The Beginning Of The End
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China Starts To Make A Power Move Against The U.S. Dollar

US Dollars - Photo by selbstfotografiertIn order for our current level of debt-fueled prosperity to continue, the rest of the world must continue to use our dollars to trade with one another and must continue to buy our debt at ridiculously low interest rates.  Of course the number one foreign nation that we depend on to participate in our system is China.  China accounts for more global trade than anyone else on the planet (including the United States), and most of that trade is conducted in U.S. dollars.  This keeps demand for our dollars very high, and it ensures that we can import massive quantities of goods from overseas at very low cost.  As a major exporting nation, China ends up with gigantic piles of our dollars.  They lend many of those dollars back to us at ridiculously low interest rates.  At this point, China owns more of our national debt than any other country does.  But if China was to decide to quit playing our game and started moving away from U.S. dollars and U.S. debt, our economic prosperity could disappear very rapidly.  Demand for the U.S. dollar would fall and prices would go up.  And interest rates on our debt and everything else in our financial system would go up to crippling levels.  So it is absolutely critical to our financial future that China continues to play our game.

Unfortunately, there are signs that China has now decided to start looking for a smooth exit from the game.  In November, I wrote about how the central bank of China has announced that it is "no longer in China’s favor to accumulate foreign-exchange reserves".  That means that the pile of U.S. dollars that China is sitting on is not going to get any higher.

In addition, China has signed a whole host of international currency agreements with other nations during the past couple of years which are going to result in less U.S. dollars being used in international trade.  You can read about many of these agreements in this article.

This week, we learned that China started to dump U.S. debt during the month of December.  Many have imagined that China would try to dump a flood of our debt on to the market all of a sudden once they decided to exit, but that simply does not make sense.  Instead, it makes sense for China to dump a bit of debt at a time so that the market will not panic and so that they can get close to full value for the paper that they are holding.

As Bloomberg reported the other day, China dumped nearly 50 billion dollars of U.S. debt during the month of December...

China, the largest foreign U.S. creditor, reduced holdings of U.S. Treasury debt in December by the most in two years as the Federal Reserve announced plans to slow asset purchases.

The nation pared its position in U.S. government bonds by $47.8 billion, or 3.6 percent, to $1.27 trillion, the largest decline since December 2011, according to U.S. Treasury Department data released yesterday.

This is how I would do it if I was China.  I would try to dump 30, 40 or 50 billion dollars a month.  I would try to make a smooth exit and try to get as much for my U.S. debt paper as I could.

So if China is not going to stockpile U.S. dollars or U.S. debt any longer, what is it going to stockpile?

It is going to stockpile gold of course.  In fact, China has been voraciously stockpiling gold for quite some time, and their hunger for gold appears to be growing.

According to Bloomberg, more than 80 percent of the gold that was exported from Switzerland last month went to Asia...

Switzerland sent more than 80 percent of its gold and silver bullion and coin exports to Asia last month, the Swiss Federal Customs Administration said today in an e-mailed report. It imported most from the U.K.

Hong Kong was the top destination at 44 percent on a value basis, with India at 14 percent, the Bern-based customs agency said in its first breakdown of the gold trade data since 1980. Singapore accounted for 8.6 percent of exports, the United Arab Emirates 7.9 percent and China 6.3 percent.

When China imports gold, most of it goes through Hong Kong.  We know that imports of gold from Hong Kong into China are at an all-time record high, but we don't know exactly how much gold China has accumulated at this point because they quit reporting that to the rest of the world a number of years ago.

When it comes to global finance, China is playing chess and the United States is playing checkers.  China knows that gold is a universal currency that will hold value over the long-term.  As the paper currencies of the world race toward collapse, China could end up holding most of the real money and that would be a huge game changer when they finally reveal that fact...

The announcement of China's new gold hoard will send shockwaves through the financial markets, and make China and the Chinese yuan (their national currency) even bigger players at the international table.

International banking expert James Rickards compared it to a game of Texas Hold 'Em poker:

"You want a big pile of chips. The U.S. has a big pile of chips, Europe has a big pile of chips. The U.S. has 8,000 tonnes [metric tons] of gold, 17 members of the euro system have 10,000 tonnes. China at 1,000 tonnes is not a player, but at 5,000 tonnes, they are a player."

There are some really good points made in the quote above, but I do take exception with a couple of things.  First of all, I believe that China now has far more than 5,000 tons of gold.  Secondly, I seriously doubt that the U.S. still actually has 8,000 tons of gold or that Europe still actually has 10,000 tons of gold.

As China (and eventually the rest of the world) moves away from a U.S.-based financial system, the consequences are going to be dramatic.

For instance, right now the average rate of interest that the U.S. government pays on debt is just 2.477 percent.  That is ridiculously low and it is way below the real rate of inflation.  It is simply not rational for anyone to lend the U.S. government money so cheaply, and at some point we are going to see a dramatic shift.

When that day arrives, interest rates are going to rise dramatically.  And if the average rate of interest on U.S. government debt rises to just 6 percent (and it has been much higher than that in the past), we will be paying out more than a trillion dollars a year just in interest on the national debt.

Even more frightening is what a rapidly changing interest rate environment would mean for our banking system.  There are four large U.S. banks that each have exposure to derivatives in excess of 40 trillion dollars.  You can find the identity of those banks right here.  Interest rate derivatives make up the biggest chunk of those derivatives contracts.  As John Embry told King World News just the other day, when that bubble bursts the carnage is going to be unprecedented...

"Stockman brought up a brilliant point, the fact that we have hundreds of trillions of dollars of interest rate swaps, which are polluting the world’s banking system. If we see growing volatility in interest rates, and I think that’s inevitable with what’s going on, that would cause spasms in the financial system. And if something goes wrong in the derivatives market, Heaven help us because the leverage that is imparted to the banking system through these derivatives is unholy."

Unfortunately, very few of the "experts" will ever see this crash coming.

Very few of them saw it coming in 2000.

Very few of them saw it coming in 2008.

And very few of them will see it coming this time.

I really like what Paul B. Farrell had to say about this...

Early warnings of a crash are dismissed over and over (“just a temporary correction”). They gradually numb us about the inevitable. Time after time we forget history’s lessons. Until finally a big surprise catches us totally off-guard. Financial historian Niall Ferguson put it this way: Before the crash, our world seems almost stationary, deceptively so, balanced, at a set point. So that when the crash finally hits — as inevitably it will — everyone seems surprised. And our brains keep telling us it’s not time for a crash.

Till then, life just goes along quietly, hypnotizing us, making us vulnerable, till a shocker like Lehman Brothers upsets the balance. Then, says Ferguson, the crash is “accelerating suddenly, like a sports car ... like a thief in the night.” It hits. Shocks us wide awake.

Don't let the upcoming crash take you by surprise.

The warning signs are very clear.

Get ready while you still can.

Money - Photo by Pen Waggener

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  • Kim

    Why not? We have almost no resources, no oil, no productive activity.

    • Giligan

      no oil? lol drive through texas one day and try and find a hotel….they are filled with people drilling for oil as we speak…we got more oil reserves than the entire world.

      • Kim

        Proven? I’m sure there is some fracking tight oil going on.

        Do you happen to remember the huge oil fields in Texas? The ones from the 1950s that didn’t require man effort or money to pump sweet crude oil up to level ground! I don’t remember either, cause like you, I’m too young, but I’ve read about that sweet crude that bubbled up to the ground surface under its own pressure. Those were the days, weren’t they! What are they doing in Texas today to extract that oil? Fracking? Cluster wells? Horizontal drilling? Off shore? Sea water pumping? These thing may extract what’s left, but buy no means are they cheap. At some point, very soon, it will not be economically viable to erect cluster drills in Texas for “sour crude oil” (aka tight oil)

        Good night.

        • Kim

          Sorry for any typos. I’m posting on the run and this “device” sucks.

          • BenguluruHuduga

            Buy a blackberry Z30

        • Mike Smithy

          Your depiction reminds me of the “Ballad of Jed Clampett” by Flatt & Scruggs.

          • Kim

            I did me too, as I was writing it.

        • davidmpark

          Crude oil is renewable. It’s made in the mantle of the earth and pushed up by centrifugal forces of rotation. Those wells are being refilled – plenty of evidence and output reports out there to prove it.

          • Jimbo

            Not true. Crude oil is an organic origin substance and there is a finite supply. What you are referring to is the Abiogenic petroleum origin theory and it is hokum. I am an engineer in the oil and gas industry.

          • Bill

            How about some proof.

          • Jimbo

            The Earths mantle is 500 degrees centigrade at its coolest point (closest to the surface).
            Crude oil is formed within the crust layer when organic material (dead organisms from the surface) become compressed below sediment layers. The process takes millions of years.

          • davidmpark

            The limit of that dead organism depth is 18,000 feet. Then why is oil found well below that? Takes millions of years is pseudo-science talk for “will not try lab experiments – we just declare it true!”

          • Malcolm Reynolds

            How did the atmospheres of Saturn, Neptune, Uranus, and Jupiter get saturated in those complex hydrocarbon chains then?

          • davidmpark

            Good point!

          • davidmpark

            Not true. Just because it contains high amounts of hydrocarbons does not prove that it’s of animal or plant origin. There are a lot of carbon chemical compounds and solutions in the earth that are made by the earth. By this definition, natural mined diamonds are organic.

            What is your exact engineering degree, and what research supports your claim? And how would you explain why re-tapped, yet previously designated depleted, oil wells are now up to full production?

          • Kim

            That should make the Saudis happy. Now they can stop pumping sea water into Ghawar.

            When is that massive oil deposit in Texas going to refill itself. What was Hubbert thinking.

          • davidmpark

            When is it going to refill? How should I know. The one’s in Russia, Africa, and Europe were capped for 20 – 40 years. Caught them by surprise, too.

          • Gay Veteran

            “…And how would you explain why re-tapped, yet previously designated depleted, oil wells are now up to full production?”

            PROOF???

          • davidmpark

            And if I provided it, you’d probably still ignore most of it.

            Any knowledge is won by your own efforts and actions. You’re just looking for anything to try and bash me with – so I don’t care.

            Type in “refilled oil wells” in an engine. It’s easy.

          • Gay Veteran

            type in “peak oil”
            it already happened in America
            but keep peddling that snakeoil

          • davidmpark

            Demeaning language is the sign of a weak argument.

          • Gay Veteran

            then it should be easily rebutted.

          • davidmpark

            Fine. You want to hurt people. The theory of peak oil is meant to shut down energy in favor of older, less efficient technology to separate the haves and have not’s. Not poor vs rich; but the proud and evil to get gain to rule with an iron fist – iniquity at all costs.

            And to top it off, I don’t know who or what you are. Hiding under the politically-correct moniker of Gay Veteran as a means of wearing some form of perceived injustice as a badge of protection against criticism and questioning. You have not identified as a male or female, no name, no origin – nothing. you hide as a guerrilla.

          • Gay Veteran

            man, sounds like you need to grab your lace hanky and head on over to the fainting couch

            “…a badge of protection against criticism and questioning….”
            wow, usually I get attacked for it. who knew it was a “badge”

          • davidmpark

            Swooning? That’s your best retort?

            Do you have the ability to answer a direct question without derision and impertinence?

            If so, then would you kindly answer the question: what are you, other than a Leftist guerrilla looking for blood?

            If not, then seriously; you need to see a counselor. You’ve got issues.

          • Gay Veteran

            if you don’t like my posts then quit whining and stop reading them

          • Kim

            These same hokum guys want to extract methane from ice. I think they call it methyl hydrate. All theory. No application in the real world.

          • Kim

            Do u also believe in perpetual motion and cold fusion? Actually, there has been some talk about nuclear fusion in the news lately.

          • davidmpark

            Perpetual motion and cold fusion? No reasonable evidence.

            Then again, most science in the US is determined by lawsuits in court rather than in the lab.

        • garand555

          We’ll never run out of oil. We just won’t be able to afford to extract what is left.

          • Kim

            So, in other words, we will run out. But, what u say is true. There is also the issue of quality. What is left in the ground, especially tight oil, is highly flammable and requires extra layers of refinement (adding to cost)

          • Mondobeyondo

            Yes we will, eventually. Oil is a finite resource. Unless you can find a way to create more oil in a laboratory (?!?), we will run out.

          • neal

            It is already possible to create the various hydrocarbons in oil in the lab. It can be scaled up to produce millions of barrels/day. The only problem is the EROEI is horrible, so unless you have a massive source of energy (fusion?) to provide the energy input you won’t have the output.

      • Jimbo

        We are squeezing the lemon for the last bit of juice.

        • Kim

          We are squeezing the peel.

        • Mondobeyondo

          We’re squeezing blood from a turnip.

  • K

    Michael, I think we have passed the stage of warning signs. The warnings are at the blaring siren level. Still the grand majority see and hear nothing. There are none so blind, as he who will not see.

    • Mondobeyondo

      Kind of like when a tornado warning siren goes off, and you look up in the sky and say, “I don’t see any tornado! Shut that noise off!:,,,,,,

      • K

        Yes, exactly like that.

      • http://loyal9.org/ Josh, Loyal9.org

        What a metaphor! Really made me face up to this message.

      • Mark

        Here we have tornado siren testing every Tuesday at 10 o’clock sharp. I sometimes think if I was a tornado, maybe I would spin around on a Tuesday morning.

        • nochipforme

          Good analogy. I’m going to use this.

    • Beanodle

      Many people including the T.P.T.B. are fully aware of the situation. The inevitable consequences of a full blown collapse are too terrible to contemplate.
      Those P.T.B. are using any band aid available legal or no to prevent this inevitability.
      After all, the 1% might be reduced to 0.5% or less with the weighing down of lamp posts.

      How does that old policeman’s prayer go? – Oh please Lord – not on my watch.

      T.P.T.B. will be using the same prayer.

      • Hammerstrike

        Propserity for the producers, starvation for the looters.

    • Edward Phillips

      When you tell people who have jobs how bad it is for us who cannot find jobs ,they mock the unemployed .They claim we are living off the Gov and lazy .Let me tell you food stamps do not pay the bills.It only give me food to eat as I lose everything .At 54 years old finding a job is even harder then if I was 30 years old .Most who have jobs are clueless to how bad it is . Companies will continue to seek out ways to get millions and billions more in profits ,as everything goes crashing around us all .These companies will cut jobs more and more .When there are too few to afford there goods the companies will become like 1800 America abusers of the work force … The Great Depression will look like good times compared to what going to happen .

      • Tim

        I’m sorry about what you’re going through, Edward. There are millions of Americans like you, which proves that the U.S. economy has NOT recovered. In the years ahead more and more Americans are going to join the ranks of the long-term unemployed, and then maybe they’ll understand the hardship you and many others have endured. I wish you the best in your search for employment.

    • Hammerstrike

      What is surprising is that it took China that long to make a move given how costly it is to the Chinese economy.

      • Dave Rohlman

        They needed to load up on gold. As the value of their USTreasuries decreases, their gold reserves increase.

    • seth

      The Synagogue of Satan is behind all of this, in their last final push towards a one-world government, one-world religion and one-world economy. They are sick to the very soul.

      Mat G-d be with us all.

  • DownWithLibs

    Have to wonder what the world will be like when the global currencies collapse and China rules the world!

  • Tim

    And the Congress recently suspended the statutory debt limit until March 15, 2015! That means there is no restraint to the federal government’s spending for the next 13 months. So it seems to me that China now has more of an incentive to get rid of its Treasury holdings.

    • smallergovnow

      could it be they know something? that they will need the ability to spend some huge sum in the near future? that ceiling was given up too easily by the republicons…

      • nekksys

        The Repubs were positioning politically when they handed over the debt ceiling. They realize the ruinous effects of the upcoming travesty and want the Dems to be held fully responsible thus securing a Republican controlled Congress and Presidency for some time to come.

        • Mal Reynolds

          Haha! You give The Stupid Party wayyyyy too much credit. The Stupid Party thinks the only problem with gummint is that they are not running it. The Senate Conservatives Fund has a list of real conservatives that need help running against the RINOs..

          • davidmpark

            And Mal, if the RINO’s loose big this year I’m expecting another Sumter-like beating in Congress from the Leftist radicals.

            And with the divisions, animosity, mental instability, and deep iniquity out there, I wouldn’t be surprised at all if there was another civil war.

            Well, if there is, I’m out. They all can slaughter each other for being racists, homophobes, heterophobes, bigots, trigots, monogots – or whatever the #$%& is used to rationalize and inhuman each other. They can all go out “to the streets” and try and kill some other mother’s child, and so some other mother’s child can try and kill them. But, the causes are worth it, right?…

            Sorry, Mal. Mostly venting to everyone else here.

          • Hammerstrike

            tpc.pc2.netdna-cdn.c om/images/Reince_Priebus_GOP_Chair_Stupid_600.j pg

          • nekksys

            “The Stupid Party thinks the only problem with gummint is that they are not running it.”

            Thank you for validating my point and proving you picked up on my intent.

      • Hammerstrike

        1992 LA riots, what was the Korean shop owner´s response to looters?

        • Rusty Brown

          “Open gun battles were televised as in one well publicized incident, Korean shopkeepers armed with M1 carbines, pump action shotguns and handguns exchanged gunfire with, broke up and forced a retreat of a group of armed looters.”

          Wikipedia

    • Mondobeyondo

      Congress really does need to hire David Beckham as a financial consultant… He would be awesome at kicking cans down the road.

      • davidmpark
  • Rodster

    I’m of the belief that it won’t matter which Country owns the most gold or silver. We could be looking at a collapse of human civilization. You see what’s happening around the world with all the riots and civil unrest?

    Can you imagine what it will be like with Nations and govts being overthrown? China is a mess with or without their gold. They lack resources and their land is polluted. So good luck with a BRICS currency as the basket reserve currency backed by gold. THERE ISN’T ENOUGH GOLD TO BACK ALL THE WORLD’S CURRENCIES. We tried it and and we got off the gold standard for that same reason.

    What you are likely to see is global civil unrest and nuclear war before any one nation issues a reserve currency.

    • chilller

      I believe Pm’s are for the recovery, not the collapse. The US and their fractional reserve banking screwed up the gold standard. They printed more dollars than they had gold to cover them. If you price gold high enough it will cover all currencies. History has shown all fiat currencies fail and fall back on the gold standard. Humans are too greedy to live under a gold standard and force their countries back into fiat, repeating their same fate all over again.

      • Rodster

        And you’re willing to trust that the Chinese will do a better job than the US with a world reserve currency? The same guys who out do the West when it comes to financial crookery?

        The problem with your argument is that a reset will reset the price of gold and probably much lower because gold is determined by the value of fiat. It also doesn’t account for the fact that central planning and central banking will destroy any gold backed currency. In order for govts to provide services and expand it uses it’s central banks as ATM machines.

        Eliminating fractional reserve banking won’t happen because of interest which helps pay future debt.

        The world has far greater issues than currency. Which is a polluted planet, diminishing resources (OIL and CLEAN WATER) and expanding population. Without clean water and the infrastructure we have created globally from Oil man doesn’t survive.

        So money in whatever form takes a backseat to resources and they are in short supply and it will only get worse. That will be mankind’s greatest challenge.

    • Kent Harris

      You are correct. 9/11 we were told rather directly by God Isaiah 9:10 -
      “The bricks have fallen down, but we will rebuild with dressed stone; the fig trees have been felled, but we will replace them with cedars.” The message was stated 3 times of a coming judgement by our leaders.
      Then you read (13) But the people have not returned to him who struck them, nor have they sought the Lord Almighty.
      (19) By the wrath of the Lord Almighty the land will be scorched and the people will be fuel for the fire.
      (14) So the Lord will cut off from Israel (US) both head and tail, both palm branch and reed in a single day.
      Reading all of Isaiah chapter 9 is recommended.

    • Ryco.

      what u are saying about”THERE ISN’T ENOUGH GOLD TO BACK ALL THE WORLD’S CURRENCIES. We tried it and and we got off the gold standard for that same reason.” its just stupid.

      the gold can’t be printed by any bank.(and thats a good thing) its the price of the gold that will rise equal to the demand.

      • Rodster

        We got off the gold standard because of debt levels to pay for Vietnam and the Great Society. We couldn’t pay for all that stuff locked into a gold standard.

        There isn’t enough gold to back all the economies when each Nation will set out to expand their economies and increase debt levels to massive proportions like the Chines have done. As Jim Rodgers said “even if you back a currency with gold, it’s doomed to failure because the politicians will find a way to cheat the system”.

        Why would they cheat the system? Because of debt and to pay for future debt, just like we decided to do when Nixon took us off the gold standard. A gold standard discourages all of that. Capisce?

        • Raymond Chow

          And we haven’t paid a thing since fiat currency is debt. We just continue circulating debt and adding more to it. When is it going to come to an end? I guess your answer is war when producers will no longer accept the debt.

      • Mondobeyondo

        There is NOT enough gold to back all the world’s currencies. If there were, every nation would use massive fiscal constraint. But every nation uses a fiat currency, where they “create” money out of thin air. Thus, no need for constraint.

        • Rodster

          As Ron Paul has stated MANY, MANY times over. A government that is on the gold standard is forced to live within it’s own means.

          Most if not all governments are doing just the opposite with central planning and central banking. In order to pay for all that debt you need FIAT currency. That is why a reserve currency that is backed by gold will suffer the same fate as the $USD.

    • Hammerstrike

      China have today what the United States had on December 7th 1941.

    • Texar1991

      There is PLENTY of gold in the world to back all currencies. Just not at $1300/ oz!!

  • Hillbilly

    The new “dark age” is upon us

    God Please help us

    • Pauly

      “Crinin’ won’t help you, prayin’ won’t do you no good..”

      • Hillbilly

        No crying here it’s called faith

        Psalm 23:4 look it up bud

        • jonno

          It’s called belief and if it wasn’t beaten into you as a child you may have learned to think critically rather than endlessly spewing contrived verses of some old jew who may or may not have lived a few thousand years ago. You are the perfect representation of what the who farce called religion was meant to embody, a mindless drone who can be programed to believe almost anything and kill or die on command. And you wonder why your nation is crumbling.

          • Hillbilly

            You know what the greatest trick the devil ever pulled off was? To convince guys like you he didn’t exist. Do you know why that is his greatest trick? Because if you do not believe in the devil than you won’t believe in god. And for the record no I don’t wonder why this once great nation is “crumbling” it is from bombastic simpletons like you who have no faith or moral compass to help you along your way. Good luck to you in the after life my friend.

          • jonno

            Attempting to frighten the unconvinced with threats of hell and brimfire is an old trick used by child raping religious zealots to control the population. Thankfully we are enlightened enough today to dismiss such childish behavior for what it truly is, the last gasp of a dying religion and in particular the Israel loving USA christian movement. There is no god, no devil, no heaven or hell so get on with living your life free from guilt and fear by being the best human you can. For further information in regards to this sad gathering of deluded, god seeking fools please see the Spanish Inquisition, the Salem witch trials, the two thousand year abuse of children and women by all manner of clergy and anything to do with American christian pastors.

          • Hillbilly

            I make no threats to you my friend. My faith is solid and surely your disbelief is as well I am in no way trying to change your mind I’m not in the custom of throwing pearls to swine . If you know of hell it is through your own searching, and if you don’t have faith in it than when you die you believe you are just gone . So I say again good luck

          • jimmybop

            You sound really stupid

          • Hillbilly

            How many names do you use on this site bud?

          • Daystrom2012

            I’d rather scare someone to heaven than love them to hell. And Jesus talked a great deal about hell and the need to avoid it so I guess he was a child rapist too?

  • Rene Girrard

    Why can’t the fed just type in another 2 or 3 trillion of electronic money to the credit of the U.S. government as needed? Obambam said he would use his pen and his phone. What’s to stop him from just calling Yellin and telling her to do this? Honestly I’d like to know because I’m not an economist. Thanks.

    • Hmmmm

      don’t you ever wonder why the US govt just doesn’t outlaw Bitcoin? you know, that digital currency created by a person/group who doesn’t really exist?

      • Mike Smithy

        Since we don’t really know much about the origins of Bitcoin, it’s possible that Bitcoin was actually created by the shadow banking industry with the consent of the U.S. Government. Perhaps it’s introduction is actually a beta test experiment pursuant to replacing Federal Reserve Notes when the time is right. It just might be a logical progression that fulfills bible prophecy and the mark of the beast as mentioned in Revelation. Perhaps the sheep are thinking that by using it they are getting back at the “Man”. However, this little scheme was actually concocted by the “Man”. I don’t know but it’s something to consider.

        • Nicnak

          I m the creator of the bitcoin… Maybe!

    • Mike Smithy

      Great question. I can only assume that TPTB will implode this thing at a time of their choosing. Riddle me this: If all countries hyper inflate their currencies at any equal rate, is it conceivable that the net effect is no inflation?

      • Jimbo

        Inflation is not rising prices. Inflation is too much money chasing too few goods and services and the symptom is rising prices.

        If a government prints to fund deficit spending, then the new money competes with existing money for goods and services and prices are driven up.

        If all governments do it at the same time, it will just happen more quickly.
        If you want to know where the inflation is from Abenomics, USA QE and UK QE, look no further than the stock markets and house prices.

        • garand555

          Exactly. And that is also why price controls NEVER work.

      • jason

        just to the savers

    • Jimbo

      Simple explanation.
      Gold has value because there is not much of it around.
      Sand is cheap because there is a lot of it around.
      The more there is of something, the less it is worth.
      There are a lot of dollars around but because many countries hold onto them for international trade, not that many are in circulation.
      If other countries decide to dump their dollars, suddenly Dollars will become like grains of sand.
      If the US prints lots of Dollars, the same thing will happen.
      The more there is of something, the less it is worth.

      • Angry Jesus

        “The more there is of something, the less it is worth.”
        Please explain how this theory applies itself to love. And yes, I’m still angry.

        • Malcolm Reynolds

          It applies to physical, not emotional.

          • Angry Jesus

            Really? Air, water and oil are physical substances that are in great supply, yet have tremendous worth & value. Valuation cannot be simplified into quantities of sand vs. gold. If there was as much gold as there was sand would men value each equally? If this theory only applies to the physical realm, then the more people there are the less each is worth. It’s no wonder why the money changers rule over the population. And yes, I’m still angry

          • Malcolm Reynolds

            “Air, water and oil are physical substances that are in great supply, yet have tremendous worth & value.”
            If I handed you a bag of air or water you’re going to give me something of “tremendous worth and value”? Didn’t think so.
            as plentiful as oil is, it is equaled in it’s demand. That’s why it’s valuable.
            cant have a conversation with irrational…

      • Mondobeyondo

        Bingo!
        Gold has value because it’s so valuable. Silver has value for the same reason, although there’s more silver around than gold.
        Federal Reserve Notes (the paper money in your wallet or purse) has no value in comparison. The only value it has is what the government says it has, and that is backed by faith in the dollar’s value as a world currency, and means of global transaction.

        • Jimbo

          In the old days, the only faith you needed in a currency was that the promise to back it with gold was true.

          Now there is no backing for any currency and we rely on pure faith only. Not just our own faith, but the faith of China, Japan and everyone else who holds dollars as well. If any large holder of dollars loses faith in the currency, it will collapse.

    • BenguluruHuduga

      Because that would be called a Ponzi scheme and rest of the world will not abide by the “faith ” of US. Fiat money requires trust , political stability, healthy financial system and healthy structure where trade takes place for investors to put their money in.

    • davidmpark

      Printing money to spend like unruly children and proudly usurping the rights and values of the American people is exactly what started this mess in the first place. Currency must have intrinsic value to be considered money. Leaders have no right to oppress their people – no matter what their major malfunctions are; they are our temporary employees and must be treated as such. We need domestic production and providence, not more cult fanaticism and foolishness.

    • Gay Veteran

      what happens when you increase the supply of something? it’s value goes down

  • FirstGarden

    Great article!

  • MeMadMax

    Only way to save ourselves is to stop spending. And that would mean the end of medicare/ss/super duper military/entitlements/etc etc etc

    But of course they won’t stop or slow the flow of cash because it would be bad for the next round of voting….

    And the train chugs on off the broken bridge…

    • garand555

      And the problem with that is that we’d have to do things like get rid of property taxes and let the banks crash, and we would still be screwed. How are all of those people who depend on SS going to pay their property taxes, mortgages, etc… without that SS income? That would lead to a lot of homeless people otherwise. No, the government has no choice. It must continue to spend, or things will come to a violent and sudden stop. We’re in a ponzi scheme, and the only way out is for it to collapse. More spending will cause its collapse and stopping spending will cause its collapse faster.

      • MeMadMax

        I have a favorite quote for the people that depend on the government for their retirement instead of doing the more responsible thing and build their own portfolio, it’s from the movie IceAge: “If you don’t prepare for the iceage then it’s Doom on you! Doom on you! Doom on you! Doom on you!”

        • garand555

          Perhaps it would have been easier for people to do so if the government hadn’t forced them to participate in SS. A lot of people’s portfolios got wiped out in 2000 and 2008 too. ZIRP isn’t helping much either.

          • hazeleyes

            You’re so right about SS and ZIRP!

        • TooLittleTooLate

          It wouldn’t be so bad except the government confiscated the SS payments and took the cash and spent it. Everyone has to pay into it… you should be able to get money out of it. Of course, it’s not the government’s job to be in the personal savings business and this once again shows government at work doing what it does. I pay the max into SS every year and, I know I’ll never see a dime of that.

          • hazeleyes

            …into the woods, off the grid!

      • hazeleyes

        Don’t you think that BECAUSE of continued gov’t spending things will come to a “violent and sudden stop?”
        Seriously?

        • garand555

          I think we are in a no win situation. I think that because of government spending, we’ll destroy the dollar, one way or another, be it a deflationary spiral or hyperinflation. The time to stop government spending to save ourselves has long since passed. It’s not a matter of getting back on track. It is a matter of do you want to collapse today, or do you want to collapse next year?

        • neal

          hazeleyes, it is because of govt spending that things will come to a violent and sudden stop. Half the population and much of the economy depends on it. So when the juice stops flowing (perhaps the EBT cards stop working) then the panic will be 100 times worse than the Rodney King riots and there will be even less relief than after Katrina. Instant social and economic chaos.

  • DMyers

    The China Question looms hugely over our future.

    We have all but handed them the gun to shoot us in the head. Surely, if there is ever a future looking back, this will appear to have been so stupid as to leave itself, a great mystery in the failure of a grand civilizations.

    • BoJangles

      We won’t even be read about in history. Look at the legacy: started from nuclear superpower to landing on the moon to MTV culture and “that’s all folks”. Next history chapter: How China and Israel took over…

  • BenguluruHuduga

    China dumped 40 billion in a month.

    See the YoY. The debt holdings has increased. Monthly variations yeah, it will be there.

  • davidmpark

    I dunno about China holding all the gold. They made a lot of commodity purchases with their own highly inflated currency in the last several months. Even if they actually have that gold, how long will they be able to hold onto it? Would they surrender the lands and resources, or pay for it with the gold paid for with highly inflated currency.

    And with the weather acting the way it is, projected crop yields, overburdened and over regulated industries from mining and agriculture all the way to the corner lemonade stand, the worldwide unrest, and reports of unrest in the US; I think the time to prepare may have past.

    • Raymond Chow

      So what if they issued debt currency to the amount of $120T? Just like any country in the world will do when the currency they issued goes back to them and cause hyperinflation. they file bankruptcy and debt are forgiven. They can then reset their currency to be backed with gold. Besides, with the $120T they issued they’ve bought a plenty of assets and real estate all over the world. The US on the other hand didn’t acquire a thing with their debt, it was given to the parasites to spend on Chinese products.

      • davidmpark

        We’d still have the same problem. Taking the resources out of the earth and producing a needed and desired commodity in sufficient quantities would work much better. Money is a medium of exchange; not the governing body. You still need a seller and buyer on both sides with the money in-between. Without the sustainable amounts of commodities there’d be too much money in-between.

        So, even if we raise the quantity of money to say that we have the funds would make the price go much higher due to lack of supply and high demand – inflated dollars would make this worse; especially if sellers can’t break even.

  • Mike Smithy

    A guy once asked Ernest Hemingway when he went broke. His response was “slowly at first and then suddenly”.

  • Bill

    “Like a thief in the night”, so well said.

  • Bill

    It is really getting annoying to have comments lost while signing in.

  • http://www.mycbn.com/ FaithDefender

    Buy gold and silver now, and try to convert substantial wealth to it, keeping just enough cash in the bank to cover month to month expenses, as necessary. Stocks are another very questionable asset. It’s not too late yet, but things are going to start moving quickly.

    • RealityBetraysUs

      Yes and what do you do when the price of food can not be bought with any amount of silver or gold?

      • 2guest2

        then we’re all screwed!

      • Raymond Chow

        When that happens your fiat currency is worthless as well. So what do we do? Barter. And gold and silver are better for barter than the paper.

      • RedC

        That’s why some are stocking up on food & water NOW, b/4 it gets too expensive.

      • http://www.mycbn.com/ FaithDefender

        It was meant as a short term solution. I guess then after that you will have to fight. I hope reality does not betray you.

  • Nicnak

    I m in thailand and I can tell you it s amazing how people are willing to be ripped off by their own government. After realizing it, they still belive their government will pay them when shinawat their first minister probably sent all stolen money to her brother TAKSIN who hide in Saudi.

    I don’t know what will happen here. Maybe another civil war Coming these next few days. All these problems come from the form of government which is not really Democratic. How can you let a government décidé what is good or not for you. Do you give the key of your house and car to your neighbors? When you leave your house, do you let the door open ?

    These people in our governments are unable to govern. All they want Is to amass maximum of money and get their retirement. They don’t care of their citizen. They are just interested to get their bonus and receive many “pot de vin”.

    • ChrisInFlorida

      Undoubtedly the civil unrest rampant around
      World right now, collapse of civilisation would not be far fetched.

  • Sophie Chang

    China sold that debt because its bank system, real estate market, and financial system are getting worst and worst, so it needs more capital.
    Chinese are more worried about their economy, because China’s dark hole is much bigger than USA.
    You will see it in the near future.

    • Chocolatini

      China will have its first lesson with capitalism: it’s not perfect.

  • FirstGarden

    Wild Edible #2 Common Dandelions

    Dandelions are found all over North America and Europe.
    Every part of the dandelion plant is edible. The young leaves are an excellent addition to a green salad. As the leaves get larger they become bitter, so it is preferable to collect only the small young leaves for salads, and the white leaves just below the surface which have not yet turned green. Dandelion leaves or “greens” can also be cooked like a vegetable, similar to spinach.

    Dandelion flowers have been used to make dandelion wine, although they can be consumed raw as well.

    The roots can be cooked and eaten as a vegetable; or roasted, ground and brewed for a healthy coffee-like beverage. Dandelion root is a tonic, so “dandelion coffee” can provide a mild stimulating effect without the caffeine.

    Nutritionists know the herb as one of the most nutrient-rich in the plant kingdom. It contains potassium, sodium, phosphorus and iron.

    The leaves are a richer source of vitamin A than carrots and contain some amounts of vitamins B, C and D.

    Herbalists value the herb mostly for its benefits for the urinary and glandular systems and as a liver and kidney tonic, due to its ability to enhance the efficiency of the body’s eliminative and detoxifying functions. It is a mild laxative and diuretic.

    It has traditionally been used as a tonic, blood purifier, for constipation, inflammatory skin conditions, joint pain, eczema and liver dysfunction—including liver conditions such as hepatitis and jaundice.

    As a tonic dandelion strengthens the kidneys and may be helpful for conditions such as water retention and high blood pressure. It does not deplete the body of potassium
    like many diuretics.

    • BoJangles

      Do you know how much pesticide is sprayed on the dandelion grounds? smh

      • FirstGarden

        Not off hand. I would avoid common lawns, schools & parks, and go for more remote areas where no one bothers to spray.

        I guess that would be a little tough in downtown New York. :-)

      • hazeleyes

        Not on my property!

      • Eatie Gourmet

        Not in my yard. And yes, I do eat them in the spring, just like Grandmom did. And yes, they really Are good, and good for you. (I make the Best mixed greens soup…) And yes, at least one neighbor Hates me because I don’t really care about keeping a dandelion-free yard. If I can eat it, it stays. Have made dandelion wine, just not recently. Good stuff.
        (How did we get onto dandelions, anyway?)

        • BoJangles

          lolol. Good stuff to know. We started on eating wild dandelions because we were discussing survival food. I’ve gotten into sprouting so at least I know how to “make” food in preparation for the upcoming events…

    • Mondobeyondo

      It’s a fact that during the Great Depression, many families cooked “dandelion soup”.

      • davidmpark

        We make a lovely dandelion wine for cooking vegetables.

        • hazeleyes

          Seems like a waste of wine!

          • davidmpark

            The taste is terrific!

      • FirstGarden

        You’re a daisy if you do.”
        - Doc Holiday

    • davidmpark

      This is the kind of comments I come here for! Thanks!

    • hazeleyes

      LOVE dandelions, learned from my grandmother.

    • Darin

      The “nutrients” in dandelions is overstated. Unless you have a massive crop at your feet, you will burn more energy picking them than you will gain from eating them.
      Learn to grow potatoes.

      • FirstGarden

        I just had bunches of them around me on Sunday. As an inclusivist, I would keep both in mind. :-)

  • J NL

    Great article, but I am puzzled by the consequenes for China when their largest export market(s) collapse. Why would they initiate this problem for themselves?

    • Mike Smithy

      The U.S. consumer is replaceable. Now that China has an emerging middle class, they will prop up their own manufacturing sector.

      • davidmpark

        If we’re replaceable, then so is China’s middle class (we’re all human). And their inflationary spending is much, much higher than ours.

        • Mike Smithy

          I never said it was a long term solution for China.

          • davidmpark

            True. :)

      • Mondobeyondo

        We’re all replaceable, except for those of us with such exceptional skills that they are invaluable, and there are very few of those people.

    • Jimbo

      Their largest customer buys with dollars and a dollar (or any Fiat note) is only an IOU. China is buying gold, land and businesses with dollars so that if the dollar hyperinflates, a proportion of their money will be safe as their assets increase in dollar value.

  • Priszilla

    Chinese families traditionallly hold gold. There are lots of jewellery shops in Hong Kong, and what they always offer are gold figurines. Gold dragons, gold phoenix, gold turtles, gold snakes, all those horoscope figures and mythical figures, and rings and bracelets, and necklaces.

    Now that mainland Chinese earn more money, they buy more gold for wedding gifts, gifts for kids’ 18th birthday, etc.
    The demand is huge.

    There is a limit on how much cash Chinese can take abroad. Sending money abroad via bank depends on getting approval by the state. Chinese currency is not traded freely around the world, like the Euro, Dollar or Peso.

    If Chinese travel abroad, they can’t buy gold abroad with their yuan, maybe just in Thailand or Hong Kong. Yes, Hong Kong is still abroad for many Chinese. Need a passport, a visa, a different currency, and a permission to leave the mainland.

    So, you better get a grip on government spending. And the biggest item is not welfare, but war.

    • Mike Smithy

      I once gave a pearl necklace to a Chinese lady.

  • T

    I keep reading about this hoard gold idea and have to say that is the wrong move. If you just look at the civil unrest stories unfolding it becomes pretty clear people resort to using food, gas, potable water, ammo, cigarettes, alcohol, candles and even lighters long before gold or silver makes it to the market place.

    Stop and think. Would you want something you couldn’t eat, drink, start a fire, fire at marauders or comfort yourself with if all else were to fail?

    • smallergovnow

      gold is a store of value and something you should have in addition to food, water, ammo, etc…

    • Malcolm Reynolds

      Gold isn’t for the collapse, it’s for the recovery.

      And as to, “Would you want something…” No, but then that’s why no prepper has ever recommended ignoring everything else except gold. That’s such a tired, old strawman.

      • davidmpark

        Very true. Best scenario is to have a trade group formed before a crisis. We’ve got one organized with our local Church community and some other folks.

        Church authorities from the European rebuilding efforts after WWII said the most traded and sought after items were cooking oil, salt, and seeds. Don’t know about the tobacco and booze situation.

    • BoJangles

      What’s your 9mm to Obama’s drone? Ammo is useless. Stick to ciggs and PMs

      • Mike Smithy

        What are you going to do when a guy with a 9mm sticks it in your face and takes your ciggs and PM’s?

        • BoJangles

          Hire him to be my bodyguard…..

  • DJohn1

    When, not if, the SHTF I suspect we will go back to making private ownership of precious metals illegal here. The government will repeat the 1930s. They will buy gold at $2,000 per ounce and then resell it at $3,500 an ounce to stabilize the currency.
    They will close down the markets and I suspect they will stay closed for at least 2 weeks while the government attempts to stabilize everything.
    Banks will go bankrupt on a wholesale basis and the result is people will not have the money to pay their mortgages. The end result will be they will lose their homes. The banks will not give them their money back for at least 6 months to a year. Direct deposit will not work because there is no place to deposit the checks. That will create a black hole of these crooks taking advantage of the situation to steal everything in sight. That means your home, your car, and anything else of value.
    The price of oil plunged in 1988-1989. Houston banks went under. All of which I described happened to people in Houston at that time.
    Banks are in league with the government and are not your friends. They are bureaucratic soul-mates.
    Panic will hit the streets when no one has a dime to spend because the banks have closed. That is what I foresee happening. I also see the same bureaucrats armed and ready to go as a secondary army because they have been armed by their government croonies.
    There are prisons sitting empty that these same bureaucrats have had built in the western part of the country. They are there to contain the rioters that will come from the panic button being hit.
    I foresee concentration camps right here in the USA.
    I hope that I am wrong. I hope that there is some way to form an equal balance of trade. That will mean we will be exporting goods to China and the rest of the world while our currency resets itself at a much lower international exchange from what it is today.
    In the meantime, this entire crew of government will reap what they have sown, and it is not going to be very nice.
    Look very closely at corporate interests when all this occurs. Because I think all of these scoundrels will have departed for more lucrative markets abroad.

  • stilu

    note the Biblical language, “like a thief in the night”. God is a better thief than the devil. These signs of chaos are also signs of the Owner returning to his world. We need to be ready in more than just finances, in our spiritual lives. Do you know Salvation (Yeshua)?

    • Guest

      That’s my hope. And I hope it’s soon.

  • Joe

    US to China: Our currency, your problem.
    China replied: Our gold, your problem.

  • Trailer Park Investor

    You can still get a 50 pound bag of rice at Sam’s club for about $17.00 and a 50 pound bag of beans will set you back about $36 And a pair of Black Berkey Water Filters will set you back about $107 (Prices are very subject to change)
    Looking better and better all the time aint it???
    One day soon that 50 pound bag of beans will cost you a one ounce gold piece and then two, then three until they will NOT be available at any price. (mark my word)

  • Kim

    I wonder how much gold the Vatican has. How long will they be able to keep it? Cash strapped nations are going to take that gold away from the Vatican by force. Watch. It will happen.

    As for the rest of this great article, when has any historic catastrophic collapse, whether economic or otherwise ever come as no surprise. All of them hit without warning but not without signs making up one comprehensive sign. Just like when mt St. Helens erupted. There were all sorts of signs, all pointing to a single event. And it blew, without warning.

    • Eric Quintero

      The Vatican along with the Royal Family are the main culprits. They have layers upon layers of political armor.

      I doubt any nation will rise against either of these primary power structures.

  • goldminer

    China is the largest gold producer in the world by a large margin. Altho US is third. Our production has been in decline for the last ten years or so. While China and Russia have increased production. Most of US gold is sold on the commodities markets. It does not go into fort Knox.
    Since 2006 China has been producing 3- 4 hundred metric tons per year. That is a lot of gold! China has been aggressively buying gold mines all over the world. Sending the gold back home.
    They are buying gold on the open market, and hoarding vast ammounts.
    When China tells the world how much gold they have. It will rock the financial markets.
    The dollar will not fair very well when China makes its move to dominate the world markets. The gold backed RMB will take its place.
    Your pile of paper could become worthless overnight.
    For you bible thumpers out there…. The black horseman is riding.
    He will bring devastation the financial world.

    • Mike Smithy

      Perhaps you can provide me some insight as to why the gold/silver miners operate the way they do. Considering that there is a lot of evidence that the PM markets are actively manipulated to the downside, it seems logical that it would be in the best interest for miners to not participate in the futures/contract markets. For example, if I were a miner, I would sell directly to the public at spot price plus a nice 10-15% surcharge/premium to cover my overhead. Here in Kansas, I can’t even hardly find gold and when I do, it goes for spot plus 25%.

      • goldminer

        Selling of gold the mines produce is complicated. Mines sell on future contracts that can be out to a year long. Because futures are most always higher than the spot price on any given day. They need a set price so they can plan development, exploration, ect.
        Mines do not produce pure gold that is sellable on the market. Mines produce large ingots called a Dore. besides gold they can contain other
        metals like silver, copper ect.
        The ingots are transported of site quickly so the mine does not have to worry about high security.
        The ingots go to a refinery where they are refined to 99.5 pure gold.
        Then its off the the secure vaults of a bank.
        There is a lot more to it. But in a nut shell that’s how it works.
        Mines don’t sell to the public because they are in the business of getting the metal out of the ground.
        Not transporting, refining, and storing gold. It also why there is a large surcharge on physical gold.
        The spot price is for paper gold and ETFs. Buying physical gold will always cost more than spot price.
        Hope this helps.

      • neal

        I wouldn’t pay spot plus 15% when I can buy as much as I want at 3-6% above spot from reputable online dealers. Kitco is currently selling 1oz gold maples at US29.95 over spot. That is under 3% above spot and Kitco isn’t the cheapest and buying bullion coins isn’t the best way if you want many ounces as close to spot.
        I’m not that rich so I buy fractionals like sovereigns and they cost me under 2 days pay.

    • davidmpark

      The mining is complicated, but so are the mining politics. That’s our big problem. China may have opened up their mining full throttle; EPA, BLA, etc. are choking the US out of the market. Even an ounce of placer gold has a full ton of politics, regulations, and restrictions behind it.

      Great posts, mate!

  • FirstGarden

    On today’s “news” (not exactly news).

    Published February 21, 2014
    Associated Press

    “Detroit’s emergency manager filed a plan Friday to restructure the
    city’s $18 BILLION debt
    [this is a *city*, not a state!]
    by making CUTS TO PENSIONS and creditors while
    offering a blueprint for emerging from the largest municipal bankruptcy
    in U.S. history.”

    For a very long time I’ve suspected this “haircut” coming, and in many ways, shapes & forms. (Remember Cypress plundering the personal savings of private citizens?)

    Only, when THESE haircuts are done, I think most middle class folks are gonna look like a bunch of bangers. Or was that skinheads?

    Pensions, 401k’s.. wherever substantial money is hanging out, is gonna vanish. Even F.D.I.C.-backed savings won’t be covered in full. Maybe pennies on the dollar. And what will the “dollar” be then?

    So, if you have such assets, please consider putting it in a safe place. Precious metals are iffy. If you don’t trust some institution to safeguard it for you, then physical possession of it would probably be the safest. Sometimes it’s the foxes guarding the henhouse. It can be confiscated, or stolen, so that’s why I’d call it “iffy”.

    Property may not be considered a good investment by some, because land values can drop dramatically.
    But if you own something in full, they can’t very well come with a steam shovel and physically scoop out the dirt, leaving a giant crater in the ground.

    And, if you’re in it for a long term investment, real estate values will eventually come back up. Eventually.
    Meanwhile, your prop tax should be low (based on lower value, over time.)

    Then, just avoid becoming an “enemy of the state”, cuz that’s when the g o v t writes its own rules, bigtime. And they could, under the pretexts of martial law. What we see, NOW, is so extremely arbitrary. What will they do to us when times are *really* down?

    I’m no financial adviser. But I’d sure hate to see you get hurt. So, it behooves us all to look at our best options, before it’s too late.

  • Joe Kleinkamp

    It’s understandable that China would pare its U.S. Treasury holdings by 3.6% back in December. The Fed announced back then that they would begin decreasing asset purchases. That news caused rates on the ten year to rise to around 3.3% as many funds and individual investors also sold treasuries. Through rhetoric Bernanke and his successor Yellen calmed the sellers and ten year rates came back down. They’re hoping that the steady $10 billion / month reduction in asset purchases will continue to appear a tidy systematic exit. The real day of reckoning will arrive when the purchases are near an end. Then bond holders will believe the Fed’s next move will be rate increases greatly increasing the cost of servicing the by then, $20 trillion plus national debt.

  • StUdio

    As the USD loses Its acceptance (petrodollar/ reserve currency) & confidence in It…. the USD will need to rely on just the global war operations, drug cartels, greedy dictators & oligarchs to trust & support the USD as a fair means for wealth transfer/trade— that status for the USD will not last for more than a mere 7 years until even the lawless will turn-their-backs on USA money

    • Mondobeyondo

      And THAT is why we have wars in far flung places like Iraq (lots of oil there) and Afghanistan (lots of poppy fields there – opium, which is where heroin comes from)

      Heroin usage is increasing in the U.S. Not so high profile as it was in the 1960′s and ’70s, but it’s becoming noticeable. I will reference a certain actor who [allegedly] died from a heroin overdose about 2 weeks ago.

  • Mondobeyondo

    In this game of international poker, China may hold the winning hand in this case.
    They own a considerable amount of our debt. And they can use that to their advantage.
    Notice, just yesterday, how China advised the U.S. not to hold talks with the Dalai Lama. The Chinese are starting to gain some bravado. “We have the great American superpower at our beck and call!”
    Not that we’re about to let China push us around, but they do have some leverage. It could be worse. They could start dumping their U.S. dollars at a whim.

  • Mondobeyondo

    I’ve heard rumors that there is very little to no gold left in Fort Knox. Has anyone ever done an inventory of the gold in Fort Knox? Has anyone ever done an inventory of the Federal Reserve? Who’s really running the show here?

    • Mike Smithy

      You are quite right. IMO, I don’t believe there is any gold in Fort Knox.

  • Mondobeyondo

    Our prosperity is a debt fueled prosperity.
    And that, right there, is the Rosetta stone you need to understand why we are in the financial Mess we are in.

    True prosperity involves no debt. You’d have a comfortable lifestyle – AND – you’d have nothing to owe to anyone. Everything you earn goes into your investment or bank account, and you don’t have to worry about Uncle Vinny with the baseball bat. All is good.

    Debt fueled prosperity is a false prosperity, because you have a DEBT which must eventually be PAID to whoever loaned you that debt. What happens if you can’t or won’t pay that debt? Try it sometime, and see what happens! You are not as “rich” as you think. Pay the amount you owe your creditors in full, and see how “rich” you are then. But the majority of people don’t understand that.

    They’ll understand it, soon enough. Sooner than they think.

  • USLibertarian

    Americans had better start learning Mandarin.

  • Sam

    My father tells me China poses no threat – the U.S. can simply tell the Chinese that they don’t owe them anymore and the U.S. got the military muscle that the Chinese don’t. As for the rest of the world playing the dollar game, he says the U.S might will ensure that the dollar continues its reign. It is useless to argue with him.

    • Eric Quintero

      Your father isnt aware of the Chinese developing orbital missile capabilities that can hyper accelerate projectiles beyond what our missile defenses can calculate.

      Both Russia and China are developing weapons that negate our missile defense systems. The Russians have their invisible nuclear subs and the Chinese are creating weapons systems that can accelerate a projectile up to Mach 10.

      We have boots on the ground, but they have nukes in the seas and (coming soon) in the skies.

      • John

        We have a little more than boots on the ground, and more than a few nukes in the seas and sky.

    • Jimbo

      That is great. So the USA force China to write off the debt.

      Can the USA also force China to send over huge quantities of goods every month for free?

      Can the USA force China to lend it even more money every month?

      Will anyone ever lend money to the USA again if they know that the USA will never pay it back?

    • fleabug

      The only problem with that is the president. I could actually see the president giving Alaska away to China to satisfy part of the debt. Remember the president is a musssslim who hates America and wants to punish/destroy this country and Israel.

    • neal

      If China is screwed over by the US they can turn around and put a trade embargo on America. For many electronic components China produces the vast majority of them and such an embargo would cripple any nation. Want to see riots in America? Tell the Sheeple that they will not have any more iphones as China makes them.
      Ditto most rare earth materials.

  • Jason7189

    Just as in the days of the Prophets, people putting faith in riches will only bring them sorrow in the end times. History always repeats itself and there’s nothing new under the Sun.

    Ezekiel 7:19 “They will throw their silver into the streets, and their gold will be treated as a thing unclean. Their silver and gold will not be able to deliver them in the day of the LORD’s wrath. It will not satisfy their hunger or fill their stomachs, for it has caused them to stumble into sin.”

    • fleabug

      So true. Maranatha

      • the p00dah

        I was reading your other posts btw, do you believe Obama is the Antichrist? I tell ya, he
        sure does fit the mold, there is no doubt about it. And part of me just cant ever imagine him leaving office, due to his pure narcissistic and insane nero-like mentality. However, i feel isnt the one. Mainly because he isnt fooling enough people anymore and he has been exposed as nothing but a joke by a hefty majority and it only gets worse for him.

        The anitchrist will be a lot like Christ. He will be charming, saying great things (before he starts blaspheming God of course), he will rule 3.5 yrs (same as Christ), and he will no doubt be divine, just as christ was, but with the power of unbridled evil (Satan’s power). He wont be ‘just a man’, you can count on that. He will want to be followed just like Christ was, and copy Christ and God in the same way (hence all the mark garbage, as God too will have a mark for his chosen). Isaiah 14:12 says it all about how he wishes to ‘be like the most high’. Daniel says he will ‘deny woman’, and we all know from countless evidence Obama is as gay as it gets. I mean, there is some definite
        traits there, but i just dont think its him. Christ even the elect will get fooled if possible. Well, this gutter rat really isnt fooling anyone
        anymore. I think he is a prelude and AN antichrist, but not THE antichrist.

        Since America is now a pit of total decadence, imperialism, theft, hypocrisy and whatever else you can think of, i believe it to be Daniel’s Fourth Beast (with the others as part of the NWO system–Britain, Russia and possibly Germany, but i could be wrong there). But i believe 100% the fourth is this country. The wh-re that he mentions, to me, represents the statue of liberty (which is a wh-re and nothing french masonic garbage, with the Illuminati torch). The ten kings WITHIN a kingdom, is the FEMA regions and the governors council thats been set up. The 3 plucked out horns (kings) will be those
        who defy it and dont wish to go along anymore, leaving 8 (7 plus the antichrist). The brass nails and iron teeth, to me, can only mean war material, machinery, bullet shells and this horrid rampage that America is going to go on, both domestically and abroad. John says the same stuff in Rev as well, for the most part, and just combines Daniels vision into one creature (out of the ocean, keep that in mind, i think
        that will be nuke from one of our sub fleets) and the one out of the earth is the antichrist, of course, which parrots Daniel (the lamb with horns that spoke like a dragon).

        I pray to God that he
        spares me of seeing it all , but that if i must experience it, that im taken care of. Its all you can do. There is nothing else that will save you, as im sure you already know though :-)

        • fleabug

          I don’t believe he is The AC, but according to 1st John he certainly has a spirit of AC as sure as the sky is blue. I really don’t think we will see The AC. I believe that the church will be raptured prior to his revealing. But then again anything is possible with the LORD. Maranatha

  • Libsare Ajoke

    some of us look forward to the crash. it will be a relief albeit a nasty relief

    • TooLittleTooLate

      I do not. “relief” isn’t how I’d describe it. If it unfolds in a global way, you will have millions that starve and untold numbers being killed. I’d not call that a “relief” and, it’s nothing I look forward to or hope for. Even for those of us who have moved to the country and raise as much food as possible, the possibility of such an event makes me shudder.

      The thought of how to deal with relatives showing up in need… friends showing up in need… neighbors…. how do you run a small farm without gas/diesel?

      No, I’m not in the “bring it on!!!” crowd.

      I still hold out hope that we could, at some point, have a “reset” or sorts. It will be painful but, I hope that it’s more of a disruption than a WWIII event.

      History isn’t on the side of this “hope” but, I’d rather hold on to this while doing as much as I can to get as ready as one can be.

      • garand555

        I’m not in the “bring it on” crowd. I’m in the “lets get it over with crowd.” Looking forward to it is just plain dumb. It will be terrifying and miserable for BILLIONS of people, and a lot of those people are going to die, one way or another. Wars will break out, diseases will run rampant and supply chains will break. Starvation will be a huge deal because food relies on modern (and retarded) supply chains. I do not look forward to that. But I know it is coming, and would rather be done with it, whether I survive or not.

        What I look forward to is trying to build a better society after it is done.

      • Eric Quintero

        Ive been keeping up with websites like this for a couple years now. Lately, Ive just had a very sick feeling in my stomach that things are going to end very badly.

        As evidence further mounts, Im starting to see that a mass culling is being planned and its going to be very difficult and painful stopping this force.

  • Libsare Ajoke

    I wonder what gary’s new name is? lolololol

  • fleabug

    Well the US has the majority of the gold and possession is 9/10′s. However, having a mussslim traitor as president definitely throws a wrench into everything.

    • Eric Quintero

      No, no, no, no, no.

      You’re missing the big picture!

      Obambam is JUST ANOTHER PUPPET.
      Stop looking at this dem v rep, red v blue, right v left, coke v pepsi dichotomy.

      The Puppet Master controls the same red strings and blue strings.

      “For we are opposed around the world by a monolithic and ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence–on infiltration instead of invasion, on subversion instead of elections, on intimidation instead of free choice, on guerrillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations.” -JFK

      • fleabug

        None taken. You are right, there are power behind Obama and those same powers would have been telling Mitt what to do as well. Its just that Obama really relishes this stuff and he is doing his best to set this country up for the big fall.

        • Eric Quintero

          Yeah no doubt about that. I have a strong feeling he’s in power because he’s willing to carry out the darkest deeds.

          His actions signify that we may be pretty close to the end here.

          Especially since he wrote his 13 tyrannical executive orders.

          13 is another revered number for the Illuminati.

          • fleabug

            Right again. With O in power only about 50% is upset. If Mitt was in power, 95% would be upset.

      • Drud

        Thank you, Eric. I say the much the same thing as often as possible and the JFK quote is one I have not heard before. Far too many people, even those who supposedly understand the grim circumstances we face as a nation and a world, still want to look at things through the left/right, R vs D lens. It is a difficult thing to drop because our rulers are so good at playing the game and have been doing it for so long. But it is absolutely essential that we drop the petty issues (political AND religious) and deal with the big one: the massive State machine that is suffocating us all.

  • RedC

    It’s time to stock up on food, water & bullets & medical supplies. US inflation is going to increase even more.

  • none

    Michael, There is a more important issue you missed.
    This U-Tube video called “Military dog ‘in Afghan Taliban custody’
    This is a very earth rattling event! The poor dog was captured and now in Taliban hands!
    I am surprised that the news media in this country has not demanded the U.N. intervene on his behave!

    • Eric Quintero

      Yeah, Michael, what the flood? Stop reporting on these nonsense issues about China. Get to the real news!! We want to hear about dogs!

  • Top Gun

    Like 1929, you will not see it coming…

    • leebo

      unlike 1929 we have internet

  • Quagmeyer

    We are in the collapse right now. Interest rates this low and all the QE mean we’re in an emergency. Get ready, the dam is bursting.

  • Bernie

    When the slow grind to the bottom finally bottoms out…what’s next? War of course.

  • Drdetroitdanchap

    Quite simply, the Obama Government is FAR more of a TERRORIST THREAT to me then any Chinese thing. DEfunding Obama might just SAVE FREEDOM.
    It is “your” DHS that is shooting at targets that look like YOUR FAMILY ……..

  • nohomehere

    its not the cash but the credit or credits . electronic credits and debits can and will be used of necessity to eliminate fluctuations due to unknown circumstances . a computer will have terrabites of capacity to weight everthing right down to if your rent payment outweights your video game purchase or if youve been buying to much beer lately , go figure. anyway , all this will be hawked as a way to have perfect peace of mind our lives will taken care or for us assuring complete safety from fears

  • Adam

    If we collapse, so does China. Michael is too dumb to understand this. China is not, however.

  • Walter

    This news is very intresting for me and i would like to see this situations whether the economic of China has increased with rapidly in each years and of course these country always create a new incentive and found another way how make theirs economic will be growth quickly and to pursue the others country who have a good economic like’s US. My expectation is my be in future there are something moment will be happen and of course it’s will causing all around the worlds especially for those country still in progress about economic but we didn’t aware that the evant will happen is too bad or good. These only one things that we can do it to changing everything we realize that our future will be get darkness is we must keep studying and learn more knowledge and we use it to make a new planning or strategic how to create a new worlds without darkness,destroy or badness and so on. I belive each of your should be take note and read more about this information and begun to changes into a good economic with wellness and fairness for everyone.

  • Karen

    Makes me think of an article I saw on Zero Hedge, one persons comment to the article stated… His employes made 180.000 to 250.000 a year they worked 60 to 70 hrs a week and lead misrable lives. They wanted all these fancy things makes me think of an old song by Wallon and Willie baby it’s time to get back to the basics of life. People have to keep up with the jones, no ones happy with what they have, they want more and more. I retired two years ago and I know of only two people that are not in debit even my daughters 25 year old friends are in debit up to their ears. People just don’t learn and it is going to cost them in the long run.

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