Can Money Just be Devalued Creating Deflation as a Solution?
QUESTION: Mr. Armstrong; Is it possible that governments devalue currencies to confiscate capital like taxes? It really does not seem likely that these people have any intention of moving into hyperinflation. They are increasing money supply but at a slower rate than the destructive deflation. It clearly appears governments are in a confiscation mode and it looks like they can just half the value of your money rather than inflate to cover costs. Has anyone taken that approach in history before?
Thank you ever so much. I really enjoyed the movie. It was a mind shocking experience. It is one of those films you have to see twice. The question and answer session was tremendous. The whole audience seemed to want to know where to put their money now.
GK
ANSWER: Yes, Amsterdam was awesome. Putting me on the nightly news I was told was very impressive. It just illustrated how on point this topic truly is. The more people who see this film the harder it will be for them to pull the wool-over everyone’s eyes.
The answer to your question concerning devaluation is ABSOLUTELY. There is more than just one way to skin a cat as they say. Roosevelt confiscated gold and then devalued the dollar to prevent people from profiting from the rise in gold from $20 to $35. In fact, the last time the confiscation approach took place aside from Roosevelt was immediately following World War II.
The Soviet government first issued a ruble after the revolution in 1917 (see above). They too went through hyperinflation and in 1922 they issued the second ruble that replaced the 1917 ruble at 10,000 to one. Why would people buy bonds of a nation that was anti-capitalist? At the same time as the German hyperinflation also caused by a communist revolution, we see the mirror hyperinflation within Russia. The next year they issued the third ruble valued at 100 to one of the 1922 ruble. The fourth ruble was issued in 1924 and this was a gold ruble valued now at 50,000 old rubles.
In 1947, Russia changed course from hyperinflation to confiscation. This new approach was implemented with a confiscatory redenomination of the currency, which was decreed on December 14, 1947. The purpose was to reduce the amount of money in circulation. The main purpose of this change was to prevent peasants who had accumulated cash by selling food at wartime prices from using this to buy consumer goods as the postwar recovery took hold. Even under communism, raw commodities could not be fully controlled especially during periods of war.
Old rubles were revalued at one tenth of their face value. This mainly affected paper money in the hands of private individuals. Amounts of 3,000 rubles or less in individual bank accounts were not revalued, while salaries remained the same. This is very similar to IMF proposals that accounts under €100,000 would not be confiscated in their original proposed bail-in. Now, they seem to have moved toward an across the board confiscation.
The proposal at the G20 is to take cash from accounts to cover losses in banks. This is the very same proposal imposed by the Communists in Russia – just have to get those capitalists. This is why I have been warning we are in the last death throes of Socialism. Those at the helm will make the very same decisions as those in Communism. Nothing ever changes. The same solution is always reached independently by those in power. Nobody ever asks – has anyone tried this before? Did it work?
Japan Downgraded By Moodys
Moody’s has cut Japan’s credit rating by one notch over rising doubts about its ability to reduce debt levels. Japan has the worst debt to GDP among the major nations. It has been able to weather that given the fact that most of its debt is a real Ponzi Scheme being held domestically. We have to get real here. NOBODYintends to ever reduce their debt levels. Let’s just downgrade all sovereign debt – it is a huge joke of everyone.
The decision by the ratings agency has sent the yen to a seven-year low against the US dollar. This is part of the rise we see in the dollar to all time record highs as it is flanked by far worse debt to GDP levels in Europe and Japan. This will make the dollar stronger as time moves on.
The Moodys downgrade comes less than a two weeks before a snap general election called by prime minister Shinzo Abe, whose economic stimulus policies and a decision to delay a second sales tax rise will be among the key campaign issues. Career politicians are unable to solve anything anywhere because they have been the main contributors to the financial crisis appearing on the horizon.
So buckle-up. We are on the ride of our lives and it does not appear that anyone is driving. This is a runaway train soon to leave the tracks.
Gold
ANSWER: Yes this is the pop. We got the Panic Down on Friday, the Monday low, we need a closing above 1208 to suggest pressing higher. Welcome to the new age of rising volatility. This now cleans out the shorts. Resistance stands at 1217. A close above that should signal some further upside.
USA – Is It time to turn off the lights?
We have a very serious problem with taxation. Only the United States and Japan regards its citizens as state property. Taxes are normally owed based upon the concept that you are paying your “fair share” predicated on use. But the United States views it simply owns anyone born in the United States or overseas if they had even one American parent. This is in reality slavery that no state should own its citizens as property.
The Washington Post has reported the plight of the Mayor of London Boris Johnson’s remains in a major dispute with the U.S. Internal Revenue Service. It would be very nice to see everyone come together and challenge this to the Supreme Court for those are the pro-government judges that ruled all Americans belong to the state and that paying your “fair share” has nothing to do with taxes – just hand over whatever you have.
The mayor’s dispute with the US tax-collectors was brought to light when he traveled to the United States and did a blitz of interviews with the American news media. He explained that the U.S. government was forcing him to pay the capital gains tax on the sale of his Islington home. “Can you believe it?” When asked by Rehm if he intended to pay the bill, he said that he would not. “I think it’s absolutely outrageous.”
Boris Johnson was born in the USA but returned to England with his parents at the age of 5. He has never lived in America, but that means nothing to the IRS. They are hunting everyone everywhere. They have been sending letters to people in Canada who they figured out had one American parent but have never lived in the USA. I previous wrote about a couple in Switzerland where the wife was American living there with her Swiss husband for 20 years. When their 14 year-old son was ready to open his first bank account, he was told no way because he was America. Even foreigners married to Americans are being compelled under FATCA to disclose they are married to an American and the risk of being denied the right to have a bank account. I use to have American Express cards in USA, Britain, and Japan. That way, I paid my local bills in the local currency. Today, no credit card can be issued to an American outside the USA.
Americans are being prejudiced everywhere. What is most revealing, Obamacare notes the distinction between living in America and overseas. Ex-pats are exempt from Obamacare for they are assumed to have healthcare where they are. Otherwise, they would have to buy health insurance in America that would never cover them outside the country.
Congress NEVER directed that Americans pay taxes worldwide simply because they were born in the USA or had one American parent. This whole scheme was crafted by the Supreme Court who merely ruled that Congress did not exclude foreign income, so it must be included. The way this is being applied is outrageous. Americans are unable to do business outside the USA with local accounts because no bank will deal with Americans thanks to FATCA. These idiots cannot grasp that this is reversing the US economy into isolationism and is paving the road for China to take the lead. It is time to turn off the lights.This is What Happens When You Call The Cops
There is a new music video that is going viral entitled This is What Happens When You Call The Cops. It is a shocking video putting together numerous clips of Police Brutality that is very disturbing to say the least. It has captured the stark transformation of the police into a militaristic force far removed from the old days.
The days of Norman Rockwell are gone and this is what I fear is unfolding as the Domestic War Cycle turns up. We are more likely than not going to see widespread violence targeted against the police after 2015.75. Once the economy turns down, the frustration against government will rise up like the 1960s. This time, it will not just be a black issue. The militarization of the police has no boundary of race, creed, or gender.
This video captures the resentment that is bubbling beneath the surface, Anyone who thinks this is just a race issue better open their eyes. The abuse has no limits. The civil asset forfeiture laws are unleashing criminal activity sanctioned by the courts against the people no different from Rome when its armies sacked their own cities to get paid. Indeed, perhaps the greatest lesson of history is that we never learn anything from it. Amazing.