A few months ago, we published “Invisible Experiments With Money and Gold” which was the result of Q&A with the authors of the book “The Silver Bomb.” With so many positive comments from readers, we are following up with a new Q&A. In it, we look at the fundamental functioning of our society.
The authors Michael MacDonald and Christopher Whitestone have a fundamentals based view and put human behavior at the epicenter of the world. They fully agree with Jim Grant who once pointed out that “we are playing in a rigged casino,” pointing to the figures that are communicated by officials which are artificial and manipulated.
Chart analysis was useful as a historical record of events. Charts allow us to look back and see the effect of actions in the market. Hence, it allows us to anticipate to some degree. Christopher Whitestone confesses the following:
“I doubt if anticipating the future based upon charts is effective anymore. The real things that affect the market are not chartable. They have to do with decisions at the top, in a world where the markets are in a complete reaction to central bank delivery of never ending money base expansion. Technical charting cannot take into account the actions of power structures. It’s not about whether the supply is up, demand is down, or another fundamental economics formula. The point is now whether the fake supply is up or fake demand is down.”
The world in which definitions are completely destroyed
Things are not what they appear to be. The media has become a mouth piece of those that literally own it. They have created their view of the world. We live in a time where the mission of the media as the social watchdog to keep the rest of us informed has completely changed. It has therefore become a propaganda broadcasting system.
In this world, the definitions of things are completely destroyed. What the creditor calls debt, the borrower calls money. We have now this debt based system which is already a perversion of the concept of money. Money is created when debt has incurred and not the other way around. Money in existence was once obtained through trade with equivalent goods or services and could also be advanced in the form of a loan, which is a positive currency. That is the opposite of what we have today, a debt based currency, which is a negative currency.
The trillion dollar coin story was the most recent public “farce” that proves this point. As the central bank keeps track with the mood of the people, they see as well that the metals are growing in popularity while at the same time they ignore that metals are money. The forces that appreciate the metals are simply too strong. The Official Monetary And Financial Institutions Forum confirmed this very recently (source).
The old problem/reaction/solution idea is at the epicenter of our world. Whenever there is a needed outcome, the fastest way to achieve it is to create a problem for which that outcome is the desired solution. It is easily demonstrable that most wars (if not all of them) and major economic shifts have begun by an event (or series of events) with historically dubious origins. Some of them, later, were fully revealed to have been lies. Think about the US – Vietnam conflict as a well-known example. The escalation of the war in the Gulf at the time of the Tonkin incident was used to get the US populist behind an escalation of the war. It turned out 40 years later fully admitted to have never happened.
More recently, a bombing attempt on the NY Fed building was executed by a 21 year old Bangladeshi cyber security student. This turns out to be just like so many other stories; it has been the subject of a sting operation. This is exactly the story that we were told about the first WTC bombing where the go-between handlers were asking harmless powder while the FBI was giving them real explosives. A couple of days ago, citizen journalists reported a dubious role of the US President in Benghazi-gate.
Quote from book The Silver Bomb: “The era of debt-based economy, which is dependent upon the creation of debt, which is leveraged with still more debt will draw to an end. The free-fall will come to a sudden stop and a hard reset of the respective values of all commodities and currencies will occur. The banks are already preparing for the paradigm shift.”
Gold ‘s revaluation
The above discussed trend is the trigger for gold’s revaluation, which will come into play as soon as a large scale awareness hits. The authors believe that the present gold bull run is in its infancy. There are early signs of a second stage, like the most recent huge increased metal accumulation by the SLV and the exploding premiums for silver and gold coins in the East, among many other events. GATA is pushing for transparency with, resulting in the publication of a secret IMF report in which the gold price suppression has been documented. It is still a very small percentage, but clearly growing number of people who become aware and take action to position themselves in advance of a coming real movement. If markets are anything, they attempt to anticipate the future effect of present situations. Markets are currently reacting to the artificial change in what constitutes the markets, which is monetary stimulus. The monetary stimulus has created an understanding of the diminishment of the value of the existing currency, which makes alternative currencies (including precious metals), to look more stable and attractive.
The authors do believe that gold’s revaluation is going to hit quite sudden. Hemingway said about bankruptcy that it happens slowly at first and then all of a sudden. It will be similar in gold, which reflects the bankruptcy of faith based currencies. We will probably see some trigger points like the recent announcement from the OMFIF proposing the re-monetization of gold, Japan’s devaluation which brings currency wars center stage, central banks’ gold repatriation, etc.
The central bank precious metal repatriation efforts are concurrent with a vigorous game of hide-and-seek, as physical delivery of precious metal commodities exchange warrants and specific lot certificate s gets more and more dicey. Moreover, questions about whether allocated holdings of gold have been re-leased, re-hypothecated, or simply removed are highlighted by events like the tidbit described in the following Wholesale Gold Group news item: CME Declares Force Majeure and blames Sandy for “Operational Limits.”
Speaking of central banks, it has now become pretty evident that there is a global central bank effort to hedge their bets. We see the grab for gold by the central banks. It could indicate that “the powers that be” are preparing for a fractional backing of currency with precious metals. The talks about backing our currency again with gold became visible last year in the Senate’s proposed legislation “2012 sound money act.” It’s an attempt to compel the Fed to at least evaluate the gold market with respect to the interest rates positioning and setting the value of the dollar. There is action at the state level as well. Illinois, for instance, could become the first US state to prepare new rules in precious metals buying and owning while Utah is striving for the opposite. This, as well, is helping to bring the precious metals center stage.