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Nothing like a crisis to make the masses more pliable for an offer they think they cannot refuse. Never waste a crisis, and if you don't have one, make one.
The Banks and their posse continued to stand on gold and silver today against the market correlations. Fairly typical post option expiration action if you can call anything typical in these times of national madness. The madness of course is to hand over the management of your life savings and your living standards to such corrupt, self-centered nincompoops.
I think we will see a contrived slither out of this budget impasse, early next week, maybe pre-announced Sunday evening, so the can kicked over to a 'blue ribbon council' that can address the nation's business without directly involving the public or their elected representatives. And the Banks and their delegates may make you an offer you cannot refuse, again. It smells like TARP in here.
"With only 2% of the money in circulation being in gold and silver, John Law reasoned that financial stability could only be restored if the amount of paper, shares and money, was reduced and the value of [precious metal] coins was increased.
Accordingly, over a period of weeks thousands of livre notes and share certificates were publicly burnt. But confidence in paper had been lost. Every smoldering bonfire sapped the credibility of paper, and the press for coins grew more insistent.”
Janet Gleeson
I especially like the above quote by the way, because it shows that John Law's common sense reasoning held that a dramatic decrease in money supply, a 'monetary deflation' if you will, would increase the value of the currency, even when its underlying value, all the things that make it worthwhile in the eyes of the market, continued to deteriorate at a much greater rate than he could burn them.
It's Midnight. Do You Know Where Your Reserve Currency Is?
National Madness
Gilbert Keith Chesterton
"This slow and awful self-hypnotism of error is a process that can occur not only with individuals, but also with whole societies. It is hard to pick out and prove; that is why it is hard to cure. But this mental degeneration may be brought to one test, which I truly believe to be a real test.
A nation is not going mad when it does extravagant things, so long as it does them in an extravagant spirit. But whenever we see things done wildly, but taken tamely, then the State is growing insane...
I should, in other words, think the world a little mad if the [wild] incident, were received in silence. Now things every bit as wild as this are being received in silence every day.... For madness is a passive as well as an active state: it is a paralysis, a refusal of the nerves to respond to the normal stimuli, as well as an unnatural stimulation. There are commonwealths, plainly to be distinguished here and there in history, which pass from prosperity to squalor or from glory to insignificance, or from freedom to slavery, not only in silence, but with serenity.
The face still smiles while the limbs, literally and loathsomely are dropping from the body. These are peoples that have lost the power of astonishment at their own actions. When they give birth to a fantastic fashion or a foolish law, they do not start or stare at the monster they have brought forth. They have grown used to their own unreason; chaos is their cosmos; and the whirlwind is the breath of their nostrils.
These nations are really in danger of going off their heads en masse; of becoming one vast vision of imbecility, with toppling cities and crazy country-sides, all dotted with industrious lunatics.... "
See you Sunday evening.
There will be no sustained recovery until the banks are restrained, and the financial system is reformed.
VIX spiked and the traders are edgy, but there remains a widespread belief in a cynical resolution. I have a suspicion that the US is being brought to a crisis so that the bankers, through their political proxies in Washington, may make the people another offer which they cannot refuse.
In other words, there is 'a whiff of TARP in the air.'
I had to chuckle again a bit as the pampered princes and princesses on Bloomberg were puzzled by the weak GDP number this morning in the light of 22 percent rises in corporate profits.
If something looks too good to be true, guess what. But what else would one expect in a system of lax regulation, crony capitalism, massive corporate tax evasion, corrupt regulators and ratings agencies, and widespread accounting fraud?
"That brings us to the final outcome of this debacle. A radical campaign to reshape popular opinion recognized the seductive potential of the appealing phrase "free markets." Powerful business interests, largely captured regulators and officials, and a lapdog media took up this amorphous, malleable idea and made it a Trojan horse for a three-decade-long campaign to tear down the rules that constrained the finance sector. The result has been a massive transfer of wealth, with its centerpiece the greatest theft from the public purse in history.
This campaign has been far too consistent and calculated to brand it with the traditional label "spin". This manipulation of public perception can only be called propaganda. Only when we, the public, are able to call the underlying realities by their proper names—extortion, looting, capture, propaganda—can we begin to root them out."
Yves Smith, Econned
“I have not sold any gold, I have bought more gold. If gold goes down I'll buy more. The price of gold is going to go much, much higher over the next decade.”
Jimmy Rogers
I suspect that the capping on gold and silver will continue into the month end tomorrow, and quite likely into some resolution of the debt ceiling discussions which will probably occur next week. They might not, and that will indeed be interesting. The Mad Hatter and his Merry Pranksters think that a 'little default' might be a good thing to make the country more malleable to their non-negotiable demands.
On a deal, the first impulse will be for stocks to rally sharply and the metals get beaten, in the usual 'risk on' trade. However, depending on the resolution of the debt ceiling, when people think of it after they have had their jollies in the first reaction, they may realize that absolutely nothing has really been fixed. The US financial system will still be corrupt and broken, and the politicians have openly stopped caring about the voting public and their opinions, in their desire to put on the corporate feedbag.
Speaking of broken systems, I am featuring worthless currencies on the sidebar this week. And one I am highlighting below, the famous US Continental Dollar, and a chart showing how it was devalued in comparison to silver, until it was finally withdrawn in 1781. Roughly two zeros were knocked off it.
I was discussing this with a friend and they said, 'Well of course, but these currency failures are the result of unfunded war debts. It is not the same in the US now.'
It's not? The US debt crisis is directly attributable to unpaid war debts, both class war and military conflicts in the famous global war on terror and on the middle class. They'll never learn.
Bon voyage, Bucky.
The early gains fall apart, as Wall Street grows increasingly 'nervy' over the House Republicans increasinly awkward looking actions on the debt ceiling. They are bending over backwards to impress a minority element in their Party.
No I am not talking about the Tea Party. I am talking about the big money corporatists, who write the politicians' pay checks. The Tea Party are hapless tools and cannon fodder for these folks, but they just don't realize it yet.
You cannot have a recovery until your reform the financial system. The white collar criminal class does not know how to say 'enough.' Their greed is obsessive - compulsive, not rational.
