http://traderdannorcini.blogspot.com/
http://www.onlygold.com/TutorialPages/p ... 0yrsfs.htm
I consider these paper tigers quite mad in the connivance's they process to date.
Thucydides was correct about people who knew both extremes are deadly and insanely stupid. Thucydides spent his exile on family estates in Thrace.
This enforced leisure gave him the time to observe critically the course and affairs of men.
“Those whom the gods wish to destroy they first make mad.”
Scripture teaches us that the gods of this world are demons (1 Corinthians 10:20), and that these demonic spirits are under the ultimate control of our sovereign God (Matthew 11:29, 30; Ephesians 1:11). However, Scripture also plainly teaches that God can use these evil spirits to chasten individuals and nations by sending spirits of deception to convince people to do what is foolish (Judges 9:23; 1 Samuel 16:14-16; 1 Kings 22:23). In my opinion, such folly characterized the major foreign policy event of the past years, something anyone could readily foresee. Now is the time I feel to search for value players for indeed the long term.
jag budgeted $1600. and as noted before we are early here on some issues. As you noted, if they rise, then I just bought a little near the bottom. I will wait on a few sectors for now but bought some of a basic material supplier for the long term view.
Financial topics
Re: Financial topics
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Last edited by aedens on Fri Jul 19, 2013 9:47 pm, edited 1 time in total.
Re: Financial topics
As we discussed no man status under common law. You as an individual have no claim. Serf in the realm will not be skinned but drawn and quartered. The rule of law to property claim in and of currency are over.
http://www.zerohedge.com/news/2013-07-1 ... posits-now
A older man conveyed when the sheep are skinned and not sheared capital is denied under common law. Fri Nov 11, 2011
"Earlier surety for the enforcement was free man becoming no man, of "whatever estate or condition he may be"
and introduced the phrase "due process of law" for "lawful judgement of his peers or the law of the land"
So what rights do investors have since they are which class in true contextual reality.
So called unique allures and variety of strategies."
Given our structure as Higg conveyed from the 1400 crisis. I agree in the contruct of affairs in terms. Middle English seurte, from Anglo-French seurté, from Latin securitat-, securitas security, from securus First Known Use: 14th century One who has become legally liable for the debt, default, or failure in duty of another. Correctly identified in the forums is crisis of debasement and usury bonds. We may differ on inception of origen but the axis point conveyed was august 15th 1971 for to the event debasement driven issue we are seeing. We have been sternly warned of the precepts of contract and property rights. And the Houses as a expiedient terms of capital control. The modifiers we are seeing today is similar to a flow dynamic to be simple. The transmission as in terminal velosity is only checked by the size of the conduit irregardless of the inital pool http://gdxforum.com/forum/viewtopic.php ... 360#p10684 riv is still correct
Just a brief note expressing support for the FDIC not insuring anything other than actual deposits at America's banks.
But, it is simply not your money is it...........toxic or uncollectable
Hayek on Keynes:
The decisive assumption on which Keynes’s original argument rested and which has since ruled policy is that it is impossible ever to reduce the money wages of a substantial group of workers without causing extensive unemployment. The conclusion which Lord Keynes drew from this, and which the whole of his theoretical system was intended to justify, was that since money wages can in practice not be lowered, the adjustment necessary, whenever wages have become too high to allow “full employment,” must be effected by the devious process of reducing the value of money. A society which accepts this is bound for a continuous process of inflation.
From Sudha Shenoy’s
We have det riot it was no accident
http://www.zerohedge.com/news/2013-07-1 ... posits-now
A older man conveyed when the sheep are skinned and not sheared capital is denied under common law. Fri Nov 11, 2011
"Earlier surety for the enforcement was free man becoming no man, of "whatever estate or condition he may be"
and introduced the phrase "due process of law" for "lawful judgement of his peers or the law of the land"
So what rights do investors have since they are which class in true contextual reality.
So called unique allures and variety of strategies."
Given our structure as Higg conveyed from the 1400 crisis. I agree in the contruct of affairs in terms. Middle English seurte, from Anglo-French seurté, from Latin securitat-, securitas security, from securus First Known Use: 14th century One who has become legally liable for the debt, default, or failure in duty of another. Correctly identified in the forums is crisis of debasement and usury bonds. We may differ on inception of origen but the axis point conveyed was august 15th 1971 for to the event debasement driven issue we are seeing. We have been sternly warned of the precepts of contract and property rights. And the Houses as a expiedient terms of capital control. The modifiers we are seeing today is similar to a flow dynamic to be simple. The transmission as in terminal velosity is only checked by the size of the conduit irregardless of the inital pool http://gdxforum.com/forum/viewtopic.php ... 360#p10684 riv is still correct
Just a brief note expressing support for the FDIC not insuring anything other than actual deposits at America's banks.
But, it is simply not your money is it...........toxic or uncollectable
Hayek on Keynes:
The decisive assumption on which Keynes’s original argument rested and which has since ruled policy is that it is impossible ever to reduce the money wages of a substantial group of workers without causing extensive unemployment. The conclusion which Lord Keynes drew from this, and which the whole of his theoretical system was intended to justify, was that since money wages can in practice not be lowered, the adjustment necessary, whenever wages have become too high to allow “full employment,” must be effected by the devious process of reducing the value of money. A society which accepts this is bound for a continuous process of inflation.
From Sudha Shenoy’s
We have det riot it was no accident
Last edited by aedens on Sat Jul 20, 2013 5:30 am, edited 2 times in total.
Re: Financial topics
Personally I have diverted a sizeable portion of my resources to betting against the Yen as it seems clear now they are headed for hyperinflation. I know that Peter Schiff, Kyle Bass, Mish Shedlock, and many other people who like gold have also bet against the Yen. Many of the people who like gold are also the people who can understand that Japan has gone too far. So I wonder if a big reason that gold is down could be that goldbugs are busy betting against the Yen.Higgenbotham wrote: "But anyway, the RECENT CHANGE IN perception is that by holding gold you have a hard asset that will NOT protect you in case of some kind of VERY major problem SUCH AS A SITUATION WHERE SUPLUSES DISAPPEAR AND THE ECONOMY BECOMES STRICTLY A BARTER ECONOMY. I suppose that one reason gold prices are lower is that people are MORE concerned about extreme outcomes, particularly EXTREMELY negative outcomes."
Last edited by vincecate on Fri Jul 19, 2013 9:43 pm, edited 1 time in total.
Re: Financial topics
Sigh.
Re: Financial topics
When gold touches under $1000.00 the masses, may, will come around to realize another commodity bubble and
intrinsic values all over again. When the ratio to dow to gold stabilizes "maybe next spring" discussion can ensue of paper
to metals. If the market implodes of paper like Argentina every ten years who cares. According to some paper and gold bears the
market will cease to exist since the sun came up. As Higg noted correctly the paper price to supply trend is disconnected and we know why.
A few budgeted production to $1600.00, that was a decision we will observe its natural course of affairs.
Bagehot, and Taylor identified the trend and we are positing statistics for Fibonacci's Rabbit problem. I think Ben and the Inkjets know this also on
this concieved dislocation. To be breif, revert to the mean and the chart was posted on historical. Point being taking delivery from fiat profits for
one hundred years has not stopped even before Exeter. Will the tax payer have a backbone to stop the debasement process. Nope.
http://www.onlygold.com/TutorialPages/p ... 0yrsfs.htm
Since the yeild hit 2.9 buy it all and hide in a cave? Since gold now hit resistance as Dan notes how will it range and hide in Platos cave?
I do not care since I did not break the market and things called red and blue teams should be removed since avarice and hubris
rule the bent of minds of this GD turning. All tyrants always act the same and end the same way since the Taxpayer deserves all and then some.
Now Detroit imploded as they stripped our districts "yes we seen it live and did our duty" and they want us to give more again as theft in, and of decisions in that cluster failure. It is insanity pure and simple and they lament demographics since math is hard for them. As the first lesson on the farm, if your in a hole stop digging but until the free shit political locusts are stopped in there tracks taxpayer deserve it all since as we know we are slaves to Tyrants.
http://www.forbes.com/sites/peterferrar ... ng-theory/
The U.S. Federal Reserve is "reviewing" a landmark 2003 decision that first allowed regulated banks to trade in physical commodity markets.
London Metal Exchange warehouses, which have been slow to deliver metal to customers, boosting premiums for physical metal and earning big profits on rent for storing the metal. A Goldman Sachs spokesman declined to comment on the Fed statement. Spokesmen for JPMorgan and Morgan Stanley did not immediately respond to emails seeking comment. So Benny and the Inkjets are taking some gun powder backed delivery also now and chocking on its tail also now...... How envious and covetous to the appreciation to Surety?
So called unique allures and variety of strategies.
Gibsons Paradox: An observation made by J.M. Keynes stating in economics there is a correlation between interest rates and the general price level of gold. This is contrary to the general view that had previously been held by economists at that time in history.
Note to self to review the 127 month cycle
intrinsic values all over again. When the ratio to dow to gold stabilizes "maybe next spring" discussion can ensue of paper
to metals. If the market implodes of paper like Argentina every ten years who cares. According to some paper and gold bears the
market will cease to exist since the sun came up. As Higg noted correctly the paper price to supply trend is disconnected and we know why.
A few budgeted production to $1600.00, that was a decision we will observe its natural course of affairs.
Bagehot, and Taylor identified the trend and we are positing statistics for Fibonacci's Rabbit problem. I think Ben and the Inkjets know this also on
this concieved dislocation. To be breif, revert to the mean and the chart was posted on historical. Point being taking delivery from fiat profits for
one hundred years has not stopped even before Exeter. Will the tax payer have a backbone to stop the debasement process. Nope.
http://www.onlygold.com/TutorialPages/p ... 0yrsfs.htm
Since the yeild hit 2.9 buy it all and hide in a cave? Since gold now hit resistance as Dan notes how will it range and hide in Platos cave?
I do not care since I did not break the market and things called red and blue teams should be removed since avarice and hubris
rule the bent of minds of this GD turning. All tyrants always act the same and end the same way since the Taxpayer deserves all and then some.
Now Detroit imploded as they stripped our districts "yes we seen it live and did our duty" and they want us to give more again as theft in, and of decisions in that cluster failure. It is insanity pure and simple and they lament demographics since math is hard for them. As the first lesson on the farm, if your in a hole stop digging but until the free shit political locusts are stopped in there tracks taxpayer deserve it all since as we know we are slaves to Tyrants.
http://www.forbes.com/sites/peterferrar ... ng-theory/
The U.S. Federal Reserve is "reviewing" a landmark 2003 decision that first allowed regulated banks to trade in physical commodity markets.
London Metal Exchange warehouses, which have been slow to deliver metal to customers, boosting premiums for physical metal and earning big profits on rent for storing the metal. A Goldman Sachs spokesman declined to comment on the Fed statement. Spokesmen for JPMorgan and Morgan Stanley did not immediately respond to emails seeking comment. So Benny and the Inkjets are taking some gun powder backed delivery also now and chocking on its tail also now...... How envious and covetous to the appreciation to Surety?
So called unique allures and variety of strategies.
Gibsons Paradox: An observation made by J.M. Keynes stating in economics there is a correlation between interest rates and the general price level of gold. This is contrary to the general view that had previously been held by economists at that time in history.
Note to self to review the 127 month cycle
Last edited by aedens on Sat Jul 20, 2013 5:07 am, edited 3 times in total.
Re: Financial topics
http://www.nytimes.com/2013/07/17/us/po ... l?src=recg
One in four people in Japan will be older than 65 in 2014, compared with 9.6 percent in China and 14.2 percent in the U.S., according to data compiled by the U.S. Census Bureau.
Now, because they have had longer to accrue wealh the older people tend to have more savings, or have retired and live in a fixed income, and therefore benefit from deflation But correlation is not causation. Certainly, Japan’s older population loves deflation. But the issue is the love of deflation, not the age of the population, per se. More than 80 percent of respondents in a Bank of Japan (8301) survey released this month who noticed rising prices last year said it was bad. Deflation-loving Japanese voters are the main stumbling block to Abe and Kuroda’s desire to reflate the Japanese economy back to inflation (to incentivise borrowing) and growth.
Diapers and deflation they need for fixed income hardly supports hyper anything...http://www.boj.or.jp/research/o_survey/ishiki1301.pdf
Politicians are never exempt from rampant stupidity. This, ceteris paribus, constrains spending. http://azizonomics.com/
Here we are with the cool aid from the source: asymmetric paternalism, states that paternalism should be invited if it bestows large benefits on those who make errors in judgment while imposing little or no harm upon those who are fully rational. While some may argue that this benefit to shortsighted consumers comes at the expense of retailers, it can be posited that correcting these errors in judgment enhances economic efficiency to the benefit of both parties involved. Given that achieving such change is a difficult process, it is helpful to understand the dynamics of an individual’s desires and the strategies that can effectively control them, AEA Papers and Proceedings, May 2003.
The corruption of the regulatory bodies does not shake his blind confidence in the infallibility and perfection of the state; it merely fills him with moral aversion to entrepreneurs and capitalists. No one should expect that any logical argument or any experience could ever shake the almost religious fervour of those who believe in salvation through spending and credit expansion. The final outcome of the credit expansion is general impoverishment. By short-circuiting the price mechanism and forcing people into economic lives contrary to their own chosing, central planning destroys the capital base and creates economic randomness that eventually ends in killing prosperity.
They are circling the herd with debt when it implodes and will claim what they want later just as the criminal intel community did over there. No accidents are there....
"But my prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt." Paul Krugman, Ph.D., Nobel Laureate in Economics, Professor of Economics at Princeton March 11, 2003
They can print all they want and even there own people do not care.
The Sustainable Development Paradox: Urban Political Economy in the United States and Europe - Kindle edition by Rob J. Krueger, David Gibbs. ... Sustainability--with its promise of economic prosperity, social equity, and environmental integrity--is hardly a controversial goal.
One in four people in Japan will be older than 65 in 2014, compared with 9.6 percent in China and 14.2 percent in the U.S., according to data compiled by the U.S. Census Bureau.
Now, because they have had longer to accrue wealh the older people tend to have more savings, or have retired and live in a fixed income, and therefore benefit from deflation But correlation is not causation. Certainly, Japan’s older population loves deflation. But the issue is the love of deflation, not the age of the population, per se. More than 80 percent of respondents in a Bank of Japan (8301) survey released this month who noticed rising prices last year said it was bad. Deflation-loving Japanese voters are the main stumbling block to Abe and Kuroda’s desire to reflate the Japanese economy back to inflation (to incentivise borrowing) and growth.
Diapers and deflation they need for fixed income hardly supports hyper anything...http://www.boj.or.jp/research/o_survey/ishiki1301.pdf
Politicians are never exempt from rampant stupidity. This, ceteris paribus, constrains spending. http://azizonomics.com/
Here we are with the cool aid from the source: asymmetric paternalism, states that paternalism should be invited if it bestows large benefits on those who make errors in judgment while imposing little or no harm upon those who are fully rational. While some may argue that this benefit to shortsighted consumers comes at the expense of retailers, it can be posited that correcting these errors in judgment enhances economic efficiency to the benefit of both parties involved. Given that achieving such change is a difficult process, it is helpful to understand the dynamics of an individual’s desires and the strategies that can effectively control them, AEA Papers and Proceedings, May 2003.
The corruption of the regulatory bodies does not shake his blind confidence in the infallibility and perfection of the state; it merely fills him with moral aversion to entrepreneurs and capitalists. No one should expect that any logical argument or any experience could ever shake the almost religious fervour of those who believe in salvation through spending and credit expansion. The final outcome of the credit expansion is general impoverishment. By short-circuiting the price mechanism and forcing people into economic lives contrary to their own chosing, central planning destroys the capital base and creates economic randomness that eventually ends in killing prosperity.
They are circling the herd with debt when it implodes and will claim what they want later just as the criminal intel community did over there. No accidents are there....
"But my prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt." Paul Krugman, Ph.D., Nobel Laureate in Economics, Professor of Economics at Princeton March 11, 2003
They can print all they want and even there own people do not care.
The Sustainable Development Paradox: Urban Political Economy in the United States and Europe - Kindle edition by Rob J. Krueger, David Gibbs. ... Sustainability--with its promise of economic prosperity, social equity, and environmental integrity--is hardly a controversial goal.
Last edited by aedens on Sat Jul 20, 2013 5:07 am, edited 2 times in total.
Re: Financial topics
http://www.space.com/21835-solar-flare- ... video.html
http://www.csmonitor.com/Environment/La ... ng-paradox
The fossil remains of a 3.5-million-year-old camel were found on Ellesmere Island in Canada's northernmost territory, Nunavut. The camel was about 30 percent bigger than modern camels and was identified using a technique called collagen fingerprinting.
It is clear rigid science is being adulterated for as we noted for parasites of political malice. As we know austerity is taking more and just not reducing the tax structures as we noted of over 2238 gun powder death cult agencys. If you doubt the attitude that goes with it consider the current study of sixty percent or more who adulterate by any means available. Locally it is dire and we have had to resort to other means to procure food stuffs for local familys who cannot even afford fuel to get to charity food stores. The parasitic weight of wage tax theft or now for profit prisons is claiming more in my normacly bias of observations of late since CFDA contains detailed program descriptions for 2,238 Federal assistance programs. Impossible to convey value to gorged government leeches everday filled with debt serfs toil and blood backed on violence and imprisonment. Indeed the hour tells fear in the eyes that they are beaten souls and no more than chattel under boot. How many we do need is a separate .gov discussion but Nafta was death sentence signed by democrats and sold as means to deal with border issues and countrys leaning left and smouldering wells from lunatics. If you think some of these get up at noon to eat fruit loops and are lazy you are an asshole and whine as the public sector took it in the ass with half benefits and one third wage loss in our area alone of that decade. Now thay are only allowed 120 hours as temps or as noted before the new economy of yes I have two or three of those jobs as these assholes comtemplate millions who do not ever belong here in the first place but cannot fathom the region mindset either since as noted the space snapshot decades ago suggest migration to follow water resources. The war on the dead republic is far from over for the 200 year the *&^^%$# will vote for us. For those who misunderstand what vapid political correct speech truly is grounded with and imported from, indeed you are the problem. True as good friend reminded it is the ninty percent who give the ten percent a bad time and name so it just the speed of life.
http://www.csmonitor.com/Environment/La ... ng-paradox
The fossil remains of a 3.5-million-year-old camel were found on Ellesmere Island in Canada's northernmost territory, Nunavut. The camel was about 30 percent bigger than modern camels and was identified using a technique called collagen fingerprinting.
It is clear rigid science is being adulterated for as we noted for parasites of political malice. As we know austerity is taking more and just not reducing the tax structures as we noted of over 2238 gun powder death cult agencys. If you doubt the attitude that goes with it consider the current study of sixty percent or more who adulterate by any means available. Locally it is dire and we have had to resort to other means to procure food stuffs for local familys who cannot even afford fuel to get to charity food stores. The parasitic weight of wage tax theft or now for profit prisons is claiming more in my normacly bias of observations of late since CFDA contains detailed program descriptions for 2,238 Federal assistance programs. Impossible to convey value to gorged government leeches everday filled with debt serfs toil and blood backed on violence and imprisonment. Indeed the hour tells fear in the eyes that they are beaten souls and no more than chattel under boot. How many we do need is a separate .gov discussion but Nafta was death sentence signed by democrats and sold as means to deal with border issues and countrys leaning left and smouldering wells from lunatics. If you think some of these get up at noon to eat fruit loops and are lazy you are an asshole and whine as the public sector took it in the ass with half benefits and one third wage loss in our area alone of that decade. Now thay are only allowed 120 hours as temps or as noted before the new economy of yes I have two or three of those jobs as these assholes comtemplate millions who do not ever belong here in the first place but cannot fathom the region mindset either since as noted the space snapshot decades ago suggest migration to follow water resources. The war on the dead republic is far from over for the 200 year the *&^^%$# will vote for us. For those who misunderstand what vapid political correct speech truly is grounded with and imported from, indeed you are the problem. True as good friend reminded it is the ninty percent who give the ten percent a bad time and name so it just the speed of life.
Last edited by aedens on Sat Jul 20, 2013 2:53 am, edited 1 time in total.
Re: Financial topics
Yes we are aware of that transitory effect also Inkjets.
But there is also another pathology of money: that of hyperdeflation (when the velocity of money is falling and becomes smaller than any positive number, however small). Permanent gold backwardation will trigger it ‘with the certainty of scientific law’.
http://www.professorfekete.com/articles ... ifesto.pdf
No Babelian Tower of bad debt can be constructed under a gold standard.
Process of joining Ozymandias in the dust-bin of fiat history. http://library.mises.org/books/Butler%2 ... _Vol_2.pdf
A culture thrives when it is capable of producing the values that define it.
Collectives provide mirror images of minds in the default mode, capable of only reflecting the shared ignorance and prejudices upon which the
institutionalized control of humans depends.
When banks faced substantial losses as a result of New York City’s financial crisis in the 1970s, only a handful of people found any flaw in having the taxpayers bail them out.
Manners and social habits soon give way to speech codes, “hate” crimes, and other forms of institutionally-mandated standards of conduct.
When a civilization reaches the point at which only coercive force is capable of holding it together, it is finished as a viable system.
And this is why Detroit must rise from its ashes and the ground work of sacrifice already laid down as the unseen ability to prosper.
But there is also another pathology of money: that of hyperdeflation (when the velocity of money is falling and becomes smaller than any positive number, however small). Permanent gold backwardation will trigger it ‘with the certainty of scientific law’.
http://www.professorfekete.com/articles ... ifesto.pdf
No Babelian Tower of bad debt can be constructed under a gold standard.
Process of joining Ozymandias in the dust-bin of fiat history. http://library.mises.org/books/Butler%2 ... _Vol_2.pdf
A culture thrives when it is capable of producing the values that define it.
Collectives provide mirror images of minds in the default mode, capable of only reflecting the shared ignorance and prejudices upon which the
institutionalized control of humans depends.
When banks faced substantial losses as a result of New York City’s financial crisis in the 1970s, only a handful of people found any flaw in having the taxpayers bail them out.
Manners and social habits soon give way to speech codes, “hate” crimes, and other forms of institutionally-mandated standards of conduct.
When a civilization reaches the point at which only coercive force is capable of holding it together, it is finished as a viable system.
And this is why Detroit must rise from its ashes and the ground work of sacrifice already laid down as the unseen ability to prosper.
Re: Financial topics
John, you don't think Japan will get hyperinflation?John wrote:Sigh.
-
Higgenbotham
- Posts: 7990
- Joined: Wed Sep 24, 2008 11:28 pm
Re: Financial topics
Thanks for posting this link. I added his complete thought at the bottom. As can be seen in my previous posts I agree with this with a few adjustments here and there.
Gold has moved into backwardation.
http://www.reuters.com/article/2013/07/ ... CB20130719
This is true enough and it will likely occur in stages but the overall theme here would be that the magnitude of what this would likely imply would render any form of money worthless, including gold. In a complete collapse of a worldwide monetary system, food becomes money because food is scarce. When food and goods are abundant, money can be used as a proxy versus storing the food and goods and incurring charges and degradation of product. I agree with him that the price is no longer relevant. The price will be subject to wide and unpredictable swings as the leverage is unwound. The only thing that will be predictable is that the ratio of paper proxies like the Dow to gold will grind down toward a small number as all the leverage is unwound and then all of it will become irrelevant. Someone can try to protect a gold hoard with the idea that it may become valuable decades or centuries into the future, if civilization survives or is reconstituted in some form where gold is still scarce. Most of the gold hoards that existed at the time of the Roman Empire were thought to be abandoned as people fled."The actual message of the backwardation is that there is behind the curtains a lack of confidence in the fiat monetary system, a de facto rejection of paper money by some people who prefer the real money (gold and silver)," said Barba.
"That's why a fall or rise in gold prices is not so relevant anymore. The monetary 'fire alarm' message, courtesy of the relationship between spot and futures prices, is: run for your gold, there is not enough for all."
This is where we're at. The self-professed ignorant becomes "Time Man of the Year" as everything gets turned on its head. What can be done?"Nobody understands gold prices, and I don't really pretend to understand them either," Bernanke said.
(4) Finally, post-Mises Austrian economics neglected to study speculation in depth, especially as it has evolved after the American embargo of gold imposed in 1971, and the commencement of gold futures trading shortly thereafter. Consequently it has failed to identify the gold basis (defined as the spread between the dollar price of gold for delivery in the nearby future and that for delivery on the spot – a concept very much in the spirit of Menger) as the harbinger of a cataclysmic event comparable only to the collapse of the Western Roman Empire in 476 A.D. This cataclysmic event that is looming large on our horizon is the advent of permanent gold backwardation. That is the event of the gold basis going negative never again to return to positive territory, its natural habitat. In practice it means that all deliverable gold (including the entire mine output) disappears in hoards. All offers of gold for sale are simultaneously withdrawn regardless how high the bid price may be. Gold, if available at all, can only be obtained through barter.
Most people fail to see why this is a threat to our well-being. After all, you can’t eat gold, can you? What these people don’t realize is that permanent backwardation of gold triggers a peculiar contagion: the condition will gradually spread to all other markets for highly marketable goods including food and fuel. The consequences of the return to barter will be appalling. They include the domino-effect causing serial collapses of firms, unprecedented unemployment, famine, pestilence, to say nothing of the breakdown of law and order. Governments are helpless in the face of gold going into hiding. The American government will in particular be unable to sequester the better part of the riches of the world in exchange for irredeemable promises to pay, as it has been doing since 1971. As long as gold futures markets are open, some gold can be obtained for U.S. dollars. But once permanent gold backwardation shuts down gold futures trading, no gold can be obtained for U.S. dollars ever again – an irreversible condition. People may ignore this threat at their own peril.
Post-Mises Austrian economists fail to see the threat of the fatal transition from multilateral trade to barter, nor do they view transition to barter as the ultimate in deflation. They are noisily predicting that the denouement of the present global experiment with irredeemable currency will take the form of hyperinflation (when the velocity of money is rising and gets larger than any positive number, however large). But there is also another pathology of money: that of hyperdeflation (when the velocity of money is falling and becomes smaller than any positive number, however small). Permanent gold backwardation will trigger it ‘with the certainty of scientific law’.
Last edited by Higgenbotham on Sat Jul 20, 2013 2:35 pm, edited 2 times in total.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
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