Stocks and Precious Metals Charts - Change Forged in Misery and Blood

 

"The only resource against political disorders that had been known till then was the concentration of power. Solon undertook to effect the same object by the distribution of power.  He gave to the common people as much influence as he thought them able to employ, that the State might be exempt from arbitrary government.  It is the essence of Democracy, he said, to obey no master but the law.  Solon recognised the principle that political forms are not final or inviolable, and must adapt themselves to facts; and he provided so well for the revision of his constitution, without breach of continuity or loss of stability."

John Dalberg Lord Acton, History of Freedom in Antiquity, 1877

"Gold does have some remarkable qualities that make it quite suitable for use as money.  No one can create it, it is enduring, and relatively stable in terms of growth.  As an external standard it is almost ideal.  There is little wonder that diverse societies have gravitated towards gold and things like it down the long corridor of time.  And yet it does have one drawback: gold alone cannot enforce honesty on a corrupted system.  The recent growth on paper of the rehypothecated gold supply is one case in point.

There is no secret to creating a workable system.  I know I could do it, and many other people could so as well and perhaps much better.  The problem is that people with power do not wish to have a good system.

There will be no good and sustainable monetary system easily reached for the same reasons that this generation of leaders can no longer create and put forward fair and workable laws for their own country.  They are overcome by ego and greed.  They wish for a system riddled with loopholes and personal advantage for them and their friends.  So this is what is produced.  And until this changes, progress and change will be spattered with misery and blood, as it has so often been in the past.

If there is any key point I wish you to take and hold in your minds and hearts it is that there is no such thing as a perfect, self-regulating monetary system.  There could only be such an ideal model if men and women were angels, perfectly rational and reliably virtuous.

And like wealth, the distribution of reason and virtue is very uneven, and so all systems must rely on a continuing effort and bias towards equal justice for all.  And this has inescapable requirements for the design of the system.  Among these are transparency and the rule of law.  And the assumption that there will always be those who will be actively attempting to subvert the system, some bluntly, and some quite cleverly. So there must be a mechanism for administering justice, for all.

Money is power, and power corrupts.  No system can succeed by its own design if its reins are held in the hands of mortal people, with all their weaknesses and failings.  So the system must account for this, and accommodate change and judgement, as well as the balance of justice.

This was the great innovation of the US Constitution, the balance of power and its ability to change and evolve through law, with its commitment to justice and equality as an ideal, integrated into its construction, even though imperfectly by imperfect men of their time. This is what made it such a bright star on the darkened horizon of human endeavour, a hymn to human freedom. And look what they've done to our song.

It will be fascinating to see how this evolves. Will we see the creation of an SDR like monetary instrument based on a basket of items and currencies not under the control of a single power bloc?

Will the world evolve into three or four powerful trading blocs, each with their own currency arrangements? Will the current dollar hegemony continue on until the collapses, and the what could have been an evolution will be a more sudden monetary revolution in which great wealth is destroyed, transferred and created anew?

We do live in interesting times. And inescapably, these questions are now being addressed in the ongoing struggle for monetary power, in what some have called the currency wars."

Jesse, Currency Wars, 9 September 2013

"How long can the US government protect the dollar’s value by leasing its gold to bullion dealers who sell it, thereby holding down the gold price?  Given the incompetence in Washington and on Wall Street, our best hope is that the rest of the world is even less competent and even in deeper trouble.  In this event, the US dollar might survive as the least valueless of the world’s fiat currencies."

Paul Craig Roberts, The Golden Rule, Daily Kos, 19 May 2009

"The vast majority of privately negotiated OTC contracts are settled in cash rather than through delivery. Cash settlement typically is based on a rate or price in a highly liquid market with a very large or virtually unlimited deliverable supply, for example, LIBOR or the spot dollar-yen exchange rate. To be sure, there are a limited number of OTC derivative contracts that apply to nonfinancial underlying assets.

There is a significant business in oil-based derivatives, for example. But unlike farm crops, especially near the end of a crop season, private counterparties in oil contracts have virtually no ability to restrict the worldwide supply of this commodity.  Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."

Alan Greenspan, Testimony to Congress, July 24, 1998

We are now dealing with people in positions of power who are lawless, and have demonstrated that no crime, no matter how horrific or dishonorable, is beyond them.  And they have no shame, and believe that they will never be held to account for their transgressions.  This is the fruition of moral hazard.

Change is coming, slowly.  And those who have served their basest desires and wickedness in high places, for many, many years, will not accept that change quietly. 

This is the lesson from history.

Global automotive giant Honda has reportedly posted an annual loss for the first time in 70 years.

Stocks shook off geopolitical tremors and awful inflation numbers and extended their rally.

Bitcoin jumped higher in the last hour of trading.   I am now more convinced than ever that it is a control fraud that will end in misery, but only after it has been used by unscrupulous people to add to their wealth.

The Dollar rallied.  Gold and silver were smacked lower.

Never forget this is a currency war, and the US and the BRICs are at the epicenter of it.

VIX is once again supine.  The mispricing of risk is a key element of any financial asset bubble.  

I am not going to try and convince anyone of anything.   There is no sense talking with people given over to madness, and those determined to be rich through extraordinarily means. 

As always, people are free to serve whom and what that they wish.

Free to follow and serve their idols, even into the abyss.  And many will.

This is the lesson from history.

But for many of us, the challenge is to be a Christian, and remain standing in faith in an increase of lawlessness. 

Have a pleasant evening.