DGC Blog » U.S. Dollar

US monetary base (chart)

Mark — Wed, 13 Jan 2010 04:17:17 +0000

As of November 2009, the ratio of the US monetary base to the valuation of the gold reserves was nearly 7 to 1. The monetary base is now greater than that measured by M1 as the value of bank reserves has now exceeded that held by the public’s checking accounts and other demand deposits.

The Dollar Bubble (video)

Mark — Tue, 01 Dec 2009 04:52:53 +0000

More Cheap Dollars…More Bubbles…Dollar Crisis

Mark — Tue, 17 Nov 2009 06:46:13 +0000

This is from Cato@Liberty

Posted by Gerald P. O’Driscoll

Over the weekend, Liu Mingkang, a senior Chinese official, blasted the economic policies of the Obama Administration. He identified low interest rates in the U.S. as the cause of “massive speculation” that was inflating asset bubbles around the world. The U.S. dollar is being used in what is known as a carry trade and is borrowed cheaply to finance the purchase of real estate in Asian cities like Hong Kong and Singapore. The easy money policies of the Fed are also fueling a boom in commodity prices.

The ordinary American, if not the political class, recognizes that neither the Fed’s monetary actions nor the trillions in spending have helped them. Unemployment is in double digits. Former senior Bush economic adviser Larry Lindsey is reported to have estimated that Americans’ net worth has dropped $13 trillion since the beginning of the recession in December 2007. Americans suffer while speculators profit.

We are on the cusp of a dollar crisis. President Jimmy Carter faced a similar crisis in his presidency. Carter ousted his own choice for Chairman of the Fed and appointed Paul Volcker to that position. Volcker recognized that the dollar crisis needed to be ended and instituted painful but necessary sound money policies. President Reagan re-appointed Volcker and together they restored American prosperity. Volcker advises President Obama and can explain to the president why he must act now.

By the way, just a reminder from Mark, silver picked up almost a dollar today, closing at $18.42 per oz. GoldMoney offers a digital silver account and so does Anglo Far East Bullion.

Salinas Price: It’s time to end World War II

Mark — Sat, 31 Oct 2009 17:33:51 +0000

It’s time to end World War II

Hugo Salinas Price

Oct 29, 2009

The shooting, the bombing and the killing of World War II stopped in August of 1945, and the War was formally over.The United States and Britain knew the War was won, in 1944.

At that time, a Conference was called among the 44 Allied Powers, to determine the nature of the world’s monetary and financial system after the fighting was over. It was held at Bretton Woods, New Hampshire, USA, in July of 1944.

As a result of the Conference, a set of Agreements were signed.

The most important of all the agreements was the one that established that gold should be the money to be used to settle all trade deficits between nations, but in lieu of gold, dollars could be used to settle these deficits; at the option of all Central Banks, these banks could demand gold from the United States Treasury at a redemption rate of $35 dollars for each ounce demanded.

Thus, the United States could pay for its trade deficits either in gold or in dollars. No other nation was allowed to pay for its trade deficits in its own currency; for all other nations, settlement of trade deficits had to be done with gold or with dollars previously acquired in the course of trade with the U.S. or with other nations who had dollars. In other words, dollars – and only dollars – were as good as gold.

General de Gaulle (President of France, 1959 – 1969) has been quoted as saying that this was “an exorbitant privilege”. And so it was, a privilege of the victor in World War II.

Under the rules of war, a country at war may loot and plunder its enemy, if it can do so. Booty has always been a great incentive to get soldiers to fight, and World War II was no exception. When a war is over the looting and plunder stops and nations renew commercial relations, exchanging their goods in peaceful international trade.

In forcing on the Bretton Woods Agreements the acceptance of the dollar as a means of settling international debts, along with gold, the US established the will of a victorious power to continue to loot and plunder the whole world.

Formally, World War II was over. But in fact, World War II was not only not over, but the US had implicitly declared war on the whole rest of the world by imposing the dollar as a means of settling trade deficits, along with gold.

By running huge trade deficits which arose out of its expansion of credit and consequent money-printing, the US was able to leverage its gold holdings and send abroad masses of dollars to pay for imports. The exporting countries received dollars – not gold – for their export surpluses to the US. The dollars began to pile up in foreign Central Banks as “Reserves”. The exporting countries, not being nuclear powers, were afraid to demand gold in payment of their export surpluses, since such a request would very probably irritate the great power, and nobody wanted to offend the USA.

All this export of dollars in payment of trade deficits finally moved General de Gaulle to demand gold for dollars held by the Banque de France. This annoyed the US government and shortly thereafter, not coincidentally, there was an outbreak of rioting in France which threatened to unseat President de Gaulle, who had offended the US by simply asking for France’s gold.

The US, by means of the “dollar as good as gold” provision of the Bretton Woods Agreements, has been looting and plundering the rest of the world, non-stop, since the end of World War II. Very subtly, based on Bretton Woods, the US has continued to act as the triumphant victor in a war; it has never since the end of World War II ” [reassumed] among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle” it, as expressed in the Declaration of Independence, 1776.

The US has not assumed an equal station among the powers of the earth, since World War II came to a formal end. It has continued to impose its Imperial Will upon the rest of the world, as vassal states, and has been duly exacting tribute from the rest of the world, by means of its paying its trade deficits with dollars, which are nothing at all since 1971. The US did not truly “normalize” relations, neither with the Axis powers when World War II was declared formally over, nor with the rest of the world.

Commerce is an eminently peaceful activity. The seller forces no one to buy; the buyer forces no one to sell. The means of payment of commerce, since written history began, has been either goods for goods, i.e., barter, or goods for gold – a perfected form of barter. Silver has also worked well, as a means of payment of commerce. But anything else, any innovation, anything decreed to be a means of payment by anybody whatsoever, cannot be anything but an imposition, a violation of the rules of commerce.

The present ruinous condition of the world’s finances and its lopsided industrial development has not yet corrected itself. If anything, we are in the “eye of the hurricane” for the moment.

If all governments in the world were to collapse, commerce would not disappear; it would arise out of the disorder, and its money would be gold or silver, or both. Gold and silver are the natural means of payment for humans. Such is the intellectual decline in the world, that those in power have forgotten this; they and their paid lackeys in the financial press and financial media are dreaming when they think that they can come up with some effective but artificial, fiat means of payment, decreed by some governmental body. Any such fiat means of payment will inevitably preserve privileges for some, and impose burdens on others. Commerce cannot thrive under those conditions; it will go into permanent decline, along with our industrial civilization.

“Regionalizing” fiat currencies will only have the result of pitting region against region – as illustrated in Orwell’s “1984″. This is the fallacy underlying all talk about a “multi-polar world” while ignoring the need for a neutral, real and time-tested medium for exchange of goods.

The world’s principal powers should convene and come to an agreement for the establishment of the world’s monetary and financial system on the basis of gold as the exclusive medium for settlement of international trade deficits – a neutral, real and objective medium for commerce and finance.

If the governments of individual nations want to allow their banking systems to diddle with fractional banking and inflation, it is their right to do so. But when it comes to settling accounts with other nations, they must come up with the required gold.

Only then will we be able to say that World War II has ended.

27 Oct, 2009

Hugo Salinas Price

President

Asociación Cívica Mexicana Pro Plata, A.C.

Mexico City

email: plata@plata.com.mx

website: http://www.plata.com.mx

The “I’m Speechless Chart”

Mark — Tue, 20 Oct 2009 02:39:03 +0000

Not Worth a Continental by Claire Wolfe

Mark — Tue, 29 Sep 2009 13:51:44 +0000

Not Worth a Continental

Karl Denninger Warns Deflationary Collapse Imminent (video)

Mark — Mon, 21 Sep 2009 14:40:30 +0000

Source: http://itsnotrealmoney.com/…

Is the U.S. Dollar now DEAD? (graph)

Mark — Sat, 19 Sep 2009 13:24:02 +0000

Source: http://itsnotrealmoney.com…

What is the U.S. Government Hiding?

Mark — Tue, 14 Jul 2009 16:13:19 +0000

The legislative effort to audit the Federal Reserve took an interesting, though ugly, turn last week. On Wednesday, the entire Senate was considering an appropriations bill. Sen. DeMint, R-S.C., saw that several amendments had been added to the bill for various authorizations of audits to be performed by the Government Accounting Office. So he introduced an amendment to the appropriations bill to add the bill calling for the GAO to audit the Fed (DeMint is a co-sponsor of the original “audit the Fed” bill asking for an audit).

When this happened, Sen. Ben Nelson, D-Neb., objected that this violated Senate Rule 16, which prohibits legislative amendments to appropriations bills. The Senate president immediately agreed and struck this particular amendment from the appropriations bill.

When this occurred, DeMint kept fighting. He mentioned that the “audit the Fed” bill had widespread bipartisan legislative support. He pointed out that Senate rules were frequently violated, which they are. He then specifically named each other GAO audit legislation amended onto this appropriations bill. The Senate president acknowledged each time that these amendments violated Senate rules, but he let them remain as part of the appropriations bill.

The implication of this development is that the Democratic leadership in Congress and in the White House does not want the public to know what an audit of the Federal Reserve would reveal. One likely revelation would be just how much gold the U.S. government really owns versus what it tries to claim it owns.

Last Thursday, in testimony to Congress, Federal Reserve Vice Chair Donald Kohn stated that if the public became more aware of the Fed’s actions, should this bill became law, that it could result in higher consumer prices, higher interest rates and a decline in the credit rating of the United States government. The question not asked of him is why is the Fed taking actions that could cause such a result – but only if the public found out what the Fed did.

Also last week, Goldman Sachs reported a theft of one of the company’s proprietary trading programs, allegedly taken by one of the employees who helped create it. In reporting the theft, Goldman Sachs said that usage of this program could make it possible for the user to manipulate markets unfairly.

Let me be clear about this. Goldman Sachs admits that they have trading software that could be used to unfairly manipulate markets, but they don’t admit to using it for such activities. The unasked question is – why else would they bother creating such software?

Already, there are theories of what Goldman Sachs has been able to do with such software and why they have made a public stink about the alleged theft rather than kept quiet. Last Wednesday, one publication stated that the software enables Goldman Sachs to assist the President’s Working Group on Financial Markets (popularly called the Plunge Protection Team). Supposedly, this software reviews trading orders on the exchanges before they were committed. In the split-second before the orders are committed, Goldman Sachs’ program can enter trades to take advantage of the change in the market before other traders learn of these developments.

Other theories speculate that the derivatives markets may soon expose major losses with Goldman Sachs wanting to pre-emptively deflect future blame that they might receive when this occurs.

Last Thursday, Rep. Carolyn Maloney, D-NY, who is the chair of the Joint Economic Committee, revealed to this committee that the $3.5 trillion of commercial real estate debt is a ticking “time bomb” and a “looming crisis” as $700 billion of this debt must be refinanced by the end of 2009. She said that there could be a second wave of huge losses at large U.S. banks.

There are significant stories flying around London and Washington that extremely bad news is going to be forced into the public eye at the end of August or in September. Among the kinds of news expected to be revealed are further major losses in the residential real estate mortgages, credit card debt and the commercial real estate market. Multiple sources are indicating that if you want to be able to purchase physical gold and silver, you probably should plan to take delivery by Aug. 20 or so at the latest (actually there is apparently some specific significant financial news that will be publicly disclosed on July 22 that would have an impact on precious metals markets, but I have no details what this involves).

Adrian Douglas, a professional commodity analyst and member of the Board of Directors of the Gold Anti-Trust Action Committee (GATA), published an analysis Saturday revealing his discovery why the COMEX gold market reports on trading activity and the movement of metals were not making sense. In addition to being able to settle COMEX contracts by either delivering physical metal or paying cash, a gold contract can be settled by “substantially the economic equivalent” of gold. What has happened is that many COMEX gold contracts are being settled with shares of gold exchange-traded funds (ETFs). In theory, these ETFs own physical gold covering all of the outstanding shares, typically 1/10th ounce of gold per share. However, there are so many loopholes in the ETF contracts that allow the managers of the fund to effectively hold paper contracts rather than physical metal that there is significant doubt that the ETF could deliver gold to redeem outstanding shares. The rules of the COMEX silver market do not (yet) allow contracts to be settled with ETF shares.

This strategy of delivering “potentially paper gold” to satisfy contracts requiring delivery of physical gold has now been adopted by the Tokyo Commodity Exchange and Tokyo Stock Exchange. Prices of precious metals took a major hit last week. The G-8 Group of the world’s largest economies plus Russia met in Rome last Wednesday through Friday. One of the subjects certain to be under discussion was the deteriorating position of the U.S. dollar as the de facto world reserve currency. The U.S. government has a strong interest in preventing any discussion of alternatives to the U.S. dollar. One way to “show” that the dollar is still strong and doesn’t need any replacement is to knock down gold and silver prices significantly just before the meeting started. Funny – that is exactly what happened.

It is difficult to see developments such as these and still have any justification for the U.S. government’s claim that there is no manipulation of the gold and silver markets.

Source: http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=7004

Dumb Ass Quote of the Decade From Economist Frederic Newmann

Mark — Fri, 10 Jul 2009 21:42:45 +0000

HSBC Senior Asia Economist Frederic Neumann had this to say regarding digital gold currency.

“It all comes down to trust,” says senior economist Frederic Neumann.

“We trust the government to guarantee our ‘virtual’ money for real currency. [With digital gold] the gold standard is guaranteed by a private company. Governments already have several hundred years of sovereignty engrained in people’s minds, so that trust is very difficult to establish.” *http://edition.cnn.com…

For this ignorant comment, we crown Frederic Newmann “Dumb Ass of the Decade”. Let me tell you, that contest had some stiff competition.

If you have not read this article Virtual cash meets the real world from CNN’s digital edition it is quite good and even brings up GoldMoney. I can’t say much about who they picked to quote regarding DGCs. What an idiot.

Any statement that starts with, “We trust the [Federal]government to guarantee…..” should be an obvious red flag. The Federal Reserve in bed with the Federal Government has been screwing the American people since the 1920′s. GoldMoney has regular third party professional audits on exactly how much gold is in the vault, bar numbers, purities and more.

The Federal Reserve HAS NEVER BEEN AUDITED and won’t consent to one so Congress is now working to legally require them to be audited…and that is being fought by government officials on all levels.

The U.S. Government gold reserves have not been audited in over 50 years and the government, despite multiple legal requested, will NOT provide an audit to the American people.

Since the Federal Reserve was created the U.S. Dollar has lost more than 94% of its value because of the Federal Government’s inflationary policies, not to mention the 5-6 Trillion that printing presses have created in the past two years.

Trust the Federal Government and the Federal Reserve with the creation money for the betterment of the American people? You are nuts.

Enjoy your award.

James Turk, Doug Jackson…these are men I trust.

“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” -Woodrow Wilson, after signing the Federal Reserve into existence