-- Posted Sunday, 26 October 2008 | Digg This Article
| Source: GoldSeek.com
By R. D. Bradshaw
An occasional reader of just a few Goldsmiths articles might be led to believe that there are contradictory positions in this Goldsmiths series on a deflationary fall/recession versus a hyperinflationary bust. To put things in perspective and prove no inconsistencies, this presentation will clarify the two positions and show that there are no contradictions in the two ideas as presented in the Goldsmiths.
Inflation versus Deflation
The Goldsmiths have argued from Part I that the plutocrat market manipulators are in total charge of the financial markets in the US, Britain and much of the rest of the world. In their capacity to control the markets, they are right now trying to bring about a controlled deflationary fall/collapse/recession. As explained in Goldsmiths X, XII, XX, XXI, and others, they have focused their attacks on home mortgages, real estate values and commodities.
Presently, they have a move on to take gold down to $700, silver down to $9, wheat down to $5, corn down to $3, soybeans down to $8, oil down to $50 and everything else in grains, softs and energy all likewise down. But while they have engineered these falls in prices, they have not really done much on the overall inflation reality.
After all, oil may be down some 60%, but the price of gas at the pump is only down some 25%. It means the oil companies are still raking in the money. Wheat is down some two-thirds from its 2008 high. But bread prices are not down (and aren’t particularly affected because the cost of the wheat in a loaf of bread is inconsequential, as outlined in Goldsmiths Part XV).
Actually, it is all academic to try to talk about inflation because the manipulators control the official US inflation statistics and the controlled media which periodically reports them. As we know, they have for years been telling us that there is no inflation problem in the US. The latest is that inflation is now flat. Of course this is the exact propaganda needed for the manipulators to lower interest rates and increase US and Fed spending programs and give-aways to the sky (as detailed in Goldsmiths X and XVIII).
Conversely, this writer has also outlined the prospects of an inflationary bust in Goldsmiths X, XX, etc. In such an environment, we can look for the following as allowed in Goldsmiths XXIII—coming price controls, higher interest rates, confiscation of gold, restrictions on the movement of capital, shortages of goods, etc.
In the various Goldsmith presentations on these two positions, there has been no inconsistency because it appears that the manipulators are trying to impose the deflationary fall/recession on us at this time while the hyperinflationary bust should come later. Goldsmiths recognize this present motion under way by the fat cats. But as repeatedly suggested in this series, there is the likelihood that the manipulators will lose control over the situation and hyperinflation will thereby set in.
Reducing it to the simplest terms—we will first of all likely have some deflation from the work of the manipulators; and then later a hyperinflationary bust will occur when they lose control. Most of the preceding Goldsmiths have outlined some of the ways that the manipulators can lose control and have even offered some possible dates/clues for such an event.
The point is that we probably will end up with both options—deflation and then inflation.
Some Other Ideas
An article by John Olaques on the “The Real Reason Behind the Bail Out” in the Oct 21, 2008 Goldseek.com offered some other thinking on this theme which has not received much media play from economists or even the various market analysts and advisory services. This article was outstanding and Mr. Olaques deserves some credit for putting together precisely what the plutocrat manipulators may be trying to do at present.
He gives the backdrop for his conclusion by citing the ideas of Congressman Ron Paul and Nobel Prize winning economist Milton Friedman on the reality that the expansion of the money supply in circulation causes the public to want more goods than are available. This demand pull phenomenon causes inflation. Frankly, almost every person who looks at the problem comes to about the same conclusion (including me).
Olaques notes that during the Rosenfeldt (this family later changed its name to Roosevelt) depression of the 1930s, the Fed allowed or caused the monetary aggregates to decrease which contributed to the depression.
Conversely, Olaques allows that the extra money now being created by the Regulators may never make its way to the consumers. If it does not, then there is no extra demand for goods and services and no inflation and no recovery in the form of extra production, extra jobs and prosperity.
He then concludes that “the question is whether the extra money supply from the Bail-Out will reach the consumer/taxpayer. The sad answer is that very little will. Almost the entire Bail-Out will go to the banks and insurance companies…Its purpose is to secure holders of bank bonds, the holders of credit default swaps guaranteed by investment banks and insurance companies and secure past and future excessive executive compensation paid by those banks and insurance companies.”
This excellent article then adds that hyper-inflation will only take place if the increased money supply goes to the hands of the consumers and does not create a corresponding amount of debt (this point on creating debt is not clear since debt will in any case be created by the national government). Hence, per Mr. Olaques, there may then be a severe demand for dollars and hyper-deflation, where the country and the people have no money to buy goods and services but only (service) debts.
For a conclusion, he says that “The bankers have discovered a way to force the people of America and the world into an intense form of debt slavery and that is the reason for their reckless past lending practices, credit cards for all and now this massive Wall Street Bankers Bail-Out. In the past, only wars created that amount of national debt. But now those debt creating war mongers have found the more friendly face of public bail-outs.”
The above noted analytical thinking of Mr. Olaques is outstanding. What he proposes could well be reality both in terms of what has brought on this present crisis and what the plutocrat masters expect to achieve with it in the coming days.
In line with what various Goldsmiths articles have said the evidence is massive that indeed the fat cat manipulators have laid all of this present trouble on the American people. They are in control and they are making things happen (with the obvious objective of them making more profits and gaining more control over the people).
I can easily envision that indeed the plutocrats plan on these massive bail outs funneling money to them where they can salt the proceeds away in such a manner that very little of the bail out money will ever reach the market place to place a demand on goods and services. In that case, we well could have a shortage of dollars and a hyper deflationary depression which will make the Rosenfeldt (alias Roosevelt) depression look like a cake walk.
And how will the big banks receiving the bail outs keep the money out of the hands of the public? Undoubtedly, they will keep much of that money in bank vaults in the form of US Treasury bonds and notes. Thus, the Fed and Treasury will buy up the old worthless mortgages and pay them off with either US bonds/notes or money for the big banks to use to buy US bonds/notes.
Of course, this market for US paper will greatly help the Treasury in its efforts to sell US IOUs. Thus, as Mr. Olaques notes, the US taxpayers will be saddled with new debts which will go to the big banks and other institutions. As noted in Goldsmiths, XVIII, the US and Fed are already out in excess of $1.8 trillion bailing the fat cats out. Probably very little of that $1.8 trillion will ever reach the public to put demands on goods and services (to cause inflation).
Other Relevant Factors
Whereas the plutocrats have surely planned this scheme out, and intend to steal trillions more from the US taxpayers before they are finished, there are some other factors which need to be assessed in this discussion.
For example, I have known for years now that the US government has been consistently lying to the American public about the consumer and producer price indexes. John Williams (of shadowstats.com) and others have documented reality that the real inflation rate is really something in the order of 14% per annum. Even now, as the government tells us that inflation is flat, we know it’s a lie. It may not be as much as 14%, but it’s far greater than what we are being told.
While the US inflation rates have been substantially higher than what the US government reports have said for the last 20 years, they have not been at the levels which they should be at with the huge expansion of the US money supply. I have known this for some time and have thought about what could be causing this strange phenomenon.
My thinking has always crystallized into the reality that huge numbers of foreigners have been buying US paper and keeping that paper overseas without turning it loose on the US market to chase goods and service. These foreigners have traded their good currency for US IOU paper.
In America, we have used this good foreign currency to buy consumer goods produced by these same foreign countries (to keep these sales going, foreign countries keep their own currencies devalued in terms of the dollar) and to finance the deficit spending and give away programs of the US government (thus, it means that America has been sending inflation to the foreign countries involved).
We Americans have largely quit producing goods. Too, many Americans are now on welfare programs of some type. The result is that the excess expansion of the money supply has not hit the US market place to cause a hyperinflationary blowout as should have happened long ago.
Per the thinking of Mr. Olaques, much of these bail out funds also will never reach the US market place. If the Treasury can successfully sell its bonds/notes to more foreigners, these foreigners may end up financing much of this bail out. Very little of these paper assets, as held by foreigners and/or the bailed out big banks, will reach the US market place in the immediate foreseeable future.
Yet What Can Happen
Never-the-less, at some point in time, that money either in foreign countries or in the vaults of the big banks will eventually come back to the US markets in some way. Holders of this paper will become concerned with the huge quantities that they are holding and begin buying up US assets. Even the US dollars used to buy oil from other foreign countries will pass to people who in time will want to look to purchase US assets.
Despite the limitations, some of this money can come back to the US to buy real estate, stocks, and whatever else America has for sale. If the crops stay up, we can be sure that foreign countries will buy American agricultural products (this will put demand on US goods in the market places and must lead to some inflation). Already, US wheat sales abroad have been quite good.
As the US debt situation deteriorates, I have already suggested that ultimately some US war ships and other military assets will go on the block for sale to foreigners. And while US manufacturing has fallen in recent years, we still are one of the world’s biggest producers of weapons of war.
There is another big factor which will nullify some of the possibilities cited by Mr. Olaques. The US is a socialist welfare country with much of this spending supported by government deficit spending. This is not about to end.
If there are any internal economic problems, we can be sure that the US government, under both Republicans and Democrats, will spend money like mad, not only to bail out the super rich but also to put some pennies into the pockets of the collective people (to keep them pacified to continue to vote for the status quo on who is to rule the nation).
There is a third thing which can cause the plutocrats problems if they try to further rip us off by intentionally trying to make their deflationary fall a deflationary bust and depression with a shortage of dollars.
The US welfare state has changed the basic thinking of many or indeed most Americans. We simply no longer have a work ethic. In fact, many Americans are quite lazy and are looking for ways to not work and especially in so-called undesirable jobs. That’s why persons from South of the Border have been flowing into the US for ages now to do work which Americans simply won’t do.
The Goldsmiths, XX, outlined the huge change in the American people from 1929 until today. We Americans are totally different people from our ancestors of 80 years ago. There are not many farmers who are going to work hard to sell corn at $3, wheat at $5 or soy beans at $8. I can tell you now; they will quit and go on welfare or revolt.
The Rothschild cabal has successfully screwed the farmers for vast ages. But one more rip off of farmers, from the present plutocrat deflationary scheme, may not work. It could easily backfire.
The Bottom Line
Finally, there are any number of things on the drawing boards which also can completely upset the diabolical plans of the manipulators as they plot and plan on putting the screws to us even more.
Any number of things can go wrong. I have already outlined several in the context of the coming wars on Iran, Syria and others. Then there is the reality that at some point in time, the Chinese, Japanese and others will say no more US IOUs. The Rothschild cabal will one day lose control. It is not whether but only when. And when they lose control, a hyperinflationary bust will arrive on stage.
It is very likely that Mr. Olaques is right and the manipulators are right now planning a deflationary bust, despite the huge expansion of the US monetary supply (which should cause a hyperinflationary blow out). And while the fat cats may successfully work this deflation scheme for awhile, their days of following it may be limited (perhaps because of the several above stated reasons).
For More Reading/Information
For more reading on this issue, the reader may wish to check these sources:
The bestseller: “None Dare Call It Conspiracy,” by Gary Allen and Larry Abraham, first published in 1971, still available on eBay, Amazon and other book outlets.
“Tragedy and Hope,” by Carroll Quigley. At the 1992 Democrat Convention, Bill Clinton’s acceptance speech cited Quigley as Clinton’s mentor.
“Conspirators’ Hierarchy: The Story of the Committee of 300”: by Dr John Coleman. Order from World in Review, 2533 N Carson St, Carson City, NV 89706, phone 1-800-942-0821.
An Internet presentation on the Plutocrats, at Volume XXII of “Ezekiel and YHWH’s Judgment for the Good People,” at www.AgeEnd.com on the net.
The author of this article is not involved in the securities or financial market business and has no financial interest in presenting the information herein. Therefore, the preceding information on this subject is presented for general information only and not for purposes of investment advise or recommendations. What the reader does on investments is his own personal decision and responsibility.
Finally, the writer of this series is a retired CPA, living in the Idaho Mountains, and still optimistic for the future of gold and silver. He is also a veteran of the Korean and Vietnamese Wars.
-- Posted Sunday, 26 October 2008 | Digg This Article | Source: GoldSeek.com
