WAR ON GOLD

    Britain, the USA and the IMF are running scared, trying to keep confidence in their faltering Keynesian economic game. Britain is the latest to announce it is selling huge stockpiles of low-yielding gold to purchase higher-yielding paper money investments. It has announced the selling off of more than half of its gold reserves, 415 tonnes of their 715 tonnes reserve over the next 2 years. This follows the April 28, 1999 announcement by the IMF that it is ready to sell some gold, perhaps one-and-a-half-billion dollars’ worth. President Clinton proposed last March that the International Monetary Fund should sell a large portion of its gold reserves to finance debt relief for heavily-indebted countries.

    Why are Britain, the USA and the IMF selling their gold reserves? Because gold is bulky and not a profitable investment? Because there is too much of the shiny metal about? Has the world lost interest in gold?

    Rather, it is fear! Fear that the current fiat money game is about to collapse before their eyes. And out of desperation, they have declared war on honest money. And eventually nothing good will be held sacred, as "all is fair in love and war".

    It was the near collapse of Long-Term Capital Management (LTCM) last September that accelerated this fear. LTCM is a hedge fund specializing in large-scale speculation, and its near-collapse caused light to be shed upon the ugly workings of the money manipulation game and unfunded paper assets. LTCM was heavily exposed to Asian currency devaluations and gold loans. Had LTCM been allowed to collapse it would have sent shock waves throughout the economic house of cards and would have caused full- blown panic and economic chaos. Gold would have risen to the top of the economic food chain as the real store of value. Paper currency would have been exposed as the great fraud that it is, and the bubble-like economic system that likes to play money games would have been blown apart.

But why would they sell gold?

    It is like fixing the game. First, by dumping large amounts of gold the manipulators mesmerize the herd. Then, suddenly uninterested in gold, the manipulators turn to paper money assets. The herd unable to do anything but follow, stampeding alongside, trying to be first to get those now-precious paper money assets. A classic Wal-Mart-style Christmas-season run on Furbys.

    Second, by waging war on gold the money manipulators hope to bail out the other hedge funds that are at risk. What they are not telling us is the true health of the Keynesian economic game. And of the similar fate awaiting other hedge funds and similar investment schemes, unfunded paper assets, Federal Reserve Notes, and the stock market.

    The Keynesian economic game has aged and has been on its deathbed for a long time. But it is going to die hard. Rubin, Greenspan, Central Bankers and other economic power- houses have a vested interest in keeping the economic body alive. Adrenaline shots are repeatedly administered to the patient in the form of lower interest rates. The paper-asset lords are hoping you will shop until you drop to keep the game alive. You would think the economic patient is alive and well, but it is more like an electrified Frankenstein Monster that you see dancing around. About the only organs still alive in this animated body are the ferociously-cancerous loans that are racing throughout its system.

    And where is this propelling us? Because of outright denial of the problems associated with the Keynesian game, the economic élite are forcing this game into overtime. The patient who once had a good heart and brain is now so weakened beyond saving that most of the organs are now considered to be unfit even for transplant. I am left to wonder, will the decaying, artificially-animated matter cause the spread of disease to social bodies (riots) and political bodies (war)?

What this all mean to you?

    Because of the war being raged against gold, the dollar will remain strong going into the next depression and worldwide deflation. But the menace to the bubble that Rubin and Greenspan are trying to keep inflated is the faith of the American people. And the kingpins are gambling that they can keep us out of a deflationary spiral by enticing us to bail out the world through spending. As we go into deflation we will find ourselves way over our heads because of our spending sprees on remortgaged-upon-remortgaged loans and unable to service our debts because of the softening of our economy. There will be increased bankruptcies; people will become spooked and will curb their spending habits. Getting into debt will become scary, even though Greenspan keeps dropping rates. The economy will stall and the markets will tank. Realize that the only thing floating the economy right now is spending.

    Most of the rest of the world has already curbed its spending. Now, it is up the American consumer to do the spending for the whole world. The good faith and credit of the American people will begin to come into question. Strong currencies like the US dollar will begin to be seen for what they have become: backed by nothing real and unredeemable. Remember the economic collapse of Rome. The people ran into the streets to dump their debased Roman money for anything of value. Their faith in the currency was lost. People realized they really couldn't see the value of coins made mostly of tin, with a likeness of an important person stamped on them. Chaos ensued and war reigned happily thereafter.

    For us, the worst case scenario will spell the death of paper assets and bring civil unrest. Remember Indonesia? Yes, my prediction for the future is grim, much worse than many of you expect. I sincerely believe this is where we are heading. I have prepared for the worst; have you? I also look forward to the new beginning on the other side of the economic collapse. Do you have the means (Game Money on hand) to survive through the accelerating deflationary period? Do you have the means (gold and silver) to preserve your wealth through the following hyper-inflationary period? Do you have what it takes to make a good life for yourself and your friends after the economic reset button has been pushed and everything restarts? I hope you will view my comments as coming from a very prepared optimist. And that you will try to be open to the possibilities and get prepared, just in case.

    In this war the casualties will be enormous and widespread. The survivors will be in a whole new world of opportunity.