Retail Gold Sales Dropping Rapidly
COMMENT: Marty,
I just got back from Madrid. I looked around for a place that sold gold. I could not find one. This is indeed very curious.
Cheers
LW
REPLY: There is a growing trend to regulate gold coin sales to the public. In France, you cannot pay in cash and everything must be reported. The French were traveling to Brussels to buy or sell gold and then France complained about that. Gold coins sales from the bullion mints of Australian and the United States fell in April and May. The US mint reported a 27% drop in May following a 37% decline in April. This is all part of the process for the final decline. But these regulations are becoming a great concern for the future if governments try to stop gold sales to the public as a means of hiding money they want to get their hands on.
Brussels to Take Over Tax Collection In Europe – End of Democracy
Germany and France have called for the establishment of a central EU authority for the Eurozone to raise taxes independently. This plan is part of a package of proposals for far-reaching integration of the single currency zone – the federalization of Europe. Currently, only national governments may levy taxes. This is part of the step seen to save Europe and then consolidate the debts. This will become a war against the people to shake them down to save a failed system design from the outset. This is a significant change and the final straw in the Death of Democracy. If such a power is handed to Brussels, they see it as their way to shake-down the Greeks and the Greeks will see this as their government betraying their own people.
Transferring power to tax the people to Brussels is significant for those on the Commission are not required to follow any vote in the European Parliament and the Commission is appointed not elected. This will remove from taxation the people’s right to be represented at all. This is the ultimate power play – taxation without representation. Welcome the coming age of Economic Totalitarianism.
Breaking Gold
Gold broke to new recent lows in Euros with critical support forming at the 1010 level as deflation continues to crush the economy. The largest ETF fund use to be gold, but now with over $900 million in liquidations in May, the fund fell out of the top ten. So far so good. It appears we are preparing for the test of critical support outlined in the gold report issued last year.
Big Bang – It Is Everywhere
Chicago may become the next Detroit and we can see this Big Bang is unfolding everywhere around us at a very rapid pace. Moody’s Investor Services just cut Chicago’s bond rating from Baa2 to Ba1 while Standard & Poor’s lowered the City’s rating from A+ to A-. Fitch Ratings also cut Chicago’s ratings from A- to BBB+.
The cuts are clearly in response to the Illinois Supreme Court decision, which ruled unconstitutional the 2013 pension changes made for current workers in state plans. The state’s constitution says that pension benefits for current workers “shall not be diminished or impaired.”
Chicago is really screwed now and government workers will now consume the bulk of taxes in pension payments. Detroit collapsed when more than 50% of the current budget went to pay for pensions. The city has six pension plans which in 2013, were only 40% funded and had a combined unfunded liability of $30 billion.
This is the problem when government is run by politicians who are exempt from the law. Any corporate mogul would have been in prison for this is outright fraud. But Chicago is the model for most other cities and states as well as those even in Germany. Welcome to Big Bang – it is everywhere.
An Interesting Observation of the World We Live in – Circus & Government
COMMENT:
Hello Mr. Armstrong,
The contrast between your thinking and that of most governments and central banks with regard to the economy (the economic behaviour of real people with hearts and minds and hopes and fears) can be compared to two ways of considering animals.
Animal trainers use positive and negative reinforcements to get the animal to do tricks. The entire dynamic is one of the assertion of power and the assumption of superiority to the beast. Does the trainer really question the morality of his or her actions? The beast is treated well with plenty of food and security. They do not even see the metal bars that necessarily surround the animal at all times and the unnecessary intrusions of humans into its life: the animal’s very nature is being frustrated. “Always maintain control of the animal for the safety of the trainer” is the rule.
Governments and central banks poke and prod citizens to save or spend with positive and negative reinforcements, blinded by the arrogant assumption that people need metal bars and trainers to keep them safe. They are fully aware (or, at best, willfully blind) that their overbearing presence is frustrating the true desires of people to live in peace and prosperity. The economy, like the trained animal, is a fiction: it is pulled out of its natural habitat where its true nature is revealed to be involved in an incalculable array of relationships with other animals and with the environment. The safety of government is paramount.
I believe I am right in likening your thought to a contemporary nature reserve where animals are left in their natural habitats and observed. Most human intervention is negative, involving protecting the animals from poachers and the environment from degradation due to human activity. Animals are respected as animals, not the playthings of humans. “Let the animal thrive on its own terms” is the rule.
In your view, the economy is to be studied on its own terms and not “controlled”. Control is impossible as animal trainers who are attacked by their animal “friends” learn. Governments act to conform their policies to immutable trends for the good of people, not march into the lives of citizens, imposing an artificial circus ring with laws that will subdue and control the economy.
Circuses are waning in popularity and reserves are the better way. Thanks for your part in bringing this same trend to the field of economics.
JP
REPLY: That is a very good observation. I fully agree, for economics has become the bastard pretend science where we are the toy. The elites in power see us as mindless drones to manipulate for their enjoyment and power trips, all while claiming it is about helping the poor against the evil class struggle.
Brussels & the Trend Toward Authoritarianism
QUESTION:
Dear Mr Armstrong,
I hope your well.
Please could you elaborate on your post: “Consolidating all the debt in the EU”
Of course you were correct and if these brain dead idiots had listened to you they would not be in this mess but surely the EU exploding with a sovereign debt crisis is right on schedule with your big bang 2015.75?
Surely this is the 100% on the cards now regardless of what they do because as you said your computer takes out humans ability to evolve the wheels are surely in motion? Or am I wrong?
Or have you posted that because it shows that although they snubbed your idea in the 90’s now they will try to do what you said but this will be futile?
If you get a chance to answer as always i really appreciate it.
Regards M.S.S
ANSWER: Consolidating the debt to prevent a Greek default is now under consideration. Those at the top assumed they could ignore Greece, and if they exited, no big deal. This is typical of someone who is in power and views the world is at their command. Those in the markets have questioned what they are smoking in Brussels. Any trader with any experience knows a Greek Exit will start a contagion.
When the commission forming the Euro came to us originally back in 1997, that crew understood the point about consolidating the debt. They did not snub the idea. They merely responded that the people of Europe would not vote for that, as they would then see it as a bailout for Greece back in 1997. The commission told me they would adopt a two-phase approach:
- First – get the currency,
- Second – consolidate the debts
Naturally, creating the currency first provided the the power to create a bureaucracy, and then handle the debt afterwards. The problem occurred when these people left, as the new crew, who were now pure politicians, never heard of phase two. This has been my criticism.
The crisis facing Europe is simply that those in power have ZERO experience in the markets, and being lawyers, they assume the answer is to write a law to dictate the result. They fail to grasp that no law will ever alter human nature. It can suppress it for a while, even cause people to become addicted to government with the Roman model of free food and circuses, but the core traits will always remain intact.
Consequently, the governments are heading in the direction of authoritarianism for they see the world only through the rose-colored glasses of their own power. This now is the NEGATIVE interest rate concept and increased taxation trend which requires the elimination of physical money to sustain their power looking at only their fiefdom in isolation. They are more than likely going to attempt this unilaterally and then impose capital controls to try to prevent the flight of money from Europe. It will fail and we are headed into a chaotic period that may result in revolution.
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