Gold.

[semper occultus]

Rumour of Gold buying restrictions

By Golem XIV on September 28, 2011 in latest
www.golemxiv.co.uk

A rumour is going round in the Private Wealth/Off-shore investment area that Austria has instituted restrictions on buying Gold.

Here is Bob Bauman writing today in “The Sovereign Investor” newsletter with one example of the rumour mill.

Restrictions on Gold Buying?

By Bob Bauman JD, Legal Counsel, The Sovereign Society

Dear Sovereign Investor,

Maybe you have heard or seen the rumor that’s been flying around the Internet for the last week…There is a “secret” European Union limitation on gold sales! Indeed this rumor got very specific: “Austrian banks have now been ordered to restrict the sale of gold and silver bullion purchases and are limiting personal acquisitions of precious metals to €15,000 (US$20,243) at a time, or 11 ounces of gold at today’s prices.” Wow!

According to the source he later references,

According to the bank representatives and manager we spoke with,Austrian banks have now been ordered to restrict the sale of gold and silver bullion purchases and are limiting personal acquisitions of precious metals to 15,000€ (approximately $20,700 USD) at a time, or 11 ounces of gold at today’s prices.

If the restriction really do exist – I have not been able to verify – then I suspect this is a move to ward off or make harder, capital flight. Of course moving money is as easy as the press of a bank’s keyboard. So why buy gold? One answer is that for those who don’t want tax questions or official ‘snooping’ it makes sense to buy gold and move money in a way that takes the money off the grid.

It is also possible that the Austrian banks are concerned that they might not have enough physical gold and don’t want that sort of headline. Either way what is most interesting is the rumour itself regardless of the reality.

‘The Sovereign Investor’ is typical of a whole world of publications pandering to the wealthy who constantly imagine that ‘socialists’ if not outright commies have infiltrated every government and are intent on robbing the innocent weathy.

They talk constantly of ‘getting off the grid”. They write about which countries offer second passports with the fewest questions. Which jurisdictions have the best facilities for investing and for buying ‘safe haven’ properties to which the wealthy can retreat to when/if it looks like their governments might start to ‘victimize’ the wealthy.

Panama is one place they talk about in glowing terms. Money and those with lots of it, is welcome there. Panamais happy to offer servies which puts money beyond the reach of ‘intrusive’ American tax authorites. Recently an article professed to also like many things about Paraguay or Uruguay I forget which.

While you are worried about your job, your community and your country, the ‘Sovereign Investor’ extols the virtue of getting out, on a second passport and taking your money with you.

Gold restrictions were put in place in the US in the Great Depression and people still talk darkly about it. That they are talking about it now and peddling rumours suggests that there is a fear of popular unrest. And in that I think they are right. I think if Greece does find it has even more debts than it has admitted and if it also admits, what we all know, that the government has NOT been able to force actual implementation of the full range of austerity measures and so the debt has not been cut as promised, then default will come and it will not be ebntirely’orderly’ and banks will find their bonds are cut by quite a bit more than the ‘agreed’ 21%. In that case the rich will want to get their bonuses and accumulated wealth out in case they are required to be ‘all in it together’.

Bueaucrats and medling politicians can get control of banks and their keyboards. But they can’t get the gold you drive across the border to put in a safe deposti box somewhere that asks fewer questions.

CRASH 2 EXCLUSIVE: It looks like the EU is moving covertly to restrict retail gold sales

What lies behind the mystery Brussels meeting with the WGC, and new restrictions on gold sales in Austria?

September 23, 2011

The Slog

[Elihu]

Market Nuggets:LCH.Clearnet To Accept Gold As Collateral
06 October 2011, 10:00a.m.
By Kitco News
http://www.kitco.com/

(Kitco News) - LCH.Clearnet, the London-based clearing house, says it will begin to accept gold bullion as eligible collateral by the end of the month, subject to final regulatory approval. The firm says by offering gold for margin liability, it gives its market participants more flexibility. The initiative is supported by the World Gold Council, who recently submitted evidence to the Basel Committee for gold to be included in banks' "Tier 1" assets by European banking regulators. The gold will be lodged in vaults in London. The quality and fineness of the 400-troy ounce gold bars will be based on the LBMA Good Delivery List. In December 2010, LCH.Clearnet launched the first clearing service for the over-the-counter wholesale London gold market in a joint initiative with the London Metal Exchange.

By Debbie Carlson of Kitco News dcarlson@kitco.com

http://www.kitco.com/reports/KitcoNewsM ... 11006.html

[JackRiddler]

.

Now here are some people who have begun to understand, unlike the goldbugs, what money really represents. The headline is a misnomer; what is described is not a barter network. It is a community currency. This is not the first such experiment, but one of thousands around the world. When it becomes millions, it can become an alternative to the present system far more "real" than gold, because it is based on the real basis of all economies. All wealth comes from nature, all value is added through labor (physical and mental).

Angeliki Ioanniti, a seamstress, runs a small shop in Volos and participates in a network that uses barter and vouchers. Such networks build on a sense of solidarity in tough times as people seek creative ways to cope with a radically changing landscape.

http://www.nytimes.com/2011/10/02/world ... nted=print

October 1, 2011
Battered by Economic Crisis, Greeks Turn to Barter Networks
By RACHEL DONADIO

VOLOS, Greece — The first time he bought eggs, milk and jam at an outdoor market using not euros but an informal barter currency, Theodoros Mavridis, an unemployed electrician, was thrilled.

“I felt liberated, I felt free for the first time,” Mr. Mavridis said in a recent interview at a cafe in this port city in central Greece. “I instinctively reached into my pocket, but there was no need to.”

Mr. Mavridis is a co-founder of a growing network here in Volos that uses a so-called Local Alternative Unit, or TEM in Greek, to exchange goods and services — language classes, baby-sitting, computer support, home-cooked meals — and to receive discounts at some local businesses.

Part alternative currency, part barter system, part open-air market, the Volos network has grown exponentially in the past year, from 50 to 400 members. It is one of several such groups cropping up around the country, as Greeks squeezed by large wage cuts, tax increases and growing fears about whether they will continue to use the euro have looked for creative ways to cope with a radically changing economic landscape.

“Ever since the crisis there’s been a boom in such networks all over Greece,” said George Stathakis, a professor of political economy and vice chancellor of the University of Crete. In spite of the large public sector in Greece, which employs one in five workers, the country’s social services often are not up to the task of helping people in need, he added. “There are so many huge gaps that have to be filled by new kinds of networks,” he said.

Even the government is taking notice. Last week, Parliament passed a law sponsored by the Labor Ministry to encourage the creation of “alternative forms of entrepreneurship and local development,” including networks based on an exchange of goods and services. The law for the first time fills in a regulatory gray area, giving such groups nonprofit status.

Here in Volos, the group’s founders are adamant that they work in parallel to the regular economy, inspired more by a need for solidarity in rough times than a political push for Greece to leave the euro zone and return to the drachma.

“We’re not revolutionaries or tax evaders,” said Maria Houpis, a retired teacher at a technical high school and one of the group’s six co-founders. “We accept things as they are.”

Still, she added, if Greece does take a turn for the worse and eventually does stop using the euro, networks like hers are prepared to step into the breach. “In an imaginary scenario — and I stress imaginary — we would be ready for it.”

The group’s concept is simple. People sign up online and get access to a database that is kind of like a members-only Craigslist. One unit of TEM is equal in value to one euro, and it can be used to exchange good and services. Members start their accounts with zero, and they accrue credit by offering goods and services. They can borrow up to 300 TEMs, but they are expected to repay the loan within a fixed period of time.

Members also receive books of vouchers of the alternative currency itself, which look like gift certificates and are printed with a special seal that makes it difficult to counterfeit. Those vouchers can be used like checks. Several businesspeople in Volos, including a veterinarian, an optician and a seamstress, accept the alternative currency in exchange for a discount on the price in euros.

A recent glimpse of the database revealed people offering guitar and English lessons, bookkeeping services, computer technical support, discounts at hairdressers and the use of their yards for parties. There is a system of ratings so that people can describe their experiences, in order to keep transparent quality control.

(The network uses open-source software and is hosted on a Dutch server, cyclos.org, which offers low hosting fees.)

The group also holds a monthly open-air market that is like a cross between a garage sale and a farmers’ market, where Mr. Mavridis used his TEM credit to buy the milk, eggs and jam. Those goods came from local farmers who are also involved in the project.

“We’re still at the beginning,” said Mr. Mavridis, who lost his job as an electrician at a factory last year. In the coming months, the group hopes to have a borrowed office space where people without computers can join the network more easily, he said.

For Ms. Houpis, the network has a psychological dimension. “The most exciting thing you feel when you start is this sense of contribution,” she said. “You have much more than your bank account says. You have your mind and your hands.”

As she bustled around her sewing table in her small shop in downtown Volos, Angeliki Ioanniti, 63, said she gave discounts for sewing to members of the network, and she has also exchanged clothing alterations for help with her computer. “Being a small city helps, because there’s trust,” she said.

In exchange for euros and alternative currency, she also sells olive oil, olives and homemade bergamot-scented soap prepared by her daughter, who lives in the countryside outside Volos.

In her family’s optical shop, Klita Dimitriadis, 64, offers discounts to customers using alternative currency, but she said the network had not really gained momentum yet or brought in much business. “It’s helpful, but now it doesn’t work very much because everybody is discounting,” she said.

In an e-mail, the mayor of Volos, Panos Skotiniotis, said the city was following the alternative currency network with interest and was generally supportive of local development initiatives. He added that the city was looking at other ways of navigating the economic situation, including by setting aside public land for a municipal urban farm where citizens could grow produce for their own use or to sell.

After years of rampant consumerism and easy credit, such nascent initiatives speak to the new mood in Greece, where imposed austerity has caused people to come together — not only to protest en masse, but also to help one another.

Similar initiatives have been cropping up elsewhere in Greece. In Patras, in the Peloponnese, a network called Ovolos, named after an ancient Greek means of currency, was founded in 2009 and includes a local exchange currency, a barter system and a so-called time bank, in which members swap services like medical care and language classes. The group has about 100 transactions a week, and volunteers monitor for illegal services, said Nikos Bogonikolos, the president and a founding member.

Greece has long had other exchange networks, particularly among farmers. Since 1995, a group called Peliti has collected, preserved and distributed seeds from local varietals to growers free, and since 2002 it has operated as an exchange network throughout the country.

Beyond exchanges, there are newer signs of cooperation from the ground up. When bus and subway workers in Athens went on strike two weeks ago, Athenians flooded Twitter looking for carpools, using an account founded in 2009 to raise awareness of transportation issues in Athens. The outpouring made headlines, as a sign of something unthinkable before the crisis hit.

With unemployment rising above 16 percent and the economy still shrinking, many Greeks are preparing for the worst. “Things will turn very bad in the next year,” said Mr. Stathakis, the political economics professor.

Christos Papaioannou, 37, who runs the Web site for the network in Volos, said, “We’re in an uncharted area,” and hopes the group expands. “There’s going to be a lot of change. Maybe it’s the beginning of the future.”


Dimitris Bounias contributed reporting from Volos and Athens.

[Canadian_watcher]

From what i understand, Greece has always had a huge underground / barter type economy ... I believe that this is trotted out as a part of the 'Greeks are epic tax-evaders' theory of their economic collapse.

[anothershamus]

This is all very interesting philosophically speaking, however nothing is ever going to replace fiat .... okay, more/different fiat will, of course but nothing 'of value' will ever replace it,

that's true. not with the current economic and political structure intact. in that context, this is a philosophic discussion (which tend to be long and tedious). there will be no orderly reconsideration by the banksters. they don't care. this discussion has revealed the incoherency of the masses victimized by the banksters so a focused popular movement is unlikely. however, if the banksters are repealing natural law by no other means than illusion, that doesn't repeal natural law. those that can understand what they are doing, can oppose them by discerning their best interest outside the illusion. there's the contest. it's not on tv and it's not in politics. but it's happening...

The best us peons can do ATM is try desperately to beat inflation.

it's a numbers game. most won't.

I concur with your analysis.

It's very difficult to watch as everyone chases security these last few days when there really is no security. Certainly there are opportunities to cash in on these flights: sell treasuries now, buy metals now (or soon) etc. But the underlying theme I'm getting from all of it is that TPTB don't like Geithner's latest move and they are in punishment/harvest mode. The little guy in this scenario is in a lose-lose position. But, like you said, 'they' don't care. It moved beyond logic, even as the way I see there is a bit of an end game being approached. As usual, it'll result in the fat cats getting unimaginably fatter. I can only hope that a French Revolutionary climate will result in most countries.. that's where we are going to be at the end of this.

We have recently sold out of everything. I mean everything. We had accidentally good timing, I guess.. believe me I do not have a firm grasp on anything I'm talking about (probably obvious), but we're in cash right now and hoping to buy just enough, save just enough, to hedge against inflation. I think that barring utter insanity in the reliable areas we might be able to keep our earnings at par with inflation. (at least the reported inflation which, where I am, was 3.1% last month.) If we do it'll be beginner's luck for sure, and have nothing to do with market savvy and everything to do with intuition.

The big deal comes when there is the transition from the 'old' fiat currency to the 'new' fiat currency: This is why a 10% stake in metals has been suggested by investment advisers for decades, (although now they have forgotten their own advice, and sold out, or bitch that it's at a peak and don't want to buy in), when the transition comes, like it did with the Weimer mark, the exchange will be parabolic and your 10% will equal most, if not more, than your original investment and thus the 'hedge', it's just a good idea in a volatile market. (who want's to bet that the DOW will drop the 330 it gained today(10/10/2011) in the next three days?)


The Gods of the Copybook Headings

by Rudyard Kipling


AS I PASS through my incarnations in every age and race,
I make my proper prostrations to the Gods of the Market Place.
Peering through reverent fingers I watch them flourish and fall,
And the Gods of the Copybook Headings, I notice, outlast them all.

We were living in trees when they met us. They showed us each in turn
That Water would certainly wet us, as Fire would certainly burn:
But we found them lacking in Uplift, Vision and Breadth of Mind,
So we left them to teach the Gorillas while we followed the March of Mankind.

We moved as the Spirit listed. They never altered their pace,
Being neither cloud nor wind-borne like the Gods of the Market Place,
But they always caught up with our progress, and presently word would come
That a tribe had been wiped off its icefield, or the lights had gone out in Rome.

With the Hopes that our World is built on they were utterly out of touch,
They denied that the Moon was Stilton; they denied she was even Dutch;
They denied that Wishes were Horses; they denied that a Pig had Wings;
So we worshipped the Gods of the Market Who promised these beautiful things.

When the Cambrian measures were forming, They promised perpetual peace.
They swore, if we gave them our weapons, that the wars of the tribes would cease.
But when we disarmed They sold us and delivered us bound to our foe,
And the Gods of the Copybook Headings said: "Stick to the Devil you know."

On the first Feminian Sandstones we were promised the Fuller Life
(Which started by loving our neighbour and ended by loving his wife)
Till our women had no more children and the men lost reason and faith,
And the Gods of the Copybook Headings said: "The Wages of Sin is Death."

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four
And the Gods of the Copybook Headings limped up to explain it once more.

As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!

This from WIKI: "The Gods of the Copybook Headings is a poem published by Rudyard Kipling in 1919 that foresaw the decline of his country's empire and attributed it to a loss of the old virtues, and to a general complacency entailing that "all men are paid for existing and no man must pay for his sins" (38). The central message of the poem is that basic and unvarying aspects of human nature will always reemerge in every society that becomes complacent and self-indulging.

The "copybook headings" to which the title refers were proverbs or maxims, extolling virtues such as honesty or fair dealing that were printed at the top of the pages of 19th-century British students' special notebook pages, called copybooks. The school-children had to write them by hand repeatedly down the page."

[Hammer of Los]

About eight to ten years ago I told my father in law that there would be a massive financial crisis coming soon, and that he ought to sell all his stocks and shares (he does have a "portfolio" as I believe they are called. I prefer to own as little as possible), and use the money to buy gold.

I wonder what difference it would have made to his fortunes had he taken my advice.

He scoffed at it at the time. After all, he reads The Economist, listens to Money Box and watches The Money Programme, reads other investment and financial magazines and papers whose names I forget, and furthermore had a long and successful career as an accountant. Now me, I have never had anything more than a menial job, never owned anything of note, and know absolutely nothing about finance, investments, accountancy or the modern economy (I do have a GCSE "A" level in Economics from 1984). I don't blame him at all for not listening to me.

Also the day before 911 had me wondering what sort of provocation the west might use for a planned war in Afghanistan.

It's a funny old world.

[Stephen Morgan]

Any predictions for the 3.30 from Kempton?

[Hammer of Los]

Any predictions for the 3.30 from Kempton?

Give me a link to the race and I will pick one horse out based on my intuition, and also a quick glance at the odds to assure me that it has at least some chance of winning. That's how magic works. You need some chance. Chance is a fascinating thing, an opportunity for the will and desire to manifest themselves in peculiar ways.

Of course, I can't make any guarantees.

Needless to say, I know nothing of racing. To take a racing tip from me would be defy reason.

Sorry about the off topic diversion.

[Elihu]

The continuance in the obligation between all parties gives value to the chit. The chit does not have value in and of itself. Higher order money does not have value in and of itself, as opposed to money. The chit can be sold if need be. It is not hard to imagine that other villagers may be willing to buy the chits, nor is it hard to imagine that different chits representing credit behind different productive endeavours and with different ‘maturities’ would also exist. The important thing to remember is that all chits eventually get extinguished and disappear once the credit that they represented gets discharged.
There is a class of chit in the village that is superior to all other classes in terms of demand from villagers: the chits that represent the credit behind the production and sale of items continually in demand by other villagers: bread; clothing; firewood etc. This class of chit is superior to the others. It only relies on the sale of a simple item for the credit behind it to be discharged, as opposed to the other chits that rely on the successful execution and running of an arduous endeavour. The chits and the ‘superior chits’ are analogies for the ‘bond’ and the ‘bill’ respectively.
The merchant bank is a synonym for a dealer in ‘chits’ or ‘bonds’ and the discount house is a synonym for dealers in ‘superior chits’ or ‘bills.’ In our example, instead of the villager keeping the chit himself he could deposit it at the village’s merchant bank against the creation of a deposit: a deposit which turns into money upon the settlement of the original credit.
The system of merchant banks and discount houses arises as nothing more than the precipitation of social interaction. They are the consequence of social interaction not the cause. The balance sheets of these institutions represent nothing more than [part of] the aggregation of the representation of social interaction through bonds and bills. As society progresses with education, there is no limit to the potential for productive social interaction. Consequently, there is no physical limit to the size of the bond and bill market (i.e. higher order money in relation to money.)These institutions certainly did not create the bonds and bills that they hold…they merely liquefy (i.e. bring order to) that which would exist anyway.
Evidently, bills and bonds do not make sense without the monetary substance gold. The whole system of financial institutions is meaningless without the supreme measure of gold.
Perturbing the Natural Social Interaction
It is a mistake, as has been elaborated on above, to assume that merchant banks, discount houses and financial institutions in general dictate the level of social interaction (or economic activity.) In aggregate, they are merely a mirror of social interaction of various forms and frequencies. The only limit to the size of various frequencies of higher order money is the boundary of productive social interaction. This, naturally, is enhanced by a philosophy of education amongst the people.
Errors and pitfalls are a part of human nature. The

[Elihu]

The system of money and higher order money is a mirror of the natural social interaction. Consequently, it is as sound as the interaction that it represents. Therefore the expectation of a monetary system that is absolutely perfect and free from any form of risk is a chimera. To expect them not to occur is as untenable as expecting humans not to make errors. But the damage on the monetary system caused by mistaken social interaction can be limited.

The Gold Standard The Gold Standard Institute
Issue #12 ● 15 December 2011 13

[Elihu]

http://www.24hgold.com/english/news-gol ... 6532G10020

...(3) We believe the focus on negative lease rates misses the point of the current gold market structure and instead we should be looking at changes in the gold forward rate. The gold forward rate has increased during both the late September and current sell-offs in gold, which probably means that gold is being leased by central banks in order to provide liquidity for the banking system. Importantly, central bank gold is probably not being sold outright despite rumors to the contrary. The implication is that the current gold correction is similar to past events where gold has been used as a liquidity management tool. Its use for such purposes is hardly inappropriate -- after all, gold is the ultimate money and what good is money if it doesn't get used? In any case, the eventual reversal of gold funding activity should correspond with improved commercial bank liquidity and a return to gold's dominant price uptrend.



(4) Important structural changes in the financial sector could soon mean that gold’s widespread use as collateral and eventually as money might actually not be that far off. If so, it would only be a natural progression for an asset with no counterparty risk in a post-credit-bubble world. Excessive leverage has transformed even the gold swap and leasing business, which by definition is supposed to involve physical metal, into a paper form a number of years ago. While the recent reports from Bloomberg, Financial Times and elsewhere offer shreds of truth about this condition amid all their misdirection, they fail to examine underlying developments in the gold market that may change the sorry state of affairs. Among the most intriguing is the possible development of clearing and collateral facilities for 100% physical backed gold, perhaps in the format of the LBMA unallocated bullion account.



We suspect that all this talk about “negative gold lease rates” may represent the initial glimmer of recognition that a major development is afoot in the gold market. Pieces of the puzzle are being put together without most people really knowing or understanding what the completed picture looks like. The general trend of the financial markets thanks to the information age has been to move away from intermediation and toward self-directed transaction. The tri-party arrangement redefines the role of the intermediary so that it is no longer the matchmaker between customers but rather acts as a clearing agent, administrator of collateral and a funding backstop.





Importantly, in a tri-party arrangement one party posts the collateral that the other party desires. And that desire for specific collateral is where things could get interesting for the gold market with gold being the ultimate collateral. In essence the selective collateral nature of the tri-party format may force bullion banks to eventually declare their unallocated LBMA gold accounts as backed by 100% physical bullion. While there certainly will be gold appearing on the market from time to time in the form of gold leasing or similar funding arrangements, the 300 year history of archaic bullion banking may be coming to an end. If so, it could ironically be JP Morgan that modernizes the gold standard by establishing gold as the premier monetary asset with no counterparty risk and infinite mobility.





Implications



The gold time bomb takes the form of a possible panic out of paper gold into physical metal when counterparty risk reaches an extreme level whereas a new gold standard would complement modern financial markets by serving as the ultimate asset: gold with mobility and no counterparty risk. We believe such a radical development could take shape if the most popular paper gold product available today, the LBMA unallocated bullion account, is used increasingly as a source of secured funding between counterparties rather than as credit between a bullion bank and its customers. Indeed, if the gold market is left to its own devices, the shunning of credit risk will eventually lead counterparties to demand that gold be provided in the form of risk-free collateral. The LBMA and bullion banks would then have no choice but to establish and market 100% physical backed unallocated gold accounts similar to BullionVault and GoldMoney, except on a grand scale.





Tom Szabo

[vanlose kid]

The Golden End Game – A Thought Experiment
Submitted by Cognitive Dissonance on 12/20/2011 15:51 -0500



Part One of Two
With limericks by The Limerick King


This is part one of a two part exploration into what the world might look like after a total or partial collapse of the currency/economic system from the perspective of holding Gold. As the title explains this is a thought experiment, not a dissertation filled with footnotes and references. Consider it one man’s flight of fancy, so take what you need and leave the rest. Anyone who claims they know what will actually happen is a fool greater than me.

As markets are starting to sink

The end could be here in a wink

So should I prepare?

Should I even care?

My PMs will save me!!! (I think......)

(The Limerick King)


When I first entered the business 20 plus years ago the firm I started with had a mentoring program that paired the fresh faced rookie with a veteran for the first 6 months. The idea was that for a piece of the action paid to the veteran from the rookie’s commissions, the veteran would offer hands-on review, insight and support. While some on both sides of the office divide groused over this arrangement, from management’s point of view it made all the sense in the world because now the office was raising the rookie, not just one or two managers.

I found the mentoring system to be beneficial simply because I was coming in quite a bit older than the younger shark chum fresh from the diploma mills. Most of them felt they had the world by the balls, thus as long as they showed up the (fiat) spice would flow. But I knew these financial chop shops had a tendency to chew up the rookies, and then spit them out once they’d been used and abused. Since I didn’t want any part of the rookie churn and burn I relished the chance to work with a veteran and develop good habits early rather than be left with trying to break many bad habits later.

Luckily I was paired with an old pro who quickly took a shine to me and showed me the ropes, spending far more time with me then he was ever compensated for. In fact the experience re-invigorated him and he went on to become the top producer of the office two years running. The more I learned the harder he pushed, reasoning that since I knew this, I damn well better know that. So he took most of his compensation in the form of my spilled blood and an inner satisfaction that he was making his mark. For me, the processes, morals and methods he taught me are still paying sweet dividends two decades later.

One of his demands was the weekly ritual of a portfolio review of each holding in every client account. When Friday came round he insisted I justify why this or that position was in a client’s account and quite frankly it drove me crazy. I would complain that we had done the same damn thing every week for months and not much had changed. So why was he still asking me the same questions again and again. And every time I complained he would respond with a question of his own, often dramatizing it by looking out the window or throwing the Wall Street Journal on his desk. Prove to him that the world was the same one that existed when we reviewed the accounts the last time.

And of course he was right; the world was not the same and often quite different from week to week. This trial by fire is something I still force myself to go through every Friday afternoon. Knowing the client and the world situation, if I can’t justify the position, why the hell is it still in the account? But of equal or greater value to me were my mentor’s questions each time I tried to add a new position to an account. I hated his probing and poking and often I took it personally. And that bastard knew where all my buttons were and delighted in pressing every single one until I finally wised up and stopped letting him goad me.

After we had discussed why I was adding the position, and well before I was allowed to call the client and make the pitch, he always had one final question for me. How was I going to dispose of it if things went wrong in a hurry? Or in his words, “What’s the end game on that?” At first I felt his question was downright stupid and my rote answer was always that I would cross that bridge when I got there. But he never let me get away with my intellectual laziness and he’d ask the same question 6 different ways until I saw all the possible pitfalls based upon the knowledge I had at the time.

I can still hear him today. “Don’t ever take on a new position until you have thoroughly considered how you will dispose of it under the worst of conditions.” It forced me to look beyond my nose and consider how circumstances change, and with those changes the ability to sell something that, while saleable today, might not be tomorrow. Liquidity and desirability can dry up quickly and always when it is least convenient to you and your client. This perspective broadening exercise was extremely useful beyond my business world because it can and should be applied at all (not just major) life decision points.

As this Keynesian game nears an end

And the Banksters can no longer lend

What will we all treasure?

Will gold be our measure?

Or the love of our family and friends?

(The Limerick King)

So……what’s the end game here folks? Regardless of whether we are USA centric or more globally focused, the fact is that we ‘own’ a political, economic and social portfolio that is the foundational basis not only of our wealth and investments, but of our very lives and those of our family, friends and neighbors. So have we done a fearless and thorough portfolio review or are we simply buying Gold and other precious metals, along with guns and various food stuffs, and hunkering down to wait out the storm?

I don’t pretend to have all the answers, let alone the proper questions. So don’t look to me for instructions when the T-1000 HFT bots crest the ridge and cream our asses. But a little proactive introspection is well warranted here considering we are now entering uncharted territory. And it is uncharted territory; at least for plebs such as you and me, even though there have been fiat currency collapses throughout history. This time really is different (as were all the other times for each generation caught in the middle) if for no other reason than the massive use of financial leverage combined with the humongous explosion in global population over the last 100 years.

Don’t get me wrong. I’m basically a hard asset guy at this point in the great unwind. But as I have said in the Zero Hedge comment section several times before, it’s one thing to grow and/or protect your assets and wealth in Precious Metals (PMs) (and other hard assets) and another thing entirely to move those assets to the next game board when this one is reset, replaced or recreated.

I see and hear a great deal of cognitive dissonance in many of the articles and comments discussing PMs as the best vehicle to use when moving to dry land……….that is, when dry land finally does rises from the ocean floor to form the new capitalist capital called Atlantis Redux. I find that many are kind of fuzzy on how the actual transition/transaction will go down and nearly all just sort of insert “and then a miracle occurs” at some point in the discussion when they recite the precious metals (PM) mantra.

Let’s just say for a moment that our Gold, Silver, Platinum and Gold-plated Tungsten have all quintupled in price (as measured in whatever fiat is the favorite at the end) and we are now all sitting pretty. Do we really honest-to-God no-fingers-crossed cherry-on-top believe that the powers-that-be will simply allow us to mosey up to the cashiers cage and redeem or convert it all for whatever monetary unit reigns supreme? Really? Because from my point of view it’s just crazy talk to assume that the enemy of the state (Gold and other PM’s) will be welcomed home with a warm welcoming embrace.

Now before you bite my head off (remember boys and girls, this is just a thought experiment) understand who this essay is directed towards. Or rather isn’t directed towards. If you are capable of purchasing several LBMA Gold bars and are able to store them overseas and you can easily relocate yourself to where your Gold is, then this rant really isn’t directed towards you. While you may not be a power-that-be, you are in a class above the middle class regardless of your protestations to the contrary. I’m not saying you don’t share many of the problems others are facing, only that you have a great deal more flexibility to deal with them.

In the same respect, if you own several Gold Eagles and a couple hundred ounces of Silver, then you are also not to whom I’m speaking. Most likely you will run under the radar because your small amount of Gold and Silver is being held in the form of the U.S Eagle coin which, while not exactly produced as a numismatic, is a US Mint produced Gold and Silver coin that is considered US legal tender. So from my point of view, if Gold and Silver Eagles are held in small quantities, they will not be considered an investment, but rather savings or collectibles.

The people I am talking to are those who are converting a substantial portion of their investable assets into physical Gold. Or who are selling other assets or breaking qualified retirement accounts (IRAs, 401(k)s etc) in order to purchase relatively large amounts of physical Gold and Silver, though the focus of this essay is Gold. Their intent is not only to grow their PM assets, but to carry the bulk of their wealth over to the Promised Land when the current Ponzi Empire crashes and burns.

You know who you are and unfortunately so do the government goons if you have ever bought any quantity of Gold from an established dealer with a check, a cashier’s check, wire, electronic funds transfer or other traceable method. And because of Check 21 everything is traceable nowadays (even cash within a few degrees of separation) if you used one of these instruments to gather the cash.

The End Game is here so I'm told

Will the last valued asset be gold?

If so, keep it tight

From the thieves in the night

For they know every ounce that you hold

(The Limerick King)

Where I have a problem with the logic used by some is this. There seems to be a general consensus that Gold is the arch enemy, the Kryptonite if you will, of the out of control fiat creation by central authorities in order to extend and pretend while looting the executive bathrooms of the Gold faucets and monogrammed bathrobes. This understanding, along with a host of others, is always proffered when explaining the reason behind PM manipulation and the entire PM paper racket. And I don’t necessarily disagree with this general supposition.

What I don’t get is the idea that if Gold has been considered ‘contrary’ or ‘dangerous’ to the unfettered debasement of fiat in the past and present, thus the reason for the manipulation, then why would this suppression and resistance to the ‘Golden enemy’ by the powers-that-be suddenly disappear precisely when the powers (or more accurately their agents and puppets) are desperate and have the most to lose? It is clear to me, and judging by the comments clear to many others here on Zero Hedge, that these guys and gals play for keeps, consistently pushing nearly all their chips to the center of the table in an endless game of bluff and intimidation.

More important to me, at least for the purposes of this essay, is that those lovable sociopaths would rather burn to the ground than play to lose or walk away. This, by the way, is precisely why they rarely lose. They play for keeps and they’ve been doing so for thousands of years. They not only have the power, but they know how to use the power they have. Meaning they are ruthless cutthroat bastards who see you and me as cattle to be consumed or beasts of burden to be used. And I’m being kind for the sake of the weak stomachs among us.

As best as I can tell the general assumption is that when the partial or total collapse comes (not if because we are talking worst case scenario here) the failed powers that be, perhaps inspired by some public hangings and decapitations, will pack up their lawn chairs and vacate the levers of power, allowing more responsible adults and even some advanced children to take over and save the day. Or at the very least, the expectation is that the new kids on the block will clean up the mess left behind by those traitorous bastards and that they will do so in a reasonably fair, open and egalitarian manner. Let me take a moment to collect my thoughts before rendering my opinion on this matter.

I DON’T THINK SO!

Why am I so confident of this? Well, from studying history of course. And by history I mean good old fashioned world history dictated and approved by the Empire for high school or college textbooks. You see, from the perspective of long term history, while we may have a new production company and support system for the global Ponzi screenplay, as well as fresh faces to fill the role of puppets, enablers and useful idiots, and even a (relatively) new political system to emotionally and culturally unify us all as we labor away in our hamster cages, the Ponzi is at its central core the oldest con in the books.

Essentially we are all experiencing plantation living at its highest and most efficient evolution to date, where the sole purpose of our existence is to serve our immediate masters who then serve their masters who then serve their masters in an ever narrowing pyramidal hierarchy. This goes on until it reaches the point where at the top we find several hundred to a thousand elite scattered across a number of blood-line families that share the power and spoils. And there is serious evidence available to be examined by the determined researcher that there might even be another level (or two) above that.

BTW for the most part, but with certain exceptions, you will not find these elite of the elite on any list of richest people in the world. I personally suspect that many of those who you do see listed are in fact the public caretakers of the wealth of others and who are paid handsomely to play the role and weather the slings and arrows of public scorn in exchange for growing the assets and guarding the anonymity of the real owners of Mother Ship Earth.

The Powers That Be are concealed

Their identities won't be revealed

They will hide from the light

And continue their fight

Until all of our fates have been sealed

(The Limerick King)

History is full of examples of crumbling empires and nearly all of them seem to share several characteristics. First and foremost in my mind is that regardless of how dire things may seem to be, the collapse progresses much slower than expected. It always seems like today’s bad news signals the end of the world as we know it….until tomorrow’s even worse news hits the ticker.

Grab Mr. Peabody and fire up the WABAC (pronounced ‘wayback’) machine to travel a few years into the past, say to 2007, and consider some of the headlines we saw and the reactions they provoked. What were considered Earth shaking events back then are nearly routine today, no big deal really. This is a severely misunderstood and underappreciated, and thus under weighted, counter balancing force to the general insanity level. The (normalcy bias) force is strong in you young Skywalker.

I suspect this isn’t so much because the powers that be are holding it all up, but rather it is the common folk living on the ground floor of this insanity that are doing the heavy lifting. Never underestimate the desperate desire of those who are chained to the plantation to preserve that plantation even when it would be easier and saner just to walk away. This Stockholm syndrome conditioned mind is of course exploited by the masters to rape and pillage long past the normal or even expected expiration date of the Empire.

Also, collapse (partial or total) is a relative term. For the financial elite, politically powerful and top tier business people, collapse is just another word for a really severe business cycle downturn. When conditions become harsh, the script is always the same. Shed useless eaters, strip all usable assets and sell the estate to the last of the greater fools, then move on to a more favorable business location. So by the time the barbarians are at the gate, the rich and powerful are long gone and have stripped most of the wealth from the kingdom.

In the modern era this means that the rape and pillage of the middle class is the purpose and eventual outcome of any severe recession/depression. So of course it is the purpose of the ongoing collapse. See ‘The Great Depression’ of the 1930’s for the Cliff Notes on the coming fun and games…exponentially escalated by $708 Trillion (notional value) in derivatives. But always remember that the explosive firepower released back in the 1930’s is nothing compared to the massive potential energy that is about to be released. The real purpose of can kicking is to try to slowly release that energy rather than to allow it to go BOOM all at once. Consider it a form of extended game play for the elite.

When the global reset is complete

And the Kleptos are in full retreat

Secure family and friends

For their game never ends

And they'll never accept their defeat

(The Limerick King)

The true powers that be have a long history of backing all sides in nearly every conflict or collapse. So it is not a stretch to assume they are supporting the very barbarians who are beating the door down while also relocating their kin from the collapsing empire. If you spend any time studying the blood lines of the rich and powerful, despite our general indifference to this seemingly inconsequential subject matter, to Earth’s owners the blood lines are carefully massaged, managed and manipulated in order to maintain a balance of power and influence among the bickering kings and queens. Do not underestimate the utmost importance of blue blood hierarchies or of the interconnected web between supposedly bitter enemies and plantations/countries. If it is important to them, then it should be considered life and death to us.

Inside the sprawling plantation the conditioning of the slaves is ongoing and ever changing and relies heavily upon the older, more experienced slaves to indoctrinate and condition the new ‘volunteers’, thus cementing the bond that is often expressed as nation or community…..or more properly ‘misery loves company’. For several thousand years religion was the center of the indoctrination process and controlled by the blue bloods, all of whom had no aversion to donning priest’s robes to spout the all important rites and rituals. A close inspection of history shows that while the vehicles of power shifted and morphed, the methods used and the personalities involved always remained the same.

Closer to the modern era, there was a shift to the sharing of power between religious centers and blue blood families who presided over kingdoms. Again, there really wasn’t a divide, only the public appearance of division. Mom usually decided which son became King and which became a Cardinal or Pope, thus assuring her it all remained in the family.

Over the last several hundred years the center shifted once again to the façade of central governments organized under ideological memes such as democracy, communism, socialism and of course the more traditional blue blood families aka Kings, Queens and royal families, sometimes along with a quasi democratically elected congress designed to create a false sense of self control for the naïve native slaves.

Regardless of the method or ideology used today, they are all simply more sophisticated methods to organize and exploit the plantation and nothing more. In much of the so called ‘free’ world today, giving the slaves the illusion of freedom of (limited) choice has been found to dramatically increase productivity. An intelligent plantation manager will allow any work rules as long as they still maintain order while increasing efficiency because strip mining the human and mineral resources of Earth is the one and only goal of the ruling elite.

Preserving your wealth can be fun

The first thing you'll need is a gun

Trust no one you meet

Each night soak your feet

Just in case it is prudent to run

(The Limerick King)


Regardless of whether the financial elite remain in place or move on during or after the collapse, there will still be some type of procedure set up to exchange the old slave script for the new slave script. Without a doubt there will be different tiers or exchange rates depending upon which social and/or economic class you reside in. And rest assured the transition will not be fair and it will be used to extract whatever remaining wealth the middle class still holds. This is a given, but it will not be readily obvious or even visible since most of the dirty work will occur behind closed doors and well in advance of the general scrum.

There is also no doubt, once again predicated by a careful reading of history, that regardless of the leadership actually holding office, when the gates are busted down (or as is more likely the case pulled down from within, often via false flag attacks), in order to placate the increasingly restless slave population, fresh faces will magically appear from the cloning rooms to offer stirring speeches and heartwarming platitudes about how all the slaves must engage in mutual sacrifice and work even harder to ensure that the elite make a clean getaway before the cleansing fires are set and the system is finally rebooted. I can’t wait for the games to begin because I still have more cognitive room left over for that hope and change thingy.

Every crumbling Empire always reaches into the same bag of tricks when the heat is on and the slave nation becomes restless. After all, the elite must maintain order so that the fleecing can be completed. ‘Order’, especially near the end of the End Game, is usually maintained by a heavy handed police and/or military presence via outright martial law or the stealth version implemented by (executive) decree. Let the head bashing begin. Desperate puppet leaders will most certainly do desperate things, first to maintain their own illusion of power, then just to save their asses. Count on it.

Two tricks of the deception trade that often work hand in hand are scapegoat harvesting combined with war mongering, which usually leads to out-right-war in order to deflect attention and blame those evil elites over there and their supporting band of vicious baby eating enablers, indentured servants and wage slaves. And while it might be an old trick, even the oldest, it still works every single time it is used because we slaves would rather support the devil we know then to take a chance and actually live free. Spend enough time in a locked cage under dehumanizing conditions and the jailer no longer needs to lock the door anymore. We slaves will keep ourselves just fine, thank you very much.

While I could extend this list of common denominators for several more pages, let me cut to the chase and list the one commonality that is near and dear to my heart and the core function of every central government that administers the (crumbling) Empire……..to be a blood sucking parasite. The bottom line is that governments, Kings and religious orders do not ‘produce’ anything nearly equal to their consumption no matter how you measure it, unless you have been drinking their Kool-Aid. These entities will consume from all sources using one or more of the following strategies; regulation, taxation and ultimately confiscation.

In Chapter Two we will examine the third method as the end game worst case scenario draws ever near.



11-20-2011

Cognitive Dissonance


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http://www.zerohedge.com/contributed/go ... experiment

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[Nordic]

The bottom line is that governments, Kings and religious orders do not ‘produce’ anything nearly equal to their consumption no matter how you measure it, unless you have been drinking their Kool-Aid. These entities will consume from all sources using one or more of the following strategies; regulation, taxation and ultimately confiscation.

Great. Another one of those "libertarian" types, typical Zero Hedge stuff. I read the site anyway, because they're very good at figuring out what is going on, but terrible at seeing the actual causes of it.

I mean, they're still stuck in the "too much government is causing the collapse!" nonsense.

It's a bit tiresome at this point.

Yeah, let's "free" the markets even more, so the looting can speed up into red-line territory! Sure, that'll work.

[vanlose kid]

The bottom line is that governments, Kings and religious orders do not ‘produce’ anything nearly equal to their consumption no matter how you measure it, unless you have been drinking their Kool-Aid. These entities will consume from all sources using one or more of the following strategies; regulation, taxation and ultimately confiscation.

Great. Another one of those "libertarian" types, typical Zero Hedge stuff. I read the site anyway, because they're very good at figuring out what is going on, but terrible at seeing the actual causes of it.

I mean, they're still stuck in the "too much government is causing the collapse!" nonsense.

It's a bit tiresome at this point.

Yeah, let's "free" the markets even more, so the looting can speed up into red-line territory! Sure, that'll work.

really? false dichotomy much?

apropos of the post you commented on, what do you think the (always and ever necessary) government will do to these despicable "libertarians"?

...The inlet beside Wukan, in China's south, is tranquil. Herons and egrets fly over the nearby lagoon. The surrounding hills, some rising high above the village, are covered with lush trees and shrubs and the green-blue waters show barely a ripple. There is no wind.

For the fisherman of this village on the South China Sea three hours' drive east of Hong Kong, this should be a pleasant day for fishing.

But this is a fishing village where the fisherman cannot fish.

Wukan has captured the attention of the world, and of internet-savvy Chinese, as its residents have risen up against what they see as corruption among the local Communist Party officials who answer only to their party bosses.

China may be a country that spends more on maintaining internal security than on defence, according to finance ministry figures, but the residents of Wukan have nonetheless driven out the bureaucrats and the police and are now governing themselves...

http://www.thenational.ae/news/worldwid ... le-to-fish

people who choose to govern themselves, freaks of nature, huh? completely impossible right?

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[Hammer of Los]

...

I concur with the Kid as usual.

Hi Kid!

Preserving your wealth can be fun

The first thing you'll need is a gun

Trust no one you meet

Each night soak your feet

Just in case it is prudent to run

I shall never own a gun.

However, I have been carving a number of wooden items recently.

A wand, a walking stick for a child, that has many uses including bow and slingshot, and a larger, heavier walking stick for me. The lattermost I have yet to begin, I have the branch but I am not sure it will be fit for purpose. I will find out when I begin carving.

They are carved in hazel, yew and oak.

If anyone ever sought to point a gun at me, I would have to either dodge or incapacitate the hand that wields the gun.

Hopefully, my kung fu would help in such a scenario.

I sure hope and pray it never comes to that, but who knows?




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