I have come to some conclusions, some of which would be normal, like the US dollar up, and gold down until the Great Disconnect begins. The Great Disconnect being when gold finally chooses its' own path, instead of following the dollar like a dog on a leash. When this happens, gold will go up, even if the dollar is rallying.
Or something more abnormal, more contrary to commonly held beliefs, such as the banksters being no different, better, or worse than common everyday legal ambulance chasers. There are some who would agree, but on the majority, most persons see bankers as upstanding citizens.
What was the genesis of this 'taking to task' of the money changers? Good question, and here is the answer. A daughter of mine, has been doing some babysitting for a little extra ching. This is where it gets good, I promise. The couple has been paying her in personal checks. Too funny actually, that they consider it acceptable to give 14 year olds personal checks. To get back on track, I took her to the bank they were wrote on. We arrived, she signed the back of the checks. Well the robotron teller says to me, she needs two pieces of ID. Well stupid me, I say to her, does it look like she has two pieces of ID or a drivers license? The teller says no, not her, you! Oh, OK. I give her two pieces of ID. She then tells us she needs a thumbprint to cash the checks. That was all it took for me. I said it will be a cold day in H E double hockey sticks before you will get a fingerprint from either of us. Does this young girl look like a terrorist, or whatever other foolish excuse you are choosing to use today for your insanity? Rules are rules! She tells me. I tell her now you know why none of us have accounts at this particular bank. End of discussion.
For quite some time now, I have spouted a few thoughts on the subject. For instance, bankers are no different than shoe salesman, only they are selling purported 'money'. Why else would they consider gold and silver on a balance sheet to be 'immaterial' ? Why else would they exclude the value of gold and silver as something representative of wealth?
Their job, as they have been enlisted into the US fiat army, volunteer of course, is to continue to move the unending and unwavering fiat monetary creation into the everyday economy. They do this through various methods, but most of all through consumer and business lending.
To them, they really don't care, as long as they are making a spread off the difference of cost vs lended rate. Especially when they have a taxpayer backed organization to dump their risk on, be it Fannie Mae or Freddie Mac. Time was when this really didn't seem to be such a bad plan, I mean who can argue with The American Dream, or owning your own home? (they never told you that you never really own it, you rent it from them). Ahhh you say, but I don't have a mortgage, so I do own it I am going to argue with you here, by reiterating the point. Even if you have paid off the mortgage, you still have this pesky little thing called property taxes (or rent of your property from the Feds). Try to not pay your property taxes once, and see who in fact owns your property.
So the Fed goes merrily along, addicted to the growth curves of monetary creation, virtually forcing the banksters to lend more and more and more. There are a few bankers who understand, and wish it wasn't so, but in reality, they are still one with the system and addicted to the spreads.
With the incredibly expanding bag of fiat the Fed totes around, the whole system is flush with excess. They have devised many creative ways to move this into the economy, for instance the whole credit card evolution, the 125% mortgages, the interest only mortgages, the list is endless. Seems as though they are pretty darn creative when it comes to keeping this fiat monetary experiment alive and kicking.
When something happens to rumble the system, the Feds or CONgress comes in to save the day. As evidenced by the most recent bankster protection law, or some other such drivel. They issue, they issue, they issue credit cards, hell they issue credit cards to dead people and babies. The banksters then run off to the lever pullers, crying profusely that this cannot be. That these stupid, uneducated, wealth builder wannabes are going bankrupt and making them accountable for their reckless lending standards. They then wonder to themselves where it all went wrong.
It used to be so easy, Joey farmer would come in to your office, asking for a loan to plant this years crops, and the money hustler would tell him no. The funds were reserved for those that did not actually need them. Little mammy homeowner would come in and tell the bankster it was hard to eat, as she had no teeth left. She had the audacity to ask for a loan to get some shiney white pearls for the gums. Of course the answer would be no, not unless you didn't need the funds. Ahhh, those were the days.
Now they give away the teeth if you open an account with them. They give away funds as though their very lives depended on it. I suppose you could say it does, but you get the point. The hidden little secret in all of this, is that the banksters of today are no different than John and Jane, they have the same mortgages, the same credit cards, and the same multiple car payments. They are addicted to the game as much, if not more so, than the everyday sheeple.
Most certainly the world has changed. Long Bonds continue to rise (interest rates down), all the while the Fed is raising short term rates (bonds down). The dollar collapses in a predetermined devaluation, and then rises like a Phoenix, trying to put out the 'all clear' to anyone that will listen worldwide. The discussions of controlled devaluations all around (read worldwide) continue, seems I am stuck on that.
As the dollar was decreasing, all was aok for a bit, but after awhile, other countries started to fidget in their chairs. They started to get uncomfortable with the whole idea of a dollar decline. They realized the threat this would provide to their own fiat based overmanaged underutilized economies. They realized there were consequences to this dollar depreciation game. They would look bad politically if this continued to happen. Their answer of course, was to embark on their own period of devaluation, much to the chagrin of the US. Hence, our long bonds stubbornly continue to rise. Guess we need a new plan ..Damnable Chinese anyway, never did unpeg their currency.
Little 'ole Gold, having a hard time trying to keep up to all of this nonsense. Yes, we have been through a bit of a correction, but the long term trend is in tact. Don't let the fools dissuade you, Gold is not the barbarous relic as proposed by so many fiat addicted money changers. They, after all are only looking to build more fiat wealth at your expense. Too bad, they understand so little. The real game is won by those that are still standing in the end, and I would argue that the fiat addicted will be wealth challenged at that time. Gold will be $500 before it is $300 again.
All these political machinations creating a continuous roller coaster ride, but in the meantime, gold continues to hold up, and will rise as conditions warrant. Speaking of conditions, has anyone noticed how, almost imperceptibly, certain little annoying occurrences continue to happen in the markets? For instance, in the Forex markets, there seems to be more frequent 'issues' crop up that cause a cessation of trading, or at the very least, a reboot of the system. And how this seems to be happening in other markets as well? Almost as though there is a constant nibbling at the edges of the system. Checking for vulnerabilities, probing, and probing. Believe it, it is there. To some this may seem like meaningless noise, but to those that watch the markets closely, maybe they will have this same 6th sense that all is not as it seems. Shoot, I don't even do drugs and I can see it.
When they are trying to fingerprint minors, or adults to cash some Yuppy checks of minor amounts, I am getting the Heeebeee Jeeebeeeies.
I believe I'll have to go get some more gold just to calm the spidey senses. Getting' a little warm in here, and the storm clouds seem to be gathering. Have to wait and see if it is a tornado , or yet another thunder boomer moving through.
Frank A Lechner
June 6, 2005
Frank A Lechner is a private investor, and makes no allowances for stupidity or insanity as each chooses his own investment battles. Past performance is no indication of future direction, nor do I even care about govt mandated disclosures. You make your choices and you live with them. He does in fact believe that we are indeed in a time of turmoil, a time of increasing prices, much as wrote about before, and that this period will resemble the 70's. Those that fail to learn from history are destined to repeat, or so I hear. Good investing to you.