Monday, July 20, 2009

Stuttering Hank

Stuttering, also known as stammering, is a speech disorder in which the flow of speech is disrupted by involuntary repetitions of sounds, syllables, words or phrases. The disorder is variable, which means that in certain situations the stuttering might become more severe depending on the anxiety level connected with that activity.

More fun from the HOTseat!


FOFOA said...

MK ( 20July2009; 14:56)
Anyone have an extra $23.7 trillion lying around?

Pete, you ask: “How do we payback a bill that may be nearly twice the estimated US GDP for 2008?”

Here’s the other question: How does the federal government go about actually funding a $23.7 billion bailout program? Washington, I am certain, could come up with a ten or fifteen year payback program like they have with past bailouts or schemes to gradually reduce the national debt — even for $23.7 trillion. But how does it plan to raise that kind of money in the first place? I would assume that the bailees need this capital injection in short order, not over the next decade. Weimar comes to mind when you start throwing around numbers like this.

Anonymous said...

Barofsky versus Williams :

Treasury spokesman Andrew Williams said the U.S. has spent less than $2 trillion so far and that Barofsky’s estimates are flawed because they don’t take into account assets that back those programs or fees charged to recoup some costs shouldered by taxpayers.

“These estimates of potential exposures do not provide a useful framework for evaluating the potential cost of these programs,” Williams said. “This estimate includes programs at their hypothetical maximum size, and it was never likely that the programs would be maxed out at the same time.”

>>> The fact that everything remains calm (at the surface-!?) with such a Weimar number ($ 23 Trillion),...
Can't find the right word for it.

Martijn said...

Interesting article: was Enron right?

Dave said...

I saw that video elsewhere, and noticed that Paulson didn’t deny there was a conflict of interest between his role as Treasury secretary and his affiliation with GS. In fact, he admitted he sought an “ethics waiver”! Boy, these people are so slick they have even managed to “legitimize” being unethical! Just make a rule and it's OK.

Dave - Erstwhile Urban Wanderer

Martijn said...

Some more talk on flying helicopters.

Anonymous said...

Bernanke wants us to believe that he is Hercules who can put the contracting economy back on the growth rails and at the same time contain the inflation effects from the past astronomical monetary/financial stimulations !?


Anonymous said...

UPDATE 1-Morgan Stanley to settle class-action lawsuit:

It's about ETFs

FOFOA said...

The Bernanke article is enlightening!

--This "exit strategy" talk is meaningless jawboning because he admits it will not be used "for an extended period" which he later qualifies as "several years".

--He reminds us that narrow money is still under HIS control, in HIS vaults, and that he is on the lookout for "built-in" inflation and for broad money "demand-pull" inflation. He ignores both "cost-push" inflation (supply shock) as well as the currency event we call a run on the dollar. In my opinion he is on the lookout for the less-likely and completely impotent against the more-likely.

--He views the results of TARP and the subsequent exit from TARP in order to resume high bonus payments (see Goldman Sachs) as a positive economic sign, one that will continue. This was a one-time event... unless we do it again!

--He's no longer talking about selling the toxic assets back into the market. He is now waiting for them to mature! Or... he'll sell them back to you with the GUARANTEE of buying them back at a HIGHER price! Ha!

--He reminds us that Congress gave him the OK to pay interest on excess reserves. This is pure base money printing at the rate of $2B per year, or $5.5M per day. Not large in the big picture, but a significant change in monetary policy APPROVED by Congress.

--He reminds us that HIS interest is "risk-free" because there is no "default risk" (unless of course his printing press breaks down). But his very use of the term "risk-free" shows that everyone's focus is still on "default risk" and not currency risk.

--The fact of the matter is that this Fed-sponsored mis-pricing (RIGGING) of currency risk actually RAISES future default risk in a stealthy way. Borrowers are forced into short-term borrowing for the low rates - the equivalent of an ARM loan. When the world finally ditches the dollar all these short-term borrowers (including the Treasury!) will NOT have their short-term debts inflated away. They will have to roll them over at much HIGHER rates or not at all, meaning default central! And in the case of the Treasury-Fed relationship, this will be the hyperinflation trigger.

--All of his "tools" that he lists in this piece are based on one very important assumption; that there will ALWAY be a net, aggregate demand for US dollars. Here in the US (where it is legal tender), and perhaps within the financial paper industry this is true. But the fatal weakness of the dollar is that it is not contained within a zone of forced demand! If the international demand for dollars ever shifts to a dishoarding event, his "tools" become completely worthless, even inside the US!

FOFOA said...


CNBC Attempts Assasination on Barofsky

FOFOA said...

December 1929 - Herbert Hoover: "I am convinced that through these measures we have reestablished confidence."

May 1930 - Herbert Hoover: "While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.”

July 2009 - Barack Obama: "The fire is now out. I think that we have stepped back from the abyss. I think we've put out the fire. The analogy I use sometimes is, we had this beautiful house. And there was a fire. We came in and we had to hose it down. The fire is now out... If we didn't stop the bleeding in the financial system, then it would have been even worse for everybody... That I don't have second thoughts about."

Anonymous said...

After 18 years Greenspam easy money,...and now Bernanke-Paulson-Geitner-Summers even more QE,...The goldprice must absolutely NOT signal ANY infla-expection for the next 100 yrs.

Grotesque and absurd from any point of view.


Martijn said...

I agree on the Bernanke article. I also agree with your comment on how you read articles different then I do. The course has been set, they've even managed to write it in the stars - there seems to be no escape.

I guess I read articles the same as you do - I was by no means believing in all this helicopter flying to come to a good end - but sometimes I respond to what I think is an under-explained overstatement to check whether we really do see the same thing.

Did you happen to read some of the links I posted on the China game?
Seems like an interesting play of chess to me.

FOFOA said...

If you're referring to David Alexander, yes, I did read them. He seems to have a good grip on things. He should come over to our playground!

Shanti said...

This vid of Hank shows again that the whole thing is a large - PUPPETRY -

How long are we going to run on water.....?

Anonymous said...

@ Shanti : Look at the 10 yrs GE chart ! $-Finance capitalism runs already a full decade on water (in dark pools)!

The next thing that will sink in this "(fire)water" is the unit of account ($) in which all these papers are quoted.

Allow me to repeat an A/FOA quote (fundamental) : The gold-revaluation (VALUE-!) is only a once in a lifetime event !

I now say definitely goodbye to the theory of gradual revaluation.

Your label "puppetry" is a much too civilized (polite) word for what is really happening before our eyes.

FOFOA said...

From the Enron article, a view of the Strong Dollar Policy:

"This strategy becomes particularly attractive if the US Federal Reserve is forcing short-term interest rates down to levels far below long-term rates, as it has since 1995. Indeed, since long-term interest rates declined steadily from 1981 to December 2008, many traders in the debt area were able to spend their entire careers in an arena in which a modest level of profit, year after year, was built into the structure of their operations. Yes, there was the occasional year in which short-term and long-term interest rates backed up, but the last such year in which debt trading was economically unattractive was as long ago as 1994."

@ ANON : "I now say definitely goodbye to the theory of gradual revaluation."

Would you say that your Thoughts have recently undergone a "phase transition"?

Perhaps you are frontrunning reality!

Anonymous said...

" phase transition " - Yes, Sort of. :)))

Bernanke preaches gradualism (a perception of gradualism). I conclude that he's admitting that the catch-22 comes closer to the finale. Those who question him do so pro forma and very "detached".
No sign of anger-indignation ! This looks very frighthening to me.

This constant " subtle change" of "tone" in mainstream media is as quiet before a (the) storm.

One more small detail : The premiums on spotprices for bullion coins, remains high/higher (8+%)
The same fenomenon happened each time the goldprice made a major move in its 1913 > 1971 > 1980 history.

Anonymous said...

Ambrose : Road to ruin !?

Yes, I always take Ambrose with some salt. But the core message is an as dramatic nearby future as can possibly be (cath-22).

I see Ohbama's popularity fast declining (now under Bush's lowest). Doesn't surprises me at all. Because I have my own little theory about why the PTB chose Obama.

Anonymous said...

Jesse nails a few things...

Anonymous said...

I like this €-gold chart !?$gold:$xeu

May be wrong on emminent break out.Often am...

Shanti said...

Remarkable €-chart Anon !

Thought all charts where painted. Although this one looks like an exeption as it was not pushed down, neither did the line of 1,40 €-$ was defended

Still remember me something that ANOTHER said on the right time. "when CB's find so"

Tijd voor de 2 meterbak, slaapwel

Anonymous said...

No, Anon, I don't think you are wrong. The pressure is growing. Everywhere unemployment gets higher, French people are geting more aggressive, in Germany we have millions on Kurzarbeit (less working hours) finances are RUINED, debts will NEVER get paid back - no, it will not get go on forever, not even for years.If we don't have a war in the next three months or even if we have one - something is going to happen.
It's not only US, it's the WHOLE world!

FOFOA said...

New video added at the top.

SatyaPranava said...

grayson is my favorite...a great trial atty who seems to know just about every angle that his subjects might attempt.

this isn't his best interrogation, but it's still great theater. Bernanke isn't quite as dumb as the lady the FED sent up last time. with that said, grayson still sticks it to the FED pretty good :)

Ender said...

@Tekin's 9:35 am post July 20th.

You have interesting thoughts that don't look to have been addressed in any previous post. If you are still willing, it might be worth thinking of your words a little deeper.

In the context of "Freegold for whom?", it seems that within your words it appears that Freegold is not all that free. I am sure FOFOA has posts that see the freegold concept through my words, but I would like to state a critical concept here that seems contrary to your line of thinking: If you and I are allowed to buy gold with our currency, we have settled other's debts to us. On a personal level, acquiring gold allows you to settle other's debt to you. This act of settling others debt to me (as the case may be) does not destroy any currency nor relieve those that are still in debt to others of any burden. What it does offer is a means for me to buy a wealth reserve that stands on its own merit.

Doing a little calculus, if you sum an infinite number of little gold buying transactions you end up with a means of settlement for economies as all the little gold bugs enter the market and buy wealth reserve with their surplus currency. The currency remains in circulation and gold moves into its settlement role. 'Nations' and 'States' worth of people may be seen as settling, but the Nation and State still have the same amount of currency in circulation.

My question to you is: is it the Nation that is looking for settlement or is it the people of the nation that want settlement? Keep in mind that currency is needed by those in the nation for everyday function. We need to buy things.

Ultimately, your point of view on this will only make a difference conceptually. Here, as we theorize about the days ahead and what it means to us (you and me) personally.

Independent of the nation state, those with surpluses that are currently held in currencies may find that the nation state is placed in a position to create MORE currency rather than less. That design in the system will always, over time, create a situation where more currency will be available to chase items that work as wealth reserve.


Ender said...

... Continued

Now, back to the Freegold concept. Because gold is a wealth reserve, it will work just as well for a person as it will a nation state. In the marketplace, if gold is plentiful, it's 'price' will be low. Likewise, if it is scarce it's price will be high. If a nation state markets it's gold to market and thins the gold market, it may find a high 'price' for all the nuggets the nation holds on reserve. This implies that if the nation state does NOT SELL gold in the open public market, all us little gold bugs (advocates) will be the ones that offer up our gold (in exchange for currency) that help settle the imbalances that occur in global/national/local trade. If 60 billion needs to be settled every month and only a few ounces are available, those few ounces may absorb the imbalance.

In a Freegold system, the actual gold metal market determines the exchange rate of a currency. The nation state can liquidate/acquire less/more gold but the balance sheets will show the change allowing the businessman to determine where or not the currency is being managed respectably.

In a Freegold system, the incentive is for the nation state to create an environment where the gold price is continually falling in that local currency. If so, people will want to hold that currency knowing that they will be able to buy MORE gold tomorrow (or in the future). It will setup an environment where the businessman will WANT TO invest in that economy knowing that when the payoff comes - years from now - they will be able to convert it into wealth reserve.

Freegold is beneficial to everyone - except those that can print a currency out of thin are that can be used to buy goods anywhere in the world. You and I CAN NOT print money. You and I can only go in debt for currency today (Committing future work for currency today). That going in debt subjects us to the political ramifications of the management of the currency. That may be good or bad depending on how it's managed.

Gold stands separate of this miss-management.

And, as you may have already figured, the way the reserve-currency of the world has been managed, gold is extremely undervalued. We are going through the process of discovery - where those with paper riches figure out that it's really not real until it's settled. As the settlement process accelerates, so will the scarcity of gold.

Stand for Gold settlement. It is the honorable thing to do.

Siege said...

The dollar dump moves to broad daylight...

China to spend reserves to grow overseas

Martijn said...


May be wrong on emminent break out.Often am...

Ever missed one, or did you predict more break outs than occured?

Tekin said...

@ Ender;

Thank you for your interest.

***My question to you is: is it the Nation that is looking for settlement or is it the people of the nation that want settlement? ***

It is the nation that is looking for settlement.

For me, the existence of a free gold the market is a necessary but not a sufficient condition for gold settlement. A free gold market and an independent political administration, together, would constitute a necessary and sufficient condition for gold settlement.

In less cryptic words, I can explain my thoughts as follows. If the US can organize and interfere with the politics of a country, it will threaten the elites with color revolutions, in case the surpluses are settled in gold. If the elites of the surplus country give in, which is quite likely since this is the way they have been living for the last 100-150 years (think both UK+France+Germany+US, the elites had many experiences with these powers), the surplus will be kept in dollars. If a faction within the elites tries to settle, they will be disposed of (think Benazir Butto, or perhaps even Saddam Huseyin).

If you find the above illustration too much anti-US, try this. A small neighbor of China, say Burma, has surpluses with China. They sell yuan in the free market and buy gold. China gets angry and openly threatens the country if they they continue with such "western oriented" hostilities. There are riots in the streets. China employs economic sanctions. Then, what will happen? This method could be refined as necessary. China might refrain to tell the "gold" word in the public. Instead, bombs explode in China. Burma terrorists are captured. China gets angry in public. Behind the closed doors, the gold word is spoken...

Anonymous said...

@ Martijn : The entire monetary/financial complex (including goldprice governance) is in a crescendo manipulative/interventionist grip !

Emphasis on "crescendo" ! This happened regulary during the past 100 years (and longer).

It means that so much tension is building that changes have to materialize.
This is no time to speculate/wager on goldprices and/or gold leverages. Many break out/down predictions (TA/TI) on the goldprice are often wrong...and will remain wrong for some time...up until the fundamental change(s) materializes (Cfr. The London Gold Pool period).

Please, read some fragments of " The flight of international capital " - Brendan Brown. 450 Pages of gold and monetary facts over 40 years !
You will be surprised how Big a role gold/goldpricing is playing.

Anonymous said...

@ Martijn (continued) : I conclude that the more UN-predictable the mon./fin. complex becomes,...the closer we come to a finale (fundamental change-!).

Increasing unpredictability means crescendo UNstability...loss of confidence...flight...panic...

How many traders/investors do you know in your environment who still are making net profits ?

Anonymous said...

@ Siege : When international capital cannot flow freely where it wants to be,...mon./fin. warfare increases !

How can $ 5 Trillion CB $-reserves possibly find a reliable return in a $ 40 Trillion global economy ???

Many fortunes (and small savings) already booked heavy losses. They will increasingly hesitate to "invest" AND "speculate" ! I don't see this situation changing for the better anytime soon.

Take the message in the article with some salt.

Martijn said...

I'll try to read some of Brendan Brown.

Meanwhile: does this indicate more QE?

Martijn said...


Take the message in the article with some salt.

What are you saying? China is not investing oversees?

Many fortunes (and small savings) already booked heavy losses. They will increasingly hesitate to "invest" AND "speculate" ! I don't see this situation changing for the better anytime soon.
Are you not predicting hyperinflation? Rising inflation with artificially low interest rates in my opinion are the stick "they" are applying to beat money out of saving and into housing, stock etc.

Martijn said...

In the Grayson vid it is mention that the Fed has placed half a T USD currency swaps at other CBs. Who can explain that?
Is there a relation with the treasury bond actions?

Martijn said...

Or did those swaps indicate that foreign CB had massive exposure to toxic US financial products>

Martijn said...

He did say foreign banks were short USD.
What does that mean?

SatyaPranava said...

@martijn: that means the whole f-in world save the US public knows we're going down and is betting big money. i think they're going to enjoy the ride.

Martijn said...


I was thinking in the same direction.

However, if they were betting against Hanky Panky Shalom Bernanke, why would they have been helped?

I actually believe it had more to do with the Lehman collapse. My guess is that foreign central banks had quite some exposure to CDOs and other funny paper that was linked to Lehman.

Ender said...


Might need to rephrase my question to something like: Is it the politicians, the central bank or the people that want settlement?

I believe you're onto a key element when you say that a political organization "... organize and interfere with the politics of a[nother] country..." (Hopefully, I didn't butcher your words to much.) This is clearly an issue in today's world, one that I'm sure everyone - except the dollar political group - would like to change.

At the same time, what empowers the political organization to have this kind of influence? I'm sure we'd both agree that a strong currency, one where the people have lots of confidence in it, provides - 'the function' - that backs the currency that provides the political advantage. If people are willing to accept a currency as their medium of exchange, that currency functions. The larger the user base, the easier it is to raise taxes for your political influence via inflation. I'm sure we both agree there too.

On a side note, I agree that elites that gather too much gold are dealt with harshly, but is there an underlying reason other than gold? Here I will ask, if you could print all the currency you wanted, would you use it to buy gold?

If you were to ask me, it doesn't make sense too. You would acquire the means of production and develop methods of efficiency throughout the entire economy. The key is that you would spend easily created currency to buy confidence in the currency so that you can keep creating the currency - at no cost to you all the while growing the economy so as to keep the people using the currency.

The elites know the power of currency creation. All political groups in conjunction with their central bankers will always do what they can to keep confidence high in THEIR currency. These same groups talk openly that debt and deficits don't matter. They really don't, when you're organized to the point where EVERYONE agrees to support each other in a floating fashion.

Gold is for the people. Gold is the people's defense against such (organized crime) a system. Gold stands as a measure for honest productivity. Politicians could care less about gold, they just want the currency to function. Bankers know the power of gold and use it as a tool to profit from empowering the politicians with their currency.

When people want to get out of debt, we will see gold regain its value in the eyes of man. The less debt man takes on (less currency created) the smaller the influence of the politicians and the smaller the productivity the bankers get to siphon off the populous.

Do not go in debt, spend the currency you make and save gold.

Anonymous said...

" The power of currency creation "

Is the power ($-regime) to create $-currency fading away ? And will the $-system as a consequence become dysfunctional ?
My answer is 2 times YES !

Because the $-regime has increasingly ABUSED this power (given privilege). In the same way as all other rising/faling empires have been doing. (Cfr. the sterling empire-commonwealth)

One cannot pinpoint (single out) ONE major argument why this is happening. It are a multitude of reasons why the rot grows. Listen to the hearings and ask yourself how the $-regime is handling (considering) the astronomical debt growth. The governors remain in complete denial about the gravity of the abuses. They simply normalize (standardize) their absurd modus operandi...AND produce a pro forma (misleading) sanitation perception.

FED/ECB swap $/€ to keep IRs low/lower ! They jailed themselves and throw the keys away.

When the population's PP continues to decline,...they crescendo go for gold that the fiat governors cannot keep frozen anymore.
They already mobilized almost all the goldmetal available that is demanded for self protection by those who undrstand the gravity of the systemic failure.

That's why agree 100% with Ender's last line conclusion.

Martijn said...

To me we are in an interesting, but also puzzling situation.
On the one hand there is a lot of in-your-face evidence that the dollar is to go down (although not necessarily disappear) and that gold again will become important.
On the other hand I find it rather hard to believe that it really is that simple and that hardly anyone in power seems to understand it, or - if they do - act to their understanding.
As I cannot disregard the aforementioned evidence, but also do not believe global high-level power plays are as simple (or to put it different: visible) as they seem, I keep wondering what it is that I fail to see.

I have quite a lot of gold and silver, but for me now is the time to continue to ask myself if I am "right" instead of looking for confirmation.
Fyi: I will sell gold nor silver before I have compelling evidence that I am wrong, and I do not even expect to find it, but that does not keep me from looking.

Martijn said...

What I mend is: I have seen enough evidence against the dollar and for gold. Once you know something, the value of hearing it again decreases rapidly. Information proving the opposite of what you know however gains in value.

Apart from that I am by no means claiming to completely understand the financial markets and the attached (geo)political (and military) plays. Information on that topic remains valuable, and so I have found myself to continue to read this outstanding blog.

FOFOA said...

"spend the currency you make and save gold."

It is the concept of becoming a Super-Producer (producing more than you consume) that creates the need for savings. We all do this over the course of our lives if we plan to live a long time. It is a well-known fact that old people have a difficult time producing. There comes a time when we must retire on our Super-Producer fruits of yesteryear.

John Locke made the point in 1690 that metal money gives men something lasting to keep, that will not spoil, and does not infringe on anyone else's daily lives.

Today, when in our younger years we produce more than we consume, we hold our excess value in bonds. That is, someone else's bondage to us. A SPECIFIC SOMEONE! We hold as value a contract that says someone SPECIFIC will provide for us later when we can no longer provide for ourselves. These contracts are reputed to be better than gold! But are they?

This system on its surface is clearly a Ponzi scheme, requiring an ever-growing future army of laborers lured into debt in order to service the Super-Producers of yesteryear. But there are bigger problems than just the pyramid structure of the system.

Rather than staying in balance, the globe has separated into hemispheres where one side is producing more and the other is consuming more. The producing side is accumulating enormous amounts of contracts holding the consuming side in bondage well into the future. So it would seem that future generations in the West would be supporting an aging East (net-net) at some point in time.

The problem is that the trend is now visible to all. The West is shrinking while the East is growing, both in population and economically. So I ask again, are these contracts really better than gold?

If we hold gold as value instead of A SPECIFIC ENTITY'S bondage, we have exchanged SPECIFICITY for DIVERSITY. We now hold a claim on the future services of ANYONE IN THE WORLD who is willing to work for us (for gold)!! We eliminate the risk that our PERSONAL, SPECIFIC SERVANT may fail to perform for us in our time of need.

In the opaque world of paper investments we must CHOOSE which entity we want to service us in the future. Perhaps we choose a Vanguard Mutual Fund. Or a global company like General Electric. But how do we know they will perform for us when we need them.

With gold we have eliminated the risk of choosing the wrong entity. Instead, we have our own small share of a future claim on the entire workforce of the planet!

This simple difference between holding debt and holding gold is getting a lot of publicity right now, not through the media, but through the window of reality!

Tekin said...

@ Ender

Well, I agree with everything you have said.

***Is it the politicians, the central bank or the people that want settlement?***

The central bank wants settlement. However, the politicians, the upper bureaucracy (civil and military [NATO!]), the top banking and industrial groups of the country - all of them - would be held responsible for an attempt to settle in gold.

***I'm sure we'd both agree that a strong currency, one where the people have lots of confidence in it, provides - 'the function' - that backs the currency that provides the political advantage.***

Agreed. However, one should also consider the effects of three decades of liberalization, globalisation, asset privatization etc. Many state enterprises have already been sold for dollars. Many private national companies have already been forced to seek foreign partners in return for dollars. The dollar has already functioned to provide political advantage. The leverage is there in the form of company ownership/shareholding in critical sectors, mainly telecoms, energy, utilities and agriculture. "For a few more dollars" or for "A fistful of dollars" Americans have become partners in business. Lesser countries also have foreign debt which also is an additional leverage.

Personally, it is simpler, as there are not too many parameters. The Black Blade motto is sufficient: "As always, get out of debt and stay out of debt, stash enough emergency cash for several months’ expenses, accumulate Gold, and start a storage program of nonperishable food and basic necessities."

I do not envision any problem at the personal level, while settling in gold.

Anonymous said...

Yes Martijn, we all ask ourselves those same questions repeatedly.

IMVHO, I think that a lot of capital from the non insiders (out of the dark pools) has been "mislead" during the past 15 years !

Yesterday, an old (wealthy) woman asked me where all that money went !? I answered her : Those amounts of money were never there.
And she understood this answer and agreed !

All those financial digits cannot run from the tops right into the golden refuge ! These enormous capitals are condemned to keep on "moving" from bubble to bubble,...up until this Ponzi affair vaporizes into the nothing.
(look at 10 yrs GE shareprice, again, as an example)

We have been living in a financial LALA-land (Coney island) already for many decades now !

NOBODY paid for the tickets to ride !

Very hard to believe and accept this theory/view.

What more evidence are you expecting ?

Anonymous said...

WAAAAWWWW FOFOA,...Again brilliantly said, Sir (12:33) !!!

Thank you.

Martijn said...


This is a bit of a side-step, but highly relevant for anyone valuing the blogsphere and the internet. It is a movie on property rights and the ridiculous american attitude regarding that topic. It also offers some explanation for the offshoring of low-wage jobs from the US to China.

For who is interested: Here is 50 mins of very current documentary material

Anonymous said...

Blame it "again" on mercantilist China !?

It is the $-system/regime that caused the systemic debt crisis and now wants China to be (part of) the solution !?

An upside down world. This attitude is making the Chinese pissed. And this is an understatement. Orientals are no Westerners !

Ender said...


Agreed; "The central bank wants settlement", but they do not want to use their own gold to do so for it would nullify debt in circulation and weaken their position. If they don't use their own gold, they are not really part of the settlement process, but rather settlement advocates.

Thank you for sharing your point of view.

Martijn said...

The titel of the movie mentioned in my previous post is: "RIP: A Remix Manifesto".

It really was worth my while.

Anonymous said...

China !!!

"As an important investor in U.S. debt, we of course are concerned about the state of the U.S. economy," Assistant Finance Minister Zhu Guangyao told a news conference.

"We hope that U.S. economic policies will yield more effective results as soon as possible, that the U.S. government's fiscal deficit will gradually come down and that the balance sheet of the U.S. Federal Reserve will be improved," he added.

Martijn said...


This is what I mean: we are beyond the point of anyone believing that will happen (US bringing down their debt and all).

China must know it too. Off course they can't say something like: "our expectations are for the US debt to massively increase and for US productivity to decline further, leading to a situation where they shall never pay off any of their debt. Yet we shall continue to buy treasuries."

Anyway, I'm sure you get my point.

Martijn said...

Back to Grayson and the swaps:

Grayson: Which financial institutions received this money?
Bernanke's answer: I don't know.

As the Fed was lending this money, the dollar increased by 30% in value.

Grayson asks, was this a coincidence? Bernanke's answer: yes.

The dollar increasing must mean some sort of liquidity trap was opened, or is there another explanation?

Anonymous said...

@ Martijn : Some very straith talk from China !

China urged the United States to prevent separatist activities against China on U.S. territory.
·The July 5 riot in the northwestern region of Xinjiang was a grave and violent criminal incident.
·The China-U.S. strategic and economic dialogue will be held in Washington, D.C. from July 27 to 28

FOFOA said...

There was an interesting article in (I think) early '08 while the dollar was tumbling fast. It was about Chinese merchants dumping US dollars on their local banks as fast as they came in. In China, it is illegal to exchange dollars for yuan anywhere except the bank. And the banks were overwhelmed by the demand for renminbi. The PBOC was printing currency as fast as possible to keep up with the demand, but it was not fast enough. Long lines were forming at the local banks and some merchants were being turned away at the close of business, doomed to hold their depreciating US dollars for one more day.

I think it is helpful to consider the journey of a dollar in today's system.

If I am an importer of goods into the US, I simply pay foreigners with my home currency. But if I happen to be an importer elsewhere, there is a good chance I will have to first buy US dollars before I can pay for my shipment. If I am an exporter in China, I am prepared to receive both yuan and US dollars. But for my operating expenses I need only yuan. So I must go to the bank often to turn in my dollars.

My local Chinese bank then gives the dollars to the PBOC who prints new renminbi ("people's currency" in Chinese, denominated in "yuan" and "jiao").

Sitting at the core of the Chinese economy of 1.3 billion Super-Producers, the PBOC ends up with an astounding amount of US dollars which it pays for with its printing press. This yuan inflation (printing) is a burden on the Chinese economy which must be offset by the central bank's investment of the accumulated US dollars in future usable value.

Today, US Treasury debt is the primary option for such large hoards of greenbacks. No other entity offers as large of a future "debt service" as the US government. So the PBOC ships the accumulated dollars back to Washington DC who spends them back into the US economy. In exchange, China receives a contract stating that future US taxpayers will labor in service to China.

The problem is that our debt has grown so large that we are now servicing it with the printing press.

So the Chinese printing press (yuan) is backed by the US Fed printing press (dollars) which is backed by Chinese REAL labor (goods) which is backed by the Chinese printing press (yuan) which is backed by the US Fed printing press... and on and on and on....

Jumping back to the Chinese merchant who needs yuan to pay his operating expenses, we must remember that he is also a Super-Producer, producing more than he consumes. So he has an inflow of EXTRA yuan to store for future retirement. His three choices are keep the paper yuan (not a good idea with inflation), buy a specific entity's future bondage, or buy a share of the entire future global workforce (gold). This third option has only recently been made available to Chinese citizens.

If our merchant chooses gold, he settles the world's debt to him for the time being, a debt which he can reactivate later by selling the gold in exchange for whatever paper medium is best at that future time for obtaining the goods and services he needs at that time.

It is helpful also to follow the path of the renminbi he exchanges for gold. That gold dealer will deploy the majority of that renminbi in search of replacement gold, because that is his business. That is his operating cost. This path leads ultimately to the people's gold, the CB gold, or new gold from the mines. This path of yuan seeking gold bids for the best value from each of those three sources. This yuan is now a heat-seeking missile aimed directly at Freegold. Multiply this effect over the entire globe and imagine the force of trillions of heat-seeking missiles all seeking the same thing! What do you think would be the result?

Note also that China recently offered its own bondage (backed by the printing press) as an option to absorb some of this massive yuan inflation, an offering that was basically rejected.

Martijn said...

Some more umbrella talk.

In some media I am beginning to sense that they are manipulating the public opinion against Iran btw. I wonder what Israel is up to.

Martijn said...

China has been playing more trick in order to deal with it's inflation, such as tightening reserve requirements for backs.
Besides they has some "luck" in the fact that Chinese people - at least until recently - did not have too much trust in the future and hence were saving a lot.

This yuan is now a heat-seeking missile aimed directly at Freegold. Multiply this effect over the entire globe and imagine the force of trillions of heat-seeking missiles all seeking the same thing! What do you think would be the result?
Does this - interesting - reasoning happen to come along with some quantitative argument (e.g. Chinese gold-mining turnover)?

Anonymous said...

A deal taking shape between Israel and Western leaders will facilitate international support for an Israeli strike on Iran's nuclear facilities in exchange for concessions in peace negotiations with the Palestinians and Arab neighbors, The Times reported Thursday.

Martijn said...


That is one nasty development if true.

And once again to the Grayson tape.

His conversation with Bernanke, on the dollar going up when those swaps were provided: perhaps there was no direct cause. Maybe it really was one layer (CDOs and other illusional assets) of the wealth pyramid collapsing and flowing into a lower level (the dollar).

SatyaPranava said...

@ martijn.

"On the other hand I find it rather hard to believe that it really is that simple and that hardly anyone in power seems to understand it, or - if they do - act to their understanding."

you and I both have a very healthy, and serious dose of humility, skepticism, and even cynicism.

For me, I know they know the rules and the game much better than most of us. Moreover, they know all the rules makers, and they know how to change the rules in the middle of the game at the hour of midnight.

Humility is what keeps me from feeling I have the upper hand, PMs or not. I'm always wondering just what trick they have up their sleeve to pull a rabbit out of their butt and make us think it came from the damn hat!

I tend to worry when I hear citigroup and GS, and COMEX traders sayign that gold's going to 1600 or 2000 dollars. that's when i begin to worry. when cnbc is calling for 10,000 gold, i'll be selling, however.

as of right now, I'm figuring that they've buying up all they can w/fiat before they either lose control or take it down another notch.

just my $0.02!

SatyaPranava said...

The Jerusalem post is meant mostly for western, english speaking audiences and should never be considered an indepth-inside scoop, IMO.

Plus, it's quite globalist establishment in its ownership, editorial positions, and in its connections.

consider the public threats to be saber-rattling by the west; but anything but military tip-offs about an upcoming strike.

Nibblybits said...

Found an interesting blogger that demonstrates some research on gold manipulation. We all know it's happening, but he shows when and largely who. It was good to read some evidence behind what we observe on such a frequent basis.

Hope you guys enjoy it!

SatyaPranava said...

yeah nibblybits...DeCarbonnel does some very good work. he also takes leaps at times, but overall, very thorough.

thanks for sharing!

SatyaPranava said...

martijn, that mashup manifest was amazing. thanks so much for posting it.

we spend so much time talking about structure, and it's nice to see that we also talk about agency and what we can do (gold, mashup, pirate, etc).

love it!

FOFOA said...

Prana, Martijn,

I agree... awesome film. I can relate. I'm watching it now!


SatyaPranava said...

more than just a great's got me high as can be. it just opened up my thinking and world. i've already DLed some 70 songs by artists in there...well, i guess some 5000 artists, and some 1267 music corporations...

wow :) thanks so much martijn!

i feel so very victorian all's time to just masturbate in public :)

anyway, i've been working on a series of speeches for a class to get my second degree before going on to get my masters in public health and then onto holistic medicine, and I've been focusing on the economic situation, though i've been having to take very baby steps with them, i get to provide my solutions to our economic problems/system and debt.

any suggestions are welcome. this movie will make the list as will this blog.

Freedom, not the self-perpetuating illusion of control, will be the ultimate theme. Agency. We have the most influence if we only know how to tap into that creativity and stop being subordinated to the will of those who wish us to choose their will.

i'm rambling...high. have a beautiful night, fofoa.

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