Twisted Titan
21st July 2010, 08:56 AM
http://www.zerohedge.com/article/jim...-around-corner
Its going to be a very sad day for the indebted when they realize the endpoint.
In our system of money created by debt it is essential to the function and survivability of the system to have ever increasing inflation (expanding money supply) in order to service interest costs. Those who get the money first will profit as it loses value as it passes hands. Thus the government/banks reap the most benefit.
Unfortunately it is mathematically impossible for the game to continue forever and at some point deflation takes over. Money created by debt is inherently deflationary in nature due to the interest costs. The only possible exception is giving away debt free money which if done in sufficient quantities (if not then you just flatline forever like Japan) would undermine the value of the currency thus causing a hyper-inflationary collapse....basically a loss of faith in the money (and government backing it) such that no one recognizes it as a means of exchange.
This (inflation created by debt free money) would negate the central banks ability to influence the world as its "their" money (they create it) Vs. deflation in which their money becomes more valuable - wields more power and control.....and to top it off - you have to pay back the IOUs created with another IOU. Try getting your wages in gold....or paying your debts with gold....or purchasing at Walmart with gold. Its their world at this point. Do you think they are just going to give it up?
Based on this assumption I believe they will not hyper-inflate - i.e. give away free money. They may facilitate transactions with governments but only to maintain power and control over the masses.....and it will still be debt.
The endpoint is debt saturation at which point people can barely service the debt they have and cannot take on new debt. The debt saturation point is flexible and can move up or down based on interest rates (the cost of the debt).
We started to hit that point in the mid 90's and Greenspan created the sweeps program in which average checking account balances (demand deposits) are swept into a savings account and loaned out....thus creating more leverage and more money in the system. We hit that point again in 2000/2001 and Greenspan lowered interest rates to 50 year low thus lowering the debt saturation point. This resulted in huge dive into the debt pit across most of the world.
We have now hit that debt saturation point again but interest rates can't go much lower without basically offering debt free money.
I believe the debt pit (bottomless pit?) that is being dug...has been dug is designed to result in the transfer of assets/wealth. When everyone is loaded to the gills with debt (debt saturation point at lowest interest rates in history) then the carpet is pulled out from under their feet and ownership of all wealth/assets is transferred to the creator of debt based currency - the central banks and ultimately to the central bank of central banks - the BIS......at near zero cost I might add.....or outright theft!
FYI - this isn't exactly easy to accomplish. Its taken nearly a 100 years (or more) of careful planning and manipulation to get to this point. Even now 1/3 of all residential homes are owned outright. Thus it requires a careful coordinated attack from all angles - medical, food supply, energy, taxes, etc. If your goal is to steal another's wealth you have to either murder them as Cain did.....or you must trick them out of it. Money created by debt will slowly steal everyone's wealth with inflation and then quickly and rapidly with deflation at the end.
Look at what's taking place currently - collapsing demand for debt, rising taxes, rising medical, rising food, rising energy. They are taking away everything we have. Are you leveraged? Does your income rely on leverage? Is your business leveraged? Does your business rely on leveraged customers?
Now with that background lets focus on precious metals....oh my precious.
1st - we know that deflation is the final tool for the transfer of wealth.
2nd - we know that those who have the wealth make the rules. No poor man ever gave a rich man a job.
3rd - we know that when they own everything....they can create whatever system of credits they so desire and it doesn't need to be gold/silver backed.....since we are begging for the food and necessities which they will/do own and control.
4th - in the event they fall into the pit they have dug....which I interrupt as to mean complete system wide collapse.....the focus will be on food and necessities.
Thus precious metals can be a hedge by the very wealthy to protect their wealth if the whole system collapses.....but only for those who can completely isolate themselves from a deflationary spiral....or else they are just delaying the transfer of assets (or even speeding it up depending on how the central banks play the game). But we are only talking .1 to .5% of society. And most of those people will ultimately rely on the central bank version of society as a means of protecting their wealth from being ravaged by the masses - belief and support of the iron fist!
Everyone else is just speculating with borrowed dollars....
So in terms of the present - we face a deflationary gap. The gap between now and the endpoint - system of credits to utilize central bank assets (chipped) or a complete system wide collapse. In this gap the central banks will be gaining more and more power until they fall into the pit. The FRN's will be in increasingly short supply as interest costs vacuum up all the debt based money while the macro economy slides down the deflationary spiral. The value of most assets will slide with it....except perhaps the tools they have created to help force everyone (specifically those who haven't been enticed by the debt) down the spiral - medical, energy, food, etc.
The absolute best position one could be in for the above would be - debt free, ample supply of food storage, means of food production, means of energy independence, clean water supply, as healthy as possible, means of producing things other people must have (food, energy, medical, etc.), and means of protecting all of the above from others who might resort to less than admirable methods of trying to acquire it.......have I missed anything?
Its going to be a very sad day for the indebted when they realize the endpoint.
In our system of money created by debt it is essential to the function and survivability of the system to have ever increasing inflation (expanding money supply) in order to service interest costs. Those who get the money first will profit as it loses value as it passes hands. Thus the government/banks reap the most benefit.
Unfortunately it is mathematically impossible for the game to continue forever and at some point deflation takes over. Money created by debt is inherently deflationary in nature due to the interest costs. The only possible exception is giving away debt free money which if done in sufficient quantities (if not then you just flatline forever like Japan) would undermine the value of the currency thus causing a hyper-inflationary collapse....basically a loss of faith in the money (and government backing it) such that no one recognizes it as a means of exchange.
This (inflation created by debt free money) would negate the central banks ability to influence the world as its "their" money (they create it) Vs. deflation in which their money becomes more valuable - wields more power and control.....and to top it off - you have to pay back the IOUs created with another IOU. Try getting your wages in gold....or paying your debts with gold....or purchasing at Walmart with gold. Its their world at this point. Do you think they are just going to give it up?
Based on this assumption I believe they will not hyper-inflate - i.e. give away free money. They may facilitate transactions with governments but only to maintain power and control over the masses.....and it will still be debt.
The endpoint is debt saturation at which point people can barely service the debt they have and cannot take on new debt. The debt saturation point is flexible and can move up or down based on interest rates (the cost of the debt).
We started to hit that point in the mid 90's and Greenspan created the sweeps program in which average checking account balances (demand deposits) are swept into a savings account and loaned out....thus creating more leverage and more money in the system. We hit that point again in 2000/2001 and Greenspan lowered interest rates to 50 year low thus lowering the debt saturation point. This resulted in huge dive into the debt pit across most of the world.
We have now hit that debt saturation point again but interest rates can't go much lower without basically offering debt free money.
I believe the debt pit (bottomless pit?) that is being dug...has been dug is designed to result in the transfer of assets/wealth. When everyone is loaded to the gills with debt (debt saturation point at lowest interest rates in history) then the carpet is pulled out from under their feet and ownership of all wealth/assets is transferred to the creator of debt based currency - the central banks and ultimately to the central bank of central banks - the BIS......at near zero cost I might add.....or outright theft!
FYI - this isn't exactly easy to accomplish. Its taken nearly a 100 years (or more) of careful planning and manipulation to get to this point. Even now 1/3 of all residential homes are owned outright. Thus it requires a careful coordinated attack from all angles - medical, food supply, energy, taxes, etc. If your goal is to steal another's wealth you have to either murder them as Cain did.....or you must trick them out of it. Money created by debt will slowly steal everyone's wealth with inflation and then quickly and rapidly with deflation at the end.
Look at what's taking place currently - collapsing demand for debt, rising taxes, rising medical, rising food, rising energy. They are taking away everything we have. Are you leveraged? Does your income rely on leverage? Is your business leveraged? Does your business rely on leveraged customers?
Now with that background lets focus on precious metals....oh my precious.
1st - we know that deflation is the final tool for the transfer of wealth.
2nd - we know that those who have the wealth make the rules. No poor man ever gave a rich man a job.
3rd - we know that when they own everything....they can create whatever system of credits they so desire and it doesn't need to be gold/silver backed.....since we are begging for the food and necessities which they will/do own and control.
4th - in the event they fall into the pit they have dug....which I interrupt as to mean complete system wide collapse.....the focus will be on food and necessities.
Thus precious metals can be a hedge by the very wealthy to protect their wealth if the whole system collapses.....but only for those who can completely isolate themselves from a deflationary spiral....or else they are just delaying the transfer of assets (or even speeding it up depending on how the central banks play the game). But we are only talking .1 to .5% of society. And most of those people will ultimately rely on the central bank version of society as a means of protecting their wealth from being ravaged by the masses - belief and support of the iron fist!
Everyone else is just speculating with borrowed dollars....
So in terms of the present - we face a deflationary gap. The gap between now and the endpoint - system of credits to utilize central bank assets (chipped) or a complete system wide collapse. In this gap the central banks will be gaining more and more power until they fall into the pit. The FRN's will be in increasingly short supply as interest costs vacuum up all the debt based money while the macro economy slides down the deflationary spiral. The value of most assets will slide with it....except perhaps the tools they have created to help force everyone (specifically those who haven't been enticed by the debt) down the spiral - medical, energy, food, etc.
The absolute best position one could be in for the above would be - debt free, ample supply of food storage, means of food production, means of energy independence, clean water supply, as healthy as possible, means of producing things other people must have (food, energy, medical, etc.), and means of protecting all of the above from others who might resort to less than admirable methods of trying to acquire it.......have I missed anything?