Category Archives: Economics
By: Tom Chatham
One of the problems with the credit industry that we have is the fact that you often pay twice or even three times for the object you want to get. Many people do not take the time to calculate the true cost of the things they buy on credit or simply do not care. They want it now and are content to overpay for it as a result.
Another symptom of the society we now have is the demand for cheap products that only last a few years and seem to self destruct. Repairable metal has given way to disposable plastic and solid wood has given way to pressboard. The era of planned obsolescence has taken its toll on our society and we are poorer as a society as a result.
If you go around in life paying twice as much for everything you get and end up with inferior products that do not last, how can you expect anything but to be poorer. This is a fact that seems lost on the new disposable, must have the latest edition generation. Over the years the forgotten frugal ways of the past offer those in this collapsing financial situation we find ourselves in a way out if they choose.
When you are young you want to have the newest and most fashionable items available because things have become status symbols to our society. To have something old or out of date is repulsive to some. This is the mindset we have been programmed with by those who profit from our impulsive buying habits. We as a people must reprogram ourselves to regain the upper hand and free ourselves from this economic system we have created. We must reprogram ourselves to look upon objects that we use in a functional way rather than a fashionable way.
As I sit here and write this article I do so on my Dell laptop circa 2004 that still serves me well. I purchased an old rocking chair recently made of thick solid wood that cost me all of $25, a chair that would sell for over $100 if bought new today. My want of a good lamp led me to the purchase of an old Aladdin Lincoln Drape lamp for $50 which would have cost me over $150 if bought new. To get the most from the money you work so hard for, you must leverage it in a way that increases your net worth and supplies you with the items that provide the needed function. By doing this you will come ahead faster and with less money and that is crucial in tough economic times.
When you need a lamp, find a used one that you like that will last a lifetime or at least can be repaired if it breaks. Good quality used furniture can be found in many places today that provide the function you need at a cheaper price and much of it is built to last a lifetime. When you prepare to buy a large durable item you should look at it and determine if it is something that you could use and then hand down to the next generation.
Sometimes it is necessary to purchase new but you should always analyze the item for price and durability before making your decision. If it is not possible to buy a new item that you want due to price that is when you should search for good used items that are affordable and durable. By taking this approach you will increase your net worth by paying less and getting better items that will last. If you only have to buy furniture for your home one time in your life, that will save you a lot of money in the long run. If you only buy a car every ten or twenty years and get a used one at that, it will save you thousands that you may not have or can use for other things that you need. This is how you can come ahead in life much faster and with fewer worries and headaches that will keep you awake at night.
We are now in a situation that many younger people should take advantage of to insure a good quality of life in the years to come. Many of those from the older generations are retiring and down sizing their homes. Many of these people bought quality American products to furnish their homes when they were starting their families in the 40’s, 50’s and 60’s. These items are now starting to flow into the used market and those that want quality for a fraction of the price now have a golden opportunity.
One of the greatest stumbling blocks is the programming of the newer generation. Those in the know about what I am saying need to make an effort to educate the next generation before it is too late. If you have children in college and want to help them get a good start in life then why not buy them some good used furniture to give them a helping hand. If things continue to deteriorate that used durable furniture may be all they have to use for many years to come and they will eventually come to appreciate it.
I’ve said before that if you were to go back in time and find yourself living in the 1950’s you might not have all of the technology we have today but you would have a good quality of life even with that old technology and the products they had then. These older products should be a foundation you build on to insure a good quality of life while you work to improve your position. Some of these products are also a good way to store excess wealth until later.
With the decaying economic system we are faced with, it is up to each of us to make the best of what we have, and what we have will likely decrease with the years. By getting the most from our spending dollars we will be in a better position to weather the storm. While you may be able to buy more cheap stuff short term, if it does not last, you will be right back where you started from except without the funds you wasted. It is not always possible to buy the best quality but it should be a top priority when possible and buying used can help you with this. Quality is not expensive, it’s priceless.
By: Tom Chatham
In the pursuit of a control grid, for our own good, the global elite will need a global currency. This new currency will likely be completely electronic in nature. It will make it easier for the controllers to create, cheaper allowing them to keep more of the profits and easier to get their hands on what you have anytime they want. With a totally electronic currency there will be nowhere to hide any of your earnings. It will also be much easier for those in control to enforce payments for government mandated services. It will also be much easier for them to implement and enforce new taxes, for your own good.
So you say you don’t need any stinking health insurance. That’s too bad. It’s now mandatory so your account will be debited every week for your health insurance premiums. No way to get around that.
Green energy tax
Since everything is now electronic they will know how much gas you are buying for your car. If you drive too much you’ll be assessed an extra green energy tax for polluting too much. They know how much your electric bill is so if you are using too much electricity you’ll be taxed on that too. But don’t worry, they’ll just automatically deduct it from your account. No messy paperwork to keep track of. Isn’t that thoughtful of them.
Since everything you earn has to go through your electronic account, they will know exactly how much money you are earning. They can just deduct your taxes straight out of your account every week. And with a graduated income tax, they will just deduct more as you hit certain income levels. No more messy tax forms every year. Isn’t that nice of them.
So you want to buy a gun or ammo. Sorry, you don’t have the required permit so the transaction is prohibited. So you want to buy a bottle of wine or that fifth of bourbon?
Sorry, you are drinking too much as indicated by your purchases so this sale is denied. And if you have a DUI, don’t even think about it. Cigarettes are only for the global elite who can afford them so that’s a prohibited item as well. So you want to buy that new luxury car or SUV? Sorry but you don’t have the necessary carbon permits like the well connected people so you’ll have to settle on one of these smaller, more efficient models.
Since every purchase is monitored, everything you buy at the grocery store is monitored. You scan your card before your goods are rung up and anything you shouldn’t have is flagged. Obesity a problem? Not any more. You will be barred from purchasing certain products. Not eating what the government says you should? You will have limits on the quantity of certain items you buy forcing you to buy what they want you to eat. Buying more canned goods than they estimate you are eating? That could get you a visit from the food police to insure you are not hoarding. And don’t get caught growing your own food without the proper permits, you don’t even want to know the penalty for that.
Since you are too stupid to save money for your retirement they will just deduct a little every week from your account and “keep it safe” until you need it for retirement. And when the time comes for retirement if you have too much money saved up they will just redistribute some of it to the less fortunate, bless their hearts.
If you live in one of those wealthy countries you’ll have to pay an extra tax for that as well to be redistributed to the poorer countries. That’s only fair, right? Since everything you buy is recorded the tax assessment for property taxes will be much easier as well. How convenient!
Yes, a new electronic currency would solve a lot of problems and free us of all of that messy paperwork we have to do. And since we are too dumb to make our own decisions, the government can help steer us in the right direction in everything we do. Doesn’t that sound like Utopia?
By: Tom Chatham
The U.S. banking system has been in defacto default since 2008. But since everyone needs U.S. dollars to continue commerce around the world it has been put on delay. Everyone has been playing lets pretend. That will not last much longer. The events in Cyprus tell volumes about what is coming to other nations around the world.
As the banks tumble in domino fashion around the world everyone will head for the U.S. as the last safe place to store money. That may be by design. Once in the U.S those assets may have no safe place else to go so they will be essentially trapped. It will be a tempting target for the bankers and politicians to loot. A collapse then could force everyone into a one world currency. But not everyone wants to play with that marked deck.
The BRICS nations just held a meeting in South Africa and one of the things they discussed was the formation of a BRICS equivalent of the IMF and World Bank. They want to establish their own bank to aid emerging economies and they have agreed in principle to collectively finance it with a 100 billion contingency reserve arrangement for starters. These nations have a lot of gold and are increasing supplies as fast as possible. It is likely this new bank will be financed with gold backed currencies at some point. That will give the IMF crooks a lot of heartburn. It may also be the spark that ignites another world war.
The western bankers cannot afford to have a competing currency to anything they create so some type of action will be forthcoming. If people were able to shield their money from the corrupt bankers by moving it to another currency or bank out of the western bankers control it would prevent their plans to force through a one world currency which they would control. It always comes back to they money doesn’t it.
What would stop someone from moving large amounts of money from the U.S. to a BRICS bank? How about the imposing of capitol controls after all of that money is here. That seems likely. And if you are thinking of pulling that money out of the bank and hiding it under your mattress consider this. If a bank holiday is declared in the U.S. they can close the banks on say Friday night and reopen on Monday morning after having locked you out of your accounts all weekend while taking a “fair” percentage for the national good. But it might not stop there.
Suppose after you regain access to your accounts you find they have also devalued the dollar by 20 or 30 percent. They may just forgo the actual theft of money and devalue alone. In any case, they will have succeeded in stealing a large percentage of your money even if it were not in the bank.
I can’t tell you what to do but I don’t keep any more than a weeks worth of operating funds in my account and only about 30 to 60 days worth of cash on hand. Everything else I have is in highly liquid forms like silver. If they pull this I would take my cash on hand and go shopping that weekend before they have a chance to devalue. That would limit my losses and put me ahead of the general population. But that’s just me.
What would you buy in a crunch like this? Anything you can use to take care of yourself. It might be impossible to buy anything on line or through wire transfers but with cash you might visit coin shops, pawn shops, local merchants or look on craigslist for things worth something to you or for later trade. If you need to “store” money why not do so in gold and silver coins, a good used wood stove, a generator or possibly in extra fuel storage. All of these things will become much more expensive after a devaluation.
And always remember, if it isn’t in your direct possession you don’t own it. This will become brutally obvious to those with safety deposit boxes in the future. When they finally pull the plug on U.S. banks you should consider anything you have inside the bank as lost. If you get anything at all back consider yourself lucky. If you keep these things in mind it might not be as painful when it happens. Good fortune favors the prepared mind.
By: Tom Chatham
The modern day survival movement grew out of the cold war era of the 60s when nuclear war was seen as the ultimate nightmare scenario that humanity had to protect itself from. That evolved in the 70s when a host of other threats were realized. For over 40 years Americans have sought to protect themselves from nuclear war, asteroids, earth changes, solar flares, economic collapse, civil breakdown and a long list of other crises.
Those that prepared in the 70s were sure doom was only a short time away. Every year they continued to prepare and expected the event at any time. Forty years later we are edging ever closer to doom but it still has not happened yet. This is not to say the doomsayers were necessarily wrong, they just misjudged the timing and failed to realize that some of the things they imagined were controlled by human actions that are somewhat unpredictable.
One of the things survivalists have prepared for is an economic breakdown along with all of the connected systems. If a system breaks and living conditions take a sudden and catastrophic dive it becomes evident to even the ones in a media induced coma.
When a break from normality happens suddenly it can cause chaos and riots as people realize they have been sold an illusion. When a breakdown comes slowly over the years, people have time to adjust to this new reality and learn to accept it. This is the boiling frog syndrome where a sudden shock to your system will evoke a response but a slow, steady change will not be perceived as danger until it is too late.
The breakdown of our economic system is a mathematical certainty. Many realized it in the 70s but they failed to realize how long government machinations could stretch it out. The government has known for years the day would come when the system would break and has pursued a boiling frog strategy to prevent a violent reaction from the population.
We are nearing the end of this system but it is in the governments’ best interest to keep it going a bit longer. The closer they can get the population to poverty and misery while the system still appears to work, the less of a violent reaction there will be when it ceases. When people finally find themselves broke and miserable, the majority will accept it as the new normal because they will be acclimated to it.
If you were to look at life today and compare it to the same day in years past, you would probably see a great deal of difference and the negative impacts the changes have had on your life. If you had went from that days reality years ago to today’s reality in only a few days time it would have been brutally obvious something bad had happened to you and this would have spurred you into action. Those that have been awake and those now awakening see this.
Because the masses have been lulled into their new reality it is hoped they will readily accept it when the system breaks. That is why as close as we are to disaster, they will continue the slow decay of society a while longer because it is to their advantage to have the masses accept the new reality and avoid violence. By the time the masses realize what has happened it will be too late to get out of the boiling pot and that is the way the government wants it.
By: Tom Chatham
If you talk to a number of people preparing for bad times eventually you will hear this comment. While it is an accurate observation, it misses the point of a well rounded plan. If you have some wealth and your plan for catastrophic situations is to buy and hold gold and nothing more then essentially you have no plan. That is what this comment really means.
For a person that feels the need to prepare for situations that force you into a survival position you need to place your eggs in several baskets. You need to take care of absolute needs first to get through the situation you perceive. A person needs food, water, shelter, clothing, sanitation, security, heat and light as a minimum to get through difficult situations. You need to determine how long the situation may last and how extensive your preparations need to be to get you through it.
In a normal functioning world a person may be able to get by in a situation with just money. Someone displaced by a hurricane can relocate to an undamaged area and just buy what they need until things are repaired but what good is money if money as we know it collapses?
That is the problem with other than normal disasters where supplies are in short supply and those with them refuse to sell at any price. A proper plan addresses this type of breakdown and prepares you for it. So why do so many people say buy gold and silver if it may not buy what you need in a catastrophic disaster?
Gold and silver are a way to store your EXCESS wealth until the situation stabilizes and commerce resumes in some form. You should not be dependant on PM’s to acquire goods DURING the crisis except in emergencies where something out of the ordinary may be needed such as a tire for your car or medicine for an unexpected illness. The things you must have to satisfy day to day needs should already be in your hands when this type of situation emerges.
This does not mean you may not be able to buy goods at all. Producers such as small farmers, fishermen and producers of other goods that people need may still have a production capability and will still need to sell those products to earn a living. Those that have a medium of exchange they will accept will allow the purchase of these items to bolster the items you already have and extend your supplies.
The value of gold and silver become important when the situation stabilizes and you want to improve your living position. They allow you to preserve your wealth and take advantage of bargains when others are unable to buy and acquire property, equipment, businesses and income producing investments such as rental properties. They allow you to get your hard earned savings from back there to up here where they will be needed to insure a good retirement. Precious metals are your life raft when everything else sinks. They allow you to stay afloat along with your other floatation supplies and reach safety.
When someone asks you if they should buy PM’s to get them through difficult times you should ask them what their plan is for food, water, shelter, clothing, sanitation, security, heat and light. If they say gold then you are correct for stating, you can’t eat gold.
By: Tom Chatham
The people that have an understanding of the current financial situation have already begun their plans to stay solvent and provide for their families. They have stored food and seeds, bought some silver or gold coins and looked into alternative sources of power and energy for their homes. These are the logical starting points, but is it enough?
With the downturn in the economy many are doing the best they can to prepare but smaller paychecks, higher taxes and rising prices are making it difficult to stay ahead of the growing problems in the world. Even though you may have a limited amount of money, you need a long range plan to get through the potential troubles ahead.
The best way to navigate economic troubles is to be as free from the economic system as possible. This means you must be able to provide as many of your own goods and infrastructure as possible to limit the needed financial resources you have available. The act of building a self sufficient homestead is a large and often expensive task. It is beyond the ability of most to do it in a short period of time.
For those that see the need for self sufficiency but lack the financial resources, a long range plan must be devised to get you there. In devising a plan you must decide what resources are critical and which are the most readily attainable with the financial resources you have.
A raw piece of land that you can grow food on and build a structure from locally available materials is a critical piece of the plan but you may lack the financial resources at this time to buy what you need. You must look at your financial ability to buy this piece of land and determine how long it will take you to save up to get it. You want to buy it in full with no debt obligations which will make it more difficult.
After determining how long this will take, you must decide if the length of time will leave you vulnerable to economic shocks while saving this money and what the best use of your money short term would be. If it will take you several years to save up the needed money for purchase, some of your funds may be better spent short term on infrastructure to equip your homestead when you finally get it.
The purchase of gardening tools, grain mills, canning supplies, alternate energy systems, carpentry tools and production equipment may offer you more for your money now if prices are rising fast. The stocking of materials you will need later is one way to beat inflation. This must be done as part of a well thought out plan though to insure your goal of purchasing property is not undermined.
Many of these items are useful even if you do not have your own property yet so you will be able to get some use from them and even save some money as a result to put towards your land. If you grind wheat you buy in bulk and can as much as you can from a kitchen garden, it can do a great deal for your cash flow. A wood stove that you can use now and relocate later to your new property can be a good investment. Something as simple as collecting tree limbs from around your yard during the year and from your neighbors providing free fuel may allow you to use much less fuel or electricity during the winter allowing you to put that savings toward your property.
The purchase of production equipment will detract from your land fund but the ability to use that equipment now may allow you to save as much or even more to put into that fund. This will provide a compounding effect if planned well that can see you to your goals even sooner.
You may decide getting some livestock is advantageous. A few pullets and a rooster are easy enough to care for and once moved to your new property you have the capability to hatch more chicks and expand your flock with little expense. The same can be said for pigs. Buying a pair of piglets cheaply several months before you move will provide you with the ability to expand your hog numbers shortly after arriving at your new homestead providing a good source of extra cash. A livestock operation can be expanded very economically once the breeding animals are obtained.
This is the value of having a well thought out plan. It will help you determine what you can purchase now and what financial savings and impact it will have. A good plan is the key to economic security and your future happiness. While you accumulate your tools, you may want to study the economic situation and determine the best method to preserve your savings until you buy your property. If it will take you several years to save enough, during that time high inflation may rob you of a lot of your purchasing power.
You may decide it is best to store this money in gold or silver until it is needed for the purchase. As long as the government continues to print money it is a safe bet that paper assets will take a big hit over time. This may allow you the opportunity to leverage the value of your savings up allowing you to purchase sooner.
What should come first, the land or the tools? This is a question that you will need to answer. If you have the means to buy property now outright it might be the best idea to get it and work on the tools next. If you have property, you have the means to grow food and provide a minimal structure for shelter. In a worse case scenario, this might be the best insurance policy to have especially if you may lose your current home due to job loss or other economic shock. This is what your plan will help you to decide.
Nobody knows better than you what your needs are and what your capabilities are. A sound plan will help you through the difficult times we are facing. No two plans work equally well for everyone so your plan needs to be tailored for you and your circumstances to be most effective. It costs you very little to run some numbers and do some research now but the payoff can be well worth it. .
If you don’t know where to begin, start with this. Make a spreadsheet with all of your monthly purchases and bills. Do this for the whole year and include everything you know you will have to pay during the year such as mortgage, insurance and even clothing. Once you have this list you will see the payments that are somewhat set every month and those that vary. It is the variable items where you will save the money you need for your plan. You must look at these variable items and decide what is more important, entertainment and expensive foods now or financial peace of mind later. You must develop a plan to save as much of your disposable income as possible while still providing those things in a cheaper way such as growing and canning your own food or repairing your clothing instead of just buying something new.
The paradigm we all have built our lives on is coming to an end and those that refuse to plan for the inevitable changes will be devastated. The flexibility you have in future years will determine how well you will adjust and how much pain you will have to endure. Those that have no plan will suffer the most and will find it difficult to lead a normal life. If you have no plan it is not too late but time is very short. You must act now or live with the consequences.
By: Tom Chatham
Recently when the G20 met they discussed plans to deal with the devaluing currencies around the world. The same bankers that created this problem are going to fix it by creating another problem. When the system breaks down they intend to fix it by making the problem bigger.
The idea is to make the IMF the new Global FED and use SDR’s as the new world currency. Once the bankers do this they can start their Ponzi scheme all over again but on a larger scale. What the bankers don’t own when the system fails this time, they figure they will own by the time it fails again. Creating a world currency that is still under their control will allow them to decide who the winners and losers are in the world. They will be able to redistribute the wealth and resources of the world anywhere they want.
The bankers are counting on this to continue their looting of the world and are counting on a gullible public to go along with it. If the public stands by and allows this after the currency fails all I can say is, the people deserve to lose everything they have, which they will. When the currency fails it will mean that everyone that has produced excess over the years, and stored that excess production in the form of fiat currency for future use, will lose it and have to start producing and saving all over again. That will mean that all of your excess production ended up in someone else’s pocket. This is what fiat currencies are designed to do.
For anyone that has been keeping up with the machinations of this group of international swindlers, it is obvious that some sort of self preservation is in order. Before they can destroy the system as we know it, it would be beneficial for local communities to devise a medium of exchange they can use and have it in the wings ready to go when the system breaks. Gold and silver are preferable but most people will not get on board until it is too late so something else may be needed.
If most Americans held just $25 face value in pre ‘65 silver coinage, that would be enough to circulate and establish local commerce. That does not sound like a lot of money but keep in mind, this amount in the 1940’s was a weeks pay ($1,299 annually) to most people and prices reflected that fact. The minimum wage was 40 cents per hour and a quart of milk cost 15 cents. A recalibration of prices to 1940 values would be a starting point to get things moving again. These two small steps by the population could avert disaster and provide a foundation to return to a stable monetary system. Unfortunately, very few Americans will make the small sacrifice now to insure a transition can take place without a great deal of chaos.
Even if there is not enough pre ‘65 coinage available to do this, the purchase of 20 oz of silver bullion by individuals would have the same effect. Getting silver into the hands of as many individuals as possible is the only long term solution to this fiat madness. The use of gold coins in this situation would act as the medium for larger purchases.
The use of local barter currency is an alternative that would work well but would be limited to the locality where issued while silver would be universally accepted. Barter script could be used universally but it would take a great deal of coordination to make it accepted. This would take time and the chaos experienced would make it difficult initially.
When the current fiat currencies fail we must not allow a new fiat currency to take its place. This will be nothing short of knowingly selling ourselves into debt slavery for life. Any attempt to subvert this fiat transition will likely be met with force projected by the surrogates of the ruling class. When this happens you will have to decide how you will deal with these people. The future of this nation will be determined by the actions we take during this crisis.
By: Tom Chatham – Author of The American Dream Lost
The western world as we know it will not last much longer in its’ present form. The architects of this collapse will extract as much of the wealth as they can before they finally pull the plug and watch as the nations tear themselves apart from within. Make no mistake, this is a designed collapse and has been planned for decades. Keep in mind that real wealth is made up of hard assets like precious metals, land, production equipment, mineral resources and businesses that produce a physical product. These are the assets that the engineers will take possession of just prior to the total collapse of the affected nations. These are the things that will have value after the collapse and those that have possession of them will make the rules for whatever type of society we find ourselves in.
There are certain sign posts on the road to collapse that act as warnings to those receptive to the signs. These signs can help those attempting to navigate the times to prepare for the final stages when they will be in the greatest danger. Countries go through some stages faster than others or even skip some stages so the signs must be observed to estimate where you are in the countdown to chaos. The signs to watch are the following.
Capital Controls and Nationalization of Retirement Accounts
Chaos and Social Breakdown
When a country’s economy begins to falter, the government will attempt to deflect blame and divert attention with other things. As the government appropriates the last of the nations’ wealth and the final destruction of the currency is in sight, many times they will go to war to hide these facts. When inflation begins to enrage in the population the government will invoke price controls to appease the mob, but this will ultimately cause shortages and set the stage for the chaos that follows. Those that believed in the government will be caught unprepared and will be easy to manipulate by those in charge and will be used in many ways.
Gun control is not present on this list due to the fact that most countries already have gun control in effect at this time. While gun control can be activated at any time by the government of collapsing countries, it will almost certainly happen prior to chaos due to the governments need to control the chaos with force.
The U.S. may be a special case though due to the fact that gun ownership is tightly woven into the very fabric of the nation. This will no doubt give the engineers a harder time of planning a reaction to the planned chaos. The U.S. government has several scenarios on paper to deal with the chaos as it plays out. They may provide a false flag attack according to one DHS insider, in a major city such as D.C. which will be blamed on patriots, constitutionalists and Christians in order to garner government support from the population to go after these types of individuals. This is designed to create a civil war that will give the government cover to commit crimes against citizens and eliminate their enemies. This is only one scenario but seems likely given the current climate in this country. The engineers will try to eliminate weapons for fear they will become targets by those who know what is happening but in all likelihood this will fail.
The engineers expect the crisis to end in their favor in some form of tyranny that they control but even the best laid plans never survive the first battle intact. This means they will have contingency plans to deal with the changing tides of chaos as citizens react to government operations. Those that see the signs and prepare for troubling times should have their own contingency plans to deal with changing situations on the ground where they live. The next ten years will be very fluid and you need to be adaptable to survive with your family and resources in tact.
The fate of the nation will lie in many things such as who controls the farmland and water resources in the country. These things are mainly found in the rural areas where government resistance will be the greatest. These are things that must be controlled by the government to insure control of the country and its’ population. Those who control the food, water and energy will have a great deal of power.
As stated in a previous article, we may be facing not one war but three to fight inside this country, a revolution against the government, a civil war against government supporters and a war against foreign troops at some point. It is not out of the realm of possibility that the government will bring in mercenaries from abroad if they seem to be loosing ground to the citizens. More information on the governments’ plans can be found in a recent article at Northeast Intelligence Network concerning a DHS insider. Those that plan on some type of armed resistance should insure they ration their resources to enable them to get to the end of the crisis. The fate of nations often times rests on the shoulders of a chosen few willing to do the hard things to insure a future worthy of those who have died to keep the torch lit.
By: Tom Chatham – Author of The American Dream Lost
As one of the financial capitals of the world, New York has some of the worlds’ largest financial companies. Among them is the NY branch of the privately owned Federal Reserve Bank. This bank is actually owned by some of the largest banks in the world. As a center of global finance, it only made sense in the past to store some of the gold from many countries there so trade imbalances could be quickly satisfied by moving gold from one pile to another. The Federal Reserve operates on the confidence of other central banks around the world.
As of 2010 the NY Fed had something on the order of 200,000,000 troy ounces of gold in storage for many different nations. It has become common knowledge that many of the worlds’ banks and institutions have leased out and sold literally tons of gold in the last several years. The gold stocks have been moved around so much the last few years, at the very least on paper, that rightful ownership of much of it is now in question.
Since the Fed is merely storing this gold for other countries, they have the right to withdraw it at any time and repatriate it to local bank vaults, at least in theory. With the U.S Dollar coming under pressure in the last few years and the reserve currency status of the Dollar now in question, many governments are now contemplating the return of their gold to backstop their own currencies if something happens to the dollar.
Recently Germany decided to bring some of their gold home and decided to repatriate about 374 tons from France and 300 tons from the U.S. The Fed is currently holding about 1,500 tons of Germanys’ gold. Since Germany is only asking for 20% of its gold back from the Fed that would seem like a small matter to resolve. For some strange reason, Germany will have to wait 7 years to get that amount out of the Fed. This raises some very troubling questions.
Some people have speculated that much of the gold has been leased or outright sold and very little remains in the vaults. The fact that no one is allowed to audit their gold stocks is also a troubling sign. Let’s just suppose for a moment that the gold has been sold. What would that mean?
Keep in mind that the Federal Reserve is a privately owned bank. It is owned by some of the largest banks in the world. If they sold this gold the parent banks would almost certainly have to know about it and approve the transactions. Also keep in mind that this gold is owned by governments henceforth the citizens in many cases and not the banks themselves. If the banks sold this gold they profited from it immensely, at least until they have to replace it. With the price of gold at near record levels it would be devastating if the banks have sold all of that gold and had to replace it at much higher prices. That presents another problem.
If the Fed had to buy large sums of gold to replace stocks, what would that say to the markets? The bankers have always called gold a barbarous relic and don’t consider it real money. If the Fed suddenly started buying large sums of gold it would signal to everyone that they consider gold more valuable than the money they print. Remember, the Dollar is the world reserve currency so why do you want to own any gold? If they sold the gold, and printed money was just as good, then they could just replace the gold with currency, right?
With the large amount of gold in the vaults, 300 tons should be an easy matter to fix by just buying it back from the current owner with newly printed money and no one would be the wiser. That would be easy unless the gold is not physically in the vaults. If it had been removed and was somewhere else in the world, they would have to go into the world markets to buy it back, thus exposing themselves. Some have speculated that much of this gold has ended up in China, and if so, they probably won’t want to sell it back anytime soon.
So, you are a banker that has sold 1/3 of a trillion dollars in other peoples gold and now they are starting to ask for it. What do you do now? If they accept cash instead you’re ok but they don’t want cash, they want the hard stuff. Buying back all of that gold would be impossible because once people realized you were printing more money to buy it they would refuse to sell at any price. That is if you can even find that much gold to buy.
But why would you need to print more money? What happened to the money you got from the original sale? Gee, maybe you shouldn’t have given everyone all those multi million dollar salaries every year.
So what happens when you tell everyone you don’t have any gold to give them? They won’t come after the U.S government because they have no control over the Fed. They will come after the bankers with a vengeance. So as a banker how do you save your neck without having to give the gold back?
I’m sure everyone has seen the James Bond movie Goldfinger. The arch villain wants to destroy the U.S. supply of gold in order to make his gold worth more. How do you destroy gold? With a radiological bomb of course, making it radioactive for a very long time.
If a “terrorist” group made its way into the NY Fed vaults and exploded a radiological bomb, everything in the vault would be radioactive for a very long time. If the blast was contained in the vault and only irradiated the contents, it would be an easy way to eliminate gold that does not really exist. This would let the bankers off the hook as none of the gold could be removed or even audited. Would someone do something like that for real? What would you be willing to do if you stole 1/3 of a Trillion dollars in gold and wanted to cover it up?
Could a bank stage something like this? Not on its’ own, but with the help of a major government that it basically owns, it would be a simple matter. Would the U.S. government do something like this? Why not? It would get the bankers off the hook and provide the government with a crisis to institute even more measures to lock the country down. We know the government has no shortage of lame plots that it is willing to feed to the gullible public and they have little concern about any casualties.
Is this speculation? Of course. But if the gold is really gone, how will they hide it? I suspect that it is gone and the crisis that is building will reveal it sooner rather than later. Where do I think it is? To allude to an old song, all the gold in New York City, is in a bank in the middle of Switzerland in somebody else’s name.