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FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Investor Antidote to Globalists Threat to U.S. Dollar Gold Investments

Commodities / Gold and Silver 2010 Nov 19, 2010 - 12:48 PM GMT

By: DeepCaster_LLC

Commodities

Best Financial Markets Analysis Article“Dollars newly printed for free by The Private for-Profit Fed (and loaned at interest to the U.S. Taxpayer) diminish the Purchasing Power of those already in circulation. Therefore, Quantitative Easing is Taxation without Representation.” Deepcaster

“Let the economists gasp: The classical gold standard, the one that was in place from 1880 to 1914, is what the world needs now. In its utility, economy and elegance, there has never been a monetary system like it…


National currencies were backed by gold. If you didn't like the currency you could exchange it for shiny coins (money was "sound" if it rang when dropped on a counter)… In gold-standard countries, government budgets were mainly balanced. Central banks had the single public function of exchanging gold for paper or paper for gold…

"Quantitative easing," a.k.a. money-printing, is as old as the hills. Draftsmen of the United States Constitution, well recalling the overproduction of the Continental paper dollar, defined money as "coin."… The pure paper era did not begin until 1971…

For a convertible currency is a sophisticated, self-contained information system. By choosing to hold it, or instead the gold that stands behind it, the people tell the central bank if it has issued too much money or too little. It's democracy in money, rather than mandarin rule…

Today, it's the mandarins at the Federal Reserve who decide what interest rate to impose, and what volume of currency to conjure…

The Bank of England once had an unhappy experience with this method of operation. To fight the Napoleonic wars of the early 19th century, Britain traded in its gold pound for a scrip, and the bank had to decide unilaterally how many pounds to print. Lacking the information encased in the gold standard, it printed too many. A great inflation bubbled…

To reinstitute a modern gold standard today would take time, too. The United States would first have to call an international monetary conference…

…the delegates could get down to the technical work of proposing a rate of exchange between gold and the dollar (probably it would be even higher than the current price of gold, the better to encourage new exploration and production).” (emphasis added)

“James Grant: How to make the dollar sound again” James Grant, New York Times, 11/14/10

It is becoming ever more widely recognized that the U.S. Dollar’s Status as the World’s Reserve Currency is in jeopardy. Moreover, long-term, the very existence of the U.S. Dollar is in question, as the recent comments by World Bank President Robert Zoellick indicate.

Indeed, Zoellick’s comments (see below) reflect an Extraordinary Arrogance as well as a Threat to and Betrayal of the U.S. Dollar.

He tacitly acknowledges a willingness to allow the U.S. Dollar to cease being the World’s Reserve Currency by advocating a New System in which 5 Main Currencies would be used with Gold as a “Reference Point” to determine future Currency values (see below).

Such a Giant Step toward a de facto Global Currency would have wide-reaching Negative implications for U.S. Dollar, Euro, and other Fiat Currency holders and Investors around the World as we explain below.

In commendable distinction, James Grant (Grant’s Interest Rate Observer) advocates reinstitution of a Gold-U.S. Dollar link, rather than a Gold-5 Currency link. In our view, reinstitution of a Gold-U.S. Dollar link is probably the only way to save the U.S. Dollar in the long run.

Why should one care about preserving the U.S. Dollar? One should care because preserving the U.S. Dollar would also help to preserve Investors’ Wealth, their Economic Freedom, and Much of their Political Freedom, all of which would likely be much diminished under a One Global Currency Regime.

Indeed, by comparison a five-Currency-Gold “Reference Point for future Currency Values” is a Giant Step toward the Wealth Confiscation of those who now hold their Wealth in Assets denominated in those five currencies (doubtless the five would include the U.S. Dollar and Euro).

The Globalists led by the IMF (its SDR’s already function as a Global Currency for The Big Boys) and The World Bank would doubtless determine the Exchange Rate of the New Five-Currency Currency, vis a vis Gold and Silver.

The Globalists already have a Model for such a Wealth Confiscation. It is the de facto Wealth Confiscation which appropriated U.S. Citizens’ Wealth in the early thirties. The F.D.R. Administration demanded to buy all privately held Gold at just over $20/oz and then subsequently pegged the currency exchange rate for Gold at a much higher level.

-- In other words, that de facto Confiscatory Episode played out like the following: “We will buy your Gold from you at $20/oz and sell to others, or back to you, a bit later at $35/oz”, but you, Former Gold Holder, get none of those profits.

In light of our comments, and Jim Grants’, consider again Zoellick’s Comments and our Interpretation. (But bear in mind that Coin Collections were exempt from that Confiscation in the early 30’s. Thus it is prudent to hold a Major Part of Ones Core Position in Gold (and Silver) in Physical Coins, as we have already recommended.)

Thus, Robert Zoellick, World Bank President and former U.S. Treasury Department Official, (and where are his loyalties?) provides a Major Clue regarding both his and his Globalist Comrades’ Threats to the U.S. Dollar and, by implication, the Solid Rationale for linking the U.S. Dollar to Gold.

In considering his comments, it is important to keep in mind the Crucial Distinction between Globalists on one hand, and Nationalists/Internationalists on the other.

Consider our Interpretation of his Recent Pronouncements:

Quote: “Although textbooks may view gold as the old money, markets are using gold as an alternative Monetary Asset today.” 

Our Unspun Interpretation: “The Purchasing Power and Credibility of the U.S. Dollar is being destroyed by us Globalists and in the next few years the U.S. Dollar will cease to serve as the World’s Reserve currency. Other Fiat Currencies are being similarly Degraded. Certain Major Sovereign Nations (and certain Private) Debts cannot be repaid without this Currency Degradation…we all know Gold (and Silver) is the only Real Money. Thus the Next Money (i.e. World Reserve Currency), will be valued in terms of Gold and we Globalists shall determine that Exchange value.”

Quote: “The development of a monetary system to succeed Bretton Woods II launched in 1971, will take time. But we need to begin.”

Our Unspun Interpretation: “We Globalists know the Major Fiat Currencies (e.g. U.S. Dollar and Euro) are going to Fail and (Wink, Wink) we may just have planned it that way.” (See Deepcaster’s Article regarding The Cartel’s ‘End Game’: “Gold-Freedom versus The Cartel ‘End-Game’ & A Strategy for Surmounting It” (09/23/10) in the ‘Articles by Deepcaster’ Cache at www.deepcaster.com.)

Zoellick Conclusion (summarized): A new System is needed using 5 Main Currencies with gold as the “reference” point for future currency Values.

Our Unspun Interpretation: We Globalists are going to Need (to further increase our Power and Wealth) a New Global Currency (printed out of thin air and issued by us Globalists for profit of course) which to start will be an amalgam of 5 main then-devalued currencies including the U.S. Dollar and Euro and which will serve as a Transition to our One World Globalist Currency (likely the “Banco”, as Keynes suggested) which, since we Globalists Control it, will be linked to Gold (which of course will have to come from the Main Nations whose Currencies have been devalued), so The New One World Currency will have some lasting Value, mainly for our benefit, but also yours, for you will gain Stability.

But of course in the process of Sovereign Currency Devaluation, and gaining Stability, you will lose Much of your Wealth (because we Globalists will determine the Exchange rate for Gold in New Currency Terms, and because we have already confiscated the Wealth you thought you stored in Dollars/Euros etc. by diminishing their Purchasing Power via repeated Q.E. 2), Thus Much of your Economic Freedom (No More Sovereign National Currencies, or genuinely Sovereign Nations, for we shall Control The Currency), and therefore Much of (if not all) of your Political Freedom will be sacrificed.

(And is it not true that if The Fed were serious about helping the Real Economy rather than just the Mega-Banks, would it not do a “Cram-Through” forcing the Banks to Lend the Q.E. Funds into the Economy, rather than letting The Mega-Banks sequester them on their books, as they do now?)

Our Suggested Antidote to the Globalist’s Power Grabbing Scheme: Link the U.S. Dollar to Gold and Veto a Global Currency.

Of course, in the process (of either scenario), which is already occurring, Gold and Silver will soar in Value (subject of course to occasional Cartel-generated Nasty Price Takedowns like the one we just saw in the last few days). 

But therein lies an Opportunity. [As our Regular Readers know, we have developed a Strategy designed to Maximize Profit from The Opportunity and Minimize Damage from The Ongoing Threat of Cartel* Generated Takedowns. We Outline the Background for and the Key Points of that Strategy, as well as points made by others, below. For full details, readers should see “Surmounting the Confiscation or Collapse Scenario” (09/09/10) in the ‘Articles by Deepcaster’ Cache at www.deepcaster.com.]

*We encourage those who doubt the scope and power of Overt and Covert Interventions by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to read Deepcaster’s December, 2009, Special Alert containing a summary overview of Intervention entitled “Forecasts and December, 2009 Special Alert: Profiting From The Cartel’s Dark Interventions - III” and Deepcaster’s July, 2010 Letter entitled "Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds" in the ‘Alerts Cache’ and ‘Latest Letter’ Cache at Deepcaster’s website. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org, including testimony before the CFTC, for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster’s profitable recommendations displayed at Deepcaster’s website have been facilitated by attention to these “Interventionals.” Attention to The Interventionals facilitated Deepcaster’s recommending five short positions prior to the Fall, 2008 Market Crash all of which were subsequently liquidated profitably.

Buy Gold and Silver on the dips.

Best Regards,

By DEEPCASTER LLC

www.deepcaster.com
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© 2010 Copyright DeepCaster LLC - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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