The Sauds, The Dollar and Income Inequality

Please be sure to read this free, public post.

Wed, Apr 24, 2019 - 10:13am

So far, there's not much going on today with an absence of economic datapoints and other news. So let's take the day to discuss two other items that have been on my mind recently.

As I type, we've (mostly) avoided the 8:30 Comex beatdown. I say "mostly" because the usual selling was still there...just not as overwhelming as it has often been over the last two weeks.

So with everything (mostly) stable, today seems like a good day to prompt a discussion of two things that have been on my mind quite a bit lately.

First, here's an item that received some news coverage last week...but not much. The US has been assisting the Sauds in their war against Yemen through the supply of bombs and materiel as well as aerial refueling for their warplanes. Some place the Yemeni death toll of this war as high as 70,000 with images of the war-ravaged and famine-stricken country easily found on the internet.

Two weeks ago, both houses of the US Congress passed a War Powers Resolution that, by invoking the War Powers Act, aimed to limit future US involvement in assisting the Sauds. Trump vetoed this resolution, effectively killing it unless Congress can muster the 2/3 votes to override the veto.

Now why would Trump (and ALL other US presidents!) seemingly support the Sauds at all costs...regardless of their internal and external policies? By the way, did you see this story yesterday?

The "traditional" talking point is that "Saudi Arabia is a key ally in the region" as they are aligned against the Great Satan of Iran...blah, blah, blah. Instead and FAR MORE IMPORTANT is the Saudi protection and control of the petrodollar system, and this is the key, primary rationale behind US Middle East policy.

The article below is from April 4 and we referenced it at the time. However, it's worth linking again in light of these recent events. Here's the link from Reuters but below are the key (and very rarely stated) paragraphs.

Simply put: The U.S. will always blindly support the Saudis as their participation in the Petrodollar Recycling Scheme is the key linchpin in maintaining the US$ as the global reserve currency. Period. End of story.

The second item worth discussing was brought to my attention again this morning through Twitter where I found this NYT opinion piece from the esteemed Nobel laureate, Joe Stiglitz. Here the buffoonish "economist" attempts to make the point that income inequality flows from the misgivings of capitalism. What a quaint, little thought.

Instead, the current state of income and wealth inequality is simply a by-product of our corrupt monetary system...where the monopolistic control of the money supply by The Fed and their Banks is at the root of the problem.

As you can see and read below, prosperity across income groups was growing steadily until Nixon closed the gold window in 1971, effectively ending the monetary stability of the sound money, Bretton Woods system. Almost as soon as unlimited fiat creation became the new normal, wealth and income disparity began to grow.

Current politicians like to blame each other for this dire situation. Instead, the blame lies with ALL of them AND their central bank enablers.

You may be asking yourself, what do these two issues have to do with the price of gold and why are they being discussed on a precious metals website? Well, if you have to ask yourself that, then I invite you to think more deeply about these subjects and then be sure to freely participate in what I hope will be a lively discussion below.

As I close, I now have $1274 and $14.82. Go make it a great day!


About the Author

turd [at] tfmetalsreport [dot] com ()


Apr 24, 2019 - 10:26am


Digesting what you wrote Craig. I think income inequality is not the result of doing away with the gold standard. Keeping the federal minumum wage at paltry $7.25 an hour is just one of the reasons though.

PS surprise surprise.... gold / silver popping!

Sound Money Minnow
Apr 24, 2019 - 10:30am

Couldn't agree more Craig

The real question is what exactly can we do about it in the current 2-party disaster? The people are entertained by breads and circuses. I often feel the more responsible I am with my own budget, the more this government will take from me to give to someone else. That is why the savers in the metals will never be allowed to prosper. It puts an end to the power of the purse for the politicians. Crony capitalism sucks and it is the reason why socialism sells to the youth.

indiana rod
Apr 24, 2019 - 10:37am

Saudi Arabia

Chelsea Manning, a man who thinks he is a woman, was convicted of espionage. She/he disclosed 750,000 classified documents. At least she/he beat Hillary's record of putting classified documents out on the World Wide Web for all the world to see.

Sentenced to 35 years, she/he was pardoned by our illustrious former President.

In Saudia Arabia she/he would have been executed. Maybe they know how to take care of traitors.

Apr 24, 2019 - 11:00am

Everything is relative

A traitor to Nazis is a hero now...same for traitors to Stalin.

Traitor to Saudis brutal regime is (likely) a hero to me.

Sound Money Minnow
Apr 24, 2019 - 11:04am


Additionally, never forget that the petrodollar gives us unlimited power to export inflation. Having a printing press that can burden the rest of the world with our own over consumption has given us a huge benefit. Lock others out of the system ie SWIFT. Jim Rickards outlined this well in his book Currency Wars. So the question I posit is this. Is a country moral in doing this? The current CFTC is an example of a leviathan government allowing the same thing to be done to its own people. We, the precious metals holders, are locked out of preserving purchasing power the same way the countries that don't play ball with us are locked out of international trade settlement SWIFT system. Will the SDR end up being the currency accepted or a return to the gold standard. I doubt either. Some crypto block ledger platform? Doubtful too because where will Wall Street and the bankers skim? Face the music folks this whole shit show is a ponzi scheme any way you look at it. Our parasite government is doing to its own people what it has done to the rest of the world in the name of fairness, lol. don't know if anyone follows my rant.
Angry Chef
Apr 24, 2019 - 11:05am

The Gold Standard, The MIC & Bread & Butter

When Nixon closed the Gold window in 1971 and defaulted upon the World. It was the official close of the Bretton-Woods Agreement and the beginning of Bretton-Woods 2.0. What role did the MIC have in the closure of the " Gold Window ". I concur that the bill for the Vietnam War was coming due and without either a significant increase in the price of Gold. Or a default. That said Bill would not be paid. And lets also remember LBJ demanding of the Fed that he wanted both Guns & Butter !!! So America would have an increasing reliance on War ( Guns ) as an economic driver and socialism ( butter ). All of this was eventually paid for ( or delaying another default ) by the creation of the petro-dollar. A lot of water has passed under the bridge in the 48 years since the first default. The Guns have continued to flow and the Butter keeps getting eaten. Now what is left but a bloated War Economy and a gluttonous population. And this includes the Politicians that allow themselves to trade on insider trading but not the people. A Political Class that gets Free Medicare but not the People. A Political Class that doesn't obey the Law but where the People do. A Political Class and the MSM that have been captured by the MIC to the point that spying on it's population and legalizing propaganda is legal. Where secret FISA Courts and Intelligence Agency hit men are used to scare and silence the people.

Tough to see the shining light on the hill from here. The hole is too deep. Best to stop digging while you still have a chance.

Apr 24, 2019 - 11:05am

2-party system... a false dichotomy

I find myself surrounded by colleagues at the U who are quite liberal and hate everything red, Trump & conservative. Instead they support the liberal agenda on all issues, not realizing that both parties do the will of the deep state. (I am preaching to the choir again). They cannot see the signs right in front of them, that the deep state & globalists are slowly moving us toward socialism, no cash, and few liberties.

From my perspective, a majority of both parties are guilty. But to try to explain this to any one--even my intelligent, well-educated colleagues, elicits a blank stare.

I just bought me sum JNUG and set a stop loss. I might double down if we take a trip back down to $7.

Sound Money Minnow
Apr 24, 2019 - 11:23am

My answer to this mess

Don't buy leveraged ETF's. If you know that manipulation is a fact why double or triple your potential exposure to risk? I played the reverse VIX and got my a** handed to me. Don't utilize margin. Something is going to break. When people all end up on one side of a trade someone will pay the price and it won't be the government or the banks. Pay down debt, don't get overweight in anything. I currently have 20 % of my net worth in physical metals, own my home debt free, no credit card debt. That is a start. I refuse to break my a** anymore to have my stuff stolen to give to someone else in need. That is not charity, it is theft. Full time work for a retiree is foolish when our progressive political system imports dependency for me to pay for. That is the end result of a socialist utopia, erase history, work ethic, accountability, and retreat to your own worthless identity. Make the government your god, after all they are only looking out for your best interest. That is what a VET understands everytime they visit the VA.

Apr 24, 2019 - 11:44am

Barkerville Gold BGM.V

could be interesting. Has an interesting history and now Sean Roosen backing and buying. FWIW. not investment advice of course.

Apr 24, 2019 - 11:57am

My guess...

Relief rally in miners....overdue...still welcome.

Key Economic Events Week of 1/13

1/14 8:30 ET CPI
1/14 9:00 ET Goon Williams
1/15 8:30 ET PPI and Empire Fed
1/16 8:30 ET Retail Sales and Philly Fed
1/17 8:30 ET Housing Starts
1/17 9:15 Et Cap Ute and Ind Prod

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Key Economic Events Week of 1/13

1/14 8:30 ET CPI
1/14 9:00 ET Goon Williams
1/15 8:30 ET PPI and Empire Fed
1/16 8:30 ET Retail Sales and Philly Fed
1/17 8:30 ET Housing Starts
1/17 9:15 Et Cap Ute and Ind Prod

Key Economic Events Week of 1/6

1/7 8:30 ET US trade deficit
1/7 10:00 ET ISM Services PMI
1/7 10:00 ET Factory Orders
1/8 8:15 ET ADP employment
1/9 8:00 ET Goon Chlamydia speech
1/9 1:20 ET Goon Evans 2:00 ET Goon Bullard
1/10 8:30 ET BLSBS
1/10 10:00 ET Wholesale Inventories

Key Economic Events Week of 12/16

12/16 8:30 ET Empire State Manu Idx
12/16 9:45 ET Markit flash PMIs Dec
12/17 8:30 ET Housing Starts and Bldg Perms
12/17 9:15 ET Cap Ute and Ind Prod
12/19 8:30 ET Philly Fed
12/20 8:30 ET Final guess Q3 GDP
12/20 10:00 ET Pers Inc and Spending
12/20 10:00 ET Core Inflation

Key Economic Events Week of 12/9

12/10 8:30 ET Productivity and Unit Labor Costs
12/11 8:30 ET CPI
12/11 2:00 pm ET FOMC fedlines
12/11 2:30 pm ET CGP presser
12/12 8:30 ET PPI
12/13 8:30 ET Retail Sales
12/13 10:00 ET Business Inventories
12/13 11:00 ET Goon Williams speech

Key Economic Events Week of 12/2

12/2 9:45 ET Markit Manu PMI
12/2 10:00 ET ISM Manu PMI
12/2 10:00 ET Construction Spending
12/4 9:45 ET Markit Services PMI
12/4 10:00 ET ISM Services PMI
12/5 8:30 ET Trade Deficit
12/5 10:00 ET Factory Orders
12/6 8:30 ET BLSBS
12/6 10:00 ET Wholesale Inventories

Key Economic Events Week of 11/25

11/25 8:30 ET Chicago Fed Nat'l Idx
11/25 7:00 pm ET CGP speech
11/26 8:30 ET Advance Trade
11/26 9:00 ET Case-Shiller home prices
11/26 10:00 ET New home sales
11/26 10:00 ET Consumer Confidence
11/27 8:30 ET Q3 GDP 2nd guess
11/27 8:30 ET Durable Goods
11/27 9:45 ET Chicago PMI
11/27 10:00 ET Pers Inc & Cons Spndg
11/27 10:00 ET Core inflation
11/27 2:00 pm ET Beige Book

Key Economic Events Week of 11/18

11/19 8:30 ET Housing Starts & Bldg Perms
11/20 2:00 ET October FOMC minutes
11/21 8:30 ET Philly Fed
11/21 10:00 ET Existing Home Sales
11/22 9:45 ET Markit November Flash PMIs

Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

Key Economic Events Week of 11/4

11/4 10:00 ET Factory Orders
11/5 9:45 ET Markit Services PMI
11/5 10:00 ET ISM Services PMI
11/6 8:30 ET Productivity & Labor Costs
11/6 Speeches by Goons Williams, Harker and Evans
11/8 10:00 ET Consumer Sentiment
11/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
10/30 2:00 ET FOMC fedlines
10/30 2:30 ET CGP presser
10/31 8:30 ET Personal Income & Spending
10/31 8:30 ET Core Inflation
10/31 9:45 ET Chicago PMI
11/1 8:30 ET BLSBS
11/1 9:45 ET Markit Manu PMI
1/1 10:00 ET ISM Manu PMI

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