September 21, 2017
We posted this at Wrisley.com a year and a half ago.
If the theory holds true we'd better keep an eye on the precious metals barometer!
"Price inflation has been creeping at a very slow pace, considerably lower than the Federal Reserve's goal of at least 2 percent annually. The "barometer" may be predicting higher inflation throughout the economy. Or, maybe not. But something's going on that deserves our attention.
"When gold/silver prices are stuck in low gear that usually means a stronger U.S. dollar. (Strong dollar = deflation.) When the precious metals prices are rising quickly that's a clear sign of a weaker dollar. (Weak dollar = inflation.)
"OUR GUESS: If Saudi Arabia, China, and other big holders of U.S. debt get ticked off at us and start dumping dollars the flood will have a strong effect on the purchasing power of dollars already in circulation in the U.S. A good defense against the loss of purchasing power is to hoard gold and/or silver. But if heavy inflation is in the cards it's foolish to see the rise in metals prices as a windfall. However, gold/silver have a very long track record for preserving purchasing power against the tide of irredeemable paper IOUs."
We haven't changed a word since April 19, 2016.
Today the spot price of gold is down, sharply, indicating investors are not worried about a burst of currency inflation. They're steering their dollars into stock market bets.
If our theory is a reasonable indicator, the gold "barometer" (dollar price) will rise when inflation is a bona fide threat and it will fall when the dollar shows strength. As off Sept.21, 2017 the price is down sharply - probably because the Federal Reserve says it will do some basic interest tightening in December.
(Rising interest rates tend to throttle inflation, as Fed Chair Paul Volcker demontrated in the late 1970s.)
Mr. Bill Bonner has been watching the gyrations of the world's finances from his house in Normandy, France. We've been following Mr. Bonner's opinions since he first went into print in the 1970s. He's good at interpreting what he sees.
"But a fractured majority party and an independent president make Congress irrelevant… and unable to do much of anything.
"So there will be no genuine tax reform. No repeal and replace of O’care.
"And now, with the debt ceiling out of the way, there will be no halt to the Debt Bomb Express… running wide open and bound for Hell.
"And that means the next move by the feds will be to ban physical cash.
Once the feds get cash out of the way, they have us all under control."
"The Washington Post reports that a 'chilling new study' shows that large numbers of college students are hostile to free speech. They believe that shouting down speakers they don't like and committing violence against them is acceptable. They fail to recognize that 'hate speech' is protected by the First Amendment." ~Jack Heliner
Being hostile to opinion with which one disagrees is not new, of course. Bloody battles over religious and political opinion have raged throughout most of history. It's discouraging, though, to see censorship of free speech being nurtured among college youth.
It hardly contributes to a civilized society.
The topic is bothering commentator Pat Buchanan, too. " In Berkeley, home of the Free Speech Movement, the university last week had to spend $600,000 to protect an invited speaker of the college Republicans from being assaulted." FREE SOCIETY
"My cartoon shows some of the central players involved in the Deep State. Prominently featured is George Soros. He wants to break America and Europe and see western civilization replaced by a feudal, collectivist, globalist system." ~Ben Garrison
Ben, our artist nephew, labors at his drawing board in Montana. The popular web site ZERO HEDGE often publishes his 'toons because they tend to agree with the site's political point of view.
We post some of Ben's work for the same reason!
did the U.S. morph from a republic to a democracy?
clearly recall as a kid hearing elderly politicians speak of
republic." Even today in the oft recited flag pledge we refer to
"...and the republic for
which it stands." However, at some point
the concept of the republican form of government was replaced by the
idea of democracy.
Mr. Robert Curry, author of Common Sense Nation: Unlocking the Forgotten Power of the American Idea believes 1913 was the year we switched horses from the idea of a republic, established by the Constitution, to the notion of democracy.
argues....rightly, we think....that the keys to changing the U.S. form
of national government occurred when the 16th and 17th amendments were
ratified and when Congress created the Federal Reserve System.
The year was 1913.
And he quotes a most unlikely source when revealing one of the chief instruments the Fed uses to debauch the currency.
"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some." ~John Maynard Keynes.
Keynes was right! Curry's
remarks on the matter are worth reading. 1913:
THE TURNING POINT
decline from democracy to tyranny is both a natural and inevitable
one." writes Jeff Thomas. "That’s not a pleasant thought to have to
consider, but it’s a fact, nonetheless. In every case, a democracy will
deteriorate as the result of the electorate accepting the loss of
freedom in trade for largesse from their government. This process may
be fascism, socialism, communism, or a basket of 'isms,' but tyranny is
the inevitable endgame of democracy. Like the destruction of a
sandcastle by the incoming tide, it requires time to transpire, but in
time, the democracy, like the sandcastle, will be washed away in its
Messrs. Curry and Thomas correct? Will the voting majority opt
for bigger government and more social safety nets?
The long simmering Inflation v. Deflation question:
Make no mistake. Monetary inflation is still alive and churning the economy, although consumer prices are not yet reaching the 2 percent annual rate the Federal Reserve wants before it boosts interest rates any further.
Inflation is evident when a boom occurs in the stock market, when gold and silver prices rise, when real estate prices trend higher, and the bond market is lackluster or declines.
Deflation, on the other hand, generally sees a booming bond market and a collapsing stock market. Real estate prices also decline. Banks become hard pressed to keep their noses above water, businesses fail, and general prices decline.
Inflation promotes a declining dollar, which is hell on creditors because they receive weaker dollars in payment. Deflation, on the other hand, is hell on debtors because they must pay back their obligation in scarcer dollars.
It's easy to understand the difference between money inflation and deflation. The hard task is guessing which will prevail in the immediate future. In the 1970s price inflation occurred in double digits, then slowed to a crawl in later years. What next? Hyperinflation?
Possibly. On the other hand, no money inflation in human history has not eventually collapsed.
We keep scanning the horizon for clues.
Muddled Masses Become Iconoclasts.
"And once all the Confederates are gone, one must begin with the explorers, and then the slave owners like Presidents Washington, Jefferson and Madison, who seceded from slave-free Britain. White supremacists all." `2nd Civil War
The above remark by Pat Buchanan sums up the feelings of many Americans who have grown weary of the summertime frolic in public parks and streets over historical memorials. No one seems to see the senselessness of smashing icons and none think of the heavy cost to taxpayers of providing police supervision and cleaning up after demonstrators erupt into violence.
The late British political leader, Winston Churchill, quite rightly pointed out that going to war against the past was an emormous waste and could seriously interfere with the present and the future.
Something else to consider: Only 0.3 percent of the U.S. population have the slightest interest in the precepts of the politically extreme right. And their chance of being elected to political office is very, very low.