Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

[jpatter666]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

I have seen opinion that the term "new deal" really applied to the very rich, not to the average person. The "new deal" for the American elite was to give up part of their wealth to avoid hanging by the neck from a lamp post, as was happening in Europe under the communist and socialist movements of the day.

Recently read "People's History of the United States" which while biased (the author is very open about this and clearly states that he's OK with that given nearly every other US history is biased coming from the other direction).

One of his basic tenets is that nearly all "reform" in the US was when TPTB felt the noose tightening, they allowed "reforms" in order to keep as much power as they could while giving away as little as possible.

The book makes for *very* interesting reading.

[c1ue]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

Yes. The 1933 law only applied to US citizens. At the time, the politics of rich versus poor in Europe was shaping into movements that made FDR's offer to the wealthy look like a good deal, to take a haircut on the value of gold holdings when exchanged for FRNs.

Thank you, and EJ, for the clarification.

I think it is safe to say that the situation today in Europe is significantly different than in 1933. For one thing, there is not the specter of Communism embodied in an actual nation.

You are taking the point literally. You first have to imagine a future in the US that is more like the conditions that occurred in Korea in 1998. The propaganda campaign will focus on assigning blame to deflect it from the true culprits and identify scapegoats. In the heat of crisis the masses will accept it blindly.

...

A well executed propaganda campaign that appeals to patriotism in crisis will erase in hours a lifetime of Internationalism.

I understand what is being said; I cannot say that I agree with it.

If anything the wealthy internationalists have been far more skilled in their use of proxies: witness the entire Tea Party movement and its Koch-ean underpinning.

The success of the Iraq (W version) campaign is as much due to the influence of 9/11 as it was any particular skill by the federal government. Certainly the WMD meme did not hold up very well over time at all.

What is Warren Buffett's purpose in making public pronouncements that he is under-taxed other than a move to build a reputation with the masses as one of the "good rich" to deflect popular anger that we see today away from himself?

I would note that Warren Buffett was saying that taxation was unfair long before our current situation. He first mentioned the dichotomy at least in 2006 and I believe very possibly before that:

http://www.nytimes.com/2006/11/26/bu...y/26every.html

The criticism does hold true for any number of other 'summer soldiers' though.

I apologize for the Ben Stinker reference in advance...

Another (non Ben S) related reference, this time in 2005:

http://www.cnn.com/2005/US/05/10/buffett/index.html

These are all fair questions. I can tell you that from numerous personal conversations with both Bill Black and Elizabeth Warren that they conflate FIRE Economy abuses of power to abuse of power by the wealthy in general, regardless of how that wealth was earned. I have done my best to get them to see the difference but to no avail.

Indeed, I do actually agree that most of the potential reformers we see today are indelibly touched by their political leaning.

Mr. Black in particular often undertakes massive gyrations in trying to assign our present situation to the Republicans; it is with great difficulty that he seems to be learning that the rogues are on both sides of the aisle.

We may yet get the commissions you list. We have not so far because reflation was too effective, at least compared to the inaction from 1930 to 1933 that created the political conditions for formation of those commissions.

Perhaps so, and I do hope so.

I personally very much doubt it though, because unlike the Great Depression the federal government was not itself one of the instruments preventing reform.

Again and again in this latest episode of boom & bust, the machinery of the federal government has been used to peel back legislation based on lessons learned and to undercut regulatory supervision.

While in general I have zero sympathy for "Starve the Beast" and the like, at the same time it is quite true that government (or lack thereof) is a huge factor in our present situation.

So perhaps we can be united in hoping "the worse, the better", because it seems neither Fred, EJ, nor myself believe reform will occur without sufficient misery to engender true change.

Then again, sometimes the gem shatters instead of getting faceted.

[LazyBoy]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

We we all "turn in" our gold quite voluntarily if we have not already sold it, because we will get new currency that is de-facto backed by the very same gold.

So? That gold will also have to back a much larger amount of existing, currently un-backed currency. Wouldn't that make it advantageous to keep it? (In the "voluntary" scenario.)

Did you mean"new" currency as in New Dollars each worth N Old Dollars?

Anybody know how much US currency is out there? (Including electronic, I guess.)

[LazyBoy]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

EJ writes in:

You first have to imagine a future in the US that is more like the conditions that occurred in Korea in 1998. The propaganda campaign will focus on assigning blame to deflect it from the true culprits and identify scapegoats. In the heat of crisis the masses will accept it blindly.

With respect, it might help to paint a picture of this future before telling us the societal impact.

[gnk]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

With respect, it might help to paint a picture of this future before telling us the societal impact.

With all due respect, if you have been following EJ's articles in the past - such a future should not be that difficult to imagine.

[cjppjc]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

[QUOTE=FRED;211954]EJ writes in:

I am a little unclear on what is being said here.



Yes. The 1933 law only applied to US citizens. At the time, the politics of rich versus poor in Europe was shaping into movements that made FDR's offer to the wealthy look like a good deal, to take a haircut on the value of gold holdings when exchanged for FRNs.



You are taking the point literally. You first have to imagine a future in the US that is more like the conditions that occurred in Korea in 1998. The propaganda campaign will focus on assigning blame to deflect it from the true culprits and identify scapegoats. In the heat of crisis the masses will accept it blindly.



A well executed propaganda campaign that appeals to patriotism in crisis will erase in hours a lifetime of Internationalism.



Elites as the target of popular anger will be used to motivate high net worth gold owners, whether they are members of the elite or not, to turn in gold for the greater good.



You can see this taking shape already. What is Warren Buffett's purpose in making public pronouncements that he is under-taxed other than a move to build a reputation with the masses as one of the "good rich" to deflect popular anger that we see today away from himself?



These are all fair questions. I can tell you that from numerous personal conversations with both Bill Black and Elizabeth Warren that they conflate FIRE Economy abuses of power to abuse of power by the wealthy in general, regardless of how that wealth was earned. I have done my best to get them to see the difference but to no avail.

They do have a soft spot for technology entrepreneurs, particularly those who support liberal causes, but deep in their souls is a grinding animosity toward capitalists that I presume was learned at Mother's or Father's knee. It was for me. I had to unlearn it through the experience of running two companies and being responsible for both employees, who comprise the value of a business, and the shareholders who make the enterprise possible by supplying capital.

This is why the phrase "socialist entrepreneur" is an oxymoron.

I believe that the cure for socialism is to give socialists the responsibility of making payroll.

We may yet get the commissions you list. We have not so far because reflation was too effective, at least compared to the inaction from 1930 to 1933 that created the political conditions for formation of those commissions.

The diffuse and unqualified anger and passion of the Occupy Wall Street Protesters is a harbinger of what is to come. As Eric Hoffer noted in his seminal book on mass movements:

All mass movements avail themselves of action as a means of unification. The conflicts a mass movement seeks and incites serve not only to down its enemies but also to strip its followers of their distinct individuality and render them more soluble in the collective medium.
-- Eric Hoffer

I doubt if the oppressed ever fight for freedom. They fight for pride and for power -- power to oppress others. The oppressed want above all to imitate their oppressors; they want to retaliate.
-- Eric Hoffer, The True Believer (1951)

When our individual interests and prospects do not seem worth living for, we are in desperate need for something apart from us to live for. All forms of dedication, devotion, loyalty and self-surrender are in essence a desperate clinging to something which might give worth and meaning to our lives.
-- Eric Hoffer, The True Believer (1951)

Passionate hatred can give meaning and purpose to an empty life. Thus people haunted by the purposelessness of their lives try to find a new content not only by dedicating themselves to a holy cause but also by nursing a fanatical grievance. A mass movement offers them unlimited opportunities for both.
-- Eric Hoffer

I have long warned here on iTulip that a new era of unreason would be upon us once the bubble era ended. The ingredients and antecedents for a destructive and violent mass movement are extant: a large population of uneducated citizens who have been humiliated by financial losses from two government-backed bubbles that enriched a minority, plus the added insult to injury of long-term unemployment that grinds a sense of meaning and self-worth into despair. Along comes social media to accelerate the process. History is full of such unfortunate coincidences.

It does seem EJ has moved on the Doomer Scale. I don't enjoy reading this.

[doom&gloom]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

It does seem EJ has moved on the Doomer Scale. I don't enjoy reading this.

All the more reason to internationalize your assets where possible.

[cjppjc]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

All the more reason to internationalize your assets where possible.

I have no assets to internationalize. Just thoughts to internalize.

[leegs]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

I have no assets to internationalize. Just thoughts to internalize.

Awesome!

[vt]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

FDR is the last type we need. Instead we need a clone of Harry Truman and Ronald Reagan.

Elizabeth Warren and Bill Black also are lost causes, as are their counterparts on the right.
As Shakespeare said: "A pox on both your houses"

[rogermexico]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

So? That gold will also have to back a much larger amount of existing, currently un-backed currency. Wouldn't that make it advantageous to keep it? (In the "voluntary" scenario.)

The premise of the gold window reopening is that the US gov. will find it necessary to allow exchange of dollars internationally for gold in order to stabilize the value of the dollar and stop runaway inflation. How much it "backs" is irrelevant as far as an actual ratio as long the value of the dollar is now stable and the ratio remains the same. Once that happens, the reasons for holding gold, both in terms of protection against the event that has already occurred and the goal of seeking abnormal profits, will no longer be there.

The reason you and I will likely cooperate, if we have not sold the gold already, is that they will make it disadvantageous to hold it so that it can be added to the reserves that will back the dollar - the reserves that you are concerned will be too low relative to whatever metric of the money supply you want to use.

Did you mean"new" currency as in New Dollars each worth N Old Dollars?

I mean new in that any dollar now backed by gold internationally will be a new thing we have not seen since before 1971- whether it is paper printed in the late 90's that stops depreciating or whether it has some official name (which I doubt) the effect will be the same

[cobben]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

EJ writes in:
A well executed propaganda campaign that appeals to patriotism in crisis will erase in hours a lifetime of Internationalism.

CA Fitts has made a case, nay was told decades a go by connected people, that "capital" had given up on the US and was moving out.

To China of course, though "where to" is not so important from the US perspective I suppose, though Armstrong seems to agree with China being the future financial focus and collecting point.

A few Swedish multinationals want to move headquarters to China it seems, birds of a feather flock together and all that.

[renewable]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

This is the official iTulip position on leasing of Treasury gold:

Given America's historical unilateralism with respect to foreign gold obligations, in a crisis, who would you rather be, a foreign holder of a paper claim against US Treasury gold or the US government with the gold in the vault?

I had understood that when gold is leased by a CB, physical gold actually leaves the CB.

It appears that the iTulip position is that when CBs lease gold, no physical gold leaves the bank, only paper?

If this is correct, why would anyone have any claim against US Treasury gold - i.e. if the Treasury has only leased paper gold to bullion banks, it remains the Treasury's gold anyway? There is no claim on it, as it has just been leased. Surely the only liability would be with the bullion banks?

[raja]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

And more worrisome: who is standing in the wings who has any credibility or capability to accomplish will need to be done?

Eliot Spitzer?

[bart]

Re: Essential Trends - Part I-A: Gold in an Era of Global Monetary System Regime Change - Eric Janszen

...
Anybody know how much US currency is out there? (Including electronic, I guess.)

Little clue what you mean by electronic currency, but total currency & coin is around $1.045T.

http://research.stlouisfed.org/fred2/series/WCURCIR