• 173 days Will The ECB Continue To Hike Rates?
  • 174 days Forbes: Aramco Remains Largest Company In The Middle East
  • 175 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 575 days Could Crypto Overtake Traditional Investment?
  • 580 days Americans Still Quitting Jobs At Record Pace
  • 582 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 585 days Is The Dollar Too Strong?
  • 585 days Big Tech Disappoints Investors on Earnings Calls
  • 586 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 588 days China Is Quietly Trying To Distance Itself From Russia
  • 588 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 592 days Crypto Investors Won Big In 2021
  • 592 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 593 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 595 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 596 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 599 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 600 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 600 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 602 days Are NFTs About To Take Over Gaming?
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Fix Gold, Collapse the World

MP3: Discussion with Jay Taylor taped October 7, 2014.


1. Using US Bureau of Labor Statistics (BLS) CPI inflation method from 1980 as at www.shadowstats.com, real economy is in decline
Even using the understated CPI figures of today, the economy is experiencing very modest growth.

According to the Goldman Sachs index of global leading indicators the global economy is decelerating toward contraction http://www.zerohedge.com/news/2014-10-01/goldman-global-leading-indicator-drastically-revised-collapses-confirmed-slowdown

2. Austrian School of Economics theory of 'time preference'

  • Higher interest rates required to pull economy out of post credit-binge economic slow-down through (1) clearing excess debt (debt burden and cause of economic distortion) and also (2) finance only highly productive enterprise that can clear higher interest rate hurdle and generate high returns in the near term
  • Easy credit policies such as Quantitative Easing merely capitalize the Too Big To Fail (TBTF) banks and lending at low interest rates finances inefficient enterprise continuing prior easy credit economic distortion.
  • Higher interest rates focus financing of productive enterprise on only capital projects that can contribute in the near term and give high returns - this then helps pull the economy out of slowdown as in early 1980s
  • Secular low interest rates result in continued slow / non-growth and does not clear bad debt from economy resulting ultimately in economic decline and currency failure

3. Historically stable debt levels at ~ 150% of GDP.

4. TBTF banks are levered 15:1 and will not allow organized write-down of outstanding debt as writing-down their assets by more than 6.7% would result in bankruptcy of the TBTF banks that control the economic and monetary system and central banks

Larry Summers paper in 1988 with Barsky re. Gibson's Paradox found that rising rising interest rates associated with rising gold prices - Summers had awareness of inter-relationship of gold and interest rates

5. If gold is suppressed then that would allow loose monetary policy to be effected and a series of economic bubbles while gold and interest rates kept low.

1991 J. Aron & Co. of Goldman Sachs given first "bona fide hedging" exemption to allow a US dealer to speculate in commodities

Summers and Robert Rubin (former Chairman of Goldman Sachs) joined Treasury in 1993

Dimitri Speck's statistical work shows strong gold price intervention starting in 1993 on the Comex:

Gold intervention through (1) NY Comex virtual gold trading and (2) LBMA trading of "unallocated" gold (virtual gold) trading on LBMA where 85% of daily gold trading volume occurs. 200 M oz. per day traded in London

Shutting down the golden inflation warning system by rigging the gold price has the global impact of rigging interest rates worldwide as gold is a globally traded asset.

  • Loose monetary policy can be run without impacting gold price when paper gold traded in London & Comex as well as BIS coordinated gold leasing from central banks
  • Results in excess debt and speculative bubbles globally - we ultimately face collapse of the global debt market inflated by the manipulation of gold allowing gross distention of the global debt markets

Need higher gold prices to stop flow of gold (wealth) out of the West as well as restructuring of debt markets

6. There will be no recovery with low interest rate policy. Only bubbles and ultimately currency failure.

John Exter - Exter's pyramid shows end result is deflationary (paper asset) crash with gold going to extraordinary levels


7. In summary - Low interest rates and intervention in markets prevents normal market function of gold market and flow of physical gold from primarily paper Western gold markets to Global physical gold markets.

Because London LBMA and NY Comex markets levered 100s:1 virtual gold : physical gold, will be no physical gold available in crisis; even now shortness of physical gold is appearing

Gold market intervention facilitates the ultimate extraction of wealth from the West before currency crash or reset.


Back to homepage

Leave a comment

Leave a comment