NAV Premiums of Certain Precious Metal Trusts and Funds - And Ah! Bright Wings

"When the people of any particular country have such confidence in the fortune, probity, and prudence of a particular banker, as to believe that he is always ready to pay upon demand such of his promissory notes as are likely to be at any time presented to him; those notes come to have the same currency as gold and silver money, from the confidence that such money can at any time be had for them...

The commerce and industry of the country, however, it must be acknowledged, though they may be somewhat augmented, cannot be altogether so secure, when they are thus, as it were, suspended upon the Daedalian wings of paper money, as when they travel about upon the solid ground of gold and silver."

Adam Smith, Wealth of Nations

By the way, from what I have been able to determine, Adam Smith never said, "The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money."

 

It is certainly popular on the internet, and quoted widely.  But I have never found even the use of the word 'fiat money' in any of his writings that I have examined closely, much less this particular quote. And his use of the word 'minority' seems to be confined to the context of someone who has not yet 'come of age' or their majority.

If you find an actual citation from his original works I would be glad to have it.  I spend quite a bit of time trying to search out the basis for various quotes.  I am not always successful, but am continually shocked at how many quotes there are that seem to be just constructed out of thin air. 

And this does not include the even more common practice of taking quotes selectively and out of context to support notions that the author could have hardly been expected to support given the body of their work and thought in context.

 

Related:  Paul Krugman Does Some Injustice to the Thoughts of Adam Smith on Gold, Silver, and Money

By the way, some of Krugman's acolytes later admitted the error.  If only his more vehement opponents would so willingly show such grace in a misstep, of which we are all capable.  But such is the undervalued status of truth at the extremes of the political continuum.  God is truly to be found in the ordinary things, and the exceptional, but as He defines such exceptional rarities in His economy.

 

Bill Black on the Rule of Predatory Finance Over Argentina

As you know I think that this ruling by the Supreme Court, written by Antonin Scalia, which essentially puts the Argentine people and the other creditors at the mercy of the demands of a few vulture funds, may prove to be a watershed, or perhaps trigger, event in the excesses of crony capitalism and the Empire of the Dollar. 

 

The blowback from this action on foreign assets held in the US, and on US corporate assets held overseas, may be profound.  

 

The BRICs will be having their annual summit in mid-July.   And the US has certainly given them something to think about,  set at least a part of their agenda,  and given them a common cause of concerns, over the past four or five months.   I see no reason for optimism that a ruling elite, grown in-bred and self-absorbed in its hubris, will do anything different in its self-serving policies.

 

If there ever was a time for enlightened leadership to rise to the occasion it is now.  And in looking over the current crop of puffed-up princes and predators, we can see none.

 

Robert Johnson with Paul Jay: Ugly Money Politics

"The danger is that as dysfunction increases and the people subject to that dysfunction are a very, very large proportion of the population, you start to either experience social disruption or you experience what you might call authoritarian crackdown on that social disruption.

And at one level or another, it would be nice to see a political reform, what you might call a civilized tacking in a new direction, rather than a physical confrontation. But sometimes you have to have a crisis to make change. And it's not clear that the elite stewardship, whether it be corporate or individual, is sufficiently constructive right now and able to bring this, how would I say, onto a new, more healthy path without some crisis as a precipitating factor. It might be environmental, it might be social.

Often, as Bismarck used to say, when you can't solve your own problems, you go to war. I wouldn't rule that out, given the strength and the vitality of the military-industrial complex in this country. But the last two or three wars we've been involved in haven't really shown the American people much that they, how would you say, took solace from. I think warfare's changed quite a lot.

And we're at a juncture now where I think what we really need is a healthy revitalization of politics, first and foremost getting money out of politics."

The entire series is on The Real News Network.

Gold Daily and Silver Weekly Charts - When Trust and Confidence Is Lost, The Die Is Cast

"After nearly 6 years of blocking the normal development of systemic transition, a blocking caused by a flood of dollars leading to a renewed artificial global addiction to the US dollar, history is now taking its course. It isn’t as if during these six years nothing has happened.

On the one hand, the US has failed to relaunch its economy and the actual situation for Americans has only got worse, and on the other, the emerging nations have used – and contributed to creating – this 'pause' to prepare themselves for the ultimate and inevitably painful stages of completing the crisis which we are now approaching.

The Ukrainian crisis and the characteristic aggression against the legitimate interests of one of the major players in the emerging multipolar world, Russia, as well as the US’ attempted annexation of Europe, have blown the whistle for the end of the game. The whole world has thus realized that the US was on its last legs, henceforth dangerous and that it had become urgent to move on."

GEAB N°86: The Major Global Geopolitical Reconfiguration

The BRICS will be having their 2014 Summit in Brazil on July 15, 2014.

The FOMC will be meeting tomorrow.

I am a bit surprised that so little has been said about the somewhat shocking US Supreme Court decision upholding the hardball tactics of the vulture funds with regard to the sovereign debt of Argentina.  I may attempt to write something particular about this in the coming week, but let me just say that it is looking like the first lightning flash in what could become the Perfect Storm.

These things have a cumulative effect. I suspect that trust in the government in Washington is falling to historic lows in places other than Main Street USA. 

Modern money is a confidence game, a masterful combination of both fraud and force.

All things considered, US bonds looks like a rather precarious place for some people to be, especially given the noises that the Fed is making about erecting barriers to exit for those in bonds funds.  And the grants which the Supreme Court has given to the vulture funds in the Argentina debt case has the potential to trigger a series of unfortunate events, with potential repercussions.

 

Nothing of consequence happened in the Comex gold warehouses the other day.  That must mean that all is well.

 

Few will see this one coming.

Have a pleasant evening.