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Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

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  • #31
    Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

    Originally posted by jtabeb View Post
    We will get our "mother of all inflations".
    That is possible, but not as long as the current derivative scam is allowed to continue.

    Originally posted by jtabeb View Post
    Because eventually all scams end BADLY for everyone one).
    As long as there is a large supply of gullible victims inviting the scammers to fleece them, the game can continue indefinitely. And even if it falls apart the perpetrators have a good chance to get away with their loot and the victims will end up paying for all losses.

    The big banks responsible for setting up the Federal Reserve System had no problem getting away with their frauds (by today's standard the market actions they took at that time would be considered a fraud). The average people (the victims) ended up paying for the loss.

    Originally posted by jtabeb View Post
    The USA is Argentina writ large, same as it ever was, same as it ever was...
    The Argentinian peso was not a global reserve and trade currency si chances for that to happen are very low, although it is not impossible.

    On a separate note I was wondering if the Guest Post we are debating was an exclusive interview for iTulip, and if the answer is affirmative, I would like to tell to Fred that someone is stealing content from iTulip without offering any credits. The same material was published on Financial Sense without any disclaimer that it was an iTulip guest post.

    Here is the link : http://www.financialsense.com/editor...2010/0419.html

    Also it would be nice if our guest can be so gracious to offer at least some brief comments to our feed-back. Not everybody is also a member of ChrisMartenson.com forum where he can get some comments from Mr Townsend.
    Last edited by Supercilious; 04-20-10, 04:00 PM.

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    • #32
      Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

      "The Argentinian peso was not a global reserve and trade currency si chances for that to happen are very low, although it is not impossible"

      I obviously agree with the first part as it is a statement of fact.

      On the second part, we have a chicken and egg problem (as I see it).

      Do economic events drive devolution of the USD from a world reserve currency to some other state OR is it that the Loss of USD reserve currency status drives economic events.

      I would answer in the only way one can answer a chicken and egg problem, it's BOTH. Both processes will constructively interfere until a cascade finally ensues. The system is dynamically unstable, and it has already had it's initial disturbance. Guess what happens next?

      (I know, I know, you think that the Fed's efforts to restore the static stability of the economy will succeed. I am not convinced, BECAUSE it NEVER was statically stable, it was only UNDISTURBED)

      Last edited by jtabeb; 04-20-10, 04:35 PM.

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      • #33
        Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

        Originally Posted by jtabeb
        My question is thus "what happens when people loose trust in derivatives as an asset class"? Where will the flow of funds be directed? Will they lose trust is debatable, but that's not the question I'm asking here. (I obviously THINK that this process is already well underway, but that is a discussion for another thread.)
        I believe that if you rephrase the question to "what happens when people loose trust in paper money", the answers will be a lot clearer.

        Paper money and derivatives are inextricably linked and inter-dependent.


        Plus, "derivatives as an asset class" is too broad a term since it includes not only the ugly CDOs that banksters etc. screw around with, but also "normal" things like corn or wheat futures which are indispensable to most farmers (and don't forget pork bellies - mmmm... bacon!! ;) ).
        http://www.NowAndTheFuture.com

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        • #34
          Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

          Originally posted by jtabeb View Post
          Plus, "derivatives as an asset class" is too broad a term since it includes not only the ugly CDOs that banksters etc. screw around with, but also "normal" things like corn or wheat futures which are indispensable to most farmers (and don't forget pork bellies - mmmm... bacon!! ;) ).
          Why is it that the Muslim guy is always the one that elicits comments about bacon!?!

          Comment


          • #35
            Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

            Originally posted by jtabeb View Post
            Why is it that the Muslim guy is always the one that elicits comments about bacon!?!
            LOL! That was funny!!!
            In my case I think it was a subconscious connection made when I was talking about big banks. Fat banksters --> pork bellies, I wonder what was my subconscious train of though that brought up this strange connection

            For those fascinated by the subject of perception of gold as an asset class I have a wonderful essay from 1999, which contains also a lot of interesting historical details and perspectives. The author is obviously wrong, we are still using paper currency, but nevertheless IMHO it is an enlightening read.

            Bart is right again with respect to the issue of derivatives. Paper money and derivatives are inextricably linked. Actually one may extrapolate saying that all fiat money is nothing else than credit derivatives on government debt expressed in credit derivatives. This circular reference is in fact what makes possible the today's banking scam, which is based on a hidden connection between the FED and Treasury. As long as most of the people remain oblivious to the fact that the Treasury and the Fed are just two parts of the same scamming machine (a classic bait and switch), designed to allow an elite minority to fleece us all, the whole scheme can continue indefinitely.

            Those guys who set up in 1913 the Third Central Bank of the US were financial scam geniuses. Over the years others tried to imitate them, but failed, because were unable to understand how the fraud scheme really works. Therefore the dollar is tightening its global monopoly, while the majority of observers live and die forecasting its imminent demise.

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            • #36
              Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

              Originally posted by $#* View Post
              As long as most of the people remain oblivious to the fact that the Treasury and the Fed are just two parts of the same scamming machine (a classic bait and switch), designed to allow an elite minority to fleece us all, the whole scheme can continue indefinitely.

              Those guys who set up in 1913 the Third Central Bank of the US were financial scam geniuses. Over the years others tried to imitate them, but failed, because were unable to understand how the fraud scheme really works. Therefore the dollar is tightening its global monopoly, while the majority of observers live and die forecasting its imminent demise.
              Well then we both agree that there is a very simple fix to this. If one does not like how the systems operates, all one would have to do is to shun the dollar and dollar denominated assets and buy physical precious metals then, right?

              Pretty simple choice really if you ask me.

              If people don't like the system they can just choose to leave it and choose to select something else.

              That's it, a simple choice is all that prevents changing the way the system is and the way the system works.

              And who holds this power of choice? Every individual collectively does!

              That's pretty profound when you really understand the implications. (And pretty sad that we can't bring ourselves to choose something better.)

              Oh well, you can bring a horse to water, but you can't make it think.

              Comment


              • #37
                Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

                Originally posted by jtabeb View Post
                Well then we both agree that there is a very simple fix to this. If one does not like how the systems operates, all one would have to do is to shun the dollar and dollar denominated assets and buy physical precious metals then, right?
                Nope. I think we disagree. Physical gold is also a dollar denominated asset. You pay for your gold eagles with dollars, which you got because you were paid with dollars by your employer or your business generated a dollar revenue. With dollars you buy groceries and gold coins. The use of paper currency in transactions is enforced by all governments. You can't pay your taxes with eagles.

                Originally posted by jtabeb View Post
                Pretty simple choice really if you ask me.
                Not sure it's a simple choice. You can buy physical PM for wealth storage as a hedge against rampant inflation and in SHTF events. Otherwise by buying physical metal you are just playing into the game of those who control the game. The only bonus of this strategy is a higher chance to have a lower rate of depreciation of your wealth stored in retail grade PM's . Although with the level of spot price manipulation, not even that is a certainty. If big players and CB's collude to send the PM price at very low levels there is nothing you can do, but take the loss. Of course buying physical PM is way better than sinking your savings and retirement money into various mutual funds, who bought ABACUS CDO's and other crappy paper.

                Originally posted by jtabeb View Post
                If people don't like the system they can just choose to leave it and choose to select something else.
                I don't think there is any other real option to choose. To my knowledge there is no country left with a PM standard currency, where physical PM is used as money. Putting your savings into PM's is not a real alternative as long as government enforced banking monopolies can dictate the value of gold, and you are forced to use their paper currency for all exchanges. Of course if TSHTF and there is no more effective state/government authority to enforce the use of paper currency, having a PM stash is life saving. When Argentine collapsed those who had wealth stored in PM or were able to barter the fruits of their labor (farmers for example) had a much better situation.

                Originally posted by jtabeb View Post
                That's it, a simple choice is all that prevents changing the way the system is and the way the system works.

                And who holds this power of choice? Every individual collectively does!
                IMHO the choice is not so simple and the big problem is that the power of choice is held by the collective. Since the majority is not interested in claiming their rights to economic freedom, the system can go on. How many average people do you think would bother to spend some time to understand what is the essence of the problem and what should be change. If the majority of citizens of a country adopts a debt serf mentality, not being interested to stand for their freedom and liberties, guess what? You have a country of debt serfs.

                We got rid of the First Central Bank, in 1811, when its charter, but even then the vote was at the limit (65 to 64 in the House), and at that time the quality of senators and representatives was much better than what we have today in the Clowngress.
                With the Second Central Bank, (reincarnated in 1816 by Madison to "deal" with the effects of the phony War of 1812), we were lucky with Andrew Jakson.
                With the Third Central Bank (The Fed), I think we are out of luck, with Obama or Bush style presidents and with the fauna in the Clowngress .... fat chance ( as fat as the paper pork bellies)


                Originally posted by jtabeb View Post
                That's pretty profound when you really understand the implications. (And pretty sad that we can't bring ourselves to choose something better.)
                Yep. It's pretty sad. You can't force people to be free. That is a fact.

                Originally posted by jtabeb View Post
                Oh well, you can bring a horse to water, but you can't make it think.
                Sometimes it can take a lot of effort and frustration even to bring a horse to water....

                Comment


                • #38
                  Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

                  Originally posted by jtabeb View Post
                  here you go (feel free to jump in gnk if you think i missed something).







                  Did that hedgehog just whisper "freegold?"
                  ;)

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                  • #39
                    Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

                    Originally posted by $#* View Post
                    Physical gold is also a dollar denominated asset. You pay for your gold eagles with dollars, which you got because you were paid with dollars by your employer or your business generated a dollar revenue. With dollars you buy groceries and gold coins. The use of paper currency in transactions is enforced by all governments. You can't pay your taxes with eagles.
                    You describe the way things ARE not the way things would be IF people made this choice. You use circular logic to end up with the conclusion that "we would end up with the system that we have, because this is the system that we have". What? That not only makes no sense, it is a logically flawed argument.

                    What I'm SAYING is if people made this choice gold would go from being a dollar denominated asset to a situation were dollars were being priced in terms of gold (everything, actually would make this transition). I'm not arguing with you that this is the way the system is now (of course what you describe is the situation as it stands now). WHAT I AM ARGUING is that this choice (above) would change the fundamental nature of the pricing structure in the entire world economy. Assets denominated in gold, not dollars. Am I to take it that you do not think that if everyone pulled a switch-a-roo and traded dollar denominated assets for gold, that the system would not change in a structural and fundamental way? My polite answer would be "Yeah Right!". Mass revulsion of the dollar and safe-haven flight into gold would be a De Facto dethroning of the dollar as world reserve currency, would it not?

                    (BTW, I realized that you and I were talking about opposite sides of the same coin in our debate about your idea on "world dollarization". You described PERFECTLY the events that transpired after the initial crash in '08. I think you will find that what I describe PERFECTLY describes the events that are yet to come. So really, I think we are both right and both wrong. You got the initial portion of the crisis dead-on, and I think time will prove that I got this later portion of the crisis dead-on).

                    Maybe we should collaborate on a paper together when this is all said and done (and we are both proven correct in our respective time frames). ;)
                    Last edited by jtabeb; 04-20-10, 09:15 PM.

                    Comment


                    • #40
                      Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

                      Originally posted by cjppjc View Post
                      If you have a few minutes, could you say how you think things may turn out.
                      I'm no expert in the precious metals markets. I was just countering the smugness of the post by putting words in Erik Townsend's (and respectfully, FRED's) mouth. Erik was actually kind of balanced, what puts me off sometimes is the aloofness and derogatory remarks geared towards other bloggers. Are they sensationalist? Yes. BUT... they point out the fires that exist more so than many others do. Regardless, I like this site for its nonsensational long-term analysis. The mudslinging I can do without.

                      Satyajit Das and Janet Tavakoli are two of many people I read. In 2007, when I started reading Das, and began to understand the derivatives market - more so in the mortgage world - I knew then that this would end badly. We're far from resolution. Political constraints tell me that we're on a runaway train and we're not sure what lies ahead - if there are any more tracks, or if the tracks end up as a dead end in front of a mountain with no tunnel. I'm not being sensational here. I really do think it's that bad.

                      We all have views on what scenarios can play out. More important than the views is how we arrive at them. I view the crisis thru an eclectic lens of economic theories. Austrian, Econophysics, and Biophysical Economics play the largest roles.

                      But back to Tavakoli. She recently posted an article on her site on how to corner the gold market. Yes it was sensational, and fun for conjecture. But the question remains: why did she write it?

                      Well, here's a clue: Google the two words "Tavakoli" and "Gold." The first result is her article with the phrase: I know you believe you understand what you think I said, but I am ...

                      Now, instead of clicking the pdf link, click on "Quick View" and you'll see the entire phrase above the document:

                      I know you believe you understand what you think I said, but I am not sure you realize that what you heard is not what I meant

                      I'm assuming these are Janet's words. In the narrative she wrote - she basically described the explosive "kinks" in the paper gold market. Was she being sensational in using a hollywood type narrative? Yes - as are others. But you have to hand it to Janet Tavakoli for being one the "level headed" eggheads that can make a point and do it in such a way that it also captures the gravity of the situation.

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                      • #41
                        Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

                        xPat, thanks for the excellent article.

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                        • #42
                          Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

                          Originally posted by jtabeb View Post
                          What I'm SAYING is if people made this choice gold would go from being a dollar denominated asset to a situation were dollars were being priced in terms of gold (everything, actually would make this transition). I'm not arguing with you that this is the way the system is now (of course what you describe is the situation as it stands now). WHAT I AM ARGUING is that this choice (above) would change the fundamental nature of the pricing structure in the entire world economy.
                          Well, maybe I'm complicating things too much. First, if there is a free exchange regime between paper dollar and physical gold, if you can express the price of gold in dollar, obviously you can express the price of the dollar in gold. You can do that even now.
                          What am I saying is that individual citizens do not have the freedom to chose as long as the current system exists, and as long as there is a government enforced monopoly of money issued by a private consortium of banks. The first step to offer a choice to people would be to dismantle the FED. As long as the current system exists there is no hope.

                          Even if all people would start buying gold that will solve nothing. The banks will just make fat profits.

                          Originally posted by jtabeb View Post
                          Assets denominated in gold, not dollars. Am I to take it that you do not think that if everyone pulled a switch-a-roo and traded dollar denominated assets for gold, that the system would not change in a structural and fundamental way?
                          We will just go back to the gold standard. If you think the system was much better before 1933, I'm not sure I can agree.
                          It's like asking: do you prefer to be slapped over the face on the right side or on the left side. I would reply that neither alternative is good, and I can't stand to be slapped.

                          Originally posted by jtabeb View Post
                          My polite answer would be "Yeah Right!". Mass revulsion of the dollar and safe-haven flight into gold would be a De Facto dethroning of the dollar as world reserve currency, would it not?
                          Even if you would be able to convince the majority to do that, having gold as world reserve currency would not make things (much) better. Banksters have been masters of the mass fleecing game with gold money since the time of the Roman Empire. Creating artificial scarcity of gold money is a classic and really easy to do. Actually the globalists are thinking seriously of introducing a global, uber-currency based on gold.

                          Originally posted by jtabeb View Post
                          BTW, I realized that you and I were talking about opposite sides of the same coin in our debate about your idea on "world dollarization".
                          Yep. We see the same abomination from completely different angles. I think, I have a more pessimistic approach. That is all.

                          Originally posted by jtabeb View Post
                          I think you will find that what I describe PERFECTLY describes the events that are yet to come.
                          The future will show it. For time being I don't see any indication of an imminent or even forseable dollar collapse in the near future. I believe the scam is too stable for that to happen. I can see the gold price spiking through the roof, but I can't see yet any possibility to have gold replacing the dollar.

                          Originally posted by jtabeb View Post
                          Maybe we should collaborate on a paper together when this is all said and done (and we are both proven correct in our respective time frames). ;)
                          That would be very interesting,...

                          Comment


                          • #43
                            Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

                            Originally posted by $#* View Post
                            Actually the globalists are thinking seriously of introducing a global, uber-currency based on gold.
                            Indeed - the Intor being just one of the possibilities.


                            Most probably don't know this, but the IMF's original S.D.R. was actually 100% gold "backed" in 1971.
                            One S.D.R. was worth about .028 troy ounces and was also worth about $1.03.

                            Today SDR is worth about $1.52. Not bad... until you calculate that if the SDR was still gold "backed", it would be worth about $32.50.
                            http://www.NowAndTheFuture.com

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                            • #44
                              Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

                              Originally posted by $#* View Post
                              We will just go back to the gold standard. If you think the system was much better before 1933, I'm not sure I can agree.

                              It's like asking: do you prefer to be slapped over the face on the right side or on the left side. I would reply that neither alternative is good, and I can't stand to be slapped....


                              The future will show it. For time being I don't see any indication of an imminent or even forseable dollar collapse in the near future. I believe the scam is too stable for that to happen. I can see the gold price spiking through the roof, but I can't see yet any possibility to have gold replacing the dollar.
                              I don't want to be rude here by jumping in. But I just want to make a couple comments.

                              1)Gold Standard - I think people too often confuse how technological advances and monetary systems affect our everyday lives - they blur the two. Actually, monetarism piggy-backs on technological advances in productivity in particular to mask inflation - which is a great theft. All the while taking credit for our lifestyle where none is due. Much of the wealth we see today is illusory. If it were not, there would be no takeover of GM, AIG, bank bailouts, and QE.

                              2) The dollar, actually most currencies are already collapsing. It's happening right now. As for gold - it is already replacing the dollar in the reserves of many central banks. Let's think back just 2-5 years ago. What was the fear from China and many Oil producing countries? That they would replace the dollar with the Euro. How'd that work out? How are those same countries viewing gold today?

                              There is a panic in China, India, and Russia - they are accumulating as much gold as they can in anticipation of the big event. The US thinks they have everyone on board with the increased issuance of SDRs. That's just a temporary ploy to soften the transition caused by the next Triffin dilemma. The big one.

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                              • #45
                                Re: Debunking the Precious Metals Fear Mongering Campaign - Erik Townsend

                                From http://en.wikiquote.org/wiki/Knowledge :
                                I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant.
                                • Attributed to Robert McCloskey, U.S. State Department spokesman, by Marvin Kalb, CBS reporter, in TV Guide, 31 March 1984, citing an unspecified press briefing during the Vietnam war.

                                Most folks are good; a few aren't.

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