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.

Angry Chef
Apr 24, 2019 - 11:57am

Missed Earth Day !

Too busy looking at the PM's. I hope this makes up for it.

Apr 24, 2019 - 11:58am

Echoing David Stockman

The Federal Reserve, by adopting the Bernanke fallacy of a requirement of 2% inflation, has created bad money. Instead of a mandated by charter stable currency, the FR dollar melts to a lessor value the longer you hold it. Because of the dollar diminution, the laborers need a repeated wage increase to keep up, and businesses need to raise prices. Over many years, the 2% or more increase in American costs of production has pushed US corporation to source materials and assembly costs overseas. This is where the better wage jobs have gone, and with them the factory guy and now his wife work to replace an income and life style that left. The rusted fabrication plants are like tombstones for fallen opportunities that years ago made America great.

Apr 24, 2019 - 12:00pm

Saudi Petro Dollar

There's something going on when Mohammed bin Salman high-fives Putin before a meeting that took place recently. China and Russia are wooing Saudi Arabia toward the Petro Yuan. And as far as American oil independence is concerned, it's way overblown. The shale oil patch is pie-in-the-sky with high costs and fast depleting reserves. Oil companies in the shale are zombies drowning in debt, and they will not survive much longer

Apr 24, 2019 - 12:06pm

oil ex spurts

ex Zerohedge

"Gasoline inventories fell for the 10th week in a row (ignoring API's build) but crude saw a big upside surprise build - the 4th in 5 weeks."..

How come all the experts are Always "surprised" by draw downs or builds??

Apr 24, 2019 - 12:15pm

Barkerville Gold

Check outstanding shares.

Apr 24, 2019 - 12:21pm


Moriarty has article on his site this AM where he is projecting a market crash within days: "Who Says They Don't Ring a Bell at the Top?".

It is interesting that a Letter Writer goes out on a limb and makes such an exact timing estimate. Obviously we can keep the projection in the back of our minds for a few days and see how accurate he is.

Miners having a better day...TF said it could happen. His limb remains pretty strong.

Apr 24, 2019 - 12:25pm

Income Inequality

Stems from criminality and corruption.

Apr 24, 2019 - 12:30pm

We are too far gone. A long rant.

The government schools and the media share much of the blame. These institutions mold minds, and they certainly have an agenda. The U.S. Constitution is generally not taught in public schools. If it were, it would be too easy to see that much of what our government currently does is unconstitutional. The concept of democracy is elevated to a god-like status. No one is ever taught about historical examples of pure democracy being an undesirable and unstable form of government. The schools and media refer to "our democracy" so often that the average person doesn't even know that we were never intended to have a purely democratic government, and for good reason. The most disturbing thing the media and our schools does is place U.S. militarism on a pedestal to be worshiped. Patriotism has been linked to war in the minds of nearly everyone. A person in a military or police uniform has become a semi-celebrity. They walk around with people telling them "Thank you for your service." and buying them coffee and lunch. Rarely does anyone question whether this "service" is something to be thankful for. Does endless war in Iraq, Afghanistan, and Syria protect our freedom? Does anyone know that, according to the constitution, wars must be declared by congress? Do the media and schools report on the number of innocent civilians killed by our military, the corporations enriched by militarism, or the connection between military actions and economic interests abroad? If you do question U.S. militarism, you are simply an unpatriotic demon.

The result of years of molding minds is a warped view of government, and a government that has far too much power. The government is viewed as a savior and protector. This has become true for young and old, rich and poor. Everyone has some special interest, some benefit that they want to protect. Students, farmers, senior citizens, teachers, soldiers, labor union members, business owners, defense contractors, leaders of large corporations, and just about everyone else has something that they get from government and want to keep coming every year. Dependency breeds corruption. Dependency keeps the size and power of government growing. The truth is that the nature of government is force. The government takes away freedom and choices. Any benefit you receive from government is because it has been taken by force from someone else. If everyone could just understand that single point, we'd all be better off.

When it comes to the economy, government is generally viewed as the protector and savior there as well. How many students in public schools have been taught about the negative consequences of minimum wage laws, labor unions, occupational licensing, deficits, taxes, or inflation? How many students in public schools have been taught about the positive consequences of free markets? Public schools and the media portray the government as a wise sage that it there to control the market for everyone's benefit. I'm sure that the average person thinks that without the government we'd have children working in mines, poison in our food, and slave wages. Capitalism is taught as some caricature that results in a few white men getting fabulously wealthy at the expense of everyone else.

I had a conversation with my youngest daughter about Amazon. That business has made my life better. I now have access to a wider range of products at lower cost than I had before. That means Amazon has enriched me. I voluntarily give money to Amazon each month. Jeff Bezos has become the richest man in the world, and I don't care.

I'm afraid that we are way too far gone to think that the general public will see any connection between monetary policy and wage inflation versus asset inflation. What I expect to see is the general public voting for politicians who promise to steal for them. They will vote for the simplest, lowest level solutions: rich people have too much money, so tax wealth, make college "free", give everyone "free" healthcare. Meanwhile, they will keep ignoring what our military is doing overseas, and keep ignoring the increasing corruption of politicians at home that inevitably comes from giving them more power.

We are all going to be poorer as a result.

Apr 24, 2019 - 12:34pm

more Martenson

Off The Cuff: Living With Integrity - Public

Always worth listening to Chris (my opinion).

Joseph Warren
Apr 24, 2019 - 12:34pm

Re: Echoing David Stockman

@Welder99 - of course you, and David Stockman, are correct. The System is designed to steal the real wealth of most of the population to benefit the .0000001%. The purchasing power of the US Dollar has been eroded by 98% since the Fed was established and the banker gangsters staged a coup of America a century ago. The banksters used their control of the money system to also take control of the propaganda arms of society - the ‘education’ system and the media. So, most people- if they give it any thought at all, which is very rare - think they actually benefit from this system of theft.

Those running The System act in ways to cover their crime. Off shoring of manufacturing to fill shelves with cheap goods from China and cheap foreign labor sneaking across the border are all about covering up the long term destruction of the dollar by the usury parasites. Americans need more of these dollars, declining in value each year, - just to survive. Thus our labor is uncompetitive. Of course, the whores in the media blame ‘lazy Americans’ and claim that only foreigners from the 3rd World will do work ‘that Americans refuse to do’.

After all, why work for slave wages when you can always join the US military and fight wars around the world to defend the bankers petro-dollar ? If your body & mind survive (never mind your soul) and you have in demand skills, you can always make the ‘big bucks’ as a private contractor when your military hitch is over. Your salary is chicken feed compared to the kind of money banksters make off you.

Most of the problems of America can be summed up by David Stockman’s quote:

” It’s the lousy money.”

No POTUS and no other politician of recent memory has seriously challenged this.

Apr 24, 2019 - 12:37pm

If I remember correctly...

Moriarty said few weeks ago, that he expects to make most of his money on...Irving, number one...and Novo, number two.

He seems to have a good sense on miners

Apr 24, 2019 - 12:40pm

Monetary Freedom

It's all about personal freedom. Freedom has been taken from the population by the replacement of sound money with fiat money that robs by inflation and which is always a counter party risk if you have sufficient to bank or invest.

The rich have become richer and the GINI coefficient has increased because the rentiers get the newly created fiat first and are able to deploy it before the dilution effect on the money supply and decreased value becomes effective.

Greenspan's 1966 essay on "Gold and Economic Freedom" is frequently cited to underline these points.

What can be done? There is a need to reintroduce sound money as a store of value and transactional currency. If this can be done globally, perhaps by stealth and personal choice, then the banking cabal will not be able to control the lives of millions of their former debt slaves.

boomer sooner
Apr 24, 2019 - 12:42pm

Not really a fan

Of Jeff Snider (ra ra dollar or so I thought), but his currency calls are very good. I think he has found the crux of the globe trying to get away from the dollar. I am finally starting to understand what Jeff calls the Eurodollar.

Banks reserve ratio is 3-10% in the US (dollars). The European banking system I think is the same or worse 3-10%. They not only loan in Euros, but dollars as well. That means 90-97% of dollars lent in Europe don't exist except on a balance sheet at a bank. How to pay off something that doesn't exist?

Angry Chef
Apr 24, 2019 - 12:47pm


....Matt. I agree with 98% of what you just posted. But AMAZON's seed money was born out of the CIA and likely the ESF. They don't make money. They continue to borrow at near zero interest rates and role over it's debt with more debt. Putting most Mom & Pop shops out of business. It's the old Nazi model where Corporations who were members of the Nazi Party paid a dues each year. And for that dues the Military guaranteed it's protection and expansion. With a helpful hand from Banksy as the money had to be offshored and shipped around tax free. Sounds kind of familiar doesn't it ? The same goes for Facebook, and Google, and Netflix. Seed money from the ESF/CIA Trusts. Providing a near endless hidey hole for US Treasury Bond Purchases and the pursuit of Empire. As a Russian General said during the Ukraine Maidan..." We don't have to worry about the Nazi's in Ukraine. It's the Nazi's in Washington we have to worry about ".
Apr 24, 2019 - 12:52pm

The alpha dogs eat first... always

The middle class has been hurt (to put it mildly) because the central banking cabal hands the newly created money to the wealthiest in our society. They take (eat) what they want and throw the crumbs to those below. Like Marie Antoinette said, "Let them eat cake."

What are the socialists trying to do? Simply reroute the funds river in their direction. They want the initial funds to flow to them so they can eat what they want and then throw the crumbs to those below. This is why you always see a socialist ruling class living above the worker class below. Bernie Sanders and the other Democratic shills are simply trying to fool the general population so they can enrich themselves.

If the people fall for this BS, they get what they deserve and the rest of us just get screwed.

Apr 24, 2019 - 1:06pm


My sister once dated a U.S. Congressman. He told her that once you get to Washington, you go through a week of "orientation". The first two days you learn about all the perks/benefits (gym, private bank, hair salon, etc.) -- there are too many to cover in one day! The third day you learn procedural stuff. Days 4 and 5 are spent on the real focus of your first term -- getting re-elected!

'Nuff said . . .

As an aside, she was taken to a function at the Rockefeller estate in upstate New York. There are something like 75 miles of roads on the property! As they approached the building, she remarked "That's the largest house I've ever seen!". The Congressman laughed, and replied "That's the guest house!"

Angry Chef
Apr 24, 2019 - 1:06pm
Sound Money Minnow
Apr 24, 2019 - 1:10pm

Well said Matt.


As retired law enforcement and a VET I couldn't agree more. If my service had actually resulted in more liberty, instead of exchanging "a walk on part in a war for a lead role in a cage." perhaps I would feel differently. Credit to Pink Floyd.

Unfortunately the masses prefer to be taken care of as a child, rather than assume individual accountability. Good perceived as evil, and evil good. It is all biblical, but we don't do that anymore either. Choose today who you will serve. Personally, I would like to see a return to simpler times, I suppose that isn't an option as we slouch towards gomorrah. Loving and serving the creature rather than the Creator is not a long term profitable strategy.

matt_ Angry Chef
Apr 24, 2019 - 1:14pm

Good points...

I haven't really looked at the history of Amazon financing. Unlike with government services, you still have a choice not to use Amazon.

Amazon and Netflix at least have a service with an upfront cost. I agree that the costs have been subsidized by low interest rates and stock speculators. However, if Amazon is willing to lose money shipping me a product, I will take it.

Facebook and Google are a different story. They have a deceptive business model. Nothing is free.

Apr 24, 2019 - 2:19pm

We know the problems...

We've pointed them out and discussed them at lengths.

The real issue of our time is, what are the solutions to these problems and how do we implement said solutions?

Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 6/17

6/18 8:30 ET Housing Starts and Building Permits
6/19 2:00 ET FOMC Fedlines
6/19 2:30 ET CGP presser
6/20 8:30 ET Philly Fed
6/21 9:45 ET Markit flash June PMIs

Key Economic Events Week of 6/10

6/11 8:30 ET Producer Price Index
6/12 8:30 ET Consumer Price Index
6/13 8:30 ET Import Price Index
6/14 8:30 ET Retail Sales
6/14 9:15 ET Cap Ute and Ind Prod
6/14 10:00 ET Business Inventories

Key Economic Events Week of 6/3

6/4 All day Fed conference in Chicago
6/4 10:00 ET Factory Order
6/5 9:45 ET Markit Services PMI
6/5 10:00 ET ISM Services PMI
6/6 8:30 ET US Trace Deficit
6/7 8:30 ET BLSBS
6/7 10:00 ET Wholesale Inventories