# News & Current Events > Economy & Markets >  OLD THREAD:Gold will plummet: the dollar will strengthen.

## YumYum

Every bubble this country has had is followed by a contraction of credit by the larger banks. This is done by raising the discount rate with a drastic increase overnight. Interest rates are still very low, which means there is a lot of cash floating around; creating inflation. The banks are currently collecting dollars and buying gold at the same time. What the banks are doing is setting up people and industries to fail so they can take back their wealth. As soon as the dollar has saturated the world economy to the Fed's satisfaction, the central banks will up the interest rates to 6% overnight; all in the name of preventing runaway inflation. This sudden stop of credit will create a shortage of cash and at the same time the central banks will dump their gold reserves, thus strengthening the dollar (which they are currently stockpiling). This scenario has happened time after time. What makes you think this time is any different? Remember folks, the central banks make their money by manipulating paper and their only reason for buying gold is to sell it later to strengthen the dollar. I predict gold will pull back to 500-600 an ounce and the dollar will once again become dear to us like it was during the Great Depression.

http://seekingalpha.com/article/1670...cle_sb_popular

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## Austrian Econ Disciple

> Every bubble this country has had is followed by a contraction of credit by the larger banks. This is done by raising the discount rate with a drastic increase overnight. Interest rates are still very low, which means there is a lot of cash floating around; creating inflation. The banks are currently collecting dollars and buying gold at the same time. What the banks are doing is setting up people and industries up to fail so they can take back their wealth. As soon as the dollar has saturated the world economy to the Fed's satisfaction, the central banks will up the interest rates to 8-12% overnight; all in the name of preventing runaway inflation. This sudden stop of credit will create a shortage of cash and at the same time the central banks will dump their gold reserves, thus strengthening the dollar (which they are currently stockpiling). This scenario has happened time after time. What makes you think this time is any different? Remember folks, the central banks make their money by manipulating paper and their only reason for buying gold is to sell it later to strengthen the dollar. I predict gold will pull back to 500-600 an ounce and the dollar will once again become dear to us like it was during the Great Depression.


Eh no. For one, money simply doesn't disappear. They have created so much inflation, that at the best we'll get high inflation (15-30%) and at worst we're going to get hyperinflation. I see this as a 50/50, because right now the FED is in between a rock and a hard place because of the political ramifications of raising interest rates. Do you honestly believe that they are going to do anything to tarnish Obama's image and presidency? So no. They aren't going to raise rates to 10% overnight. They'll more than likely raise it to 2-4% at most. 

Secondly, our national debt is scaring off every country that has dollars as reserves, which is everyone due to Bretton Woods. They are trying to rid themselves, because the dollar is rapidly becoming worthless no matter what the interest rates are. Three, people are investing in gold and the banks really aren't. The Bank of England doesn't even have enough gold to cover what has been bought, and many other banks don't either. Gold supplies in the central banks across the world is VERY low. China has been urging their citizens to buy gold, and that's not going to stop. 

I'll stop there, but you are very, very wrong.

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## YumYum

> Eh no. For one, money simply doesn't disappear. They have created so much inflation, that at the best we'll get high inflation (15-30%) and at worst we're going to get hyperinflation. I see this as a 50/50, because right now the FED is in between a rock and a hard place because of the political ramifications of raising interest rates. Do you honestly believe that they are going to do anything to tarnish Obama's image and presidency? So no. They aren't going to raise rates to 10% overnight. They'll more than likely raise it to 2-4% at most. 
> 
> Secondly, our national debt is scaring off every country that has dollars as reserves, which is everyone due to Bretton Woods. They are trying to rid themselves, because the dollar is rapidly becoming worthless no matter what the interest rates are. Three, people are investing in gold and the banks really aren't. The Bank of England doesn't even have enough gold to cover what has been bought, and many other banks don't either. Gold supplies in the central banks across the world is VERY low. China has been urging their citizens to buy gold, and that's not going to stop. 
> 
> I'll stop there, but you are very, very wrong.


I don’t think so. Leopards don’t change their spots and the central banks have been playing this game a lot longer than China’s current boom. Your thinking is flawed because you're viewing the situation in terms of Obama, his image, and politics. That means nothing to the central banks. Whether Obama has a good image or not is irrelevant: it is about making money. The dollar will to continue inflate, and if all the dollars come back to America, that is great, because the central banks will hold on to them. When they contract credit the dollar will deflate due to the scarcity of cash, the banks will make another fortune watching the dollar climb in value. They did it to the farmers in 1920-21, they are doing it again. Nobody knows how much gold the central banks possess. We don’t know anything about what the central banks are doing. We can only look to the past to determine what they will do. Why do you think we are pushing HR 1207?

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## Pants

Also keep in mind this is a slightly different situation. If we increase rates, that would mean the interest on the national debt will go up with the rates. I would think even if we raise rates 1 or 2% in the short term, the interest on the national debt alone would exceed the GDP. Which would mean the United States would be bankrupt.

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## hugolp

> I dont think so. Leopards dont change their spots and the central banks have been playing this game a lot longer than Chinas current boom. Your thinking is flawed because you're viewing the situation in terms of Obama, his image, and politics. That means nothing to the central banks. Whether Obama has a good image or not is irrelevant: it is about making money. The dollar will to continue inflate, and if all the dollars come back to America, that is great, because the central banks will hold on to them. When they contract credit the dollar will deflate due to the scarcity of cash, the banks will make another fortune watching the dollar climb in value. They did it to the farmers in 1920-21, they are doing it again. Nobody knows how much gold the central banks possess. We dont know anything about what the central banks are doing. We can only look to the past to determine what they will do. Why do you think we are pushing HR 1207?


You are kidding, arent you?

- Central Bank independent? When did that happen?

- How in earth is the Fed going to contract the money supply? Let me remind you that in the 70's the Fed got the interest rates to even 7% and prices were still rising fast.

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## YumYum

> Also keep in mind this is a slightly different situation. If we increase rates, that would mean the interest on the national debt will go up with the rates. I would think even if we raise rates 1 or 2% in the short term, the interest on the national debt alone would exceed the GDP. Which would mean the United States would be bankrupt.


Exactly. The United States; its industries and people will be bankrupt, but the central banks won't be. The central banks don't care if the U.S. goes bankrupt, in fact, they are counting on it. That is how they "reclaim their wealth"; by buying everything up; a penny on the dollar when the dollar is scarce. The American citizens have to pay back the national debt; not the central banks. That is the genius of the central banks. They have done this over and over. They are doing it again.

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## YumYum

> You are kidding, arent you?
> 
> - Central Bank independent? When did that happen?
> 
> - How in earth is the Fed going to contract the money supply? Let me remind you that in the 70's the Fed got the interest rates to even 7% and prices were still rising fast.


By cutting off credit. Money as debt is created by making more debt. If you don't loan money, you will cut the cash supply. The central banks will hoard the glut of the currently inflated dollars and when they cut off the credit the dollar will be scarce, thus deflating the dollar.

The inflation in the seventies was due to Nixon cutting the dollar's peg to gold. Nixon did that because countries were buying up our gold reserves with our dollars at 40 an ounce and selling gold on the world market for 80 an ounce. Nixon had to do something because our gold reserves were being wiped out. Now, all the world's currencies are fiat and have nothing to do with gold, so the situation is different.

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## ctiger2

Loss of faith in the govt & currency will cause the *USD to go down* and real tangible assets such as pm's/oil/agriculture to go up in USD value.

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## YumYum

> Loss of faith in the govt & currency will cause the *USD to go down* and real tangible assets such as pm's/oil/agriculture to go up in USD value.


Yes, but how will Americans invest in oil and agriculture if there are no dollars in circulation? The dollar is our legal tender. Whether Americans have faith or not in the dollar is irrelevant, because they need the dollar to buy food. It is our currency after all. Our money is worthless now. Are you saying it will become “more worthless”? Our dollar is our “legal tender” of trade and when there is a shortage of it, it will go up in value. It is strictly supply and demand. Also, even if China, Russia and OPEC come up with a basket currency backed by gold/silver and oil it will be illegal to use as legal tender here in the U.S. In a nut shell, they American people are going to be wiped out. How else will we have communism? When people are hungry and thinking about their next meal, they are not worried about credit default swaps and derivatives.

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## hugolp

> By cutting off credit. Money as debt is created by making more debt. If you don't loan money, you will cut the cash supply. The central banks will hoard the glut of the currently inflated dollars and when they cut off the credit the dollar will be scarce, thus deflating the dollar.
> 
> The inflation in the seventies was due to Nixon cutting the dollar's peg to gold. Nixon did that because countries were buying up our gold reserves with our dollars at 40 an ounce and selling gold on the world market for 80 an ounce. Nixon had to do something because our gold reserves were being wiped out. Now, all the world's currencies are fiat and have nothing to do with gold, so the situation is different.


Wait, wait, wait. So why were people selling gold in the market at 80$ dollars? Maybe because the USA inflated the curency way way way too much and that was the reason the USA goverment could not mantain the gold standar and defaulted? It is very nice to be able to print, print, and print and buy with your paper like if it is gold, but then when people come back to ask for the gold you have promised (dollar was a gold certificate, a contract) then you accuse them of being speculators just for asking you to fulfill your promises...

But besides that, the situation is similar because there is not the restrain of gold. They can inflate as much as they want like they did in the 70's.

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## akforme

What's the agenda by this post?  

Your a new member so I'm going to blow this off as misdirection bull$#@!.

Nice try tho.

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## Original_Intent

I'm not that strong on economics but it seems like there are a couple of opposing forces here, someone set me straight if my thinking is wrong.

We have seen a huge tightening of credit, which is acting as a deflationary force (talking price deflation and really for all intents and purposes it is acting almost like monetary inflation because people's credit was acting like money in the market.

And then we have the bailout/stimulus and insance amounts of printed money on the inflationary side. However, it seems like most of the money is not being spent into the economy, but is just being used to buy stocks, PMs and etc - so it is inflating the stock market but it is not causing the huge price inflation (at least not yet) that one would expect.

So it really SEEMS to this neophyte that there are still a lot of levers of control in TPTB's court. They could liquidate their stock holdings causing a market crash and causing inflation by spending their money into the economy. This will severely weaken the dollar but they come out winners as they spent their dollars first while they were still worth something.

Or they can continue to tighten credit, unemployment continues to rise, this somewhat stabilizes the dollar, maybe even strengthens it, but causes deflation and things go more or less the path of the great depression.

And I am sure someone who actually knows what they are talking about can rip that to shreds and explain to me why I am wrong on both counts - I wish someone would actually, I want to understand this better. Sometimes I think I see it all pretty clearly, other times I prety much figure that TPTB are completely in control and they will manipulate things to their advantage and their really is no predicting anything by the rules that have worked in the past.

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## specsaregood

The OP is correct in that if they significantly increase the interest rates, gold would probably go down signficantly.  The problem is that if they do that, everything else in the economy collapses at the same time.  So it isn't that gold would go down, but that everything would go down.   Now this is something that they should have done quite a while ago, well before TARP; but they chose the other path: the path to devaluing the dollar through inflation and that path will be good for gold.

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## YumYum

> I'm not that strong on economics but it seems like there are a couple of opposing forces here, someone set me straight if my thinking is wrong.
> 
> We have seen a huge tightening of credit, which is acting as a deflationary force (talking price deflation and really for all intents and purposes it is acting almost like monetary inflation because people's credit was acting like money in the market.
> 
> And then we have the bailout/stimulus and insance amounts of printed money on the inflationary side. However, it seems like most of the money is not being spent into the economy, but is just being used to buy stocks, PMs and etc - so it is inflating the stock market but it is not causing the huge price inflation (at least not yet) that one would expect.
> 
> So it really SEEMS to this neophyte that there are still a lot of levers of control in TPTB's court. They could liquidate their stock holdings causing a market crash and causing inflation by spending their money into the economy. This will severely weaken the dollar but they come out winners as they spent their dollars first while they were still worth something.
> 
> Or they can continue to tighten credit, unemployment continues to rise, this somewhat stabilizes the dollar, maybe even strengthens it, but causes deflation and things go more or less the path of the great depression.
> ...


You don't need to be ripped to shreds. Nobody knows exactly what is going to happen in the short term; not even the experts. We are brainstorming here; no question or viewpoint is too "dumb". I do believe in the long run this whole thing will collapse and whoever is left standing will start over. But that is not the point of my OP. I am doing a research paper for college on the Federal Reserve and I see a pattern with the Central Banks that has been going on since they began.  They create bubbles with easy credit and with low interest rates by issuing paper, which is debt. This creates a phony "prosperity" for everybody, because even though everybody is working and companies are growing: everybody is in debt. The banks must continue to lend money at low interest to allow the economy to grow. People accumulate wealth during this period by purchasing on credit cars, real estate, and stocks etc., which do have value. During this time bubbles are created where everybody rushes in to buy into the bubble using cheap credit. When the bubble collapses, the central banks contract credit by raising the interest rates considerably and tightening their loan requirements. They cut off lines of credit to companies who then go under and this creates massive unemployment. People and industry cannot service their existing debt and they go under. The dollar is in short supply because the banks stop issuing debt. Supply and demand will cause the dollar to deflate. The central banks are sitting on a pile of this cash, which they accumulated while the money was inflating. With this huge bundle of cash that has deflated, they buy up things that have value at a penny on the dollar. Thus they take back the wealth from the American citizens and from industry. This has been done time and time again. 

The central banks could care less about Obama, Palin, Bush and all the other politicians, who are nothing more than puppets. All the central banks care about is making money. They central banks start wars, remember?

Take the time and read the link I am providing. It will really open your eyes as to how this all works. 

http://www.apfn.org/apfn/reserve.htm

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## eric_cartman

> Every bubble this country has had is followed by a contraction of credit by the larger banks. This is done by raising the discount rate with a drastic increase overnight. Interest rates are still very low, which means there is a lot of cash floating around; creating inflation. The banks are currently collecting dollars and buying gold at the same time. What the banks are doing is setting up people and industries to fail so they can take back their wealth. As soon as the dollar has saturated the world economy to the Fed's satisfaction, the central banks will up the interest rates to 8-12% overnight; all in the name of preventing runaway inflation. This sudden stop of credit will create a shortage of cash and at the same time the central banks will dump their gold reserves, thus strengthening the dollar (which they are currently stockpiling). This scenario has happened time after time. What makes you think this time is any different? Remember folks, the central banks make their money by manipulating paper and their only reason for buying gold is to sell it later to strengthen the dollar. I predict gold will pull back to 500-600 an ounce and the dollar will once again become dear to us like it was during the Great Depression.


omg... thanks for posting! i'm gonna sell all my gold and silver tomrrow and buy US dollars!  you're a financial genius!

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## sarahgop

are you  predicting  a  depression?

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## tmosley

YumYum is missing out on exactly HOW the dollars are going to come back.  He mistakenly thinks that they will flow back from foreign central banks into our central bank.  This is wrong.  Remember, each central bank is looking out for their own best interest.  To this point, it has been in their best interest to prop up the dollar, while quietly reducing their exposure.  The central banks of western nations tend to operate as a block, but we will likely find that it will quickly become "every man for himself" as the dollar continues its decline.  Once the Asian banks start dumping in earnest, and openly, the Europeans will be forced to abandon America or face the destruction of their own economies.

How will they divest themselves of their dollars?  They may do so quietly at first by selling them to the Fed in exchange for whatever they have on their balance sheet that isn't worthless (basically, their gold and their foreign currency holdings).  Once those run out, they are going to use them to purchase anything and everything that won't lose value as the dollar collapses.  This means commodities, production capacity, scrap metal, anything that isn't bolted to the floor.  This means that the prices for all of those things in terms of dollars will explode, as they will be buying them on the open market, not in closed deals between central banks.

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## specsaregood

> This means commodities, production capacity, scrap metal, anything that isn't bolted to the floor.


Of which I'm pretty sure the chinese have been doing for a while now.   Imagine the stockpile of oil they could trade those USD's for?  How long until opec starts demanding non-USD for their oil....

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## YumYum

> are you  predicting  a  depression?


I am speculating from what has happened before that we will have a terrible depression; even Peter Schiff has predicted that. Even though recovery looks probable, unemployment is rising. Massive unemployment is one major factor that contributes to a depression, according to Schiff.

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## YumYum

> YumYum is missing out on exactly HOW the dollars are going to come back.  He mistakenly thinks that they will flow back from foreign central banks into our central bank.  This is wrong.  Remember, each central bank is looking out for their own best interest.  To this point, it has been in their best interest to prop up the dollar, while quietly reducing their exposure.  The central banks of western nations tend to operate as a block, but we will likely find that it will quickly become "every man for himself" as the dollar continues its decline.  Once the Asian banks start dumping in earnest, and openly, the Europeans will be forced to abandon America or face the destruction of their own economies.
> 
> How will they divest themselves of their dollars?  They may do so quietly at first by selling them to the Fed in exchange for whatever they have on their balance sheet that isn't worthless (basically, their gold and their foreign currency holdings).  Once those run out, they are going to use them to purchase anything and everything that won't lose value as the dollar collapses.  This means commodities, production capacity, scrap metal, anything that isn't bolted to the floor.  This means that the prices for all of those things in terms of dollars will explode, as they will be buying them on the open market, not in closed deals between central banks.


All the central banks are controlled by the Central Bank of London, including the Fed. You need to read the link I am providing. It will show the broader, correct picture of what is happening. How do you know what the central banks are currently doing? Nobody does. That is why we are pushing HR1207. Read this link and you will see exactly what the central banks have done in the past and how they operate.

http://www.apfn.org/apfn/reserve.htm

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## YumYum

> Of which I'm pretty sure the chinese have been doing for a while now.   Imagine the stockpile of oil they could trade those USD's for?  How long until opec starts demanding non-USD for their oil....


The central banks want to strip us of our wealth. That is what they have done in the past. Even if the whole world refuses our dollar, it is still the legal tender we use in this country. If any state or private individual creates a new sound currency here in America they will be going against the Federal government. We are stuck with the dollar to pay our debts until the government says different. If everybody is out of work and the banks are not issuing anymore debt, the dollar becomes scarce and it will deflate. What other currency or we going to use here in America?

We Americans are the richest people on Earth and the central banks are going to strip us of everything we have. Doesn't this fit into Obama's plan for a communistic government?

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## hugolp

> The central banks want to strip us of our wealth. That is what they have done in the past. Even if the whole world refuses our dollar, it is still the legal tender we use in this country. If any state or private individual creates a new sound currency here in America they will be going against the Federal government. We are stuck with the dollar to pay our debts until the government says different. If everybody is out of work and the banks are not issuing anymore debt, the dollar becomes scarce and it will deflatet says different. If everybody is out of work and the banks are not issuing anymore debt, the dollar becomes scarce and it will deflate. What other currency. What other currency or we going to use here in America?
> 
> We Americans are the richest people on Earth and the central banks are going to strip us of everything we have. Doesn't this fit into Obama's plan for a communistic government?


Why would the banks completely stop issuing more debt? Banks make money by giving loans. Now they are getting 2% by leaving their money at the Fed, but that is going to change at some point.

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## eric_cartman

> the central banks will up the interest rates to 8-12% overnight


... and then hell will freeze over

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## puppetmaster

The bankers have grown weary of only controlling a few nations currencies. The actions they are taking currently are sure to destroy the dollar as this is necessary to move to a newer platform. This will also ensure they are on the ground floor for this new world wide currency.

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## YumYum

> Why would the banks completely stop issuing more debt? Banks make money by giving loans. Now they are getting 2% by leaving their money at the Fed, but that is going to change at some point.


When the banks stop issuing debt their cash reserves deflate. They take the surplus of cash they have and buy up assets with real value for practically nothing. They buy up other banks, corporations, real estate, etc.. To demostrate how the central banks work together, read the minutes of The House Stabilization Hearings of 1928. The Central Bank of London wanted back on the Gold Standard and dictated to the Fed to lower the discount  rates. After doing this The Bank of England then took almost all of our gold reserves back to London, thus bringing instability to our dollar and bringing on The Great Depression. The central banks planned The Great Depression.


The House Stabilization Hearings of 1928 proved conclusively that the Governors of the Federal Reserve System had been holding conferences with heads of the big European central banks. Even had the Congressmen known the details of the plot which was to culminate in the Great Depression of 1929-31, there would have been nothing they could have done to stop it. The international bankers who controlled gold movements could inflict their will on any country, and the United States was as helpless as any other.

Notes from these House Hearings follow:

MR. BEEDY: "I notice on your chart that the lines which produce the most violent fluctuations are found under Money Rates in New York. As the rates of money rise and fall in the big cities the loans that are made on investments seem to take advantage of them, at present, a quite violent change, while industry in general does not seem to avail itself of these violent changes, and that line is fairly even, there being no great rises or declines.

GOVERNOR ADOLPH MILLER: This was all more or less in the interests of the international situation. They sold gold credits in New York for sterling balances in London.

REPRESENTATIVE STRONG: (No relation to Benjamin): Has the Federal Reserve Board the power to attract gold to this country?

E.A. GOLDENWEISER, research director for the Board: The Federal Reserve Board could attract gold to this country by making money rates higher.

GOVERNOR ADOLPH MILLER: I think we are very close to the point where any further solicitude on our part for the monetary concerns of Europe can be altered. The Federal Reserve Board last summer, 1927, set out by a policy of open market purchases, followed in course by reduction on the discount rate at the Reserve Banks, to ease the credit situation and to cheapen the cost of money. The official reasons for that departure in credit policy were that it would help to stabilize international exchange and stimulate the exportation of gold.

CHAIRMAN MCFADDEN: Will you tell us briefly how that matter was brought to the Federal Reserve Board and what were the influences that went into the final determination?

GOVERNOR ADOLPH MILLER: You are asking a question impossible for me to answer.

CHAIRMAN MCFADDEN: Perhaps I can clarify it--where did the suggestion come from that caused this decision of the change of rates last summer?

GOVERNOR ADOLPH MILLER: The three largest central banks in Europe had sent representatives to this country. There were the Governor of the Bank of England, Mr. Hjalmar Schacht, and Professor Rist, Deputy Governor of the Bank of France. These gentlemen were in conference with officials of the Federal Reserve Bank of New York. After a week or two, they appeared in Washington for the better part of a day. They came down the evening of one day and were the guests of the Governors of the Federal Reserve Board the following day, and left that afternoon for New York.

CHAIRMAN MCFADDEN: Were the members of the Board present at this luncheon?

GOVERNOR ADOLPH MILLER: Oh, yes, it was given by the Governors of the Board for the purpose of bringing all of us together.

CHAIRMAN MCFADDEN: Was it a social affair, or were matters of importance discussed?

GOVERNOR MILLER: I would say it was mainly a social affair. Personally, I had a long conversation with Dr. Schacht alone before the luncheon, and also one of considerable length with Professor Rist. After the luncheon I began a conversation with Mr. Norman, which was joined in by Governor Strong of New York.

CHAIRMAN MCFADDEN: Was that a formal meeting of the Board?

GOVERNOR ADOLPH MILLER: No.

CHAIRMAN MCFADDEN: It was just an informal discussion of the matters they had been discussing in New York?

GOVERNOR MILLER: I assume so. It was mainly a social occasion. What I said was mainly in the nature of generalities. The heads of these central banks also spoke in generalities.

MR. KING: What did they want?

GOVERNOR MILLER: They were very candid in answers to questions. I wanted to have a talk with Mr. Norman, and we both stayed behind after luncheon, and were joined by the other foreign representatives and the officials of the New York Reserve Bank. These gentlemen were all pretty concerned with the way the gold standard was working. They were therefore desirous of seeing an easy money market in New York and lower rates, which would deter gold from moving from Europe to this country. That would be very much in the interest of the international money situation which then existed.

MR. BEEDY: Was there some understanding arrived at between the representatives of these foreign banks and the Federal Reserve Board or the New York Federal Reserve Bank?

GOVERNOR MILLER: Yes.

MR. BEEDY: It was not reported formally?

GOVERNOR MILLER: No. Later, there came a meeting of the Open-Market Policy Committee, the investment policy committee of the Federal Reserve System, by which and to which certain recommendations were made. My recollection is that about eighty million dollars worth of securities were purchased in August consistent with this plan.

CHAIRMAN MCFADDEN: Was there any conference between the members of the Open Market Committee and those bankers from abroad?

GOVERNOR MILLER: They may have met them as individuals, but not as a committee.

MR. KING: How does the Open-Market Committee get its ideas?

GOVERNOR MILLER: They sit around and talk about it. I do not know whose idea this was. It was distinctly a time in which there was a cooperative spirit at work.

CHAIRMAN MCFADDEN: You have outlined here negotiations of very great importance.

GOVERNOR MILLER: I should rather say conversations.

CHAIRMAN MCFADDEN: Something of a very definite character took place?

GOVERNOR MILLER: Yes.

CHAIRMAN MCFADDEN: A change of policy on the part of our whole financial system which has resulted in one of the most unusual situations that has ever confronted this country financially (the stock market speculation boom of 1927-1929). It seems to me that a matter of that importance should have been made a matter of record in Washington.

GOVERNOR MILLER: I agree with you.

REPRESENTATIVE STRONG: Would it not have been a good thing if there had been a direction that those powers given to the Federal Reserve System should be used for the continued stabilization of the purchasing power of the American dollar rather than be influenced by the interests of Europe?

GOVERNOR MILLER: I take exception to that term "influence". Besides, there is no such thing as stabilizing the American dollar without stabilizing every other gold currency. They are tied together by the gold standard. Other eminent men who come here are very adroit in knowing how to approach the folk who make up the personnel of the Federal Reserve Board.

MR. STEAGALL: The visit of these foreign bankers resulted in money being cheaper in New York?

GOVERNOR MILLER: Yes, exactly.

CHAIRMAN MCFADDEN: I would like to put in the record all who attended that luncheon in Washington.

GOVERNOR MILLER: In addition to the names I have given you, there was also present one of the younger men from the Bank of France. I think all members of the Federal Reserve Board were there. Under Secretary of the Treasury Ogden Mills was there, and the Assistant Secretary of the Treasury, Mr. Schuneman, also, two or three men from the State Department and Mr. Warren of the Foreign Department of the Federal Reserve Bank of New York. Oh yes, Governor Strong was present.

CHAIRMAN MCFADDEN: This conference, of course, with all of these foreign bankers did not just happen. The prominent bankers from Germany, France, and England came here at whose suggestion?

GOVERNOR MILLER: A situation had been created that was distinctly embarrassing to London by reason of the impending withdrawal of a certain amount of gold which had been recovered by France and that had originally been shipped and deposited in the Bank of England by the French Government as a war credit. There was getting to be some tension of mind in Europe because France was beginning to put her house in order for a return to the gold standard. This situation was one which called for some moderating influence.

MR. KING: Who was the moving spirit who got those people together?

GOVERNOR MILLER: That is a detail with which I am not familiar.

REPRESENTATIVE STRONG: Would it not be fair to say that the fellows who wanted the gold were the ones who instigated the meeting?

GOVERNOR MILLER: They came over here.

REPRESENTATIVE STRONG: The fact is that they came over here, they had a meeting, they banqueted, they talked, they got the Federal Reserve Board to lower the discount rate, and to make the purchases in the open market, and they got the gold.

MR. STEAGALL: Is it true that action stabilized the European currencies and upset ours?

GOVERNOR MILLER: Yes, that was what it was intended to do.

CHAIRMAN MCFADDEN: Let me call your attention to the recent conference in Paris at which Mr. Goldenweiser, director of research for the Federal Reserve Board, and Dr. Burgess, assistant Federal Reserve Agent of the Federal Reserve Bank of New York, were in consultation with the representatives of the other central banks. Who called the conference?

GOVERNOR MILLER: My recollection is that it was called by the Bank of France.

GOVERNOR YOUNG: No, it was the League of Nations who called them together."

The secret meeting between the Governors of the Federal Reserve Board and the heads of the European central banks was not called to stabilize anything. It was held to discuss the best way of getting the gold held in the United States by the System back to Europe to force the nations of that continent back on the gold standard. The League of Nations had not yet succeeded in doing that, the objective for which that body was set up in the first place, because the Senate of the United States had refused to let Woodrow Wilson betray us to an international monetary authority. It took the Second World War and Franklin D. Roosevelt to do that. Meanwhile, Europe had to have our gold and the Federal Reserve System gave it to them, five hundred million dollars worth. The movement of that gold out of the United States caused the deflation of the stock boom, the end of the business prosperity of the 1920s and the Great Depression of 1929-31, the worst calamity which has ever befallen this nation. It is entirely logical to say that the American people suffered that depression as a punishment for not joining the League of Nations. The bankers knew what would happen when that five hundred million dollars worth of gold was sent to Europe. They wanted the Depression because it put the business and finance of the United States in their hands.

The Hearings continue:

MR. BEEDY: "Mr. Ebersole of the Treasury Department concluded his remarks at the dinner we attended last night by saying that the Federal Reserve System did not want stabilization and the American businessman did not want it. They want these fluctuations in prices, not only in securities but in commodities, in trade generally, because those who are now in control are making their profits out of that very instability. If control of these people does not come in a legitimate way, there may be an attempt to produce it by general upheavals such as have characterized society in days gone by. Revolutions have been promoted by dissatisfaction with existing conditions, the control being in the hands of the few, and the many paying the bills.

CHAIRMAN MCFADDEN: I have here a letter from a member of the Federal Reserve Board who was summoned to appear here. I would like to have it put in the record. It is from Governor Cunningham:



Dear Mr. Chairman:

For the past several weeks I have been confined to my home on account of illness and am now preparing to spend a few weeks away from Washington for the purpose of hastening convalescence.

Edward H. Cunningham

This is in answer to an invitation extended him to appear before our Committee. I also have a letter from George Harrison, Deputy Governor of the Federal Reserve Bank of New York.



My dear Mr. Congressman:

Governor Strong sailed for Europe last week. He had not been at all well since the first of the year, and, while he did appear before your Committee last March, it was only shortly after that that he suffered a very severe attack of shingles, which has sorely racked his nerves. George L. Harrison, May 19, 1928

I also desire to place in the record a statement in the New York Journal of Commerce, dated May 22, 1928, from Washington:

It is stated in well-informed circles here that the chief topic being taken up by Governor Strong  of the Federal Reserve Bank of New York on his present visit to Paris is the arrangement of  stabilization credits for France, Rumania, and Yugoslavia. A second vital question Mr. Strong  will take up is the amount of gold France is to draw from this country."

Further questioning by Chairman McFadden about the strange illness of Benjamin Strong brought forth the following testimony from Governor Charles S. Hamlin of the Federal Reserve Board on May 23rd, 1928:

"All I know is that Governor Strong has been very ill, and he has gone over to Europe primarily,  I understand, as a matter of health. Of course, he knows well the various offices of the European central banks and undoubtedly will call on them."

Governor Benjamin Strong died a few weeks after his return from Europe, without appearing before the Committee.

The purpose of these hearings before the House Committee on Banking and Currency in 1928 was to investigate the necessity for passing the Strong bill, presented by Representative Strong (no relation to Benjamin, the international banker), which would have provided that the Federal Reserve System be empowered to act to stabilize the purchasing power of the dollar. This had been one of the promises made by Carter Glass and Woodrow Wilson when they presented the Federal Reserve Act before Congress in 1912, and such a provision had actually been put in the Act by Senator Robert L. Owen, but Carter Glass House Committee on Banking and Currency had struck it out. The traders and speculators did not want the dollar to become stable, because they would no longer be able to make a profit. The citizens of this country had been led to gamble on the stock market in the 1920s because the traders had created a nationwide condition of instability.

The Strong Bill of 1928 was defeated in Congress.

*The financial situation in the United States during the 1920s was characterized by an inflation of speculative values only.* It was a trader-made situation. Prices of commodities remained low, despite the over-pricing of securities on the exchange.

*The purchasers did not expect their securities to pay dividends.* The idea was to hold them awhile and sell them at a profit. It had to stop somewhere, as Paul Warburg remarked in March, 1929. *Wall Street did not let it stop until the people had put their savings into these over-priced securities.* We had the spectacle of the President of the United States, Calvin Coolidge, acting as a shill for the stock market operators when he recommended to the American people that they continue buying on the market, in 1927. *There had been uneasiness about the inflated condition of the market, and the bankers showed their power by getting the President of the United States, the Secretary of the Treasury, and the Chairman of the Board of Governors of the Federal Reserve System to issue statements that brokers loans were not too high, and that the condition of the stock market was sound.*

Wouldn't you agree that it sounds like what happened during the housing bubble?

----------


## Carson

Gold will just be gold.

Will a dollar be a dollar? That is the question.

If create a new global currency we will be under the foot of a global master, if we aren't already.




> YumYum,
> 
> The central banks want to strip us of our wealth. That is what they have done in the past. Even if the whole world refuses our dollar, it is still the legal tender we use in this country. If any state or private individual creates a new sound currency here in America they will be going against the Federal government. We are stuck with the dollar to pay our debts until the government says different. If everybody is out of work and the banks are not issuing anymore debt, the dollar becomes scarce and it will deflate. What other currency or we going to use here in America?
> 
> We Americans are the richest people on Earth and the central banks are going to strip us of everything we have. Doesn't this fit into Obama's plan for a communistic government?


They have once again made off with it all.

----------


## hugolp

> Wouldn't you agree that it sounds like what happened during the housing bubble?


Ok. I have not read the whole thing, and I really dont want to spend my sunday night documenting about the claims of the Bank of England doing all this. The fact of the matter is that I agree with you that central banks create this mess. They create the inflationary boom, and they decide when they bring about the inevitable deflationary correction. Also, they can end sooner or later this correction and start to inflate a bubble again.

But in all this you are forgetting something: they need the system to keep working. They need the goverment in place and everything. And for that they need to inflate the currency or otherwise the goverment debt will be unpayable. So at some point they will start inflating again, and for a long time until the goverment debt is more bereable.

There is not going to be massive deflation. That would just kill the whole system. They are going to put presure to gather what they can and then inflate the hell.

----------


## YumYum

> Ok. I have not read the whole thing, and I really dont want to spend my sunday night documenting about the claims of the Bank of England doing all this. The fact of the matter is that I agree with you that central banks create this mess. They create the inflationary boom, and they decide when they bring about the inevitable deflationary correction. Also, they can end sooner or later this correction and start to inflate a bubble again.
> 
> But in all this you are forgetting something: they need the system to keep working. They need the goverment in place and everything. And for that they need to inflate the currency or otherwise the goverment debt will be unpayable. So at some point they will start inflating again, and for a long time until the goverment debt is more bereable.
> 
> There is not going to be massive deflation. That would just kill the whole system. They are going to put presure to gather what they can and then inflate the hell.


The government debt is not the responsibilty of the central bank to pay back. That responsibility rest on the American Public. You keep mixing government and politics with central banking. The governments are just instruments to be used by the central bankers. To prove my point look up the chart on page 26 of Dr. Paul's "End The Fed". This chart shows the purchasing power in the United States of Gold and selected currencies. You will notice that the Nazi Reichsmark held its purchasing power better that any other currency during the war. In fact it held its purchasing power clear up to the total destruction and surrender of Germany. How could this be? Its because the Nazi Germany had been backed by the Central Bank of London, thus demonstrating that the central banks influence is much greater on the stability of a currency than any government. Think about that for a moment. Berlin is about to fall and the Nazi Reichsmark had better purchasing power than our dollar. We're not anywhere near the collapse of Berlin.
The central banks are very much in control of our dollar, regardless of what our government does.

----------


## tmosley

> All the central banks are controlled by the Central Bank of London, including the Fed. You need to read the link I am providing. It will show the broader, correct picture of what is happening. How do you know what the central banks are currently doing? Nobody does. That is why we are pushing HR1207. Read this link and you will see exactly what the central banks have done in the past and how they operate.
> 
> http://www.apfn.org/apfn/reserve.htm


The Chinese central bank is controlled by the Communist Party, an organization that has violently resisted control by any and al Western elites for 50+ years.  Though they have shown some amount of cooperation since the Nixon administration, do not be fooled into thinking that they are under the control of London.  Only the European and American central banks have been historically beholden to London, and even that link has weakened significantly over the last 30 years, as Rothschilds began to lose prominence, with the heirs slowly falling to the corruption that eventually consumes all "great" families.

You're right that no-one can predict the actions of any individual when backed into a corner, but the central bankers both in the Fed and in London have painted themselves into a corner in a way that they have never done before.  There is no way out.  One could claim that this is some sort of presage for a single global currency, but I don't think so, giving the failures that have been perceived with the Euro, especially in Spain and Ireland.  Those countries see the lack of control over their own money as the problem (this has been reported in the media).  They most certainly won't see a more dilute vote in monetary policy as the answer.  

One can't say what will happen, but one certainly can say what WON'T happen.  The dollar is going down, no matter how you look at it.  The speed in which it fails will be a strong indicator of how cohesive the central banks are, granting vital insight into communications between central banks.  We are certainly in for an interesting 2010.  It is entirely possible that the entire works of the whole system will be laid bare before the end of next year, though only time will tell if it is too late to save the dollar (which CAN be saved, but only via gold and/or silver backing, which will cause the price of gold and/or silver to skyrocket).

----------


## tmosley

> When the banks stop issuing debt their cash reserves deflate. They take the surplus of cash they have and buy up assets with real value for practically nothing. They buy up other banks, corporations, real estate, etc..


This is very right.  This is why gold will go UP.  The central banks will be buying it like mad, along with all the sovereign wealth funds (these have only a tenuous connection to the central banks, at best), along with foreign corporations and individuals.

The only way gold can go down is if central banks SOMEHOW get all the dollars out of circulation (hard to do, when you don't have anything of value to trade for them), and then BURN them.

----------


## eric_cartman

also keep in mind... gold made it's previous all time high (i think around $850 in 1980) when interest rates were around 20%

----------


## YumYum

> This is very right.  This is why gold will go UP.  The central banks will be buying it like mad, along with all the sovereign wealth funds (these have only a tenuous connection to the central banks, at best), along with foreign corporations and individuals.
> 
> The only way gold can go down is if central banks SOMEHOW get all the dollars out of circulation (hard to do, when you don't have anything of value to trade for them), and then BURN them.


Turning over the Governments credit to private bankers in 1913 gave them unlimited opportunities to create money. The Federal Reserve System could also destroy money in large quantities through open market operations. Governor Marriner Eccles said, at the Silver Hearings of 1939:

"When you sell bonds on the open market, you extinguish reserves."

Extinguishing reserves means wiping out a basis for money and credit issue, or, tightening up on money and credit, a condition which is usually even more favorable to bankers than the creation of money. Calling in or destroying money gives the banker immediate and unlimited control of the financial situation, since he is the only one with money and the only one with the power to issue money in a time of money shortage. The money panics of 1873, 1893, 1920-21, and 1929-31, were characterized by a drawing in of the circulating medium. In economical terms, this does not sound like such a terrible thing, but when it means that people do not have money to pay their rent or buy food, and when it means that an employer has to lay off three-fourths of his help because he cannot borrow the money to pay them, the enormous guilt of the bankers and the long record of suffering and misery for which they are responsible would suggest that no punishment might be too severe for their crimes against their fellowmen.

----------


## tmosley

> Turning over the Governments credit to private bankers in 1913 gave them unlimited opportunities to create money. The Federal Reserve System could also destroy money in large quantities through open market operations. Governor Marriner Eccles said, at the Silver Hearings of 1939:
> 
> "When you sell bonds on the open market, you extinguish reserves."
> 
> Extinguishing reserves means wiping out a basis for money and credit issue, or, tightening up on money and credit, a condition which is usually even more favorable to bankers than the creation of money. Calling in or destroying money gives the banker immediate and unlimited control of the financial situation, since he is the only one with money and the only one with the power to issue money in a time of money shortage. The money panics of 1873, 1893, 1920-21, and 1929-31, were characterized by a drawing in of the circulating medium. In economical terms, this does not sound like such a terrible thing, but when it means that people do not have money to pay their rent or buy food, and when it means that an employer has to lay off three-fourths of his help because he cannot borrow the money to pay them, the enormous guilt of the bankers and the long record of suffering and misery for which they are responsible would suggest that no punishment might be too severe for their crimes against their fellowmen.


The problem is, no-one wants US treasury bonds, except the Fed.  This is like writing yourself checks to make it look like you have a lot of income.  You'd think the feds were trying to qualify for a mortgage or something.

----------


## Carson

Every time I read the dollar will strengthen I am just not seeing it.





The only way I see that happening is to regain control of the spending. I think that will take force. Like the force of a collapse.

----------


## Pauls' Revere

> Also keep in mind this is a slightly different situation. If we increase rates, that would mean the interest on the national debt will go up with the rates. I would think even if we raise rates 1 or 2% in the short term, the interest on the national debt alone would exceed the GDP. Which would mean the United States would be bankrupt.


thats a scary thought, but ultimately our dollar is backed by our military power.

----------


## Carson

> Snip...
> 
>  In economical terms, this does not sound like such a terrible thing, but when it means that people do not have money to pay their rent or buy food, and when it means that an employer has to lay off three-fourths of his help because he cannot borrow the money to pay them, the enormous guilt of the bankers and the long record of suffering and misery for which they are responsible would suggest that no punishment might be too severe for their crimes against their fellowmen.



Since when did it become a give-in that a thriving business needs to borrow money to make pay role?

Have we been operating at a level of default for so long that that sort of concept has become common place?

----------


## Carson

> thats a scary thought, but ultimately our dollar is backed by our military power.



Actually or military power is backed by our fake dollar.

Which is a scary thought indeed.

----------


## Pauls' Revere

> I'm not that strong on economics but it seems like there are a couple of opposing forces here, someone set me straight if my thinking is wrong.
> 
> _I think what causes alot of economic disparity is the differences in economic theory, Keynesian, Friedman, Mieses, etc..._
> 
> We have seen a huge tightening of credit, which is acting as a deflationary force (talking price deflation and really for all intents and purposes it is acting almost like monetary inflation because people's credit was acting like money in the market.
> 
> _However, credit (as a lending tool) has been granted or given to the major banking institutions i.e. B of A, Wells fargo, and the like. They borrow the dollars by the fed funds rate, the interest the fed cahrges them to borrow the money. Which is at record lows at what may as well be zero interst rate. Money is basically given to them almost free of charge. I believe it is at .25% or so. But we are not seeing these banks release this credit or dollars and lending to business and individuals because of all the defaults, forclosures, etc...would you lend money in this economy expecting a return with unemployment at 10%? So credit has been granted which is why Wall Street is doing well but we the little people are sucking on the tailpipe._
> 
> And then we have the bailout/stimulus and insance amounts of printed money on the inflationary side. However, it seems like most of the money is not being spent into the economy, but is just being used to buy stocks, PMs and etc - so it is inflating the stock market but it is not causing the huge price inflation (at least not yet) that one would expect.
> ...


_and no sir...just my two pieces of eight. Yep, they invent new methods to store and move money. Not to mention that now these things are done in coordinated efforts with other central banks around the world as was done earlier this year with Europe and Asia._

*I failed miserably at muti quote!*

----------


## Bill Still

So wrong. Interest rate rises, when they happen in the distant future, will be gradual #1. #2 raising interest rates sucks money out of the system. Can you imagine the commercial real estate market if even less money was available to roll over their loans? The truth of this is that they are stuck between a rock and a hard place. Their debt money system has finally reached its mathematical limit. The world economy can no longer support the interest payments. The system is collapsing. The question is with what will it be replaced? States are now investigating the Bank of North Dakota model where states create their own state-chartered banks and bypass the debt/interest trap. This may not control quantity, but, at least, it bypasses the interest.

----------


## YumYum

> So wrong. Interest rate rises, when they happen in the distant future, will be gradual #1. #2 raising interest rates sucks money out of the system. Can you imagine the commercial real estate market if even less money was available to roll over their loans? The truth of this is that they are stuck between a rock and a hard place. Their debt money system has finally reached its mathematical limit. The world economy can no longer support the interest payments. The system is collapsing. The question is with what will it be replaced? States are now investigating the Bank of North Dakota model where states create their own state-chartered banks and bypass the debt/interest trap. This may not control quantity, but, at least, it bypasses the interest.


Did you invest heavily in gold?

----------


## YumYum

> Since when did it become a give-in that a thriving business needs to borrow money to make pay role?
> 
> Have we been operating at a level of default for so long that that sort of concept has become common place?


Most businesses operate on a line of credit because in today's environment a business may wait 60 to 90 days for account receivables. Employees need their pay either weekly or bi-weekly.

----------


## YumYum

> Every time I read the dollar will strengthen I am just not seeing it.
> 
> 
> 
> 
> 
> The only way I see that happening is to regain control of the spending. I think that will take force. Like the force of a collapse.


When credit is contracted, the dollar deflates. The upswing in gold is tied to oil. Please read this article.

http://seekingalpha.com/article/1670...cle_sb_popular

----------


## krazy kaju

I doubt there will be a pullback to the $600 range. I do think, however, that there will be a pullback closer to the $900 range, as a second financial crisis hits the US. A second financial crisis will mean a second wave of credit destruction along with a falling velocity (rising demand) of money, causing the USD to strengthen. Since much of gold's strength relies on the dollar's weakness, gold prices will fall as a result of dollar strengthening.

----------


## YumYum

> I doubt there will be a pullback to the $600 range. I do think, however, that there will be a pullback closer to the $900 range, as a second financial crisis hits the US. A second financial crisis will mean a second wave of credit destruction along with a falling velocity (rising demand) of money, causing the USD to strengthen. Since much of gold's strength relies on the dollar's weakness, gold prices will fall as a result of dollar strengthening.


You may be right. I provided a link where the author agrees with you. He says that if oil hits a $100 a barrel gold will settle around $950. He thinks that gold is overpriced right now. The point of my OP was that the central banks have a pattern in these economic crisis, and at some point the central banks will cut off all credit; leading to a huge deflation of the dollar. People are going to loose their shirts going long in gold.

http://seekingalpha.com/article/1686...he-wrong-again

----------


## jon_perez

> When they contract credit the dollar will deflate due to the scarcity of cash, the banks will make another fortune watching the dollar climb in value. They did it to the farmers in 1920-21, they are doing it again. Nobody knows how much gold the central banks possess. We dont know anything about what the central banks are doing. We can only look to the past to determine what they will do. Why do you think we are pushing HR 1207?


I think someone who reads up on history like you do should make better investment decisions and fare better than many of the one-track minds I see here...

This is not to say that the Fed can necessarily control the QE it has let loose out of the bottle, but if you look at Japan, hyperinflation was not the end result of QE.  Also even though Gary North thinks the deflationists don't have a sound thesis, he believes - and with good reason - the Fed WILL NOT let hyperinflation happen (or at least try not to let that happen).  Recent history such as the chronic inflation of the 70s shows us that *politics* WILL ensure that inflation will become an issue that will at least try to be fought.

----------


## Blueskies

> I doubt there will be a pullback to the $600 range. I do think, however, that there will be a pullback closer to the $900 range, as a second financial crisis hits the US. A second financial crisis will mean a second wave of credit destruction along with a falling velocity (rising demand) of money, causing the USD to strengthen. Since much of gold's strength relies on the dollar's weakness, gold prices will fall as a result of dollar strengthening.


I disagree.

Last year was an anomaly.

If there is another financial crisis (perhaps the better statement is 'when') gold may fall in relation to other currencies, but the dollar will not strengthen.

Why?  All the chips are on the table.  We're all in.  The Fed has fired all its bullets, the government has pretty much done everything it can.  If the US economy still collapses, then theres no hope that the Government debt can ever be repaid--and the currency will collapse.

----------


## YumYum

> I disagree.
> 
> Last year was an anomaly.
> 
> If there is another financial crisis (perhaps the better statement is 'when') gold may fall in relation to other currencies, but the dollar will not strengthen.
> 
> Why?  All the chips are on the table.  We're all in.  The Fed has fired all its bullets, the government has pretty much done everything it can.  If the US economy still collapses, then theres no hope that the Government debt can ever be repaid--and the currency will collapse.


The debt cannot be paid back. Even if the government goes into bankruptcy, it is the American people left holding the bag, not the Fed or the Federal Reserve Notes. The Reserve Note is an issue of debt for the American people, not the Federal Reserve. The government and the Federal Reserve are separate entities and the Fed has no liabilities; only the government. People think that if the government collapes that the dollar will collapse, and that is not true. Just look at my post on Germany and its currency. The reason the Reichsmark did not collapse with the collapse of Nazi Germany government, was not because it was on the gold standard, but it was because the Reichsmark was backed by the Central Bank of London. This demonsrates the enormous power that the central bank has. If the dollar collapses, that could cause the collapse of the U.S. government. But if the dollar collapses, the central bank can manipulate its assets and paper to actually profit from its collapse, since it doesn't have to pay back the U.S. debt, and as I said, it has no liabilities.

The sole purpose of the central bank is to rob the people of their wealth and it will do this with a deflated dollar.

----------


## Truth-Bringer

> Exactly. The United States; its industries and people will be bankrupt, but the central banks won't be. The central banks don't care if the U.S. goes bankrupt, in fact, they are counting on it. That is how they "reclaim their wealth"; by buying everything up; a penny on the dollar when the dollar is scarce. The American citizens have to pay back the national debt; not the central banks. That is the genius of the central banks. They have done this over and over. They are doing it again.


You mean "that is the deceptive, fraudulent evil genius of the central banks."

No doubt about it - those cunning, greedy demons are the worst criminals on the planet.

----------


## Truth-Bringer

> You may be right. I provided a link where the author agrees with you. He says that if oil hits a $100 a barrel gold will settle around $950. He thinks that gold is overpriced right now. The point of my OP was that the central banks have a pattern in these economic crisis, and at some point the central banks will cut off all credit; leading to a huge deflation of the dollar. People are going to loose their shirts going long in gold.
> 
> http://seekingalpha.com/article/1686...he-wrong-again


There still is a chance for hyperinflation though.  That chance comes from the fact that we have 3 to 6 trillion (or more) FRN's floating overseas.  China could spark a run by failing to prop us up and purchase our debt.  Or multiple countries could announce they'll no longer buy oil with FRN's.  The velocity (rate at which dollars exchange), which I haven't seen anyone speak about, could get out of control.

I grant that hyperinflation is unlikely, but it is still a possibility.

----------


## YumYum

> You mean "that is the deceptive, fraudulent evil genius of the central banks."
> 
> No doubt about it - those cunning, greedy demons are the worst criminals on the planet.


They go beyond evil. I did not know that civilized humans could be so vile.

----------


## Truth-Bringer

> thats a scary thought, but ultimately our dollar is backed by our military power.


That's definitely a huge factor.  But also the petrol recycling - the agreement whereby most Arab nations signed up to restrict oil purchases to dollars / FRN's - that helps the U.S. float its debt.  So, there's a de facto backing of oil and military might.

----------


## Blueskies

> The debt cannot be paid back. Even if the government goes into bankruptcy, it is the American people left holding the bag, not the Fed or the Federal Reserve Notes. The Reserve Note is an issue of debt for the American people, not the Federal Reserve. The government and the Federal Reserve are separate entities and the Fed has no liabilities; only the government. People think that if the government collapes that the dollar will collapse, and that is not true. Just look at my post on Germany and its currency. The reason the Reichsmark did not collapse with the collapse of Nazi Germany government, was not because it was on the gold standard, but it was because the Reichsmark was backed by the Central Bank of London. This demonsrates the enormous power that the central bank has. If the dollar collapses, that could cause the collapse of the U.S. government. But if the dollar collapses, the central bank can manipulate its assets and paper to actually profit from its collapse, since it doesn't have to pay back the U.S. debt, and as I said, it has no liabilities.
> 
> The sole purpose of the central bank is to rob the people of their wealth and it will do this with a deflated dollar.


On paper (no pun intended), the Fed and the government are separate, but in reality they are one entity.

You're saying that the Fed would allow the US government to go bankrupt.  I disagree.  The Fed will print money to bail the government out.  I would be everything I own on that fact.

If there is another financial crisis, investors will lose all faith in the US.  The Chinese, who have been supporting us, will finally cut their loses and run.  There will be no one left to buy the debt but the Fed--which will destroy the currency.  As the Fed becomes the sole buyer of government debt, foreign central banks will dump their dollar reserves, which will contribute to the inflation.

I don't believe in doomsday scenarios.  What I think will happen is that there will be a crash, which will destroy all confidence, but it will not happen for a few years.  At that point, the Fed will agree to buy the debt to prevent outright bankruptcy, but the government will significantly reduce its expenditures.  Foreign central banks will dump a large portion of, but not all, of their reserves.  This will create very, very high inflation for years, but not hyperinflation.

----------


## YumYum

> On paper (no pun intended), the Fed and the government are separate, but in reality they are one entity.
> 
> You're saying that the Fed would allow the US government to go bankrupt.  I disagree.  The Fed will print money to bail the government out.  I would be everything I own on that fact.
> 
> If there is another financial crisis, investors will lose all faith in the US.  The Chinese, who have been supporting us, will finally cut their loses and run.  There will be no one left to buy the debt but the Fed--which will destroy the currency.  As the Fed becomes the sole buyer of government debt, foreign central banks will dump their dollar reserves, which will contribute to the inflation.
> 
> I don't believe in doomsday scenarios.  What I think will happen is that there will be a crash, which will destroy all confidence, but it will not happen for a few years.  At that point, the Fed will agree to buy the debt to prevent outright bankruptcy, but the government will significantly reduce its expenditures.  Foreign central banks will dump a large portion of, but not all, of their reserves.  This will create very, very high inflation for years, but not hyperinflation.


If the Fed and the U.S. government are one entity, are you then saying that the Fed is just as liable as the American taxpayer to pay off the national debt? This is hardly the case. The Fed put the liability on us, the taxpayer. The government can go bankrupt and the bankers who control the Fed will walk away unscathed. You think the central banks will dump their reserves? Think again. They are buying up treasurys; just as I said they would. You should read this article.

http://online.wsj.com/article/SB125545754084882895.html

----------


## LibForestPaul

Central Banks vs 
International banking cartel...

i.e. The Fed...
No.
Just one subsidiary of IBC.
Does it matter if the Fed, or the FRN or the US government "collapse" to the IBC?

----------


## LibertyEagle

> The sole purpose of the central bank is to rob the people of their wealth and it will do this with a deflated dollar.


How would a *de*flated dollar rob us of our wealth?

----------


## YumYum

> How would a *de*flated dollar rob us of our wealth?


It isn't so much a deflated dollar, but the actions of the Fed and other central banks that bring about the deflated dollar, which robs us of our wealth. We live in an economical system that depends on debt. If debt is not created by the Bank of Issue, there is no new money. When the central banks buy up treasuries, as they are doing now, it strengthens the dollar. Couple that with higher interest rates and tighter lending regulations and you have contraction of credit. 

What the central banks do is go into a country and they lend money at low interest rates to stimulate the economy. Small businesses, large corporations and other institutions benefit from all this money available and they grow. Even though they are all in debt with the bank they have added value because of labor and production. Jobs are plentiful, wages are high and the people’s standard of living is getting better. But everyone, organizations and individuals alike, are strapped with debt. During this period bubbles are created by the Fed for the purpose of having everybody jump in, using credit, to make a killing in the frenzy. Once the market is saturated, the central bank pulls the plug by tightening credit and upping interest rates. The bubble burst, companies’ lines of credit are cut off, people are laid off, and society cannot pay back their loans. They then lose everything they bought on credit, along with losing the equity they acquired from their labor. There is more and more people laid off, and companies go under. There is no new money being loaned out, and the majority of people are broke, so they are not buying anything. This causes the price of goods to drop and because there is a shortage of money the dollar deflates. In the meantime, the central banks are flush with all this deflated money, and they buy up everything of value at a penny on the dollar. That is how they rob you and I of our wealth with a deflated dollar.

----------


## Blueskies

> It isn't so much a deflated dollar, but the actions of the Fed and other central banks that bring about the deflated dollar, which robs us of our wealth. We live in an economical system that depends on debt. If debt is not created by the Bank of Issue, there is no new money. When the central banks buy up treasury's, as they are doing now, it strengthens the dollar. Couple that with higher interest rates and tighter lending regulations and you have contraction of credit. 
> 
> What the central banks do is go into a country and they lend money at low interest rates to stimulate the economy. Small businesses, large corporations and other institutions benefit from all this money available and they grow. Even though they are all in debt with the bank they have added value because of labor and production. Jobs are plentiful, wages are high and the peoples standard of living is getting better. But everyone, organizations and individuals alike, are strapped with debt. During this period bubbles are created by the Fed for the purpose of having everybody jump in, using credit, to make a killing in the frenzy. Once the market is saturated, the central bank pulls the plug by tightening credit and upping interest rates. The bubble burst, companies lines of credit are cut off, people are laid off, and society cannot pay back their loans. They then lose everything they bought on credit, along with losing the equity they acquired from their labor. There is more and more people laid off, and companies go under. There is no new money being loaned out, and the majority of people are broke, so they are not buying anything. This causes the price of goods to drop and because there is a shortage of money the dollar deflates. In the meantime, the central banks are flush with all this deflated money, and they buy up everything of value at a penny on the dollar. That is how they rob you and I of our wealth with a deflated dollar.


Banks, in a deflationary environment, lose more than the average person.

The banks take on more debt than the average person, especially during a bubble.  They make their money by borrowing money at low rates and lending it at higher ones.  Deflation kills debtors, therefore it kills banks, which is why you always have a wave of bank failures following a boom period.

Inflation benefits the banks, which is why the Fed has done nothing but inflate the money since its inception.

Also, the idea that there is this nefarious group of bankers going around creating bubbles is just unfounded.  No one understands what causes bubbles.  They have been shown to occur with or without the free market, and with or without central banks.

----------


## YumYum

> Banks, in a deflationary environment, lose more than the average person.
> 
> The banks take on more debt than the average person, especially during a bubble.  They make their money by borrowing money at low rates and lending it at higher ones.  Deflation kills debtors, therefore it kills banks, which is why you always have a wave of bank failures following a boom period.
> 
> Inflation benefits the banks, which is why the Fed has done nothing but inflate the money since its inception.
> 
> Also, the idea that there is this nefarious group of bankers going around creating bubbles is just unfounded.  No one understands what causes bubbles.  They have been shown to occur with or without the free market, and with or without central banks.


First of all, when I refer to "banks" or "bank", I am talking about the central banks, which are banks of issue. They all are under the authority of the Central Bank of England. They are known as "The London Connection". To help you better understand how debt is issued please watch this video titled "Money as Debt."

Money As Debt

Also, to show you that there is without a doubt evil men who do create bubbles and then collapse them to "take back the wealth", please read this book online "Secrets of the Federal Reserve System" by Eustace Mullins. It will change your views. It will also shock you.

http://www.apfn.org/apfn/reserve.htm

----------


## Blueskies

> Also, to show you that there is without a doubt evil men who do create bubbles and then collapse them to "take back the wealth", please read this book online "Secrets of the Federal Reserve System" by Eustace Mullins. It will change your views. It will also shock you.


Mullins kind of lost all credibility with the whole occult thing.

Sorry, I don't subscribe to the tinfoil hat theories.  People are not that smart.

----------


## tremendoustie

> Mullins kind of lost all credibility with the whole occult thing.
> 
> Sorry, I don't subscribe to the tinfoil hat theories.  People are not that smart.


Yes, especially bureaucrats. I really don't get how people think they're evil geniuses. They're giant egoed morons on the public dole, who screw up everything they touch.

----------


## revolutionary8

> Yes, especially bureaucrats. I really don't get how people think they're evil geniuses.* They're giant egoed morons on the public dole, who screw up everything they touch.*


Kinda like sociopaths?

----------


## revolutionary8

> Mullins kind of lost all credibility with the whole occult thing.
> 
> Sorry, I don't subscribe to the tinfoil hat theories.  People are not that smart.


Yess, yesss, people are not that smart, people are not that smart, people are not that smart, people are not that smart...

Yessss...
I suppose that is why we are now classified as a "Bacteria" or " A Virus" that has "invaded" the earth, where only *population control/"family planning"* is a viable solution....

----------


## Blueskies

> Yess, yesss, people are not that smart, people are not that smart, people are not that smart, people are not that smart...
> 
> Yessss...
> I suppose that is why we are now classified as a "Bacteria" or " A Virus" that has "invaded" the earth, where only *population control/"family planning"* is a viable solution....
> 
> Take off Frodo's invisible cape, we see you here in the "underworld". 
> 
> Nothing personal, I don't accuse YOU of having these thoughts at all.


Thanks for not understanding anything I said.

Let me try again.

Imagine the smartest person you've ever met.  Now multiply that by 10x.  Do you honestly think a person that intelligent would be capable of manipulating world economies comprised of trillions of economic transactions and billions of economic agents?  Yeah, no.

There is no nefarious cabal of evil geniuses manipulating the world for their own ends as if its some orchestrated play.  It's not.  There is no human being, or group of human beings capable of being intelligent enough to pull it off.

Basically there's a South Park episode all about this...

----------


## revolutionary8

> Thanks for not understanding anything I said.
> 
> Let me try again.
> 
> Imagine the smartest person you've ever met.  Now multiply that by 10x.  Do you honestly think a person that intelligent would be capable of manipulating world economies comprised of trillions of economic transactions and billions of economic agents?  Yeah, no.
> 
> There is no nefarious cabal of evil geniuses manipulating the world for their own ends as if its some orchestrated play.  It's not.  There is no human being, or group of human beings capable of being intelligent enough to pull it off.
> 
> Basically there's a South Park episode all about this...


well, I edited my post to re-orchestrate, but now that you've inserted a SP episode, all bets are off.
I lived there. 
(well, at least in the town SP was based upon) (FairplayIMO) 

Cartman is a sociopath. If you doubt it- please see the episode wHere he chops up what'shisdude's parents and feeds them to Radiohead  "in the form of"---> A BOWL OF CHILI!. 

Is Cartman evil? Is he a genius? Is he a psycho/sociopath?  What about an "evil genius"?  Is "he" based on a real "character"?  A "group" of characters? 
who knows...

----------


## YumYum

[QUOTE=jon_perez;2385560]I think someone who reads up on history like you do should make better investment decisions and fare better than many of the one-track minds I see here...

This is not to say that the Fed can necessarily control the QE it has let loose out of the bottle, but if you look at Japan, hyperinflation was not the end result of QE.  Also even though Gary North thinks the deflationists don't have a sound thesis, he believes - and with good reason - the Fed WILL NOT let hyperinflation happen (or at least try not to let that happen).  Recent history such as the chronic inflation of the 70s shows us that *politics* WILL ensure that inflation will become an issue that will at least try to be fought.[QUOTE]

I lost money listening to the financial experts with the crystal balls. Not anymore. The research I have done is for a thesis I am doing in college. The evidence is overwhelming that the central banks work in collusion and control this country and Europe's economies. 

Inflationists keep mixing our government with the Fed as if they are one. That is crazy. The Fed is a seperate entity. If it isn't true why does Ron Paul want transperancy and a complete audit of the Fed? I feel that politics plays into the economy when it benefits the bankers and not the other way around. The Fed lowers interest rates during an election if it wants a president re-elected and raises the interest rates when they want him to lose.

----------


## Liberty Star

I must have been watching too much CTN,  when I saw "Gold will plummet" on front page, at first glance I read "God will punish". 

Crazy LOL

----------


## Blueskies

What interest do they have in "controlling the economies"?

The Fed and the government are the same.  The chairmen is appointed by the President.  He appears in public with the President frequently.  The dealings of the Fed are secret from the congress and the people, like the CIA or the FBI, but its still a government agency.

----------


## YumYum

> I must have been watching too much CTN,  when I saw "Gold will plummet" on front page, at first glance I read "God will punish". 
> 
> Crazy LOL


My title should have read: "Gold will plummet: God will punish!" Hey, I like that!

----------


## YumYum

> What interest do they have in "controlling the economies"?
> 
> The Fed and the government are the same.  The chairmen is appointed by the President.  He appears in public with the President frequently.  The dealings of the Fed are secret from the congress and the people, like the CIA or the FBI, but its still a government agency.


It is not a government agency. Who told you that? 

Actually, they work for the shape shifting reptilians and the Tri-bi-lateral Bilderberger's Zionist's Council on Alien Relations.

----------


## revolutionary8

> It is not a government agency. Who told you that? 
> 
> Actually, they work for the shape shifting reptilians and the Tri-bi-lateral Bilderberger's Zionist's Council on Alien Relations.


well now you have officially "lost it".  
Kookland for you.

I disagree w/ a LOT you are saying YY (esp. as far as deflation vs.inflation goes) , but I am sure enjoying reading what you  have to say, and sure appreciate it.  This is a really good thread here in Ecoland. Inviting, yet intriguing. No doubt I will keep what you are saying in mind. I think you are doing a great job in your research and wish you only the best.

----------


## YumYum

> well now you have officially "lost it".  
> Kookland for you.
> 
> I disagree w/ a LOT you are saying YY (esp. as far as deflation vs.inflation goes) , but I am sure enjoying reading what you  have to say, and sure appreciate it.  This is a really good thread here in Ecoland. Inviting, yet intriguing. No doubt I will keep what you are saying in mind. I think you are doing a great job in your research and wish you only the best.


yeah, I think I need a drink. All this talk of a financial Armaggedon followed by a One World Order communistic regime that will be controlled by a bunch of headbanging Zionists who want to put me in a FEMA camp has finally taken its toll.

----------


## revolutionary8

YumYum 
needs some
TumTum

Yes, it's sickening.  I think that is why a lot of ppl avoid economics like the plague- homeo sapiens can smell death. It takes esp. brave human beings to dive in for the good of THE PEOPLE, and remain "free".  Beyond acheiving thier own freedom, in their own minds, they must pass the scrutiny of those who scrutinize the definition of "freedom", as well as remain ojective towards those who claim to own the rights of that "definition". 
I tend to confuse people, so pardon me if I didn't make any sense, feel free to PM me w/ any questions, I come and go. 

Nite Nite.
 Don't let the banksterbugs bite.

----------


## LibForestPaul

For YY
So basically...tighten credit to cause a "reverse" bubble, wait for things to tank (deflationary implosion) print new money, buy up cheap assets(foreclosed business, cheap resources) with money at face value, ride out the hyper inflation, let the little people deal with 30% inflation rate?

----------


## LibForestPaul

> Thanks for not understanding anything I said.
> 
> Let me try again.
> 
> Imagine the smartest person you've ever met.  Now multiply that by 10x.  Do you honestly think a person that intelligent would be capable of manipulating world economies comprised of trillions of economic transactions and billions of economic agents?  Yeah, no.
> 
> There is no nefarious cabal of evil geniuses manipulating the world for their own ends as if its some orchestrated play.  It's not.  There is no human being, or group of human beings capable of being intelligent enough to pull it off.
> 
> Basically there's a South Park episode all about this...


bees have 0 intelligence, but they hexagons quite nicely.

----------


## YumYum

> For YY
> So basically...tighten credit to cause a "reverse" bubble, wait for things to tank (deflationary implosion) print new money, buy up cheap assets(foreclosed business, cheap resources) with money at face value, ride out the hyper inflation, let the little people deal with 30% inflation rate?


Yes, and by tightening credit, buying up treasuries and raising interest rates the dollar will deflate. Have you seen how hard it is for people to get a loan who are employed and have great credit? It is going to get worse, not better. I agree with Schiff about buying gold and keeping it as a hedge against inflation, but that should be done when you plan to keep the gold for twenty years or more. Day to day, week to week, and month to month speculation in gold is too risky. We are going to go into a very bad depression. If the dollar goes into hyper-inflation we will go into a depression with hyper-inflation, which is economic collapse. Instead of buying gold, people should be buying silver dollars as a protection against starvation. If the government bans hording gold like it did in the 30's, a farmer will sell his crops for silver dollars. 

Look at this chart. I think gold has hit a ceiling.


http://www.kitco.com/charts/popup/au0030lnb.html

----------


## hugolp

> Yes, and by tightening credit, buying up treasuries and raising interest rates the dollar will deflate. Have you seen how hard it is for people to get a loan who are employed and have great credit? It is going to get worse, not better. I agree with Schiff about buying gold and keeping it as a hedge against inflation, but that should be done when you plan to keep the gold for twenty years or more. Day to day, week to week, and month to month speculation in gold is too risky. We are going to go into a very bad depression. If the dollar goes into hyper-inflation we will go into a depression with hyper-inflation, which is economic collapse. Instead of buying gold, people should be buying silver dollars as a protection against starvation. If the government bans hording gold like it did in the 30's, a farmer will sell his crops for silver dollars. 
> 
> Look at this chart. I think gold has hit a ceiling.
> 
> 
> http://www.kitco.com/charts/popup/au0030lnb.html


When did you say the cheap credit is going to stop? Look at what Bernanke just did:



http://www.ronpaulforums.com/showthread.php?t=216579

----------


## YumYum

> When did you say the cheap credit is going to stop? Look at what Bernanke just did:
> 
> 
> 
> http://www.ronpaulforums.com/showthread.php?t=216579


I don't know when the cheap credit is going to stop. Cheap credit is benefiting the banks; not the average American. Bernanke is keeping interest rates low for the benefit of central banks. He has tightened the credit for Americans while having a low discount rate by making loan requirements so strict that no one can get a loan. High interest rates make loans undesirable. What business wants a line of credit that has a rate so high it robs them of any profits? That isn't the current problem businesses and citizens are facing. The banks have pulled the rug out on businesses that are still profiting by cutting off their lines of credit. And for middle calss Americans, under the current banking credit requirements, you can be fully employed and have great credit, and still be turned down on that low interest home equity loan that you so badly need.

Currently, central banks are making loans to central banks and creating enormous wealth for themselves, while millions of Americans are losing everything they have.

----------


## hugolp

> I don't know when the cheap credit is going to stop. Cheap credit is benefiting the banks; not the average American. Bernanke is keeping interest rates low for the benefit of central banks. He has tightened the credit for Americans while having a low discount rate by making loan requirements so strict that no one can get a loan. High interest rates make loans undesirable. What business wants a line of credit that has a rate so high it robs them of any profits? That isn't the current problem businesses and citizens are facing. The banks have pulled the rug out on businesses that are still profiting by cutting off their lines of credit. And for middle calss Americans, under the current banking credit requirements, you can be fully employed and have great credit, and still be turned down on that low interest home equity loan that you so badly need.
> 
> Currently, central banks are making loans to central banks and creating enormous wealth for themselves, while millions of Americans are losing everything they have.


Yes, yes, I kind of agree.

But what does all this have to do with what we are discussing? Your arguments have been just very very poor all over, but now you are directly bullshiting.

Are you a politician?

----------


## YumYum

> Yes, yes, I kind of agree.
> 
> But what does all this have to do with what we are discussing? Your arguments have been just very very poor all over, but now you are directly bullshiting.
> 
> Are you a politician?


You think so?? I have stated my position from the research I have done that at some time gold will drop and the dollar will get stronger. When? I don't know. Why? Because this is the pattern that has happened before in every boom and bust cycle we have had. That ain't bullshitin'. That's fact.

----------


## hugolp

> You think so?? I have stated my position from the research I have done that at some time gold will drop and the dollar will get stronger. When? I don't know. Why? Because this is the pattern that has happened before in every boom and bust cycle we have had. That ain't bullshitin'. That's fact.


Oh, ok. So you are talking about something that could happen in years. Well, then I have to agree its a posibility. But there is the serious positbility that the dollar collapses, I am sure you have seen that in your study of boom and bust cycle. And because you have studied it hard, you have seen that when those events happen, they happen quick, very quick.

So in my view, hyper-inflation of the dollar is a real posibility. The other posibility is going back to the 70's, and then to the beggining of the 80's where Volcker pushed very high interest rates (+20%) and made the dollar become again the bubble it is and give it temporal strenght. BUT before that happens, it has to happen years of high raising prices, it has to happen the 70's. Why is that? Because the real porpous of the 70's inflation was to erode the goverment debt. And now goverment debt is again out of control and needs to be brought down by inflation. The Fed can not raise interest rates very high because it would crush the goverment.

So, if the dollar does not collapse, there are some years of high inflation down the rodad. Some years. Then, after those years, at some point the Fed probably is able again of raising interest rates where they should be (above 20% like Volcker did) and inflate the dollar bubble again. That would be the moment of investing your gold in dollars. But that is if the dollar does not collapse, and in some years, not now.

----------


## YumYum

bump....for those who have told me I am wrong. Gold will eat your lunch. Buy on the dips. But where do the dips end? Only tmosley knows. HAHAHAHAHA!!!!!!

----------


## LDA

People that actually trade gold have been calling for a correction for quite a while. Correction doesn't equal "plummet." There are no fundamentals to support a stronger dollar, it's just trading. Gold will be going up to new highs in time, at least in terms of dollars. 2k is a foregone conclusion at this point.

----------


## tmosley

> bump....for those who have told me I am wrong. Gold will eat your lunch. Buy on the dips. But where do the dips end? Only tmosley knows. HAHAHAHAHA!!!!!!


Oh noes, 4% down!  What will I do with my 66% profits!?

----------


## tmosley

Whoops, strike that, 150%.  I didn't factor in the fact that I bought some ag stocks recently, and they diluted my % gains.

----------


## Original_Intent

> bump....for those who have told me I am wrong. Gold will eat your lunch. Buy on the dips. But where do the dips end? Only tmosley knows. HAHAHAHAHA!!!!!!


Gold was at $1050 an ounce when you made this prediction 6 weeks ago. Even taking the low point hit today at $1150 an ounce, that's almost a 10% increase in 6 weeks. And you are here crowing about how right you were??? I think there is a job opening in the current administration - surely if you can claim this as a victory for your predictive power, you can spin unemployment number in a positive light, maybe you can even win us the war in Afghanistan?!

----------


## andrewh817

> I am speculating from what has happened before that we will have a terrible depression; even Peter Schiff has predicted that. Even though recovery looks probable, unemployment is rising. Massive unemployment is one major factor that contributes to a depression, according to Schiff.


Why does recovery look probable?  What do you define as recovery?

----------


## Bossobass

> bump....for those who have told me I am wrong. Gold will eat your lunch. Buy on the dips. But where do the dips end? Only tmosley knows. HAHAHAHAHA!!!!!!


OK, I have to just say it. You're a moron.

Got out at 1220.00 Will put it all back in at the bottom (which may be Sunday night). The lower it drops, the better.

Every year, the stack grows.

When the NWO currency makes it's debut, you'll be exchanging 5 USD for 1 OWD.

Over the past 40 years, I'll have a 40 for a 1. 

BTW, I never told you you were wrong, so let me take this opportunity...

You're wrong.

Bosso

----------


## devil21

> Gold was at $1050 an ounce when you made this prediction 6 weeks ago. Even taking the low point hit today at $1150 an ounce, that's almost a 10% increase in 6 weeks. And you are here crowing about how right you were??? I think there is a job opening in the current administration - surely if you can claim this as a victory for your predictive power, you can spin unemployment number in a positive light, maybe you can even win us the war in Afghanistan?!


Zing! 

One day does not a trend make, dear YumYum.  This won't have any effect on foreigners still buying gold and the dollar being further diluted by printing.  It's a one day bump on the last day of the week to raise the USD over the weekend and profit taking on paper gold positions.  BFD.

I find the funniest part of today's action is that a genuine green shoot sends the markets into a genuine frenzy.  Is this an admission that all of the other "green shoots" were indeed fake?

----------


## YumYum

> OK, I have to just say it. You're a moron.
> 
> Got out at 1220.00 Will put it all back in at the bottom (which may be Sunday night). The lower it drops, the better.
> 
> Every year, the stack grows.
> 
> When the NWO currency makes it's debut, you'll be exchanging 5 USD for 1 OWD.
> 
> Over the past 40 years, I'll have a 40 for a 1. 
> ...


Eh! Yua talkin' ta me? huh? Yua talkin' ta me? Gold hit a bottom bing, a bottom boom!

HA!HA!HA!HA!HA!HA!HA!HA!

----------


## NoMoreFed

bump!

----------


## ctiger2

> Eh! Yua talkin' ta me? huh? Yua talkin' ta me? Gold hit a bottom bing, a bottom boom!
> 
> HA!HA!HA!HA!HA!HA!HA!HA!


Seriously dude, you look like a fool. When you created this thread Gold closed at $1055. It's now at $1129. Even with the correction it's up $74. You can beat your chest when it closes below $1000. Good Luck.

----------


## YumYum

> Seriously dude, you look like a fool. When you created this thread Gold closed at $1055. It's now at $1129. Even with the correction it's up $74. You can beat your chest when it closes below $1000. Good Luck.


That's what they say about Ron Paul and Peter Schiff. I won't beat my chest when gold plummets; I'll be too busy making money.

----------


## Danke

//

----------


## YumYum

> //


People need to read this thread all the way through.

----------


## devil21

It's plummeted all the way down to.....$1118!  It faced some pressure a couple weeks ago but I think there's a strong $1050 support level that will not get broken.  Too many foreigners are demanding gold now.

----------


## Che

> It's plummeted all the way down to.....$1118!  It faced some pressure a couple weeks ago but I think there's a strong $1050 support level that will not get broken.  Too many foreigners are demanding gold now.


let's just wait few more months.. we'll see what the price of gold will be.

----------


## devil21

> let's just wait few more months.. we'll see what the price of gold will be.


If it does "collapse", good luck finding any for sale at that price.

----------


## tmosley

> let's just wait few more months.. we'll see what the price of gold will be.


Let's make the exact same post every few months, such that gold's "plunge" is always a few months away.

----------


## YumYum

> Let's make the exact same post every few months, such that gold's "plunge" is always a few months away.


Yes, I agree. We should have this post every few months.

----------


## Carson

*



			
				Gold will plummet: the dollar will strengthen.
			
		

*

Show me where dollar has ever strengthened.



It may have regained some strength after being sucked dry by the vampires printing fiat money during times of war. Now they seem to be at war with the whole world.

It would be nice to have a stable currency we could bank on and save for our future.

I think more people are going to have to figure out just how they are being taken.

----------


## theoakman

People were screaming about gold and complaining how it went down to $700 as late as early last year.  The message from me has always been the same.  Buy some gold every month if you aren't comfortable with price fluctuations.  I can bump a bunch of threads of people talking about "pullbacks to $800" and "taking profit at $950".  Those pullbacks never came.

----------


## Truth-Bringer

> Show me where dollar has ever strengthened.


It can't.  It can only weaken now that it has no gold backing.  However, what has kept it afloat since 1971 is a de facto oil backing due to the petrol "recycling" agreements with the Middle East.  But now they're looking to back out of that.  They want something other than dollars for that oil.  Once that happens (a gradual transition over the next 10 years) there will be nothing backing the dollar.

All trends and pressures are on the dollar to continue losing value.

----------


## Danke

bump

----------


## Original_Intent

> bump


rabble rouser.

----------


## devil21

YumYum appears to have gone ByeBye.

His hypothesis had academic merit but never had practical merit and I think most of us knew that.  I was 100% convinced when PMs went vertical during the flash crash.

----------


## hazek

I don't understand why you even bother with this troll and reply to his bs..

----------


## psi2941

he guess was "SHORT TERM" not long term.

----------


## LibForestPaul

> illegal to use as legal tender here in the U.S. .


This statement is illogical. I do not have to sell anything for your dollars. I can demand gold, euros, and wons if I so choose. Only debt has legal tender monopoly protection.

----------


## tmosley

Just thought I would bump this thread, as it a year has now passed since I made my famous offer to YumYum to back up his beliefs with cold, hard gold.  He failed to accept.  Bully for him, as the bet was that I would pay him last year's price for an oz of gold on this day, delivered.  That would have been $1182.70 paid for an item now worth $1504.19.  Honestly, it wasn't as much of a blowout as I was expecting.  I thought we would be into hyperinflation by now.  Guess not.

I bet he's DAMN glad I didn't accept his lopsided and foolhardy bet for $100,000.

----------


## puppetmaster

> Just thought I would bump this thread, as it a year has now passed since I made my famous offer to YumYum to back up his beliefs with cold, hard gold.  He failed to accept.  Bully for him, as the bet was that I would pay him last year's price for an oz of gold on this day, delivered.  That would have been $1182.70 paid for an item now worth $1504.19.  Honestly, it wasn't as much of a blowout as I was expecting.  I thought we would be into hyperinflation by now.  Guess not.
> 
> I bet he's DAMN glad I didn't accept his lopsided and foolhardy bet for $100,000.


we....this board, is always early to the party. We all predict the right things but always expect it too early

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## cubical

To his defense YumYum's scenario has not played out yet. His is similar to Prector's the guy on schiff radio show. Once the credit bubble burst is when his theory is tested. It really is a question as to what the fed will do when it happens.

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## gonegolfin

> To his defense YumYum's scenario has not played out yet. His is similar to Prector's the guy on schiff radio show. Once the credit bubble burst is when his theory is tested. It really is a question as to what the fed will do when it happens.


No ... YY was repeatedly calling for significant Fed tightening to take place in early 2010. The exact opposite has occurred.

Brian

----------


## cubical

but his scenario as to why has not happened. he was wrong on his timing though.

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## psi2941

> but his scenario as to why has not happened. he was wrong on his timing though.


yea but i have 100% confidence that Ben will do all the wrong things. and the short pit falls with be very short it will be like yesterday in PMs

----------


## tmosley

> To his defense YumYum's scenario has not played out yet. His is similar to Prector's the guy on schiff radio show. Once the credit bubble burst is when his theory is tested. It really is a question as to what the fed will do when it happens.


I'm afraid there is no defense.  He was just plain wrong.

As is Prector.

We have already had massive credit destruction, yet gold is at record highs regardless.  More credit destruction isn't going to change that.  What was the Einsteinian definition of insanity?  It applies here.

----------


## YumYum

> No ... YY was repeatedly calling for significant Fed tightening to take place in early 2010. The exact opposite has occurred.
> 
> Brian


There was a tightening of credit in early 2010. I thought the Fed would up rates slightly in in either March or early April, but as you know they only upped the discount rate. The dollar did get stronger; I was right about that, but my timing on gold was wrong. But today is different, I predicted back in November something bad would happen in either late summer or the fall. Gold right now is plummeting and the dollar is strengthening. People are selling stocks and metals/commodities. What do you make of this? Did you sell your positions in gold or are you do you believe this is a pullback and plan to buy more?

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## echebota

> Gold right now is plummeting and the dollar is strengthening. People are selling stocks and metals/commodities. What do you make of this? Did you sell your positions in gold or are you do you believe this is a pullback and plan to buy more?


Yes, during the 365 days since the orignial post silver "plummeted" from $17 to $25.70 (51% "drop")  and gold "plummeted" from $1050 to $1360 (30%
 "collapse")    

YY, we have to accept by now that no FED tightening would be happening in a foreseable future.  The congress and president would not allow this to happen since otherwise it would mean an immidiate collapse of governments at all levels and a very deep depression. With no FED tightening, we'll get the depression anyway, but with inflation and polititians claiming they did all they could.

----------


## gonegolfin

> There was a tightening of credit in early 2010. I thought the Fed would up rates slightly in in either March or early April, but as you know they only upped the discount rate.


No, they did not tighten credit. As I explained to you, the discount rate is meaningless. Not only is nobody using the discount window, nobody needs to use the discount window as plenty of funds are available for much less than the discount rate.

Also as I have explained, the federal funds rate is meaningless in this monetary environment. *The only thing the Fed can do now to manipulate interest rates is to adjust the interest rate paid on reserves*. They did not do that. *But even raising the interest rate on reserves means nothing more than more money for the banks if the Fed does not drain reserves from the banking system*. 

*Not only is the Fed not draining reserves, it is aggressively added to them.*

Brian

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## YumYum

> Yes, during the 365 days since the orignial post silver "plummeted" from $17 to $25.70 (51% "drop")  and gold "plummeted" from $1050 to $1360 (30%
>  "collapse")    
> 
> YY, we have to accept by now that no FED tightening would be happening in a foreseable future.  The congress and president would not allow this to happen since otherwise it would mean an immidiate collapse of governments at all levels and a very deep depression. With no FED tightening, we'll get the depression anyway, but with inflation and polititians claiming they did all they could.


So, do you think this is just a minor correction? Isn't this an insider's game with the big banks manipulating the markets? How can anybody know what is going to happen? My predictions were based on history, and history repeats itself. What do you think?

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## gonegolfin

> Gold right now is plummeting and the dollar is strengthening. People are selling stocks and metals/commodities. What do you make of this? Did you sell your positions in gold or are you do you believe this is a pullback and plan to buy more?


Gold is not plummeting. If you think Gold is plummeting, you have no experience in these types of markets.

You can see some of my recent trading comments on Gold and the S&P here ... http://www.ronpaulforums.com/showthread.php?t=268482.

These corrections are not only expected, they are predictable within several ticks. This is healthy in a Gold/Silver bull market. Buying strength must always be renewed. Silver approaching $30 this fast is insanity. But it will get there in time.

I took significant profits in Gold and Silver bullion and mining stocks a couple of weeks ago and have been trading the obvious patterns. I expect a correction to more sane levels. But it is just that ... a correction. We are not in a bubble (the often repeated phrase by the clueless media) and Gold is not doomed ... we are in an expected corrective pattern ... and when completed, we will be challenging new highs after buying strength is renewed. I do not have a target to the downside yet. I just hope I did not take profits too early on my core holdings. My bias is only somewhat bearish in the short term. 

As for the US Dollar, it has staged a couple of very meek rallies (from very low levels ... the US Dollar has been a dog this year) ... only to be rebuffed and turn lower. It has failed to take out several look-to-the-left peaks on the chart, which is bearish. The 78.70 level on the cash index needs to be taken out before we can even consider the Dollar staging any sort of rally. Reaching this level will result in more corrective action in Gold/Silver.

Brian

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## YumYum

> No, they did not tighten credit. As I explained to you, the discount rate is meaningless. Not only is nobody using the discount window, nobody needs to use the discount window as plenty of funds are available for much less than the discount rate.
> 
> Also as I have explained, the federal funds rate is meaningless in this monetary environment. *The only thing the Fed can do now to manipulate interest rates is to adjust the interest rate paid on reserves*. They did not do that. *But even raising the interest rate on reserves means nothing more than more money for the banks if the Fed does not drain reserves from the banking system*. 
> 
> *Not only is the Fed not draining reserves, it is aggressively added to them.*
> 
> Brian


The banks did tighten credit for businesses and the general public starting at the first of this year. The banks loan to other banks; that has not helped the economy. Banks need to start loaning to consumers and businesses, but they won't because they are claiming that people are not "credit worthy". I realize that the raising the discount rate was nothing more than noise, but if rates rise as they are now, people will jump out of gold and into investments that pay higher interest.

More money given to the banks means nothing if it is not injected into the system as loans to the general public. They can print trillions more with QE, but if it isn't loaned out and is only held by the banks, how does this help our economy? History shows that gold goes down when interest rates go up, but since we are facing a financial Armageddon, gold may continue to rise. But as things get worse and corporate executives are dumpster diving I believe the average person will dump their gold to buy food.

Another point: the world is not ignorant anymore about gold and fiat currencies. Everyday on cable TV economic collapse is being discussed, even by the liberals. So, why did gold collapse today? There is absolutely no reason in our economic climate of rabid fear that gold should drop, and yet it is. Why?

Answer: Bank manipulation

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## YumYum

> Gold is not plummeting. If you think Gold is plummeting, you have no experience in these types of markets.
> 
> You can see some of my recent trading comments on Gold and the S&P here ... http://www.ronpaulforums.com/showthread.php?t=268482.
> 
> These corrections are not only expected, they are predictable within several ticks. This is healthy in a Gold/Silver bull market. Buying strength must always be renewed. Silver approaching $30 this fast is insanity. But it will get there in time.
> 
> I took significant profits in Gold and Silver bullion and mining stocks a couple of weeks ago and have been trading the obvious patterns. I expect a correction to more sane levels. But it is just that ... a correction. We are not in a bubble (the often repeated phrase by the clueless media) and Gold is not doomed ... we are in an expected corrective pattern ... and when completed, we will be challenging new highs after buying strength is renewed. I do not have a target to the downside yet. I just hope I did not take profits too early on my core holdings. My bias is only somewhat bearish in the short term. 
> 
> As for the US Dollar, it has staged a couple of very meek rallies (from very low levels ... the US Dollar has been a dog this year) ... only to be rebuffed and turn lower. It has failed to take out several look-to-the-left peaks on the chart, which is bearish. The 78.70 level on the cash index needs to be taken out before we can even consider the Dollar staging any sort of rally. Reaching this level will result in more corrective action in Gold/Silver.
> ...


Let me know where the bottom is, I want to buy some gold. If I make a profit I would like to give a percentage to Dr. Paul's presidential campaign. I'm scared of day trading, but you seem to know what you are doing. Max Keiser says gold will go to $4,000 an ounce, do you think it will reach that?

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## gonegolfin

> The banks did tighten credit for businesses and the general public starting at the first of this year. The banks loan to other banks; that has not helped the economy. Banks need to start loaning to consumers and businesses, but they won't because they are claiming that people are not "credit worthy". I realize that the raising the discount rate was nothing more than noise, but if rates rise as they are now, people will jump out of gold and into investments that pay higher interest.


I will try one more time.

You are not looking at the macro picture close enough. The banks tightened credit beginning in late 2008 (and has remained tight), not early 2010. But the Fed has entered the picture with immense amounts of credit, overwhelming what the banks are not doing. The market also discounts into the future what will happen once the banks utilize more of their massive reserves. This is why Gold is going up and will continue to go up until the Fed signals a *real reversal* of course. I have explained in detail (you can reread the articles) what reversing course means. Not only has the Fed not reversed course, it is stepping on the accelerator.




> More money given to the banks means nothing if it is not injected into the system as loans to the general public. They can print trillions more with QE, but if it isn't loaned out and is only held by the banks, how does this help our economy?


Wrong again. Bank lending is not the only way money supply increases. Money supply also increases when banks invest their reserves (it is the equivalent of lending). While the banks have been much more conservative in investing their reserves than most of the gold bulls in the media have claimed, there is some investing happening here. We know this because excess reserves are declining modestly (relative to total reserves) and required reserves are increasing modestly (relative to total reserves). *This is money entering the economy*. The result has been once again (after a lull) modest increasing money supply in the past year.

Also, I never claimed that net Fed asset purchases (what you refer to as QE) helps the economy. While it can help selected industries short term, it hurts the economy in the long term. It also creates asset bubbles, hence the rising prices in precious metals (despite your continual predictions that they are doomed) and other commodities. This is the market discounting mechanism at work.

Also, do not discount the money supply increase directly introduced by the Fed. The Fed, currently, is not transacting directly with banks as it did with the TAF and other credit programs. These programs only increased reserves and did not increase money supply. The asset purchases in the last ~18 months have been transacted with the primary dealers. This results in deposit money being created (increase in both reserves and money supply).




> So, why did gold collapse today? There is absolutely no reason in our economic climate of rabid fear that gold should drop, and yet it is. Why?


First, Gold did not collapse. Second, this is simply speculator profit taking. I am one of those taking profits. This action is not unexpected nor out of the ordinary.

Brian

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## Bruno

> Let me know where the bottom is, I want to buy some gold. If I make a profit I would like to give a percentage to Dr. Paul's presidential campaign. I'm scared of day trading, but you seem to know what you are doing. Max Keiser says gold will go to $4,000 an ounce, do you think it will reach that?


Why didn't you buy it when you started this thread and the conventional wisdom was that it was still a good buy and undervalued?  You could have turned some of your 40% in profits to Dr. Paul's campaign.

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## YumYum

> Why didn't you buy it when you started this thread and the conventional wisdom was that it was still a good buy and undervalued?  You could have turned some of your 40% in profits to Dr. Paul's campaign.


I had just done research on the Fed for a college paper and one thing Griffin and other authors made clear is that there is a severe deflation before hyper-inflation. When a bubble "busts" the banks have always tightened credit and raised interest rates, wiping everybody out and buying up assets real cheap. Our government is no different than any other government: it will do whatever it takes to stay alive, even if it means price and wage controls, and by making laws that it is illegal to hoard food, guns and PM's. 

We are entering uncharted waters. Gold was going up while the dollar was going up, and that is unheard of. Gonegolfin says gold dropped $60 today because he and other speculators took their profits. If speculators can drive the price up and down while we wait for a financial apocalypse, what would happen to the price of gold if all the hip-hop rappers in Compton sold their "bling"?  

I didn't buy back in October because of historical trends, but if gonegolfin tells us at what price to buy in I would like to try some day trading since he has had good results.

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## YumYum

Brain,

A couple of questions I have:

1) you said that the banks have been using the money paid to them by the Fed for the toxic MBS to purchase assets, which include gold, but that they haven't created a gold "bubble" by doing so. How do you know this? Is there a record of how much gold the banks are buying?

2) you and other speculators sold gold to take profits; causing gold to drop $60. That means that there are millions of small time speculators who are working the same system as you to cause such an effect. I assume you and others find the spots to buy and sell by studying charts. Yet the banks are buying gold. Are they too studying charts to know when to "buy" and "sell". I find it difficult to believe they are doing so. So, who is driving the gold market, the speculators who use charts, pendulums and crystals, or the banks?

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## legion

Gold Bugs are going to feel really dumb...

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## legion

This is a classic bubble scenario. 

Bagholders abound. Don't be the last one out the door. 

To the people promoting it, like Lebed, it's just another penny stock. Only, this one lets them move more cash.

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## legion

> Two directors of Agoracom will pay a total of $150,000 and face trading and employment restrictions under a settlement agreement that was approved Friday by Ontario's securities regulator.
> 
> Agoracom, which runs a website that does investor relations for public companies listed on the Toronto Stock Exchange and TSX Venture Exchange, will also post a notice about the settlement on www.Agoracom.com.
> 
> Agoracom founder George Tsiolis and dealer Apostolis (Paul) Kondakos acknowledged they required Agoracom staff to use hundreds of fake names and pose as investors in thousands of messages on the firm's public online forums.
> 
> Kondakos, the firm's chief compliance officer, also intercepted private messages between public users of the forum from July 2008 to February 2009 to gather information about companies in which he was invested.
> 
> Under the settlement agreement, the Ontario Securities Commission has suspended the two men's registrations as investment professionals for 10 years.
> ...


http://www.thestar.com/business/arti...-investor-site

This probably had more to do with Gold's recent fall than anything else.

Agoracom is a major promoter in the Gold bubble and many of the PM commodity stock scams that have been popping up.

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## LibForestPaul

> Yes, but how will Americans invest in oil and agriculture if there are no dollars in circulation? The dollar is our legal tender. Whether Americans have faith or not in the dollar is irrelevant, because they need the dollar to buy food. It is our currency after all. Our money is worthless now. Are you saying it will become more worthless? Our dollar is our legal tender of trade and when there is a shortage of it, it will go up in value. It is strictly supply and demand. Also, even if China, Russia and OPEC come up with a basket currency backed by gold/silver and oil it will be illegal to use as legal tender here in the U.S. In a nut shell, they American people are going to be wiped out. How else will we have communism? When people are hungry and thinking about their next meal, they are not worried about credit default swaps and derivatives.


Who care what our legal tender is? International corporations? Holding assets in several different regions.  When there is a shortage of dollars NOW unlike in the PAST, corporation will simply find a new curreny.

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## gonegolfin

> Brain,
> 
> A couple of questions I have:


That would be Brian.




> 1) you said that the banks have been using the money paid to them by the Fed for the toxic MBS to purchase assets, which include gold,


I said no such thing (re: Gold).

Also, you are also still confused about how the Fed operates. The Fed has conducted its treasury and MBS asset purchases via the primary dealers (as counterparties). It is not purchasing these assets from the depository institutions themselves.

Brian

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## YumYum

> First of all, it is Brian.
> 
> 
> I said no such thing (re: Gold).
> 
> Also, you are also still confused about how the Fed operates. The Fed has conducted its treasury and MBS asset purchases via the primary dealers (as counterparties). It is not purchasing these assets from the depository institutions themselves.
> 
> Brian


I'm sorry Brian, that was an honest misspelling of your name. Actually, that would be a fitting nickname for you.  You are very well informed on these matters. Thank you for bearing with me.

You edited your comment and I thought you had said that gold was one of the assets that the banks were purchasing with the reserves but you have clarified that. So, I think what you are saying is that the banks are sitting on the reserves and not loaning them nor buying PM's, but holding on to them to fulfill their reserve requirements. What exactly are the banks doing with the quantitative easing monies? This $600 billion that Benanke is pulling out of thin air; isn't that created on the backs of the American taxpayer? If so, how does the Fed justify purchasing bonds on the market at the expense of the taxpayer? Is the debt to the public to be wiped out when the Fed extinguishes the reserves?

Also, you did say that gold on Friday pulled back because speculators such as yourself took profits. That means you and millions of other other speculators are unknowingly working together buying and selling. If you and other speculators are causing the market to fall when you sell, then are you and the other speculators controlling the market? Or, is it financial powers higher up controlling the gold market? My concern is that you and other speculators are studying the charts and will continue to be spot on; buying and selling, and then BOOM!! The guys at the top yank the chain and you and millions of other speculators get wiped out! Is this scenario feasible?

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## gonegolfin

> You edited your comment and I thought you had said that gold was one of the assets that the banks were purchasing with the reserves but you have clarified that. So, I think what you are saying is that the banks are sitting on the reserves and not loaning them nor buying PM's, but holding on to them to fulfill their reserve requirements.


I merely edited my comment in the last post to ensure you understood I was taking issue with your claim that I said anything about the banks buying Gold.

Recall from earlier in this thread, I replied to you concerning the banks and their excess reserves ...

http://www.ronpaulforums.com/showpos...&postcount=123

"Bank lending is not the only way money supply increases. Money supply also increases when banks invest their reserves (it is the money supply equivalent of lending). *While the banks have been much more conservative in investing their reserves than most of the gold bulls in the media have claimed, there is some investing/lending happening here. We know this because excess reserves are declining modestly (relative to total reserves) and required reserves are increasing modestly (relative to total reserves)*. This is money entering the economy. The result has been once again (after a lull) modest increasing money supply in the past year."

Thus ... banks are not holding onto these massive levels of reserves to meet their reserve requirements (this makes no sense). Required reserves are low ... excess reserves are high. I stated there is some amount of lending/investing by the banks as evidenced by the monetary stats cited above. However, they are keeping a substantial amount of excess reserves as they are being paid interest by the Fed on reserves and they are fearful of the quality of assets on their respective balance sheets. Hence, they are keeping a healthy amount of excess reserves on hand.

There is no evidence to suggest that the banks have been buying Gold. But I have not taken a position on this. I am merely stating that the banks are holding most of their reserves ... but have been lending/investing a modest amount as evidenced by the monetary stats.




> What exactly are the banks doing with the quantitative easing monies?


Mostly holding them as reserves. There is some lending happening. There is some investment (purchases of securities) taking place. I would venture to say that most of the investment is in treasuries (mostly short to intermediate term) ... but I am sure there is some equity investment.




> This $600 billion that Benanke is pulling out of thin air; isn't that created on the backs of the American taxpayer?


It depends what you mean by that. Certainly it debases the currency. The purchases result in an immediate increase of narrow money supply (M1) as the purchases are made from the primary dealers.




> If so, how does the Fed justify purchasing bonds on the market at the expense of the taxpayer? Is the debt to the public to be wiped out when the Fed extinguishes the reserves?


I am not going to defend the QE actions of the Fed as I believe they are misguided and wrongheaded. *However, you do understand that we would not have our current monetary system without the Fed purchasing assets (it should purchase assets of no less quality than US treasuries ... and has ... at least traditionally ... but no more), right? This is how money comes into existence in our monetary system*. So, if you understand this, you will understand that your first question in the above paragraph must be reworded (changed significantly) if you were to ask this question of the central bank establishment and engage in a meaningful discussion.

Why would you think that extinguishing reserves would repudiate the government debt? This simply lowers the quantity of reserves in the banking system. Reserves are extinguished when the Fed either 1) sells the purchased treasuries back into the marketplace or 2) allows the purchased treasuries to mature (obviously this is passive and requires no action by the Fed). In #1, obviously the debt still exists ... someone else now owns it. In #2, the US Treasury has made good on its principal payment (repaid the loan). The Treasury can then choose to lower outstanding debt (by doing nothing but simply repaying the principal) or issues more securities in another auction (which it always does) to replace the debt (debt rollover). 

Of course the Fed can also extinguish reserves by selling (or allowing to mature) other assets held on the balance sheet (Ex. MBSs) ... I was keeping it simple.




> Also, you did say that gold on Friday pulled back because speculators such as yourself took profits. That means you and millions of other other speculators are unknowingly working together buying and selling. If you and other speculators are causing the market to fall when you sell, then are you and the other speculators controlling the market? Or, is it financial powers higher up controlling the gold market? My concern is that you and other speculators are studying the charts and will continue to be spot on; buying and selling, and then BOOM!! The guys at the top yank the chain and you and millions of other speculators get wiped out! Is this scenario feasible?


The market is controlled by a myriad of forces ... not just the "Managed Money" section of the COT report .. or the "Managed Money" + small speculators. But the "Managed Money" players consistently hold the dominant long positions in PMs. They are offset by the commercial hedgers as well as the "Swap Dealers". In a bull market, speculators are going to take profits. Nothing goes up or down in a straight line. When the traditionally long speculators take profits, you are going to have pullbacks.

Yes, the "Managed Money" has been taken to the cleaners often in the past (Silver and Gold). I do sense that the tables are turning ... as evidenced by JP Morgan throwing in the towel two weeks ago in Silver and leaving the local traders (whom were also in cahoots and short) in London out to dry. The pullbacks in June/July 2010 and November/December 2009 were also much less severe as in past years after large runnups in price.

As for myself, most of the trading portion of my portfolio (as opposed to my core long term investments) is strictly technical in nature. Which means I will go long or short (or sometimes simply go to cash), depending on what my trading systems tells me.

Brian

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## YumYum

bump...because I have been reading that some gold bugs are nervous about gold.

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## cubical

> bump...because I have been reading that some gold bugs are nervous about gold.


Which bugs? I will see to it that they are taken care of.

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## ctiger2

> bump...because I have been reading that some gold bugs are nervous about gold.


I'm not a gold bug, but I am getting more nervous as the number of dollars to purchase 1oz of Gold keeps rising...

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## YumYum

> Which bugs? I will see to it that they are taken care of.


cubical ---I don't know if you read the entire thread, but what has intrigued me as of lately is the concern by gold bugs on other forums that we may be in a "gold bubble". What we do all agree on is that PM's have been manipulated. At what price will they manipulate gold to rip everybody off?

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## ForLibertyFight

Do you guys think that the price of gold and silver will ever fall? or Will we continue to see prices rise

----------


## cubical

> cubical ---I don't know if you read the entire thread, but what has intrigued me as of lately is the concern by gold bugs on other forums that we may be in a "gold bubble". What we do all agree on is that PM's have been manipulated. At what price will they manipulate gold to rip everybody off?


Yeah, I remember reading parts of it.

I think gold bugs will be proven right when the US literally defaults, or inflation becomes a day to day, average joe topic. They will be proven wrong when the fed sucks in dollars paired with government solvency. imo gold bugs that jump ship based on easing tensions in the middle east or on other shorter term problems going away are a different breed than what you see on here.

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## cubical

> Do you guys think that the price of gold and silver will ever fall? or Will we continue to see prices rise


Valued in terms of what?

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## ForLibertyFight

> Valued in terms of what?


Dollars. 

I have money that I want to buy precious metals with but I am wondering whether I should wait for the prices to come down a little bit or not, if prices continue to rise in terms of dollars.

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## YumYum

> Valued in terms of what?


My concern is whatever Obama determines the value with wage and price controls.

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## cubical

> Dollars. 
> 
> I have money that I want to buy precious metals with but I am wondering whether I should wait for the prices to come down a little bit or not, if prices continue to rise in terms of dollars.


Personally I would just buy now and hold it. A few dollars in silver or 100 bucks in gold won't make a difference if you are buying to hold. I think its going much higher and will stay at those levels.

With that said, some people think gold is a bubble, so it's up to you.

----------


## cubical

> My concern is whatever Obama determines the value with wage and price controls.


I doubt that happens. Could I guess, though.

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## YumYum

> YumYum is missing out on exactly HOW the dollars are going to come back.  He mistakenly thinks that they will flow back from foreign central banks into our central bank.  This is wrong.  Remember, each central bank is looking out for their own best interest.  To this point, it has been in their best interest to prop up the dollar, while quietly reducing their exposure.  The central banks of western nations tend to operate as a block, but we will likely find that it will quickly become "every man for himself" as the dollar continues its decline.  Once the Asian banks start dumping in earnest, and openly, the Europeans will be forced to abandon America or face the destruction of their own economies.
> 
> How will they divest themselves of their dollars?  They may do so quietly at first by selling them to the Fed in exchange for whatever they have on their balance sheet that isn't worthless (basically, their gold and their foreign currency holdings).  Once those run out, they are going to use them to purchase anything and everything that won't lose value as the dollar collapses.  This means commodities, production capacity, scrap metal, anything that isn't bolted to the floor.  This means that the prices for all of those things in terms of dollars will explode, as they will be buying them on the open market, not in closed deals between central banks.


tmosley was spot on with this prediction. The question is: how long will this continue?

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## YumYum

tmosley is a genius. I think that is his frustration. He made an excellent observation to my theory, and here was my reply:




> Turning over the Government’s credit to private bankers in 1913 gave them unlimited opportunities to create money. The Federal Reserve System could also destroy money in large quantities through open market operations. Governor Marriner Eccles said, at the Silver Hearings of 1939:
> 
> "When you sell bonds on the open market, you extinguish reserves."
> 
> Extinguishing reserves means wiping out a basis for money and credit issue, or, tightening up on money and credit, a condition which is usually even more favorable to bankers than the creation of money. Calling in or destroying money gives the banker immediate and unlimited control of the financial situation, since he is the only one with money and the only one with the power to issue money in a time of money shortage. The money panics of 1873, 1893, 1920-21, and 1929-31, were characterized by a drawing in of the circulating medium. In economical terms, this does not sound like such a terrible thing, but when it means that people do not have money to pay their rent or buy food, and when it means that an employer has to lay off three-fourths of his help because he cannot borrow the money to pay them, the enormous guilt of the bankers and the long record of suffering and misery for which they are responsible would suggest that no punishment might be too severe for their crimes against their fellowmen.

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## devil21

> bump...because I have been reading that some gold bugs are nervous about gold.


Source please.

I'd have to see it to believe it and they'd have to not be posting newbs with a 1/10 GAE scared about whether they should sell or not.

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## Blueskies

Gold is not yet a bubble but it will become one in a few years, probably.

A bubble, is by definition, when the value of some asset becomes completely unrelated to its underlying supply/demand fundamentals.

As the PMs have little industrial use, their entire value is derived from being a safe haven.  As we have a president with no desire to even begin to try to balance the budget and a fed chairman who thinks printing money will cure all, the fundamentals remain strong bullish.

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## YumYum

bump...because this summer my prediction is coming true

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## squarepusher

> bump...because this summer my prediction is coming true


gold at 1500 is still not a prediction coming true

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## YumYum

> gold at 1500 is still not a prediction coming true


QE2 will end, tanking our economy. Then the Fed will have an excuse to begin QE3, which will bring hyper-inflation. There will be a period of deflation before hyper-inflation.

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## hazek

I thought you learned your lesson? wtf.

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## devil21

Interesting that equities have taken a beating lately yet Au and Ag are steady and even gaining for Au.  Dollar isn't a safe haven anymore.  YumYum's whole theory is based on the premise that the dollar is still the ultimate safe haven.  But is it?  Doesn't look like it to me.

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## devil21

> bump...because this summer my prediction is coming true


How's that workin out for ya so far?

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## YumYum

> How's that workin out for ya so far?


Well, between the ass whoppin' I got on this thread and the beating I'm taking in the religion sub-forum, I've been licking my wounds. And how is your summer?

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## Bruno

Humble Pie

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## YumYum

> Humble Pie

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## Anti Federalist



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## LibertyEagle

Rofl

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## cubical

> Well, between the ass whoppin' I got on this thread and the beating I'm taking in the religion sub-forum, I've been licking my wounds. And how is your summer?


Michael Pento said a few months back he cut his gold holdings in half because of the exact reason you stated. You are at least in good company. It still could happen if things get very bad before the fed acts.

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## inibo

> 


I think I just hurt myself.

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## devil21

> Well, between the ass whoppin' I got on this thread and the beating I'm taking in the religion sub-forum, I've been licking my wounds. And how is your summer?


Investment-wise it is very good.  Keep on stacking that bullion and watching prices keep rising.  Sure glad I didn't listen to you

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## Brian4Liberty

Who bought when the metals were bottoming (relatively) a little over a month ago?

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## efiniti

I bought at 33.45 at that one point in late june in the morning.  My pms dealer unfortunately rounded to 34.00 and charged a $2 premium.  I still gave myself a pat on the back for that call though.

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## cubical

> I bought at 33.45 at that one point in late june in the morning.  My pms dealer unfortunately rounded to 34.00 and charged a $2 premium.  I still gave myself a pat on the back for that call though.


hmm i wouldn't go through that dealer again then.

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## mport1

Good thing I didn't listen to the OP.  I've done very well with gold/silver.

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## Wolverine302

> Who bought when the metals were bottoming (relatively) a little over a month ago?


Bought 6k in eagles at 36.25

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## inibo

> Who bought when the metals were bottoming (relatively) a little over a month ago?


I've been buying some every month since November, regardless of the price.

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## Brian4Liberty

> I've been buying some every month since November, regardless of the price.


Nothing wrong with dollar cost averaging. 

There were a couple of threads where we were trying to call the bottom on silver around $33. That may turn out to have been the buying op of the year.

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## angelatc

> Nothing wrong with dollar cost averaging. 
> 
> There were a couple of threads where we were trying to call the bottom on silver around $33. That may turn out to have been the buying op of the year.


I don't really pay attention to metals, but I peeked at silver earlier today....wow.  I remember talking to a guy in 2007, when it was 11 or 12.  I wish I had believed him....

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## tremendoustie

> cubical ---I don't know if you read the entire thread, but what has intrigued me as of lately is the concern by gold bugs on other forums that we may be in a "gold bubble". What we do all agree on is that PM's have been manipulated. At what price will they manipulate gold to rip everybody off?


Ooo good news! Another buying opportunity!

I hope they can manipulate the paper markets lower. I love it when the paper markets get driven down. It means I can get the real stuff for way less than its actual value.

When the paper markets, which are hugely leveraged, collapse, the real supply will be recognized in the market, and prices will skyrocket.

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## Brian4Liberty

> I don't really pay attention to metals, but I peeked at silver earlier today....wow.  I remember talking to a guy in 2007, when it was 11 or 12.  I wish I had believed him....


And 11 or 12 was a good profit from buying a few years earlier at 7.

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## Bern

Gold and silver are still good buying opportunities.  They will continue to rise over the medium to long term.

My rapidly devaluing $.02

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## Brian4Liberty

> My rapidly devaluing $.02


Not if you are holding copper pennies.

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## Bern

> Not if you are holding copper pennies.


Pre-'82 only lol.

I traded in all my penny and nickel collections for better performing and less space hogging silver some time ago.

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## FromFreedomToFascism

Speaking of pre 82 pennies, I've been stockpiling some for years. Heck, if they get to 5 cents, anyone know somebody who can melt ...a ton of pennies? lol

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## Zippyjuan

Legally- nobody can melt them for you.

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## YumYum

Since somebody had the decency to bring this thread back up, I thought I would share this.

*Strong Dollar, Weak Jobs Outlook Fuel Market Plunge*

http://finance.yahoo.com/blogs/break...172923404.html

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## YumYum

*New Fee to Bank Cash* 




> But it is a glaring sign that corporate executives, bank leaders and money-market fund managers are fleeing from risk *and hoarding cash* as the recovery threatens to peter out.


http://online.wsj.com/article/SB1000....html?mod=e2tw

*The Second Great Contraction*




> But Great Contractions, as opposed to recessions, are very infrequent events, occurring perhaps once every 70 or 80 years. These are times when central banks need to spend some of the credibility that they accumulate in normal times.


http://www.project-syndicate.org/com...goff83/English

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