The World Bank announcement this week that the US budget fight is sinking the global economy. If the United States does not continue to create deficits, it would sink the world economy and here’s how.
Since the US Dollar is the world’s reserve currency and since it is a debt based, fiat currency that must create more debt money every year in excess of the debt and interest or it will collapse in the mother of all margin calls.
This reality was first quantified by famed economist Robert Triffin. He stated in Triffin’s Dilemma , that if a country was to be the world’s reserve currency, it must supply the world with extra currency through a trade deficit. He noted that at some point the debts would become so large that at some point those debts would be some onerous that they would need to be defaulted upon. That default would bring down the world economy that was built up around that economic paradigm.
One solution that was prospered would to have an even larger global currency that could be used to supplant the dollar. That would limit nations the ability their sovereignty and ability to create debts. We have already seen how the Euro has done in a very short time frame. Also rising non-Anglo American powers with reserves and trade surpluses wanted more control than the current economic powers are willing to concede.
This has lead to a secret race for gold where central banks around the world see that the day of the dollar is coming to an end and that there will be no world reserve currency to supplant the dollar, so gold is the only answer left.
The problem with this is that this gold is believed to have multiple claims on the physical ounces in storage. Now there is a scramble for the amount of real gold in storage. Nations like Venezuela started repatriating their gold from storage in other nations. Now nations like Germany, Austria and Mexico are questioning where their gold is. Even individuals realize that the end game is coming near and the physical demand, lead times and premiums are going up. At some point the dollar game will end and those nations and individuals with their physical metals in their possession, will win the largest game of musical chairs the world has ever seen.
“I respectfully disagree with most of the explanations given today on the why of German actions in gold. My understanding is that the causal event of this notification actually came from the actions of the US Exchange Stabilization Fund and the long term plans to strengthen the euro.
I have published a chart from Patrick showing the extreme change in the ratio of gold to fiat currency presently being held in reserve by Euroland.
First you need to understand what the Exchange Stabilization Fund is and is not. It is an account at a major gold bank in the name of the Exchange Stabilization Fund. This fund can legally trade in gold and does. The President of the USA and the Secretary of the US Treasury run this fund. Those two managers by law are permitted to designate another manager if they wish. The fund can trade long or short, borrow or lend anything. Basically this is a an account that can legally do anything it wants whenever it wants in secret as the year end statement can easily be brought to only benign activates by warehousing all the trades.
Their broker is quite an expert in that strategy to wash year-end positions for clients.
What occurred as I am told is an act in Germany in reaction to a parting shot from the retiring Secretary of the US Treasury via the Exchange Stabilization Fund.
When gold traded at $1918 it was setting up for a challenge of a very important round number, $2000. The sell off was a product of long liquidation in an anticipation of $2000 in a fast market. Gold did fall on its own weight into the $1800 area, however the body block at $1800, $1775 and $1750 was a product of the Exchange Stabilization Fund operating as an account of a major Gold Bank. Seeing that, this gold bank went to the short side for the account of its hedge funds and not wholly owned trading arm. This gold bank issued a public statement that the gold market was dead as a doornail, finished and completed.
On the level of central banking there are no secrets. The long term plan for the currency war between the euro and the dollar is a derivation of the Free Gold Thesis. That means a significant change in the percentage of fiat currency versus gold at market value held by Euroland as reserves. This thesis has a target for cooperating Asian central banks for gold holdings at no less than 15% at market value. I question some of the thesis of Free Gold thinkers, but much of it has been in my writing for more than a decade on what the end game recovery will look like.
I am told that the parting shot to break gold’s back by the Exchange Stabilization Fund was considered a direct attack on the Euro strategy for what the end game recovery will look like. The Free Gold thesis requires significantly higher gold prices to work and to elevate the euro back in reserve by choice category.
The German reaction was not political but rather a direct warning that they could demand return of their gold just like DeGaulle of France did in the 60s by making a direct and immediate demand for conversion of the US dollar holdings into Gold.
A major central bank will not insult another major central bank unless it is an act of financial war. It has not come to that yet, but it is not that far away. It is 2015 to 2017 and not 2020.
The reason that gold is relatively firm after the media leak and release on the night of the 14th is that I am not the only person who knows the real story. The price of gold will go to and beyond $3500. Gold will be market to market by the majority, if not all, major central banks. This will balance the balance sheet of the many and major debtor nations and will provide the platform for recovery after unwinding.
Very succinctly written. I used the musical chairs analogy on a youngster at work and she appeared to understand a little bit more than she did previously. I love analogies
If the central banks started to accumulate silver the game would be up in a matter of days……shit, they don’t even have a starting position like they do with gold LOL
One estimate I read or heard recently was that slightly over $26 billion would buy up all the physical silver [available for sale or available in some way; sorry I don't remember the details].
The point is at current prices silver isn’t valuable enough for central banks to even think about stockpiling as a substitute/backstop for their fiat currencies. They would be better off looking for diamonds, reactor-grade uranium or plutonium, or maybe just “buy up” all the remaining freedom in the world. I’m being facetious — or am I??
How is it that this Gold repatriation to Germany which is only 5% of the Federal reserves holdings going to take 7 years. And that the SLV fund can purchase and install 500 plus tons into the ETF in one day?
Because that is all that the US/FED would allow to be repatriated. Its an amount still less than annual production and its mangagable. Germany will accept those terms because it must have somethng to bandy around as a victory. The French are in a different boat, or maybe I should say, the German boats are nearer France and there is a bit of history there. Certainly, Germany has power over the EU.
If the reason to keep Gold in the USA was because it was safe here than aboad as those countries we held it for might be targets of war and confiscation (Specifically, Germany had fear of Soviet invasion and confiscation in years gone by), what does that say about the confidence in the USA? Germany is not the first (France repatriated in 1969, causing the end of Bretton Woods in 1971) and certainly won’t be the last.
SBSS – please PROOF READ your articles before publishing them… I love your work, but when you have multiple typo’s and grammatical errors in one article, it undermines your credibility to new visitors. How can they believe what you’re writing if it isn’t even proper English? Just some constructive criticism…
Example: “He stated in Triffin’s Dilemma that stated that if a country was..”
“That would limit nations the ability their sovereignty and ability to create debts.”
“The problem with this is that *the the* gold is believed…”
Understandable. Sorry if that came off as more negative than “constructive.” Just in a bad mood I suppose. Thanks for your work though, keep it up! Can’t wait to see the next release in the SBSS coin series!
chris – in the article, and many others in the past, you emphatically state the proposition that ” every year a fiat currency regime is required to create more fiat currency equal to the debt and interest already on its books”. this is a half truth – literally. the half that is true is that additional money must be created to equal the interest accrued – however, additional money needn’t be created to cover the debt as well. you, yourself, acknowledge that all money is debt. correct? well if all money is debt than the entire money supply must be recreated every year – according to your proposition. this would entail doubling the money supply every year and continually. this does not happen.
it is only the interest that is missing, and therefore, only the interest that must be recreated. any sovereign government can have any size debt it wants without degrading the utility of the money supply by an iota.
one more point. essentially all money is ‘fiat’ money. the claim that money backed by a ‘precious’ metal is not fiat is only that – a claim -and a very hollow one at that. in reality, all money is only a recording of the trust between 2 parties backed by an insurance policy issued by the government that its currency ( and only its currency) will be accepted as a means to pay taxes. this insurance is not backed by gold or any other metal. it is backed by the authority of the government to command its armed forces, if necessary, to vivify its claim.
money, under any disguise or form, does not have a value other than its purely utilitarian value as a record of/contract of trust and insured by a sovereign government.
Gold and silver are natural money. They are not issued by any government. Their value is inherent. You can make circuit boards out of them, solar panels, water purification systems, and much more.
Currencies are issued by governments, and their only inherent value is paper,
their other value is the fiat declaration of the issuing government. There is fiat CURRENCY, but there is no fiat MONEY, but the verbiage is tricky because currency has been used AS money for so long most people have forgotten there is a difference…also the way we transitioned from money to currency is tricky, because at one time the USA used gold and silver as money AND currency too. It then stopped using the money as currency and replaced it with currency that looked the same, but did not have the same inherent value. It is the very definition of counterfeiting. See: President Johnson – Remarks at the Signing of the Coinage Act http://www.presidency.ucsb.edu/ws/?pid=27108
It would be like…if I had a car, and an axle broke…I replaced it with a broomstick and some bubblegum. It rolls, but one axle is not like the other…it is so different from the OEM that to call it an axle would be deceptive. You need a car. You drive mine around the parking lot. It rolls. You buy it and head off down the road. Sooner or later you will hit a bump and the inherent value of what you are riding in will be revealed. In the story “I” am a government issuing fiat currency.
As a spectator watching from outside the Continental USA. I would not want to be anywhere near population centers of greater than 250K. These poor souls will be begging for government to “do something” The new paradigm will require physical strength as well as mental and spiritual. The guys wearing the pick polo shirts and riding the BMW to the club for 18 rounds will be up the creek.
hi matt – your considered opinion is incorrect. there is no difference between ‘currency’ and ‘money’. you have every right to differentiate the two but it will only serve to generate a state of confusion that needn’t exist. any symbol of money [gold, gold backed notes, 'fiat' notes, beads, baubles or beaver pelts] can only ‘represent’ a reality.
what’s the reality?
an exchange transaction in which the seller trusts that symbols he receives as payment will be honored at a future time.
call the symbols whatever you like – they only ‘represent’, ‘stand in place of’, ‘are metaphors of’, ‘symbolize’ another reality. a rose by any name would smell THE SAME.
you seem like a smart guy, matt – dont waste your life on meaningless sophistry.
Hey Chris,
Just wanted to take a moment out of my life to thank you for all the life changing decisions/events that have occurred because of the information you've brought to the forefront when I discovered you, DTOM, & the SOL academy.
I shunned the psychopaths in my life, closed my facebook, took every hour of free time to see the academy and read A LOT (a first for me), learned that I have a deep innate thirst for knowledge and teaching, jumped head first on topics I would have NEVER taken an interest in if not for waking up (finance, economics, politics, psychology, to name a few), and view everything in a completely different, but forward thinking and more intricate way.
What you say is so true ... "once your eyes are open, you can never close them again" - EVER.
The magnitude of all the changes that I've made in my life because of the SOL academy are so huge that I can't even begin to put a word on it. It's like a golden seed of life, love & truth, planted in my mind that is making me realize what does matter, what is real, and what I want be at the end of the day to myself, loved ones, and the world.
Hope you're having a well-deserved and wonderful time with your family. A toast to you, the individuals in our group, and all the great and positive things to come despite such times.
Peace.
- Irving A.
Sons of Liberty Academy Testimonial
You really need to sign up at the Sons Of Liberty Academy! I have been researching, as Chris has, for the last 5 years and have found out many things that have really changed my way of thinking! After signing up with Chris I have learned a lot more and he has vilified that which I have already learned!
Check it out!
He will BLOW your mind and secure your future! Chris Duane ROCKS!!!
-Dennis S.
Sons of Liberty Academy Testimonial
I just finished the 10 modules of the Sons of Liberty Academy. I have never been so educated and aware, in such a short time.
I now have a game plan and see my role more clearly. It all makes sense.
It is very important to understand what is going on in our world and how to fight against it most effectively.
45 hours of video is a lot of information (I spend 3 weeks day and night, going through the course).
I would look for information on my own and it would take me a lot of time but to have it done and just to be able to build on that is great.
I do appreciate it to be free otherwise I would not be able to take it.
Thanks;
Raj
Sons Of Liberty Academy Testimonial
I just wanted to drop you a note and thank you. I've been studying the Academy, about to start module 5.
The information I've observed to this point has opened my mind to new ideas, and also reaffirmed some beliefs I've always had. I feel a tremendous sense of confidence now, the fear is subsiding, and I'm excited to complete the Academy and find the direction I can take with my future, as well as my friends and family.
As Bill Hicks said, the next revolution will be a revolution of ideas. I'm glad to be a part of this program.
Many thanks,
Michael
Naples, Florida
Sons of Liberty Academy Tesimonial
"Silver Shield,
The Sons of Liberty Academy is really fantastic! I highly recommend the Academy and the hard work and dedication to the truth that Silver Shield has put forth for defenders of Freedom and Liberty.
The betrayal of the Tea Party loyalist is becoming evident. A rebellion is brewing day by day, and the Power Elite have every right to be very worried.
Awaken People don't be fooled again! Join the Academy.."
-Ray
Sons Of Liberty Academy Testimonial
My only regret is that I did not have this knowledge 20 years ago. The Sons of Liberty Academy is truly life changing.
If anyone is on the fence about joining the Academy, I will tell them they are doing themselves, their family and the country a injustice by not taking it.
Don’t let the money stand in the way, the course is invaluable and will pay for it self many times over with the finance info within the course.
I have two masters degrees and the Sons of Liberty Academy has been of greater benefit than all the “formal” education I have received.
Thanks Chris! You are a true Patriot and hero! -Randy H.
Sons of Liberty Academy Testimonial
"I am very excited about what I've learned so far! I have 3 more modules to complete. I've gone through a few of them twice, especially when there is history discussed. I find that very interesting. I am going to run through the entire Academy again, and review all the additional materials linked below the videos. There is so, so much information. Thank you for your hard work putting this together.
I am spreading the word."
- Michael L.
Sons of Liberty Academy Testimonial
"I have just finished watching Module Six and continue to be amazed at the deception perpetrated on the American people.
I applaud your work and thank you sincerely for these eye-opening truths you have laid out.
I never had an interest in politics or our monetary system because it seemed too confusing, however, the simple way it is taught in the Academy has far surpassed any education I have received in my 35 years on this earth."
- Sean A.
Sons of Liberty Academy Testimonial
"In just a few short months, I've gone from being a skeptic to being a believer.
I'm a born-again Christian, a veteran, and a patriot, but I'm also a realist.
I now prep and am protecting my assets.
DTOM has played a big part in my new education.
Heck, I love the T-shirts, too!
Thanks for doing a great job. Now I Get It!!!!"
Harry S.
Thank you for giving me the wisdom of awareness.
I have been sharing it with others, but there are so many more to reach. I am not afraid of the changes we will soon see, but confident that I am prepared to handle them. We are building a strong group here in my area and have shared your website with several key people of influence here.
Thank God I found you and took the time to go through the Academy. At the risk of sounding overly dramatic, my life will never be the same, and for that I am very grateful.
The World Bank announcement this week that the US budget fight is sinking the global economy. If the United States does not continue to create deficits, it would sink the world economy and here’s how.
http://www.jsmineset.com/2013/01/16/germany-reacts-to-the-retiring-treasury-secretarys-parting-shot/
“I respectfully disagree with most of the explanations given today on the why of German actions in gold. My understanding is that the causal event of this notification actually came from the actions of the US Exchange Stabilization Fund and the long term plans to strengthen the euro.
I have published a chart from Patrick showing the extreme change in the ratio of gold to fiat currency presently being held in reserve by Euroland.
First you need to understand what the Exchange Stabilization Fund is and is not. It is an account at a major gold bank in the name of the Exchange Stabilization Fund. This fund can legally trade in gold and does. The President of the USA and the Secretary of the US Treasury run this fund. Those two managers by law are permitted to designate another manager if they wish. The fund can trade long or short, borrow or lend anything. Basically this is a an account that can legally do anything it wants whenever it wants in secret as the year end statement can easily be brought to only benign activates by warehousing all the trades.
Their broker is quite an expert in that strategy to wash year-end positions for clients.
What occurred as I am told is an act in Germany in reaction to a parting shot from the retiring Secretary of the US Treasury via the Exchange Stabilization Fund.
When gold traded at $1918 it was setting up for a challenge of a very important round number, $2000. The sell off was a product of long liquidation in an anticipation of $2000 in a fast market. Gold did fall on its own weight into the $1800 area, however the body block at $1800, $1775 and $1750 was a product of the Exchange Stabilization Fund operating as an account of a major Gold Bank. Seeing that, this gold bank went to the short side for the account of its hedge funds and not wholly owned trading arm. This gold bank issued a public statement that the gold market was dead as a doornail, finished and completed.
On the level of central banking there are no secrets. The long term plan for the currency war between the euro and the dollar is a derivation of the Free Gold Thesis. That means a significant change in the percentage of fiat currency versus gold at market value held by Euroland as reserves. This thesis has a target for cooperating Asian central banks for gold holdings at no less than 15% at market value. I question some of the thesis of Free Gold thinkers, but much of it has been in my writing for more than a decade on what the end game recovery will look like.
I am told that the parting shot to break gold’s back by the Exchange Stabilization Fund was considered a direct attack on the Euro strategy for what the end game recovery will look like. The Free Gold thesis requires significantly higher gold prices to work and to elevate the euro back in reserve by choice category.
The German reaction was not political but rather a direct warning that they could demand return of their gold just like DeGaulle of France did in the 60s by making a direct and immediate demand for conversion of the US dollar holdings into Gold.
A major central bank will not insult another major central bank unless it is an act of financial war. It has not come to that yet, but it is not that far away. It is 2015 to 2017 and not 2020.
The reason that gold is relatively firm after the media leak and release on the night of the 14th is that I am not the only person who knows the real story. The price of gold will go to and beyond $3500. Gold will be market to market by the majority, if not all, major central banks. This will balance the balance sheet of the many and major debtor nations and will provide the platform for recovery after unwinding.
Respectfully,
Jim”
Very succinctly written. I used the musical chairs analogy on a youngster at work and she appeared to understand a little bit more than she did previously. I love analogies
If the central banks started to accumulate silver the game would be up in a matter of days……shit, they don’t even have a starting position like they do with gold LOL
Buy silver a say adios to your government.
One estimate I read or heard recently was that slightly over $26 billion would buy up all the physical silver [available for sale or available in some way; sorry I don't remember the details].
The point is at current prices silver isn’t valuable enough for central banks to even think about stockpiling as a substitute/backstop for their fiat currencies. They would be better off looking for diamonds, reactor-grade uranium or plutonium, or maybe just “buy up” all the remaining freedom in the world. I’m being facetious — or am I??
How is it that this Gold repatriation to Germany which is only 5% of the Federal reserves holdings going to take 7 years. And that the SLV fund can purchase and install 500 plus tons into the ETF in one day?
Because that is all that the US/FED would allow to be repatriated. Its an amount still less than annual production and its mangagable. Germany will accept those terms because it must have somethng to bandy around as a victory. The French are in a different boat, or maybe I should say, the German boats are nearer France and there is a bit of history there. Certainly, Germany has power over the EU.
If the reason to keep Gold in the USA was because it was safe here than aboad as those countries we held it for might be targets of war and confiscation (Specifically, Germany had fear of Soviet invasion and confiscation in years gone by), what does that say about the confidence in the USA? Germany is not the first (France repatriated in 1969, causing the end of Bretton Woods in 1971) and certainly won’t be the last.
SBSS – please PROOF READ your articles before publishing them… I love your work, but when you have multiple typo’s and grammatical errors in one article, it undermines your credibility to new visitors. How can they believe what you’re writing if it isn’t even proper English? Just some constructive criticism…
Example: “He stated in Triffin’s Dilemma that stated that if a country was..”
“That would limit nations the ability their sovereignty and ability to create debts.”
“The problem with this is that *the the* gold is believed…”
Part of the reason why I stick to videos…
Understandable. Sorry if that came off as more negative than “constructive.” Just in a bad mood I suppose. Thanks for your work though, keep it up! Can’t wait to see the next release in the SBSS coin series!
chris – in the article, and many others in the past, you emphatically state the proposition that ” every year a fiat currency regime is required to create more fiat currency equal to the debt and interest already on its books”. this is a half truth – literally. the half that is true is that additional money must be created to equal the interest accrued – however, additional money needn’t be created to cover the debt as well. you, yourself, acknowledge that all money is debt. correct? well if all money is debt than the entire money supply must be recreated every year – according to your proposition. this would entail doubling the money supply every year and continually. this does not happen.
it is only the interest that is missing, and therefore, only the interest that must be recreated. any sovereign government can have any size debt it wants without degrading the utility of the money supply by an iota.
one more point. essentially all money is ‘fiat’ money. the claim that money backed by a ‘precious’ metal is not fiat is only that – a claim -and a very hollow one at that. in reality, all money is only a recording of the trust between 2 parties backed by an insurance policy issued by the government that its currency ( and only its currency) will be accepted as a means to pay taxes. this insurance is not backed by gold or any other metal. it is backed by the authority of the government to command its armed forces, if necessary, to vivify its claim.
money, under any disguise or form, does not have a value other than its purely utilitarian value as a record of/contract of trust and insured by a sovereign government.
why?
because money is only a symbol.
commodity .
goods .
Jim K:
You seem to confuse money with currency…
Gold and silver are natural money. They are not issued by any government. Their value is inherent. You can make circuit boards out of them, solar panels, water purification systems, and much more.
Currencies are issued by governments, and their only inherent value is paper,
(Google images for “weimar rebublic” and “zim dollars” or just look at these for the value of paper: http://3.bp.blogspot.com/_YGLQQZTHoU0/TL9BaZHkvuI/AAAAAAAAL8M/_S2gtkS7Pmg/s1600/Inflation-1923.jpg http://www.hitler2012.com/wp-content/uploads/2009/11/moneyinstreet.jpg http://www.google.com/imgres?um=1&hl=en&tbo=d&rlz=1C1CHFX_enUS468US469&authuser=0&biw=1304&bih=683&tbm=isch&tbnid=cppLR9_lv4xYtM:&imgrefurl=http://www.freakonomics.com/2008/12/18/freak-shots-when-money-goes-down-the-toilet/&docid=jVYMjPHlp7XWiM&imgurl=http://www.nytimes.com/images/blogs/freakonomics/posts/Zimdollars.jpg&w=480&h=360&ei=4vn8UIrHDcPuiQL6uoCACA&zoom=1&iact=hc&vpx=4&vpy=125&dur=959&hovh=194&hovw=259&tx=78&ty=108&sig=101647248999734726599&page=1&tbnh=136&tbnw=178&start=0&ndsp=25&ved=1t:429,r:0,s:0,i:82)
their other value is the fiat declaration of the issuing government. There is fiat CURRENCY, but there is no fiat MONEY, but the verbiage is tricky because currency has been used AS money for so long most people have forgotten there is a difference…also the way we transitioned from money to currency is tricky, because at one time the USA used gold and silver as money AND currency too. It then stopped using the money as currency and replaced it with currency that looked the same, but did not have the same inherent value. It is the very definition of counterfeiting. See: President Johnson – Remarks at the Signing of the Coinage Act http://www.presidency.ucsb.edu/ws/?pid=27108
It would be like…if I had a car, and an axle broke…I replaced it with a broomstick and some bubblegum. It rolls, but one axle is not like the other…it is so different from the OEM that to call it an axle would be deceptive. You need a car. You drive mine around the parking lot. It rolls. You buy it and head off down the road. Sooner or later you will hit a bump and the inherent value of what you are riding in will be revealed. In the story “I” am a government issuing fiat currency.
As a spectator watching from outside the Continental USA. I would not want to be anywhere near population centers of greater than 250K. These poor souls will be begging for government to “do something” The new paradigm will require physical strength as well as mental and spiritual. The guys wearing the pick polo shirts and riding the BMW to the club for 18 rounds will be up the creek.
hi matt – your considered opinion is incorrect. there is no difference between ‘currency’ and ‘money’. you have every right to differentiate the two but it will only serve to generate a state of confusion that needn’t exist. any symbol of money [gold, gold backed notes, 'fiat' notes, beads, baubles or beaver pelts] can only ‘represent’ a reality.
what’s the reality?
an exchange transaction in which the seller trusts that symbols he receives as payment will be honored at a future time.
call the symbols whatever you like – they only ‘represent’, ‘stand in place of’, ‘are metaphors of’, ‘symbolize’ another reality. a rose by any name would smell THE SAME.
you seem like a smart guy, matt – dont waste your life on meaningless sophistry.