“There’s a shift in power from the traditional to the emerging world.”

The move is seen as a way for BRICS to protect themselves from the US and Europe’s financial trouble and as a way to increase their global financial influence.

Details here  and here.

• Russia to ban cash transactions over $10,000

• Bitcoin’s market capitalization briefly hits $1Billion!

• Texas want’s its gold back from the Fed.

As you might imagine, creating new money is a very handy little trick for banks. In fact, the commercial banking business model is dependent on the variable nature of national fiat currencies which makes this possible.  But this trick only works on fiat currencies, replace the US Dollar with Bitcoins, and the banking system as we know it today ceases to exist.

Comparing national fiat currencies and Bitcoin isn’t a case of apples vs. oranges; it’s more like fashion vs. math. The rules that determine the creation, transfer and value of national fiat currencies are constantly changing and are subject to the prevailing wisdom of the financial regulators of the time.  While proponents of national fiat currencies believe it’s variability to be an advantage, Bitcoin is based on an entirely different premise. The rules that determine Bitcoin’s creation and supply do not change. Only 21 million Bitcoins will ever be created and this creation happens on a precise schedule.  Bitcoin is ruled by math. As such, these two systems are not only fundamentally different, but incompatible.

To understand this incompatibility, it is necessary to understand the variable nature of fiat currencies and the primary method of money creation, fractional reserve banking. This isn’t known for being a particularly exciting topic and one could devote an entire career to understanding its nuances. However, the key fact is this: not only does the Federal Reserve create money, but commercial banks do as well.  There are rules of course; the Fed creates money for purchases & commercial banks create money for lending.

Fiat currencies, in their digital form, exist as digits in a database on a bank’s computer server.  Think of an Excel spreadsheet where cell L254 represents your account’s balance.  When your loan is approved, the bank’s computer system simply increases the value of the digits in cell L254. The cell representing the bank’s account is not reduced by an equal amount; this extra money was brought into being with the push of a button.

“Where did the money come from? It came – and this is the most important single thing to know about modern banking – it came out of thin air.” –Murray Rothbard

As a consequence of this ability, Fed policy and demand for loans has a dramatic impact on a national money supply. The supply of Bitcoin has none of this variability. As mentioned, only 21 million Bitcoins will ever be created and this creation happens on a precise mathematical schedule.  Bitcoin is not an account based system. There is no spreadsheet with cell’s representing account balances, Bitcoin is a cryptographic p2p network, no one entity owns or controls it. When you hold USD, you have a cell in a spreadsheet linked to your name. When you hold Bitcoins, you have a private cryptographic key.  No one can transfer your Bitcoins or alter your balance without that private key.  In this way Bitcoin is similar to gold. You either have it or you don’t and there is only so much of it.

The difference between Bitcoin and commercial banking (fractional reserve banking) can be understood by imagining the difference between gold and commercial banking.  Gold does not fit into cell L254 on the bank’s spreadsheet.  Gold cannot be deposited in a bank account. What is possible is to deposit an otherwise incompatible asset, such as Bitcoin or gold, with a commercial bank and have an account credited accordingly.

Of course the inability to manipulate the Bitcoin supply does not mean Bitcoin fractional reserve banking is not possible. You could have a Bitcoin accepting bank that issued vouchers or receipts in excess of their Bitcoin deposits or reserves. After all, gold storage facilities did exactly that hundreds of years ago which is what lead to modern fractional reserve banking.

However, having Bitcoin backed bank accounts would put limits on the amount of credit creation possible. The effect that this would have on the banking system would be similar to the effect of returning to a gold standard.  This would restrict expansion of the money supply and fundamentally alter the current functioning of the banking system and monetary policy.

A serious limit on money creation would cripple the current financial system; as such Bitcoin (and gold), are not compatible with fiat national currencies and commercial banking.

Reports of Bitcoin’s integration with the banking system should more accurately be reported as co-operation for easy conversion.  An example of this situation is the recent story of Bitcoin-Central, a French Bitcoin exchange, and their ‘integration’ with the banking system.

Bitcoin Central announced in December via the Bitcoin forum that they were “the first exchange licensed to operate as a bank”, a statement which was factually incorrect and has since been changed to “the first exchange licensed to operate with a bank.”

What this deal actually represents is close cooperation with the banking system. Customers’ Bitcoins and fiat currency will necessarily be held separately and treated differently. Bitcoin Central, the Bitcoin exchange, holds all of their customers’ Bitcoins on their servers. For the handling of national currencies, in this case Euros, the exchange has partnered with Aqoba, a French licensed “payment services provider”.

Aquoba is licensed to handle “payment accounts” which will have IBAN numbers and be able to receive money wires and be associated with debit cards. Bitcoin Central customers can have fiat funds deposited to their payment account at Aqoba and then converted to Bitcoins at Bitcoin Central. They can also have a debit card linked to their payment account, and when they use that card, their Bitcoins will be converted to fiat to be spent via the traditional banking system.

This situation is not integration, but co-operation and easy conversion.

An important illustration of this is that only the fiat/Euro denominated portion of customer funds will be insured via the French equivalent to FDIC insurance.  The Bitcoin denominated accounts at Bitcoin Central are not covered, as these are outside the French banking system.

These two systems can co-operate to some extent, but it is unlikely that they will co-exist for any extended period of time. To financial regulators, fiat currency is not just a medium of exchange but a method of economic regulation, and central banker’s monetary tools are ineffective without the ability to create money and expand the money supply.

This tool, the creation of money, is not possible (or at the very least is seriously limited) in a Bitcoin world. The digits in spreadsheets called Dollars are what financial regulators can influence.  If Dollars lose their dominance, financial regulators’ current methods will suffer the same fate.

Gold cannot be created with a new piece of legislation and likewise, Bitcoin’s cryptographic private keys cannot be altered with the change of a regulation. This effectively makes Bitcoin  immune to Federal Reserve monetary policy.

A nation’s monetary policy cannot function without a monopoly on the unit of account; Dollars, Euros, Yens etc.  The unit of account provides a common measure of the value of goods and services.  Monetary policy alters the value of the monetary units that’s its regulating.  When the Fed expands the supply of Dollars this dilutes the value of all pre-existing Dollars.  If people begin to transact using an alternative “unit of account”, they are opting out of this dilution.

In a recent paper from the European Central Bank is it clear that this fact is not lost on financial regulators.  The October 2012 paper titled “Virtual Currency Schemes” covered the possible impact that “virtual currency” could have on monetary policy.

“The ways in which innovations to payment systems might have an impact on price stability and monetary policy has been extensively discussed in the context of electronic money.2 The most important challenges identified were (i) the preservation of the unit of account, (ii) the risks to the effectiveness of monetary policy and its implementation, and (iii) the possible distortions to the information content of monetary aggregates.”

As central bankers believe their policies promote financial stability, they fear that a weakening of their monetary tools would lead to declining stability. The ECB report expressed a concern for “financial stability” should alternatives such as Bitcoin gain market share as they are aware that this would erode the effectiveness of their tools.

Any significant gain in market share for Bitcoin would mean a corresponding decrease in the influence of monetary policy. The issuing of new money, inflation, is effectively a wealth transfer from those holding the pre-existing money to those who are first to receive the new money.  Fiat inflation does not affect people who do not hold their wealth in the fiat currency.  The Fed cannot dilute the value of your Bitcoins. It cannot lower Bitcoin interest rates. It has no direct influence over the Bitcoin economy and the bigger this market becomes the more ineffective monetary policy will be.

Commercial banks are major players in the regulation of the money supply.  In addition to creating money themselves, large banks engage in many transactions with the Fed via open market operations, assets purchases involved in quantitative easing, etc. Commercial banking’s business model is deeply entangled in the flexible nature of the national currencies that they use.  Removing this flexibility would fundamentally alter the functioning of these banks.

The growth of alternative currencies, such as Bitcoin, has dramatic implications for banking.  Bitcoin can exist alongside competitors, but the commercial banking system and its national fiat currencies cannot.  These systems are incompatible to the point where the rise of one may destroy the other.

The price of gold has taken a hit in the last few weeks dipping down to the $1,500’s. If you own gold and silver as ‘a put option on the financial system’ this temporary dip is of little concern, what you own is real money. And this week Patrick Barron explained why it is the dollar and not gold that is overvalued.

“The problem with comparing the price of gold in dollar terms today and its price in the past is that it ignores dollar inflation.  The price of gold today is around $1,600 per ounce.”

“In December 1980 the CPI stood at 86.3.  In January 2013 it was 230.3. (This is hardly believable; i.e., that prices have gone up only 2.7 times since 1980.)  Nevertheless, adjusting for the CPI increase since 1980, the price of gold today should be $1,633…about where it is right now.”

“But now let’s look at inflation of the money supply.  In 1980 M1 was $.420 trillion and M2 was $1.605 trillion.  As of January 2013, M1 is $2.470 trillion and M2 is $10.445 trillion.  So, taking into account the great inflation in M1 and M2, the price of gold should be either $3,600 per ounce (M1 equivalence) or $3,983 per ounce (M2 equivalence) for the price of gold, IN DOLLAR TERMS, to match its price at year end 1980.”

“Another way to look at the relationship between the dollar price of gold and dollar inflation is to calculate gold’s dollar coverage price; i.e., for the Fed, which owns 262 million ounces of gold, to back the dollar in gold and make it truly redeemable, it would be forced to set the price at either $9,427 per ounce (M1) or $39,866 per ounce (M2).  In other words, at any lower price the Fed would not be able to redeem all of its dollars.”

]]> http://www.dgcmagazine.com/the-price-of-gold/feed/ 0 http://www.dgcmagazine.com/the-treasury-writes-a-report-on-its-accounting-practices/ http://www.dgcmagazine.com/the-treasury-writes-a-report-on-its-accounting-practices/#comments Thu, 21 Feb 2013 04:06:03 +0000 Julia Dixon http://www.dgcmagazine.com/?p=1191 Continue reading →]]> This would be a more appropriate description of the recent reports on the Treasury’s “gold audit”.

The ‘audit’ appears to have been mostly an accounting review. It largely covers reliability of financial reporting, and compliance with applicable laws and regulations and is titled “Audit of the Department of the Treasury’s Schedule of United States Gold Reserves Held by Federal Reserve Banks as of September 30, 2012”

As Turk put it in a recent interview with King World News, “I don’t want to use the term audit because it debases the meaning of what an audit really is.  Even the Treasury itself just called it a ‘report.’… They just did a report of some paper at the Treasury’s office. “

Turk is understandably annoyed by some very misleading accounts of the ‘audit’, most notably an LA Times article “Audit confirms US gold safe at New York Fed.”

This story does a good job of giving the reader the impression that the audit covered the US’s physical gold reserves. It even states “As part of the audit, the Treasury tested a sample of the government’s 34,021 gold bars in the New York Fed’s vault five stories below Manhattan’s financial district, according to the inspector general’s office. Auditors drilled tiny holes into the bars to remove samples that were tested for fineness in a process called assaying.”

The Treasury’s official report has no mention of assaying. The only possible hint at physical testing in the report is this line… “An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Schedule.“ …thats it.

It is important to note what the ‘audit’ does NOT cover…

• Physical quality or amount of gold held at the Fed
• Foreign gold reserves held at Federal Reserve Banks
• US reserves held in other locations, such as Fort Knox
• Ownership of the gold via leases or swaps

If you would like to have a look for yourself, the report can be found here. It’s a very manageable 14 pages with large font. Enjoy ; )

In a new GoldMoney post PeakProsperity.com’s  Chris Martenson helps to explain one part of this bizarre system, Quantitative Easing.

“Despite its sophisticated-sounding name, QE is nothing more complicated than the Fed buying ‘assets’ from commercial banks and other private financial institutions. I put assets in quotes because the Fed does not buy things like land, Stradivarius violins, diamonds, gold, or silver from these institutions, but rather various forms of debt.”

“The main forms of debt purchased are Treasury bills/notes/bonds and Mortgage Backed Security (MBS) paper. “

“The reason that QE differs from normal monetary policy is that, in the normal case, the purchase of various bond types by the Fed does two things: it lowers interest rates, and it increases the amount of money in the system.”

“QE, on the other hand, cannot lower interbank interest rates any further than they already are, because they are at 0%. So a different name is used for the process in which the only thing being eased is the quantity of money. Hence Quantitative Easing (QE).”

“This is just a fancy way of saying that the central bank, via prior errors and miscalculations, has found itself stuck in a trap where it has lost one of its most potent tools: the price of money. And now it can only fiddle with the quantity of money.”

“When the Fed performs this trick, what happens is that the assets end up on its balance sheet as – well, assets of course.”

“The Fed’s asset balance had been holding steady at around $2.75 trillion for a bit over a year. But then the latest round of QE (QE4) began, which has swelled the Fed balance sheet above than $3 trillion – and it’s way to (at least) $4 trillion by year end (2013).”

“At this point you might be thinking, where did the Fed get the money to buy these assets? The answer to that is simple: it was created out of thin air. Or ex nihilo, if you want to use Latin to make it sound more official.”

“In these modern times, no actual paper money was created and exchanged, of course; just a few clicks on a computer keyboard. And – voila! – billions and billions of dollars are created.”

“There are several critical risks to flooding the world with invented money. Once we understand them, it becomes clearer how the Fed’s decision to pursue QE has put it in a box, where its available options are becoming fewer and fewer. And it explains why the Fed is continuing – and will continue until it simply can’t – with its aggressive money printing.”

Read the post in its entirety here.

“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.”

“Today’s report, if true, is a salvo fired at the concept that the USA has all the gold it claims and all the gold it stores for others. If true, this event is the most important gold development since Charles De Gaulle called the US hand that it would stand by convertibility which many then assumed it could not because even then the amount of gold held was publicly questioned.”

Read the email here.

“Many people complain about government control of currency, but only a few do something about it. I’m not talking about movements to ‘audit the Fed’ and such. I’m talking about real innovation that makes an end run around the government’s iron grip on the monetary system.

A few of us old folks might like to return to the days of slapping a silver dollar on the bar for a shot of whiskey, but the younger techno-savvy generation sees paying for their Negroni cocktail with virtual currency from their hand-held device. To serve this market, a new world of virtual currencies has popped up spontaneously.

In a debate, Mitt Romney said, ‘You couldn’t have people opening up banks in their garage and making loans.’

Really? Some people are thinking precisely along these lines and even going further to create new units of accounting.

You might think these people are crazy. After all, to be a proper money, a currency must have a nonmonetary value, a high value per unit weight, a fairly stable supply and be divisible, durable, recognizable, and homogeneous. Gold and silver fit the bill perfectly. But does that mean something else (or a variety of things) can’t?

Money develops from being the most marketable good that in turn is used for indirect trade. Historically, that has been gold and silver. However, governments have worked very hard to demonetize gold and silver with taxes on precious metals and legal tender laws. And while a few people swear by storing their wealth in gold and silver, in relation to all other financial assets, the percentage of portfolios invested in precious metals is only 1%.”

“The answer to the currency question may not be to reform government in a way that it can’t reasonably be reformed, but to turn loose entrepreneurial genius to solve the problem and create a quality product. There are plenty of government roadblocks, but every new innovation encounters government resistance. Entrepreneurs persevere. However, this is a particularly risky area. There are currency entrepreneurs sitting in jail for competing with the government.”

“So while people contend that money must be this or must be that, or come from here, or evolve from there, Menger, the father of the Austrian school, seems to leave it up to the market. When a money becomes uneconomic to use, it loses its marketability and ceases to be money. Other marketable goods emerge as money. It’s happened throughout history and likely will continue, despite government wanting to freeze the world in place to its liking.”

“Ironically, while some economists are pooh-poohing Bitcoin, the ECB devotes some of their lengthy report to the idea that the Austrian school of economics provides the theoretical roots for the virtual currency. The business cycle theory of Mises, Hayek and Bohm-Bawerk is explained in the report and Hayek’s Denationalisation of Money is mentioned.

The report writers indicate that Bitcoin supporters see the virtual currency as a starting point for ending central bank money monopolies. Like Austrians, they criticize the fractional-reserve banking system and see the scheme as inspired by the classic gold standard.”

“Governments are destroying their currencies, and businesses know it. Entrepreneurs won’t just stand by and theorize. They’re doing something. They recognize a market opportunity. The banking industry realizes it. As Mr. Kahr concluded his article that calls for an end to all uninsured deposits: ‘Otherwise, we might have an unregulated Facebook or Google of payments, even PayPal, quickly becoming both highly vulnerable and TBTF. (It could actually be run by someone wearing a hoodie, without tie or even white shirt!)’

Here at LFB, we don’t know what tomorrow’s money will be. Digits and computer algorithms? Silver and gold coins engraved with someone wearing a hoodie, perhaps? What we know for sure is that we’re rooting for enterprising entrepreneurs to give the government a run for their money in the money business. Watch this space.”

You can read the post in its entirety here.

Bitcoin makes an appearance on the National Geographic Channel. http://channel.nationalgeographic.com/channel/videos/bitcoin-the-new-way-to-pay/

SilkRoad and Bitcoin make an appearance on Australian TV. http://www.youtube.com/watch?feature=youtu.be&hl=en&v=hmiBzvW4P40&gl=US

Last week a German court ordered the German central bank to audit its sovereign gold holdings, which includes its gold stored with the Fed in NY. http://www.zerohedge.com/news/2012-10-22/german-court-demands-bundesbank-audit-sovereign-gold-holdings

Then there were reports that in 2001 the German central bank “decided to voluntarily pull two thirds of its gold holdings held by the Bank of England.” http://www.zerohedge.com/news/2012-10-24/why-did-bundesbank-secretly-withdraw-two-thirds-its-london-gold

Report – 90% of consumers in developing countries interested in using mobile payments

“The study has also found that consumers’ needs for financial services in developing countries are far more sophisticated than previously believed and go well beyond the established transaction set offered by mobile money services today.”

http://www.thepaypers.com/news/mobile-payments/90-of-consumers-in-developing-countries-interested-in-using-mobile-payments-services-report/748985-16

There has been talk in Europe of handling debt issues by issuing new bonds “part-backed by gold” particularly in the case of Portugal and Italy has these countries have relatively large gold reserves. However, there are some legal issue as gold reserves are owned by the central banks, not the government. The two below links from The World Gold Council and BullionVault discuss these issues. http://www.gold.org/government_affairs/new_financial_architecture/gold_and_the_eurozone_crisis/

http://goldnews.bullionvault.com/gold-bonds-eurozone-102420122

Dwolla updated it’s iPhone app with “the added ability to view and pay money requests.” http://www.mybanktracker.com/news/2012/10/23/dwolla-mobile-option-pay-money-requests/

Financial Institutions: How Much More Will You Have to Spend on Anti-Money Laundering Programs to Avoid Criminal Prosecution?

“This June, the Justice Department brought criminal cases against a number of check-cashing businesses and their owners for failing to implement effective AML programs – remarkable because they are among the first BSA prosecutions brought against non-bank financial institutions and individual owners.”

http://www.forbes.com/sites/insider/2012/10/24/financial-institutions-how-much-more-will-you-have-to-spend-on-anti-money-laundering-programs-to-avoid-criminal-prosecution/

An interesting piece from MoneyMorning Australia on Why a Return to the Gold Standard Could Actually Be Bad

“History tells you that governments will always try to fiddle with the money supply in order to pay for votes and wars… In order to fiddle with the money supply, the government needs control over the money supply. Most importantly it needs legal tender laws. Legal tender laws create a money monopoly that makes it illegal for people and businesses to transact in a competing currency.”

“Bottom line: if the US government could easily confiscate gold while most of the population still had a concept of sound money, don’t you think it will be much easier when 99% of the population has no concept of sound money? … And because returning to a gold standard would involve devaluing the currency … governments would only do this after it has confiscated private gold.”

They also  note that due to  “Part IV of the Banking Act 1959” gold confiscation is a possibility in Australia “when the Governor-General says so.” http://www.moneymorning.com.au/20121025/why-a-return-to-the-gold-standard-could-actually-be-bad.html

Prices rise and supply shrinks ahead of Vietnam’s gold ban. http://vietnamnews.vnagency.com.vn/Economy/230122/gold-supplies-dwindle-ahead-of-ban.html

http://www.livetradingnews.com/gold-price-in-vietnam-rises-to-12-month-high-86080.htm#.UFz_u1EpqA5

Stories of ‘ghost inventories’ in China’s steel industry makes GATA wonder if LBMA and gold and silver ETFs are next in line for inventory verification. http://www.gata.org/node/11751

A talk by Mike Hearn at the London Bitcoin conference discusses how the Bitcoin protocol can be modified to include exotic new transaction types. These could include a micro-Payment channel, assurance contracts, smart property, lock times and cross-chain trading. Fascinating stuff.

Listen to it here, http://vocaroo.com/i/s0rbwBRBSKxn (audio not so great.) Or read about it here, http://codinginmysleep.com/exotic-transaction-types-with-bitcoin/

Bitfloor thieves have yet to spend their stolen hoard. http://www.bbc.com/news/technology-19633980

BitInstant’s Charlie Shrem and Erik Voorhees went to Rio de Janeiro for the annual Global Payments Forum held by the North American Payments Association (NACHA) to speak about Bitcoin. A long but entertaining account of their trip can be found here, http://blog.bitinstant.com/blog/2012/9/15/brazil-and-the-global-payments-forum.html

What I found the most interesting about story is Mr Voorhees take on a presentation by a senior legal counsel to the Federal Reserve.

“The last presentation of the whole event was by far the most intriguing. On the surface it sounded quite dull, “The Implications of Dodd-Frank Section 1073”, and it was delivered by a conservative, senior legal counsel to the Federal Reserve, but in fact it became a perfect demonstration of two things:

a)      How crippling regulation is going to drive business toward Bitcoin, inevitably

b)      How this same regulation will be unable to cripple Bitcoin itself, inevitably

… My take away from this last session was the revelation that Bitcoin eviscerates entire statutes of law. Bitcoin will result in a number of “legal impotencies,” while simultaneously offering an alternative to the business and money that is being stifled by these same laws in the normal economy. I think Barney Frank may just be, inadvertently, Bitcoin’s new VIP star player. Perhaps he should be BitInstant’s Employee of the Month. Such laws will continue to weigh down Bitcoin’s competitors, inadvertently strengthening the use case for a system which undermines their entire apparatus of monetary control. The irony is beautiful.”

Another community currency, the Bristol Pound. http://bristolpound.org/

BitPay, an automated payment processing system for Bitcoin, announced that they now have over 1,000 merchants accepting Bitcoin. “The sheer volume of new merchants has started to explode over the last month as more businesses begin to see the value in accepting bitcoin payments,” http://pymnts.com/news/businesswire-feed/2012/september/11/bitpay-exceeds-1000-merchants-accepting-bitcoin-20120911005855/

There really isn’t anything about this Mitt Romney/Bitcoin ransom note story that I approve of. I’m not a fan of Romney, theft or ransom notes and Larry Flynt just creeps me out. But you’ve got to admit, this whole saga is very amusing! The plot continues to thicken. http://rt.com/usa/news/flynt-romney-records-tax-802/

Read Flynt’s post here, http://larryflynt.com/larrysworld/larrysstatements/what-is-mitt-romney-hiding-reward/

Attention Digital Currency providers; your US market has grown by 8.2% as “more Americans have limited or no interaction with banks.” Beyond all the issues with fiat, the Fed’s banking system is inefficient and expensive. As such, more and more people who are struggling in a tough economy are simply ‘opting out’. http://www.washingtonpost.com/business/economy/more-americans-opting-out-of-banking-system/2012/09/12/6380b986-fcf1-11e1-a31e-804fccb658f9_story.html

Money laundering rules are not only ineffective, but they hurt the poor. Just like the above story, these rules raise the price of banking and price a lot of people right out of the market. http://www.forbes.com/sites/danielmitchell/2012/04/20/world-bank-study-shows-how-anti-money-laundering-rules-hurt-the-poor/

As the Euro Tumbles, Spaniards Look to Gold “According to Marion Mueller, vice president of the Spanish Precious Metals Association (AEMP) … ‘Up until very recently, to speak about gold as an investment or as wealth protection insurance was grin-provoking. That is changing,’ … She notes that since 2010, when the Spanish economic downturn became inescapable, a growing tendency to invest in physical gold developed among Spanish investors, brokers, and financial institutions.” http://www.resourceinvestor.com/2012/09/10/as-the-euro-tumbles-spaniards-look-to-gold?ref=hp

John Williams of Shadowstats.com, discusses ‘virtually assured’ hyperinflation.

“the Treasury actually publishes financial statements that are based on generally accepted account principals, GAAP accounting, … You’re seeing an annual deficit right now of about 5trillion dollars per year. …  That’s beyond containment. You could raise taxes to 100%, take all peoples wages and salaries and you’d still be in deficit.”

“If you’re a politician and you raise an issue like that, you have to have a solution or you don’t get re-elected. … They don’t have a way out of this.“

“right now inflation is running above the Treasury bill so your losing money in real terms. … Yet, if you went out and bought canned goods you would probably make more on that over the next year.”

http://usawatchdog.com/hyperinflation-is-virtually-assured-john-williams/