Tuesday, November 3, 2009

Hard assets

The price of gold spiked up sharply today on the news that the IMF has been quietly selling gold to India over the past few weeks totaling 200 tonnes. The excuse given was that IMF needed to raise money for its bailouts of various third world countries. Some are newly members of the third world like Iceland. This need for cash is a transparent lie of course, the IMF does not own any of its own gold but has pledges from its members to provide over 3000 tonnes of gold to provide legitimacy to the IMF. If it needed currency, it could have all it wants by the same mechanism. The third world country the IMF based in Washington DC is desperately try to prop up is the United States of America. By taking Dollars out of circulation they hope to keep countries like India from dumping them on the market.

China has been quietly buying gold for several years, purchasing at least a 100 tonnes this year alone bringing its total holdings to well over a thousand tonnes. China has been telling its own people to put at least 5% of their savings into copper, silver or gold. In the US, coins contain no precious metals to speak of, even "copper" pennies are made of nickel and the mint would prefer to make coins of steel if not stop minting entirely. The rest of our money is imaginary, why mint coins?

The world wide banking crisis last year panicked holders of Euros into buying Dollars because the historical belief has been that the US is the most stable economy in the world. This fiction has worn thin and we’re gradually converting to a gold backed world economy. This is a problem for the holders of trillions of Dollars as a reserve currency. It’s a really big problem for any country that has been printing Dollars to fiancĂ© its trade deficit.

China has been unloading Dollars for hard assets and natural resources anywhere they can. India was not in a position to do this on any scale so they went with gold. In the US, Warren Buffett is apparently on the same page. He paid 34 billion in cash for 100% stake in a railroad, one of the hardest of hard assets you can still buy in the US.
If times get really hard Buffett can probably count on government subsidy for operating expenses. And if we convert entirely to fascism, railroads will be in big demand. Moving troops, tanks and people.... www.prairie2.com


Anonymous said...

One of the things I have been wondering about for a while is if Communism is so bad why did the Right set up laws to make it easy for us to export our jobs and our money to COMMUNIST China...? I mean if being Red is sooo bad, why did we decide to throw the race to China and make them the soon to be sole superpower just to make a few Americans really, really rich and the rest of us as proud members of the Third World?

Is it too much to ask that since we have sold our country and our soul to Communist Red China that we could have "Socialized Medicine" since all but a thousand of us will not be able to afford much more than aspirin at Walmart?

prairie2 said...

Communism is not socialism but really a kind of fascism which is what the corporatists here are all about. The Neo-cons planned to eliminate the middle class and go on a spree of conquest across the middle east and south asia encircling Russia and China. Ultimatimatly controling the world for a 1000 years peace or the real Third Reich. Welcome to the New American Century. The conquest didn't work out so good but they'll settle for the facist state.

Anonymous said...

I pretty much agree, Stalin and Mao were not Communists, Stalin did worry a bit more about his people than Mao but that isn't saying much. Hitler, Stalin and Mao were really just using what was handy to get to and to stay on the top...didn't really matter to them the method or the name of the "cause" they used.

In Hitler's case while he caused some of the wealthy in Germany some concern...at the end of the war the company names might have changed but the people behind the names didn't and some of them were quite happy to employ some of their old war criminal Nazi friends while waving a new flag and promising friendship to America...for a price.

Of course I agree that the handful of people in the upper 2% will use what ever cause is handy that is willing to do their bidding to try to run the country the way they need.

I do find it a bit funny, the poor supporting the Neo-Cons, not too unlike the Log Cabin Republicans or Jews for Hitler...supporting an idea, a cause, a group of people that despises you and see those people in the role of the rest of us in America...cannon fodder and wage slaves.

But I have to admit that the Republicans are pretty much honest how they feel about everybody except rich white males, the Democrats seem to be doing pretty much the bidding of the same group with a bone thrown to the rest of us now and then.

I don't see any hope for the near future, maybe at some point the system will be soo messed up we...well, our great grandkids...might have some hope of real change. Might be better off moving to the Amazon and know that we will be burned out and run over in a few years.