As The World Burns

Mon, Sep 17, 2012 - 10:45am

Another week is off and running. What will it hold? Will we all still be here come Friday?

Seriously, I'm starting to wonder. Maybe I'm beginning to get immunized somewhat to all of this craziness but don't things seem a bit out of hand? Maybe the world has always been this crazy and I've just never really noticed before? Nah, I'm going with the former. This is madness.

Think back to...let's say...1999 or so. Everything was peachy. Almost all of the countries in world were getting along just fine. Oh sure, there was the occasional battle in the Kashmir and you had No-Fly-Zones in Iraq, but I don't recall checking the news with dread every time I opened a browser. Now you never know what might flare up next and the entire world seems on the edge of conflagration. Actually, in my gut, the world doesn't just seem on the edge, I know that it is on the edge and this is sure keeping me from ever getting a good night's sleep.

The latest craziness is this whole China v. Japan issue. While I have little doubt that it was purposefully begun as a a way to "distract" the Chinese and "dissuade" them from getting too forceful in the Middle East, it seems to have really touched some raw nerves in China. Have you seen much of this in the mainstream media? Me, neither. Perhaps because it is potentially another Obama Regime blunder of such epic proportions that the MSM would prefer to ignore it in the hopes that it will all simmer down in due time. We'll see but you definitely need to take the time to scroll all of the way through this ZH article. Look at all of the pictures and read all of the captions. And here's a companion piece that was posted just a few minutes ago: And, for the coup de grace, try this one on for size:

For now, of course, this is just a sideshow. The real action is in the MENA where everything points to imminent conflict. You've got this: and this With this and this And, of course, there's all of this: I think I'll head out today and buy some more .40 ammo, just in case. It's kind of like physical metal...If you have to ask yourself if you have enough, you probably don't.

The metals are getting whacked around a bit this morning which is perfectly fine. Both gold and silver would appear to be temporarily "overbought" again and need some time to work of some of the recent excesses. As discussed last week, all significant dips must be bought as QE~ means price is moving inexorably higher.

And, after reading through the comments of my Saturday post, I feel as if I should clarify my remarks a little. First and foremost, I was/is/am very excited that The Cartels got caught wrong-footed last week. Everything shows that their intention was to smash price, just like they did on Leap Day. They were hoping for either some "disappointment" out of the German Constitutional Court on Wednesday or The Fed on Thursday. They got neither and, consequently, took it in the shorts (no pun intended). HAHAHA you arrogant jerks!

This is/was not intended though to give you the impression that it is a straight up rocket ride from here for the metals. It, most assuredly, won't be. There will be raids and corrections just like there always have been. This difference now is that every correction will be bought and bottoms will be quickly found. Can we still see brief 5-10% drops in silver and 3-5% drops in gold? Of course! The Cartels are trapped massively short and they will manipulate as much as they can in order to cover as much as possible. But in the end, they are screwed. The game has changed regardless of whether they want to see or admit it.

Prices will continue to advance in stages and this is why I encourage you to buy all dips. Not the intraday $10 kind of dip. I'm talking about the real, raid-type dips where gold falls $30 or $50. Physical demand is so high and supply is so tight (particularly in silver) that paper price dips can only be driven so far. Massive physical orders emerge and, unless The Cartels want to further exacerbate their supply issues, price must be allowed to rebound. You end up with a "stair" type pattern as seen on the charts above or a steady sloping pattern of higher highs and higher lows. Either way, gold and silver will undoubtedly continue higher and will likely do so at an increasing pace as The Cartels get increasingly desperate against their untenable position of underwater shorts and need-to-be-repaid leases.

You could even look at today's action as a microcosm of this. The short algos and The Cartels have tried to drop price enough to shake out some longs and relieve some pressure. They've tried this even in the face of a falling POSX. So far, they've failed miserably and now they are on the cusp of getting run the other way. If forced to cover the shorts they put on just today, price will quickly move toward 1780 and 34.

I leave you today with another gem of an article from Jim Quinn. Jim has been doing excellent work chronicling the real demise and destruction of middle-income America. This new article is very well done but really quite sad to read.

I'll be keeping an eye on things and will post again if conditions warrant. In the meantime, I'm off to Cabela's.


About the Author

turd [at] tfmetalsreport [dot] com ()


Loud Noises BagOfGold
Sep 17, 2012 - 12:01pm


I don't want to veer off topic, but there many, many accounts of unidentified craft approaching US missle installations and disabling all systems when they are in proximity. Whether you believe we are visited by ETs or not, it does happen. If I were visiting here from another planet, its probably the first thing I would do too. "Turn off those ridiculous things, boys, you're just gonna blow yourselves up!! Make sure you don't do it while I'm here!"

Sep 17, 2012 - 12:03pm

1999 was anything but peachy

In 1999, Nato went to war in the Balkans without UN mandate, thus officially tearing up international law, and setting the precedent of going to war in the name of humanitarian intervention, which is basically licence to intervene nearly anywhere, anytime, so long as you are NATO. The UN security council veto was tossed aside and opened a dangerous new chapter in international relations, the end consequence of which is still in the pipeline.

In the course of the aerial bombardment of Serbia, the 'Can't Identify Anything' CIA, supplied faulty maps, leading to the 'accidentally on purpose' bombing of the Chinese embassy in Belgrade.

The Chinese were furious, and berated the US at the UN in unprecedented manner, which was nothing compared to the alleged screaming sessions in private, in which US officials were reported to be literally locked in while they took a figurative kicking, and sounded at the time like something really serious was about to happen.

It got worse. The Russian peacekeeping contingent in Bosnia, led a tank brigade charge to Pristina, arriving there before NATO. There was something in Pristina that NATO wanted and they didn't get it. Visionary commander in chief, Wesley Clark, ordered commander on the ground (a Brit, Gen. Jackson), to open fire on Russian troops. Had Jackson not flatly disobeyed a direct command, it could have been war with Russia there and then.

Other than near war with both Russia and China, and the bulldozing of international law and security council protocol, I think it was indeed a pretty quiet year.

Sep 17, 2012 - 12:07pm


A new Turdite but long time resident and observer of China

Don't be distracted by the media hype, the communist party is under severe pressure and undergoing a rocky leadership change in October. As in the West, any and all external excuses to distract their masses from the real internal problems are encouraged.

Yes there are significant and deep anti Japanese sentiments in China (one questions why the Japanese government would do anything to provoke a reaction given the Sept 18 anniversary and the upcoming National Congress) but the vast majority of these demonstrations are 100% staged with people bussed in and given their signs, scripts, banners, eggs, water bottles, etc.

As one famous Chinese dissident said over the weekend, "thank god for the Japanese invasion of the islands, now we have the right to protest"

This is a non issue in the short term but longer term.... a future post

Sep 17, 2012 - 12:34pm

Excellent Robin Hood episode applies directly to our situation

Guys and gals, may I humbly recommend to everyone who can, to please take some free time to watch this episode of the old 1950's British TV show, "The Adventures of Robin Hood".

It deals with things you'll all find to be very timely: oppressed peoples' being over-taxed, official "coin of the realm" being sub-standard and debased money, with those who try to legally use real money being made out to be outlaws, and the importance of competition in currencies. Timeless, and in the end....the money-stealing criminal government loses, and the people win out.

This is one of my favorite episodes, called "Outlaw Money", but all of the episodes are gems. Richard Greene was the best Robin Hood that ever lived.

If you can't watch it now, please bookmark it on youtube to watch it later this evening over your favorite brew, or blend. I promise you that you'll be uplifted in doing so. Have a great day!

Video unavailable
Sep 17, 2012 - 12:34pm

Feel free to use my global collapse footage in your next project

global financial destruction free stock footage
Sep 17, 2012 - 12:39pm

Expectations Permanently Changed

Worthy the read! The rest is on his page.

Trader Rog

All doors wide open for higher gold and silver prices.

Expectations Permanently Changed

Trading and investing education has now become sheer survival.

Analysts had expected a QE-3 announcement similar to previous ones. Instead, they got an unrestricted new policy for quantitative easing to print more currency and bonds with no limits imposed whatsoever. Markets liked what they heard as investors in larger numbers jumped in to buy and buy with some serious power. For those of us less reactive and shall we say, more studious about the outcome, it signals rabid inflation with a potential for hyperinflation.

With interest rates so remarkably low, the majority were holding zero inflation ideas on their collective minds as they heaved a joint sigh of relief when the Federal Reserve had indeed come to their markets’ rescue, and that all is well for now.

We suggest that these new policy decisions are ominous indeed as the FOMC is in fact accountable to no one. We see a powerful group of private banker reserve governors at the beck and call of big money capitalists sprinkled throughout the world without any accountability to their respective national governments and their supporting taxpayers.

This means they have absolute power to do as they wish, when they wish, with all international currency, credit and bond markets. What this is saying for all to hear is that there is nothing in this old world that can begin to compete or impose any kinds of rules on this private banking cabal at all.

The old paradigms with at least some restraints are invalid and old news. One of our top analyst colleagues just reported a fabulous history of similar events since the 1700s throughout the world. His excellent historic work proved these economic catastrophes always end the same: in a massive bubble that blows up. Further, as he wrote, the healing time is usually one full decade.

We were pleased to see he also reported something we noticed and discussed at length before, the epic USA bad times from 1873 to 1896. This cycle arrived after the American Civil War and was a massive, rolling, recessionary depression. Some economic historians prefer to tell us there were intermediate cycles of better times during that period. We agree with the latest analyst’s report that it was just over 20 years of hell.

What was further interesting was the fact this mess landed in the middle of America’s Industrial Revolution, which seemingly should have given major support and jobs growth as new industrial might was blossoming. This was not case however.

The truth was, once again political and governmental economic intrusions protracted this depression and would not let it heal itself naturally. Between 1897 and 1906 things were much better. Then the Panic of 1907 ensued and a new nastiness began all over. This malaise extended from 1907 to 1916 in broader stock markets. Only World War I cranked-up the soldier jobs program and related defense industries as a prelude to better times in the roaring 20s......

Katie Rose
Sep 17, 2012 - 12:40pm

Dr Jerome

The pictures of the three islands really hit home for me.

Sent me back to high school, where seventeen of my class mates died in Viet Nam, never making it to 21.

Sent me back to University, where car loads of us drove over 24 hours to San Francisco to take part in a million plus person peace march. I remember how tired I was, how hungry, and how slowly we walked. All the while menacing police lined the entire parade route.

I'm glad I don't have sons that can be called up, only to be turned into hamburger meat by the EE/Banking Cartel.

I am feeling very, very pensive this AM.....

Sep 17, 2012 - 12:41pm


Thank you for joining and offering those experienced observations.

snick Loud Noises
Sep 17, 2012 - 12:46pm


so here's the story: one day in the near future, benevolent aliens will prevent Humanity from self-destructing, but demand payment in PMs.

I say: Ok, aliens - you ain't gettin' my stack, I'm armed, got all kinds of guns from pistols to automatic weapons, and plenty of hollow-point bullets, just like Homeland Security, that can pierce your slimy insect shell. So forget it. And stop sticking your jaw out at me like that, it's irritating. ... Ah, what was that? ... you have a what? I didn't quite get that ... a P-L-A-N-E-T-A-R-Y D-I-S-I-N-T-E-G-R-A-T-O-R R-A-Y. ... oh. ok, I understand, but still ... just take the tung .. err ... gold in Fort Knox, OK? And buzz off! ... ah, what? ... and you can what? ... with your advanced genetic engineering, you can grow me a new asshole on my forehead. I see. ... do I feel what? ... do I feel it starting to pucker up there? ummm ...would it be acceptable to send my PMs via FedEx?


(sorry for the off-topic, but I couldn't help myself ...)

Sep 17, 2012 - 12:49pm

agree again

"I think this site is outstanding at putting ALL the pieces together. You are a class act, Turd."


I rarely need to post. Puck seems to almost always post what I was thinking.

tanks puck

Sep 17, 2012 - 12:49pm

Following on

Turd, I didn't post my earlier comment in any smart-arse spirit, but it is true that what seemed like crises yesteryear are quickly forgotten. And it is easy to think that only today's problems are real crises.

In the words of Billy Joel,

'We didn't start the fire, it was always burning since the world was turning.'

Sep 17, 2012 - 12:50pm

Re: The Blaming game

One thing I learned in life is that "it is always easy to blame others". It is more comfortable to criticize setting on a chair vs. reality. Since we bring up the word "raid" and "smack-downs", then it would make sense to blame this on the Obama administration as well. For god sake, I have never seen so much exacerbated claims of blaming everything on the President and his administration.

@Ben Bernanke: I feel sometimes sorry for this guy. We make him look like he is "the son of the devil". You know what, i wouldn't hold a position like that with so much scrutiny and responsibility. I'm not a big fan of big banks, or giving too much power to the FEDs. They have to be audited. I cater towards the Jeffersonian ideology (which was never trust the banks, and don't give them too much power). However, Mr. Bernanke is doing the best he can (he sees the world in a different way vs. Precious Metal fanatics and etc.). Some say why the bailout? Well, I was furious about the bailouts. But with time, one starts to develop more of a balanced thinking, and you cut the emotions out of the equation. What would have happened if there was no FED intervention? We know for sure that many more would have lost their jobs because of liquidity and the falling stock market. What would have happened to GM? I don't like GM cars and I never bought GM cars. However, we would have lost more jobs, and the GM demise might have brought down a few other car makers. This means our real unemployment rate would have been much higher, and more people on welfare. When you have more people on welfare, then the government has to feed those people and extend it's welfare programs.

@GOLD and Silver....I only see it as an investment...Not, the savior of my problems and the world. I don't care about holding physicals. I'm not a Bullion bank or a country. I trade for paper profits. This is just a money game, nothing else. In money game, you lose and you win. At the current phase, Gold and Silver is the trade, but not the savior of this world or fixing the world economy. During the course of our history, Gold standards didn't mean immunity from wars, bubbles, and economic contractions, or military invasions.

Is the government that evil? No, it is not. There is nothing perfect in this world (as simple as it sounds). We bitch and moan all the time. As a human nature, we always like to blame things on others vs. looking at the mirror.

Does Capitalism work all the time? No....Bubbles are created, and the middle class suffers the most. You get a few with millions and billions, and the rest living on paycheck to paycheck.

Does Socialism work? No, there is always the notion that the government might over-extend it's boundaries...many will develop an addiction to welfare, and not willing to work.

Does Communism work? No, the central government holds the key, and dictates everything.

Does the Free-Market notion work? No, allowing the market to dictate always leads to bubbles and market manipulation. Less regulation doesn't bring prosperity to the market.

Do we have a perfect utopian society or system? No, and we might never achieve this. As long as you keep this in the back of your perspective, then it answers many of the complexities of the world. Therefore, as mankind, we haven't been able to come-up with a system that works for everyone. Humans are greedy (it is in their DNA). We were territorial from the onset of civilization (starting as cavemen). We continue to do whatever we could to have advantage and leverage over other tribes or countries. We created warriors from the onset of the civilization (now we call them Army with weapons).

Why do we created these boundaries, countries, borders? As a resident of this world, you should have been able to visit any part of the world without Passport, Visas, Border Patrols, and etc. The more borders we created, the more problems we created. The division amongst us was created (Russia vs. US, Israel vs. Arab world, China vs. Japan, India vs. Pakistan, Iran vs. Iraq, and the list goes on). Today, one tribe or one country feels like it has all the answers. On top of it, we need to add the emphasis on religion (Islam, Christianity, Judaism, Hinduism, Buddhism, and etc). To an extend, religion has brought divisions amongst us. Many followers believe their religion has all the answers.

In summary, I see this on-going problems because of our DNA (genetics). To blame everytying on one entity or one person is fruitless and irrational.

@Trading today....Good consolidation, nothing more. We might see 2 days-3 days of consolidation (which has been the norm lately before the next spike). Based on this norm, tomorrow (or Wednesday), we should see our next spike. Don't get so caught-up with holding physicals. Remember, it is a business and a money game. Those who promote Gold and Silver are not prophets or saviors of this world. It is just an idea about the money game. Holding physicals will not stop poverty, discrimination, bubbles, wars, famine, and etc.

Thank you, and Good luck...

Sep 17, 2012 - 12:52pm

@Turd - re physical Silver tight

Are you saying that there is very little physical Silver out there to buy?

If so, how do we (you) measure this tightness?

Did Sprott get his latest for example.

I think this data is probably the most "telling" of how things really are. Feedback appreciated.


Sep 17, 2012 - 12:54pm

Here We Go Again

Peleliu Group to deploy to Middle East

Posted: Sep 17, 2012 6:12 AM PDT Updated: Sep 17, 2012 6:12 AM PDT

SAN DIEGO (CNS) - Three U.S. Navy warships and an expeditionary force of Camp Pendleton-based Marines trained to extract Americans who get caught up in mob violence overseas are scheduled to depart Monday for a 7-month deployment to the Middle East and Western Pacific.

The Peleliu Amphibious Ready Group, led by the amphibious assault ship USS Peleliu, includes some 4,000 Marines and sailors and is under the command of Capt. Mark Sakaguchi. As a captain in charge of multiple amphibious ships, he will bear the title of Commodore during the deployment, according to the Navy.

Besides the Peleliu, the force includes the amphibious transport dock USS Green Bay and the dock landing ship USS Rushmore. The Peleliu returned from its most recent deployment in December 2010, and the Rushmore did so in April of that year. The Green Bay's most recent deployment ended almost a year ago.

Also deploying Monday is the Marine Corps' 15th Marine Expeditionary Unit and elements of Fleet Surgical Team 1, Helicopter Sea Combat Squadron 23, Assault Craft Units 1 and 5, and Beach Master Unit 1.

Their departure comes against the background of ongoing tensions with Iran over its nuclear program and amid anti-American unrest throughout the Muslim world triggered by an anti-Muslim film trailer posted on the Internet.

U.S. Ambassador to Libya Chris Stevens and three other Americans working for the State Department -- including two local former Navy SEALS, Encinitas resident Glen Doherty and Tyrone Woods of Imperial Beach -- were killed by an armed force in the Libyan city of Benghazi on Sept. 11 amid demonstrations over the film.

The sailors and Marines in the Peleliu Ready Group recently completed nine months of training scheduled long before the current anti-American unrest flared. Rescue training is a common part of pre-deployment training for Marine expeditionary units.

The final pre-deployment training was on the evacuation of noncombatants from hot-spots, according to U.S military authorities. The exercise included role-players on San Nicholas Island and Victorville in San Bernardino County who were "rescued" by Marines and taken by helicopter to Camp Pendleton, the Los Angeles Times reported.

The 15th MEU was on a deployment similar to the one starting Monday when the Sept. 11 terrorist attacks occurred. Summoned back to their ships from a port-call in Australia, the Marines were among the first U.S. combat forces into Afghanistan just weeks later, The Times reported.

Sep 17, 2012 - 1:11pm

Staged Demonstrations in China

I have no doubt the demonstrations in China are being allowed if not encouraged by the Chinese government, probably to distract their sheeple from domestic problems, but I doubt that is much consolation to people whose cars, restaurants and car dealerships are being burned. These kind of things can get out of hand. I wonder what will happen if some Japanese expats working in China get lynched. I'm pretty sure the Koreans, both North and South are loving this.

People are paying with fire and it does not look good to me.

Sep 17, 2012 - 1:12pm

memories of Japanese atrocities stirred...

Here's a film by the great Yimou Zhang ('Hero' & 'House of Flying Daggers') that gives a glimpse into the Japanese brutality in Nanjing (1937 occupation)...

Sep 17, 2012 - 1:15pm

For god sake, I have never

For god sake, I have never seen so much exacerbated claims of blaming everything on the President and his administration.

You must suffer from advanced Alzheimer's or, if you were being sarcastic, accept my apology.

Sep 17, 2012 - 1:16pm

Managed ascent

Given this interesting little pattern in the daily Gold chart, I expect things to movesideways a few more days. The pressure builds and the price pops up, then runs flat again. I have never noticed a pattern as geometric as this...

The Watchman
Sep 17, 2012 - 1:17pm

Interesting -How Silver is Created

Silver in Space: Metal Found to Form in Distinct Star Explosions

Astronomers decode nuclear recipe for precious metal forged in supernovae.

Metals like gold and silver spring from supernovae (file illustration).

Photo Illustration by M. Weiss/NASA/CXC

Andrew Fazekas

for National Geographic News

Published September 7, 2012

It's long been known that earthly metals like gold and silver were forged in supernova explosions, but the metals' exact origins have been shrouded in mystery. Now a new study has identified the unique nuclear recipe for silver in space.

(Related: "Huge Asteroids Brought Gold to Infant Earth, Study Says")

While most common light elements like hydrogen and helium were formed in the big bang, heavier elements like carbon and oxygen are formed within stars through nuclear fusion.

Rare heavy metals like silver and gold, however, need the most extreme stellar environments to form—found only during the explosions of massive stars, or supernovae. (See supernovae pictures.)

When these stellar titans die and explode, they spew new materials into space—the origin of most heavy metal

elements on Earth, said lead study author Camilla Hansen, an astronomer at Heidelberg University in Germany.

To pinpoint just how silver is produced, Hansen's team used computer modeling as well as observations of more than 70 massive stars.

The team analyzed light wavelengths to discern the stars' chemical makeups. "The amount of each element is directly connected to how strong the spectral lines are, which relates to how hot the star is," Hansen said.

The researchers concluded that silver production occurs in less massive stars than those that produce gold—and through an entirely different type of nuclear fusion, called the weak r-process.

Universal Silver Surplus?

The discovery allowed the team to put a limit on the metals certain types of supernovae can create.

"Stars with masses eight to nine times that of the sun may explode at the end of their lives as faint low-mass supernovae and create elements up to palladium and silver," she said, "but not heavier."

(Related: "How Planets Can Survive a Supernova.")

What's more, she said, "it seems that this weak r-process can be connected to supernovae of much lower masses than what we thought earlier."

So while the amount of the metal ejected by a single star may be quite low—as little as a billionth of the original mass of the star—these silver-producing supernovae may be more widespread than their larger, gold-producing cousins.

That cosmic disparity, Hansen said, may help explain why silver on Earth is so much more abundant than gold.

The stellar-silver study is published in the September issue of the journal Astronomy & Astrophysics.

Sep 17, 2012 - 1:29pm

Yeah, It's Like That

One of my favorite movies, Training Day, has that line. The scene is where Jake and Alonzo have their fight and confrontation at the end of the movie. In a split second, the power shifts. Alonzo asks the neighborhood leader, Bone: "It's like that, Bone?" Bone says "yeah, it's like that."

It is mesmerizing, and fantastically powerful, watching the power ebb from the once untouchable Alonzo, to the rookie cop and the neighborhood leader who announces to Jake "go on and bounce up out of here homie, we got your back." The now powerless Alonzo, realizes he just lost EVERYTHING, gets petulant, while the neighborhood citizens, realizing what just happened, walk away understanding that everything just changed.

We in turdville, are at that moment. Bernanke is Alonzo, doing the bidding of TPTB. Us turdites are like the neighborhood citizens, watching, realizing what just happened, with QE to infinity, MOPE, rumors of war, uprisings in the middle east, sabre rattling over Iran, drones, Hillary the warmonger, all of it. Who is Jake? Turd? Anyhow, that is how I see it. Now for the analysis.

Let's all operate from the same macro understanding.

(1) There is a system of global governance, banking, military, what not.

(2) That system is controlled, as opposed to being random.

(3) Those in charge of the system desire to keep the system in place, that is, to perpetuate the system, rather than see it collapse. This desire to perpetuate the system includes recognition of the ending of the current paradigm, to be replaced by another permutation of the system, allowing those in charge to remain in charge.

(4) As a result, those in charge, understand that there are but three methods to maintain system stability, that is, to keep the system from uncontrolled collapse, which collapse WILL occur from the accumulation of DEBT which cannot ever be repaid:

a-dilution of the existing fiat currency to prop up the system, that is, repaying debt by devaluing the currency and stealing from savers by inflation;

b-default on sovereign debt to prop up the system, that is, forgiveness of debt by creditors, or insolvency; or


Choose one.

We are there now, clearly.

Fiat devaluation has been ongoing for years, and has grown exponential, including since 2008. There is a race to the bottom, says Jim Rickards, proven correct time and time again.

Default or forgiveness is not an option, since the entire system in intertwined by massive derivatives. That is, each unit of debt translates to trillions of derivatives, each of which to be viable requires that the underlying debt NOT default, or else the derivative explodes into worthlessness.

That leaves WAR.

Look backwards in time.

The great depression, societal collapse, and a changing paradigm, from agrarian to production in factories, cities. Collapse was ongoing, and FDR radically altered the landscape. When FDR's fixes proved unable to solve the problems, including confiscation and devaluing the currency, the only solution left was WAR. Debts were thus defaulted/forgiven/repaid in blood and treasure. The world changed.

Economic prosperity ensued, because the US was the world's economic engine. That paradigm lasted for a while, then it changed, of course.

Currently, we have a basic world structure:

(1) Producers of size with regard to goods, China, BRICs, rest of the third world;

(2) Consumers of size with regard to goods and energy, USA, Europe, Japan, China;

(3) Producers of size with regard to resources, Africa, China, Russia;

(4) Producers of size with regard to energy, OPEC, Russia, etc.

EACH needs the other in this global world. NONE individually can go it alone any more.

The producers of goods need resources, energy and consumers. If there is a fall off in ONE of the three, chaos ensues, and those in charge face revolution and death.

The consumers need cheap goods, cheap energy, and the means to consume; hence, fiat devaluation and credit, since labor prices have fallen off the cliff, the unproductive outnumber the productive, and those in charge use bread and circuses to control the masses by propaganda and distraction and MOPE. Without consumers, the producers collapse. The producers holding the fiat, face ruin, revolution, and societal upheaval, including death to those in charge.

Producers of energy need producers of goods and consumers, or else the energy produced falls in price due to collapsing demand. Revolution likely ensues, see Venezuela. Shifting alliances of political and tribal factions are on balance, insignificant, but are useful as distractions.

Putting it all together reveals:

(1) The USA is the consumer part of the puzzle. Those in charge will keep it this way, for now.

(2) China produces goods, and will keep it this way for now, with India the other third world countries with their cheap labor continuing to produce at rates the USA cannot match.

(3) Energy and resources continue to be the shifting targets, with each pillar of the system dependent upon cheap energy.

(4) In balance, all players mutually benefit the others. Out of balance, there is chaos.

(5) The US military is the enforcer. So long as the US military engages and keeps the order, the other countries will accept and hold our worthless fiat. If the USA reneges, then the fiat system collapses. If the holders of fiat try to dump them, the USA will not support those in charge, and revolutions and coups will result.

See, simple?

What then, when there is too much fiat sloshing all around? Food prices get too high, citizenry goes hungry, risk of revolution and death of leaders. Cannot have that, no sir.

So, the world needs a distraction, and a reset.

WAR IS COMING, as certain as I sit here and type this.

Please, please prepare, and give homage to Turd for allowing us all to reap the knowledge that he so selflessly puts out day after day.

Thanks again, Turd for all you do. Thanks to the turdites, too, who are frequent and valuable contributors, DPF, Pining, all of you too numerous to mention [please do not be offended if I did not list you!]

Sep 17, 2012 - 1:30pm

That's not what I'm saying

Surely, you can go to your LCS or log onto HAA and buy some.

What I'm talking about is physical, in size. 10,000,000 or 15,000,000 ounces. Delivered outside of the LBMA system. I have firsthand knowledge that this is extraordinarily difficult to accomplish. Reluctance to deliver is a dead giveaway of the shortage of actual metal. Oh sure, the banks can create and outlast all the paper metal they please. Having to deliver it is something else entirely.

Sep 17, 2012 - 1:31pm

Any Turdite in the UK...

... who could do with a good laugh tonight, be sure to check out this new documentary on BBC2 at 9pm:

"Masters of Money"
Episode 1 of 3

"Stephanie Flanders explores the ideas of three influential thinkers who transformed international economics, and examines how their influence has shaped the 20th and 21st centuries.

She begins by profiling John Maynard Keynes, the Cambridge-born economist whose ideas revolutionised the approach of Western governments to financial crises during the Great Depression and the Second World War, and explains why the world's leaders drew on his teachings as the global meltdown took hold in 2008"

Sep 17, 2012 - 1:42pm


Where would we be without the telly to tell us what to think, eh?

Dyna mo hum
Sep 17, 2012 - 1:45pm
thurd aye
Sep 17, 2012 - 1:45pm

So there I was checking the

So there I was checking the price my dealer would give me for my au. $1550+-,not bad. Then I thought to myself "What the hell are you thinking?..You have been through ALL this crap, you have read about shale.wars,China,colloidal silver,Muslims,yadda yadda , and now you want to sell?"

Of course I came to myself in a few minutes, but it was close there for a while.Strong hand I consider myself,that's a laugh.With the biggest bull market erupting any day now, I think I should sell.I reckon the Devil himself got in there somehow,but he ain't there now.Get behind me Satan.Hello Blythe, Jamie BTW.


upped one thread

Richard Booze Just A Regular Guy
Sep 17, 2012 - 1:51pm

Er, Regular Guy

Based on the scores of photos of violence against Japan in China, it would appear that the "Australian" got it right. Facts are facts.

You might want to pay a little more attention to that "toilet rag".

Republicans in the USA are not right-wing fringe lunatics. We simply want smaller government and less taxes -- and more freedom at the expense of Big Brother "security" and micro-management. We also value a press that gives us unbiased truth, though we get little of that.

Please do not belittle us.

Very informative articles, Mr. Ferguson. We're obliged.

Jan Roos
Sep 17, 2012 - 1:52pm

Thurd Aye

Are you in RSA still? If so, who do you buy through?


Fr. Bill
Sep 17, 2012 - 1:56pm

Nigel Farage Fined $4,000 for Tacky-talking

Read all about it here:

Sheesh! What wimps those EU MPs are! Someone oughta send 'em to a US school of journalism somewhere, or to the Institute for Democratic Party Factotums and PR Specialists.

Sep 17, 2012 - 1:56pm


Exactly. That's why I'm treating it as a comedy .

No, that's a bit unfair. BBC documentaries are still generally very good to excellent (and therefore soon forgotten / never mentioned again - especially when truths are uncovered).

At an hour long (and with no ads to distract), this documentary will probably be very well researched and well-balanced.

It's everything else that the BBC do and report on nowadays that's a complete joke.

Sep 17, 2012 - 1:58pm


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