Unravelling the credit Scam
The End of the Deep State is in sight
Two different kinds of money
Over the last 10,000 years, humans have tried two different kinds of “money.” They began with exchanges based on bartering credit – “You give me a chicken – I’ll pay you back later, maybe by helping you build a new wigwam.”
Then, when society became too large and extensive, they switched to gold and silver. The advantage of this was obvious: You didn’t have to remember who owed what to whom. You could settle up right away. “You give me a chicken. I give you a little piece of silver. Done deal.”
Periodically, governments were tempted to go back to credit systems. Essentially, they issued pieces of paper – IOUs – and declared them “money.”
Usually, these hybrid systems began with some collateral backing up the paper. Issuers typically had gold in their vaults and agreed to exchange the paper for metal at a fixed rate. Holders of the paper money were told that it was “as good as gold.”
In some cases, people believed the IOUs were better than gold. When John Law (1671 -1729) began modern central banking in France, he backed his paper money with shares in a profit-seeking business – the Mississippi Company. You could take his provisional certificate of money and imagine that it would grow in value along with the profits of the company.
The trouble was, the Mississippi Company never made any profit. It was a failure and a fraud. Great prospectus. Few real investments. When people eventually realised this, they wanted to get rid of their paper money as soon as possible. In 1720, the system collapsed, and John Law fled France.
Later in the 18th century, the French tried this scam again. This time, the revolutionary government backed its new paper money with revenues from church properties which they had seized. This didn’t last very long, either. The system blew up in 1796. Napoleon Bonaparte, on the scene at the time, declared, “While I live, I will never resort to irredeemable paper money.”
Richard Nixon didn’t seem to get this message. In 1971, he changed the world monetary system. Thenceforth, it would be based on irredeemable paper money. We are now in the 47th year of this new experiment with modern, credit-based money.
All right so far? Well, yes as long as you don’t inspect the system too carefully.
Nothing More Than Promises
When you have a system based on credit, rather than bullion, deals are never completely done. Instead, everything depends on the good faith and good judgment of counterparties – including everybody’s No. 1 counterparty: their government. Its bills, notes and bonds are the foundation of the money system. But they are nothing more than promises – debt instruments issued by the world’s biggest debtor.
A credit system, such as the one in the modern world, cannot last. Because, as the volume of credit rises, the creditworthiness of the issuers declines. The more they owe, the less likely and able they are to pay back.
As time goes by, the web of credit spins out in all directions, entangling not just the present, but the future generations too. It stretches out over the entire society; one person owes another; who owes a third; whose debt has been pledged to a fourth; who now depends on it to pay a fifth; while all are calibrated in the IOUs of sketchy value from a sixth. Do you get the fraud?
Total debt in the US now measures more than twice what it was – in proportion to GDP – in 1971. And GDP itself has been goosed up by credit. Every time someone borrows money to spend… the spending shows up in GDP.
It looks great on paper. There’s only so much gold. But there is no reasonable limit on how much of this new credit-based money can be created. As it increases, it gives people more spending power. GDP goes up. Employment goes up. Prices – especially asset prices – go up.
Naturally, everybody loves a credit system; until the credit turns sour. Then they wish they had a little more of the other kind of money. Wise governments, if there are any, take no chances. They may feed the paper money to the people. But they hold onto gold for themselves. Throughout history, the most powerful governments were those with the most gold. Remember the golden rule;
“He who has the gold makes the rules.”
When the push comes to the shove, governments need gold, not more IOUs with their presidents’ pictures on them.
Unravelling the credit Scam
Britain famously and foolishly sold much of its gold at the very worst time, at the end of the 1990s, when gold was trading at a 20-year low.
But how about the US? Does it have any gold left? That is the question recently posed by Eric Sprott:
Central banks from the rest of the world (i.e., non-Western central banks) have been increasing their holdings of gold at a very rapid pace, going from 6,300 tonnes in Q1 2009 to more than 8,200 tonnes at the end of Q1 2013. At the same time, physical inventories have declined rapidly since the beginning of 2013 (or have been raided, as we argued in the May 2013 Markets at a Glance), and physical demand from large- and small-scale buyers remains solid.
As has been shown in previous articles, the past decade has seen a large discrepancy between the available gold supply and sales. The conclusion reached is that this gold has been supplied by central banks, which have replaced their holdings of physical gold with claims on gold (paper gold). Analysing the gold sales figures over the last 12 years, Sprott noticed that there was far more gold sold than mined. Where did it come from?
Some of it is easily accounted for in jewellery and private holdings. But, generally, the private sector is a buyer and an accumulator of gold, not a seller. And the quantities released to the market have been so great, Sprott believes they could have come only from central banks.
But if they have sold such massive quantities over the last 10 years, how much do they have left? Maybe not much at all.
This wouldn’t be surprising. Western central banks are committed to their credit-based money system. They intend to stick with it. And they know that unravelling this unruly credit scam would be extremely painful.
Selling gold into the bull market of the last 15 years probably seemed like a very smart move. It will be revealed later on just how smart it really was, when the credit-based money system blows up. Readers are advised to hold onto their gold. It’s the kind of money that has stood the test of time.
The End of the Deep State is in sight
People are so unaware that they have no idea of the risks President Trump is taking by challenging the Deep state and the US military industrial complex – MIC.
The mainstream media do their utmost to discredit the elected President of the United States and to overthrow him in order that the utterly criminal and corrupt elite that rule the western world can continue to hold on to power by defending the central bank conglomerate, and the massive budget of the military/security complex that, along with the Israel Lobby, funds the elections of those who rule us.
The Europeans, especially the Germans, are doing some serious chess moves that will make the job ahead easier. The powers that are feeling resentful of Mr. Trump are also moving in a positive direction which is healthy for all.
Mr. Trump is doing a great job that isn’t understood by the public at large and probably not known by himself, as the whole operation has been scripted in advance by the Alliance. They are helping and heeding the skirmishes that are forever going on. That’s part of this whole scenario: this is the undercurrent behind everything. It isn’t just one banker nor one attorney nor one government official. Rather, it’s a whole bunch of folks trying to keep resisting the change. But again the Deep State won’t succeed; their point of ‘return’ has been passed.
As result of the meeting between U.S. President Donald Trump and Russian President Vladimir Putin in Helsinki last week, the two leaders have agreed that their common enemy is the Khazarian mafia. Further, the Khazarians have completely lost control of the military and intelligence apparatus in the U.S. While, almost nobody believes their lies anymore.
The above shows once again that citizens are silenced
Nobody in the government is responsible, worse nobody does feel responsible for, or is worried about and getting organised themselves to act against it. People continue to rely on their representatives in Parliament, who in reality play games because they are bribed, and therefore do not stand up for the interests of the people – for us who have chosen them. Every time we are being lied to by the puppets that fleece us naked through plain robbery, as the decisions were already made much earlier at a higher level. Elected politicians have no influence on this. So, the world is kept silenced. Citizens are never consulted on important issues, such as the Maastricht Treaty and the introduction of the euro. Indeed, about the EU-Constitution that has been rejected, but simply by way of a detour as the Treaty of Lisbon has been implemented, while no one bothered to protest against it.