We surely are in a freaky age, one in which the nation states are losing their economic value regarding how they serve our needs. It is coming to pass that their promises were only just that, promices, based sadly on mis-representations and mis-appropriations. Governments and political organizations are so wasteful with their spending in comparison to the free market. For example, it costs much more for the government to build something like a bomb in comparison to an Afgan ‘terrorist’. In order for the US government to make a bomb, it costs say maybe 100 thousand dollars, but for an Afgan pyrotechnics expert, it costs him only 100 dollars. In order to equip themselves, the fighters in Afganistan spend much less and they know that the Americans have to spend much money in order to face them, in order to achieve the same outcome. For the fighters in the middle East, it is simply much cheaper for them to fight a war than it is for the Americans. This is a fact that they must obviously know. Obviously, this was a fact that worked against the Soviets when they invaded Afganistan in the 1980′s. Perhaps there will be a similar outcome with regard to the the push made by the American government in its invasion and use of violence in the Middle East. This is an example of the failure of governments to act virtuously and to act prudently. The violence and waste of capital in the manufacture and detonation of bombs is a tremendous waste of capital, lives and potential economic prosperity. Sadly, this wasted money could have been used responsibly in order to create econimic conditions that would benefit people’s lives. Furthermore, the current paradigm, with its lack of efficiency and usefulness is a drag on the populace as a whole. It enslaves its devotees through taxation and inflation. It controls them via propaganda and it also distorts the sense of reality which its subscribers attest to. Instead of living virtuously, they have instead lived wastefully, violently and destructively.

I am 72 and first started studying and reading about the Federal Reserve when I was a teenager, and only now do I see the outcome of the failed policies, if not DELIBERATE DESIGN that has enslaved the whole world to debt. Being Canadian I have been trying for years to educate first my family and friends, then politicians and even government officials, but they are so entrenched in the established system they can not see the forest for the trees.

We once had an HONEST Central Banker, (almost an oxymoron) Graham Towers, who testified before our Parliament in 1939 that; “every bank loan is a NEW CREATION of money, and when it is paid back it ceases to exist” a TRUTH with consequences that not one person in 10,000 consciously understands even if they intuitively sense that there is something dreadfully wrong with our present monetary system.

I have no hesitation in saying that the architects of the 1913 Federal Reserve Act designed it in such a way that it would allow the International Bankers to profit from every hour of labour, usage of natural resources and financial transactions of every citizen. They as you well know, STEALour substance through inflation which is just gradual enough to “cook the unsuspecting frog to death” if you know what I mean.

Here is the part that people don’t seem to get; interest is mathematically IMPOSSIBLE long term, and here is why. Going back to Graham Towers statement, since ONLY the principal of a bank loan is ever created, but interest is payable, the bankers withdrawal of interest of say a contemporary $200,000. mortgage (French meaning “death gamble) amortized over 25-30 years at say 5% average interest will in effect DOUBLE the amount of fiat currency taken OUT of circulation than was actually created when the loan was contracted.

It should be obvious then that the only way that interest can continue to be paid is if there is an ever growing number of new borrowers contracting ever larger loans to cover the uncreated interest as well as expansion funds for a growing economy, making it a classic Ponzi scheme. While I doubt that you are fooled by banker propaganda that they “make their money on the spread between the low interest they pay on deposits, and the higher interest they collect on loans. The fictions is that they loan out 90% of their depositors money and hold 10% in RESERVE so they can cover any withdrawals exceeding new deposits.

How can you loan a liability? The money still belongs to the depositor, so it is a LIABILITY of the Bank, but through the monopolistic hocus pocus of the Federal Reserve Act these deposits are magically converted to “RESERVES” on the strength of which bankers are allowed to create NEW CURRENCY/CREDIT out of thin air, as much as 20X what they hold in reserves, so they can collect interest on 20X the amounts they are paying almost no interest on today.

The RESULT of those activities over decades means that eventually everything of any value has been pledged as collateral for debt money and when the Ponzi scheme is in danger of collapsing, the government has to step in as “borrower of last resort” and the DEBT PYRAMID gets so large that it can no longer be service, hence in effect NEGATIVE interest rates we have currently.

This situation is rapidly coming to a climax where hyperinflation is a serious danger as even existing debt is monetized and the result could easily lead to civil unrest, martial law and war as nations states cannibalize their currencies to get a trading advantage.

While there are no SIMPLE solutions, merely “kicking the can down the road” as politicians are famous for doing only prolongs and exacerbates the problem, making the next generation even greater DEBT SLAVES than we already are!

Second and lastly, buy PM’s every month and when the SHTF use PM’s to retire and exchange for property.( I like that advice!)
Hmmm… $3000 in Silver purchased 2 leagues of land in Texas in 1835.

Question, how long did it take for Zimbabwean currency to hyperinflate to zilch?

Plus, for parents, and particularly fathers charged with protecting and providing for their families, I can’t think of a good reason to allow their kids to be kidnapped and put in indoctrination pens. Perhaps search about the Robinson curriculum.

I am down in Cafayate this week for the event. Are you coming again?

Dear Trace,
Thanks for your last post on confiscation. I remain wary, however.

Could you post some thoughts on PM stocks and solvency of brokers. I note you only seem long on physical.

Regards, Al Cox

Good effort to TRY and tie the “Xmas story” into investing and the evils of excessive government.

My take is a little different; professed bible believers are the biggest hypocrites of all because they do not PRACTICE what they profess to believe, i.e. LIVING BY the scriptures!

1) When Israel demanded a king like the nations around them Samuel was told by the Creator that: “they have not rejected you but they have rejected me from ruling over them” and then followed all the things that would happen to them under a human King, virtually fulfilled in spades in our modern day.
In other words societies problems can ALL be traced back to human nature (greed in particular) and REJECTION of the Creator’s laws in favour of human wisdom based on flawed foundations.

2) The most important LAW the Creator gave his people is not to charge INTEREST, yet both Jews and Christians engage in spades, in other words the objective of the average person is to enslave their fellow man by accumulating enough capital to LEND and collect interest so they do not have to work.
Only the Muslims have taken this prohibition against usury seriously, and no i am not Muslim and for those who would argue that there is a difference between charging interest and usury by defining usury as EXCESSIVE INTEREST, you have no biblical leg to stand on, there is no prescribed level of interest that is somehow okay.

But people would argue that our economy could not function without interest and that owners of capital are ENTITLED to earn interest for the risk they take in making loans.

Now we are getting to the crux of the problem, man has chosen a system focussed on GET instead of a system focussed on GIVE! The Creator has freely given us immense wealth (the natural resources of the earth, minerals, everything that grows, fresh pure water etc) that only requires that we ADD our own labor and ingenuity to EXPAND that wealth as a blessing to all humanity.

The foundational problem came when greedy bankers in Babylon took note that merchants were in the habit of trading their gold receipts (for gold left with them for safe storage which was based on TRUST, confidence that the merchant really owned the gold specified by the receipt) and these merchants rarely removed their actual gold. This was the BEGINNING of paper money based on confidence in bankers, and later government that aligned with them in an evolving con game! This eventually led to issuing MORE RECEIPTS than the actual gold they held.

Now for the record, the Bible DEMANDS “just weights and measures” and this applies to gold and silver, they are to be of a specific weight and are not to be “clipped” as corrupt kings in ancient times often did, neither were they to be debased with base metals, another common practice to this day, i.e. gold bars hollowed out and filled with tungsten recently in the news, wasn’t it Soloman, the wisest man who ever lived who said: “there is nothing new under the sun”?

After many generations the International Bankers came up with the ultimate Ponzi scheme! They tricked politicians into giving them a MONOPOLY to create the nations money supply, of course as DEBT on which they would collect interest and indeed COMPOUND interest, the very DEBT PYRAMID that is now destroying the United States. This fraudulent unconstitutional boondoggle was named the Federal Reserve ACT of 1913, the biggest swindle that has ever taken place in human history.

The U.S. Dollar as a direct result has over the ensuing years LOST approx. 97% of its purchasing power, while gold and silver (REAL MONEY) has with minor fluctuations (due to MANIPULATION by the bankers and politicians) maintained stable purchasing power.

In BLUNT terms, the reason bankers and politicians (for the most part) HATE GOLD is because if pays no interest, in other words they can not steal from their fellow man or get re-elected based on promises they can only keep by taking from one class to give to a more favoured class or BORROW (by running deficits) putting us all ever deeper in DEBT to the International Bankers that OWN the Central Banks of each country.

Here is how this scam works: By substituting paper money that only costs them the cost of printing, plus the miniscule amount of interest they pay on deposits they; (IB) in effect through the interest they collect on loans, GAIN a percentage of every individuals labor and every economic transaction in the entire world. Contrast this with labour, dangers and expense of finding, then digging gold and other precious metals out of the ground.

It has been said that if you tell a big enough lie often enough, the masses will eventually come to believe it, and this has happened. Most people have been deluded by bankers into believing their lying propaganda that they make their money on the SPREAD between the interest they pay on deposits and what they collect at a higher rate on loans by loaning out 90% of their deposits and maintaining a 10% reserve in case some choose to withdraw their money, echoes of ancient Babylon!

In REALITY, deposits appearing on the reserve ledger are LIABILITIES, the property of the depositor, the REAL TRUTH is that via the fraudulent (unconstitutional) Federal Reserve Act bankers are able to create out of thin air, 20x paper dollars of new money for every one they hold in reserves! This changes the picture dramatically, the SPREAD they allege is magnified 20 to 1 and through various means much more leverage than that is entirely possible for them to achieve.

Remember the story of the frog put into a pot of tepid comfortable water and cooking to death because the heat was turned up so slowly there was NO ALARM? Well the same thing has happened to the masses who are not for the most part aware that 97% of their labor has been stolen plus having been sold into DEBT SLAVERY that neither their children or grandchildren will be able to pay off!

Mathematically this is a reality for a reason that not one person in probably 10,000. understands!
The foundational truth was actually stated by Graham Towers a Canadian Central Banker in 1939 before a parliamentary committee investigating banking practices as follows: “every bank loan is a new creation of money” (not someone else’s deposit of existing fiat money) and now the important part of his testimony; “and when it is paid back it ceases to exist” do you get the implications?

Take a standardized 15-30 y mortgage at 5-6% as a model and it should be clear that if $200,000. was CREATED to grant the mortgage and add to the nations money supply, by the same token, over the ammortization period, DOUBLE or more circulating medium of exchange is REMOVED, the obvious conclusion, and PROOF of a Ponzi scheme, is that exponential numbers of new loans are needed to keep enough money in circulation to allow a growing and healthy economy as the bankers extract their interest.

Now draw the logical conclusions from all this by asking some deep and penetrating questions:

1) Why does the debt pyramid continue to expand at all levels public and private, from individuals to corporations to all levels of government?

2) WHY is it that debts are mostly “rolled over” than actually being paid off, again at all levels?
Governments certainly do that, so do corporations, and what about individuals? How many people do you know that borrowed against their equity in a house so they could either pay off other debt or live higher on the hog?

The simple answer is because the INTEREST is never created by this iniquitous system of DEBT MONEY, the interest can only be paid by SOMEONE ELSE borrowing (going into debt and pledging collateral of goods of value previously paid for) to keep the system liquid.

So what is the problem with that you ask; simply this eventually there is no viable collateral to loan against, or borrowers with the INCOME to be able to carry an increasing debt load. In other words the Federal Reserve system of Central Banking on a fractional reserve fiat money basis is FRAUD of the first magnitude that like ALL PYRAMIDS is bound to self destruct, and we are nearing the end game.

Either our politicians and bankers are so close to the forest they can not see the trees and are so self deluded they can not figure out that the problem is STRUCTURAL and can not be fixed by their “tinkering” OR, they are so corrupt they will do ANYTHING, (martial law, ultimate dictatorship) to keep this Ponzi scheme going and maintain their privileged positions at taxpayers expense

In my view, ANY of the powers that be that condone, sanction, support, defend, apologize for this corrupt banking system are collaborators in a Ponzi scheme that should get them the same treatment as Bernie Madoff, they should be stripped of all their ill-gotten gains to compensate the taxpayers, the REAL owners of the countries assets, and spend the rest of their lives in jail!

Merry Christmas to You and your Family from a Reader of your
Articles. I see only one other made a comment on this Christmas Eve. But I say I support every word you have to say about real Money. God just has to laugh at Man’s attempts to create something from nothing…that is a lie of Satan Himself. He wants to be God and Create but only God Can. And Man can add to God’s creation through only Honest weights and Measures. Fiat Money is nothing more than Fraud…it is that simple. Why can’t we all see this as Truth…well many answers to that…Welfare Etc.
But Merry Christmas and Keep the Truth Marching forward in your articles. Most will not get it But there are some that will…they are who you write to. Also they will tell others…Take Care Trace.
Silver and Gold ARE MONEY and will come to fruition again…I hope I am in good health to see it happen!! Bradley C. Beyer

Thanks for your steady stream of information.

I have tried to send some of your postings to friends. Seems like I need a password, etc. Somehow I do not have a record of my codes. Can you help?

Regards, Al Cox

Is there any chance this same tape will be available in text?

Thanks
Kirk

Depleted Uranium is just one example of laws being ignored while innocent men, women, and children die everyday.

I think you may know that there is a human population reduction program going on and war is one part of it.

It kind of makes me sick that war is equated in this way – yes, war is destruction and peace is construction but it’s a lot more urgent now for peace than waiting for market forces to kick in.

Let’s wage peace – humankind is one family.

When one suffers we all suffer.

Thanks for your good work.

down here Cay Man (that’s how they say it here) way soaking up some sun and fun for 2 weeks.
(I took your advice you gave a while back)Besides I told my girlfriend to take a job here when it came up and that’s just 1 BIG thing I don’t have to worry about when TSHTF.

They don’t have guns here and they take Sunday off to pay respects to God so this place seems far enough from the possible turbulence.

Mon, I just been easing around the Island trying to plan a a method for capturing some of the wandering chickens they got ALL OVER the place. The’re just everywhere !

My little test with Gold Money has been working out just fine as I withdrew funds and accessed AOK ! (1 day transfers back to my bank for access)

Lobster season just opened so we ate Wahoo and Lobster the other night under a full moon on the bay.

One day I hope to be doing that tender bife de lomo and keeping the shotgun shell factory fully employed while dove and duck hunting, maybe some Perdiz as well !

Trace, I wish you a fine trip in what I consider Shangri La !

See you in Phoenix in Feb I hope,

Jay

p.s. I guess I can quit worrying about any of my Silver bars being fake but what about those Chinese Silver clad Pandas and other maybe fake stuff on E Bay the novice could get suckered with buying?

p.p.s. Did anybody hear from the Mogambo Guru lately?
I’m thinking he either took a space trip to the outer cosmos or his wife got Sancho to put a knife in his back so she could live happily ever after with all that Gold, Silver and Oil he’s been hoarding.

No government should save (buy) any industry. This is not a proper function of a government. To do this is to abuse its power.
If an industry has made a mistake and ended up insolvent it has to go bankrupt. All its unsustainable obligations will be wiped out. What is left will be bought by a new owner and the reborn industry will be able to continue efficient production.
When a government buys an insolvent industry it forces the taxpayers to subsidy the industry and by this prevents the market from free functioning. No government bureaucracy is capable of replacing the market.
A government can try to replace the market only by enslaving and robbing its populace. This is what we have in the USA.

Q: So if the Swedish government dont want to save (buy) the car-
industry then that´s a good thing..?

To save the money as long they can ..

Trace,
I never know where you are !

I guess that How To Vanish thing you got down pat.

So, now I got this physical Silver Jason got me into, and now this

Gold Money thing because of you , and Palladium now ??

Maybe I’m just kinda dumb and can’t write so eloquently but if I’m ahead of the curve I’ll look brilliant when it’s all said and done huh?

“El Matador ” (dont bring a toothpick to a sword fight with Trace)

may have a new name as the “Swami” !

Just lately I’ve carefully made some buys as you called them and ya know? with all the other stuff I read it wasn’t too hard to trust your intuitions.Funny how the writing is ALL OVER the walls !

Thanks for all the effort you put in for us that maintains our freedom.
Oh yeah, Bloomberg is calling for Copper to correct 25% down!

(That’s like believing John Nadler doesn’t have night sweats ! LOL !)

Hell ! what are we gonna use for money when Silver is scarce ?

Happy Thanksgiving !
Me and my two bird dogs will have a place set for you as an honored guest today.
See ya in Phx.in Feb.2010

Jay

I discussed the inflation versus deflation issue on Contrary Investors Cafe back in episode #45 and even devoted a very lengthy article to the topic. Hope those help.

Thanks again,

AS Chichura