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I find it interesting that your linked article makes no mention whatsoever of the gold holdings, and the love of gold, by the Chinese and the Indians.
Both those countries form 1/3rd of the worlds population, and both of those countries are presently buying gold on a big scale.

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Bubble.

Just like tulips....and Aussie house prices. Those that are in on the bubbles would strongly disagree. Just watch and see over the next few years.

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I've been following this thread with interest (pardon the...). One of the glaring conclusions is that gold (and a gun) is the go. Could you gold pundits comment, then, on this article:
What is wrong with gold?

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Life goes on~groceries need to be bought,cars repaired,fuel bought and then we begin all over again.

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SATURDAY, MARCH 20, 2010

THE Most Important Chart of the CENTURY

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In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.his is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

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Though it churns out a sweet looking chart, does it actually mean anything?

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Money is loaned into existence (Government sells a bond to the Central Bank, the Central Bank then creates money out of thin air - holding the government bond as collateral - an IOU backed by governments ability to tax citizens. Government then spends money into the general circulation).

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So, then, Breakfastburrito, if that is the case, countries such as China and Norway, who have no net Government debt and have huge reserves, therefore should also have no currency in circulation?

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The argument is not cogent.

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Who Creates Money?
Changes in the quantity of money may originate with actions of the Federal Reserve System (the central bank), depository institutions (principally commercial banks), or the public. The major control, however, rests with the central bank.

The actual process of money creation takes place primarily in banks.(1) As noted earlier, checkable liabilities of banks are money. These liabilities are customers'accounts. They increase when customers deposit currency and checks and when the proceeds of loans made by the banks are credited to borrowers' accounts.

In the absence of legal reserve requirements, banks can build up deposits by increasing loans and investments so long as they keep enough currency on hand to redeem whatever amounts the holders of deposits want to convert into currency. This unique attribute of the banking business was discovered many centuries ago.

It started with goldsmiths. As early bankers, they initially provided safekeeping services, making a profit from vault storage fees for gold and coins deposited with them. People would redeem their "deposit receipts" whenever they needed gold or coins to purchase something, and physically take the gold or coins to the seller who, in turn, would deposit them for safekeeping, often with the same banker. Everyone soon found that it was a lot easier simply to use the deposit receipts directly as a means of payment. These receipts, which became known as notes, were acceptable as money since whoever held them could go to the banker and exchange them for metallic money.

Then, bankers discovered that they could make loans merely by giving their promises to pay, or bank notes, to borrowers. In this way, banks began to create money. More notes could be issued than the gold and coin on hand because only a portion of the notes outstanding would be presented for payment at any one time. Enough metallic money had to be kept on hand, of course, to redeem whatever volume of notes was presented
for payment.

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Sure, the video suggests private banks create money, but that's not what you said

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So, the Reserve Bank of Australia is not a private bank. I don't know if that should make us feel better, or not.

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What happened when Allco and Babcock and Brown went broke, or Ansett for that matter?

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If I and thousands of other people my age have diligently paid off our mortgages and loans and owe nothing to anyone, does that mean money has been leaving the system? Or does the fact that we now are accumulators of cash in our bank accounts just make the cycle repeat. Thank goodness for government guarantees on savings accounts, in that case.

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You know, we all really need to go outside and play, and not sit hunched over our screens trying to make sense of this stuff. Go and look up at the stars, or watch the waves roll in.

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What happened when Allco and Babcock and Brown went broke, or Ansett for that matter?

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If I and thousands of other people my age ....owe nothing to anyone, does that mean money has been leaving the system

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Does the removing of debt out of the system have a geared effect in reverse?

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“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

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All I do is look around at the world, and I see the uber wealthy getting wealthier, and the average person getting poorer.

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There is only one politician in this country that I can see actually has any integrity, the good Senator X.

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Here's a list of some countries that weren't aligned with the BIS system: Iraq, Iran, Libya, North Korea & Syria, interesting isn't it.

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Yugoslavia was once a regional industrial power and economic success. From 1960 to 1980, annual gross domestic product (GDP) growth averaged 6.1 percent, medical care was free, literacy was 91 percent, and life expectancy was 72 years. But after a decade of Western economic ministrations and five years of disintegration, war, boycott, and embargo, the economy of Yugoslavia collapsed.

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Libya all about oil, or central banking?
By Ellen Brown

Several writers have noted the odd fact that the Libyan rebels took time out from their rebellion in March to create their own central bank - this before they even had a government. Robert Wenzel wrote in the Economic Policy Journal: I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising. This suggests we have a bit more than a rag tag bunch of rebels running around and that there are some pretty sophisticated influences.
Alex Newman wrote in the New American:
In a statement released last week, the rebels reported on the results of a meeting held on March 19. Among other things, the supposed rag-tag revolutionaries announced the "[d]esignation of the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and appointment of a Governor to the Central Bank of Libya, with a temporary headquarters in Benghazi."
Newman quoted CNBC senior editor John Carney, who asked, "Is this the first time a revolutionary group has created a central bank while it is still in the midst of fighting the entrenched political power? It certainly seems to indicate how extraordinarily powerful central bankers have become in our era."


Another anomaly involves the official justification for taking up arms against Libya. Supposedly it's about human rights violations, but the evidence is contradictory. According to an article on the Fox News website on February 28:
As the United Nations works feverishly to condemn Libyan leader Muammar al-Qaddafi for cracking down on protesters, the body's Human Rights Council is poised to adopt a report chock-full of praise for Libya's human rights record.


The review commends Libya for improving educational opportunities, for making human rights a "priority" and for bettering its "constitutional" framework. Several countries, including Iran, Venezuela, North Korea, and Saudi Arabia but also Canada, give Libya positive marks for the legal protections afforded to its citizens - who are now revolting against the regime and facing bloody reprisal.


Whatever might be said of Gaddafi's personal crimes, the Libyan people seem to be thriving. A delegation of medical professionals from Russia, Ukraine and Belarus wrote in an appeal to Russian President Dmitry Medvedev and Prime Minister Vladimir Putin that after becoming acquainted with Libyan life, it was their view that in few nations did people live in such comfort:
[Libyans] are entitled to free treatment, and their hospitals provide the best in the world of medical equipment. Education in Libya is free, capable young people have the opportunity to study abroad at government expense. When marrying, young couples receive 60,000 Libyan dinars (about 50,000 US dollars) of financial assistance. Non-interest state loans, and as practice shows, undated. Due to government subsidies the price of cars is much lower than in Europe, and they are affordable for every family. Gasoline and bread cost a penny, no taxes for those who are engaged in agriculture. The Libyan people are quiet and peaceful, are not inclined to drink, and are very religious.


They maintained that the international community had been misinformed about the struggle against the regime. "Tell us," they said, "who would not like such a regime?"


Even if that is just propaganda, there is no denying at least one very popular achievement of the Libyan government: it brought water to the desert by building the largest and most expensive irrigation project in history, the US$33 billion GMMR (Great Man-Made River) project. Even more than oil, water is crucial to life in Libya.


The GMMR provides 70% of the population with water for drinking and irrigation, pumping it from Libya's vast underground Nubian Sandstone Aquifer System in the south to populated coastal areas 4,000 kilometers to the north. The Libyan government has done at least some things right.


Another explanation for the assault on Libya is that it is "all about oil", but that theory too is problematic. As noted in the National Journal, the country produces only about 2% of the world's oil. Saudi Arabia alone has enough spare capacity to make up for any lost production if Libyan oil were to disappear from the market. And if it's all about oil, why the rush to set up a new central bank?


Another provocative bit of data circulating on the Net is a 2007 "Democracy Now" interview of US General Wesley Clark (Ret). In it he says that about 10 days after September 11, 2001, he was told by a general that the decision had been made to go to war with Iraq. Clark was surprised and asked why. "I don't know!" was the response. "I guess they don't know what else to do!" Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.


What do these seven countries have in common? In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements (BIS). That evidently puts them outside the long regulatory arm of the central bankers' central bank in Switzerland.


The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked. Kenneth Schortgen Jr, writing on Examiner.com, noted that "[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar."


According to a Russian article titled "Bombing of Libya - Punishment for Ghaddafi for His Attempt to Refuse US Dollar", Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar. Gaddafi suggested establishing a united African continent, with its 200 million people using this single currency.


During the past year, the idea was approved by many Arab countries and most African countries. The only opponents were the Republic of South Africa and the head of the League of Arab States. The initiative was viewed negatively by the USA and the European Union, with French President Nicolas Sarkozy calling Libya a threat to the financial security of mankind; but Gaddafi was not swayed and continued his push for the creation of a united Africa.


And that brings us back to the puzzle of the Libyan central bank. In an article posted on the Market Oracle, Eric Encina observed:
One seldom mentioned fact by western politicians and media pundits: the Central Bank of Libya is 100% State Owned ... Currently, the Libyan government creates its own money, the Libyan Dinar, through the facilities of its own central bank. Few can argue that Libya is a sovereign nation with its own great resources, able to sustain its own economic destiny. One major problem for globalist banking cartels is that in order to do business with Libya, they must go through the Libyan Central Bank and its national currency, a place where they have absolutely zero dominion or power-broking ability. Hence, taking down the Central Bank of Libya (CBL) may not appear in the speeches of Obama, Cameron and Sarkozy but this is certainly at the top of the globalist agenda for absorbing Libya into its hive of compliant nations.


Libya not only has oil. According to the International Monetary Fund (IMF), its central bank has nearly 144 tonnes of gold in its vaults. With that sort of asset base, who needs the BIS, the IMF and their rules?


All of which prompts a closer look at the BIS rules and their effect on local economies. An article on the BIS website states that central banks in the Central Bank Governance Network are supposed to have as their single or primary objective "to preserve price stability".


They are to be kept independent from government to make sure that political considerations don't interfere with this mandate. "Price stability" means maintaining a stable money supply, even if that means burdening the people with heavy foreign debts. Central banks are discouraged from increasing the money supply by printing money and using it for the benefit of the state, either directly or as loans.


In a 2002 article in Asia Times Online titled "The BIS vs national banks" Henry Liu maintained:
BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies. The BIS does to national banking systems what the IMF has done to national monetary regimes. National economies under financial globalization no longer serve national interests.


... FDI [foreign direct investment] denominated in foreign currencies, mostly dollars, has condemned many national economies into unbalanced development toward export, merely to make dollar-denominated interest payments to FDI, with little net benefit to the domestic economies.
He added, "Applying the State Theory of Money, any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation." The "state theory of money" refers to money created by governments rather than private banks.


The presumption of the rule against borrowing from the government's own central bank is that this will be inflationary, while borrowing existing money from foreign banks or the IMF will not. But all banks actually create the money they lend on their books, whether publicly owned or privately owned. Most new money today comes from bank loans. Borrowing it from the government's own central bank has the advantage that the loan is effectively interest-free. Eliminating interest has been shown to reduce the cost of public projects by an average of 50%.


And that appears to be how the Libyan system works. According to Wikipedia, the functions of the Central Bank of Libya include "issuing and regulating banknotes and coins in Libya" and "managing and issuing all state loans". Libya's wholly state-owned bank can and does issue the national currency and lend it for state purposes.


That would explain where Libya gets the money to provide free education and medical care, and to issue each young couple $50,000 in interest-free state loans. It would also explain where the country found the $33 billion to build the Great Man-Made River project. Libyans are worried that North Atlantic Treaty Organization-led air strikes are coming perilously close to this pipeline, threatening another humanitarian disaster.

So is this new war all about oil or all about banking? Maybe both - and water as well. With energy, water, and ample credit to develop the infrastructure to access them, a nation can be free of the grip of foreign creditors. And that may be the real threat of Libya: it could show the world what is possible.


Most countries don't have oil, but new technologies are being developed that could make non-oil-producing nations energy-independent, particularly if infrastructure costs are halved by borrowing from the nation's own publicly owned bank. Energy independence would free governments from the web of the international bankers, and of the need to shift production from domestic to foreign markets to service the loans.


If the Gaddafi government goes down, it will be interesting to watch whether the new central bank joins the BIS, whether the nationalized oil industry gets sold off to investors, and whether education and healthcare continue to be free.

Ellen Brown is an attorney and president of the Public Banking Institute, Public Banking Institute - Banking in the Public Interest. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are Web of Debt - How Banks And The Federal Reserve Are Bankrupting The Planet... and http://ellenbrown.com.

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MICHAEL BURLEIGH: This saga of moral squalor shames Britain
Last updated at 11:24 AM on 8th September 2011


They say that when supping with the Devil, you should bring a long spoon. The discovery of secret correspondence between the Labour government and the Gaddafi regime in the abandoned British ambassador’s residence in Tripoli reveals dining arrangements akin to snouts grubbing greedily together in one stinking trough.


The tone is occasionally risible. ‘Dear Muammar’, Blair begins a letter to Gaddafi on December 28, 2006, adding the Arabic New Year salutation ‘Eid mubarak’ with a toe-curling desperation to please. Maybe Gaddafi had already wished Tony ‘Happy Christmas’? I somehow doubt it.


In the following March, Blair was at it again, writing with gushing insincerity to ‘Engineer Saif’ – Gaddafi’s playboy son Saif al-Islam – thanking him for sending him a copy of his ‘interesting’ LSE thesis. That will be the plagiarised thesis Saif concocted with the help of Tony Blair’s favourite academics at the London School of Economics, an institution whose once-proud reputation has been dragged through the mud after it accepted Gaddafi’s tainted cash.


You have to pinch yourself to realise that these letters are not a spoof, but instead some of the more farcical elements in the grotesque dealings of a major western power with a flyblown desert dictatorship in North Africa whose leader was recently described by David Cameron as ‘a monster’.
We all knew that Blair had signed up to a sordid Faustian pact with Gaddafi, but to see the letters and embassy documents which have emerged in Tripoli, as well the information obtained from the office of his former Minister for Security Musa Kusa – who turned sides and fled here this spring – is to realise the true, appalling extent of the damage that has been done to Britain.


The manner in which the machinery of government and the security and intelligence forces were co-opted into highly dubious practices on Gaddafi’s behalf is staggering.


Who could have possibly believed that MI6 illegally provided the Libyan secret police with tailor-made questions to be asked of its Islamist detainees, in the sure knowledge that Gaddafi’s thugs habitually used torture?


How can we reconcile the fact that MI6 information and advice was used by Gaddafi to undermine the fundamentalist Libyan Islamic Fighting Group, whose leader Abdel Hakim Belhadj was held and tortured for six years in Libyan jails, with the fact that we now proclaim him a rebel hero who has just been appointed chief of security in newly liberated Tripoli?


Perhaps the most appalling indictment of the last government’s dealings with Gaddafi comes in the form of documents leaked from the office of the dictator’s former henchman Musa Kusa – a man who used torture without compunction and was known in Libya as The Fingernail-Puller-in Chief.
These appear to show that MI6 actually helped capture Belhadj and deliver him into Gaddafi’s hands – an episode hardly likely to lead to a cordial relations with the new regime

We have heard much in recent weeks of the antics of Britain’s Special Forces heroes, as they have brilliantly directed Nato airstrikes on Gaddafi’s forces. But the documents now unearthed in Tripoli reveal that the very same SAS was involved in training the feared Khamis Brigade, commanded by one of Gaddafi’s sons and thought to have been behind some of the worst atrocities in the conflict. Ninety of these killers were even brought to Britain for instruction, before returning home to Libya with Blair’s stamp of approval. Whether that quality assurance covered the Khamis Brigade’s inclination to line rebels against a wall and shoot them is a moot point.


Of course one cannot be naive. In global politics, Western powers such as Britain have to deal with monsters and Mad Dogs – as Ronald Reagan memorably called Gaddafi.


But what is so grotesque is quite how close to him Labour became, and how unscrupulously fawning it was in carrying out his wishes.
Everything about the Labour government’s relations with Libya seems sordid, whether under Blair or Gordon Brown. And how hypocritical these two men seem given the moralising posturing they indulged in on the international scene. Both were always ready to lecture any erring Third World government, not to speak of the Chinese and Russians, on human rights while at the same time helping Gaddafi with his murderous activities.
It was back in 2004 that Blair made his deal with Gaddafi, shaking hands with the dictator amidst the kitsch surroundings of his now burnt-out palace in Tripoli.


They made an odd couple, the right-on London lawyer whose wife was a noted human rights advocate, and the rancid old tyrant.

But Blair saw political capital in embracing the monster. The ostensible reason was that Gaddafi would abandon his WMD programme, although there is no evidence that he did so. The real reason was that Shell and BP would gain extensive drilling rights in an oil and gas-rich country much nearer to Europe than the Gulf. For his part Gaddafi was fed up with being an international pariah and saw the advantage of Western investment in industry, oil and tourism.


But the deal Blair made was shameless. He was to let bygones be bygones. Gaddafi’s past support for the IRA? Think nothing of it. The gunning down of WPC Yvonne Fletcher outside the Libyan Embassy in 1984? Let’s forget it.
Lockerbie? Now this is where things began to unravel – for Blair and Brown ignored the potential anger of both American and Lockerbie families by releasing the bomber Abdelbaset Al Megrahi after Gaddafi threatened ‘holy war’ if the mass killer died in his Scottish prison.


U.S. outrage over the deaths of 270 people – most of them American citizens – was construed merely as a ‘presentational risk’, the papers now show. How typical that a party which was so obsessed with image and PR should construe such a crime in such amoral terms.
Officials also noted in the papers that Megrahi’s release would lead to suspicions that ‘the UK is prepared to do anything to maintain its commercial and other ties with Libya’.


Quite how far Labour’s leaders were prepared to go to keep those oil and gas contracts is now depressingly apparent.
Instead of congratulating himself on bringing down Gaddafi, David Cameron should be initiating a public inquiry into this episode of moral squalor, while ensuring that nothing like it occurs in our relations with the new Libya – or any foreign power – ever again.

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Tony Blair's six secret visits to Col Gaddafi
Tony Blair’s close relationship to Colonel Muammar Gaddafi has come under fresh scrutiny after it emerged he had six private meetings with the dictator in the three years after he left Downing Street.

By Robert Mendick, Chief Reporter9:32PM BST 24 Sep 2011

Five of those meetings took place in a 14-month period before the release of Abdelbaset al-Megrahi, the Lockerbie bomber.

Mr Blair is coming under increasing pressure to make public details of all his meetings and discussions with Gaddafi. It follows the disclosure in The Sunday Telegraph last week that on at least two occasions Mr Blair flew to Tripoli on a private jet paid for by the Libyan regime.


Among the new meetings uncovered by this newspaper is a visit to Gaddafi in January 2009, when JP Morgan, the US investment bank which pays Mr Blair £2  million a year as a senior adviser, was trying to negotiate a deal between the Libyan Investment Authority (LIA) and a company run by the Russian oligarch Oleg Deripaska, a friend of Lord Mandelson. The multi-billion dollar deal, which later fell through, would have seen the LIA provide a loan to Rusal, the world’s largest aluminium producer.


JP Morgan’s involvement in the deal is revealed in an email sent to the LIA by the bank’s vice-chairman, Lord Renwick, in December 2008, in which he sought to “finalise the terms of the mandate concerning Rusal before Mr Blair’s visit to Tripoli”.


JP Morgan said Mr Blair had no knowledge of the Rusal proposal. A spokesman added: “JP Morgan declined to participate on such a transaction and thus Mr Blair was never involved, and it was never discussed with him.”


A spokesman for Mr Blair said: “Neither Tony Blair nor any of his staff raised any issue to do with a Russian aluminium company.” He added that the “bulk of the conversations” with Gaddafi had been about Africa and how Libya could develop infrastructure. While Gaddafi raised the issue of Megrahi’s release, Mr Blair always repeated that “it was a matter for the Scottish government”, the spokesman added.


Global Witness, an anti-corruption campaign group which obtained the Rusal email, said Mr Blair’s links to the LIA raised potential conflicts of interest between his roles as a Middle East peace envoy, fund-raiser in Africa and business adviser. Robert Palmer, a spokesman, said: “It’s hard to see how being Middle East peace envoy squares with doing business with a tyrant.”


Mr Blair's spokesman said: "Tony Blair has never had any role, either formal or informal, paid or unpaid, with the Libyan Investment Authority or the Government of Libya and he has not and has never had any commercial, business or advisory relationship with any Libyan company or entity."


This newspaper can also disclose that the Foreign Office granted a visa for Gaddafi’s daughter Hana to come to Britain last year, even though she was supposedly killed in a US bombing raid in 1986. Evidence has also emerged of the full extent of Britain’s deals with Khamis Gaddafi, the tyrant’s feared son, whose Khamis brigade has been accused of committing atrocities.

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