Posted by Cristopher Rodriguez on 10/20/10
Last updated 10/20/10

I promised several weeks ago before the halls of facebook to respond to my feature in ABC's "Nightline."  Anybody that has the fortunate grace (or perhaps the opposite) to know me knows how I love to go on and on about the economy to the point of the listener's eyes rolling.  Some people were surprised how I, a regular Joe, who graduated with a degree in Creative Writing, was asked to be featured on the illustrious "Nightline" program to discuss gold, of all things.  On the day of the interview, gold hit an all time high of $1272 an oz.  (The segment can be viewed here).   

The question that the show poses is...who the hell are these people that buy gold?  Since the airing of the show, gold has continued to reach higher heights.  Coincidentally that morning I had another reporter on NPR (National Proletariot Radio) publish a story with me based on the same question...who the hell are these people that buy gold?  

I will analyze why gold is destined to go much higher.  I also want to analyze the meaning of the skit, as brought to you by our friends from the mainstream media...  

If one is to break down the structure of the "Nightline" piece, it portrays the various investors of gold across the world: the traders amidst the animalistic chaos of the stock exchange trading pits, a member of a large trading firm, and, coincidentally, one of my bullion dealers, who featured a gold bar worth over 700 k!  Then there was me...   

Now, of course, the media loves to do two thing in telling a story.  They love conflict, to drive the story along and keep things interesting, and they love to marginalize.  I was their patsy.  At one point I could "feel" the pitch winding up, before he asked how I felt about people possibly viewing me as a hillbilly with a treasure chest of kreugerrands, pyramids of goya beans, and a couple of shotguns.   

Everything else I talked about: that the dollar has lost 98% of its value since 1913, that the Federal Reserve is a cartel that socializes losses onto the American people, and that back in 2008, when the banking system was in peril and faced widespread bankruptcy, that it was prudent to not keep ones' savings in the bankng system--was conveniently left on the floor of the editing room.  

But it got better.  As the little guy, I had the honor to have my edits interjected by none other than Ben "State" Stein.  This was rather amusing.  Although I've recently perceived him as sort of a redesigned twirp/talking head for the state media enterprise, especially after he tried to low blow Ron Paul with an accusation that he was an anti-semite, I found out after the show through a friend that Ben Stein used to be an economist for Richard Nixon.  A Tricky Dicky economist!  Imagine!  I must say I would have almost preferred the ignorance and all the bliss of not knowing that fact, because my whole image of him as being the quintessentially boring teacher in "Ferris Beuller's Day Off" had now been shattered.  Or, as he had jubilantly expressed in his unforgettable Red Eye commercial: "Wooowww."   

Now as talented at multi-tasking Ben State is, he should curb his expertise before he gets to the gates of economics.  (Perhaps he should stand amidst the Keynesian barbarians.  But allow my own bar bar tongue to muster its possible explanation as to why he is wrong)...  As many a caveman and shrill for the state would counter-argue against the fears of inflation (which has led to gold's surgence), he stated that he sees no inflation.  In fact, I heard this same bleep from another shrill on Fox News who was interviewing Jim Rogers a while ago on "Follow the Money."  (I have the utmost respect for Mr. Rogers by the way; he has been dealing with the hubris and stupidity of financial news reporters for a long while now, and I always enjoy how he deals and mocks these creatures).  Now the truth is this.   Aside from looking like Mt. Everest, this is a graph that shows the Federal Reserve's credit expansion into banks after the September 2008 crisis.  (This is sort of like a WMD in finance).  Everyone is talking about how the banks aren't lending--the so-called liquidity trap.  What do you think will happen when the banks start lending again?  when money goes into the real economy?  Do you think the price of living won't rise?  This has always been the case historically...  But since it is not immediately apparent, the neon light driven ADD financial newscasters can't see it.  Ben State probably sees it but won't admit it, since he's a Keynesian statist.  --And the majority of the middle class doesn't see it.  

Since the FED's policy is more money printing, which then goes into the stock market (in order to keep it from collapsing), is this not the definition of inflation?  See here.   When you think of dollars vs. the stocks, the dollar goes down (through excessive supply via the printing press), the stock market gets inflated.  (Now compare that to this chart, which measures the SP500 vs. commodities...  The chart indicates strong growth in the commodities area: the things that money is intended to buy!)  And as FED chairman Bernanke has recently indicated, more money printing to sustain the stock market will be their policy no matter the cost...  

No matter inflation?  Are you still too gullible to believe where we're heading?  Do you understand that the reason why the state hates gold so much is because it threatens their spending power?  When will people sell their shitty Citibank stocks?  Am I sitting in a bunker, reading off Hail Mary's, waiting for the end?  Or should I just blog about this, give the facts, declare common sense before the economically inane, and call it out before it happens: we stand on the precipice of a major meltdown, before the currency collapse.   

When will the masses have ears to hear?  when it comes from Terry Moran's mouth?  And why am I writing this story when I am supposed to be doing work for a lame desk job at a company that provides some of the worse news and journalism on TV?  The horror...  

But why do I know that gold is ultimately going up?  It's not rocket science.  It's common devalued cents.  When you have a printing press that is running nonstop, the dollar goes down, gold goes up.  It's that easy.  There isn't even any need to understand technical analysis--as many a talking head professional gets mired in, without a clue of the ultimate picture.  Ben Bernanke is not a mythical god; he's no Zeus; he cannot control the markets from Mt. Olympus.  If anything he is almost Kronos--soon to be unemployed...  

That damn river god!  The hubris!

Posted by Cristopher Rodriguez on 03/03/09

The Dollar-Get the Hell Out    

By Cristopher Rodriguez

While the news of the economy has been gloom and doom, and Obama's stimulus package has drawn its criticisms, the most easily overlooked-and yet vital-factor in this whole economic fiasco is the dollar itself.  Its role cannot be given enough credit (no pun intended, as too much credit is what got us into this mess).  But to examine the problem of the economy and blame it on a matter of greedy banksters is to merely look at the symptom-and not to examine the root cause of the disease, which is the weakness of the American dollar-thanks to the Federal Reserve System's careless policies.  The stock market continues to plunge, banks perform poorly, American confidence is shaken, but the worst and most terrifying economic reality is still yet to come-the plummet of the American dollar and the very real threat of hyperinflation as a consequence of that weakness.

The Slippery Slope and Denial

It all started when America snowballed itself into a reckless policy of creating debt out of thin air.  We could start with the FED's habit of loaning out immense amounts of money, which caused surges in stock purchases (like in the Great Depression and the dot com boom) or real estate (as in the 00's).  Since the dollar today does not have real worth-since it only requires a mere printing press to produce-the FED has a way of causing-and covering up-recessions.  After all, most recessions aren't popular and don't do well for officials looking to get reelected (but it is profitable to big business initially).   

But why are people so scared about a recession?  It takes a wise economist or a seasoned individual to accept recessions.  Recessions are merely a recovery from a macroeconomical sickness.   While most people would opt for not getting sick, sickness is a part of life-and it is a means to a healthier being.  When money is used unproductively in areas, causing a recession, the time comes for it to move to areas of more efficient productions.

Unfortunately, there are plenty of Americans who can't stomach a little recession.  After all, consumer creditism, easy American dreams, and no money down houses have fueled our culture of comfort.   And some of the loudest cries against the recession are the "experts" and financial advisers on the financial news, who are either incompetent or cheerleaders for special interests.  The effect is the same.  Therefore, nowadays it is rare to hear in the news of things such as the FED caused Great Depression by bolstering up stocks with free money.  It is rare to hear that FDR's policies, which Obama is echoing, lengthened the Great Depression.  It is rare to hear that deficits now matter more than ever.  Because this time the FED cannot print its way out of this mess, and we need a real change of a socioeconomic nature.  Yet, we continue down the same road of borrowing money to pay for crap we can't afford.

Where We Went Wrong (or just one place).

In 1971, rather than go on a badly needed diet as American dollars surged from the FED's printing press to support the Vietnam War and a spurt of socialist programs, America took itself off the gold standard.  In short America denied that it was bankrupt, due to unaffordable policies including the development of health care subsidies that cripple our nation today, since the public could no longer redeem gold from cheap dollars.  By not backing up paper money with actual gold reserves and simply printing more money, America postponed the consequences of going into the red.   After all, if paper money had any real value in itself, wouldn't all that matter for a nation's prosperity is if it had the fastest printing press?  Wouldn't our nation's wealth merely be measured by our printer's speed?  Otherwise, in order to continue to pay for the roaring 60's guns and butter programs, America would actually have had to hold a lot more gold in order to back up the world market's desire to get rid of the dollar, which was losing value.  Thanks to tricky Dicky, Nixon closed the gold window, to avert the reality of lack of gold reserves, which is the real money.  Onward hoe, the printing press has been out of control, pumping money into Asian markets, causing the 70's long recession, Regaenomics and 80's deflation to counteract bad policies, the dot com bubble, and the new housing market bubble.  Rather than face up to the idea that America has been broke for a long time now, we keep hiding behind a newer bubble. 

You Can't Avert Economic Reality-Just postpone it-and Post-Postpone it...

 What were the symptoms of American recklessness of the 60's?  Stagflation and rising oil prices.  While some erroneously or conveniently blamed turmoil in the Middle East, America was not feeling too well from the government's squandering of public money through inflation.   In contrast to the 70's unhappy economic times was the previous decades go-go 60's-just as the terrible hangover of the 30's was preceded by the roaring 20's bad government policies of Hoover and the FED.  Just as the 00's should have been a time of belt tightening in reaction to the 90's dot com bubble.  But it didn't happen.  It was never allowed to play out.  Instead, we had Alan Greenspan as our FED chairman, who blew a bubble the way Louis Armstrong blew his trumpet.  And thus the FED did not allow for the dot com malinvestments to be played out.  In other words, since the demand was displaced by the appearance of merely more paper money, which the FED printed out at even higher levels, the bubble replaced the dot com crash.  More inflation was created for Americans as they fell for the myth that real estate could never go wrong, and the FED chairman put the printing press on full speed.  The public only had to direct this new, "free" money to a housing market that produced way more houses than there was a basic demand.  And now we are in a bigger mess since the recession was not allowed to occur in the 90's.  It's better just to have the recession and get it over with.

The Slippery Slope and the Dollar and the Tidal Wave...

As Peter Schiff, a popular and often very cynical guest in financial news noted: America is not producing, it is not saving, and it was wasting its credit on needless consumer products.  All America is doing, like the latest FED's chairman, is crediting.  But it's losing its credit in more ways than one.  Unfortunately, according to Peter Schiff, pretty soon the world is going to catch on and realize that America is nothing more than a paper producer-instead of a producer of real goods.  At that point the world is going to ask if they really need America.  It is going to ask if they really need to produce products for a country that has been broke, who want to purchase homes for little or no interest in a get rich quick scheme at the rest of the world's expense.  Too long has the world been sucker to this ponzi scheme of the FED, since Nixon closed the gold window.  The Chinese, America's largest creditor, and a titanic producer, with over a billion people, are going to say enough.  Or, to borrow a phrase we liked to use, they will owe it to themselves.  Did they not toil in the sweatshops only for the credit borrowers to squander?  And has the FED mass produced enough green paper for which they now are realizing is in danger as it loses its purchasing power?  Perhaps it will be their turn to buy American, even though America has little or nothing to export other than used flat screen TV's and other forms of entertaining goods to distract attention from reality.  And when this happens, Ben Bernanke, Obama, Geithner, or any member of CNBC financial won't be able to stop the tidal wave of the real market demand-or repulsion of the dollar-for something, anything of value.  And then...we will see hyperinflation, rising energy and food bills, and rents.  And probably more government excuses, calls for regulation, and the need to do "something." 

What We Can Learn

Let's stop and be humble before the world and the market.  Economics does not have to be the hocus pocus jargon that the "experts" would perhaps like us to feel uncomfortable with.  We can realize what the dollar is and isn't.  It is a symbol of an inflated and undeserved wealth that we could not keep from borrowing and not producing.  It is not an unlimited I.O.U. for the rest of world.  Thus, as many of the wiser investors have recommended, we ought to get out of dollar backed assets immediately (before they do), whether it be in stocks, bonds, savings, etc., and invest elsewhere that isn't dollar orientated so we won't have to suffer from the postponed postponement of the economic recession that can't be bought off for much longer. 

Gold anyone?

Posted 04/02/09 mybug67 Huntington Beach, CA

Silver and Gold is the only way!!

Posted by Cristopher Rodriguez on 02/12/09
Last updated 03/03/09

FED 101-The Class They Never Taught You
By Cristopher Rodriguez
 

The Federal Reserve System, also known as the FED, is the central bank of the United States.  It controls money circulation in America by lending out money to other banks. Situated in Washington DC, it decides the monetary policy of the United States.

The FED works by setting an interest rate.  When the rate is low, banks can borrow money cheaply from the FED. When high, banks have more to pay back.  Through this system, the FED controls the economy. 

One may ask how such a simple thing as deciding an interest rate controls the economy.  When banks borrow from the FED at low rates, it can lend to borrowers at higher rates.  Doing so provides the bank a profit from the interest.  However, when FED rates are too low, too many bad loans are made in order to make this profit.  Such was the case when banks made too many loans to sub-prime borrowers during the housing bubble.  Through this manipulation of interest rates busts and booms are arbitrarily stimulated into the economy.

Despite this immense power, the FED is a private entity and is only subject to the government when appointing its seven board members by the president (also confirmed by the Senate).  It is not even subject to auditing, which raises the question of how much reserve actually is in the FED.  And yet, it can print as much money as it wants.  Its meetings are conducted sometimes secretly.  The rest of its members are of the banking industry and big business. But, not a single member of the Federal Reserve is elected popularly.

After Congress authorized a bailout for large banking institutions for over 700 billion dollars last October, the FED was responsible for printing that money out of thin air. Since August, the FED has printed over 1.3 trillion dollars that Congress has decided to use to bail out failing big business.  The Senate has just authorized almost another 800 billion to be printed. 

One of the largest recipients of the bailout was Citigroup, whose executive members conducted meetings with Timothy Geithner just prior to the bailout.  Geithner, who oversaw the Federal Reserve Bank of New York, is now the new Treasury Secretary under the Obama administration.  The interconnectedness between the Federal Reserve, big business, and the government has occurred since the FED's creation in 1913. JP Morgan, which had been the most powerful financial grouping in America, helped spur its creation then, and was also a large contributor to Woodrow Wilson's presidential campaign. Woodrow Wilson signed the Federal Reserve Act in 1913 which created the FED.

Though the claim of the FED, according to its purported purpose, is to "provide the nation with a safer, more flexible, and more stable monetary and financial system," many people have long fought against centralized banking, since the very beginnings of the United States' formation.  This included Thomas Jefferson, who had written, "[The] Bank of the United States... is one of the most deadly hostility existing, against the principles and form of our Constitution... An institution like this, penetrating by its branches every part of the Union..."

With the onslaught of the economic recession, concerns of the FED's role have been brought to the public's attention. Some criticisms pertain to the FED's policy of printing too much money, which causes inflation.  The former FED chairman, Alan Greenspan, testified before Congress on October 23rd to answer about his role in the housing market crash. Though he had denied much responsibility, Alan Greenspan once stated in an interview that, "[T]he Federal Reserve is an independent agency and that means basically that there is no other agency of the government that can overrule actions that we take..."  Such attitude shows that the FED's carte blanche power has little or no culpability to the public or the government in its control of money.

A prominent critic of the FED is congressional house member Ron Paul, a 2008 GOP presidential candidate. He believes in order to bring a proper economic balance to the economy that the FED ought to be completely abolished. According to him, the American people are not allowed to know who receives the FED's interest payments.  Other economic critics, such as economists belonging to the Austrian School of Economics, have argued that centralized banking is the root of all financial woe within a nation.

On the contrary, the current Chairman of the FED Ben Bernanke has reiterated the need for the FED's recent actions in order to avoid a financial meltdown, including the rescue of Bear Stern's last spring.

Today, the Federal Reserve interest is virtually 0%, which means banks can borrow unlimited money almost for free. With more money in circulation comes inflation, which is the latest of threats to the American economy. 

The Federal Reserve also has an exclusive monopoly in America over all money, known as legal tender. In other words, all transactions and payments must be made with a Federal Reserve Bank Note, commonly known as the American dollar.  Any payment without a dollar is illegal.  In other words, when the dollar goes down, there's no way for you to opt out to purchase with a different, stronger currency.

Currently, the United States owes 10 trillion plus dollars in unpaid loans and interest, while the dollar loses its premier stance in the world market. 

And the FED cannot deny its involvement with this.

Posted 04/18/09 robotsworld Long Island City, NY

Excellent! Posted it on my Facebook account/profile.