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Tuesday, 23 October 2012

Global economics made simple

Gold, and gold alone, is money. The news that the US had confiscated all the gold from a refiner under the 'proceeds of crime' and sent the $1.4 billion company into liquidation had the effect of lowering the gold price over the weekend.

Why? Well simply put the United States government now has more gold to underwrite its printing press...

UNITED STATES OF AMERICA

The US is bankrupt, the US has been bankrupt for the past 40 years so the aim for the United States is to lessen the debt through inflation. The United States has 8,000 tonnes of gold (although whether this is actually held remains a mystery). In 1934 the United States arbitrarily re-valued gold from $20 per ounce to $35 per ounce, so why can it not simply repeat this today?

It can and it will, but there are some other people who might not like this.

The outstanding liabilities of the United States stand at around $74 trillion, simple mathematics therefore pegs the value of gold at $9,250 per gram.

Libya's gold was stolen last year, as was Egypt's - they will get it back when some 174 conditions are met... in other words never.

The United States is building its gold reserves.

CHINA

China (and other nations such as Brazil) have pegged the value of its currency to the US dollar and like many other nations it intervenes in the market to maintain the exchange rate that it wishes to have. The exchange rates are kept low so as to maintain competitive prices on the exports which mainly head to the US

So as the US prints more money and floods the market, China has to do the same the difference is that China is stockpiling more and more gold.

Currently therefore the US is not experiencing the hyper inflationary effects of its money printing because nations such as China and Brazil are dealing with it instead.

China is of course building its gold reserves, quietly away from publicity but estimates put the increase at over 1,000 tons this year.

EUROPEAN UNION

There are massive gold reserves in the European nations, Portugal, Italy, Germany etc. So whilst there is money printing continuing in Europe, the combined reserves of the European Union exceed those of the United States.

It is this gold which is underwriting all Germany's loans which cannot be repaid by the southern European nations... Germany is building its gold reserves.

UNITED KINGDOM

On the other hand the United Kingdom has sold most of its gold reserves and yet is continuing the same program of money printing, with an ever increasing holding of US dollars (see above the very US dollars which the US government is desperately trying to de-value).

The UK has a paltry 310 tonnes of gold. The UK has some £12 trillion outstanding liabilities setting the price of gold at approximately £39,000 per gram.

Saturday, 20 October 2012

Austerity, they don't even know the meaning of the word

Austerity is the current buzz-word in economic and government circles but like all words it has been warped and twisted from its true meaning and used against the people, for austerity is the trait of self-denial.

You will notice the emphasis on the word self, and it is this that Western Governments have excluded from their re-interpretation, when they say austerity it is not an idea that they place on themselves but on others. That is not austerity that is repression.

In essence for a government to truly invoke an 'austerity program' would mean to cut back on the luxuries they afford themselves; but they have not... budgets and staff levels continue to grow, consultants and fact finding missions continue unabated.

No where is this more true than in the European Union, which continues to expand unabated whilst honest, hard-working people are told to give up more of their wealth to fund the ever increasing bureaucracy which is almost to a point where it is as large as the bureaucracy in Jersey.

Next time someone tells you we need more Austerity, agree with them, we do, we need a government that is going to commit to self-denial so that taxes can be lowered and the economy can recover from the damage caused by the parasitic bureaucracies of this world.

What we do not need to is government-imposed impoverishment of good, hard working people.


Tuesday, 9 October 2012

A cheap and easy way to hedge against the coming inflation

If you cannot afford to buy and hold gold and silver then your attention should turn to the next most commonly used metal currency... copper.

For a few years now I have been looking through my loose change for pennies and tuppences which date from before 1992 and 1998/1999. Why?

Well the simple reason is that the copper value of a penny today is 1.5p the copper value of a two pence piece is 3p, with hyper-inflation still in its early stages the opportunity is there now for you to collect all these coins and you will barely notice.

Think that this is just stupidity... well those silver $1 coins are now worth $34 and the $20 dollar gold coins are now worth $1,750.

Our advantage is that whilst it is against the law for UK citizens to melt down UK pennies there is no such prohibition on melting down the coins of Jersey & Guernsey and the trade in these coins can continue unabated.

Any British bronze coin from 1806 onwards is going to contain at least 95% copper and the early ones are pure copper, the easy way to test if your coin is copper or iron coated in copper is with a magnet. Further information including on foreign coins is available here.

Golden Jackass: The End is nigh for the US dollar


Sales of Gold and Silver bullion are increasing exponentially in store these days but why?

Ever wondered what is happening in the Middle East? Are the battle lines being drawn, just who is on our (and we in the UK are the US's poodle puppy) side? Want to understand what the BBC is not telling us?

If you have been following the remarkably accurate predictions of Jim Willie, then you will note that all he predicted is now coming to pass...

The Golden Jackass fills us in on the global economic war which is verging on actual war... just as soon as that presidential election is over of course.

The recent decision by the US Federal Reserve to contaminate the financial body until it responds favourably was the last straw in my book. Witness a declaration of permanent QE and hyper monetary inflation of the most virulent strain, unsterilised. The USFed is essentially admitting failure. 

The signal serves as the loudest death knell for the USDollar among many in a sequence. On a similar parallel note, lighter and more humorous, one might be reminded of the pirate swash buckling style of yelling at the swabbies that the beatings will continue until morale improves. The QE bond monetization of USGovt debt has turned viral and entrenched. It is sold as stimulus, when in fact it acts like a giant wet blanket on the USEconomy. It is intended as stimulus to businesses, but the effect is felt on the financial speculation and on Asian direct business investment. In the past the emergency lever device had been successful only because it was used on a temporary basis. But now the USFed high priest assures it is a permanent fixture, a sign of their failure. The public is too ignorant to comprehend the ruin. They can only see the threat to their personal ruin.

The bankers are determined to ruin the entire system in order to retain power, all while dispensing increasingly nonsensical dogma like from heretical high priests about the effectiveness of their solutions. Theirs is heresy built upon alchemy laced with arrogance, with no precedent of success in past history. A definition of insanity comes to mind, offered by a psychologist who works in a clinical practice. Let's stick with the layman translation. Insanity is defined as repeating the same action but expecting a different result. So the USFed conducted QE, then QE2, then Operation Twist (a deceptive QE), now is set for QE3. It expects a different result from the rising costs and debasement of the currencies. Somehow by enlisting the cooperation of the Euro Central Bank, the Bank of England, the Bank of Japan, and the Swiss National Bank, together they can pull off QE3 in a veritable ongoing QE to Infinity when all previous efforts have failed to produce a solution or economic recovery. The high priests from the central bank altars do admit that liquidity does not address the insolvency ills, yet they hit the monetary levers and accelerators more quickly. The central bankers are in a panic, and it is beginning to show clearly. Their solutions solve nothing. They will next attempt to rule more formally over the ruins.

MONEY VELOCITY
Money velocity is going down as quickly as money supply is going up. This report card is a grand contradiction of the USFed actions for a generation. The American Weimar experiment is turning into a tornado of financial ruin with inadequate recognition. As industry was dispatched and forfeited to Asia, the USEconomy lost its base for traction. New money has lost its effect in producing economic activity following a series of asset bubble busts, a spinning of capitalist gears, now stripped gears. New money is devoted to the financial sector in perverse fashion, as a reward for the past destruction of capital itself. The central bankers cannot dictate the speed at which money moves. They can only create it and drop it in the mix, speak their incantations, sprinkle pixie dust, offer some loony fiat prayer to the duped public, and continue with the next paper dump. The Untied States will gradually achieve systemic failure from redoubled efforts, suffer debt default from inability to manage the debt structure, and fall into the Third World. The nation will experience the monsters of high prices and acute shortage without comprehension of its source. It is toxic money.

The growth of the monetary base has been staggering high since the financial crisis broke in September 2008 with the collapse of Lehman Brothers. Since the end of August 2008, the monetary base has risen from $877 billion to $2,651 billion as of September 2012. That is a giant 3-fold rise. Witness the American Weimar era, its final chapter. The massive increase in new money has done nothing to foster growth in the USEconomy. The main reason is that fiat paper money destroys capital, a concept the hapless corrupted US economists cannot comprehend, either from compromise to their masters or lack of intellect due to years of exposure to the ass backwards preachings. The USEconomy is stuck in a powerful recession based in grotesque insolvency and bond fraud. As the USFed is poised to kick in another round of QE bond monetization, the money supply will ramp sharply up again.Do not expect much of any economic benefit, since the cost structure will rise again, then shrink profit margins. This capital destruction factor is a great blind spot to the hack economists who operate more as marketing harlots for Wall Street and the USGovt than analysts and advisors. The Ponzi Scheme theory dictates that an acceleration in new money is required to keep a constant speed. Expect more wreckage from the stripped gears of the USEconomic engine.


The money velocity chart shows a deadly decline since 1980, and a powerful decline since the 2007 outbreak of the absolute bond crisis. The new money is going to the big banks in bond redemption, derivative coverage, and Black Hole (Fannie Mae, AIG) fills under the USGovt supervision. The money is not finding its way into the USEconomy for further circulation. The plague is insolvency, soaked by endless applications of tainted money from central bank fire hoses. The velocity of money has been falling for years, in reflection of an economy that is not turning over much at all. Think of a car missing its cylinders, spinning its gears, burning itself out, going nowhere. The above chart serves as pictorial evidence that the root cause of ruined money was the war. In the current decade, the wars are endless. America chose war over industry. A fuller explanation is offered in the September Hat Trick Letter.

Three eras are worth identifying in my view. The Vietnam War era and its aftermath saw huge expansion in money supply, huge nominal income growth, and huge increases in price inflation. The USFed did not interrupt the expanded USGovt debt from reaching Main Street, simply put. For consecutive years, the Consumer Price Index rose over 10%, which led to big worker pay hikes. The result was that US corporations began to send industry overseas. It started with Intel going to the Pacific Rim. The money velocity fell, as income fell on a real basis. The climax event was China being given the Most Favoured Nation status in 1999, which released the gates for foreign direct investment. China made a deal with the Wall Street devils that has yet to gain publicity. The hidden motive was for Wall Street firms to borrow the Chinese gold hoard from the Chairman Mao era, so as to continue the great gold suppression game that has bankrupted the Untied States and betrayed the nation. US and London bankers skimmed and stole the gold.

HOUSE OF SAUD STARTS TO UNRAVEL
More loyal Jackass wannabee followers will recall a story (repeated often) that on the Easter Sunday weekend of April 2010, a secret gathering of over 200 Arab billionaires convened in Abu Dhabi. They arrived in unmarked jets. My source was one of only two or three white faces in the crowd, invited by his clients. One result of the meeting was an accord struck between the Persian Gulf oil producers, led by the Saudis, to work toward a pact with Russia and China as protector of the gulf in return for financial cooperation, economic construction, and forward progress. The implicit message was that the Untied States would be phased out in the protectorate. In the balance would lie the Petro-Dollar defacto standard as victim. Events continue to this day in movement toward that end.

However, since the Syrian uprising, a new lethal element has entered the mix. Account will be kept brief, since so volatile and controversial. Just some bare notes. The Assad family in Syria has suffered some assassinations. Apparently, the Saudis had a hand in the killings. HezBollah has vowed retaliation. Their ties to Iran might be longstanding, but perhaps are exaggerated. My view is their home is in Lebanon. In August, Prince Bandar was assassinated. He was the Saudi head of security, and long-time ally to the USGovt. The Saudi regime is concealing his death, with outdated photos and false statements. They are working toward a transition. The House of Saud has been unstable from threats to the south in Yemen. It is unstable from internal threats tied to the fundamentalists. Although cooperation and respect has been shown between Riyadh and Tehran, the Bandar hit has created an entirely new environment. The Saudi regime with high likelihood is in its final months.

More importantly, the Petro-Dollar is losing its all important Saudi leg. Implications are vast. The US public takes the USDollar for granted, with almost no concept of FOREX exchange rates. If the House of Saud falls, when it falls, the impact crater will include the entire waistline of the USEconomy and its financial dog tail that wags it. The USGovt and its banker handlers have relied heavily upon the Petro-Dollar in general, and on the Saudis in particular, ever since Henry Kissinger signed an accord that governs over the grand surplus recycling back in the 1973-1974 era. Watch the Saudis convert USTBonds to Gold, then bug out of the desert to their new mansions in Southern Spain.

CHINA AS INTERMEDIARY AGAINST PETRO-DOLLAR
Reports swirl that China is attempting to act as intermediary in global oil transactions, for Yuan currency settlement. The rebellion globally is picking up momentum against the USDollar. The Petro-Dollar defacto standard is slowly unraveling. The denizens of the Untied States have no idea the ravaging impact of a lost global reserve currency. It will unleash price inflation when the USFed central bank is letting loose the monetary flood gates. This declaration is an act of financial war directed at the US by China. To fortify the rear flank, Russia has promised to meet all requests for crude oil made by China, with settlement in Yuan and Ruble currencies. Take the pledge as a protection from any sudden USGovt threat or retaliation. The Russia-China Axis is forming more clearly in opposition to the USDollar, the Syndicate behind it, the many Embassies that offer sanctuary for espionage, and the global rules that enforce its hegemony.

Crude oil payments are the critical core of global trade. The rest of global trade will follow in non-USDollar payments, all in time. Entire banking systems will gradually make a transition away from the USTreasury Bond in its reserves managements. The banking practices will follow the trade payment structures, as it should be. The profound effect on the USEconomy will be clear, as blame is shifted as usual to external factors, even to extremists. In reality the US is up against vengeful Cossacks and the angry Mongol Horde. The entire world is moving against the USDollar, seen increasingly as a toxic agent within their internal domestic systems. They see the lack of solutions, the spreading bank insolvency, the accelerated debasement of currency, and the corrupted grants of multi-$trillion banker grants. They are taking action in response. They are following the Chinese lead with the Russians acting as a quasi-Rasputin.

Gerald Celente reported in early September, "On September the 6th of 2012, China officially announced that any country in the world that wishes to sell crude oil using its currency the Renminbi instead of the USDollar can do so. The following day September the 7th, Russia announced that the nation will sell China all the crude oil they need, no limitations whatsoever. They will not use the USDollar for their trade." The claim by Celente is far reaching. The USDollar is dying a slow death. Its antagonists do not wish to speed the death process too rapidly, for fear of quickening the ravage to their own nations. They also do not wish to invoke the wrath of the USGovt, which since 2003 has enforced the USDollar as global reserve currency via its war machinery.

What China is offering is an intermediary clearing house role to sidestep the Petro-Dollar, where crude oil payments can be made in the Chinese Yuan currency. This offer is a financial act of war against the Untied States currency, where China will backstop all transactions. It is a violent offer to disrupt the USDollar. Look to see if any Saudi oil sales are settled in Yuan currency as alternative, even the Euro currency as expedient. The superpowers are openly attempting to isolate the USDollar, the clear victim to be the USEconomy, the land of consumption excess. The move is a tacit push of the US into an isolated place where it can very easily slide into the Third World.

MEXICO CUTS A DEAL WITH CHINA FOR OIL
Mexico is in the process to make concrete a major deal to sell crude oil to China, but not in USDollar terms. The Chinese declaration of financial war against the Untied States has reached both the northern border in Canada and the southern border in Mexico. To be sure, the Canadian oil is not sold outside the USDollar. But other factors are hard at work. The bulk of Athabasca oil produced from the oil sands in Western Canada (Alberta) output is directed to China, by way of the Vancouver ports owned 100% by China. In fact, the Chinese influence is so strong in the beautiful city on the Pacific coast that it has earned the nickname of Hongkouver. Some shallow analysts attribute a wayward motive to the decision by the USGovt to abandon the Keystone Oil Pipeline several months ago. The more realistic hidden motive was to assure the Western Canada oil output would be sent to China. The cutoff to the pipeline came with spurious official accounts, all quite humorous to the informed. The pipeline was abandoned to accommodate China, owner of significant USTBond holdings. They are the largest USGovt creditor. The tipping point was passed many years ago when the majority of USGovt debt was held by foreign creditors. Its consequence is vivid and unmistakable. The Untied States is converted into a colony, a killing field, as pathways are fashioned for entry into the Third World.

China through closed door negotiations is sealing deals to purchase Mexican crude oil without using USDollars as its trading currency. The Yuan is slowly moving toward global reserve status, not by a summit meeting and signed accord, but rather by numerous bilateral deals. Consider the bilateral swap accords signed by China with partners in Brazil, Japan, and elsewhere. The list grows, and beyond oil trade. As it does, the net is cast over the USDollar in isolation. Officials claim meetings were held with the Mexican Govt and PEMEX, the state owned oil giant. They are in progress with a brokered secret deal to purchase crude oil using currency means other than the USDollar. Expect a public announcement soon by Chinese Govt and PEMEX firms. In the past decade, China has planted seeds in trade while ignoring politics with numerous major players in global trade. The USGovt prefers the heavy handed financial banking games, backed by the heavy handed military maneuvers, all part of the sickening Full Spectrum Dominance that has blossomed in ruin. The Chinese have responded with an archipelago of trade pacts, best viewed as a Full Spectrum Encirclement of the USDollar. It cannot be conquered. So their plan apparently is to isolate it, to starve it, to let it suffer the Weimar consequences of its own high pitched debasement, and to permit it to become a Third World currency by default.

Over the past ten years with new trade agreements China has invested $billions inside Mexico. China has helped the Mexican Govt create jobs and has financially supported investments in the privatization of ports and infrastructure throughout Mexico. As the movement toward privatization of large sectors of its economy continues, China is in line to benefit from additional investments inside Mexico. Since the 2009 global economic crisis, Mexico's central bank has been quietly purchasing large quantities of gold. In fact, some of the recent boost in May for Mexico Central Bank gold holdings was gold purchased from Chinese sources. The gold sales belie a closer relationship building with Mexico on the southern US border. While the USGovt is occupied with the Mexican Govt on matters pertaining to gun running, to handling illegal immigrants, and to shielding vast narcotics sales, the Chinese are busily working on trade, with a gold foundation and crude oil blood system. Those are the stuff of a stable currency. Perhaps Mexican leaders are preparing for the imminent and unavoidable devaluation of the USDollar. In more practical terms, regard the movement as the collapse of the USDollar in a vast sea of liquidity, better identified as toxic fiat paper currency.

STRIKES HINDER GOLD OUTPUT
Not in sufficient focus is the radical impact on gold supply. The gold investment demand has been on a tear in recent months. A sinister effect has been realized from the vast QE bond monetization conducted by the USFed and its partners at the Euro Central Bank and the Bank of Japan. The effect is of rising food and energy costs. The impact is particularly hard felt in poorer areas of the world. The great majority of major gold and silver mines are located in the poorer nations. The labor strikes at mining facilities are as much based upon unsafe worker conditions as they are based upon a higher cost of living, centered on food costs. The workers need more to survive at home, as they provide more precious metal output that satisfies mining company production targets. The end result is lower output in pockets of South America such as Bolivia, but more importantly in South Africa. A whopping 39% of South African Gold production has been taken offline. The impact on global output will be seen in the next few quarters. The fast rising investment Gold demand will be met by a significant decline in Gold supply. Price pressures will force a much higher Gold price. But first comes the depletion of the COMEX, as its paper contract merchants continue to ply their trade. Their new specialty is stealing client accounts that stand ready for contract delivery. See MFGlobal and the JPMorgan thefts, all fully blessed by the tainted US Court system.

THIRD WORLD THREAT
The implications are vast. A lost Petro-Dollar standard would mean a grand shift in payment for oil transactions, the most important of all global trade. In the last 20 years, all has been turned upside down. A global phenomenon of a powerful nature has been at work since the Lehman Brother failure, the Fannie Mae adoption, and the AIG redemption in 2008. The entire world is losing trust in the USGovt and its financial institutions. Personal email exchanges cite a regular occurrence of US corporations not receiving return phone calls, and of open disrespect in Europe for American businesses. The debt rating agencies do their part in upholding the paper fortress walls, but they must over time deliver the downgrades. An important catalyst took place when the USGovt imposed trade sanctions against Iran. The result was angering US trade partners more than anything else, well, except for causing severe price inflation on the Iranian Economy. The movement in reaction has been swift by global trade partners, in establishing bypass routes for payment systems between nations. The workarounds against the SWIFT bank payment system have been remarkable. The climax will be the non-US$ payment system to emerge, with no centralization, complete independence, relying upon non-bank devices like mobile communications.

Another bypass event just hit the news wires. The Swiss-based Vitol is the latest oil firm bypassing the USGovt sanctions against Iran. They exploit a legal loophole in Swiss law, since the nation did not abide by the US-led sanctions, a notable resistance. Vitol boasts being the largest oil trader in the world. It buys and sells Iranian fuel oil, undermining Western efforts to choke the flow of flow of money to Tehran. In August alone, Vitol purchased two million barrels of fuel oil, used for power generation, from Iran and offered it to Chinese traders. The Vitol firm is not obliged to comply with a ban imposed in July by the European Union on trading oil. The tale of the cargo for Iranian fuel oil involves tanker tracking systems being switched off, frequent ship-to-ship transfers, and the blending of the oil with fuel from another source to alter the physical specification of the cargo. How crafty.

Global finical markets are acutely aware that oil trade outside the USDollar will rapidly destabilize the USDollar even further. With Russia and China having entered into an agreement to trade crude oil using their own currencies, the Mexican news of a Chinese oil deal has potentially devastating consequences. The eventual effect is that the USDollar will lose its prestigious reserve currency status. In the process, it will lose value gradually. My view is that the defense of the USDollar will lead to all major fiat paper currencies to implode, step by step, taking down the banking systems and economies of major nations. The prevailing currency will be what is used in global trade. All signposts point to Gold. A new global trade system is ready to be installed, based upon gold in special notes. The transition awaits further collapse of the current currency regimes, the further collapse of the sovereign bonds, and the further collapse of the banking systems, which all assures the collapse of the global economy.

The QE fallout by the desperate central bankers has been seen in fast rising demand for gold bars and gold coins. The phenomenon is primarily in the Eastern world but also in Europe. The American crowds remain transfixed on their dwindling paper assets locked in stock accounts, many not easily altered due to tax rules. They remain transfixed on home equity losses, in a mindnumbing effect that the Jackass described in years 2005 and 2006 and 2007. The American Home was not a hard asset at all. Since its value was largely determined by the mortgage loans and mortgage bonds, together with the vast network of devices like MERS among bankers and the hidden caches with slush funds at Fannie Mae. The entire criminal history of Fannie Mae has been safely buried under the USGovt roof. Ten years ago, people would laugh at comments that the largest and most powerful criminal syndicate was operating under the USGovt label. They do not laugh anymore, including my own family. They protect themselves with the real deal currency for storing life savings, GOLD. They will soon enjoy the benefits, safety, and efficiency of trade systems based upon GOLD also.

GOLD PRICE READY TO EXPLODE UPWARD
Gold market instability could be a tremor before a burst upward. The same appears true for the silver market. On a single day last week, JPMorgan dumped two years worth of US silver mine output in the form of paper silver supply on the COMEX market. The corruption went largely unnoticed. They defend the important $36 level. Volatility has returned to the Gold price. The current pause could be interrupted very quickly with a strong upward leg in both precious metals. The announced QE3 bond monetization program cannot be sterilized any longer. A powerful USDollar decline is imminent. As the USDollar reserve status is threatened, the gold price will zoom upward. Notice the occasional propaganda and basic lies regarding sterilization of new bond purchases. The USFed is fast running out of short-term USTBills to fund long-term USTBonds in the Quantitative Easing shell game that is more reminiscent of the Weimar Republic.

Fortunately for the USFed paper mache artisans, the American public is a lousy student of history and especially the concept of money, even the nature of economics and capitalism. The dumbing down of the public has reached a critical mass, but hope lies in the Gold sanctuary if people have any savings left after the busted bubbles and the parade of banners to join. They joined asset bubble parades instead of lines to enter factories. Across the world, an army of Gold soldiers is awakening after a 16-month slumber. They react to the stark awareness that QE not only ruins money, but its purpose is to redeem the toxic bonds owned by banks. The QE programs are not intended to bolster, stimulate, or fortify the economy. In fact, they render the USEconomy incredibly deep harm by raising the cost structure, reducing profit margins, wrecking business segments, and killing jobs. But the hard sell sure is fun to watch, as the central bankers squirm. The Jackson Hole conference was a gathering of buffoons without the clown suits. The public must seek refuge in Gold & Silver or face personal ruin.

The USFed mandate on inflation moves next to an absurd mandate on jobs. They will fail on both. Inflation will be permitted by the USFed central bank in order to produce jobs, in the most heretic and misguided folly ever seen in modern times. The 0% rate will stick until economic growth arrives, but it will never arrive, due to the damaging effect from the 0% rate itself. The dog's tail is eating the entire dog in a perverse reverse effect of modern alchemy. The USFed ignores all Weimar chapters, after having rewritten the Great Depression chapter. The nation emerged from the depression only due to the Gold Standard and ample industry. The nation has neither today, and will therefore plunge into a systemic failure. The Third World awaits. Watch for the pressure points of tens of thousands of gasoline stations and food supermarkets, certain to erupt as the frustration and disorder spread.


The response in the Gold price has smelled a QE3 in bond monetization since the summer months. The difference is that this time, unlike the deceptive Operation Twist, the bond purchases will be unsterilized with new money injected into the system. That is a Golden supercharge to recognizable inflation. A major intermediate reversal is underway, with a 1570 base, a 1780 top, which indicates a 1990 Gold price target. The kicker in the market is the broad mining industry strike, which extends from South Africa to South America. Gold supply will be inhibited. Expect some regrouping with a pause at the 1720-1770 area, as a critical consolidation takes place before a breakout that captures the world's attention. The right side handle is being formed, carved out. During this time, the doubters are tossed off the train. The new believers join. A recycle process is underway, as the monetary dumb are unloaded and new intelligent soldiers join the ranks. The renewal will permit a run over $2000. Once over 1800 price level, the 1900 resistance will be overrun like a paper fortress by angry mobs bearing torches and sticks. But in the meantime, a big battle is being waged at the right side handle, a consolidation before breakout.

Sunday, 7 October 2012

Freeman: A Notice of Understanding and Intent

Ian has posted up on his blog the full video of Dean Clifford from December 2011 here.

So I just wanted to comment a little more in depth about some of the issues raised, remember this is a Canadian, talking about how things work in Canada and whilst the underlying principles remain the same the system is subtly different.

Again this is not a criticism of the Jersey judicial system because if you get them by the short and curlies, then they will actually always follow the law - but putting them in a such a position is the difficult part.

So first thing to remember is that any Jersey statute solely governs the actions of the Civil Servants employed to operate under that statute. We are going to use the Social Security (Jersey) Law 1974  as our example and you should remember that this regulates the Social Security department, and only the Social Security department.

Philosophically it depends how you view Social Security, personally I view it as a massive Ponzi Scheme, which will never be able to deliver the returns that it has promised me, it therefore is a FRAUD, which if operated by anyone other than the government would land its architects in jail. Why should I pay in now when a) I am a better investment manager of my own money than anyone else and b) I will not see a return on this supposed investment. The fund will be empty by 2030 according to government estimates and I will not currently benefit until 2042, so only a fool would pay in.

The first article which should be of interest is Article 3 (2) which reads:

(2)    For the purposes of this Law, insured persons shall be divided into the following 2 classes –
(a)     Class 1, which shall comprise employed persons, that is to say, persons gainfully occupied in employment in Jersey under a contract of service; and
(b)     Class 2, which shall comprise persons not in Class 1.


Let's re-state this in clearer English to demonstrate how it affects you - under the law you are considered Class 2 (commonly referred to as self-employed, although this is a misunderstanding) unless you are under a Contract of Service. If you are employed under a Contract of Service then you are 'Class 1' also known as 'f****d'. You have sold yourself into slavery, and your master will deduct from your wages a compulsory contribution from the agreed consideration of the contract.

So let's restate the common misconception, under the Social Security Law there are 'slaves' and 'free men'.

To avoid being classified as a slave, simply work under a contract which is not a contract of service or better yet under no contract at all. The Employment (Jersey) Law, more commonly referred to as the unemployment law, defines 'employed person' differently, but since the Social Security department solely operates within the bounds of the Social Security Law this is of no consequence whatsoever to our analysis and in any case if you operate under a non-legally binding notice of understanding and intent then that is NOT a contract and even under the Employment (Jersey) Law, you cannot be considered employed.

Who can you trust more, one individual whom you work with to your mutual benefit for as long as you both so wish to do so whilst remaining free to part ways at any point with no hard feelings, (another human being), or the government?

So we must look again at what defines a 'Contract'.

Any contract has a number of specific elements which must be in place for a Contract to be considered legally binding. The first is that the parties to the Contract must be known, the second is that both parties must have a consideration either in the form of provision of services or goods or in the payment of a sum of money. All parties must be aware of the terms and conditions of the contract, one party must make an offer and the other party must accept that offer in full. All parties must intend for the contract to be legally binding.

So for example if I offer someone a job working Monday to Thursday and Saturday and they say they will work Monday to Friday then they have refused my offer and made a counter offer.

So the easiest way to make a contract not a contract is to state clearly that you have no intention for any agreement to be legally binding.

If you never enter into a contract then you can never be an employer or an employee under this Law.

Social Security is simply a tax on those who can least afford to pay... it is your moral duty not to support this fraud and tool of repression.

If anyone is ever given the opportunity to run a defence of 'How can I be forced to be a victim of a fraud?' against the Social Security department then I look forward to hearing what the Court has to say, for some reason they have refused to take me to Court for eight years now, pretty soon the time limit will expire.

36    General provisions as to offences and penalties
(2)    An employer or insured person who fails to pay a contribution that he or she is liable to pay under this Law within the time prescribed for payment of the contribution shall be guilty of an offence and liable to a fine not exceeding level 3 on the standard scale.[68]

The first thing to note here is that at no point does the law say that you cannot act in any way you please, rather what this article does is empower the Social Security Department to ask the Court to tax you with either a fine up to level 3 on the standard scale if you undertake certain actions or fail to undertake certain actions. The law cannot tell you what to do and what not to do, but it does coerce you through threats of harm to your personal freedom and financial security.

The term offence is an interesting one because it certainly does not cause ME any offence that someone might not pay the Social Security department it is none of my business, and I'm pretty sure that it would not offend God (in whose name the Court operates), so who is offended? Well I guess the Social Security Department are the ones who have taken offence.

On the other hand the very existence of a massive fraud on my island causes me great offence on a daily basis, might I seek an order from the Court for the harm that the Social Security Department causes me?

The second thing to note is all the elements which will be required of the Social Security to prove beyond reasonable doubt before the Court can order a fine to be paid.

These elements are:
1) That the defendant is an employer or an insured person
2) That they failed to pay
3) That they failed to pay within a certain time
4) That a payment is due within the terms of this law

Proving all the above elements will only prove ACTUS REA (that the act was guilty), but the act can only be guilty if the mind was guilty also (MENS REA), that the person as an employer or insured person failed to pay within a certain time a payment that was due within the terms of this law. So for example if they failed to pay within a certain time, but did not believe that they were supposed to pay within the terms of the Law then there is no offence.

Jersey Civil Servants are as a rule arrogant and lack any genuine understanding of the law and generally make so many mistakes that if you know what you are looking for. Dealing with them is best done by letter, they will lie to your face knowing you cannot prove what they said, they will tell you that black is white, that the law is something other than it is. The chances are they will err somewhere so make them write it down.

Remember any prosecution they bring against you is in reality a trial of whether they have successfully been able to demonstrate all the elements they require to bring a case.

The lower Courts are generally pretty poorly run, if you get called into the Magistrate's Court you should familiarise yourself with all the elements that the prosecutor will have to show and tick them off as they do, if they fail to present any evidence to show anyone of the elements, then they will lose on appeal. In any Court case you should think of it as putting the prosecutor on trial. The Magistrate may well find you guilty in haste well that can be easily overturned. Legal Aid Advocates are a complete waste of time, probably by design, and will simply tell you to plead guilty, if you have one representing you, you may as well. The Magistrate as a result is used to simply sentencing people, they do not have much experience. Bridget Shaw on the other hand was a ferocious prosecutor and I have found is a judge who is not prone to making mistakes.

My experience of the Royal Court is that it is different; all the boxes are mentally ticked off the by the judge the Bailiff, Deputy Bailiff and Attorney General do not get caught out in the same way. An appeal is in effect putting the Magistrate on trial, did he act as the Bailiff would and ensure that all the elements were presented and proven beyond reasonable doubt before he reached his verdict.

No judge is 'on your side', they are simply there to ensure that all the elements required have been proven. The majority of Court cases are won by the Plaintiff.

Ultimately the best way to avoid any chance of prosecution is to take yourself out of the scope of the law by not entering into Contracts. The specifically non-legally binding notice of understanding and intent is your friend.

Write these notices to aid people to understand what your current intentions are, but with the proviso that you might change your mind at some point in the future and you reserve your right to do so, with no legal consequences, unless you cause harm to someone.

Use legally binding contracts only when necessary.