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
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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
* HSBC
* 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 miningnerds.com 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
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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
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