by Joseph P. Farrell, Giza Death Star:
When V.T. sent along the following article, I knew I would have to blog about it, because it basically warns about something I’ve been trying to warn about, most recently in my two Rialto in Richmond books. That something is simply that there’s not enough bullion and specie in all the world to cover, or be convertible to, the circulating supply of money and currency. This story is important, not only because it traces the history of a financial lie, but even more importantly, for what it says about the underlying – and still assumed – bullion basis of money:
TRUTH LIVES on at https://sgtreport.tv/
I want to draw your attention to the following paragraphs, because they are an exact repeat of the financial position the post-War Between the States Union/Federal government found itself:
…The Eurozone, already teetering on skyrocketing debts and rising bond yields (and hence interest rates), doesn’t have the money nor the gold to meet their 100:1 levered gold derivative contracts hitherto floating on the London and NY Gold Exchanges with a gross exposure of over $1 trillion.
Yes, One TRILLION.
Sadly, we’ve been warning of this derivative time bomb and Comex insanity for years, yet only now the ECB is confessing its trillion-dollar problem out loud.
These metals exchanges, which rolled over and extended paper gold contracts since the 1970s to artificially short (i.e., price control) the gold price, were basically credit exchanges, not gold storage providers…
But now they are seeing counterparties wanting the physical gold itself rather than just their extended paper contracts.
Unfortunately, the Eurozone doesn’t have the gold their contracts promised.
In short, they are caught in a lie.
The other lie is trying to “blame” this leverage trap on gold while failing to confess that counterparties are seeking actual gold delivery to cover their own past sins.
To put it country simple: the money supply was vastly expanded beyond the ability of an bullion or specie reserves to cover, at par value. Faced with this dilemma, and assuming the bullion basis of money to be the implicit basis of money, there are two basic ways out of this dilemma: (1) recognize reality and devalue the money vis a vis the supply of bullion and specie, of (2) remove as much of the circulating supply of currency to allow the specie/bullion value of that currency to come back close to par, in other words, the so-called deflationary strategy. This was, in fact, the strategy (more or less), after the conclusion of the War Between the States.
More recently, we’ve been watching the emergence of another strategy, the latest version of number (1), namely, the establishment of “state bullion depositories” that “back” their “electronic transfer systems” (i.e., digital currencies), with gold. As the article avers, without revaluation, this means that the circulating “currency” is valued at a few flecks, a few milligrams at best, of gold (or a few more of silver). What enables this fractionlization of “backing” is precisely the ability of the computer age to track and keep records for such tiny decimals and fractions. No one is going to bother marching up to a state bullion depository and demand their Texablips be converted into a few barely visible flecks of gold, not to mention be able to use that physical medium in transaction.
In other words, and to use the language of the article, it’s another scam, and another lie.
So there is one more strategy available, and it’s also one I’ve been warning about, and it’s time to do so again. When the 2008 financial crisis broke, we were quickly informed that the amount of bad paper derivatives sloshing around in the financial system was approaching 14 quadrillion dollars. I even emphasized the “colossality” of that figure by spelling it out:
$14,000,000,000,000,000.00
That’s fourteen millions of billions of dollars.
That’s two to three orders of magnitude more that even the projected federal budget under the Big Beautiscamful Bait-And-Switch bill. Indeed, as a few people pointed out in the aftermath of 2008, that’s several multiples more than the gross domestic product of the entire planet Earth!
Now, if you’ve read The Rialto in Richmond Reconstructed, you’ll have caught something that made the deflationary strategy even more insidious and deliberate than it need have been: as the post-war Union was deflating, and doing so on the basis of a gold-buggery via the de-monetization of silver, which had become quite scarce, the Comstock silver lode was discovered in Nevada, and it was worth about $250,000,000,000 in greenbacks. In other words, silver was deliberately demonetized when new supplies clearly became available in order to enrich the gold-bugs. And don’t forget, the other factor that made the whole model so treacherous was the discovery of the enormous gold deposits in the Black Hills of South Dakota, my home state.
The Lesson? when one form of money becomes an inhibition to vested interests in another form of money, then just demonetize the first form, or declare it to be the second form.
I mention these two events because they illustrate the other mechanism and strategy available to Mr. Globaloney and his brother-in-law, Mr. Central Bankster: go find a similarly large vein of hard assets to mine and become money. It is not accidental nor coincidental that the derivatives crisis was accompanied by all those stories of asteroids being valued at – here it comes – quadrillions of dollars. All we have to do is go out there, snag one, mine it, and bring the treasure back in our galleons SpaceX rockets.
Originally Posted at https://www.sgtreport.com