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Home » Money » Currency Markets » No Gold in Them Thar Hills

No Gold in Them Thar Hills

The Germans and most of the world no longer trust us. Rather, the Germans no longer trust the Federal Reserve, our political or economic elite and leaders — why should they?

The United States has held the world’s reserve currency status since 1971 when Nixon took on the gold standard after Charles DeGaulle demanded that any transfer payments between the US and France be in gold. After that, the world accepted us as reserve currency, and the dollar became the gold standard. Along with London and the Swiss, the United States became a financial empire as well as a military and political empire.

Since 1971, most trading between countries has been done in dollars; however, that situation is changing as the US began to squander it’s reserve status in foolish schemes and dreams, derivatives and financialization of the US economic system.

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In recent years, the world’s countries have looked furtively at one another wondering what the world’s crazy uncle – the US – will do next. Meantime, our once large and thriving Middle Class is shrinking and a nation that was once a producer/saver has gone nuts – spending itself both publicly and privately into massive debt. From producers and savers we have become consumers of junk from the rest of the world; using our McMansions as giant ATM machines and producing very little of importance – derivatives and drones don’t count. The world’s crazy uncle chopped off various body parts and fed them to the wolves.

We gutted our manufacturing, imported millions from the Third World, shut down our productive capacity, closed off resources to any good use, went nuts doing regime change around the world, kept military in over 100 countries, and built a giant police state and prison system. We pretended we could spend and tax ourselves into being king of the world forever. Our entire economic system became one of debt junkies on a private and public level gone off on a wild spending spree. Meanwhile, in the REAL economy, the Middle Class went into free fall and no one seems to care, let alone know what to do about it.

The Middle Class is on the ropes for many reasons and we are not in Kansas anymore. According to Pew Research Center:

“In 2011, this middle-income tier included 51% of all adults; back in 1971, using the same income boundaries, it had included 61%. The hollowing of the middle has been accompanied by a dispersion of the population into the economic tiers both above and below. The upper-income tier rose to 20% of adults in 2011, up from 14% in 1971; the lower-income tier rose to 29%, up from 25%. However, over the same period, only the upper-income tier increased its share in the nation’s household income pie. It now takes in 46%, up from 29% four decades ago. The middle tier now takes in 45%, down from 62% four decades ago. The lower tier takes in 9%, down from 10% four decades ago.”

As I recently told my grown children, this is not your father’s United States anymore – not even close. The world knows that we are over-extended geopolitically. Our own finances and economic system have become a big Ponzi scheme as we spend too much and produce too little. For all intents and purposes, we are bankrupt. Fiscal cliff and debt ceiling make nice theater but signify hype that someone is an adult and in charge.

Nevertheless, US politicians as well as central banks and most corporate entities continue to act as if it were 1948 and we were sitting on top of the world dictating terms. A half dozen major and minor wars later, the United States indulged in “guns and butter” to an insane degree. The giant boondoggle called the “War on Poverty” and various wars on drugs or terrorism have left the United States broke and printing it’s way out of trouble.

The US has turned on itself, eating its own leg off as the moral and economic capital we once had has been squandered recklessly and with an arrogance that is breathtaking. It took generations to accumulate our capital and build our system and only one generation to bring it down.

We are broke or broken in every significant way: monetarily, fiscally, spiritually, economically, politically and culturally. All squandered in a binge of empire building and and trying to become the world’s policeman, its banker and increasingly its bully.

The world knows we are busted like some genteel southern lady living in grand style but who can’t pay the light bill. We can’t seem to stop with the empire building. It was recently announced that the US military will be going into 35 African countries. The president offers bread and Obama-phones when we owe trillions and servicing the debt is going to eat up most of the money we take in through taxes. Our leaders do not seem to care – but the world notices and cares. The bill has come due and we can’t pay it. We continue to write rubber checks to cover it, but that only works until no one accepts them any longer – as in the case of the German Bundesbank. We have bounced one too many checks and the world no longer trusts us.

Recently, the German Bundesbank decided to begin repatriating its gold from the US Federal Reserve in New York, as well as the gold held in trust in Paris. Germany is worried about the socialists and empire builders in both countries. Germans are concerned and rightly so. The country does not want its gold to be used to prop up either country as they implode from debt and stupidity.

In fact, Germany’s gold might not be in the Fed in New York. I would hazard a guess and say it is gone – long gone. Likely, the Fed has loaned out Germany’s gold, which was then sold to different entities in the giant Ponzi that is now the globalized economic system. Scrooge McDuck probably has more gold in his imaginary vault than the Fed does in theirs.

In any event, the official statement from Bundesbank includes:

“By 2020, the Bundesbank intends to store half of Germany’s gold reserves in its own vaults in Germany. The other half will remain in storage at its partner central banks in New York and London. With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centers abroad within a short space of time.

To this end, the Bundesbank is planning a phased relocation of 300 tonnes of gold from New York to Frankfurt as well as an additional 374 tonnes from Paris to Frankfurt by 2020.

The withdrawal of the reserves from the storage location in Paris reflects the change in the framework conditions since the introduction of the euro. Given that France, like Germany, also has the euro as its national currency, the Bundesbank is no longer dependent on Paris as a financial center in which to exchange gold for an international reserve currency should the need arise.”

Gold guru Jim Sinclair writes in his latest newsletter:

Basically the Germans – if they go through with repatriation of their gold – is one of the most significant events in monetary history – at least in the last hundred years.

Charles De Gaulle was the first person in modern history to call the hand of the USA on its then obligation to convert French held dollar reserves into gold. I was a senior trader at the time.

History will look back on this salvo fired across US war financing as being the beginning of the end of the US dollar as the reserve currency of choice.

The reaction on the part of the US was to cut the tie between the dollar and convertibility. This again raises the question of the USA having fungible gold to the degree that is claimed without 3rd party audits or any viewing publicly whatsoever.

He knows, I know, and most people know, the gold that belongs to Germany is likely not in a bank in New York or, as the song says, Beverly Hills either. In order to comply with Germany’s request to get it’s gold returned, the Federal Reserve will have to shut the Germans out or give them an I.O.U that is not worth the paper it won’t be printed on. The Fed may take  gold stores from someone else and give it to Germany.

What may happen is that The Bernanke, Helicopter Ben, will tell the Germans – “If you repatriate that much gold from us it will implode the entire world economy, the markets will go down, and we will be left with lots of egg on our face and have to shut our doors because everyone else will want their gold too.”

A few years ago, crazy man dictator of Venezuela, Hugo Chavez simply demanded his gold from the Federal Reserve then sent it to Russia for safe keeping. Given that the Federal Reserve is playing fast and loose with the US and world monetary and financial system – Chavez may not have been crazy after all. Putin is renowned for calling US leaders nuts – he is right; they are nuts and are so arrogant they believe the scam they have been pulling for 30 years or so will continue.

So what is the end game in this momentary madness? Sinclair seems to think it’s a game the banks are playing.

Jim Sinclair clarified his beliefs that the end-game for gold in this global debt/fiat/derivatives crisis will be a virtual reserve currency linked to gold, that is tradable by central banks only.

What does all this mean for the United States, the American people, the Middle Class? It means we are in for a very rough ride. It means that the US government, Federal Reserve and central banks will continue to play fast and loose with our economic future. It means your children and grandchildren will have less of a future, band e slaves to debt mostly incurred by dumb policies from the government and central banks. It means we are on our own to rethink the system. The one we currently have is broken beyond reform. It also means the end game is a world currency or one currency or a basket of currencies consisting of various groups backed by gold.

The answer? Be prepared.

Think preparation. Think in terms of what you can do for your family, community and state. The federal government and central banks have ruined us. It is likely we will have to act outside their notice and start over again. In addition, be ready for a one-world-fits-all economic system – and that is what this entire crazy bubble and process was about from the beginning.

10 comments

  1. I enjoyed the article. I think the timelines can be stretched out much farther than she presents. For one, it took more than “one generation” to wreck the economy. The debt buildup has been on overdrive since the Vietnam war. So has the war machine. So has the takedown of American inudstry.

    It is doubtful that America ever had actual control of its economy. The meddlers in England and Vatican could never let loose of their territorial gem “they” discovered (there were people already living here, FCS). Rather than expend their own wealth fighting lengthy and costly wars, they took control of the economy, paid off anyone willing and killed anyone not willing. It has been this way for 240 years.

    When the Federal congress farm sold the banks to the Federal reserve 100 years ago, it was the final means of debt enslavement. I would guesstimate that since that treasonous action, the American people have been bilked out of over 100 trillion dollars in labor value by the usurious debt scam of the alien banks of the Federal Reserve.

    I don’t think that money even exists any more. I think they burn it, or in today’s world, delete it. I think in order to keep this nation at an even keel, they are purposely making life stressful and wealth unobtainable for most. It is class warfare using the fiat currency called dollar.

    The paper is worthless, and it always has been worthless. Even if “backed by gold”, which is a joke in the first place, it still can only hold value if valued by living men. Understand that the value of gold is also speculative, as is all precious metals, gems and material items. The only thing that has real value on planet earth is the labor value of men, physical, mental or both. The controllers of the planet are well aware of it, which is the true purpose of the debt enslavement system to begin with. They could care a less about paper and coin, which is evident from their action. What they care about is energy, and that energy comes from working men.

    It goes a lot deeper, but each man must be willing to ask for the answers themselves and then put forth the effort to search.

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  2. A fine game of musical chairs: The last one to demand their gold is in for a big disappointment.
    One to watch!

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  3. Charles de Gaulle died in 1970 and resigned from the French presidency on April 28, 1969. Georges Pompidou was the French president after de Gaulle resigned in 1969.

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    • The link to get Diane’s posts is not operative. Whoever’s responsible, please fix it.

      Excellent article, Diane.

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  4. Unfortunately, we are headed for a societal and monetary collapse. In all cases except two that I am aware of, the end result of such a collapse has been war. Large collapses propagate large or world wars, small collapses…small wars. The two collapses that did not follow this “war as a result” scenario were in South America in the latter half of the 20th century. In both cases the economies of those countries were bolstered and subsequently bailed out by The International Money Fund (IMF) on backs of the American taxpayer and industry. Where shall the American economy and society look for the bailout when the dollar crashes. The destabilization of the dollar is inevitable given the current FED and US government fiscal policies and is in fact irretrievable without a complete reversal of our propensity to tax and spend…all very improbable.

    A dollar collapse will trigger a US market collapse (the largest single consumer market by far)and subsequent global economic collapse.

    The question is not “will this happen?” The question is “when will this happen?”

    The next question is “Will history repeat itself with war as the result of collapse? The apparent charted course of the global economy coupled with the complexion of modern warfare and the arms buildup by the major and minor powers, China, Iran, Korea et al. is a most frightening prospect indeed!

    were bolstered and consequently bailed out

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  5. seems like a thinning of the herd will happen people avoid reality and then finally freak when they no longer can do so. I’m not so sure I agree with the comment that it has only taken 1 generation to screw everything up – more like we’ve reached boiling point where the long term plan of the elite is really showing it’s hand. I will agree that too many are lacking in morality, intelligence etc..
    One thing to make this a smoother ride is to get as many people to change their foolish ways and learn to become as self sufficient in as many aspects of their lives as possible.
    A revolution is probably coming – although from others I’ve talked to about this the majority believe that there’s not enough people with the balls to go thru with it, but if it does, hopefully it will be a more peaceful one than not.

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  6. After reading James Rawles book Patriot, it seems like the set up to the “crunch”…world pulls out of dollars as reserve currency….to pay off debt FED prints more money…massive inflation and devaluation of currency…national and global financial colapase….massive riots and looting…fall of civilization…kind of scary when life imitates art/fiction…

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  7. I agree with ChewyBees. Everything humans need and want is produced by humans, either themselves or others. Gold backing is a total farce!

    If we want something produced by others we must trade something we make to the person who has what we want. This is known as bartering. Direct bartering does not work well in a modern society. It is very unlikely that a person “A” will find another person , offering what person “A” wants, that will need or want what person “A” offers.

    The purpose of money, the one and only purpose of money, is to facilitate bartering! All money must come into circulation as the representative of human productivity; either physical or intellectual.

    Contrary to common belief, there is nothing in the Constitution that establishes or enables any government created thereunder, to issue any form or manner of money. There is a restriction on what states may require as payment to the state, being gold or silver coin, but there is no provision mentioning where the gold or silver will come from to create such coins.

    The Constitution does direct Congress to determine the size and value of such coins, and to create a mint to stamp them out, but no provision as to the source of the gold or silver ore. All such coins were made from privately owned gold or silver ore, and the coins made therefrom were returned to the private owners of the ore, and those private owners then spent the coins into circulation.

    There is no Constitutional provision or authorization for the Federal Government to acquire a pile of gold bars in Fort Knox or anywhere else.

    The Constitutional provision empowering Congress to borrow money on the credit of the United States enabled dishonest politicians (is there any other kind?) to create the Federal Reserve System so they could enrich themselves, bringing us to the economic destruction we are now suffering. It will get much worse before it gets better, if ever.

    I am Eric Williams, The Radical In The Twilight Zone

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  8. Excellent article, Diane! Also the article on Valley Forge.
    I’m very impressed with your credentials and the writings cited—so much so that I would like to read more of those writings. I am intrigued.

    To Diane and those others who have ‘replied’, THANK YOU for your courage to speak the truth. May we remember the miracles that God performed in making this nation free and in preserving it. While the sky grows ever more dark, and we struggle for our liberties, the way will seem long, yet, the Master of all has already prevailed. Often we will pray, O God of Heaven, please help our faith and help us hold on and press on in fighting the good fight. He is coming. Perhaps not in my day, but in the day of my children and grandchildren. Perhaps He will allow me to return as a member of the heavenly Legions that will rescue America.

    Let us be “Forever Strong”.

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  9. This analysis deals with much of the surface information, hints at the underlying short- term causes but doesn’t address the substantive reason for the disastrous policies of the government, et al. The blatant destruction of the dollar and its reserve currency status is a planned milestone of the NWO agenda. Attaining this milestone; sets the stage for the inevitable food riots, this leads to the planned marshall law and the subjugation of large numbers in the already planned concentration camps funded by Congress for decades. Any pretense or person that points away from this being planned is a NWO stooge attempting cover-up and it is a controlled media that will be the shill in the crowd. The basic truth is the agenda plans for the removal of the rights of the people under the US Constitution, eliminate the 2nd amendment without any vote. Institute a progressive income tax, destroy the family, etc. The liberal Marxist is the precursor to the AntiChrist who, according to Holy Scripture predicts will “kill the precursor and his followers”! The sacrificing of the Leopard- BO is shown in the Denver airport murals. The guillotine is also predicted and this is a punishment for blasphemy! All of these matters draw closer to WWIII, in which America and England will lose… as planned! The Vatican, Italy and all of Europe will then be ripe for the slaughter by …Soviets and muslims. The Coming of Enoch and Eli, the two witnesses, will oppose the AC. Jesus Christ will after their public hanging for three days arrive in the clouds and they will meet Him there. The AC, False Prophet and the ten kings of the AC will be thrown alive into the Lake of Fire (yet to appear) at the hands of the Holy Angels! Three days of continuous convulsions of 70 hours of Fire will change the world and all the godless will be removed. The Black Beast and the Red Dragon will be overthrown. The world will go back to an agrarian focused economy. Sorry, but this analysis finds most people in either the category of being part of the 3/4 of the world’s population being “toasted because they are godless, or the saved who will rebuild under a Christian period of Peace as the Blessed Virgin Mary has predicted. The choice is open to everyone. Believe it or not, the Rosary will be prayed by many, not just Catholics! 444 is replaced by 666 who is defeated by 555! Another way to view this is BO (capitalism) is killed by the AC (666)(Communism) and the vastly outnumbered Catholics will pray the Rosary and wear the Brown Scapular, together they will defeat the AC. Armaggedon will finalize the fates of enemies of Jesus Christ and fire awaits them for eternity. Your assent to this scenario is not required; it will happen like the Flood, it was first water; now it is fire. Just because your unfamiliar with the predicted events doesn’t excuse anyone from the wrath and punishment of many. God’s Plan will overcome the agenda of the NWO and the Child of Freemasonry- Communism will be forever destroyed. Deo Gratias. Strap yourself in for the ride, gird yourself with the weapon and the shield of Her Livery or die the death of the godless. He gave you individually free will and the choice will have eternal consequences!

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