I won’t have time to delve into what you wrote until sometime tomorrow because I am doing some paper work at this time.  Seeing that you are also Italian, though, I’ll have to review it………………LOL.

I will toss out a few questions for you, though.  The first is, “How do you see debt monetization by the US in terms of currency inflation?”

2nd, “How do you see the massive amount of credit the Fed extended to the banks in terms of currency inflation?”

3rd, “What do you think the reason was for the Fed to end the M3 numbers……….and would either #1 or #2 have had any affect on M3?”

You certainly do not need to address any of the above is you do not feel like it, and I am sure that Augirl, myself, and others would love to see your pasta recipes.

The multiplier does not say anything about inflation.

The only thing the multiplier speaks of is the efficiency of the currency; that is, how much does each unit of currency contribute to the progression of the economy. This entry on my blog may better explain my contention:

guidoromero.wordpress.com/2009/11/07/the-utility-of-a-fiat-monetary-system/

So, you don’t recognize dollar inflation in any manner other than the traditional multiplier effect?

It is in theory a fine idea. That’s what the USA did between 1930 and 1970.

Of course, since nobody was allowed to check, the USA printed way more paper than there was gold. Untill France came along that is, and asked to redeem their Dollars for the gold they thought they were entitled to. And that’s when the cookie crumbled and we abrogated Bretton Woods.

In several thousand years of human history inflation has always and everywhere been at the heart of devastation of society. Sometime terminal devastation. More often just simple devastation and war.

Societies (i.e. governments) will always try to prevail over their peers. It is inevitable.

It is telling of the direction we are going in when government becomes the single largest employer and when public salaries are grossly higher than private sector salaries. When at the same time the currency looses is traditional multiplier effect and government is still expanding, then you are looking at a situation of self cannibalization.

The outcome is scripted and won’t be pretty…

In the past two years, what waning traction money printing had, has been utterly lost…

research.stlouisfed.org/fred2/series/MULT

Bernanke let the cat out of the bag when he wrote his treatsie on deflation titling it “making sure it does not happen”. Deflation is perceived as the bogey man. But deflation is only the bogey man if you are in debt to the tune of several times your underlying assets… as governments are…

PM FEVER @ world currency

by guidoamm @ 23:49 pm.

———————-

No doubt that human fear and greed will never be controlled, yet to a large extent the greed IMO can be controlled by Gold as money, or with Gold backing of paper currency.  The Romans might have clipped coins, but that is a major stretch from the exponential methods employed with no Gold involvment in a paper money system, no?

If the self control of humans is what all of this rests on, I am afraid we are forever doomed.

“…………….and on the other hand they are attempting to restart the inflationary cycle… “

I don’t think that they are trying to “re-start the inflationary cycle.”  IMO, they are moving to more aggressive means of currency inflation like outright monetization of debt, just to get to the natural end of the inflation cycle where Gold will rise to balance the budgets.  The more aggressive type of currency inflation is necessary to move all of the debt onto the govy’s balance sheet into that end, no?

I can pretty much guarantee that no main stream politician can contemplate a monetary system other than fiat. Anyway, as I stated earlier, the monetary system matters not in the least. We could very well achieve the goals of sound money in a fiat system by fixing the amount of money to a set of parameters.

Similarly, a world currency would not resolve our problems. Think of the Euro. The Euro is a dry run for a world currency. The problem remains inflation. Anyway, the US$ is the defacto world currency. That’s what a US$ fiat monetary system based on floating exchange rates is. That’s just a fancy way of saying that currencies are convertible to US$ and that the value of individual currencies is predicated on the value of other currencies.

Upon introduction of the Euro, individual currencies were devalued by anywhere between 20% (DMark) to 50% (Italian Lira). Thus buying the US$ some needed respite. At the same time, we had been working on globalization thus buying further breathing room for the US$.

Many will have forgotten or not know that the USA were already bankrupt in the 60s. Essentially back then the USA were exactly in the same position we find ourselves in today globally.  That is, inflation has saturated the system and underlying activity no longer suffices to service the debt brought about by inflation that has been forcibly pushed ever faster.

Off and on, there is talk of a potential two tier US$ devaluation. Something along the lines of devaluing US$ held overseas by a greater amount than US$ held withing US borders. This of course would only be a stop gap that would buy us some time as the Euro did before. The problem remains the quantity of inflation we have pushed into the system. Till that is purged, nothing changes…. hence my contention that we are hurtling towards a world war… this one will be the real deal with civilians packed off to the front or employed by the war industry and food and energy rationing at home… my contention is by 2015 latest…

The problem is not the monetary system. The problem is the degree of fiduciary duty government is willing to extend to society.

Any monetary system can be gamed including a monetary system based on gold. The Romans debased their gold coins.

Fiat money is actually a brilliant concept. The problem is in an evnironment of competing nations states. This simple truth ensures that inflation (expansion of credit and money in excess of production) becomes necessary and vital to what is perceived as legitimate raison d’etat.

In an environment of competing entities, the tendency will always be to outspend other entities in order to prevail economically or militarily. Hence, inflation is guaranteed. But inflation is a dinamyc that is exponential thus it is constrained by underlying resources. As the inflationary dyanmic progresses, money gradually looses its traditional multiplier effect as contemplated in Keynesian theory. Thus, government has an interest in closing an eye on practices that initially may be considered as border line legal. However, towards the end of the inflationary cycle, tolerance no longer suffices so that government has a vested interest in sponsoring practices that contradict the letter of the law untill, at some point, governmetn must collude in criminal practices all in an effort to keep inflation on a positive trajectory.

Of course, it doesn’t help either that GDP is the one single measure that is at the heart of any and all social and economic metric one cares to look at. Thus the tendency is always to goose GDP in any way possible. But of course, goosing GDP via inflation says nothing about the quality of development.

That’s what my entire blog is all about.

As a by the by, inflation is also at the heart of the depletion of resources thus at the heart of climate change doctrine. I am dumbfounded at the glaring contradiction our governments are caught up in when on one hand they are peddling climate change doctrine and on the other hand they are attempting to restart the inflationary cycle… fascinating if astounding…

“This is all so very confusing for some who just don’t understand a lot of what is going on.”

If you truly want to understand, then look at everything you see, upside-down.

First, Gold does not go up and down in value as it is a constant value; Gold only goes up and down in “price” because it is priced in paper currencies.  It is the value of the paper currencies that constantly is changing.  Thus, Gold is the only Real Money of constant value that man accepts as a Real Money Stable Source of Value……….although Silver is generally considerd a cousin to Gold in the same way.

2nd, Gold is not now, or is it ever “manipulated.”  Gold cannot be manipulated because it is accepted as a Real Money constant value.  “paper gold” is a paper derivative contract of Real Gold, and paper gold is constantly manipulated and “sold to the people as Gold.”  Just like paper fiat money is a derivative of Real Money Gold due to the fact that paper currency could never exist without Real Money Gold either backing it, or at least being around to “back it” at crucial times………….paper Gold is also a dervative of Gold used by the elite to fake out investors since paper Gold has no real tie to Gold, in fact, paper gold simply cannot “perform” in times of crisis when people turn to Gold because of the fact that paper gold is inflated in quantity far beyond the amount of Real Gold in existence…….and more importantly because the elite would never allow much Real Gold to be accessed through paper gold……….only enough to maintain the illusion (Hi, Illusion) that the paper gold market is the Gold market.

3rd, Gold does not really “go  parabolic” at any point in time, nor does Gold ever drop in value.  The “price of gold” only goes parabolic when the paper currencies fall dramatically in value………AND the “price of gold” only does that when “ALL PAPER CURRENCIES” fall dramatically in value, all at the same time like the point in the paper currency cycle seen into 1980.  In terms of value, Gold just sits there, day after day, and week after week, and month after month, and year after year, and decade after decade, and century after century…………as a constant value.  All of the volatility in the “price of Gold” is created by the volatility of greed and fear of man in his perception of the “value” of  paper fiat currencies as the denominator of the price fraction of anything……………..X/ currency. As the “price of the currency” as the denominator in the pricing fraction of anything (X) denominated in the currency “rises”, it generally affects the price of the item (X) lower due to the math.  As the “price of the currency falls” as the denominator of the pricing fraction, then the  price of the item (X) generally rises as the answer to the fraction.  During times of  very aggressive currency printing, or currency inflation, the price of the currency in the denominator falls aggressively and completely overwhelms the supply and demand fundamentals of everything that represents “X” in the numerator (top of the fraction) so we tend to see “price inflation” across the board.  Still, those rising prices due to the falling price of the currency denominator is “mathematical only”, and like the Dow rise since March of 2009, the  “value” of the Dow can still be falling even though the “price” as overwhelmed by the changes in the denominator currency price ……….is rising.  This is why I say that “during aggresive currency inflation, Price and Value Diverge.”  This is easy to show in a chart, and I have shown it, before.  Price tracks value during times of currency deflation, but price and value diverge during times of currency inflation.

Lastly for this section, the pricing scheme for currencies whereby each of the major currencies is priced against a basket of other variably price currencies (that are also priced in the same manner) is a gimmick that leaves no constant reference point in the pricing system.  It is kinda created like the game where you smack one head that pops up with a hammer while another head pops up instead.  There is absolutely “no relationship” between this currency pricing system and the “value” of the currency, itself.  Thus, at times a currency will “rise in price” while the same currency is actually “falling in value.”  Thus, with this type of currency pricing system all currencies can be falling in value if all are being inflated, yet one or more of the currencies falling in value will actually be rising in price………………..because all currencies can fall to zero, but in reality none will ever fall anywhere near zero due to the “constant sum” mechanism of each being “priced” AGAINST others.  Thus, the currency pricing system “fails” during times of aggressive currency inflation by many or all of the major currencies.  And, that pricing system was IMO put into effect in the early 70’s, just for that reason going into aggressive currency inflation into 1980……………..as a mechanism to confuse the many to “protect” the major currencies from the fear of man.

Thus, your confusion is simply a marvelous ploy by those at the top to protect their paper fiat currency systems against a move to Real Money Gold.  So, this time around what seems to being offered as a remedy to the paper fiat system?  Why, it is a one world paper fiat system………to replace a many paper fiat system.  I can’t see much difference between the two, except that instead of many politicians deciding to continue the paper fiat currency printing game, now there will only be one set of politicians doing so for the whole world, no?  So, if this system is implemented, then the next time in the cycle when the one paper fiat species has been inflated to the moon in terms of spending what we don’t have, just who will be called on to bail it out?  Well, Gold, of course………………….just like it has for thousands of years.  Will anything change?  Of course not………….except in terms of a smaller number of polticians make the paper inflation decisions.

watch.bnn.ca/market-call/january-2010/market-call-january-12-2010/#clip254511

shares as I understand.  Love the symbol - “PHYS”!!!

www.businessinsider.com/sprott-ipo-physical-gold-trust-2009-12

Sprott Jumps On Gold ETF Craze With New “Physical Gold” Trust

Courtney Comstock | Dec. 14, 2009, 7:34 AM | 1,204 | 1

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Tags: Wall Street, Gold

Fund flows into gold ETFs are out of this world, and now well-known gold bull Eric Sprott is looking to get in on the action.

Last week, Sprott Asset Management filed an F-1 for a $575 million IPO of a small gold trust called the Sprott Physical Gold Trust (PHYS).

In the prospectus, Sprott lists a number of advantages of the fund like, a “convenient way to own physical gold bullion” and an “ability to redeem units for physical gold bullion.”

All gold ETFs are backed by physical gold, of course, and large investors have redeemed bullion from the like of GLD, but Sprott is really trying to play up the physical aspect — hence the name and the ticker “PHYS” — though arguably that’s mainly marketing

VIDEO:  watch.bnn.ca/squeezeplay/february-2010/squeezeplay-february-4-2010/#clip263664

For years I’ve wondered the same thing - where was the miners outrage?

I’ve called dozens of companies inquiring.  With rare exceptions they just don’t care. 

Check out the major shareholders and who sits on the Board.  I’m afraid most miners work for the banksters.  Their purpose in life is to keep pumping product into demand …. regardless of price.

I’d love to be wrong about this.

This is all so very confusing for some who just don’t understand a lot of what is going on. You presented some very easy to understand comments about it and is appreciated.

Hanging on to my shiny stuff.

I think Augirl simply called it……………….”What a girl wants……………what a girl needs”………or something like that.

I dunno guys,  note the wording “western powers” especially with the Olympics starting the day after ..   Vancouver’s downtown core is fortressed up and locked down but there are security people that are plenty concerned . what a world.

aggie..  pay no attention to the other thing you asked about ,,,GR is dreaming in technicolor 

The taxpayer will just see another billion Dollars inflated to take care of the mis-hap.

Recently comparing himself to God?  I guess the real God took some offense to that remark.

The Power Plant explosion in Connecticut over the weekend that killed 5 and injured 12 was finance by none other than Goldman Sachs.  They put up about a billion dollars in 2008 to get this thing built.  “The deal of the Century.”

Story at http://www.businessinsider.com 

In fact, we already have a one world currency that has been periodically used over thousands of years.  It is called “Real Money Gold.”  And, periodically at the same points in the cycle, the one world currency- Gold- balances the budgets of all of the fiat countries as all of the paper fiat currencies are “re-set in price” to Real Money Gold, as it is ready to occur, once again.

Is it even possible to have a one world currency without the stable protectional value of Gold?  Of course not.  No one world paper currency can last as some politician at some level will decide to inflate it, just as the inflate all world currencies.  Thus, Gold will continue to be the ONLY real one world currency forever into the future.

Why do they not state that, now?  They simply have to have a “plan” that does not include Gold, lest all currencies are immediately devalued against Gold before all of the debts are moved to the various governmental balance sheets………where they must be before Gold goes parabolic into 2012 to balance all of the budgets.  So, they state some brain-dead plan to allow the cycle to play out.  They might even announce their hair-brain one world paper currency at some point, but it cannot work as long as humans are in control of it.  Humans are subject to greed…………..and greed motivates them to “cheat” by inflating any paper currency.  This is why our Forefathers listed only Gold and Silver as money.  They simply stated the only timeless concept of money that can ever work to enforce self-restraint of human greed.

I believe it is as simple as that………………………

Are we really to absolutely believe that all the countries of this world are going to agree that a one world currency is the only answer to the continuing problems with individual currencies?

I just cannot see that happening. Can anyone here honestly say that  is what we are headed for?

The Devaluation IS the default on debt.  It occurs across many countries simultaneously as all currencies are devalued against Gold.  Stated another way, Gold rises to balance the budgets of all of the countries in each of their own currencies.  Thus, once Gold has balanced all of the budgets, each country has no reason to default further.  Then, the one world currency or SDR backing with Gold backing, or whatever……..comes in to play to back all currencies with some sort of value, or the one world currency is simply used by everybody so nobody can again inflate their currency and spend (live) beyound their means.

JS has left a wide margin of time for this to occur………seems like maybe 4 or 6 years if memory serves.  IMO he leaves that time-frame wide as a range of time it takes Gold to finish the parabolic climb.  You must consider the fact that JS has often said 2011……others have said 2012…………..some have used later dates.  Personally, I believe the cycle count is into late 2012 with a perfect Golden ration

=======================================

A wonder

by kitcoblows @ 19:39 pm.

From James Sinclair

This is all you need to know:
1. Bretton Woods was folded.
2. The floating exchange rate system is about to be folded.
3. By default or design we are going to a one-world currency and a one-world central bank of central banks.
4. For Portugal, Ireland, Italy, Greece or Spain to break off from the euro would be an expansion of the floating exchange rate system under present conditions.
5. There are presently 3 major currencies. That is the US dollar, the euro and gold.
6. The SDR was an attempt to form a single reserve currency that never took flight.

What I find incredible is all of this has already been presented for you by way of Martin Armstrong. I am amazed at the amount of indifference across the web toward his writings. If you have not spent countless hours studying his writings, you do yourself a disservice in my opinion. The man is truly a marvel.

First you devalue, then comes default. The one world currency will allow sovereign default. That is the point.

Posted: Feb 08 2010     By: Dan Norcini    

Dear CIGAs,

Today was, “Let’s throw away the Dollar and Buy everything else in sight” day. The entire commodity sector had money flowing back into it in a big way today as both the Yen and the Dollar were jettisoned in favor of “risk” plays. Copper reversed its collapse building a bit on Friday’s bounce. Ditto for silver and for crude oil. Even pork bellies were higher today.

The effect of all this was a steady flow of buy orders into gold the entirety of the session. So far it has pushed to a high near $1,074. If it can get back above that critical level of $1,080 and hold there for a couple of days, it has a much better chance of entering a range trade rather than making another leg lower as technicians will point to bear-flagging action unless it recaptures the former broken support level where our big buyer of size had once been making their presence felt. While it is nice to see the gains in gold, technically it has a lot of work to do to repair the severe chart damage of the last week.

Once again the problem is the mining shares as the HUI still can barely manage even a bounce. The hedgies are continuing to sit on the shares with their ratio trades. The sheer “logic” of this trade reflects just how ignorant the majority of hedge fund managers are and how algorithms have taken over the markets at the expense of reality but it is what it is for now and with as much money at their command as they have, until these guys decide to either reverse those spreads or lift the short leg, the shares are going to underperform. Same comments as Friday – the HUI will need to get back above the 400 level to initiate more short covering and kick in some fresh buying.

You can get a pretty good feel for how the battle between the inflationists and deflationists is playing out by watching a few key markets such as copper and soybeans but a better picture still remains the Continuous Commodity Index ( I still do not like the CRB index because it is too heavily weighted in energies). The CCI needs a weekly close above 481 – 482 to give the inflationists a reprieve from the recent selling barrage in this sector and turn that weekly chart friendly again on the shorter term. Long term its uptrend still remains intact. Short term the trend encourages selling into rallies.

As usual we are back to watching the broader equity markets and the currency markets to gauge the psychology of investors/traders. The S&P 500 will have to climb above 1105 and hold there for two days to convince some of the shorts to get out. While the Dollar is moving lower today, as long as it remains above 79, the short term trend is in favor of the bulls. Money flows are what markets have become all about these days and it is those two primary markets that determine pretty much where that stuff goes.

Click chart to enlarge today hourly action in Gold in PDF format with commentary from Trader Dan Norcini

Harry Truman once said “if you laid all the economists in the world end-to-end on the equator and asked them which way the economy is heading, each one will point in a different direction.” Unlike most economists, Jim Sinclair worked in the Wall Street pits with the blue bloods and seems to know the gravity of the current economic situation. The paper game is over, and you better own some tangible precious metals, some storable food, and some means to protect yourself until the financial storm blows over. Maybe add a case of scotch on the list since this is appreciated with age (LOL)

From James Sinclair

This is all you need to know:
1. Bretton Woods was folded.
2. The floating exchange rate system is about to be folded.
3. By default or design we are going to a one-world currency and a one-world central bank of central banks.
4. For Portugal, Ireland, Italy, Greece or Spain to break off from the euro would be an expansion of the floating exchange rate system under present conditions.
5. There are presently 3 major currencies. That is the US dollar, the euro and gold.
6. The SDR was an attempt to form a single reserve currency that never took flight.

What I find incredible is all of this has already been presented for you by way of Martin Armstrong. I am amazed at the amount of indifference across the web toward his writings. If you have not spent countless hours studying his writings, you do yourself a disservice in my opinion. The man is truly a marvel.

First you devalue, then comes default. The one world currency will allow sovereign default. That is the point.

www.hospitalcompare.hhs.gov/hospital/mortalitytool/index.asp