by John Galt
April 22, 2013 05:30 EDT
The sad truth about our modern reality is that everything is fixed. Football games? Probably. Elections? Definitely. Judicial trials? If you have the money, no problemo. Stock markets? Seriously, you have to ask? Thus why the Central Banks have declared a currency war to protect their precious post-Bretton Woods period of dominance so they can continue the rape and pillaging of nation after nation in exchange for greater power at the expense of the individual citizen’s freedom.
The assault on Bitcoin should not have come as a surprise to anyone then as the idea of a virtual non-central bank originated fiat currency that was outside of their reach or control that did not have any relation to the U.S. Dollar beyond an electronic trading platform for dollar based investors to participate in. The idea behind the crash appears to be some major investor or investors acting on behalf of the Federal Reserve, European Central Bank, Bank of England, Bank of Japan, etc. to bid up the price into the stratosphere then using their offshore agents, short it and profit on a fire sale in such a short time period that long term small players had no prayer. The chart below appears to reflect this theory:
The Bitcoin assault appears to be the first opening salvo against anyone who dares to invest against the wishes of the central banksters of the world. The war started with Bitcoin’s small market share as a demonstration to the big players in the investment world that nobody dares to bet against the Fed, BoE, or ECB. While the Fed probably encouraged a war on Bitcoin as a demonstration, sort of like President Reagan’s invasion of Grenada as a demonstration to Cuba, the big war was about to begin and continues to this very minute.
The war on gold is nothing short of a desperation attempt to salvage some sort of respectability for the currencies the major central banks control. Unfortunately for the “investing class” who thinks that real gold and silver consists of nothing but paper promises and triple ETFs, the precious metals which have been misunderstood since Roman times is once again being relegated to a role as the Armageddon investment instead of an insurance policy. The war began against Bitcoin and continued against the precious metals, especially gold over the past week and a half:
Why the war? Why the sudden, urgent need to use the tools of the member banks within each nation’s central banking system of the West to crush the price of gold? Because the goldbugs and those worried about corruption of the fiat currencies were being proven right with each event like Cyprus, Slovenia, Spain, and now Japan. This attack on gold was not because of a speculative froth. It was because of the historic importance of gold as an alternative currency in the event of a financial collapse or crisis because of the next PIIGS type implosion or worse, war erupting in some corner of the world.
The world has been taking note of the fallacy contained within the Western fiat funny money and piling money into currencies that actual produce things and commodities which the world can use. The Australian dollar is the best example of this and when compared to gold have been running almost in lock step until this past ten days:
The break in gold prices is also probably a future indicator that worldwide demand for commodities is about to drop and a touch of deflation will occur causing a decline in demand for Australian products and thus its price levels should break back below parity against the U.S. dollar. Yet the Aussies and Chinese are no longer 100% married to the fiat funny money of Europe, America, and Japan. That means the central banks are beginning to panic that they must first reign in the goldbugs and alternative currencies then next begin the process of restricting freedoms like they have in the United States and Cyprus to prevent capital flight and a massive historic crash.
What is at stake? Let’s start with the United States and the status of the U.S. Dollar using the Fed’s favorite measure against other major currencies in the Trade Weighted Dollar Index:
Uh, I’m no overpaid Bubblevision chart expert but that downtrend since the 1980’s looks pretty damned intact. In fact it would appear that the recent strength in the U.S. Dollar is only a short term correction to try to salvage the Japanese economy and bail out the European Union! How bad a shape are the Japs in? Check out the Yen against the dollar:
The recent “unlimited printing” devaluation might seem like a great idea. Yet it is the only way they can pay off the quadrillions of Yen in debt they have issued and still maintain a non-Zimbabwean economic system. Unfortunately for the Japanese, it looks more like they will engage in a radioactive Fukushima version of the Zimbabwe economic model where savers will now be crucified and the structured Japanese society will endure hardships unseen since World War II. The problems with their currency pale when one views the nightmare known as the Euro:
Ever since the rally off the original lows of the Euro into the dollar deflationary atmosphere of the 2008 time period, the Euro was in dire need of devaluation to keep their manufacturing base competitive. German stubbornness along with typical French intransigence created a situation where the weaker economies of Southern Europe where penalized because they were willing to sacrifice freedom for a stable currency regime without any responsibility for the inflationary or deflationary decisions. This abdication of freedom for their quasi-socialist societies collapsed in the last five years and as the chart above demonstrates that the only stability introduced by the Euro was a permanent state of instability requiring drastic action like what occurred in Cyprus in recent weeks. The war on freedom and gold is nothing more than one final last ditch effort to salvage a failed global economic model for the currencies of the dying Western powers.
Americans, smug in their independence and McSnacks, seem to think they are immune from these restrictions and penalties for success while ignoring the implementation of regulatory oversight which penalizes capitalists on a daily basis. The iEconomy as some call it is now beginning to deteriorate further and the overdue correction from the late 1990’s of our economic excesses is being traded off for a sacrifice of individual freedoms all to guarantee the ability to retire with two homes, two cars, and a furball mini-dog named Fluffy. This surrender of liberty is nothing more than a last ditch effort to ensure that our currency survives and our economy flourishes under someone’s direction. This too shall fail.
The only successful models where freedom is sacrificed and capitalism modified to work within a statist system were Nazi Germany and current day Communist China. That is the model the Central Banks of the world, along with their members, would not mind moving towards along with stripping your freedoms and ability to object or interfere along the way. It is also why gold must become a pariah in the investing world so the banksters can seize control of the actual physical asset regardless of the paper price or valuations. For those who doubt this war on gold and freedom, let us harken back to the 1930’s and early 2000’s to ask the only question that mattered to the persecuted:
Do border guards accept fiat funny money or paper promises of future delivery of gold or the real metal to let one’s family escape tyranny?
Put a price on that and let me know if you can find it on any government managed financial exchange.