THERE IS NO MEANS OF AVOIDING THE FINAL COLLAPSE OF A BOOM BROUGHT ABOUT BY CREDIT EXPANSION. THE ALTERNATIVE IS ONLY WHETHER THE CRISIS SHOULD COME SOONER AS A RESULT OF A VOLUNTARY ABANDONMENT OF FURTHER CREDIT EXPANSION, OR LATER AS A FINAL OR TOTAL CATASTROPHE OF THE CURRENCY SYSTEM INVOLVED (Ludwid Von Mises)And that explanation is why the Austrian School of economics is correct.
Many of you have read commentary by Egon von Grayerz. He is the chief strategist for a Swiss asset management firm and his writing is not only highly insightful and polished, but should be examined carefully. I've strung together some quotes from his latest interspersed with my own commentary. But I hope everyone reads the von Grazerz piece its entirety (linked below - it's not long).
The reason that Keynes' model does not works is that "governments worldwide are totally incapable of stopping the money printing. This is their only means of staying in power and buying votes. But not only that, this is the only method they know. This has been their patent solution to all economic problems in the last decades. Not that this is new in history."
Politicians and government organizations are one massive drag on the economy: "The transfer of capital from private enterprise to government by massive taxation is approaching 50% in many countries. The average for 18 industrialised countries is almost 40%. This means that on average 40% of the productive economy is transferred to a non-producing entity (government) which wastes most of the money in the process of redistribution."
In addition, despite the repeated promises of austerity and fiscal restraint, the governments here and in Europe have proven repeatedly to be completely incapable of cutting spending and reigning in deficits: "There will be no lasting austerity programmes in any country that can print money. Governments are incapable of sticking to austerity measures since in the end that is a guaranteed way of losing power. As power is the main purpose of all governments, they will use any method to retain it."
This Keynesian system has created a gigantic welfare class that gets bigger by the day. Every god damn month in the United States the percentage of people who get food stamps increases: "For a great many people it is now totally natural to rely on the state for their needs rather than on themselves."
Fool me once, shame on you. Fool me twice, shame on me. Fool me three times...you are a criminal and I'm insane. Anyone who continues to have faith in the United States Government and buys into the promises being delivered by our leaders is certifiably insane. Absurdly, Obama was on national television yesterday giving a "fiery" (as it was described by the media) speech which contained a reconstituted version of the same f*%king promises he issued in 2008, but on which he has resoundingly failed to deliver. You want to believe him yet again?
There is nothing we can do - unless we do something collectively that goes well beyond voting - to change this. If you want to give yourself the best shot at surviving what is coming financially, then the ONLY way to achieve this is by moving as much of your wealth as you can into physical gold and silver. As von Grayerz puts it:
In order to preserve wealth and keep capital intact, it is critical to keep a major part of investment assets in precious metals held outside the banking system. But for investors who continue to follow conventional wisdom, they will sadly find that their investment strategy was merely conventional and contained no wisdom.But be prepared to hold your gold for the long haul and expect that there will be vicious corrections (like the current one):
Governments are creating credit and paper money and consequently through their fraudulent actions “stealing” from the people whilst at the same time increasing the people’s dependence on the state. And the people does not understand that the value of paper money is declining continuously. But gold reveals the deceitful destruction of paper money. This is why governments do not like gold and try to suppress the gold price.Use these corrections to move even more paper fiat currency into physical metal. And don't listen to your idiotic investment advisor when tries to tell you that gold is risky and is in a bubble. That is utter bullshit. Ironically, gold is the safest thing you can hold on to right now. Want proof? If gold was risky and at the top of a bubble, why aren't the European countries who are in a state of collapse selling their gold to raise money? Italy is one of the larger sovereign holders of gold in the world...As von Grayerz states:
Gold is money and reflects the total destruction of paper money. But most investors do not understand gold. Common arguments I hear is that “you can’t eat gold” or that “gold pays no return.” It seems that these investors prefer to eat paper money. And as to the argument that there is no yield on gold, who needs yield on an asset that has massively outperformed all major asset classes in the last 11 years.Here's von Grayerz's piece: LINK - Deus Ex Machina
The reality is that - and forget about Europe for a moment - the United States has created a debt and spending bomb that gets worse by the day. Our banks are still technically insolvent - after the Taxpayers shelled out a few trillion to bail them out in 2008 - and are headed for another collapse. Europe is being used as the excuse but it's really just part of the problem - the problem of which the United States is the largest component.
You can sit by and hope and pray that things turn around in this country. But that's insane thinking because they won't. The spending deficits, economic decay and corruption will continue to get worse until the U.S. dollar collapses. Your best "hope" is to continue or commence accumulating as much physical gold and silver as you can - not GLD, not CEF and not PHYS (unless you have enough money to convert your PHYS into 400 oz. bars of gold). At least PHYS can make good on that delivery. GLD and CEF can not.