Gold Price Manipulation On Public TV

Here is a documentary about gold price manipulation. It was originally broadcast May 9, 2014 on 3sat, which is a public TV station that is shared by Germany, Austria and Switzerland.

As I mentioned the other day, the London Silver Fix Will End August 14, and hopefully the gold fix will be ending soon too,

The show is in German, but I’ve posted an English translation below the video.

Good evening and welcome to the bussiness magazine, Makro.

The purchase of gold, for many people, represents a safe reserve for bad times. No wonder that, at the height of the financial crisis, savers were queuing up at gold dealers. Throughout history, gold has served as a promise of reliability and stability. But today there are considerable doubts as to whether that promise remains valid, because an examination of gold prices reveals machinations fit for a financial thriller.

London, the most important gold market in the world. Whether the price of gold rises or falls is determined here. Twice a day, a handful of bankers confer on the phone to fix the daily price of the precious metal. Thus arises the most important reference value for physical gold, used by businesses ranging from jewellers to gold mines. There is no public oversight for the “Fixing”.  Apparently, this lack of restraint has led to serious manipulations of the gold price, as pointed out by a current investigation which has detected strange price movements spanning a number of years.

Rosa Abrantes-Metz: The setting of the gold fixing is, in my view, problematic. It opens the door for abuse and manipulation. There is absolutely no transparency in the arrangements made during the private phone conversations of this small group of participants as they decide what the price of gold should be. Experts have long complained that this system is particularly susceptible to manipulation. Only five banks participate in the London gold fix, thus far including the Deutsche Bank. In the more extreme futures markets, where bets are made on gold price developments in future months, the quantities that exchange hands are of quite different magnitudes.

Folker Hellmeyer: We have a situation whereby this market by three essential players in the USA, from three banks, is being dominated. These banks have a market share in the order of 80 percent. In other words, we are talking about an almost monopolistic structure which of course also provides the power to manipulate the market. And which power is apparently being abundantly used. The futures market, intended to provide predictability and stability for future prices, is controlled by the following three banks: HSBC, Citibank, and JP Morgan. Their tool: paper gold securities.

Thorsten Schulte: It is possible to simply sell scraps of paper, thereby creating fear, especially fear among those who possess gold in its physical form, and who may then arrange to sell their metal, eventually resulting in such a a wave of fear … The gold price has been attacked in this fashion time and again, often with massive price declines within a matter of a few minutes. Yet, there is quite a bit more to the story.

Dimitri Speck: Gold is the opponent of debt based moneys and in particular the US dollar. Therefore, the US Federal Reserve has an interest in a weak gold price, and the US government protects the manipulation of the gold price by the private banks. For years, the US Federal Reserve has served as the lender of last resort. Gold must be weak if a loss of confidence in the US dollar is to be averted. It has been difficult to prove that this is a rigged game with a stacked deck, but if the gold market manipulations are indeed encouraged in addition to being condoned, that would explain why oversight bodies have thus far, turned a blind eye to it, despite years of massive conspicuous activities in the futures markets, as with the gold fixing in London. The Deutsche Bank incidentally intends to withdraw from the gold fix. As of now, no other bank has expressed an interest in filling that spot. Too many banks are scared to damage their good reputation in London.

Gold is a speculation commodity with a high symbolic power. Its price is therefore strongly influenced by many fears and hopes. Here are a few facts about that from our Makroskop.

31.1 grams, that’s the weight of one ounce of refined gold. The precious metal is regarded foremost as protection in times of crisis. During the financial and economic crisis gold climbed rapidly. Currently gold trades for about USD $1300 per ounce. Yet the more hopes grow for an end to the international economic slowdown, the more the price of gold declines. The US government continues to hold the largest governmental gold reserves at 261.6 million ounces, over 8100 metric tonnes. The US is followed by Germany, Italy, France, and China. But the largest demand comes from China. From gold coins to gold bars, the Chinese are accumulating large quantities. In 2013, the Chinese acquired 1065.8 tonnes, moving for the first time ahead of the Indians, who purchased 974.8 tonnes in 2013. Jewellery accounts for the highest portion of the demand. In China, jewellery sales since 2004 have tripled. They represent about 30 percent of worldwide demand. About 400 tonnes was purchased by businesses. In particular China’s electronic manufacturers need industrial gold for production. Meanwhile China has risen, in the mining sector, from being a small player to become the number one gold producing country. In the past tens years, Chinese gold production went from from 217 to 437 tonnes, it more than doubled.

Today, the course of the gold market is being set by China. What are the worldwide consequences of this? I will talk about this with the chief editor of the Frankfurter Börsenbrief. A very good evening to you, Mr. Bernhard Klinzing. These days the flow of gold seems to be from the west to the east, as we have just seen. There are considerably more buyers in Asia than in the developed western countries. What do you attribute this to?

The reason is that India and China, which together make up half the gold market, do not have state provided elder care, it’s a different situation there. Then there is of course the fear of inflation. “The Chinese are the Germans of Asia”, it is said, and so they sit on gold. We have seen that the price of gold is heavily manipulated. These manipulators are apparently supported by the highest places.

Do you believe that, or do you regard it as a conspiracy theory?

Based on the Deutsche Bank and the London fix I don’t believe that, but based on what we just saw from the Americans I absolutely do see that danger, because there is a quasi “Edward Snowden”, his name is Paul Roberts and he worked at the US treasury department, and he has confirmed that the Fed, together with a number of banks, prevents gold from rising above $1400 per ounce, by continuously providing gold bids, which put downward pressure on the price.

Given the unsound loans that came to light in the Libor scandal, do you believe that in the gold market this is only the tip of the iceberg?

I would say that we are only seeing a snow ball from the iceberg while a lot more is hidden at the bottom. The banks earn a hefty sum whenever they manipulate the gold price by as little as 1/10th of a US dollar upwards or downwards. You can see that with Goldman Sachs who published studies predicting gold’s decline to $950 per ounce while at the same time increasing their own gold positions by 20%. That does not match up.

What are some consequences for other market participants? You stated that the banks are lining their pockets, but what are some of the consequences?

Yes, there is a hedge fund manager by the name of William Kaye who has said that the German gold is no longer stored in the vaults of the Fed in New York, but has already found its way to China because the Fed needed the gold in order to carry out its market manipulations. This is as yet only a suspicion, and it may even be a conspiracy theory, but the Germans were denied an opportunity to touch or take samples of their own gold. One could hardly think up a better plot for an economic thriller.

I would like to talk about investors again. Is gold a good investment for the, let’s say, small investor?

One should not construct a portfolio with only gold, that much should be clear. But of course gold is a very attractive portfolio addition, whereby investors can insure the value of their portfolio against currency risks. Because if the Euro rises, the value of the gold falls, so you can participate only less than possible, therefore invest always in a currency protected fashion.

How can I do that as an investor?

There are certificates for doing this, there is no need for an investor to store gold in their own vault or under their pillow. For that there are very good solutions on the financial markets.

Before we wrap up, what are your thoughts on how the gold price develops further from here?

We can see that in China the standard of living is rising, the middle class will grow from 300 million people to 500 million by 2020, and urbanization is accelerating. This means that there will be much more demand for gold from China, as well as from India. I don’t believe that gold will break $1400/oz this year, but we will see a new gold rally in the next few years. An overview of the gold price from Bernhard Klinzing of the Frankfurter Börsenbrief.

Thank you for being on the show with us tonight. If you have any questions for our studio guest, dear viewers, please visit the Makro blog where Mr. Klinzing will be available for a little while longer after the show. On our homepage you will also find additional background material on the topic of gold.

Get Konnected with The Kronies Action Figures

Political satire has now spilled over into the realm of children’s action figures, and it’s brilliant.

Watch “The Entrepreneurs” struggle do battle against the four G-forces of the Kronies:

  • Mandate – Big G forces people or companies to buy a product or service.
  • Inflate – When Big G (or a Krony) increases the money supply, purchasing power is weakened.
  • Tarrify –Big G raises the price of an import or export in order to erect a trade barrier.
  • Boondoggle – Big G uses the G-force to take money from taxpayers and give it to the kronies.

Check out The Kronies site which is full of satire and comedic Easter eggs, like their copyright notice, which links to another satirical site:

All audio, visual and textual content on this site have been granted an intellectual monopoly by the powers vested in the G-force.

Dr. Paul Craig Roberts: Don’t Wait Until It’s Too Late

According to former Assistant Treasury Secretary Dr. Paul Craig Roberts, “The West is draining itself of physical bullion….  If there is a currency collapse and you try to flee into gold, there won’t be any there. The Chinese will have it.”

So, is this the year gold and silver stage a big turnaround? Roberts says, “It’s gone on longer than I thought it could go on. I didn’t realize all the deceptive and crooked methods they would use to rig the markets. The notion that a democratic, capitalist country having its markets rigged by its own authorities–it blows the mind. This is not normal. What will they do next? I don’t know.”


Hidden Secrets of Money: Episode 5

In episode five of the Hidden Secrets of Money series, Mike Maloney explains about the history of money from inside the money museum at the Bundesbank, one of the world’s largest central banks.

I still think episode four is the most powerful and important videos in the Hidden Secrets of Money series so far, but episode five is pretty good.

Complete transcript of Hidden Secrets of Money: Episode 5

The entire world is facing a debt driven disaster the scale of which has never been seen before in human history. The situation is now so severe that we’re left with only two options: default on our debt, or inflate it away. You can already hear people blaming the free markets and even money itself for our problems and to me this is just tragic because we don’t have free markets any more and we certainly don’t use real money. This is the real reason for our problems: Our money itself has been corrupted. It’s not just an issue of economics, this affects your freedom. When this crisis hits, people will be screaming for the government to do something, when it was the government who caused the problems in the first place.

Many societies have faced this dilemma in the past and we can learn what the outcome might be simply by studying what they did and comparing it to what we’re doing today. So while I was in Germany, I decided to stop by one of my favorite museums and take you on a kind of crash course on the history of real money, how it evolved, and the twin dangers that arise when money is corrupted.

I’m here at the Bundesbank Money Museum in Germany and this is one of the best museums I have ever seen. Right at the very beginning of the museum you walk in and it starts with barter, you know originally the first form of currency was livestock… the problem with livestock though like for instance this cow, if I traded this cow to you for something and somebody else wants to trade you something else that has a much lower value you can’t make change! A system that relies on barter is very inefficient because you not only suffer from the problems of divisibility you also rely on the hope that you’ll find someone who has a good or service that you need who wants something that you have at the same place and at the same time. In economics this is called the “coincidence of wants.” Now add the fact that most goods have a shelf life before they perish and you can see why barter systems held mankind back for so long.

So what was it that solved the coincidence of wants and propelled us out of the Stone Age and into space? It was the invention of money. Money is not evil, it is a magnificent tool that allows us to trade our specialized skills and to store our economic energy. Without it we be struggling to feed ourselves each day and our average life span would still be thirty. In episode one we learned that real money has to fulfill certain properties in order to function. But twenty six hundred years after its emergence people still confuse money with currency… even the so-called experts. So they’ve got here some of the things about what money is, the first example here is ‘Money is whatever goes’ So, ‘in earlier cultures commodities such as cattle stones or medals were used as money. Buyers took the value of the goods on trust when making their purchase.

Today too, money is a question of confidence. So, the currency today isn’t money today we’re using currency… that’s the only reason it has any purchasing power whatsoever, it’s because yesterday your experience was that it purchased something so you have faith that it’s going to purchase something tomorrow, otherwise it has no value. Whatever form it takes reliable money has two characteristics: It is genuine, and it is stable. People can rely on its value. Well you know what fiat currency around the planet has maintained its value? They all fall in value so right away you can see the difference, they’re talking about currency here and when they say it’s genuine. I mean what is genuine?

A counterfeiter, somebody that’s running their own printing press in their basement is making genuine notes as far as he’s concerned. They’re genuine counterfeits! These things that just come off a printing press well yeah, it’s a genuine lie from a central bank or government that you’ve got something that’s going to store value for you because it doesn’t over long periods of time… it loses value. Gold banknotes and electronic money (meaning electronic currency) may be stored, divided up or transported. As its material value has declined over time, its genuineness has had to be beyond question.

Well this one says that it’s got to maintain its value and right here they’re contradicting the the next one. The one thing here, gold is the only thing that they’re talking about that has not lost its value. ‘In the past rare goods were used as money. Today central banks must ensure that the supply of money is restricted.’ Well what are they doing all over the planet today? They’re lifting all restrictions on how much currency they are creating… they’re flooding the planet with currency.

The next display shows the usual museum pieces that are described as commodity money cowry shells, representative axes, cocoa beans and the like. While these worked better than barter none of them were actually money because they all had a weakness, one or more properties of money that they couldn’t fulfill. Therefore they are commodity currencies not money. Some of these were widely used right up until the beginning of the 20th century, and there’s some stuff here that I haven’t seen before.

Here’s something very interesting, this brick of tea, its value is in the intrinsic, it’s in the commodity that you’re using, it’s the tea. But this one has a certain fungibility to it, each unit would have the same value and you can make change. You can snap these things apart into units of six, it’s portable it’s not that heavy, this one fulfills quite a few functions and money… I would not imagine that is that durable, and probably doesn’t wear that well.

And now we come to the emergence of real money. Here we have little pieces of metal, just little pieces that have been broken off bars or something that was cast, other little blobs of metal. They were traded as a currency you know they had purchasing power they had an intrinsic value but they still weren’t fungible which means interchangeable… every one of them has a different value, you can see that some of them have a higher silver content, some of them have a higher gold content. These are called electrum, a mixture of gold and silver, naturally-occurring. What you notice is that this is from the 7th century BC and then between the seventh and the sixth century were talking about somewhere between 680 and 630 BC the emergence of true money.

Here we’ve got four coins, the large one is a one-third stater coin, and the other three are one-sixth stater coins. Each unit is interchangeable, it’s now a unit of account you can take so many of these in trade for so many have loaves of bread and you don’t have to break out your little scale and weigh them any longer. With the little chunks of metal you had to weigh every transaction that was going on and you had to weigh whatever your payment was and then take a guess as to what the purity was. Here you have some standards that were set by mints and guaranteed by those mints. These are a unit of account, they’re fungible, every one of them is interchangeable, their portable, they’re durable, in your pocket over long periods of time, they’re divisible you can make change. You can see there’s a one-third stater and one sixth staters. And they’re a store in value over long periods of time. These still have purchasing power today 2,600 years after they were made.

Another thing that I find really interesting is that between maybe 680 BC in the year 300 BC, cultures all around the world, they all gravitated toward gold and silver coinage as money. The entire world sort of decided altogether that gold and silver were money. Why? Because the free markets keep on selecting gold and silver as money because of the properties that they have.

So now we get to the room of real money. This is a vault door and this is where they’ve got all the great examples of the real gold and silver coins so come on in and join me. So here we get to the first display, here’s gold and silver, what they’re using to make money and here we have some very early representations of gold and silver coins. And, I love these displays, they start with coins in Lydia so these coins go back to the very first minting of true coinage. So here we have… starting the 6th century BC, and then it goes up to the 3rd century and then from the 5th to the 11th century and the 13th to the 15th century and these displays just go on and on with the history of real money, gold and silver. And here seventeenth and eighteenth century, here we come to the 19th century and now we’re all the way up to the 20th century here.

And here we come to our first example government issued fiat currency this is a from China this is from 1375 and what’s interesting is I have a chart that compares the value have the paper currency in China compared to silver, and there was a hyper inflation of this currency it wasn’t backed by anything, it wasn’t backed by taxes it wasn’t backed by anything. The Treasury they could just print this and so this went into hyper-inflation because the government was just running its budget by just doing deficit spending by printing.

And then I’m gonna skip to sum of the colonial currency. This is the United States and each one of these currencies is printed by a different state, we’ve got Maryland South Carolina, North Carolina, Connecticut, New York, this one here is particularly interesting it’s printed in the fourteenth year of the reign of King George the third, it’s dated March 25th 1776 so this is just a few months before the Declaration of Independence. it says here ‘Tis death to counterfeit’ This was printed just before we started coming out with the continental dollar which went into hyper-inflation because of pure deficit spending on the Revolutionary War.

And so…this is the wall where real money gets corrupted. This is where it all turns to paper which sometimes is backed by something but it can be a lie, they can print more than they have of the stuff to back it.

As we learned in Episode 2 one of the first things the country does at the outbreak of war is to suspend redemption rights so that their currency is no longer redeemable in gold. This is exactly what Germany did before World War I. After losing the war they suffered through one of the worst hyper-inflations on record when they were burdened with massive reparation payments to France and the Allies. These heavy penalties stifled the German economy and brought it to a standstill leaving the country with the same two choices all indebted nations have faced throughout history: Default on their debt or inflate it away. Defaulting was not a viable option as they were completely impoverished, weakened, and surrounded by armed forces ready to take their land. Since the currency was no longer tied to gold it was decided to light up the printing presses and inflate their way out, paying the debts with new currency created out of thin air. This had drastic consequences, check out some other this Weimar currency. The display starts with one mark that actually purchased something, but soon the notes rise to the thousands, then the millions, then the billions, and finally the trillions. It’s mind-blowing.

You’ll notice that I’m laughing a little bit as we move through the museum but I’m not laughing at the people, I’m laughing at the stupidity of central banks, and of governments, and how we never seem to learn from history. OK, this is an example of different currencies used during the hyper-inflation and they call some of it inflation money and emergency money. This is interesting, they figured the way out of hyper-inflation was to print more! So, ‘In 1923 the value of money fell by fifty percent or more per day.’ That means prices are doubling every day, it’s falling by fifty percent. ‘Nearly everyone spent their money as quickly as possible on bread, shares and other safe assets.’ Well I don’t consider shares safe assets, actually the stock market did not keep up with the inflation. ‘However, this rapid circulation only served to stoke inflation even further.’ That’s the function of velocity of money it’s just a when velocity picks up it’s just like expanding the quantity, it has the same effect. ‘At the end, even 144 printing companies working for the Reichsbank could not keep up with the demand for banknotes. Emergency money issued by cities, local authorities, as well as banks and other enterprises started being circulated.’ So everybody was issuing currency to add to the currency that the government was printing like crazy! ‘Although bank notes with face values of trillions of marks were issued the vast demand for money…’ that’s not correct, ‘The vast demand for currency led to a paper shortage. Printers used anything that could be found including wool wood and silk.’ So so here’s some examples of wood, wool and silk currencies over here. So this is a great example of how even here, in a museum of what they call ‘money’… this is the Bundesbank, one of the world’s great central banks, (if you can call any central bank great) They don’t understand the difference between money and currency! They’re calling all of this ‘money’ and it has nothing to do with money, it was a promise to pay money at one point, and then it was a broken promise.

People have faith in these government created currencies and it allows governments to basically rob their own people. The government erased the debts that they had left over from World War I by just hyper inflating the currency and basically that transfers all the wealth of the middle class to the government. The government inflated away the debts but they also inflated away the prosperity of their entire population.

When we were in Germany we got a chance to shoot in front of the Bundestag, which used to be called the Reichstag, and it felt… it’s very very significant in that…out of monetary crisis you very often see the political landscape change dramatically. It’s the middle class of a country that defines the country with their vote they’re the largest sector of any country, about 70 percent. And a currency crisis like a hyperinflation wipes out and impoverishes the middle class, and they become filled with fear, and it’s very easy for somebody to come in and prey on that fear… and dictators arise out of hyper-inflation, and this is one of my greatest fears as far as the United States goes. I think that we all have to be very very careful and very watchful for what happens in the future.

A few years ago I was interviewing Congressman Ron Paul and he said, ‘I think that there’s going to be a financial collapse before they come around to thinking seriously about monetary policy, but the real thing we have to worry about is not the loss of our wealth, it’s the rise of a dictator, it’s the loss of our freedom.’ And what’s interesting is that the rise of Hitler, there were two times where he played on the public’s fear, he could never have come to power had there not been a hyper inflation back in 1923. Just one week before the end of that hyper-inflation that’s when Hitler made his first big public appearance. Playing to the public fear Hitler and his storm troopers took over a beer hall called the Burgerbraukeller that seats around 3,000 people and he took the stage by gunpoint, and to this literally captive audience he gave a speech that would change the world. Because of the hyperinflation the audience had been recently impoverished, their wealth had been stolen by the government running the printing presses, and so they’re all scared. He offers them a scapegoat and tells them he’s got the way out. He became very popular after that and the very next day the people that we’re listening to him followed him in an attempt to overthrow the government. He was arrested, tried and convicted of high treason, and served time.

While he was in jail he was provided with a private secretary, Rudolf Hess and he actually wrote about half ‘Mein Kampf’ while serving time. But once the economy started to recover Hitler lost that leverage, that power, he could no longer play on the fear of the public, once the economic situation had changed. By the middle of the Roaring Twenties he had become a joke. The Nazi Party had gone to less than two percent of the vote, then along came the Great Depression, and Hitler seized this opportunity again. He was the first politician to actually campaign by aircraft hitting multiple cities in a single day and the Nazi Party went from two percent of the vote to the second largest party in Germany. So playing on the public’s fear Hitler was able to take away the rights and Germans, all these guaranteed rights in Weimar Constitution private property rights, the right to assemble, public assembly, the right to privacy in the mail, the telephone system, he’d just took away all their rights and seized power. So this is some of the things that we have to be concerned about and be very mindful of… Economic crisis very often leads to the rise of a dictator.

Yeah the fact that this was just seventy to eighty years ago, basically there are still people alive today that experienced this, but enough of them have died off to where the warnings fall on deaf ears.

Berlin is a great example of another massive danger to individual freedom that economic crisis can bring: the swing from capitalism to collectivism. After world war two the city was basically divided in half: the West being capitalist and the East communist. Germany was reunified in 1990 but even this short period of separation showed the vastly different levels of prosperity that the two systems achieved.

So this is the famous Checkpoint Charlie and what’s interesting is how quickly an economy can heal. Just twenty years ago you would have seen a tremendous difference between the East and the West you’d have one side that has tall buildings and is much more industrialized and new and then one side that was that’s very old and gray. It was one of the best examples of what a state-run society does to an economy. How the more the public relies on government, the worse the general economy gets. What happens you know in capitalism you have the greatest disparity between the poorest and the richest individuals and there’s a backlash against that and you see this happening in waves and cycles, this cycle that goes from capitalism to collectivism. Here, the example, I mean you had this line going right through a city and one side of the city that was very poor and the other side prosperous by comparison. Now when we go toward collectivism, they want to eliminate this great disparity between the poorest in the richest individuals, but what happens is it that they don’t raise the standard of living for the poor up here, they drag the whole economy down so that everybody ends up living down here… except for the people that are in running the government.

Collectivism is a danger because we’ve proven time and time again that it doesn’t work. The evidence is in. If you look at history it’s clear that maximum prosperity can only be achieved through individual freedom, free markets and sound money. You’d think that we would learn from history, but I’m going to show you a few more displays from the museum that prove conclusively we haven’t.

And this is where we are today, this is a sheet of Fifty Euro notes and these just come out at printing press bam bam bam bam bam just like those notes did! And the entire world today is sort of- every central bank across the planet is creating currency like crazy right now, to- I think we’re going into deflation so they’re trying to stave off deflation right now, by printing their way out of it.

So here we’ve got some examples of the technology that governments around the world are putting into their counterfeit currency so that the public can’t counterfeit the currency that the governments are now counterfeiting. So you’ve got all these holograms and watermarks and different threads and different types of the paper, and then here’s this big old printing plate where they pop these things out a mile a minute, and right now they are hyper inflating the base money around the world – the paper money. We’re going into a deflation of the credit money – that voodoo hocus-pocus currency that the banks just type into the computers, that’s starting to collapse where this stuff is expanding.

So we learned in episode 4 that modern currency creation is a complete scam, but a whole lot of people had trouble believing that it could be true. The European Central Bank has this awesome display that shows you exactly how it’s done and it’s basically the same as our episode 4, so here’s a quick recap thanks to the ECB.

Basically the central bank and the Treasury swap IOUs, the central bank writes a check and the Treasury issues a Treasury bond which is an IOU and that creates currency, and then somebody is paid, it gets deposited into a bank account and a thousand marks – they withhold 10 percent so right here they’re already telling you that his bank account is a lie, he deposited 1000 in it, they only withhold 100 in case he wants some of that and then they loan out 900 which then she buys something from this guy he deposits the nine hundred they borrow ninety percent of that and leave just 10 percent on deposit for him and the result is that it expands, every 1000 ends up creating 10,000, or every one dollar creates ten dollars. You know they’ve got the result here – it’s all sort of a voodoo hocus-pocus scheme.

One of the great things that I’ve noticed here is that throughout the museum they keep on proving the point that even though this is the Bundesbank museum… they prove the point that fiat currencies that come off of a printing press, eventually go to zero, that they’re really worthless. This says, ‘The ideal goal of all monetary systems was to ensure that money is trustworthy and kept in short supply. Metal-based currencies restrict the money supply because metal deposits are naturally limited. However, during the industrial revolution in the nineteenth century the rapidly growing economy needed a means of payment which could adapt flexibly to this growth.’ Baloney! You can have a fixed currency supply and when you have economic growth it means that the currency gains in purchasing power.

‘In the 20th century uncovered currencies [meaning un-backed currencies] have been the norm. In principle the money stock could grow unchecked. This is why central banks must ensure that the money stock is in line with economic growth.’ Yeah, right!

So here we’ve got my buddy Milton. Actually Milton was a sort of semi-free market economist, he won the Nobel Prize, so he’s considered the Dean of the Chicago School of monetary thought, which are ‘Monetarists’ – they believe that we should have a Federal Reserve and it should expand and contract we currency supply to achieve a stable prices. One of the problems with Keynesians and Monetarists and so on is that they think you should expand it and contract it but they never contract it! They just, you know Keynesian: You’re supposed to spend when the economy is bad the government’s supposed to spend and stimulate and then withdraw currency from circulation to keep us from going into a bubble caused by the expansion of credit and the spending that they did during the bad portion in the economy so they take this rubber band and they stretch it and is supposed to come back, but they never do that, they just keep on stretching it to infinity! And here we are right now, where we are in the world is that that rubber band is about to snap with every currency on the planet.

And so I’m in instability, and deflation, inflation let me see maybe I’ll cause a hyperinflation… Uh! It just went off the inflation scale I guess I did cause a hyper-inflation… oops! And now the whole thing is collapsing!

This game of inflation and deflation has never worked, right now we’re on the precipice of the whole system collapsing and just like the game, our monetary system will reset. This is where the twin dangers we learned about may rear their ugly heads so it’s up to all of us to learn from history.

I mentioned earlier that it was the invention of money that allowed humans to prosper and rise out of the Stone Age, but money is only part of the equation. What use is money if you don’t have freedom?

So what’s going to happen? Will we default or inflate our way out of the mess we’re in? Since 2005 I’ve been stating publicly and I also wrote in my book that I believe we’re headed toward a series of events involving a short term deflation, followed by a big inflation or hyperinflation. If you really want to learn how this inflation might affect you and your family join me at for this episode’s exclusive presentation. It’s a special video that shows where I believe we are on this economic roller coaster ride and how I think it’ll play out.

So for now what can you do? 1 – share this video on social media and subscribe to our YouTube channel. 2 – Educate yourself by watching the rest of this series, and 3 – Take action to protect yourself and your family. Learn what you can do at I’ll see you there.

Should I buy half million or a million? Let me see how much, this is not gonna travel well in the suitcase…but it would be good to have a million euros wouldn’t it? Tough decision, so okay I’m gonna buy a quarter million Euros so here’s 50 Euros for your quarter-million and uhh- yeah, and I get change back! It’s about 8 euros to buy a quarter million Euros. OK Okay and what’s interesting is these are going to eventually be in here. And it won’t be too long before these end up like this. Oh, and we get some a chocolate gold coins! Danke.

So that’s our tour of one of the best monetary museums I’ve seen so far, but what amazes me is that they still just don’t get it!

Jim Sinclair on The Great Leveling and The Great Reset

Here are the highlights from this 45 minute interview with Jim Sinclair. Jim Sinclair predicts:

  • The Great Leveling starts next year 2014 and will last until 2016.
  • The first attempt of the Great Reset will occur in 2016. By 2020, the Great Reset will be in place.
  • The trigger will be when the USDX hits 70.
  • His near-term gold price prediction is $1,650. Then it will rise to $2,400, drop again, and then finish between $3,200 and $3,500 before the great reset begins in 2016.
  • Gold $3,200-$3,500 before 2016

Hidden Secrets of Money: 4 Episodes

Here’s a playlist featuring all four episodes in the Hidden Secrets of Money series by Mike Maloney. Episode one is important if you’re not familiar with Mike Maloney and you  plan on following him, but if you don’t have time to watch the entire series, watch episode 4; It’s a real eye-opener for the uninitiated.

Hidden Secrets of Money Episode 1 – Currency vs. Money

In this video, Mike talks about the difference between currency (the dollar) and money (gold). This is one of the most important lessons you will ever learn, and will pave the way for future episodes.

Hidden Secrets of Money Episode 2 – Seven Stages of Empire

Mike explains where and why currency became money. He also explains one of the most predictable long-term economic cycles: the Seven Stages Of Empire. Then he explains where we are now in the last 140 years of our own monetary history.

Hidden Secrets of Money Episode 3 – From Dollar Crisis To Golden Opportunity

Mike talks about the Death Of The Dollar Standard and explains what you can do about it.

Hidden Secrets of Money Episode 4 – The Biggest Scam In The History Of Mankind (In 7 Easy Steps)

As I mentioned already, if you only have time to watch one of the videos in this series, this is the one. In this video–the only one that lives up to the “hidden secrets” in my opinion–Mike explains how money is created out of debt, and how paying off debt would cause the entire system to collapse. He shows how the entire fiat banking system is a fraud, the cause of inflation and much much more. Pass this one on to your friends that need to take the red pill.

Hidden Inflation: Energy Efficient Light Bulbs

Potato Chip Inflation
Potato Chip Inflation – 2 oz less for your family

Food and energy are things everyone needs that are highly susceptible to inflation, which is why both are excluded from core inflation statistics (PCE) that are routinely presented by the MSM.  Inflation does not always mean prices go up however.  Sometimes, producers can give you less product for the same amount of money, giving the perception that prices have not changed.  We don’t notice we’re getting less for our dollar because the bag of chips is the same size as it always has been, but there are actually less chips in the bag.  While some tricks to hide inflation are obvious, such as smaller packaging (or small contents in the packaging), others are more deceptive and sinister.  The push to ban incandescent light bulbs is the deceptive sort, where politicians use environmental concerns to hide the price inflation of electricity.

Almost in unison, governments around  the globe have begun limiting or phasing out incandescent light bulbs in favor of energy efficient light bulbs. When this sort of legislation began, fluorescent light bulbs (CFLs) where the only mass-market option, and they continue to dominate more expensive LED bulbs.  The environmental argument is that we have to reduce energy consumption to save the planet from global warming.  But ask yourself: how does the planet benefit from the countless numbers of fluorescent bulbs, which contain mercury vapor, being broken and dumped in land fills? In fact, each CFL contains as much as 5 milligrams of mercury, a toxin which eats brain cells non-stop and cannot be removed from the body.

While researching this article, I found a number of government-funded sources claiming that we shouldn’t worry about mercury vapor from CFLs.  For example, Nation Geographic tries to blow it off as a non-issue.  In contrast, this video from the University of Calgary Faculty of Medicine Dept. of Physiology and Biophysics which shows how mercury causes brain neuron degeneration:

The mechanism of hiding inflation in energy efficient light bulbs

The real reason governments want to ban incandescent light bulbs in favor of toxic, mercury-filled CFLs is to hide increases in energy prices.  By forcing people to use less electricity, energy companies can charge more, while providing less.  Like the half-empty potato-chip bag, the total amount of your electric bill remains the same, but you’ve consumed less electricity.

Compact fluorescent light bulbs (CFLs) contain mercury.
Compact fluorescent light bulbs (CFLs) contain mercury.

Countries that have legislation to phase out or ban incandescent light bulbs include:

  • China
  • India
  • Philippines
  • Malaysia
  • Israel
  • The entire European Union
  • United States *
  • Canada
  • Cuba
  • Australia
  • New Zealand
  • Argentina
  • Brazil
  • Venezuela

How many of these countries are in a race to devalue their currencies?  Which ones have populations suffering from inflation that the government pretends doesn’t exist?


* In the US, you might think this is new legislation from Obama, but in fact George W. Bush signed the Energy Independence and Security Act (EISA) into law December 19, 2007. The EISA creates a de facto ban on incandescent  bulbs by requiring unrealistic, or unobtainable, efficiency standards for standard bulbs.

Stefan Molyneux and G. Edward Griffin on Central Banking and Financial Collapse

Here’s a great video featuring Stefan Molyneux and G. Edward Griffin discussing:

  • the basics of central banking.
  • historical examples of honest banking.
  • theft via inflation.
  • how fractional-reserve banking enables war.
  • false patriotism.
  • predictions on when the current system will collapse.

Stefan Molyneux

Stefan MolyneuxIf you’ve never heard of Stefan Molyneux, he is an anarcho-capitalist philosopher who promotes voluntaryism and believes that the best way to liberate society is to raise our children with love and respect and teach them the true meaning of liberty. I’ve been following Stefan Molyneux for a couple years now, and I really like his philosophies on life, freedom and economics.

G. Edward Griffin

G. Edward GriffinG. Edward Griffin is a film producer, author, and political lecturer, best known as the author of The Creature from Jekyll Island, which explains, among other things, how the Federal Reserve was founded and the causes of wars, boom-bust cycles, inflation, depression, prosperity.  I’ve seen G. Edward Griffin in a few videos, but haven’t followed him as closely as I’ve followed Stefan Molyneux.  However, after seeing this video, I think I’m going to start following him more closely.


Silver & Gold by Burt Ives

In 1964, you were still allowed to teach kids about sound money on TV. It’s a miracle they still show Rudolph, the Red-Nosed Reindeer, considering it devotes an entire song to our favorite precious metals, silver and gold, and features Yukon Cornelius, the greatest prospector in the North. It won’t be long before they dub over the lyrics with Lady Gaga singing praises of fiat, like when they used CGI to replace guns with walkie-talkies in E.T.

Silver and gold, silver and gold
Ev’ryone wishes for silver and gold
How do you measure its worth?
Just by the pleasure it gives here on earth.

Silver and gold, silver and gold
Mean so much more when I see
Silver and gold decorations
On ev’ry Christmas tree.

What’s a Christmas tree without tinsel
And pretty silver and gold decorations?
Can’t really call it a Christmas tree now
Can you?
And think of all the fun and joy
That would be lost on Christmas morning
If all the young folks didn’t get to see
That sparkling happy tree.

Silver and gold, silver and gold
Mean so much more when I see
Silver and gold decorations
On ev’ry Christmas tree.

Merry Christmas to you all!