Re: It has crashed, will crash, never crash
am 05.08.2005 00:50:47 von JTlabs
What you say is true, but this time around it is different. If you
look at all the major markets around the world, you can see that the
bubble exist. No the bubble may not be that bad in lets say alferreda,
georgia but in the major markets throughout the US it is crazy. What
people do not understand is the cause of the bubble which is currency!
What is actually happening is related to a currency bubble, and when
that bubble pops you can expect depression very soon. In this decade
if not the next few years. Once again the smart investors will make
money and the middle class will be eliminated.
In case your wondering.. here is a post that sums it all up..
"Rediscovering Gold in the 21st Century
Craig R. Smith
Substance Over Symbolism: The Folding, Spindling & Mutilating of
America's Money System
Imagine for a moment that you have the ability to create any amount of
money, without ever having to produce anything.
Is there anyone or anything you couldn't buy? Probably not.
Sound impossible? It should be, but it isn't. Just ask your local
Federal Reserve banker - they do it every day.
The folding, spindling and mutilating of America's monetary system
became legitimized in 1913, when the Federal Reserve was formed. Long
ago bankers discovered a nasty little secret referred to as
"fractional-reserve banking" which is fueled by credit and debt
creation out of thin air.
The modern American monetary system is the result of an incestuous
relationship between the federal government and the private banking
cartel, deceptively called The Federal Reserve System (a.k.a. "The
Fed").
But don't expect the mainstream press or prominent political figures to
ever discuss this relationship publicly. Sadly, few Americans
understand the process, or even challenge the Fed's attempt to
manipulate the money system.
In the two centuries prior to the creation of the Fed, unredeemable
paper currencies were judged as unethical and immoral. As of 1792, they
were deemed unconstitutional as well.
The fundamental misconception today is that America's paper or
electronic currency, denominated in Federal Reserve Notes, is that a
dollar actually has any intrinsic value.
In the words of former Fed economist John Exter, "Today's U.S. dollar
is nothing more than an IOU-nothing." Paper money retains only the
symbol, or form, of its original substance - gold and silver.
Let's now examine the untold story of how and why the U.S. dollar was
transformed from substance (gold) to symbolism (debt) - and what you
can do to recover the substance while you still have time.
As difficult as it is for honest, hard-working Americans to fathom, the
lifeblood of the American political and economic system is legal
plunder. The 19th-century economist Frederic Bastiat summed up the
tendency of central governments to embrace economic plunder in this
way:
"There are two ways to acquire the niceties of life: to produce them or
to plunder them. When plunder becomes a way of life for a group of men
living to- gether in society, they create for themselves in the course
of time, a legal system that authorizes it and a moral code that
glorifies it."
The gradual devaluation of U.S. currency during the 20th century
reflects a more subtle transformation - too many Americans have
abandoned the morality and economics of our Founding Fathers.
Today's warped and degenerate political system represents a marked
departure from the statesmanship of a bygone era. Economics likewise
has degenerated into a convoluted science orchestrated to conceal a
colossal fraud perpetrated on an unsuspecting public.
In short, "We the People" allowed the Federal Reserve, with the full
cooperation of the federal government, to replace the "Puritan work
ethic" with a "pagan plunder plan" and now the chickens are starting to
flock home to roost.
To achieve this massive wealth distribution plan required a shift in
public values from hard work and responsibility, to hardly working and
gambling. This dramatic change has occurred gradually over the past two
or three generations.
The result or fruit of this shift can be seen in the monetary realm. We
abandoned true money (commodity - gold or silver) in favor of false
money (fiat - paper, electronic). Here's how it happened, in a
nutshell.
All true money must be derived from a commodity, or at least have a
substance to back it up, or it will gradually become fraudulent, or
fiat money.
Historically, the most common substance used as a medium of exchange
and a store of value has been gold or silver coins of a standard weight
and fineness.
The U.S. Coinage Act of 1792 specifically defined a dollar as "one
twentieth of an ounce of gold (25.8 grains of 90 percent fine) or a
silver coin containing one ounce of silver (421.5 grains of 90 percent
fine)." The Founding Fathers specifically prohibited the federal
government from issuing Bills of Credit, (paper money) in the U.S.
Constitution.
Congress shall have Power to coin money and regulate the value thereof
.... No State shall make any Thing but gold and silver Coin a Tender in
Payment of Debts.
-Art.1 Sec. 8 & 10
America's system of constitutional, commodity-based money functioned
well in our nation for 125 years, from 1792 to 1913. Then "We the
People" made a big mistake - we allowed a privately owned corporation
called the Federal Reserve to begin creating paper money instead of
gold and silver coins as the Constitution requires.
The Federal Reserve's monetary manipulation began with a promise to
create paper money that could always be redeemed for commodity money -
gold or silver coin. This 100 percent redeemable money is referred to
as fiduciary or trust money.
The creation of fiduciary money assumes that the promise of payment in
substance by the issuer is redeemable at some future point. Trust money
was used as a medium of exchange even though it consisted largely of an
intrinsically valueless substance - paper.
Since the U.S. government was prohibited by constitutional law from
issuing this trust money, the Fed - a private corporation - was created
to soften and manipulate the economic down-cycles in 1913. The price we
have paid is surrendering our substance money (gold) for trust money
(credit/debt). In my view, central bankers took the mine... and we got
the shaft. Why do I say that?
History has proven time and again that neither bankers nor governments
possess the discipline needed to limit the amount of credit (or paper
money) to equal the true supply of gold and silver coins. So the supply
of paper money (credit/debt) must continually rise.
The result is always disastrous in the long term because the economy
suffers through cycles of inflation, deflation, artificial growth,
recession and depression. Because U.S. citizens did not protest the use
of trust money, our economic system then began to degenerate into
untrustworthy or fiat money.
Fiat paper money abandons any promise whatsoever to redeem the paper
currency in any physical commodity. This third step in the decline of
our currency is considered by many historians and economists as the
beginning of the end, monetarily.
Dr. Franz Pick, the noted Austrian economist, aptly stated the link
between a nation and its money,
"The destiny of a currency is, and always will be, the destiny of a
nation."
Under the fractional-reserve banking rules, a bank must always issue
more units of fiat money than can ever be redeemed (typically at an 8:1
ratio). Fractional-reserve banking is inherently a fraudulent system.
But by 1933 FDR forced Americans off the gold standard and onto the
treadmill of credit fueled by fractional-reserve banking.
Here is an example that may help you grasp why fractional banking is
flawed. Imagine that you live on a small island with just one other
inhabitant - a fractional-reserve banker. On the island there is only
$1,000 in circulation total. Let's say you decide that you want to
start a fishing business, and visit your banker for a loan. The banker
agrees to loan you $1,000 but must charge you $50 interest. That mean
you will owe $1050. But wait, there is only $1,000 in circulation.
Where will the other $50 come from? It must be created by the banker or
you could never fully pay the loan back. This is the origin of
inflation and devalues every other dollar in circulation.
Therein lies the faulty foundation of fractional banking - it must
constantly inflate the amount of currency which in turn decreases the
value of all the money in circulation. The consequences are many, but
most harmful is the crushing of the middle class via long-term monetary
inflation. If (when) the public finally discerns that the Emperor (Fed)
has no clothes, I expect hyper-inflation and a flight back to substance
money in a New York second.
Lenin pondered this modern flaw in the Capitalist system stating,
"The best way to destroy the Capitalist system is to debauch the
currency. The process of inflation is so insidious that not one in a
million can properly diagnose it, until it is too late."
The Federal Reserve and the federal government are banking on Lenin's
conclusion - that the public will not become aware of this insidious
process... until it is too late.
Karl Marx also knew that centralized money control was critical to
control the masses.
"Centralization of credit in the hands of the State, by means of a
national bank with State capital and an exclusive monopoly." -5th
Plank, Communist Manifesto, by Karl Marx (1848)
The facts are that popular delusion and public confidence are the only
two forces that uphold our present fiat money system. The financial
house of cards created by our massive personal, corporate and
government debt is now more vulnerable than ever. The government knows
it and the Fed knows it - they even admit it in print:
"All the paper money issued today is Federal Reserve Notes. The real
backing for the nation's money is faith in the strength, soundness
and stability of the U.S.economy." -Hats the Fed. Reserve Wears,
Federal Reserve Bank of Phil., p. 4
One can only deduce that the Fed believes that as America's faith and
confidence goes, so goes the economy. It is interesting that the root
meaning of the word credit (credaria) is "to believe." It is true, we
now have a monetary system purely based on faith - faith in a system
that betrays us and our children.
Over the last decade the government has even established a formal
"Consumer Confidence Index" as a means of monitoring and manipulating
the public confidence in the economy and money system. This index has
been moving downward in 2001, reflecting a loss of confidence in the
Fed... and our money system.
Starting in 1990, Federal Reserve Notes have two subtle additions: a
metallic strip embedded in the bill and special micro-print around the
President's bust. The official reason is to thwart counterfeiters and
monitor anyone attempting to leave the U.S. with a suitcase full of
cash through the use of special airport detectors.
This sounds reasonable enough, right? After all, counterfeit Fed notes
are popping up all over the world. They're calling it economic
terrorism. The Fed cannot allow competition in the money counterfeiting
business to encroach on its domestic policy of issuing unconstitutional
fiat (read: counterfeit) money.
The next major step is to convince Americans to convert entirely to a
totally intangible, electronic money system - with no "cash" at all.
It took the last decade to prepare us, but I expect over the next
decade the government and banks will accomplish it because it offers
convenience - the new passion of American culture.
So, where do we go from fiat money? To what I call virtual money - that
is, pure credit transactions reduced to blips on computer screens. This
new form of money gives the government total economic control over the
populace - a goal many have long desired. Financial privacy is also
forfeited in the process.
Should all of this give you grave concern, or a sleepy nod? It depends
on how much you value your privacy, sovereignty, freedom, liberty and
that of the next generation - all of which are God-given rights under
the U.S. Constitution.
The steady decline in the value of buying power throughout the past 80
years is a crime in my book. In fact, a 1900-dollar is worth less than
3 cents today due to inflation.
What can be done? How can we recover an honest foundation for economic
stability - even if our government won't? One person at a time. The
good news is that we still have options and rights.
Gold and silver coinage has been used as a medium of exchange and store
of value throughout all recorded history. From Abraham in the Old
Testament to your great grandfather - they all knew that real money
represented true freedom and liberty. They also knew that freedom was
not free, it often required waging a battle - which was anything but
convenient.
Gold and silver coins represent true economic value because they have
integrity by design and content. Prior to 1933, U.S. gold coins were
the visible evidence of an honest money system. The denomination and
value of the coin corresponded with the weight and fineness of the
substance - gold. "A just weight and measure," as the Bible demands.
All of this changed overnight when FDR recalled the gold in 1933,
making gold ownership illegal and allowing the Federal Reserve to issue
fiduciary money, redeemable only in silver, not gold. This trust money
was minted until 1965.
Since then America has functioned on debt, credit and fiat money.
"Funny money," as G. Gordon Liddy once told me during a radio
interview. The truth is that the systematic crushing of the middle
class family due to long-term inflation is anything but funny.
In 1934 the government removed gold from circulation and in 1965 they
removed silver. Notice that until 1964, U.S. silver coins still
represented the economic mandate of just weights and measures. The
amazing thing is how few opposed the Fed, perhaps because Americans
still trusted the federal government.
Today we readily accept symbolic money instead of substance money with
no thought. Our post-1965 copper/nickel tokens circulated today
demonstrate a serious departure from our heritage of honest money and
represent a gutted economic ethic.
Did you know that even our "copper" pennies are not even made out of
copper anymore? Go ahead, scratch a penny with a nail - nothing but
pop-metal. A pure copper penny is worth about 3 cents today.
Our money system today is symbolism, pure and simple, without any
valuable substance to it. For this reason alone I feel that every
American should diversify a portion of their fiat money into real money
- gold and silver coins. As an added bonus, many historic U.S. gold and
silver coins have maintained an above-average track record since the
late 1960s.
The nature of our present economic and monetary environment requires
decisive action - if not for ourselves, for our children and their
sake. As R.E. McMaster Jr. puts it, this is "no time for slaves."
Today, monetary myth is so widespread that it appears that nothing
short of a financial meltdown will rattle Americans enough to face
reality. Is that what it will take? I hope not, but I fear so.
Remember 1979? The Carter deficits, double-digit inflation and feverish
activity in precious metals? Most of us will never forget that year.
Something similar or worse may await America - and the time to plan for
it is now.
Prominent free market economists like R.E. McMaster, Jr., John Pugsley,
Dr. Edwin Vieira, Lew Rockwell, Dennis Peacocke, Bill Bonner, Richard
Russell, Mark Skousen, Frank Venerosa and many others agree that
we'll face a monetary and dollar crisis soon - based on the huge debt
bubble amassed during the 20th century.
U.S. non-financial corporate debt has reached a staggering 46 percent
of GDP - its highest level ever. Consumer installment debt is up to
21.7 percent of disposable income - also the highest level ever.
In early 2001 the average household has a credit card balance of $7,200
- an amount that would take 30 years to pay off if you made only the
minimum payments. Savings rates recently hit zero.
Debt and credit has become America's drug of choice. "Buy now - pay
later" has become the new mantra of the last 40 years, but at a heavy
price to our money system, our communities and our families.
The modern disintegration of the family, rising divorce rates and
bankruptcy are just a few of the visible casualties that can be traced
back to debt and credit abuse.
I suggest we admit that debt is America's greatest drug problem today
and follow the steps of any good rehab center - to start living within
our means. This may require going "cold turkey" for some.
The only alternative (as with drugs and alcohol) is to gradually
increase the dosage to continue the 'debt high.' This is what Alan
Greenspan & Co. is banking on to keep the economy from going into a
full-blown recession in the near future.
I suggest that you "just say no" to all drugs - especially debt - or
else face the possibility of becoming a bankruptcy statistic in the
great debt wash-out we are heading for unless we change direction.
Sadly, few are prepared to face this potential debt crisis with a
financial house that is built on anything more than paper and
electrons.
"