Blockchain – Central Banks Banking On It

Source: Photosteve101 via Flickr

 

“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust …”

Satoshi Nakamoto (Unknown person or persons who designed bitcoin and created its original reference implementation, Bitcoin Core)

Fiat currency debasement and failure is why gold has survived and thrived for thousands of years  and indeed in recent years. It is why bitcoin is becoming more popular, with its growing market cap and ever-expanding ecosystem.

The day China says its currency is backed by gold

Donald Trump has gained a lot of airtime recently talking about how China has been ripping off the United States over the previous decades, artificially devaluing the yuan and protecting China’s own companies at the expense of ours, stealing our technology, and attacking our infrastructure via cyber intrusion. All of that gives one the sneaking suspicion that China is preparing for something, something bad, something devastating for the United States and our children’s future. Chinese actions in the South China Sea adds to this perception, this gut feeling. Why would the communists be building military bases out of nothing so far from home? There really is only one conclusion. Although the China apologists want to dismiss this narrative, taunting its proponents about their tinfoil hats, that uneasy feeling remains vibrant, just the same.

Ron Paul warns of coming stock market chaos as bottom falls out of market

Sharing his wisdom and insight on CNBC’s Futures Now program, Paul chastised the money changers for what he maintains is their endless game of “play[ing] havoc” with the stock market. The Federal Reserve has been in the business of artificially pumping fake fiat currency into the markets for more than a century, it turns out, and such activity is nearing the end of its shelf life.

According to Paul, the Fed’s “fallacy of economic planning” is responsible for all the market “bubbles” that are constantly waning and waxing between “booms” and “busts.” The instability caused by this Keynesian model of economics, he contends, will only end in disaster, whether it culminates in years, months, or even weeks.

Who’s Got the Gold?

In 1971, the US abruptly went off the gold standard, and in making the public announcement, US President Richard Nixon looked into the television camera and said, “We’re all Keynesians now.”

I was a young man at the time and had previously bought gold, albeit on a very small scale, but I recall looking into the face of this delusional man and thinking, “This is not good.”

However, the world at large apparently agreed with Mister Nixon, and within a few years, the other countries also went off the gold standard, which meant that, from that point on, no currency was backed by anything other than a promise.

Party Time

US Financial Analyst Predicts Inevitable Collapse of US Economy

The fact that Russia bought another 30 tons of gold earlier this week, bringing its total gold reserves to 1,238 metric tons should make the United States worried, said Todd Wood, the author of the book “Currency” and a contributing writer at the Washington Times.

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Russia is now the fifth-largest holder of gold reserves, according to the IMF. Moscow is increasing its gold reserves to strengthen the value of its own currency, the ruble. The smart move, Wood argues, adding that Russia is “preparing for the day when the tables will turn” and the world will see the decline of the Western economic power.

Market Perspectives The Monetary Illusion

When such a newsletter comes from an institution such as Guggenheim, the soon-to-come problems America faces couldn’t be more surreal.

 

As economic growth returns again to Europe and Japan, the prospect of a synchronous global expansion is taking hold. Or, then again, maybe not. In a recent research piece published by Bank of America Merrill Lynch, global economic growth, as measured in nominal U.S. dollars, is projected to decline in 2015 for the first time since 2009, the height of the financial crisis.

In fact, the prospect of improvement in economic growth is largely a monetary illusion. No one needs to explain how policymakers have made painfully little progress on the structural reforms necessary to increase global productive capacity and stimulate employment and demand. Lacking the political will necessary to address the issues, central bankers have been left to paper over the global malaise with reams of fiat currency.

America’s Alice-in-Wonderland Economy

Debt is good, dollar is gold, and stocks only go up—things are getting curiouser and curiouser.

The phrase “mad as a hatter” refers to the 19th-century use of mercuric-nitrate in the making of felt hats. Long-term exposure to mercury caused hatmakers to experience mood swings, tremors and emotional imbalances that made them appear mad.

We live in a world gone mad. Money printing—today’s mercury—has poisoned the whole financial system.

Trusted relationships have broken down. Fundamental truths appear suspect, and economic laws no longer seem to hold true. In America especially, it’s as if the whole economic system fell down a rabbit hole into a world where up is down, debt is good, and people exuberantly celebrate unbirthday parties every day of the year but one.

China may be ending dollar’s hold on reserve currency as early as September

On March 9, sources within China provided new information that validates that the Far Eastern economy is now ready to compete with, or even supplant, the dollar as the sole global reserve currency as early as September of this year. Having already completed a message interchange system that mirrors the same one in the West, the Chinese equivalent of SWIFT is now ready and is expected to be fully operational by the 3rd quarter of 2015, which will allow other nations to transact with the world’s largest economy without the need to purchase dollars as a medium of exchange.

The Next Empire

What this essentially means is that the sword is coming from multiple fronts against America and it is unavoidable at this point. We are watching a new chapter in world history unfold before our eyes. Pax Americana will go into the history books as a new empire takes shape and fills in the vacuum. The only thing that can turn America around at this point is turning back to God after repentance.

 

 

Throughout history, political, financial, and military leaders have sought to create empires. Westerners often think of ancient Rome as the first empire. Later, other empires formed for a time. Spain became an empire, courtesy of its Armada, its conquest of the New World, and the gold and silver extracted from the West. Great Britain owned the 19^th century but lost its empire due largely to costly wars. The US took over in the 20^th century and, like Rome, rose as a republic, with minimal central control, but is now crumbling under its own governmental weight.

Invariably, the last people to understand the collapse of an empire are those who live within it. As a British subject, I remember my younger years, when, even though the British Empire was well and truly over, many of my fellow Brits were still behaving in a pompous manner as though British “superiority” still existed. Not so, today. (You can only pretend for so long.)

But this does suggest that those who live within the present empire—the US—will be the last to truly understand that the game is all but over. Americans seem to be hopeful that the dramatic decline is a temporary setback from which they will rebound.

Not likely. Historically, once an empire has been shot from its perch, it’s replaced by a rising power—one that’s more productive and more forward thinking in every way. Yet the US is hanging on tenaciously, and like any dying empire, its leaders are becoming increasingly ruthless, both at home and abroad, hoping to keep up appearances.

China, Europe Agree on Currency Deal

China entered into a sizable currency swap deal with the eurozone this month that represents a stride toward establishing the yuan and euro as key world currencies. The agreement also means fewer U.S. dollars will be used in commerce between China and Europe.

“The agreement is one of the largest currency deals between China and a non-Asian trading partner,” Alanna Petroff wrote for CNN Money on October 10.

Forget the Shutdown, Our Next Problem is the Dollar

The chatter against the dollar as global reserve currency has ramped up in recent days. The risks are huge and largely ignored. Even allies are questioning how long the dollar can sustain its status in light of our enormous debt and deficit. Now, with the government shutdown in place and a political battle over the debt ceiling, our enemies are looking at the possibility of an attack on our currency during the confusion.

Sadly, too many believe that our dollar will remain permanently strong. Of course, these are in many cases the same people who would argue that deficits don’t matter and that the Treasury could mint $1 trillion platinum coins, essentially making up money out of thin air, and no one would complain. They are living in a fantasy world, emboldened by doctored government statistics that attempt to show there is no inflation in the system.

James Turk: Above Ground PHYSICAL Gold Stocks Likely a Lot Smaller Than Commonly Believed

GoldMoney has released an interview with Chairman James Turk about his study of the above-ground global gold stock, gold’s role as money, and the coming fiat currency collapse. They discuss the discrepancies between official gold stock figures and the study’s carefully calculated figures, going all the way back to Roman times and using the year 1492 as a pivotal calculation point — which was when the Spanish Empire began its imports of gold deposits discovered in the Americas. In contrast to the widely referenced number of 171,000 tonnes of above-ground gold, James’s study suggests that it is actually closer to 155,000 and therefore overstated by about 10%.

Video Source: James Turk: Above Ground PHYSICAL Gold Stocks Likely a Lot Smaller Than Commonly Believed (Silver Doctors)

Counterfeit Money, Counterfeit Policy

What is the difference between printing money and counterfeiting? There is none.

Counterfeiting is illegal because it is the false creation of value. The counterfeiter takes low-value paper and turns it into high-value money, which is fundamentally a claim on the real productive value of the economy that issues the currency and recognizes it as a proxy means of exchanging that productive value.

Counterfeiting is illegal because the counterfeiter creates no additional value–he creates only the proxy for value. Creating real value–adding meaningful goods or services to the economy–is tedious, hard work. How much easier to simply transform near-worthless paper into a claim on actual goods and services.

If this is illegal, then would somebody please arrest the Board of the Federal Reserve for counterfeiting? The Fed has blatantly printed money without creating any real value to back up their added claims on productive value. Hence they are counterfeiting, pure and simple. A government based on rule of law would arrest these fraudsters and cons at the earliest possible convenience.

And while you’re drawing up the indictment, can you also charge them with counterfeiting competence and policy, as they have demonstrated the Peter Principle par excellence: the Board has risen to its highest level of incompetence. Their counterfeit policies have wreaked incomparable damage on the real productive economy.

The essence of counterfeit policy–a fake policy that claims to be something it is not–is “extend and pretend.” And the sole goal of “extend and pretend” is self-preservation and the preservation of the Financial Elite which has tightened its grip on the nation’s throat as a direct consequence of Federal Reserve policies–notably “extend and pretend.”

Full article: Counterfeit Money, Counterfeit Policy (Financial Sense)