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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Cactus Jack who wrote (70272)	1/10/2011 2:12:43 AM
From: pogohere	2 Recommendations Read Replies (1) \| Respond to of 217750

"In either instance, the purchasing power is diminished" . . . yes, so long as no additional wealth is being produced in the country. So if the Brits counterfeit the currency, and no new wealth--e.g., manufactured goods, machine tools, etc., is created in proportion to that, the paper currency is debased. As in the examples cited in the referenced article, the growth in the economy is the essential factor. A sovereign that prints money in proportion to the production of wealth need not back the currency with something as useless as gold. Overprinting leads to inflation and the debasement of the currency. The Brits knew this and counterfeited the Continental and the Assignat. The gold game is historically what I call a scarcity trap: In a fiat system run by private parties based on money-as-debt, there is no incentive for constraint on credit creation, as the scarcity issue, which is the beating heart of the system, is constituted by the fact that the credit creators never issue enough "money" to pay the interest on the credit, so everyone is obliged to compete for whatever is scarce to pay the interest on the ever mounting debt. Ultimately, this leads to war (to obtain what is scarce) and more debt to pay for the wars. Wash, rinse, repeat. The lure of gold is its relative scarcity, which when gold is legally required to permit further credit expansion, is understood to be the constraint on credit creation. However, the scarcity "factor" gives away the game: scarcity always means he who controls the gold--a worthless commodity--controls the game. (This is also true of energy sources, wherein oil is kept "scarce," in relative terms.) Gold, having no relation to production of real assets and goods, i.e., real wealth, only masks the wresting of power from one faction to another in a system predicated on scarcity. The Brits wouldn't let their N. American colonies create their own sovereign non-debt fiat. B. Franklin identified this problem as the essential issue that required a break from the Brits. After the war with the Brits was over Alexander Hamilton worked hard to create a private central bank to capture the money issuing franchise. He failed. Another attempt was made and a US Bank was established. Andrew Jackson fought to close that bank and the banksters tried to assassinate him. The pistol misfired. Abraham Lincoln issued Greenbacks during the Civil War and he was assassinated. James Garfield ("Whoever controls the volume of money in any country is absolute master of all industry and commerce") was also assassinated shortly after he took office. The money-as-debt banksters finally triumphed with the creation of the Federal Reserve in 1913. China's currency is fiat, but China does not run a money-as-debt fiat currency regime. That is a key factor that neither Jim Chanos nor Russ Winter (http://siliconinvestor.com/readmsg.aspx?msgid=27060438) take into account when they decry the credit conditions in China and insist China will suffer a major economic collapse. True, so long as scarcity is the game, investors can surf the precious metals, as we can do now, and protect our purchasing power. But the control of the precious metals markets remains in the hands of those who control the movement of massive amounts of capital globally. This Martin Armstrong's focus. Big capital runs the scarcity game, and therefore, if money creation is not restricted to a sovereign issuer effectively controlled by 1) the people and 2) a legal regime that restricts the issue of fiat in some proportion to national wealth creation, but rather remains in private hands that issues money-as-debt, so long will we be in debt to the banksters and so long will we lose our freedom.