Tuesday, November 29, 2016

Predictable Change

The resurgence of nationalism continues to be not only a rejection of progressive socialism in the West (and its PC trappings) but a continued repudiation of globalism in its present systemic context. Recent events, and thoughts about them, lead me to remind readers of these four posts:

As Rickards seems to have the best grasp of the coming "systemic lock-down", I would append his "road to ruin" conclusion with this.

There is a reason that each and every central bank holds physical gold as the one and only equity-based asset on their balance sheets.

The entire system is indeed a dollar product.

10 comments:

  1. "There is a reason that each and every central bank holds physical gold as the one and only equity-based asset on their balance sheets."

    Gold is the central banks' non-expiring put option. When credit eventually fails they can always make enough base money by putting a floor under the POG.

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    1. Indeed Grumps, glad to see your still kicking around out there.
      -R

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  2. "they can always make enough base money by putting a floor under the PoG."

    I wonder how much gold do they need to make enough base money by putting a floor under the PoG. Do we really still have 8,000 tons in Ft. Knox?

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    1. Whatever is held above ground is what it is. The price in dollars is what varies, based on what dollar denominated debt is to be cleared.

      If paper can still buy gold, the currencies still work.

      How much gold can be moved by a quadrillion in dollar denominated counter party claims? That is a good question to ponder.

      Let us see how debt derivative fail. The SDR included ...

      ;0)

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    2. I think the IMF would probably add gold as one of the component in the SDR as an anchor to stabilize the five fiat currencies. The weighting of the currency will be adjusted in accordance to the amount of gold which the country possess respectively.
      If Ft. Knox were empty, the dollar would be kicked out of the SDR.

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    3. Wouldn't it be interesting if the US claimed gold it holds for other countries to satisfy claims against foreign banks?

      There is no precedent for many things today - and yet to come.

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    4. I'm pretty sure that is exactly the reason of repatriation. There is no precedent for the hole which we have dug ourself in. They just keep digging deeper and deeper so they can all bury their heads in the sand. The amazing thing is that it actually works.
      The sky seems to have stopped falling as long as they keep their heads in the sand.

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  3. You know what's scary. It's how little actual base money is in the system compared to the claim checks on money as Jeffrey Snider has been pointing out.

    What's been going on in China is truly frightening. Richard Duncan says they took 4T in USD savings to make 24T+ in credit. This is what keep the system from imploding since 2007. QE in America was a sideshow.

    There's a YT channel I stumbled upon with good boots-on-the-ground intel about China: ADV China

    https://youtu.be/BcyYyyaPz84

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  4. Why is it frightening? The credit will never be repaid. That's not an issue.

    What's frightening is the brick wall we have hit. The truth is that the collapse has begun, it is just "news" because the fish are last to see the water.

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  5. Jim Rickards seems to have a good grasp of the "desired" outcome. The elites are still making profits, they need to protect / convert the way in which their stored wealth is denominated. Dollar debt will be inflated away, and, for a time, SDR will probably reflect a more accurate "price" for gold.

    Is that "FREEGOLD"? Let's watch what the little people's paper does in this new paradigm, as their paper still reflects the "market value" of SDR.

    ;0)

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