Thursday, November 26, 2009

The Battle of Money Versus Law Is Over
(Guess Who Won?)

Illustration: Screen grab from Cecil B. DeMille's 1921 movie "The Affairs of Anatol" showing the vamp Satan Synne (Bebe Daniels) in the wonderful Octopus Cloak.

"The bold effort the present bank has made to control the Government, the distress it has wantonly produced,. . ., are but premonitions of the fate that awaits the American People should they be deluded into a perpetuation of this institution (The Bank of the United States), or the establishment of another like it. ''
-Andrew Jackson
December 2, 1834

"This Act establishes the most gigantic trust on earth. When the President signs this Act the invisible government by the Money Power, proven to exist by the Money Trust Investigation, will be legalized. The new law will create inflation whenever the trusts want inflation. From now on depressions will be scientifically created."
Congressman Charles A. Lindburg, Sr. on the passing of the Act that created the Federal Reserve Bank in 1913

"As the Culture rises to its height, these two primary urges trend widely apart, and hostility develops between them. The history of this hostility is almost the same thing as world-history. From the feeling of power come conquest and -politics and law; from that of spoil, trade and economy and money. Law is the property of the powerful. Their law is the law of all. Money is the strongest weapon of the acquiring: with it he subdues the world. Economics likes and intends a state that is weak and subservient to it. Politics demands that economic life shall adapt itself to and within the State Adam Smith and Friedrich List, Capitalism and Socialism. All Cultures exhibit at the outset a war- and a trade-nobility, then a land- and a money-nobility, and finally a military and an economic war-management and a ceaseless struggle of money against law."
-Oswald Spengler, The Decline of the West, first published 1918

Notes on gold:

Dubai Dubai Doo
After a Wednesday record price of $1186.90, gold closed at $1,177.63 in London today on thin trading recovering about half of its loss after the strong commodities market of recent months was affected by a stronger dollar in the wake of Dubai's announcement of a six month moratorium on debt obligations! (I wish I could do that.) In other words, the world financial markets are still spinning out of control and the dollar was somehow seen as a safer haven than gold by some investors. Others moved in late and scooped up gold as a bargain.

Sorry, No Gold Or Silver Here. Who Do You Think We Are? The Mint?
The U.S. Mint has suspended sales of precious metal coins, citing depleted inventories. LINK

Take This Gold And Shove It!
HSBC Holdings has told retail clients that it will no longer store their precious metals in its huge 5th Avenue Vault in New York. HSBC states it needs the space in the vault for its lucrative business with large institutional customers. It seems investors of all kinds are demanding to take actual possession of gold rather than just being satisfied to hold a contract that states they have the right to it. There is, therefore, a shortage of vault space. In a July letter HSBC told selected (petty) clients to arrange alternate storage of their precious metals or their holdings "will be returned to the address of record... at your expense" LINK

How Can You Assume A Crime Has Been Committed Just Because A Ton Of Gold Is Missing?
Speaking of vault space, in this case, we spy a country to the North with extra vault space. In June Canada announced that over a ton of gold (17,514 troy ounces) was missing from the Royal Canadian Mint. That would be about forty-four 400 ounce bars. Last week we noted stories that a huge quantity of 400 ounce gold bars on the world market were discovered to be gold coated tungsten. LINK Logically one could speculate that perhaps Canada had run afoul of some of these bogus bars. This week the RCMP announced that after a thorough investigation the results do "not support further effort in the continuance of a criminal investigation into this matter" and furthermore "there was no theft from the mint. An external review has gone on that provides an explanation of the unaccounted-for-gold". But the RCMP must be given credit for the difficult achievement of proving a negative. And what is the explanation for the unaccounted gold? No one really knows. You just have to take their word for it. Maybe it was accounting errors. Perhaps it was a loss of concentration by a gold counter. Another report speculated something about under-estimating "shrinkage" during processing which is an astounding thing for gold to do. (Unless it was coating tungsten.) Maybe it is an unexpected effect of the Large Hadron Collider? No, it couldn't be; they just turned that thing on. The RCMP found nothing untoward so nothing untoward could have happened. Right?
But if you carefully read the RCMP verbiage, they do not address whether the mint may have obtained some of those bogus tungsten bars. They state there was no theft from the mint that would support a criminal investigation. What one does not say is as important as what one says. LINK

Surprise Surprise
It appears that all sources of value in the world are under attack. With the run on physical gold we shall soon find out if the gold business has indeed turned into a shell game as so many believe. There have been persistent stories of banks having difficulty producing gold on demand. As I have argued in this space, there is not enough physical gold to run a world economy; there probably never has been enough gold to act as a currency for the world. The banks know this better than anyone. As investors continue to lose faith in fiat money we shall eventually reach the point at which the supply of physical gold, hidden away in vaults, runs out and demand cannot be met. What happens then will surprise and amaze us.

Sexy Bebe Daniels displays the spectacular Octopus Hat of Satan Synne while making love to early Hollywood heartthrob Wallace Reid playing Anatol Spencer. Reid would have been heavily dosed on morphine at the time, acquiring the habit after suffering an injury in a train wreck during the filming of The Valley Of The Giants in 1919; he would be dead by late 1922.

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