A Screaming Buy At These Levels

My friends, I just have to break out of my normal articles routine to comment on something here- new folks who have been lurking at the site, or old-school Turdites who just haven’t chosen to sign up for the premium content… well, you have been really, REALLY missing out.  TFMR is, honestly, the best 10 dollar a month value you will find anywhere on the internet, bar none.  Pining sez “A Screaming Buy At These Levels!!!” 

Now, please don’t misunderstand me-  this is in no way some kind of “appeal for money” or something, the site is on strong financial footing and is now a self-sustaining enterprise which is exactly what Turd and the guest posters wanted with this new format.  We love this place and wanted to do what we could to secure its future, and that future is now assured.  This is a thriving enterprise.  So I am not saying this for TFMR, I am saying it for you!  If you haven’t been a member of Turd’s Vault, you are seriously missing out on some great stuff over the last month-  check it out:

On September 30, Turd wrote this (and discussed the reasons for his forecast in numerous podcasts that followed):

So, the initial conclusion is that we must be wary of significant price raids between now and the 15th of the month. Does this mean you should consider buying some puts as a hedge or as a speculative bet to the downside? This is often a good idea, regardless, but given this 2013 pattern of selling during delivery months during which JPM is delivering, well...just give it some thought. No one could blame you if you did.

One more thing, even though JPM may once again be the deliverer of October contracts, this in no way effects or lessens their overwhelming corner on Comex gold futures in out months. Uncle Ted still estimates the net size of their position to be well in excess of 60,000 contracts or nearly 25% of the open interest, excluding spreads. This cornering position WILL HAVE a significant positive impact on prices as we move through Q4. It look like we just need to get through the front half of October first. (http://www.tfmetalsreport.com/blog/5107/rawhide)

So what happened?  Nailed it. 

Yeah, TF even called the bottom, reiterating potential weakness until the mid-month in a post on the 11th, and then calling for a solid rise for the rest of the month and through November.  Again, nailed it. (http://www.tfmetalsreport.com/blog/5142/where-we-are)

So that kind of thing really isn't very useful.  Unless you are stacking, trading, own miners or buy metals ETF's... in which case it was incredibly useful. 

On top of being on fire with this analysis, the Access to Access has been fantastic-  to be able to ask questions of these folks, on exactly what I want to know, is unbelievable.  It’s really weird to type in a question and have a guy like Jim Comiskey or David Morgan address it live, in real time.  That alone is worth 10 bucks a month, a schmuck like me could never get that kind of access to all these people in the real world but I can get it here in Turdville.  These are A2A guests over the last month alone:

A2A with Jim Comiskey of ADM Investor Services

A2A with David Morgan

A2A with Jim Quinn of TheBurningPlatform.com

A2A With Jim Willie

A2A with Andy Hoffman of Miles Franklin

Folks, this new format has been a raging success.  And people post all the time behind the vault about how outstanding it is, but unless you are a member, you don’t see that.  Seriously, you should join the party.

115 Comments

StevenBHorse's picture

Indeed

What he said. 

It's pretty gangsta behind the wall. 

JY896's picture

Turd's podcasts are da bomb

Even when talking about dry technical details, it's always a pleasure to listen to Turd. The podcast format is also a very efficient, 10-15 min summary of the day's important metal-related events -- for when you may not have a chance to read multiple posts & linked articles, let alone comments.

I just hope TF doesn't wise up, and continues to accept fiat for a while longer... :-)

Mr. Fix's picture

I am thrilled to hear that Turdville is now self sustaining.

I was really concerned about that.

I genuinely hope that it lives long and prospers.

Thanks Pining.yes

flyinkel's picture

(No subject)

yesyesyes

Spartacus Rex's picture

Always Buying

Don't scream about it, you never know who is listening

Katie Rose's picture

I totally agree!

Pining,

I totally agree!

A bale of straw costs $7.00.

A single bale of alfalfa costs $17.00

I have been so blessed by the folks here. So far four Turdite families have visited me on the goat farm. It has been an amazing experience to meet like minded folks I would never have met had it not been for Turd. I truly hope to meet more of you!

Ever wonder what folks who visit here are like? I've met four of them and I can honestly say they are WAY above my educational and pay levels. These men are fantastic, as are their wives and families.

Too bad those you want to read these comments can't. Maybe Turd can open this thread for everyone this weekend.

Ten Dollars a month is a screaming deal!

Left Field's picture

Always reading

I read almost every post, I learn, I gain strength to stick by my convictions.

The value of this community is beyond what we pay and is created by so many generous contributions.

thanks 

post on fiiends....I am off to pick olives, plant garlic, and celebrate the harvest.

Left Field

ReachWest's picture

Pining speaks the truth,

Pining speaks the truth, folks.

Hands down .. Turds Vault is the best use for $10 fiat anywhere for Keynesian Deniers ...  Fun, informative and prescient. 

Hammer's picture

Malaysia introducing new

Malaysia introducing new property tax as well as starting to tax some ordinary goods/foods previously untaxed as well as increasing the minimum price to pay if a foreigner wants to buy a residence (and thereby a visa) to 1 million ringitt from 500,000 ringitt (along with a whole raft of other proposals listed below including reduction in corporate tax and reduction in income tax along with the abolition of the subsidy on sugar)

Fri Oct 25, 2013 7:00am EDT

1 USD = 3.14 Ringgitt

(Adds more details)
    KUALA LUMPUR, Oct 25 (Reuters) - Malaysian Prime Minister
Najib Razak unveiled his government's budget for 2014 on Friday,
seeking to address a large fiscal deficit, shrinking current
account surplus and growing debt pile that are sources of
concern for investors and ratings agencies.
 
For a preview of the budget, click on 
For Malaysia's economic reports, see  
Malaysia's CPI hits 20-month high     
    
Following are highlights from Najib's ongoing speech to
parliament: 
    
CIVIL SERVICE
*  Pensioners will receive a special financial assistance of 250
ringgit to assist them meet the rising cost of living. 
*  Government to give a half-month bonus for 2013 with a minimum
payment of RM500 to be paid in early January 2014. 
   
CASH HANDOUTS
* Cash handouts to households with a monthly income of below
3,000 ringgit will be increased to 650 ringgit from 500 ringgit.
* For individuals aged 21 and above and with a monthly income
not exceeding 2,000 ringgit, cash handouts will be increased to
300 ringgit from 250 ringgit.
* For the first time, cash assistance of 450 ringgit will be
extended to households with a monthly income of between
3,000-4,000 ringgit. rising cost of living borne by the lower
middle-income group. 
* To implement all cash schemes, government will allocate 4.6
billion ringgit which is expected to benefit 7.9 million
recipients. 
      
REAL PROPERTY GAINS TAX
* For gains on properties disposed within the holding period of
up to 3 years, RPGT rate is increased to 30 percent.
* For disposals within the holding period up to 4 and 5 years,
the rates are increased to 20 percent and 15 percent,
respectively. Malaysian property firms with exposure to this tax
change include UEM Sunrise,  Mah Sing Group 
and Tropicana Corp . 
* Raise the minimum price of property that can be purchased by
foreigners to 1 million ringgit from 500,000 ringgit. 
* Prohibit developers from implementing projects that have
features of Developer Interest Bearing Scheme (DIBS), to prevent
developers from incorporating interest rates on loans in house
prices during the construction period.
* Financial institutions are prohibited from providing final
funding for projects involved in the DIBS scheme. Malaysia's top
three banks are Maybank, CIMB and Public
Bank.
    
AFFORDABLE HOMES
*  To further increase access to home ownership at affordable
prices, an estimated 223,000 units of new houses will be built
by the government and the private sector in 2014. 
    - Companies that specialise in affordable housing
development include Hua Yang Bhd.  
* Government to allocate 578 million ringgit to the National
Housing Department (JPN) for low cost flats consisting of 16,473
housing units. 
* Malaysian's government to provide 80,000 housing units with an
allocation of 1 billion ringgit under affordable housing scheme.
The sales price of the houses will be 20 percent lower than
market prices.
* Introduce the Private Affordable Ownership Housing Scheme
(MyHome) to encourage the private sector to build more low and
medium-cost houses. The scheme provides a subsidy of 30,000
ringgit to the private developers for each unit built.
*  Preference will be given to developers who build low and
medium-cost houses in areas with high demand and limited to
10,000 units in 2014. 
* The scheme is for housing projects approved effective from 1
January 2014 with an allocation of 300 million ringgit. 
    
TAX RELIEF
* Government proposes a special tax relief of 2,000 ringgit be
given to tax payers with a monthly income up to 8,000 ringgit
received in 2013. 
       
GOODS AND SALES TAX
* To implement goods and services tax (GST) on April 1, 2015 -
17 months from now. 
* GST rate fixed at six percent, the lowest among ASEAN
countries. 
* GST replaces current sales tax. 
* Basic food items, transportation services, highway tolls,
water and first 200 units of electricity for domestic users per
month to be exempt from GST. 
* Sale, purchase and rental of residential properties as well as
selected financial services are exempted from GST. 
* PM Najib: "The reality is that inflation now is low at around
2 percent. The government is confident this will be the best
time to impose GST as inflation is minimal and under control."
* Training grant of 100 million ringgit will be provided to
businesses that send their employees for GST training in 2013
and 2014. 
* Financial assistance amounting to 150 million ringgit will be
provided to small and medium enterprises for the purchase of
accounting software in 2014 and 2015. 
    
CORPORATE TAX
*  corporate income tax rate be reduced by 1 percentage from 25
percent to 24 percent. 
* income tax rate for small and medium companies will be reduced
by 1 percentage point from 20 percent to 19 percent from the
year of assessment 2016.
          
INCOME TAX
* government to give one-off cash assistance of 300 ringgit to
low income households 
* personal income tax rates be reduced by 1 to 3 percentage
points for all tax payers.   
* individual income tax structure will be reviewed  
* chargeable income subject to the maximum rate will be
increased from exceeding 100,000 ringgit to exceeding 400,000
ringgit. 
* Current maximum tax rate at 26 percent to be reduced to 24
percent
* measures to be effective in 2015        
    
SUBSIDIES
* Subsidy programme to be "gradually restructured"
* A portion of savings from restructuring to be distributed in
the form of direct cash assistance with the other half to
finance development projects.
* To abolish the sugar subsidy of 34 sen effective October 26
2013.
    
IMPROVING BUDGET MANAGEMENT
* committed to reducing the fiscal deficit gradually, with the
aim of achieving a balanced budget by 2020. 
* to ensure federal debt level will remain low and not exceed 55
percent of GDP.
* government to conduct audits on projects valued at more than
100 million ringgit during its implementation. 

ISLAMIC FINANCE
-  Securities Commission to introduce the a framework for Social
Responsible Investment (SRI) Sukuk, or Islamic bonds, to finance
"sustainable and responsible" investment initiatives.
    
AGRICULTURE
-  Government to allocate six billion ringgit allocated for
agriculture programmes.          
 * Says to 243 million ringgit allocated for rubber, palm oil
and cocoa replanting as well as forest plantation programmes.
Main plantation companies in Malaysia include Sime Darby
, IOI Corp  and KL Kepong.

LOGISTICS
- Government to allocate 3 billion ringgit in soft loans under
the Maritime Development Fund through Bank Pembangunan Malaysia.
 * The fund is to provide financing to encourage the development
of the shipping industry, shipyard construction, oil and gas as
well as maritime-related support activities. 
        
AVIATION
- To replace existing air traffic control and management system
in Subang, a new air traffic management centre costing 700
million ringgit will be built at Kuala Lumpur International
Airport (KLIA).
* Kota Kinabalu, Sandakan, Miri, Sibu and Mukah airports in
Sabah and Sarawak to be upgraded with 312 million ringgit
allocation.  
- Malaysia Airports  manages and operates all airports
across the country except for one in Johor.

PUBLIC INVESTMENTS            
* Public investments to reach 106 billion ringgit. Projects to
be implemented include:
- A 316-kilometre West Coast Expressway. Locally listed Kumpulan
Europlus Bhd owns 80 percent of the project, while IJM
Corp owns the balance 20 percent.
- Double-tracking rail project along west coast Malaysia. The
project is carried out by  as a joint venture between MMC Corp
 and Gamuda.
- Various projects from state oil firm Petronas under
its 300 billion ringgit capex programme, including a
petrochemicals plant in southern Johor state.

* INTERNET ACCESS
-  To carry out second phase of high-speed broadband project
with the private sector involving 1.8 billion ringgit
investment. State-linked telco Telekom Malaysia Bhd 
is involved in the project. 
-  To increase Internet coverage in rural areas, 1,000
telecommunication transmission towers will be built in the next
three years, with an investment of 1.5 billion ringgit.
-  To increase Internet access in Sabah and Sarawak, new
underwater cables will be laid within three years at a cost of
850 million ringgit. 

 (Reporting by Kuala Lumpur bureau; Editing by Niluksi
Koswanage)

http://www.reuters.com/article/2013/10/25/malaysia-budget-highlights-idUSL3N0IE0TY20131025

gazzmann's picture

Value

I think we see ourselves as those that recognize real value, being we've always got our heads stuck in the world of PM's.

The value is here.

murphy's picture

From obit section in todays paper

If Skip were alive today he would tell you that membership in the Vault  was money well spent. Nice one P4.

SKIP ECKERT

He was the man who showed up on Christmas wearing a Spiderman costume and webbing family with silly string. The guy who put his daughter, nieces and nephews on his shoulders and jumped into the swimming pool. Over and over and over. The one who showed up to his Goddaughter's wedding in a tuxedo T-shirt. Skip Eckert was also arguably the world's best safecracker, who once saved the life of a child locked in a bank vault. Above all, though, he was a devoted husband who worshipped his wife, Connie, and a doting father who taught his precious Riley to scuba dive and took her across the globe to do it. Eckert, 62 of Medina, passed away unexpectedly over the weekend. But the loving husband, gentle father, compassionate son, hilarious brother, crazy uncle, generous friend and clever genius most certainly lives on.

He is, after all, our best party story, our favorite jokester, our tallest yet truest tale. Skip was the president of
his class at Manchester High School (class of '69), who he represented at the state championship wrestling
tournament. (He also legendarily cut off his own leg cast; he had things to do, after all, and wasn't about to
let that stop him.) He graduated from Baldwin Wallace in 1973 and quickly turned his locksmithing interest into a career. Skip was a Master Safe Cracker who traveled the world, from South Korea to Saudi Arabia, to open safes and vaults. He was honored in the Guinness Book of World Records as the world's fastest safecracker. He appeared on David Letterman to showcase his prowess.

He worked for the FBI, Scotland Yard and Quantico, among others. And when a child was locked in a bank vault in Pennsylvania, it was Skip who police escorted across state lines to save a life, making national news. He was a longtime president of the Safe and Vault Technicians Association, and is in the group's hall of fame. This year, he was given the Philadelphia Award-- the locksmith industry's most prestigious honor. (He may or may not have also used his locksmithing skills to occasionally break into other family members' rooms on family vacations and booby trap doors.) He was also a pilot, an accomplished scuba diver, a guitarist, a
member of the Medina Police Specials Unit, a mason at Akron-Coventry Masonic Lodge 83, and a gymnastics coach who trained Olympic-caliber athletes. And what was that-- you needed something? Skip had your back, no favor too big, no questions asked.

He is being ushered into his next life by his mother, Joanne, and leaves behind his father, Walter; wife, Connie; daughter, Riley Joanne; son, Tyler; sister, Anne (Gary) Cole; brother Don (Diane); brother Bobby (Kim); and several nieces, nephews, family and friends. Whether you knew Skip or not, we're certain he would prefer that you honor him not with flowers or tears, but by watching a Monty Python movie, listening to The Beatles, rigging your brother's toilet seat or building a fort in the living room for your kid. (And if you're coming to memorialize him, he'd be pleased to see you in flannel shirt and jeans, thank you.) Skip's mother always said, "Leave wherever you are a better place than you found it." And to that end, Skip cracked the ultimate code: life. 

In lieu of flowers, please donate to a charity of your choice in Skip's name.
 

didier's picture

true, very good Turdville service

A buy recommendation!

Markedtofuture's picture

TFMR - Like a Lay's Chip

Where can you go for $2.50 a week, get an email in your inbox, listen to a podcast, that catches you up on what happened in the metals market for the week? [TF Metals Report Newsletter] This Week in Turdville - October 26, 2013

TFMR is like a Lay's chip, bet you can't eat just one.

E.O.M

Hammer's picture

China Politician Promises

 

China Politician Promises ‘Unprecedented’ Reforms at Party Congress

2013-10-26T090508Z_1416112397_GM1E9AQ1B7901_RTRMADP_3_CHINA-REFORMS-PLENUM_preview

Yu Zhengsheng, chairman of the Chinese People’s Political Consultative Conference (CPPCC), pauses during a plenary meeting of the 12th CPPCC at the Great Hall of the People, in Beijing, in this file picture taken March 11, 2013. (Reuters Photo)

A top Chinese leader has promised “unprecedented” economic and societal reforms at the Communist Party’s much anticipated plenum meeting next month, state media reported on Saturday.

Yu Zhengsheng, the fourth-ranked member in the elite Politburo Standing Committee of the Communist Party, said the closed-door meeting would “principally explore the issue of deep and comprehensive reforms”.

“The reforms this time will be broad, with major strength, and will be unprecedented,” he said, according to the official Xinhua news agency.

“Inevitably they will strongly push forward profound transformations in the economy, society and other spheres.”

Yu’s comments are among the first from China’s top leaders about the plenum, where President Xi Jinping is expected to press for greater economic reforms.

The broad reform agenda is expected to steer the world’s second-largest economy, which is experiencing slowing growth, from a reliance on debt-fueled investment to a more balanced model driven more by consumption, services and innovation.

(highlights mine)

.....................China this week launched a new benchmark lending rate, aimed at letting markets set the cost of funds and reducing distortions that have led to excessive investment and overcapacity now dogging the economy.

for the rest of the article

http://www.thejakartaglobe.com/international/china-politician-promises-unprecedented-reforms-at-party-congress/

engineering edge's picture

Silver Backwardation - Lease Rates

http://www.kitco.com/charts/s_leaserates.html

Has anyone noticed that Silver is in complete backwardation out to one year?

murphy's picture

@Pining

infometron's picture

Silver lease rates and Stentor make way

Thanks EE (looks like out to 6 months, but wow!)

Hear hear !! Ditto, Pining !!

Turd's Vault is filled with gold and other precious morsels !!

Urban Roman's picture

Back in January I still

Back in January I still thought silver was a screaming buy at $30.

And at may LCS, I can still get silver for less than $30, for which they are still happy to sell it to me.

Everybody's happy here.  Well, except for the $ value of my 41K account.

ag1969's picture

CNN is Paid by Foreign and Domestic Government Agencies for Spec

CNN is paid by the US government for reporting on some events, and not reporting on others.  The Obama Administration pays CNN for content control. Let that sink in…Additionally CNN and CNN International are also paid by foreign governments to avoid stories that are damaging, and construct narratives that show them in a better, albeit false, light. Amber Lyon is a three-time Emmy winning investigative journalist and photographer. She accuses CNN of being “fake news.”

To date, this documentary has never aired on CNN. Having just returned from Bahrain, Lyon says she “saw first-hand that these regime claims were lies, and I couldn’t believe CNN was making me put what I knew to be government lies into my reporting.

http://reinep.wordpress.com/2013/10/21/former-cnn-journalist-cnn-is-paid-by-foreign-and-domestic-government-agencies-for-specific-content/

DeaconBenjamin's picture

The Fed Can Only Fail

 

The basic predicament we are in is that the current crop of leaders in the halls of monetary and political power does not appear to understand the dimensions of our situation.

The mind-boggling part about all this is that it's not really all that hard to grasp.

Our collective predicament is simply this: Nothing can grow forever.

Sooner or later, everything must cease growing, or it will exhaust its environs and thereby destroy itself.  The Fed is busy doing everything in its considerable power to get credit (that is, debt) growing again so that we can get back to what it considers to be "normal."

But the problem is or the predicament, I should more accurately say is that the recent past was not normal.  You've probably all seen this next chart.  It shows total debt in the U.S. as a percent of GDP:


(Source)

Somewhere right around 1980, things really changed, and debt began climbing far faster than GDP. And that, right there, is the long and the short of why any attempt to continue the behavior that got us to this point is certain to fail.

It is simply not possible to grow your debts faster than your income forever. However, that's been the practice since 1980, and every current politician and Federal Reserve official developed their opinions about 'how the world works' during the 33-year period between 1980 and 2013.

Put bluntly, they want to get us back on that same track, and as soon as possible. The reason?  Because every major power center, be that in D.C. or on Wall Street, tuned their thinking, systems, and sense of entitlement during that period. And, frankly, a huge number of financial firms and political careers will melt away if/when that credit expansion finally stops.

And stop it will; that's just a mathematical certainty. It's now extremely doubtful that the Fed or D.C. will willingly cease the current Herculean efforts towards reviving this flawed practice of borrowing too much, too fast. So we have to expect that it will be some form of financial accident that finally breaks the stranglehold of failed thinking that infects current leadership.

The Math

As a thought experiment, let's explore the math a little bit to see where it leads us. After all, I did just say that a poor end to all of this is a "mathematical certainty," so let's test that theory a bit. I think you'll find this both interesting and useful.

To begin, Total Credit Market Debt (TCMD) is a measure of all the various forms of debt in the U.S. That includes corporate, state, federal, and household borrowing.  So student loans are in there, as are auto loans, mortgages, and municipal and federal debt. It's pretty much everything debt-related.

What it does not include, though, are any unfunded obligations, entitlements, or other types of liabilities. So the Social Security shortfalls are not in there, nor are the underfunded pensions at the state or corporate levels. TCMD is just debt, plain and simple.

As you can see in this next chart, since 1970, TCMD has been growing exponentially and almost perfectly, too. (The R2 is over 0.99, for you science types):

I've pointed out the tiny little wiggle that happened in 2008-2009, which apparently nearly brought down the entire global financial system. That little deviation was practically too much all on its own. 

Now debts are climbing again at a quite nice pace. That's mainly due to the Fed monetizing U.S. federal debt just to keep things patched together.

As an aside, based on this chart, we'd expect the Fed to not end their QE efforts until and unless households and corporations once more engage in robust borrowing. The system apparently 'needs' this chart to keep growing exponentially, or it risks collapse.

Okay, one could ask: Why can't credit just keep growing? 

Here's where things get a little wonky. But if you'll bear with me, you'll see why I'm nearly 100% certain that the future will not resemble the past.

Let's start in 1980, when credit growth really took off. This period also happens to be the happy time that the Fed is trying to (desperately) recreate.

Between 1980 and 2013, total credit grew by an astonishing 8% per year, compounded. I say 'astonishing' because anything growing by 8% per year will fully double every 9 years.

So let's run the math experiment as ask what will happen if the Fed is successful and total credit grows for the next 30 years at exactly the same rate it did over the prior 30. That's all. Nothing fancy, simply the same rate of growth that everybody got accustomed to while they were figuring out 'how the world works.'

What happens to the current $57 trillion in TCMD as it advances by 8% per year for 30 years?  It mushrooms into a silly number: $573 trillion. That is, an 8% growth paradigm gives us a tenfold increase in total credit in just thirty years:  

For perspective, the GDP of the entire globe was just $85 trillion in 2012. Even if we advance global GDP by some hefty number, like 4% per year for the next 30 years, under an 8% growth regime, U.S. credit would be twice as large as global GDP in 2043 (!)

If that comparison didn't do it for you, then just ask yourself: Why, exactly, would U.S. corporations, households, and government borrow more than $500 trillion over the next 30 years? The total mortgage market is currently $10 trillion, so might the plan include developing an additional 50 more U.S. residential real estate markets?

More seriously, can you think of anything that could support borrowing that much money? I can't.

So perhaps the situation moderates a bit, and instead of growing at 8%, credit market debt grows at just half that rate. So what happens if credit just grows by 4% per year? 

That gets us to $185 trillion, or another $128 trillion higher than today a more than 3x increase:

Again, What might we borrow (only) $128 trillion for, over the next 30 years? 

When I run these numbers, I am entirely confident that the rate of growth in debt between 1980 and 2013 will not be recreated between 2013 and 2043. With just one caveat: I've been assuming that dollars remain valuable. If dollars were to lose 90% or more of their value (say, perhaps due to our central bank creating too many of them?), then it's entirely possible to achieve any sorts of fantastical numbers one wishes to see.

Think it could never happen?

Conclusion (to Part I)

This is the critical takeaway from all of the math above: For the Fed to achieve anything even close to the historical rate of credit growth, the dollar will have to lose a lot of value. I truly believe this is the Fed's grand plan, if we may call it that, and it has nothing to do with what's best for the people of this land. Instead, it's entirely about keeping the financial system primed with sufficient new credit to prevent it from imploding.

That is, the Fed is beholden to a broken system; not anything noble.

http://www.peakprosperity.com/blog/83361/fed-can-only-fail

ivars's picture

I was lead to these

I was lead to these astonishing insights by pursuing AM line of analogy of USD within last 12 years with French assignats. There is more. You probably know this book by Thomas Paine:

''DECLINE and FALL of English System of Finance. By THOMAS PAINE, 1796''
 
Found here:
 

People were so much better versed in money at those times. Paine is speaking about English system since 1697 with Central Bank which in todays terms we would call "gold standard with fractional reserve". Brittish were able to keep the market price of gold in pound sterling almost constant from 1718 till before WWI. 

Thomas Paine in 1796(!)  states this at very beginning:
 
Quote:

The English system differs from that of America and France in this one particular, that its capital is kept out of fight; that is, it does not appear in circulation. Were the whole capital of the national debt, which at the time I write this is almost four hundred million pounds sterling, to be emitted in assignats or bills, and that whole quantity put in circulation, as was done in America and in France, those English assignats, or bills, would sink in value as those of America and France have done ; and that in a greater degree, because the quantity of them would be more disproportional to the quantity of population in England, than was the case in either of the other two countries. A nominal pound sterling in such bills would not be worth one penny. But though the English  system, by thus keeping the capital out of fight, is preserved from hasty destruction, as in the case of America and France it nevertheless approaches the same fate, and will arrive at it with the fame certainty, though by a slower progress. The difference is altogether in the degree of speed by which the two systems approach their fate, which, to speak in round numbers, is as twenty is to* one ; that is, the English system that of funding the capital instead of issuing it, contained within itself a capacity of enduring twenty times longer than the systems adopted by America and France  and at the end of that time it would arrive at the same common grave, the Potter's fields of paper money.

 
Quote:

The datum, I take for this proportion of twenty to one, is the difference between a capital and the interest at five per cent. Twenty times the interest is equal to the capital. The accumulation of paper money in England is in proportion-to the accumulation of the interest upon every new loan;and therefore the progress to dissolution is twenty times slower than if the capital were to be emitted and put into circulation immediately. Every twenty years in the English system is equal to one year in the French (assignat)  and American (colonial war)  systems.

 
 
Now look- if French assign-at lasted about 7 years and average interest in the USA was around 6 % over years, 100 years since 1913 leads to devaluation by almost 100% ( was it 98% now)-So we are close to the end?
 
Look what more Thomas Paine has to say about it ( in 1796)- I added the wars of the USA to the right side:
 
Quote:

The English funding system began one hundred years ago in which time there has been six wars, including the war that ended in 1697.

1. The war  in 1697.                                          WWI

2. The war that began in 1702.                          WWI

3. The war that began in 1739.                          WWII

4. The war that began in 1756.                          Korean

5. The American war, that began in 1775           Vietnam

6. The present  war, that began in 1793            Gulf war one

 
Each English war cost , as Paine found out, previous PLUS half of previous in nominal terms- almost geometric progression, but no quite. Its not the case in USA (WWII stands out, but there was hell of a loot as well) - but it needs 7 wars per roughly 100 years, such system, to default or destroy currency. Why it needs wars i will explain below. 
 
7. Fight with Napoleon till 1815.                       Afganistan Iraq 2001- present
 
United Kingdom defaulted on 1822. 125 years of gold standard fractional reserve debt based money system. As Thomas Paine predicted. Since the standard was gold, but debt =money = was paper. At the end the Brittish paper money redeemable in gold(!!! ) and with stable value in gold, was leveraged approx 1:400 in 1796, probably 1:1000 in 1822. And it broke. 
 
QED. 
 
Pines prediction in 1796 was 1816 for the end of British debt based money system running since 1697....
 
Quote:

I confider the funding system as being now advanced into the laft twenty years of its existence. The single circumstance, were there no other, that a war should now cost nominally one hundred and fifty millions, which when the system began cost but twenty-one millions, or that the loan for one year only (including the loan to the Emperor) should now be nominally greater than the whole expense of that war shews the rate of depreciation to which the funding system has arrived. Its depreciation is in the proportion of eight for one, compared with the value of its money when the system began ; which is the state the French assignats stood a year ago (March, 1795), compared  with gold and silver. It is therefore that say,  that the English funding system, has entered into the last twenty years of its existence, comparing each twenty years of the English system with every single year of the American and French systems, as before stated.

 
 
Hence 2024 for final collapse if US paper based system as debt based one is  moved into capital based in 2016=2017 + usual 7-8 years = 2024=2-5...
 
Now let us look at wars- why are they necessary for paper fractional debt money to exist 100 years? Why 7 wars in between. That has to do with business cycles and different capitals .
 
Due to developments in agricultural , industrial, internet ect industries the first gainers are FINANCIAL capital ( e.g they were the first users of telegraph to wire money or get stock news , as were military) , e.g. INDUSTRIAL capital starts to grow. Now, as it grows it has ample possibilities to invest in productive activities. If there were demand, that is what they would do, BUT- there is a delay between demand and Industries ability to produce the required goods. So in beginning, if demand rises, there is prone to be inflation. 
 
Inflation in TURN raises the interest government pays on its debt to FINANCIAL capital. 
 
The demand though is a function of money supply . Money supply in debt based CB system is created by loans to the government . Now these loans are needed all the time as government never repays its debts, just rolls over, so the new loan is needed to pay ACCUMULATED ( exponentially increasing) interest on all previous debts.
 
The wars happen when government needs new loans or FINANCIAL capital is in distress but INDUSTRIAL capital is at state where increased money supply will lead to inflation. The only way out for government is to finance and additional expense - a fixed one- a war - that will utilize all new debt and more, but will not lead to raise in interest rates as there will be no consumer goods produced and the new money will mostly not enter consumption good market, but be used to by things that are hopefully immedeately destroyed- be it ARMS and munitions or mercenaries. Also in times of peace, unloading some part of money supply into useless ARMS serves the same purpose for aggressor nation - to prevent inflation/interest rate increase from happening when the debt needs to be rolled over and/or FINANCIAL capital is in distress. 
 
Now if there were enough INDUSTRIAL capital, there would be no need for debt issued money as loans to government could be replaced entirely almost by taxes. That is the reason why enemy NUMBER 1 to FINANCIAL capital is the INDUSTRIAL capital . FINANCIAL capital even sponsored invention of Marxism painting INDUSTRIAL capital as the evil of evils ,  and other theories ( earlier- against AGRICULTURAL capital in e.g  France) and kicked off few revolutions and genocide  ( Russia, China) to reduce worlds INDUSTRIAL capital. Successfully. There was a sort of awful revolution by INDUSTRIAL capital vs. FINANCIAL which was won by FINANCIAL and so here we are. 
 
Now look at INTERNET and HIGH TECH capital. It is starting to create its own capital in Trillions, and has no need for FINANCIAL capital, not even for stock issuance as such. 
 
What would be the best and most rational thing for Apple to do if there was no sickness of finance all around? To pay off all debts and go private. What it does? Issues bonds to feed financial capital. What will it do? Buy back stocks. It seems Apple is a little bit non-compliant as it has required high profile money mongers to publicly push it towards stock buyback where debt payoff and investment would be the most rational thing to do. 
 
So the next clash between FINANCIAL  and now INTERNET/MOBILE INDUSTRIAL capital is brewing. Which is the only reason why there might be WWIII after 2024-2025- to kill the accumulation of useful INDUSTRIAL capital that might lead to prosperity and reduce the need for the DEBT on fractional basis. 
 
I have only one question after having thought this through- and I have no doubt more revelations will come :
 
Why are we so STUPID, though?
 
It is all so bloody simple and logical- and has been known since ancient times -  does anyone read these ancient texts in economic/monetary Universities? Texts by famous people (Paine et al) , no obscurities. Not texts by FINANCIAL capital sponsored "economists" but simple stuff like PAINE. 40 small pages, everything clear.
 
BTW, English system (gold standard with fractional reserve paper loans) was exactly what COMEX is minus the state behind the system. 
 
Based on this, COMEX must default when the leverage ( in tons) of futures vs. real gold trade will reach 1:400-1:1000. If someone could supply a chart of time development of this leverage, it should be visible when it will happen. Soon, but not now. The default can only happen if people lose confidence in COMEX, which may happen of course also at leverage below 1:400, but lets see. The default should be caused by INCREASE in paper trade that will increase the leverage. That increase will happen when the next and last bull move will become obvious. It did not happen at price 1900 USD, so obviously the demand and volumes were still too small to achieve the risky leverage level of paper gold vs. real gold. But, if price will reach e.g 3800 USD it may happen. 
 
As to the FED, it has gold in its asset side. Calculated at market prices, it is about 400 billion USD, the FED balance sheet is about 4 trillion and is leveraged 1:100. BUT, the gold does not belong to FED since 1934. It belongs to the USG , and its debt , at 17 trillion, is now leveraged vs USA gold reserves at 1:400, exactly where England was in 1796 ( numbers from that time are not exact in my calculations). So , THOMAS PAINE would say that the USG has entered the last 20 years of its paper debt based money system. 
Personally, I do not think it will last that long . At 2017 latest the debt based system will collapse due to fast increase in interest rates. Its already over leveraged 1:400 seems to be a limit beause after PAINE wrote his book in 1796,
 
ENGLAND WENT OFF FRACTIONAL RESERVE GOLD STANDARD IN 1797, at leverage 1:400. 
 
Quote:
 This remained the lowest denomination until 1797, when a series of runs on the Bank, caused by the uncertainty of the war, drained its bullion reserve to the point where it was forced to stop paying out gold for its notes. Instead, it issued £1 and £2 notes. The Restriction Period, as it was known, lasted until 1821 after which gold sovereigns took the place of the £1 and £2 notes
 
judejin's picture

@ivars

your leverage numbers of fed and US debt is off by a factor of 10.

the fiat money is a ponzi scheme because not only the official sector rolls over debt, but also the private industrial/financial sectors rolls over debt too.

in short, the entire economic system rolls over debt in perpetual motion until it collapses.

the average interest rate is how fast the debt bubble blows bigger.

the world is doomed.

ivars's picture

@judejin-USG debt leverage

Yes , thank You, it is 1:40 , not 1:400. 

so 1:40 might not be enough - still some time to go.

Paine had ratio 1:400 of English debt over gold held by Bank in 1796. 

Every private debt is someone's else's  loan, so net debt outside USG  in USD is 0.

Only government debt has no opposite matching loan, but new issuance of money. 

Well may be in Chinese books there is a loan, but that only means less trust, no? So less leverage is needed? Interesting.

And right now Comex open interest in Oz vs Oz in warehouses etc, to back it up is 1:55, highest ever?

So it might be that the leverage target for going bust both for government and COMEX is lower than in 1796, but It is there. 

How much, any ideas? <1:400  > 1:40.

May be because today people have more information than in 1796 about the fractional scam, even if they do not understand it.

buzlightening's picture

EEE in stark raving terror.

No Syrian perpetual war to cover death of the USDinker dollar.  No lil scamBO wealthcare to bilk the public of largeness.  CONgress and SINate blowing up from the inside out.  Logically as evil has only one power.  To destroy itself.  Now in desperation the terminally  wounded jackals need free savory meaty finances to feed upon or implode.   We're in a critical stage here folks and would that we have a safe and happy holiday season.  It would be nice to have one more to prepare with family and friends for when the bottom drops out of this economic illusion.  All the kings horses and all the kings men can't put humpty USDinker dollar back together again. 

I Run Bartertown's picture

ivars

Very  important stuff!

"That is the reason why enemy NUMBER 1 to FINANCIAL capital is the INDUSTRIAL capital . FINANCIAL capital even sponsored invention of Marxism painting INDUSTRIAL capital as the evil of evils ,  and other theories ( earlier- against AGRICULTURAL capital in e.g  France) and kicked off few revolutions and genocide  ( Russia, China) to reduce worlds INDUSTRIAL capital. Successfully. There was a sort of awful revolution by INDUSTRIAL capital vs. FINANCIAL which was won by FINANCIAL and so here we are. "

The struggles between Financial Capital and Industrial/ Agricultural Capital are long over. We do live in the aftermath. In the US, the Antebellum South took the brunt of the destruction of Agricultural Capital (though the foreclosures during the great depression took it even further), and Henry Ford was in the midst of it on the Industrial side. He wrote much about the topic. Verboten now, though.

ivars's picture

@IRB

Yes i know its verboten, reading Henry Ford right now. Wonder what China thinks about it, though.. There was a deal in 1972 for China to get capital vs. becoming Industrialized and killing Western Unions and salaries- success. But deals get nixed , no?

Anyway, if there is a chance to put Financial capital were it belongs and not allow it to resort to wars and revolutions is exactly at these points when its at weakest, when the system of 100 year debt accumulation is going to crash and cause reaction against it. When its most aggressive. I think it went over limits with neocons and Bush wars and mortgage bubble - all at the same time  in  2001-2007 and opposite reaction will follow..soon, in the USA as well but more outside it as the power of the USA will be questioned. Look at Putin- what he did - and how quietly Obama administration caved in .. to polls! The same with Iran ..probably the most dangerous development to Israel in many many years. But..whe its enough its enough and I expect a tough battle ahead. Look at Dimon- first bank to be sacrificed to some extent.

So I will be waiting with interest the dialog between Icahn and non-complying so far Apple who does not want to buy back stocks to give cash to financial capital. I bet Apple will give in, since.. You know. But still interesting. On other hand business is business and profits are profits. Computer, Internet and mobile companies with cash has huge prospects to develop business and grow, like railroads or cars, oil or electricity, radio or TV. The initial phase has been  successfully passed. They can accumulate own capital. They do not need financial. 

There are many other companies in the world, public and private, that will not comply.

ata's picture

A screaming buy

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ata's picture

Not my fault

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Pining 4 the Fjords's picture

Hey folks- I just noticed

That Turd put all of the linked A2A podcasts above on the Free side-  so if you are wondering how those go, you should have a listen!  Except that all of us can ask questions in real time during the broadcast ;-)

And Atarangi-  Thank you, that is awesome!  I am a big fan of your art, and am especially in awe of your use of color.  Gracias, amigo!

ata's picture

Miley Cyrus costume

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