Thursday, October 17, 2013

Gold and the end game.

William Kay tells us that there is no question but that we are in the 'end game.'

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/10/15_There_Is_No_Question_That_We_Are_Now_In_The_End_Game.html

What is precisely the end game?

The nearest definition  I can give is this: the economic end game is a sum of events (processes) that occurs as market forces reassert themselves and the US Dollar is de-throned as a reserve currency.

The events that are included are: 1. the rise in interest rates on T-bills and in general; 2. the rise in price inflation; 3. the end of the US Dollar as a reserve currency and 4. the rise in gold and silver prices.

While, it is relatively easy to see what will comprise the end game, the resultant consequences are more difficult to see. First, because there are quite a few players and forces involved and second, because the relationship between the various factors is complicated and not necessarily subject to simple equations (though some are). Thus, forecasting the consequences of the 'end game' is more like focusing light on the hills that protrude from the forests below.

Key to understanding the end game is that it is about financials and money. Another important point is that it is a loser game. No nation has ever pulled itself out of a slump by printing more money. Thus, some of the consequences are as clear as they are unavoidable. It is the timing that is an issue. In fact, we need to view the FED's latest action as something that happens in the end game. The FED is telling the banks to cease and desist from buying commodities, which is not aimed at stopping the banks from buying oil or aluminum, but to stop buying gold and silver.  I have discussed why the FED wants to keep gold and silver prices low (it allows the illusion of low inflation and low interest rates) and how the rising interest rates will increase the deficit. An increase in the gold price will weaken the Dollar, increase interest rates and the deficit will skyrocket, which in turn will necessitate more printing, which will increase inflation and ...Once we get into the self-reinforcing and vicious circle, there is no way out until the currency is destroyed..

The graphic shows how the Roman Empire destroyed its currency vs the destruction of the US Dollar:


 The trend is reinforced by the drop in foreigners buying Treasuries;

How does the govt explain this?

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