pointing out why the second part was critical to understand.

 

This is incorrect, although a lot of people make the mistake. Inflation is a general increase in the price of goods and services in the economy caused by an increase in the supply of money that is greater than the increase in the demand for money. If the price of oil increased without a corresponding increase in the supply of money, then the prices of other goods and services [or the quantity purchased] would have to decrease. It's just math. In a free market where prices are permitted to increase and decrease with changes in supply and demand, some prices will always be rising and others will always be falling. This would be true even if there was a gold standard. In the case of oil, worldwide demand has been increasing faster than the growth in supply for a number of years. That's why the price of oil is up 7X in price over the past couple of decades. But this is not inflation. As Milton Friedman pointed out, inflation is always and everywhere a monetary event.

 

The eyeballs say otherwise. If the gold is worth so little relative to the debt, then the central banksters wouldn't want it or care about it. There are certainly other assets they could seize and sell off.

Don't listen to what they tell you. Watch what they do.

 

The debt is so large that even though the gold value is 1.3%, that's still over $6 billion, also more easily sold/converted than antiquities. Doesn't mean that gold is secretly the only thing bankers care about.

 

Plus, gold is fungible. Antiquities and other national heritage items are not. Sell off their stockpile of gold and its just a notation in history. Sell off the Parthenon and you have hundreds of years worth of terrorist and nationalistic fervor. The only real, portable, fungible asset the bankers would have would be any gold or other precious metal stores. Everything else is tied to Greece.

 

Think of it this way. Money is debt, and debt is money. For a gold standard to be reinstated in Greece then that gold would have to represent 100% of the debt which would be a 77 fold increase (100% / 1.3% ~ 77). This illustrates the disparity between tangible assets and currency backed by nothing. If we are to get back to having a currency backed by gold then gold will need to play catchup. This is all dependent upon "IF", but it seems like things are heading that direction, and powers are jockeying for position prior to that happening trying to get each other's gold. They got Libya's, now they want Greece's. I bet Italy's is in their sights too.

 

Or more realistically (i.e. not returning to an impossible gold standard), Greece leaves the Euro and devalues its own currency/weakens its credit for some time.

 

Gold is the currency of Central Bankers. Why would they be concerned about $s, Euros, Yen, Pounds? They can create as much of that as they want by pushing a few buttons on a keyboard. They have to have a basis for dealing with each other AND their respective governments. To them gold expressed in the confetti they print is meaningless. They care about physical control of it and that is why it has worth in today's world. Why do they hold gold for this purpose? Because it is the only physical asset defined by the laws in their countries that can be used as an asset on their balance sheets for their base money supply. This includes the United States.

Unfortunately for you and I, the governments we live under have forced us to use their confetti as the currency. When the Central Bankers debase this currency, as they are doing now for the simple purpose of protecting the banking system, then you and I lose. Our wealth gets transferred to them directly and indirectly to the governments. You can avoid this by holding the same monetary asset they hold which is gold. This is why gold continues to rise because the world is slowly (maybe quickly in some places) are moving some of their wealth into this asset, and furthermore, the central banks of the developing world are looking to substantially increase the amounts they hold.

Remember. In order for Federal Reserve to be successful, the USA had to forceably take the gold away from the people by threating jail and heavy fines for non compliance. Furthermore most gold ownership was made illegal for 40+ years. Long enough for an entire generation to forget about it.

 

Going to a gold standard isn't what Greece would do. Greece would go back to it's fiat currency, the drachma. But after reading my post previous to this, in order to pull that off, their central bank will need assets for its base money supply. Gold is one of the few assets the rest of the central banking world will accept for that. Right now, governmental paper from Greece is mostly worthless so they can't use that. Hence, if the bankers take Greece's gold it greatly hampers their ability to create a new fiat currency.

 

Just asking, but does every currency have nominal gold backing? Does the thai baht, Indian rupee, Uzbek whatever, etc all have gold nominally backing it up in a central bank? If not, why would Greece have to be different. None of the fiat currency is convertible to gold, so why does the gold matter?

 

It isn't necessary to have a fiat currency backed by anything. It only takes two requirements to make it work. (1) the government must spend the money into existence and make it the only legal currency with which to pay taxes. (2) the country must run an international balance of payments that is either balanced or in surplus. Given those conditions, neither gold nor Greek government bonds are required. I know people will immediately scream about hyperinflation, but it will not be inflationary if the new spending by the government is balanced by tax receipts once a suitable quantity of the new currency is in circulation.

 

Fiat currency is for peons like us. It's a meaningless creation by the private (not government) banking system. However the private banking system needs to trade amongst itself and it's governments. They use real, lawful money, for this. How could they possibly do this in their own fiat currency? Bank of England wants to buy Euros from the ECB. Do they print up pounds and hand them over? No. The ECB knows the worth of fiat currency. Instead, the BofE must trade real lawful assets.

Lawful monetary assets include gold, governmental treasury notes backed by the taxpayers, bank reserves (which reflect the wealth of the real economy) and for most every country except for the United States, the US debt valued in dollars. The problem with this scheme is that the $ is being debased at astounding levels, and this only leaves gold as the common denominator. This is why China, India, and other countries, which have developed huge wealth creation machines, are moving to acquire gold. For anyone else, like the people of greece, what ones can, have moved their money out of the Eurozone and into Swiss banks which then are happy to sell these people gold for their deposits.

In practice there is very little movement of physical gold. There are numerous large gold depositories around the world and the central bankers make ledger changes on which bank owns what gold. Greece's gold may not actually be in Greece which would be bad for them. This is why Hugo Chavez just recently removed most of their gold from London. They left a few tons behind for the purposes listed above.

 

Silver will continue to rise with a few dips here and there. 55-65.00 per oz by years end isn't out of the realm of possibility.

 

It only matters if they want a currency that doesn't require people have faith in it in order for it to succeed. If they want another monopoly money currency they can always go that route too.

 

Here is a homework assignment on the worth of gold to the central bank's of the world. Germany has the 2nd largest gold reserve in the world yet at the end of WWII they had none. So the assignment is this. How did they acquire 3000+ tons of gold. Second part, where is this gold located? Once you sort through that, use any source you like, it will confirm much of what I've said.

As mentioned above take what is said on the Internet by a grain of salt including my posts. They are worth the same as fiat money. But if you go do this work yourself, then there shouldn't be any questions.