Sunday, October 12, 2008

Look at my Wad!!

So, there I was for most of last week, staring at Forex and Stock Market feeds, trying to pick out the right transaction and precise moment when my well placed £100 trade would be the butterfly in the rain forest that brought the whole stinking facade down once and for all

I think I must have blinked

The Jesus Nut of global finance eluded me once again

Ah well, the system lived for another week

Just another

The UK economy passed an interesting milestone on Wednesday, though I don't think it was subject to much comment

Interest rates were cut to 4.5% from 5.0%

...passing the official inflation rate of 4.7% on the way down

Yup, anyone with money in a bank, is now officially getting shafted and can look forward to watching the purchasing power of their savings officially shrink day by day

and that's before you take taxation and the
real rate of inflation into account

The fact that the bank might accelerate the process and decide to take the lot in a puff of smoke is just a bonus

It is a real mystery to me how anyone can still think that the system we are subject to can be called capitalism

In a real capitalistic system reward is supposedly commensurate to risk. Someone who places their capital in a situation where they might lose it has every right to expect a higher level of return on that capital

Unless, apparently, you are an ordinary mug putting his savings into a deposit account. In which case, you are
guaranteed to lose at least some of your capital at a steady rate, maybe even lose the lot, and get fuck all in return

On the other hand, if you are a god of finance you can take spectacular risks with non existent capital on rigged markets, carve off the bulk of any profits and demand a state sponsored bail-out if things go tits up

That's kleptocracy, not capitalism

And the super-funny thing is that, within the confines of the current system, there's fuck all the average mug can do about it

All the exits have been closed

There's no way any ordinary person can secure their income or savings from the predators

All entirely accidental of course


There's been a lot of talk on the Internet, even in some comments on this blog, about how fab gold is at times like these. Worryingly, even the BBC and Sky have been including features about gold's fabness in their news programming this last week

which should be enough to make any Conspiraloon feel at least a little bit nervous

A True Loon takes a contrary approach to any established, and well promoted, wisdom

So, what's the catch with gold?

The most obvious catch is, I think, that the same bastards who have created this bullshit financial system and bullshit money have already used some of that bullshit money to secure a fair pile of the shiny stuff in advance

More importantly, I think they've also secured control of most future gold supply (and oil, and food, and water, and infrastructure) and are in the process of mopping what's left up as I type

How else do you explain the apparent paradox of people falling over themselves to buy bullion, and mints stamping away 24/7, at the same time as a suppressed market gold price?

I always thought that in a capitalist, free market system if something was in short supply its price was supposed to go up

By most technical measures, gold is selling at a very reasonable price right now

Try and find some

And it's worth checking out who sets the gold price...

* Bank of Nova Scotia
* Barclays Capital — Replaced N M Rothschild & Sons when they abdicated (yeah, right)
* Deutsche Bank
* Société Générale

One of the impacts of an artifically suppressed market gold price is that all the gold still left in the ground, which is a lot, also falls in price

Which means that the stock price of any company that owns a gold field also falls in price

Which, combined with a little, or in the case of Canadian mining stocks, a lot of, naked short selling means that you (or rather NOT you) can buy all the world's future gold production for a song

With all this in mind, the gold producers' page on the excellent website makes for amusing reading

Whilst the little guys are buying a few poxy coins, the big guys are taking over the mines

I understand the arguments for a gold based system and they have merit but, sorry Conspiragoldbugs, unless we live in a more honest world it doesn't matter what our coins are made from

First the honest world. Then the honest money


Having said all that, there is a strong argument for buying a little gold and silver to tide yourself over for a few weeks or months if the system does come crashing to a halt

But here's a thought

One I'm still working on, so it's a little rough around the edges

The biggest problem with a paper based, fiat money system is that, unlike a gold-pegged system, money supply is unchecked by any physical restrictions

The central bankers can literally print as much cash as they like, and do

Or can they?

What the central bankers actually create is an unlimited supply of electronic IOUs

Actual physical cash constitutes less than, maybe much less than, 3% of our money supply

Thanks to fractional reserve banking, notes and coins are in short supply.

And if the banking system did grind to a halt and the banks closed one day, people would start using existing notes and coins, not gold, to facilitate transactions in place of cheques or debit and credit cards

After years of forcing people over to electronic systems to facilitate greater control, the infrastructure simply doesn't exist to distribute inflationary amounts of physical currency. It's all done with computers now and to put a wheelbarrow-filling Weimar-style physical money machine in place would take months

For a time at least, physical cash truly would be King

And it's not as if keeping it in a bank is particularly safe or earning much of a return these days

That's what They are most scared of. They're not scared of a few people buying and selling a little gold. They're scared of everyone calling the Big Bluff and asking for their money back en masse

Visit your local ATM today!

And if you're worried about the durability of paper money break it down into small change. Small change is fire-proof, too heavy to steal in large quantities, has some inflation-limiting inherent scrap value and if push comes to shove you can hit anyone who's got some gold over the head with a sock filled with it



Anonymous said...

Forget democracy. Withdrawing your money from the bank is the most power you will ever have over the system. If less people than vote on X-Factor all went out tomorrow and withdrew their cash from the bank, the entire system would crash within days.

Try doing that with your vote...

Stef said...


That long?


Anonymous said...

"Withdrawing your money from the bank is the most power you will ever have over the system."

That's is why there are money laundering laws. Once in hand you can't actually do anything with it. You can't spend more than GBP 10K at a time.

Anonymous said... for those who want to buy some gold.