Thursday, February 26, 2015

We're All Bullion Socialists Now

Such is the lament of the dynasties of old, all having done quite well through the socialization of debt. It has guaranteed performance of the systemically important (is there any other kind among them?) while allowing the repositioning of underlying assets among the great unwashed, so as to gain new debtors through the transfer of balances between the little people, as they default.

It is a peculiar socialism indeed, whereby some are more equal than others. But that being said, we respect the system and its rewards. Not a single GIANT would EVER demand more gold from the system than "his share" each according to his ... restraint ... as it were. None would risk upsetting the great apple cart of socialized debt performance by drawing attention to the flow of gold, or, even worse, restricting it (heaven forbid).

Therefore, the families have long since resigned their collective status to that of "Bullion Socialists". It is no great matter when one considers the tons already in vaults just waiting to be revalued. The profits of the system far outweigh the benefits of its demise, considering the small gain in physical of a forced run. It is far too small a percent of current holdings to incur the risk.

The great secret hidden from the little people is the great potential their number have if they too collectively acted as one. If each and every one of them cashed in their 401K's for today's dollar price equivalent of physical gold (or any day's for that matter) then the load would be too great for the derivative complex to bear. The system of socialized debt would collapse, their wealth would skyrocket with the revaluation / recapitalization, and the new system would be upon us.

But this can never truly happen, for it would take far fewer than "all of them" to trip the panic wire.

As with any behavioral delta event, like the collapsing of a Ponzi scheme for example (a fitting analogy) once the run begins on deposits ... or redemptions ... or currencies ... outside the managed norm ... the "window is closed" (like in 71) and the system is reset.

This is why I so love the little people ... for they hold they key to their own survival, even though clueless as to how. And this is why I abandoned the Family and all its trappings, and did my part to help start this tiny movement among them.

The Hunt brothers was merely a diversion. The CBs never did hold silver, and never will. For all its virtues, many and profound, the little people are less inclined toward it than the ruling class is inclined against it. And this is key ... the debtors are even less inclined toward gold, having been herded in that direction so masterfully where economies are "developed toward debt". They cling to debt even in its final days.

Truly, they do not even know that they hold their wealth in debt, let alone the way forward.

But Giants? They are ALL Bullion Socialists now. No matter which way the wind blows, change is inevitable, and when it comes, they will ALL be in fantastically better positions relative to even today's egregious wealth inequality.

But those little people who redeem a small measure of GOLD from the great Debt-Ponzi before the reset will have "gotten out" before the collapse - just enough to follow in the footsteps of Giants.

Alas, there are always losers. Those who stay in the current game too long. They will be many, for with any gain there must be loss. For every seller, a buyer. For every trade, the other side.

For as much paper that will burn in the coming inferno, an equivalent measure of wealth lies in the golden sunrise on the other side of darkness. History in the making - these are the times we live in.

6 comments:

  1. HUNT BROTHERS, NOT KOCH BROTHERS? LOVE THIS BLOG!

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  2. Ahhh, right you are !! That one brain cell was on break, leaving only the remaining two for thought processing. Thanks for that correction - I have made it. -R

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    1. IT WAS MY PLEASURE. I'M A 70 YEAR OLD GETTING READY TO RETIRE. THANKS TO PEOPLE LIKE YOU AND FOFOA, I FEEL MUCH MORE COMFORTABLE ABOUT IT! COME SEPTEMBER, THINGS MAY REALLY START TO GET EXCITING?

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    2. Time will tell my honored friend...

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  3. I believe it is the Hunt brothers who were robbed by CFTC changing the rules, right at the moment when they were about to corner the silver market.

    http://seekingalpha.com/instablog/170390-jason-tillberg/144117-the-hunt-brothers-how-they-did-it-and-what-we-can-learn-from-it

    I think Hunt is the perfect example that no giant (private citizen) in the western developed nations can ever corner the PMs market. Warren Buffett tried again but did a 180 after who knows what and why.

    All giants (CBs) in the west had coordinated to suppress the spot price since 1971, a few years after the collapse of London Gold Pool, and will not rock the boat. Any giant like the Hunt will be destroyed to maintain balance.

    http://news.goldseek.com/GoldSeek/1424972460.php

    However, giants in the east (CBs and citizens) can indeed rock the boat. They will not be restricted by the last minute rules change by CFTC since they can continue to operate via Shanghai Gold Exchange. I think the only reason they haven't done so is because they believe the west may still have more gold stash away somewhere. They don't want to be surprised when they initiate the reset to find out that we have more aggregated gold than they do.

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    1. I think there is some merit to your thesis Judie (whose handle I spell correctly this time). I think if the price comes down slowly enough, weak hands will always shake out, and more still comes up from the earth.

      We had a 1300 average for a long time, now 1200. Aside from the periodic volatility that keeps the paper chase in play, we could see an average of 1100 in 2016, 1000 in 2017, 900 in 2018 and so on.

      This would be a solid strategy if price could be controlled within those tunnels as the debt can is kicked.

      But the absurdity of unrepayable debt can only last so long. The Flow-er of Understanding knows this well ...

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