The Falicy of the Welfare State

"It is easy to be conspicuously 'compassionate' if others are being forced to pay the cost."

- Murray Rothbard

Gold-Backed Ruble, Yuan To Trigger Global De-Dollarization

A gold-backed ruble and gold-backed yuan could start a 'snowball exit' from dollar F. William Engdahl notes, adding that it will diminish America's ability to use the reserve dollar role to finance Washington's perpetual overseas wars.
The irony of the situation is that the central banks of China, Russia, Brazil and other countries "diametrically opposed" to US foreign policy course are forced to stockpile dollars in the form of "safe" US Treasury debt in order to protect their economies, American-German researcher, historian and strategic risk consultant F. William Engdahl stresses.

The truth of the matter is that the role of the US dollar as the world's major reserve currency is the countries' economic Achilles Heel, the strategic risk consultant elaborates.

At the same time, by buying US Treasury debt in dollars, they are de facto financing Washington's "endless" overseas military operations.

Fortunately, "[t]hat's quietly changing. In 2014 Russia and China signed two mammoth 30-year contracts for Russian gas to China. The contracts specified that the exchange would be done in Renminbi [yuan] and Russian rubles, not in dollars. That was the beginning of an accelerating process of de-dollarization that is underway today," Engdahl writes in his article for New Eastern Outlook.

© SPUTNIK/ ALEXEI DRUZHININ
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The researcher points out that on November 27 Russia's Central Bank reported that it has included the Chinese Renminbi (yuan) into its official reserves for the first time.

Furthermore, in August 2015 Russian currency traders bought almost 18 billion yuan and only 3 billion US dollars. It is obvious that Russia is gradually increasing the use of the yuan in Russian financial markets, substituting it for the US dollar.

"But the actions of Russia and China to replace the dollar as mediating currency in their mutual trade, a trade whose volume has grown significantly since US and EU sanctions in March 2014, are not the end of it," the researcher remarks.

According to Engdahl, there are clear signs showing that gold "is about to make dramatic return to the world monetary stage."

And it's not all good news for Washington.

While it is believed that the US Federal Reserve holds about 8,133 tons of gold, the rumors circulated that things are not what they seem and "the gold chamber of Fort Knox" are nearly empty, Engdahl narrates.

Adding more fuel to the fire are doubts surrounding US' official gold statistics, a strange event occurred in 2012.

"In 2012 the German Government asked the Federal Reserve to return German central bank gold 'held in custody' for the Bundesbank by the Fed. Shocking the world, the US central bank refused to give Germany her gold back, using the flimsy excuse that the Federal Reserve 'could not differentiate German gold bars from US ones…' Perhaps we are to believe the auditors of US Federal Reserve gold were laid off in the US budget cuts?" the researcher asks.

© SPUTNIK/ VALERY MELNIKOV
China Supports Putin's Proposal to Create United Anti-Terrorist Front

Engdahl remarks, that Germany is considered the second-largest gold holder with its reserves of 3,381 tons of golden ingots.

Meanwhile, Moscow and Beijing are boosting their gold holdings steadily.

Engdahl emphasizes that from January 2013 Russia's official gold reserves increased by 129 percent to 1,352 tons as of September 30, 2015, adding that during "the dark Yeltsin years" of the 1990s Russia's golden vaults contain only 343 tons.

"Russia now holds as many ounces of gold as the gold exchange-traded funds (ETFs) do," he stresses.

According to the researcher, Russia and China are decisively paving the way for the world economy de-dollarization.

"A Russian-Chinese alternative to the dollar in the form of a gold-backed ruble and gold-backed Renminbi or yuan, could start a snowball exit from the US dollar, and with it, a severe decline in America's ability to use the reserve dollar role to finance her wars with other peoples' money," Engdahl concludes.

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Federal Reserve Is A Giant Kazoo-Playing Squid Drowning Out Beautiful Music Of Free Market Orchestra

Mike Maloney & Stefan Molyneaux discuss the delusion that central planners suffer from, and the unseen damages that they bestow upon humanity.

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A Free Market is the Real Market

"Whatever the Fed imagines they can control and whatever their real intentions are, a central authority cannot optimally set prices that are in line with people's preferences. Unhampered markets are the only way that prices can reflect people's real preferences."

- Jonathan Newman, Mises Institute

2015 Silver Wrap-up and Drutter's "Price vs. Demand" Divergence

Data, analysis, graphs, and commentary on silver, gold, platinum, oil, currencies, bitcoin, and more. Includes an in-depth discussion of the price versus demand divergence first noticed in early 2013.

These are MY findings and opinions. Use them as one way to help make your OWN.

BIG love and respect to VECity (who produces a lot of Disl Automatic's best tracks) for letting us listen to his Christmas track at the end of this video!

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Ron Paul On Buying Gold And Concerns Of Monetary Collapse

Former Rep. Ron Paul, (R-Texas), on investing in gold and concerns of a potential collapse of the monetary system.

The Fed Is Between The Biggest Rock And A Hard Place In Monetary History

Why Jim Grant Owns Gold

United States Mint Silver Bullion Sales Headed For New Record

American Eagle silver bullion coin sales are headed toward another year of record breaking sales.

2015 sales year-to-date have exceeded the same period in 2014. Sales through the third week in October are 38,986,000 ounces compared to last year’s 38,121,000 ounces. If this sales trend continues, the total number of ounces sold in 2015 will exceed last year’s record of 44,006,000.

Sales would have been even higher except that demand has been so high, it has wiped out the United States Mint’s inventories and outstripped its ability to produce fast enough to replenish those inventories. The coins have been on and off allocation for the past six months.

This number has been nothing short of astounding. Pre-Financial Crisis sales were 9,887,000 ounces in 1997. They doubled in 2008 to 19,583,500 ounces and they doubled again by 2011 to 39,868,500 ounces. Sales have increased and set new historical records every year except 2012.

What is behind this history making demand for U.S.-made silver bullion coins? While it is hard to say definitively, there are several likely reasons.

The weakening American economy has cast doubt on the efficacy of quantitative easing and low interest rates, which in turn impacts confidence in the dollar. However, currently the dollar is stronger than its peers and deflation is more of a fear than inflation. But in times of economic uncertainty, investors usually want to hedge their bets by diversifying their portfolios into tangible assets like silver.

Most individual investors do not have the same hedging alternatives that institutional investors do. Esoteric derivatives and even expensive gold are usually out of reach for most individual investors. Silver is cheaper and therefore more affordable than gold, which is appealing to smaller individual investors.

Silver has become a speculative investment because the silver-to-gold ratio is out of whack. The historical ratio in the modern economic era is 50 ounces of silver to buy one ounce of gold. Today, it takes 74 ounces of silver to buy one ounce of gold. Either gold is overpriced or silver is underpriced. Given that silver prices are at five year lows, speculative investors are betting on the higher probability that silver is underpriced.

It is a definitive fact is that the record breaking demand for American Eagle bullion coins cannot be met by all the 440,555,000 ounces minted and issued by the United States Mint since the program began in 1986.

This demand has required the Mint to break manufacturing records each year, only to continue to have supply fall short of demand. This trend is likely to continue until individual investors are convinced that the U.S. economy has fully recovered and is stable.

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There Has to be a Collapse Way Bigger Than 2008

Money manager Eric Sprott has not lost his faith in owning physical gold and silver. Sprott contends, “I don’t lose any sleep over the price of gold going down in the sense that I believe what I believe. I believe it’s been manipulated. It’s very much about currency and economics of the Keynesian scheme that we’re going to spend money, print money and it’s all going to work. It’s not working. I don’t want to wait and find out the day it falls apart because when it falls apart someday, then it will be too late. I want to be positioned beforehand. I can remember shorting stocks before March of 2000. It was a bit of a rough ride for three months, but my gosh, when it rolled over . . . you have to be a little bit early on things. I believe the last four years have been orderly and created to be difficult. I think gold would have gone up, but they could not stand for it to go up because they were printing money. If you are printing money and gold goes up, everybody figures it out. . . . I’ve been around for a while, and I have the patience to hang in there. I have been a buyer of gold stocks, and so I am hopeful this will end up being a very, very rewarding trade.”

Sprott predicts, “There has to be a collapse. It will be way bigger than 2008. We had a debt problem in ‘07 and ‘08 and the debt has exploded.”

Join Greg Hunter as he goes One-on-One with Eric Sprott, the Chairman of Sprott Inc.

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China Could Reprice Gold To $100,000 Per Ounce

Financial writer and gold expert Bill Holter contends China has enormous debt problems, but a very good plan B. Holter explains, “China used fiat debt to build real infrastructure, and when the system blows up, the fiat debt blows away and they are left with infrastructure. Do they have 20% bad loans? They very well could and probably do. If it is true that they are going to have a debt blow up, don’t forget China has been importing big tonnage of gold for years now. Over the last five years, they have imported 9,000 tons of gold. Their way out is the old way out. The old way out was to revalue gold higher. They could revalue gold and step up and say they will pay $50,000 or $100,000 per ounce for any and all ounces for sale. You can’t say there is not enough gold. What you can say is that it’s not priced correctly to support the system. If they have an implosion of debt which leaves their balance sheets impaired, the way to recapitalize the balance sheets is to revalue the price of gold higher. It creates capital, in other words.”

How about the U.S. debt problem? Holter says, “That does not and cannot work for the U.S. because we have offloaded our gold. Simple math tells you the gold that China received has to come from somewhere, and that only somewhere in the world is Western U.S. vaults.”

Could the U.S. still have its more than 8,000 tons of gold? Holter says, “That’s pure ‘hopium’ that the U.S. still has their gold. Common sense and logic tells you that the gold is gone.”

So, has the U.S. budget and debt ceiling deal fixed anything? Holter says, “If they didn’t raise the debt ceiling, there would have been an immediate implosion. You have to understand, Americans are the only people on earth that aren’t laughing at the debt ceiling. Foreigners are laughing at it. You are talking about $20 trillion. It can’t be paid. We are at 110% of GDP already, and we’re the reserve currency.”

Holter goes on to say, “It’s another bubble. It’s going to burst, and the banks are in worse condition now from a debt to equity standpoint. Nothing has changed–it’s just bigger.”

Holter worries about possible deals between Saudi Arabia and Russia that could impair the petro-dollar. Holter says, “The (dollar) dam is leaking, at this point, because there is less and less use of the dollars around the world. . . . If Saudi Arabia were to say we’ll accept euros, yuan or rubles for oil or if they said we won’t accept dollars anymore, that’s like pulling a center piece out of a dam. It will break, and it’s over for the dollar. They could do that, and they could get bombed back to the stone-age, but I am sure it’s been talked about.”

Holter says there is “no rule of law,” and criminal activity has suppressed the price of physical gold. Holter says, “We have been through a four year period of time where paper gold has been pounding the price of physical gold. You have people who were strong legged, hard money guys who are weak in the knees now, and they shouldn’t be. My hope is we can strengthen some weak knees, to not sell you only insurance in a financial Armageddon. It is mathematically coming. There is absolutely no possible exit with the system intact and the rule of law.”

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Stark Warnings On Global Trade

John Rubino and Gordon T Long discuss the September FOMC decision, Brazil, Japan in the context of the large number and size of recent international bank layoff announcements. They talk about what is really going on here that no one wants to talk about publicly.

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Inflationary Boom Distorts the Economy

"What is seldom realized is that Depressions, despite their evident hardship on so many, perform an important corrective function. They serve to eliminate the distortions introduced into the economy by an inflationary boom."

- Murray Rothbard from his article Reliving the Crash of '29

Fed Has Lost Control - All That's Left Is A Reset

Gold expert Bill Holter says, "All that's left is a reset," and the Fed is now helpless to stop the coming global financial calamity. This is not going to just be a financial problem, but a problem getting things you need to live. Holter says, “These big stores get stocked up every single night. . . . The average store only has food for about two or three days. So, this is not going to just be an issue about you paying your bills. It’s going to break down so badly it is going to be an issue about whether or not you can get food.”

On gold and silver, is this the bottom? Holter says, “To answer your question, yes, I think this is the bottom. Can they push the price down again? It’s possible, but like you say back in 2009, silver on the COMEX was trading just under $9, and to buy retail metal, you could not get anything under $15. . . . The physical market has hit a hard bottom.”

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Marc Faber: On QE-4 - Gold And Silver Is The Place To Be