By Monty Pelerin, on March 3rd, 2010
There is no greater scam than that being perpetuated by fiat money.
It is plausible that the gold market might be manipulated because of its critical importance to the current economic crisis. Gold is to Central Bankers and governments as The Cross was to Dracula. It threatens their existence.
Before governments got into the state of bankruptcy, gold hindered them from spending money they did not have. To truly increase spending and power, it was necessary for governments to remove the constraints gold imposed. Once that was accomplished the welfare/warfare state was off to the races.
Now, after almost forty years or nothing but fiat money, many governments are so bloated that they are no longer sustainable. Their key to survival (at least for some period) depends upon maintenance of the myth that fiat money is real. Gold is a huge threat to this scam.
Gold has been an alternate currency for thousands of years. It is the only currency that is not someone’s liability. It is not dependent upon the performance of some government. It stands on its own and always has.
Governments do not go bankrupt in the manner that businesses or individuals do. They do so by dishonoring their debts and obligations. The default can come as an outright refusal to honor claims or it can come via inflation. Most governments prefer the latter.
The soundest government in the world, until recently, was the United States. In spite of its enormous wealth and economic growth, its
Continue reading Dracula Government Meets Its Nemesis
By Monty Pelerin, on February 16th, 2010 These three articles are must reading for anyone interested in the future of the economy. No investor or citizen should be ignorant of the possibilities raised in these articles.
Ponzi Scheme by Puru Saxena
Editor, Money Matters
Let’s face it, the government-bond market in the West is a gigantic Ponzi scheme. Most governments in the ‘developed’ world are drowning in debt, they are running mind-boggling budget deficits and printing money like there is no tomorrow. Furthermore, under the guise of quantitative easing, their central banks are buying their own newly issued debt!
US debt will keep growing even with recovery by Tom Raum
For the U.S., the crushing weight of its debt threatens to overwhelm everything the federal government does, even in the short-term, best-case financial scenario — a full recovery and a return to prerecession employment levels.
Sovereign Default: Stuck Between Dire and Disastrous by John Mauldin
Our economic future is more and more a product of the political choices we make, and those are increasingly difficult. We have no good choices. We are left with choosing the best of bad options.
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By Monty Pelerin, on January 29th, 2010 For those who want to understand more about money and inflation, the following piece by Bill Bonner of the Daily Reckoning is good reading.
The Descent of Money
By Bill Bonner
Paris, Fance
Science and technology have produced many wondrous breakthroughs. But there are some things it cannot improve. A kiss from natural lips is still the lover’s choice. Baby formula proved no match for the real thing. Ersatz money is a flop too. That last item is not so much a fact as a prediction.
The first modern competition between gold and paper money ended like the pre-modern ones. Gold won. Herewith, a short summary:
A rogue, John Law, was the protagonist of the story. He killed Beau Wilson in a duel. Then, he went on the lam…first to Scotland…then to Amsterdam…and finally to Paris. Like Alan Greenspan or Ben Bernanke, he made himself useful to people in high places – in this case the Duke d’Orleans, who needed money. Law had a way to get it:
“I have discovered the secret of the philosophers’ stone,” he is said to have remarked, “it is to make gold out of paper.”
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By Monty Pelerin, on January 7th, 2010 Here is a good collection of articles from Chris Martenson’s site. These articles show no green shoots, and in no way are consistent with what the government wants you to believe. There is no recovery coming. See recent post about 2010 will be worse.
Take a look at Chris’ site. Be sure to watch “The Crash Course” that he provides online. It will provide a simple and thorough explanation as to why we are here and why getting out the hole is not simple (and I would say, not possible). He also provides good information as to how you might protect yourself and your family in the free “Crash” video.
Daily Digest – January 6
Wednesday, January 6, 2010, 11:01 am, by saxplayer00o1
Contracts down: Is housing headed for double-dip?
Pump prices on pace to top 2009 high by weekend
GMAC Says Lender Will Post $5 Billion Quarterly Loss
Silicon Valley ‘Bloodbath’ Leaves Buildings Empty
Manhattan Apartment Prices Fall as Finance Jobs Lost
Fed may re-enter MBS market later in 2010
TrimTabs suggests government manipulated stocks
Medicaid Long-Term Care Spending Tops $106 Billion
Missouri revenue drops in December, more budget cuts coming
U.S. business bankruptcies rise 38% in 2009
Homelessness and cold weather have shelters at capacity
Unemployment spikes demand for Census jobs
Promise to Trim Deficit Is Growing Harder to Keep
US public pensions ‘facing $2,000bn shortfall’
Over $26 billion borrowed by states for unemployment benefits
U.S. Budget Deficit May Exceed $1 Trillion for Years, Kos Says
read more »
Continue reading Martenson Sees No Recovery
By Monty Pelerin, on January 4th, 2010 Casey Research provided the following in an email. Doug Casey is a savvy guy as is David Einhorn who is quoted below. For investors, this might be a good read. At least it should cause you to examine your own investment assumptions.
The Gorilla Trade
Dear Reader,
It has become common for governments to levy large fines against successful companies. For instance, when the EU poked Intel in the eye in 2009 for $1.45 billion for being a tough competitor, an action the U.S. is now looking to get in on itself. Likewise, Microsoft has been forced to pay up over $2 billion and to unbundle much of its own software from its Windows operating system.
For the sake of discussion, let’s assume that, as a regular computer user, I were one of those fully disadvantaged by these miscreants. Let’s further assume that the extent of my lifetime losses – because I personally buy a new computer approximately every couple of years, and Microsoft’s software and Intel’s memory chips were components of those computers – might total the entire $8,000 I estimate I may have spent on their products.
In exchange for my dollars, I’ve received an extraordinarily useful set of tools, starting with the Word processing software I’m using to write you at this very moment. And the amazingly powerful laptop that I’m working on. To achieve the same computational power packed into its two pounds would have required a computer that filled a good-sized
Continue reading Casey on Government as Gorilla
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Friedrich von Hayek
Friedrich von Hayek founded the Mont Pelerin Society.
“Monty Pelerin” is a pseudonym chosen by this blogger to convey general agreement with the philosophy, goals and spirit of the Mont Pelerin Society. No other connection exists between the blogger and the Society.
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