August 17, 2012
By Kevin Michael Grace
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Gold was up (at press time) $1.70 (+0.1%) for the week to $1,616.70, and silver was up $0.29 (+1%) to $28.23. According to Business Recorder August 16, “Gold prices firmed on Thursday on speculation that central banks may be set to launch more bullion-friendly stimulus measures to boost growth, though mixed US data that dampened expectations for imminent Federal Reserve action kept prices in a range [just over $1,600].”
According to economists surveyed by Reuters, the odds of QE3 are “about three in five.” Ambrose Evans-Pritchard writes, “Markets are pricing in an 80% chance of yet more printing by the US Federal Reserve in September or soon after.” And “China is sufficiently alarmed by the flint hardness of its ‘soft-landing’ to talk up trillions of fresh stimulus. The European Central Bank is preparing to print ‘whatever it takes’ to save Spain and Italy.” Meanwhile, “Five years on, the Great Recession is turning into a life sentence.”
What about the US “recovery” that Vice President Joe Biden is raving on about? (Watch this video, and you will see that the word “raving” is used advisedly.) According to Gary Shilling, “We’ve had three consecutive months of declines in retail sales. That’s happened 29 times since they started collecting the data in 1947, and in 27 of the 29 we were either in a recession or within three months of it.” The Daily Ticker reports, “Shilling expects this recession will last about a year and shave about 3.5% from growth from peak to trough.”
As noted in this space a year ago, Bernancus Magnus will be forced to resort to QE3 because, based on his own Bernanke Doctrine, that’s all he can do. Actually, there is one final trick left up his sleeve, “dollar depreciation by stealth: wholesale purchases of foreign currencies.” Evans-Pritchard concludes, ominously, “Much of [our] debt will have to be written off. Whether this is done by inflation (1945-1952) or default (1930-1934) will be the great political battle of this decade. Pick your side. Pick your history.”
Do you hear our politicians speaking about this? Not a bit of it. In the United States, the presidential election is once again solely a contest of personalities: Barack Obama, who represents New America (yay!) versus Mitt Romney, who represents Old America (boo!).
Biden, who represents Crazy America, thunders that Romney is “gonna let the big banks again write their own rules. Unchain Wall Street!” According to Jean-Claude Groulx in the American Thinker, Wall Street has been remarkably unfettered under Biden’s boss. He notes that the Government Accountability Institute has reported that the George W Bush administration “obtained over 1,300 corporate fraud convictions, including those of over 130 corporate vice presidents and over 200 CEOs and corporate presidents,” and the Bill Clinton administration “prosecuted over 1,800 S&L (savings and loans) executives, senior officials, and directors, and over 1,000 of them were sent to jail.” The Obama administration, in contrast, “has not brought criminal charges against a single major Wall Street executive.”
Certainly not Jon Corzine. The New York Times reports August 15, “A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.” Why so? “Chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear.” Hey presto! Now you see it; now you don’t.
Of course that decision has nothing to do with the following: “Corzine is not only a former Senator (and Governor of New Jersey) but is also a former CEO of Goldman Sachs (where he employed Gary Gensler, current Chairman of the Commodity Futures Trading Commission), is ascloseasthis to the Democratic Party and is the man President Obama called ‘our Wall Street guy.’” And he’s still Obama’s guy… Corzine has raised at least $500,000 for [the Obama-Biden] re-election campaign, funds that President Hope and Change does not regard as at all tainted.”
Don’t expect Romney to make anything of this. If he did, he would have to answer questions about his VP pick, Paul Ryan, who trousered a tidy sum based on insider information he garnered as a congressman during the 2008 meltdown.
Of all the binary divisions in life—cats vs dogs, Coke vs Pepsi, Yankees vs Red Sox, Microsoft vs Apple, etc—Democrat vs Republican (or insert national variation here) is the least important. The politicians of all parties belong primarily to the Government Party. Their loyalties are not to classes, factions, regions or (ha! ha!) the commonweal; their only loyalty is to themselves—and the bankers like Jon Corzine who fund their hegemony. To speak of the calamities that threaten their nations would suggest that they have been consistently and woefully wrong in their policies, and they can’t have that. So pick your poison, inflation or default. Either is excellent news for gold.
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