Tuesday, June 29, 2010

A Must-Read Blog Post From Eric King

Eric King dissected the recently released BIS (Bank For International Settlements), which is a secretive and powerful organization that functions as a "central bank" for all Central Banks. As has been discussed on this blog, the underlying structural problems which led to a de facto collapse of the U.S. banking system in September 2008 were never addressed - they were papered over in a move that functioned to transfer a massive amount of wealth from U.S. taxpayers to the "too big to fail big banks" and the people who run them.

Based on all the indicators I track, the global financial system is headed toward a financial collision which will make the 2008 event look tame by comparison. As King highlights from the BIS report:
Policy rates are already at zero and central bank balance sheets are bloated. Although private sector debt has started to decline, public debt has taken its place, with sovereign fiscal positions already on an unsustainable path in a number of countries. In short, macro-economic policy is in a vastly worse position than it was three years ago...
Quite frankly, I find that statement from the BIS to be an extraordinary admission of failure by the world's Central Banks in their attempt to apply Keynesian economic principles to "fix" the global economic problems.  It is a brutal assassination of Bernanke's self-proclaimed expertise on having the ability to use his toolbag of economic voo-doo in order to avoid the next Depression (I didn't think it was possible, but Bernanke is even more arrogant than Greenspan and will eventually be regarded as equally incompetent).

As Eric King asserts, and I completely agree this assessment:
The very fabric and the seams of the financial system are coming apart. Who knows what the timetable is for the implosion of the current monetary system? We are witnessing the greatest wealth transfer in history, and the horrors of the aftermath of this tragedy will not be forgotten for decades...You must own gold to be on the right side of the greatest wealth transfer in history.

Here is the link to King's blog entry:  Got gold?  Here's the link to the BIS report:  BIS Annual Report

You actually don't need to read those two items in order to understand what is going.  The trading action in the gold/silver is market is sending a VERY LOUD signal.  The one remaining "policy" tool which has yet to be applied in full force - and which isn't really a policy tool, but rather one last mechanism to effect the final transfer of wealth from the public to the wealthy elite - is the outright cranking up of the fiat currency printing presses.  Make no mistake, whether it's implemented under some sort of cloak and dagger disguise or with outright "helicopter drops of money," it's coming soon and the ONLY way to have any hope of seeing the other side with your wealth somewhat intact is to own gold and silver in substantial quantities.


  1. How will GOP Sen Scot Brown's opposition to taxing the banks play in Peoria?

    Dear Chairman Dodd and Chairman Frank,

    I am writing you to express my strong opposition to the $19 billion bank tax that was included in the financial reform bill during the conference committee. This tax was not in the Senate version of the bill, which I supported. If the final version of this bill contains these higher taxes, I will not support it.

    It is especially troubling that this provision was inserted in the conference report in the dead of night without hearings or economic analysis. While some will try to argue this isn't a tax, this new provision takes real money away from the economy, making it unavailable for lending on Main Street, and gives it to Washington. That sounds like a tax to me.

    I have always strongly opposed a bank tax because, as the non-partisan CBO has said, costs would be passed onto the millions of American consumers and small businesses who rely on major U.S. financial institutions for their checking, ATM, loans or other services. This tax will be paid by consumers who will have to pay higher fees and the small businesses that won't get the funding they need to invest and create jobs.

    Imposing this new tax is the wrong option. Our economy is still struggling. It is wrong to impose higher taxes and ignore the impact it will have on our economy without considering other ways we might offset the costs of the measure. I am asking that the conference committee find a way to offset the cost of the bill by cutting unnecessary federal spending. There are hundreds of billions in unspent federal funds sitting around, some authorized years ago for long-dead initiatives. Congress needs to start to looking there first, and I stand ready to help.


    Senator Scott P. Brown


  2. Excellent post. I have had the same thoughts regarding the cranking up of the fiat currency printing presses. This is a clear historical indication that hyperinflation is on the horizon. A few band of rich elites will control the fiat currency, thus will drive prices higher. I concur.

  3. Based on all the indicators I track, the global financial system is headed toward a financial collision which will make the 2008 event look tame by comparison.