On the Side of Golden Angels

September 9, 1997

"Money is coined liberty" -- dostoevsky

In previous articles I presented threads of evidence that reveal why gold should be the investment of choice in today's casino markets. This article focuses on how smart money (like a parent preparing an evening dinner) might be positioning themselves as the masses (we, the kids) remain in awe of the gyrations of an irrational market (the kids have no concept of how dinner is made). Can we, in today's market, learn from the historical experience of a Bernard Baruch or Joseph Kennedy, who timed the market to avoid the calamity of the 1929 October crash? Was the Crash of 1929 simply an unfortunate event or was it engineered? To improve our knowledge and hone our intuition requires a study of the history of money creation and gold, the role and membership of the U.S. Federal Reserve System, and merchant banking. In previous articles I hypothesised that powerful players may be systematically engineering a global union of monetary, economic and political systems most importantly, a single global medium of exchange. The pursuit of a single medium of exchange (e.g. electronic fund/currency transfer system) is inextricably tied to gold. This inquiry is limited by lack of information through the mainstream media, though small crumbs often fall and combine with the glue of healthy intuition to provide insights. If we instinctually put our trust in gold as a rational store of value in an otherwise unsustainable casino, can we be assured that our investments are on the side of angels?

Who is Buying the Gold?

One of the central undebated issues of today's gold market is the question of "who is buying the gold?" Why has the price and sentiment towards gold declined despite official gold demand-supply statistics showing increasing demand in Asia, India, and the Middle East and systemic net shortfalls between global demand and supply? Shouldn't we question why the price weakness in gold following the Australian central bank gold sale, came several months after the actual sale?

...powerful players may be systematically engineering a global union of monetary, economic and political systems, and most importantly, a single global medium of exchange.

We must question the mainstream media's continued myopia on the sale or potential sale of gold by central banks. Mr. Kjeld Thygesen, manager of the O'Donnell World Precious Metals Fund, in a recent Globe and Mail (Canadian newspaper) article, suggests the media would do well to ask themselves where the sale of central bank bullion is going. Instead, we are led to believe that "gold no longer plays a significant role in the international financial system" (Peter Costello, Australia's Treasurer quoted in Financial Review, September 4, 1997). The Bre-X hangover and the threat of further central bank sales continues to dampen market sentiment towards gold while ignoring demand-exceeding-supply realities.

In the words of Noam Chomsky (distinguished U.S. linguist), has this sentiment and the consent of the masses been "manufactured"? If so, then why? Have we forgotten that a market is a place where trade/transactions occur between a willing buyer and a willing seller? The gold market is indeed a peculiar market where sellers are readily identified in the mainstream media, yet buyers are neither identified nor their motivations analyzed.

The gold market is indeed a peculiar market where sellers are readily identified in the mainstream media, yet buyers are neither identified nor their motivations analyzed.

So who might be buying the gold? Official statistics from the World Gold Council suggests demand is increasing in the last 2 quarters in the Middle East, India, and Asia. Could the gold coins bought by the little guy in the streets of Riyadh or Bombay as a hedge against potential paper currency defaults be influential enough? Are other central banks outside of the G7 buying gold unofficially? The Council reports that China's central bank purchased gold from both the international market and from local mine production as have the Russians from their mine production. Are there other players who remain unaccounted for in the "official" statistics?

Who is Rational in this Irrationally Exuberant Market?

Certainly, the rational buyer in this casino market is one with the intelligence, intuition, or knowledge to know when to exit the dance floor and benefit from any ensuing chaos. Some of us may be blessed with intuition or good luck, but there are certainly others, who through their market influence, may already have positioned their wealth. Can we look towards some evidence of the preferences of "smart money" that would allow us to position our portfolios to benefit from a bursting or a protracted clawing by the bear of this irrational market bubble?

A rationale person might look at the fundamental demand-supply dynamics of gold and conclude that gold's Phoenix rise is inevitable. Listening to the negative chorus of the mainstream media one is left questioning both intuition and common sense. Is gold really dead or is something else going on? Do the supply/demand rules no longer work? Is there evidence of a fix? Many goldbugs feel a certain impatience as they watch the stock markets gyrate without a move in gold. Let us examine, in extreme patience, the underlying system and structure of our monetary system by looking to our past for clues.

A History Lesson: Monetary Policy, the Fed, and the Founding of the United States of America

History always provides lessons that foreshadow the potential outcome of tomorrow. A careful study of the genesis of the U.S., its Constitution, its monetary policies, the Federal Reserve System, and dynamics of the market crash of October 1929 reveal some potential clues to the future of the markets in 1997, 1998 or 1999.

The U.S. was born in 1776 out of rebellion, in part, against British domination over monetary policy and the rights of money creation. The goal was, in the words of Dostoevsky, to achieve coined liberty and freedom. In fact, there is a close connection between money and freedom. It is thus ironic that, after more than 200 years, the U.S. exercises greater monetary dominion over the world than the British Empire ever had. One could argue that the U.S. exercises more subtle dominion than the Roman Empire ever achieved in centuries of economic, political and social domination of Europe.

Let us tour the most salient historical events of U.S. monetary policy:

In 1792 the U.S. dollar was conceived and was made equivalent to 24.75 grains of gold; control over money would, in theory, be under the control of the people for the people.

In 1797 John Adams warned Thomas Jefferson that control over the issuance of money should never fall into the hands of private interests, as it had in the case of the Bank of England and Bank of France. Thomas Jefferson issued this warning:

"If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and the corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."

On December 13, 1913 President Woodrow Wilson helped establish the Federal Reserve System (the U.S. central bank) with equity financing of $1 billion from private merchant banks. Wilson's chief advisor was Col. Edward Mandell House, a representative of European merchant banking dynasties and with close ties with the American banker J.P. Morgan.

After the vote by the House of Representatives which passed the Federal Reserve Act, Congressman Charles A. Lindberg, Sr. told Congress: "This act establishes the most gigantic trust on earth.....When the President signs this act, the invisible government by money power, proven to exist by the Money Trust Investigation, will be legalized...the new law will create inflation whenever the trusts want inflation...."

The Fed, with its 12 Federal Reserve Banks, would be run by a board of private merchant bankers and would have absolute powers to manipulate the U.S. money supply. How Jefferson would lament that day when U.S. money creation would fall under the same feudal banking powers of Europe in which private banks control the issuance of bank notes and credit. As J.N. Tlaga notes in his Gold Eagle article "We Have Been Had", the Federal Reserve System was created by rational design and executed by New York bankers, led by J.P. Morgan and Co. Under the rationale that it serve to finance the Allied side of World War I. By the end of World War II and under the Bretton Woods system, the Federal Reserve Bank of New York (one of the 12 Reserve Banks in the System) had become the de facto central bank of the world.

The Fed, with its 12 Federal Reserve Banks, would be run by a board of private merchant bankers and would have absolute powers to manipulate the U.S. money supply.

Col. House knew that, in order to control a nation's monetary system, a system of taxation of the people was required. He was instrumental in 1913 in passing the 16th Amendment ushering in a graduated income tax system. This Amendment also provided for tax exemptions for foundations (I will leave you with your imagination to guess which foundations still benefit from such loopholes).

At the same time, the relative purchasing power of the U.S. dollar vis-à-vis gold (which had largely been on par prior to 1913) began to decline to the point where gold's current purchasing power is roughly 20 times that of the U.S. dollar (source: Deutsche Morgen-Grenfell).

In 1915, Charles A. Lindberg, Sr., then a member of the Banking and Currency Committee in a speech said: "The system (the Federal Reserve System) is private, conducted for the sole purpose of obtaining the greatest possible profit from the use of other people's money, and in the interest of the stockholders and those allied with them."

In the six years prior to the 1929 Stock Market Crash, the Fed increased (inflated) the money supply by 62%, inducing unwise investment and market speculation by the public; this speculation was financed largely by bankers who could, at any time, call in their 24 hour broker call loans. (Is it like deja vu all over again in 1997?)

In October 1929, the New York Stock Market crashes; "some" banks are in crisis; citizens go bankrupt; the economy goes into a protracted depression. Until 1929, the size and cost of the Federal government was Constitutionally limited: it borrowed little money and paid little interest. But with the crisis of 1929 and the subsequent Depression, the U.S. government was officially bankrupt by 1933. The solution to this crisis required massive U.S. government borrowing (from the Federal Reserve Banks). Through their major shareholdings in the Fed, the major merchant banking interests were in a position to loan the government billions of new dollars to finance the nation out of the Depression. In order to pay the interest on increased government borrowing, the U.S. government rationalized the broadening of taxes. The Fed then proceeds to deflate (reduce) the money supply, forcing thousands into bankruptcy and foreclosure.

Between 1929 and 1935, the share price of Homestake Mining, one of the oldest gold mining firms in the U.S., soars over 500%.

June 10, 1932, Louis T. McFadden, chair of the House Banking and Currency Committee states that "some people think the Federal Reserve Banks are United States Government institutions. They are not Government Institutions. They are private credit monopolies that prey upon the people of the United States for the benefit of themselves and their foreign and domestic swindlers; and rich and predatory money lenders."

McFadden issues makes this prophetic allegation that "It (the Depression) was not accidental. The international bankers sought to bring about a condition of despair here so that they might emerge as rulers of us all."

Was the Crash of 1929 orchestrated?

In 1933, President Roosevelt issues Executive Orders (6073, 6102, etc.), under the conditions of a state of emergency (read: the country is bankrupt), ordering all persons (U.S. citizens) to deliver "on or before May 1, 19933 all gold coins, gold bullion, and gold certificates....to a Federal Reserve Bank or member of the Federal Reserve System." It became illegal to own gold.

In 1936 Congress attempts to pass a bill which raises a concern that banks were issuing loans without the backing of real deposits and that it was controlling money based on the price it attracted on international money markets or by the amount of interest they charged (see Harry Martin's article in The Federal Reserve Bunk (http://www.sonic.net/sentinel/naij2.html). Congress wanted to withdraw from the banks the right to issue credit on fractional reserves, and leave the banks the right to issue credit on account of actual deposits. Through the proposed bill, Congress wanted to resume its constitutional duty of issuing money, as Adams and Jefferson had first envisioned. The bill would have allowed the nation to pay off its national debt and stay out of debt. The bill was never passed. The result has been a history of mounting debts amounting to today's $5 trillion debt load plus increasing proportions of public tax dollars to pay for increasing annual debt charges; all of which would has been unnecessary.

In 1963 President Kennedy signs an order to end the Federal Reserve System and restore Constitutional control by Congress over money. Three weeks later Kennedy is shot dead and shortly thereafter, LBJ rescinds the Kennedy order.

How Does the Fed Work and Who Controls the Fed?

The functions of the U.S. Federal Reserve System or the "Fed" are implemented by 12 Federal Reserve Banks. The Fed is an independent "government" entity created by Congress in 1913 to serve as the central bank of the United States and is responsible for formulating and executing monetary policy, supervising and regulating depository institutions, providing an elastic currency, assisting the federal government's financing operations and serving as the banker for the U.S. government. The New York Federal Reserve bank, the largest of the 12 Reserve Banks, provides a unique custodial responsibility for gold, including storing about one-third of the world's official gold stock (12,000 tons) on behalf of about sixty countries, central banks, and international organizations (see. Gold Eagle's Red Baron article "An Enigma Wrapped in an Anomaly").

The Fed is controlled by private banking interests (Class A board of directors) and by Presidential appointment (board of governors). Not one member is elected through the democratic process. The Fed is not a government entity, it is private. The Fed has a monopoly over the most powerful economic lever; the issuing of money. Congress, the elected officials, effectively have no constitutional power over issuing and regulating money, a duty long abdicated to the private banking system in 1913. The Fed has the power to create money out of nothing, simply printing it, lending it, and printing more. Private banks benefit from the central bank money creation process by helping themselves to deposits that were created out of nothing then charging its customers, including the U.S. government, interest. (note: this process is extremely complex and beyond the scope of this article). They then lend that money to you and I and to the U.S. government, with interest, and through the power of the money multiplier effect compound their wealth (note: many bankers, including recent comments by Gordon Thiesen, Governor of the Bank of Canada, deny the existence of the money multiplier).

The Fed is not a government entity, it is private.

How does this work, this fractional reserve system? The U.S. Government borrows money, with interest, from the Fed, which has been created out of virtually nothing and supported only through an article of faith in the U.S. dollar and economy. For example, the Fed prints a $1 billion worth of paper notes- based originally on a fraction of the reserves of gold but currently based on no hard assets (only confidence in the U.S. economy) - and lends it to the Government with interest. The Federal Reserve Banks did not have the original money but rather made a bookkeeping entry (akin to writing myself a check without the cash in my account). The Fed furthermore controls the flow of money, making it tight and creating unemployment, or printing more and creating inflation, as is required. Gold, which used to serve as the chaperone of the gold-based U.S. dollar since its inception in 1792, has been systematically removed since 1913 and discredited as a store of value by U.S. citizens in 1933 by President Roosevelt. This effectively allows the Fed unlimited expansion of the money supply. Is it any wonder why we have seen U.S. M3 money supply soar to an annualized increase of over 9% in the past 12 months?

It is upon this backdrop that the recent reinstatement of the right of U.S. citizens to own gold must be viewed with suspicion. It may suggest a feeling by those who control the Fed, that gold no longer poses a threat to the U.S. dollar, confident that it has achieved supreme store of value.

Who are the primary shareholders of the Federal Reserve System and the Fed Banks? Ironically, to find the names of the principle shareholders of the Fed requires a Scotland Yard investigation. You will NOT find such a listing in the Fed's own publications (see "The Federal Reserve System: Purposes and Functions") even though it is a "public institution." Write your Congressmen and ask them to provide you a list of the principle shareholders.

According to an article by Harvey Martin, those names have only recently been revealed through Standard and Poor sources. The top controllers of the top Federal Reserve Bank in New York include:

  • Rothschild banks of London and Berlin
  • Lazard Brothers Banks of Paris
  • Israel Moses Seif Banks of Italy
  • Warburg Bank of Hamburg and Amsterdam
  • Lehman Brothers Bank of New York
  • Kuhn, Loeb Bank of New York
  • Chase Manhattan Bank of New York (Rockefeller) , which controls all of the other 11 Reserve Banks.
  • Goldman, Sachs Bank of New York.

The Rockefeller banking group owns 22 percent of shares of the Federal Reserve Bank in New York and holds 53 percent of the shares in the Federal Reserve System.

If the evidence is true, these merchant banking interests have benefited from a fractional reserve system and fiat currency game for several years benefiting from each transaction, trade and issuance of money/credit, U.S. Treasuries, and possibly gold sales or puts and calls. The degree of power and control is unfathomable to imagine.

The consequences of such control are staggering, including:

  • unbridled power, in the hands of an oligarchy of private banking interests, to create paper wealth out of thin air where once relatively scare supplies of gold provided a safety valve on zealous liquidity.
  • careful calibration of paper liquidity allowing the accumulation and compounding of enormous wealth, unparalleled in history, particularly through the mounting of government debt and taxation. Such liquidity has also provided for massive expansion in business interests involving oil, food, and transportation.
  • massive liquidity (largely unsustainable) to fund the massive expansion of our economies and the current and past stock market speculative bubbles

There have, no doubt, been benefits from such a system of paper liquidity including the advancement of knowledge, technology (philanthropic pursuits), and improvement of individual economic well-being. But, the fiat money system has also helped fuel the destruction of nature's capital (depletion of natural resources and environmental degradation) under a system that does not value the environment nor the quality of life in monetary terms.

What is disturbing is that most of us live believing that some benevolent parent is the steward of our constitutional democracy, believing that "we the people" control our collective destiny and our cherished systems of governance. But how can we put our trust in "public" institutions like the Fed, if the Federal Reserve System remains unaccountable to the public. The Fed's books are never audited, so there is no official accountability to the public. Why the secrecy?

Has our consent (the children) been subtly manufactured by those who, through their unaccountable influence, continue to compound wealth and power under a veil of secrecy?

We have, as citizens, a responsibility to gain knowledge and ask pointed questions.

The Case of the Rothschild's of Europe

The international merchant banking house of Rothschild is listed as one of the top shareholders in the Federal Reserve Bank of New York. The Rothschild financial arm extends globally, primarily through N.M. Rothschild and Sons in London and New Court. What can history tell us about how the Rothschild's might position themselves under today's market circumstances, having been one of the oldest gold merchants and money changers of Europe? What can we learn as gold investors? "The Rothschilds," a book by Frederic Morton (1962) reveals the story of one of the most influential families in the past 200 years of European and American history. This is a story of a family, who from humble beginnings in Frankfurt, Germany in 1776, grew to be the most important merchant bankers in Europe with the financial acumen passed down from male generation to male generation, without dilution. Their mastery in financing the nobility of Europe, in the London and European stock markets, and in gold markets has continued unabated into the 20th century. Their ingenuity and financial acumen undoubtedly provides them increasing wealth regardless of a bear or bull stock, bond, or gold market. I hypothesize that they effectively benefit from each and every condition and transaction, whether the sale of U.S. Treasuries or gold bullion.

More than any other family, the Rothschilds have built and maintained an empire unparalleled by any monarchy in history. Their acumen as money changers and financier to the Kings and Queens of Europe over the past 200 years is unparalleled. No single corporation or business entity has survived with so much accumulated wealth intact. Their financial hand has been in virtually every major European event including financing the Duke of Wellington at Waterloo to defeat Napoleon, the financial aid to Prince Metternich of Prussia, and the first railways of Europe. Studying the Rothschild family acumen for stock markets, gold trade, and financing of nations provides an insight into how smart money survives. The Rothschild name is also associated with philanthropy, horticulture, and fine wines (the French house). While their financial grip on Europe seemed to fleet in the ashes of World War II, their influence in global markets, particularly gold is still strong today, though less visible.

N.M. Rothschild & Sons of London, named after Nathan Mayer Rothschild, one of the five sons of Mayer Amsel Rothschild of Frankfurt, still lists as its primary business the selling and buying of treasuries and gold bullion. To this day, N.M. Rotschild helps fix the price of gold in London. A recent London Times articles noted that the gold price fix ceremony where five men (including a Rothschild) talk on their phones for 10 minutes, then lower tiny Union Jacks sitting on their desks, thereby fixing London's gold price each day. This ceremony takes place at 10:30 a.m. and 3 p.m., like clockwork, the same way, in the same place, and with mostly the same firms participating since the first gold fixing was enacted at Rothschild in St. Swithin's Lane on Friday Sept. 12, 1919. Also of note is that the Rothschild name is associated with financing gold mining companies (e.g. Trillion Resources Ltd. and other Canadian mining companies).

I hypothesize that they effectively benefit from each and every condition and transaction, whether the sale of U.S. Treasuries or gold bullion.

The market finesse of Nathan Rothschild at New Court in London is legendary. Through his financial brilliance and market clout, he would depress stock prices and markets and almost destroyed one his merchant banking foes, Barings, when attacked. It has been estimated that the Rotshchild family was worth over U.S. $6.5 billion by 1850. (vronsky note: $6.5 billion at a mere 4% compound interest since 1850 would put the value of the Rothschild fortune today at $2.1 TRILLION). The male offspring of Nathan still help fix London gold each day.

Rothschild interests touch virtually every aspect of our lives. They have controlling interests in companies like Royal Dutch Shell and De Beers. Following World War II they invested in vast areas of resource rich properties in Canada, possibly gold rich deposits. Their influence extends to the U.S. Federal Reserve, helping to set monetary policy of the world's most powerful nation.

What is unique about old power and money of the Rothschilds is their uncanny ability to sustain their power and wealth, and keep it within the family. It is the power of family and faith which makes such wealth and power sustainable. Ironically, it would seem that they are motivated not so much by gaining more power and control but by a need to maintain a sense of security against historical discrimination due to their faith and financial prowess. Nevertheless, they do control and influence.

What is most unique about the Rothschilds, that seems to differ from all other influential merchant banking interests (e.g. Rockefellers), is their continued bullishness on gold exhibited through their involvement in gold trading and investment in gold real estate (financing of gold mining companies).

The Rothschilds are also renowned for seeking stability and peace, since chaos and war ultimately leave their wealth more vulnerable.

The Rothschilds are also renowned for seeking stability and peace, since chaos and war ultimately leave their wealth more vulnerable.

The focus on the Rothschilds is meant to illustrate how we might gain insights into how such sustained "smart money" may be positioning itself in today's market. That is, does the history of the Fed and historical influence of the Rothschilds and other merchant banking powers teach us anything about how we might place our bets in the footsteps of Bernard Baruch and Joseph Kennedy? Can we avoid the calamity of the masses and the calamity of a 1929 Crash?

Understanding the next possible chess move of a Rothschild is an exercise in potential futility. Nevertheless, shards of light do emerge in the darkness that provide some indications as to what might be transpiring.

Consider the current situation.

  • a U.S. stock market that is over priced and overvalued, by even the most sage investors such as Templeton, Buffet, and Lynch.
  • a huge $5 trillion U.S. debt and associated interest payments which consume 100% of current income taxes payable by U.S. citizens.
  • a U.S. Fed which continues to prime the M3 money supply to heights unparalleled since 1976-1980 and the period prior to the 1929 Crash.
  • a U.S. continually trying to convince foreign investors, governments, and foreign banks to buy treasuries, rather than any other instrument, particularly gold.
  • unstable East Asian currency markets.
  • depressed gold price and gold stocks despite official evidence of a demand-supply imbalance.
  • allegations of Clinton political wrongdoing, manipulation of economic indicators, priming of M3, and possible trade favours for countries loading up on the U.S. dollar/treasuries rather than gold.
  • a U.S. dollar who's strength is built on a mountain of faith in its political, economic, and military systems and is vulnerable to a vote of non-confidence by foreign investors.

It is on this landscape that the likes of Rothschild and others are operating.

In spite of the mainstream media's message that "gold is dead", it is peculiar that the Rothschilds continue to make the shiny metal the business of first choice. In a sense, they earn transaction fees on both sides of the slice of bread: trading both bullion and treasuries. Why would the Rothschild's have such an apparently bullish sentiment towards gold?

There are several possibilities. First, the Rothschilds know from a lifetime as gold traders, that gold will command the attention of those seeking value when fiat currencies are in a crisis of confidence. They have a long standing history of being the financier of last resort to the greatest leaders of European history. They currently position themselves in both the physical gold bullion and in future gold production, through gold real estate and the equity financing of gold mining companies. As a member of the Fed, they understand the inherent vulnerability of the U.S. dollar to the shock wave of a stock market and financial crash. They are ultimately in one of the best positions to resurrect a failed U.S. system. After all, the most powerful of the merchant banking interests financed a bankrupt U.S. government in 1933.

What would precipitate such a crash? There are points of vulnerability to the U.S. debt and market bubbles, notably a war in the Middle East, environmental "Acts of God" disasters (El Nino), and votes of non-confidence by the Japanese or Chinese holders of U.S. treasuries. The best case scenario might see a doubling of oil prices, as in 1979 that preceded the rise to $850 gold, or a food shortage combined with energy shortages (due to war) that would drive inflation and send gold skywards. But is the current situation more like the 1980s or the 1920s?

The U.S. liquidity bubble is building again to unprecedented heights along with a speculative stock market bubble of unparalleled proportions and unparalleled involvement by average citizens.

There is a second, more sinister possibility. That a crash is being orchestrated, as McFadden and others suggested occurred in 1929. But how and why? The history of the 1929 Crash and history of the Fed provide clues. The U.S. liquidity bubble is building again to unprecedented heights along with a speculative stock market bubble of unparalleled proportions and unparalleled involvement by average citizens. One push over the edge and the house of cards collapses. But to what end would some as powerful as those who control the Fed seek such calamity? Possibly to set the foundation for a new monetary system rationalized on the basis that the existing system failed to provide checks and balances to prevent such a calamity. Such a new and global monetary system could be argued as being conducive to peace and harmony. Has coined liberty been sufficiently neutralized? The current Fed was rationalized on the basis that historical private financial institutions were inherently unstable and vulnerable to continual collapse. They might argue that "never again" shall we have irrational markets and unstable fiat currency systems. A new system could be built using a global electronic funds transfer system, the perfect saviour of unstable fiat currencies.

Such a new system would eliminate the need for both fiat currencies or any other stores of value, including gold. Having manufactured a sentiment against gold, confidence in the current U.S. dollar or future forms of currency (electronic) has been eliminated. Even with U.S. citizens now allowed to buy gold, gold no longer may be viewed as a threat and, if it were, another "Roosevelt" bill could be enacted to collect the gold under emergency banking regulations... Ultimately, the system is still controlled, yet now the control would extended beyond the U.S. Fed and throughout Europe and Asia. Preposterous? I shall leave that to your contemplation and coffee house chats!

Given these two possible scenarios, if you believe in the first scenario, then gold is still the investment of choice given the certainty of market implosion. Under the second scenario, gold may never have its day in the sun because it has been orchestrated that way. If you are a Rothshild you win in both scenarios.

Power and Control and Greed

For those who seek money, power, and dominion, it is in their interest to maintain power, however subtle, to manufacture a picture of stability, democracy, freedom, and harmony.. After all, no one wants instability. Stability can be ensured through the exercise of monetary and economic policy.. It has been said that there is more strength in giving up power than holding power. After all, power is always given from one to another.

Most of us are ignorant of the apparent dominion and tutelage underlying our economic lives. With our basic needs met, we have no need to question to, seek knowledge, to rebel, or to ask questions. In the words of Noam Chomsky, our consent may already be subtly manufactured.

But so what? Have we not benefited from a grand meal our "parents" have served us for all these years. The children are content and naive. Yet our naiveté, complacency, and ignorance is in itself dangerous. Most of our life is lived as if behind a veil of uncertainty.

Meanwhile, the smart money behind the scene benefit from both sentiments; shorting the bulls and buying the gold.

We have assumed that all things are good, that someone is ensuring our system does not fail, and that if a financial crisis ensues that there is a better system nodding our heads that the current one was after all unsustainable. Those of us with intuition and an analytical capability to catch glimpses of such control and power, can be easily be discounted as crack-pots or deluded conspiracy freaks. Without concrete evidence, all illusions become reality. While we might suspect the system is rigged, we often lack evidence of such control since the very media which provides us with information could be under the same control.

On the Side of Golden Angels

Markets epitomise greed in society. They are a place to buy and sell interests in the future productivity of firms and businesses. In today's market, such an ethic simply has been forgotten...it has become an irrational speculative game. We invest in the hope that our wealth will increase so that our future income will be secured. We hope for higher prices; some of us goldbugs hope for a crash. Meanwhile, the smart money behind the scene benefit from both sentiments; shorting the bulls and buying the gold.

One thing is certain.... if one is going to be part of this market game, it is wiser to align with the smart money. Indeed, smart money may have already positioned itself safely in gold - the physical shiny stuff and gold real estate.

Gold, I am more convinced, is the key to liberty. Gold has throughout history been a store of value, a scarce commodity, and a medium of exchange which cannot and should not be controlled by any oligarchy of power.

Indeed....there is a close connection between coined liberty and freedom!

Gold is no doubt on the side of the angels.

A single ounce of gold (about 28 grams) can be stretched into a gold thread 5 miles (8 kilometers) long.