Mike Krieger Deconstructs Commodity Inflation: "You Ain't Seen Nothing Yet"

Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.

- Norm Franz, Money and Wealth in the New Millennium

As soon as your born they make you feel small,
By giving you no time instead of it all,
Till the pain is so big you feel nothing at all,
A working class hero is something to be,
A working class hero is something to be...
When they've tortured and scared you for twenty odd years,
Then they expect you to pick a career,
When you can't really function you're so full of fear,
Keep you doped with religion and sex and TV,
And you think you're so clever and classless and free,
But you're still fucking peasants as far as I can see,
There's room at the top they are telling you still,
But first you must learn how to smile as you kill,
If you want to be like the folks on the hill,

- John Lennon, Working Class Hero

Thanks Ben…You Have Destroyed the Social Fabric of the World

History is littered with the carcasses of men that in their exaggerated hubris attempted to stop the forces of nature and the markets only to fall flat on their faces. We tell the stories of these men in history books and myths from prehistory, but it never stops men of successive generations from trying it all over again. What the current political class the world over (at the behest of Wall Street financial terrorists and other big corporate interests) are doing falls into the same exact formula of prior historical failures. Some of the historical figures that attempted to beat back nature were great warriors or kings that just reached too far. Some of them were evil megalomaniacs whose desire was nothing short of absolute power in their hands over any of the unfortunate human beings that happened to be in the way. Ben Bernanke is neither of these. He is a just a little dweeb with an electronic printing press. Tragically, because of modern technology and the way the monetary system works today he has the ability to cause more damage than any other one person in the history of mankind and he is doing it. I shudder to contemplate the ultimate effects of the inflationary holocaust he has unleashed on the six billion mesmerized and helpless souls present on earth at this time. The signs are starting to show up again just like in early 2008. Food is becoming scare at a “reasonable” price in many parts of the globe and the symptoms of this are starting to bubble up to the surface. For example in recent days we have witnessed food riots in Algeria and Tunisia where at least 14 people are reported to have died in each country.

These types of events were easily predictable and have been predicted by people like me and many other whose views will never be seen in the mainstream media. Fortunately, the alternative media is taking over (which is why the Obama administration is certain to increase its crackdown on the internet) and people are becoming very informed and linked all over the world. The divide and conquer strategy that has worked so well for millennia will be much harder to pull off this time around.

Inflation: There is No Putting this Cat Back in the Bag

Probably the most misleading thing Bernanke said in his sixty minutes interview was that he could snuff out inflation in 15 seconds (this was the most misleading thing not the biggest lie, which goes to his “I’m not printing money” statement). This statement is so misleading because it is true he can do what he says but he never will because at this point the effect of raising rates or tightening credit would immediately bankrupt every single part of the gigantic TBTF banker run ponzi scheme also known as the global economy. The world’s Western governments are loaded with more debt that before the crisis and many of these including the U.S. and Japan could not handle even a moderate increase in interest rates let alone what Volcker had to do in order to end the inflation of the 1970’s. Think about it. Other nations own our debt and currency in the form of their FX reserves. China just came out with its latest FX figures and guess what? You go it, a new record! $2.85 trillion to be exact, which is up 19% year-over-year. I want to reiterate a point I made earlier in the year on this. With their FX reserves up 19% year-over-year they needed to boost gold reserves 19% just to keep their puny 1.6% of gold at a steady percentage. If they actually want to increase the share, which they do, they need to buy far more. This goes for every other nation as well since FX reserves have been exploding across the emerging world.

You see this is the great game.  The West and Japan and major debtors that know they can never pay it off and have no intentions of trying.  The West keeps stuffing the emerging economies with their toilet paper currencies in exchange for real goods, which then fuels massive inflation and makes it virtually impossible for them to ever get their gold reserves up as a percentage of FX reserves.  We just keep diluting the hell out of them!  The Asians-ex Japan (they are a U.S. colony) and the BRICs certainly know this which is why they are buying resources around the world, strengthening their military and forming economic alliances with each other.  A great example of this is when the Chinese and Russians decided to transact in their own currencies rather than the dollar http://www.chinadaily.com.cn/china/2010-11/24/content_11599087.htm [1]. Also, there was this story about how India may pay for the oil it gets from Iran with gold as they try to hammer out another currency system http://economictimes.indiatimes.com/news/news-by-industry/energy/oil--gas/india-iran-mull-over-gold-for-oil-for-now/articleshow/7238760.cms [2].  

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