9 Mind-Blowing Facts About Money

Money and banking are seen as dark arts, extremely difficult to comprehend and understand but I’ll let you into a little secret, its all a charade. Modern money is fiat currency, currency backed by nothing and intrinsically worthless, created by the click of a button and used to subjugate the population.

History, facts and logic stand on my side, money is not a mystery but a fraudulent concept imposed on us, the people. Gold, silver, commodities and land are assets, fiat currency is not money or an asset, its a medium of exchange. When you realise this, that you have been lied to, the world has been lied to, you can protect your friends and family.

Courtesy of the Washingtons Blog:

China Invented Every Form of Money

China:

  • Invented every single major form of currency, including paper money and fiat currency not backed by any tangible commodities
  • Seized gold six centuries before Franklin Roosevelt, in order to prop up its fiat currency and prevent runaway inflation

Debt Forgiveness Is The Basis of Modern Civilization

Religions were founded on the concept of debt forgiveness.

For example, Matthew 6:12 says:

And forgive us our debts, as we forgive our debtors.

Periodic times of debt forgiveness – or debt “jubilees” – were a basic part of the early Jewish and Christian religions, as well as Babylonian culture.

David Graeber, author of “Debt: The First 5,000 Years” told Democracy Now:

If you look at the history of world religions, of social movements what you find is for much of world history what is sacred is not debt, but the ability to make debt disappear to forgive it and that’s where concepts of redemption originally come from. Continue reading

Yesterday’s Gold Forward Offered Rate…it’s Hindenburg moment?

Yesterday there was a historic inversion in the Gold Forward Offered Rate, where the 1 and 3 Month GOFO rate slide into negative territory for the first time since 2008 and 1999 respectively. Using the latest LBMA rate update today, the gold backwardation is accelerating and the 6 Month GOFO has also joined hit negative territory.

image

What could be causing this:

  • An ETF-induced repricing of paper and physical gold
  • Ongoing deliverable concerns and/or shortages involving one (JPM) or more Comex gold members.
  • Liquidations in the paper gold market
  • A shortage of physical gold for a non-bullion bank market participant
  • A major fund unwinding a futures pair trade involving at least one gold leasing leg
  • An ongoing bullion bank failure with or without an associated allocated gold bank “run”
  • All of the above

What is apparent is that something very abnormal is a foot and repeated only a few times in the last 20 years. With reports of mass fraud within the gold bullion market common and well documented, issues concerning the gold fractional reserve lending market maybe coming to surface.

Today, the golden backwardation story goes is documented in the FT:

The lack of liquidity in the leasing market has pushed gold forward rates, known as “gofo”, into negative territory, meaning that gold for future delivery is trading at a discount to physical market prices – a rare situation that has occurred only a few times in the past 20 years. The last time forwards were negative was in November 2008, when a scramble for physical gold spurred a sharp price rally.

Traders said that investors were alert for the possibility that the current tightness could trigger a squeeze among hedge funds with short positions in gold, potentially driving prices higher. “It has piqued people’s interest”, said one senior precious metals banker. Gold was trading at $1,248.50 a troy ounce on Tuesday, up 5.8 per cent from a three-year low at the end last month.
Bottom line, whatever is causing the dramatic collapse in liquidity and/or collateral, it is certainly not letting up.

Are the disconnects between physical and paper markets beginning to bare themselves to the public or are these just systemic problems in our financial markets playing out again and again and again?

There has been 120,000 ounces of gold withdrawn from the Comex yesterday, and another almost 100,000 taken off today, pushing the total down to 7.2 million oz. At this rate, the Comex gets into real trouble by the end of the summer. At the Shanghai Futures Exchange, it looks as if nearly 50% of their silver stocks have been removed since the big take-down in the price of silver in April.

History always provides us with the answer with time rhyming along the ages. The majority will refuse to learn from the past, looking only to always live in the now, ignoring lessons learnt with a belief that things will be different this time around.

The Biggest Ponzi Scheme In The History Of The World

A cracking little story by Michael Snyder of The Economic Collapse blog:

Did you know that you are involved in the most massive Ponzi scheme that has ever existed? To illustrate my point, allow me to tell you a little story.

Once upon a time, there was a man named Sam. When he was younger, he had been a very principled young man that had worked incredibly hard and that had built a large number of tremendously successful businesses. He became fabulously wealthy and he accumulated far more gold than anyone else on the planet. But when he started to get a little older he forgot the values of his youth. He started making really bad decisions and some of his relatives started to take advantage of him. One particularly devious relative was a nephew named Fred. One day Fred approached his uncle Sam with a scheme that his friends the bankers had come up with. What happened next would change the course of Sam’s life forever.

image

Even though Sam was the wealthiest man in the world by far, Fred convinced Sam that he could have an even higher standard of living by going into a little bit of debt. In exchange for IOUs issued by his uncle Sam, Fred would give him paper notes that he printed off on his printing press. Since the paper notes would be backed by the gold that Sam was holding, everyone would consider them to be valuable. Sam could take those paper notes and spend them on whatever his heart desired. Uncle Sam started to do this, and he started to become addicted to all of the nice things that those paper notes would buy him.

Fred took the IOUs that he received from his uncle and he auctioned them off to the bankers. But there was a problem. The IOUs issued by Uncle Sam had to be paid back with interest. When the time came to pay back the IOUs, Uncle Sam could not afford to pay back the debts, pay the interest on those debts, and buy all of the nice things that he wanted. So Uncle Sam issued even more IOUs than before so that he could get enough notes to pay off his debts. As time rolled on, this pattern just kept on repeating. Uncle Sam repeatedly paid off his old debts by taking out even larger new debts.

Meanwhile, since the notes that Uncle Sam was using were backed by gold, everyone else in the world decided to start using them to trade with one another. This was greatly beneficial to Uncle Sam, because the rest of the world was glad to send him oil, home electronics, plastic trinkets and anything else that Uncle Sam wanted in exchange for his gold-backed notes.

Eventually, however, the rest of the world started to suspect that the number of gold-backed notes that Uncle Sam was issuing far exceeded the amount of gold that Uncle Sam actually had. So the rest of the world started to trade in their notes for gold.

And by that time Uncle Sam definitely did not have enough gold to back up his notes. Realizing that the scheme was starting to collapse, one day Uncle Sam announced that his notes would no longer be backed by gold. But he insisted that the rest of the world should continue using his notes because he was the wealthiest man on the planet and everyone should just trust him.

And the rest of the world did continue to trust him, although it wasn’t the same as before.

As Uncle Sam got greedier and greedier, he started to issue IOUs and spend notes at a rate that nobody ever dreamed possible. The great businesses that Uncle Sam had built when he was younger were starting to decline, and Uncle Sam started buying far more stuff from the rest of the world than they bought from him. The rest of the world was still glad to take Uncle Sam’s notes because they used them to trade with one another, but they started accumulating far more notes than they actually needed.

Not sure exactly what to do with mountains of these notes, the rest of the world started to loan them back to Uncle Sam. It eventually got to the point where Uncle Sam owed the rest of the world trillions of these notes. Even though the notes were losing value at a rate of close to 10 percent a year, Uncle Sam somehow convinced the rest of the world to loan him notes at an average rate of interest of less than 3 percent a year.

One day Uncle Sam woke up and realized that the amount of debt that he owed was now more than 5000 times larger than it was when Fred had first approached him with this ill-fated scheme. Uncle Sam now owed more than 16 trillion notes to his creditors, and Uncle Sam had already made future financial commitments of 202 trillion notes that he would never be able to pay. Meanwhile, the notes that Fred had been printing up for Uncle Sam were now worth less than 5 percent of their original value. Uncle Sam was becoming concerned because some of his other relatives were warning that this whole scheme was about to collapse.

Sadly, Uncle Sam did not listen to them. Uncle Sam knew that if he admitted how fraudulent the financial scheme was, the rest of the world would quit sending him all of the things that he needed in exchange for his notes and they would quit lending his notes back to him at super low interest rates.

And if the rest of the world lost confidence in his notes and quit using them, Uncle Sam knew that his standard of living would go way, way down. That was something that Uncle Sam could not bear to have happen.

When a financial crisis almost caused the scheme to crash in 2008, a desperate Uncle Sam went to Fred and asked for help. In response, Fred started printing up far more notes than ever before and started directly buying up large amounts of IOUs from Uncle Sam with the notes that he was creating out of thin air. Fred hoped that the rest of the world would not notice what he was doing.

It seemed to work for a little while, but then an even worse financial crisis came along. Once again, Uncle Sam started issuing massive amounts of new IOUs and Fred started printing up giant mountains of new notes to try to fix things, but their desperate attempts to keep the system going were to no avail. The rest of the world started to realize that they had been sucked into a massive Ponzi scheme, and they lost confidence in the notes that Uncle Sam was using. Suddenly nobody wanted to lend notes to Uncle Sam at super low interest rates anymore, and people started asking for far more notes in exchange for the things that Uncle Sam wanted.

Uncle Sam’s standard of living dropped dramatically. Since he could no longer flood the world with his notes, Uncle Sam could not continue to consume far, far more wealth than he produced. Uncle Sam sunk into a deep depression as he watched the scheme fall apart all around him.

Uncle Sam had once been the wealthiest man on the entire planet, but now he was a broke, tired old man that was absolutely drowning in debt. Unfortunately, once he was down on his luck the rest of the world did not have any compassion for him. In fact, much of the rest of the world celebrated the downfall of Uncle Sam.

All of this could have been avoided if Uncle Sam had never agreed to Fred’s crazy scheme. And once Uncle Sam made the decision to stop backing his notes with gold, it was only a matter of time before the scheme was going to collapse.

Does this little story sound crazy to you? It shouldn’t. The truth is that you are involved in such a scheme right now. In case you haven’t figured it out, “Uncle Sam” is the United States, the “notes” are U.S. dollars, and “Fred” is the Federal Reserve.

Please share this story with as many people as you can. Our country is headed for complete and total financial disaster, and we need to get people educated about this while there is still time.

Gold Is Being Supplied By Western Governments

I look forward to the day when my neighbours think, if we live in a ‘free-market capitalist society’ how come so many markets are fixed and manipulated? I then look forward to them realising they don’t and demand change. Gold and silver is true money to me, our fiat debt based system will come tumbling down like the Ponzi scheme it is.

Adrian Douglas of GATA spoke about Gold manipulation back in 2011, before he passed, at the Gold conference and covering hypothecation very succinctly. The fraud is so in your face and brazen you have to laugh, I’m over my anger phase but when the majority begin to wake to this fraud…heads will roll.

This article is from Alasdair Macleod via GoldMoney blog, a quality article on who’s supplying the Gold to the markets. It’s not like the reserves are independently audited yearly so this would be put to bed, if that was the case the fraud would be uncovered.

There has been considerable throughput of gold in western capital markets, with substantial buying from all round the world following the April price crash. The supply can only have come from two sources: the general public, or one or more governments. It really is that simple. Two months later the gold price has only partially recovered, so physical supplies have continued to be made available. Physical demand cannot have been entirely satisfied by ETF liquidations, confirming governments are involved. This article looks at the dynamics of the gold market around this event and the implications.

While the investing public in the western nations has been generally stunned following the April price smash, demand from Asia is running at record levels, illustrated in the chart below, which is of physical gold deliveries on the Shanghai Gold Exchange. (Thanks due to @KoosJansen for pointing me to the data on the SGE’s Chinese website).

image

The increase in deliveries for April and May was spectacular, totalling 460.5 tonnes, with the week ending 26 April alone seeing phenomenal deliveries of 117 tonnes. In addition, according to the Economic Times, India imported 142.5 tonnes in April and 162 tonnes in May, compared with an average monthly rate of 86 tonnes in Q1 2013. Therefore these two countries imported 765 tonnes of gold in two months, before considering any unofficial imports or their government purchases in foreign markets. The rest of Asia, from Turkey to Indonesia would certainly have stepped up their demand for gold as well, as did the western world itself for physical metal as opposed to paper entitlements.

The table below puts this into context.

image

A prefatory note about the statistics in this table: there is no single defined source of statistics on gold movements, and there are considerable variations in the same numbers reported by different organisations. The figures in the table above can only illustrate bullion flows. I have sourced the statistics from official sources where possible. The cash-for-gold business has had the easy pickings by now, so an assumption that this is about 600 tonnes per annum is I believe cautiously over-generous. It is based on a speech made by Jeffrey Rhodes of INTL Commodities DMCC to the LBMA in 2010, when he identified scrap supply as 583 tonnes in North America and Europe, whose central banks are in the gold suppression business. At that time, 1,091 tonnes were recycled in the East, including Turkey. Since the Chinese, Russian and other gold-producing governments of Central Asia retain most if not all of their domestically mined gold amounting to over 700 tonnes, there is less than 2,000 tonnes of free mine supply annually available for global markets, based on US Geological Survey figures.

Looking at the bottom line for 2012, there were only 87 tonnes of gold supply for the rest-of-the-world, after Asian and Russian central bank and global ETF purchases. In other words, there must have been a severe deficit overall, which can only have been covered by central bank sales.

About 150 tonnes of ETF gold were liquidated in Q1, providing temporary relief until the Cypriot crisis, when concerns over the security of large deposits in eurozone banks prompted a flight into physical gold, but interestingly, not into ETFs. This was because there were escalating systemic concerns over having physical gold and currency deposits with European banks, while at the same time portfolio investors were worried that the 12-year bull market might have ended.

From the point of view of the western central banks, as well as the bullion banks with short positions on Comex, in March the alarm bells must have been ringing loudly. Chinese demand was accelerating and there was an increasing likelihood that ETF liquidation would cease if the gold price stabilised. If that happened, as the table above clearly shows, an epic bear-squeeze would likely develop, fuelling a rush into gold and potentially bankrupting many of the bullion banks short in the futures markets and/or offering unallocated accounts on a fractional reserve basis.

Therefore, investors had to be dissuaded from buying gold, otherwise the ensuing crisis would not only cause a market failure that could spread to other derivatives (particularly silver), but it would come at the worst possible time, given the coincidental programme of monetary expansion currently being undertaken by all the major central banks.

The reasons for governments to intervene on the side of the bullion banks were therefore compelling. As one would expect, the intervention was well-timed: on Friday 12 April two large sell orders of 100 and 300 tonnes were placed on Comex, clearly designed to do maximum damage to the price, and setting it up for all remaining stops to be taken out the following Monday. Furthermore, central banks were prepared to supply physical gold to keep the price from recovering. We know this because lower prices generated a surge in private demand, not only in China and India, but from everywhere. The only possible supply, other than inadequate ETF liquidation, is from governments.

India and China have absorbed enough gold in the last two months of April and May to leave the rest of the world in a supply deficit, requiring matching sales of western government gold to continue to suppress the price.

The future

We now know for certain that government-controlled gold has been used to defuse a developing crisis in gold markets that had the potential to destabilise bullion banks, other derivative markets and ultimately the whole fiat currency system. We have seen the surge in demand for physical gold, which is the consequence of sharply lower prices. Realistically, the priority has been to ensure such a crisis is avoided, rather than for the price of gold to be continually suppressed.

The difficulty for the casual observer is compounded by the available information being one-sided. We are all painfully aware of both the losses inflicted on investors and their loss of faith in gold at a time when other investment media, such as stocks and bonds, have been doing well. Concealed from us is the real financial condition of the banks and governments themselves, which is the fundamental reason for owning gold. We are acutely aware of the sellers’ pain and only dimly aware of the buyers’ motivation.

Nervous western investors in a market of 160,000 tonnes are in truth a small part of the whole, particularly since gold has been migrating from the west to the east where it has been more valued ever since the 1970s oil crisis. More fundamentally we know that the stock of gold grows at about 1½% annually in line with global population growth. We also know that central banks everywhere are expanding their balance sheets at an accelerating rate. The disparity between the rate of growth for gold and paper currencies will certainly lead to increased tensions between precious metals and currencies generally, and it is this that will drive future demand for gold, not whether or not western investors think it is in a bull or bear market.

A second point about the market being 160,000 tonnes and not just the sum of mine and scrap supply is that the market is far bigger than western governments’ gold reserves. Gold held by them is officially about 19,000 tonnes, but it may well be only half that, or 5% of the aboveground stock, when unrecorded leasing and selling over the last 25 years are taken into account. The ability of central banks to contain a global surge in gold demand such as that which followed the April price-crash and continuing to this day is therefore limited.

But this is only a part of the story. There are the factors concealed from us, such as the buying opportunity given to gold-friendly governments and sovereign wealth funds, both with surplus dollars, as well as the appetite for gold from the growing ranks of the Russian and Asian mega-rich. There are factors known to the financially savvy, such as the growing instability of the Indian rupee and other emerging market currencies, the increasing systemic risks in eurozone banks with the threat posed to deposits, and the revenue shortfalls that force governments to raise money by printing their currencies at an increasing pace: all will impact the gold market in coming months.

These and other systemic problems are deteriorating. A potentially destabilising crisis in the gold market from runaway prices has been defused by allowing the bullion banks the space to square their books. There can be no other realistic objective in supplying government-owned gold into the market. As to the embarrassment of the gold price rising at a time of accelerating money printing – that will have to be accepted, presumably emphasising the official line, that the gold price is irrelevant to a modern economy

5 Charts that show Markets are not Representative

Are markets acting rationally taking into account the current economic figures? The simple answer is no and the reason is because markets are fixed. The stock markets keep climbing to new highs, giving the appearance, to the general public, that all is well and the economy is recovering….it’s not. The Euro continues to disappoint and when does a bad outlook translate into higher stock prices? It doesn’t, it translates into mass fraud by the banks using High Frequency Trading and algorithms to give the impression of liquid and healthy stock markets.

image

Taken from The Hedge….

It would appear that the credit markets both anticipated and began to price in what is now the worst recessionary period for the European Union on record a few days ago. However, their exuberant, ever-hungry colleagues over in equity land remain in the bad is good mode and can’t get enough of these higher prices. Where ever we look around the developed world, equity prices are lifting as credit deteriorates. The masses ignored these lessons in 2007; are they ignoring it again? Or is this just another short-term divergence? If so, it is bond-buying time… if not, take your equity profits now because these divergences are unsustainable.

European stocks and credit…

image

US stocks and credit…

image

Sovereigns ain’t buying it?

image

image

and protection is bid

image

It’s time to get your cash out of the markets.

20 signs that the next Great Depression is here in Europe

This next article is taken from Zerohedge and states the 20 signs that the next Great Depression has already started in Europe…When will Mr Cameron admit that it’s much worse than what he claims it to be?

image

#1 The unemployment rate in France has surged to 10.6 percent, and the number of jobless claims in that country recently set a new all-time record.

#2 Unemployment in the eurozone as a whole is sitting at an all-time record of 12 percent.

#3 Two years ago, Portugal’s unemployment rate was about 12 percent. Today, it is about 17 percent.

#4 The unemployment rate in Spain has set a new all-time record of 27 percent. Even during the Great Depression of the 1930s the United States never had unemployment that high.

#5 The unemployment rate among those under the age of 25 in Spain is an astounding 57.2 percent.

#6 The unemployment rate in Greece has set a new all-time record of 27.2 percent. Even during the Great Depression of the 1930s the United States never had unemployment that high.

#7 The unemployment rate among those under the age of 25 in Greece is a whopping 59.3 percent.

#8 French car sales in March were 16 percent lower than they were one year earlier.

#9 German car sales in March were 17 percent lower than they were one year earlier.

#10 In the Netherlands, consumer debt is now up to about 250 percent of available income.

#11 Industrial production in Italy has fallen by an astounding 25 percent over the past five years.

#12 The number of Spanish firms filing for bankruptcy is 45 percent higher than it was a year ago.

#13 Since 2007, the value of non-performing loans in Europe has increased by 150 percent.

#14 Bank withdrawals in Cyprus during the month of March were double what they were in February even though the banks were closed for half the month.

#15 Due to an absolutely crippling housing crash, there are approximately 3 million vacant homes in Spain today.

#16 Things have gotten so bad in Spain that entire apartment buildings are being overwhelmed by squatters…

A 285-unit apartment complex in Parla, less than half an hour’s drive from Madrid, should be an ideal target for investors seeking cheap property in Spain. Unfortunately, two thirds of the building generates zero revenue because it’s overrun by squatters.
“This is happening all over the country,” said Jose Maria Fraile, the town’s mayor, who estimates only 100 apartments in the block built for the council have rental contracts, and not all of those tenants are paying either. “People lost their jobs, they can’t pay mortgages or rent so they lost their homes and this has produced a tide of squatters”.

#17 As I wrote about the other day, child hunger has become so rampant in Greece that teachers are reporting that hungry children are begging their classmates for food.

#18 The debt to GDP ratio in Italy is now up to 136 percent.

#19 25 percent of all banking assets in the UK are in banks that are leveraged at least 40 to 1.

#20 German banking giant Deutsche Bank has more than 55 trillion euros (which is more than 72 trillion dollars) of exposure to derivatives. But the GDP of Germany for an entire year is only about 2.7 trillion euros.

Peter Schiff, best-selling author and CEO of Euro Pacific Capital comments on the US:

“The crisis is imminent,” Schiff said. “I don’t think Obama is going to finish his second term without the bottom dropping out. And stock market investors are oblivious to the problems.”
“We’re broke, Schiff added. “We owe trillions. Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Eurozone, they would kick us out.”
Schiff points out that the market gains experienced recently, with the Dow first topping 14,000 on its way to setting record highs, are giving investors a false sense of security.
“It’s not that the stock market is gaining value… it’s that our money is losing value. And so if you have a debased currency… a devalued currency, the price of everything goes up. Stocks are no exception,” he said.
“The Fed knows that the U.S. economy is not recovering,” he noted. “It simply is being kept from collapse by artificially low interest rates and quantitative easing. As that support goes, the economy will implode.”

I’m not putting these articles on here to scare or spread fear, I’d like people to be aware that the markets are fixed, the economic data is terrible and window dressed and we will be in for some hard times.

We need a revolution in thinking and we will all need to participate in how the next system is put in place. The people who are perpetrating this mass financial scam of a Ponzi scheme need to be held account and prosecuted accordingly.

I’ve said it before and will say again, the system is not failing its just coming to its logical conclusion.

JPMorgan’s Eligible Gold Plummets 65% In 24 Hours To All Time Low

As reported in Zerohedge:

‘In just the past 24 hours, from April 24 to April 25, according to the Comex, JPM’s eligible gold plunged from 402.4K ounces to just 141.6K ounces, a drop of 65% in 24 hours and the lowest amount of eligible gold held at the vault on record, since its reopening in October 2010!’

image

Pertinent questions from the article:

What happened to the commercial gold vaulted with JPM, and what was the reason for the historic drawdown?

Gold, unlike fiat, is not created out of thin air, nor can it be shred or deleted. Where did the gold leaving the JPM warehouse end up (especially since registered JPM and total Comex gold has been relatively flat over the same period)?

Did any of this gold make its way across the street, and end up at the vault of the building located at 33 Liberty street?

What happens if and/or when the JPM vault is empty of commercial gold, and JPM receives a delivery notice?

IMHO they’ll find extra paper tons of gold so nothing to worry about, move along there’s nothing to see here!