Last Updated: Jan 23rd, 2012 - 15:01:07 Newsletters : Current Newsletters : 23 January 2012 Thought for the Day "Give me control of a nation's money and I care not who makes it's laws" — Mayer Amschel Bauer Rothschild The way to get control of a nation's money is by establishing a Central Bank. One of the first financial changes implemented in Iraq and Afghanistan when NATO took over was the creation of a central bank. I understand (but have not confirmed) that the rebels in Libya had a Central Bank running within a fortnight of the revolution starting. The Central Bank then fixes the price of the money it prints through interest rates charged to banks for using this money. This may seem fine but like all price fixing ideas it just will not work. As the world is now finding out it leads inevitably to a boom when the rate is too low followed by the bust as rates are raised. In a natural economic environment without Central Bank control of the price of money it would find its natural price from time to time and from situation to situation. There is no real price for money to be applied overall which would suit everyone. The tendency is always to print more money and eventually this gets out of control - as Germany found out in 1923. We have been watching this play out around the world for the last few years and have experienced it in New Zealand as Michael Cullen eased the Reserve Bank "inflation" guide lines in 2000 and created the extra money flows that made the Helen Clark government look good until, of course, the conditions changed and the bust began in 2007. The Central Bank concept survives through secrecy and mathematical flim-flam generated by the economics profession to give the illusion control. Our world wide experiment of using Central Banks is demonstrating that the theory is wrong. And the demo is about to get much worse! This process is obviously now playing out in Europe and is starting in China as Ambrose explains in the link below. It will follow (indeed I believe it has started already) in Australia and our overseas customers will all (nearly) be in economic trouble. The only way to stop this boom/bust trap from continuing to decimate our middle classes is to remove the Central Bank facility and shift to free banking using gold and silver as money. We could make a start by purchasing gold and silver even if our banks won't. [ Visit Website ] Jan 19, 2012, 11:56 Newsletters : Current Newsletters : 23 January 2012 The US-GCC fatal attraction The world runs on oil, and oil is traded in US dollars. Qaddafi tried to change that. Iran is trading oil with China money. Russia has a lot of oil and the pace of negotiations is picking up. This is a very good summary of the current situation which will serve as a useful backdrop to our stories this year. [ Visit Website ] Jan 22, 2012, 15:42 Newsletters : Current Newsletters : 23 January 2012 Shadow Government Statistics Government statistics around the world are "adjusted" to suit government needs. To more fully understand REAL Economics we studied the history of money and determined what constituted REAL Money. Now we need to continue the study to take in the field of statistics so we can determine what is true about the numbers behind our economic thinking. John Williams has done this for America as this web site shows and we need to do this for New Zealand. Have a look at Shadow Stats and you will begin to see what I mean. [ Visit Website ] Jan 22, 2012, 15:04 Newsletters : Current Newsletters : 23 January 2012 John Williams - Gold, Silver, Economy & Inflation When one looks at the REAL Statistics concerning the American economy as produced by John Williams of Shadow Stats, an interesting picture of REAL money versus paper money emerges. Austrian economics shows me the truth about economics (I call this REAL Economics) and John Williams' statistical analysis shows me the truth about the numbers behind REAL Economics. It is worthwhile searching for and understanding the truth. [ Visit Website ] Jan 22, 2012, 14:58 Newsletters : Current Newsletters : 23 January 2012 Premature Obituaries “Gold is money. Everything else is credit.” -J.P. Morgan, testifying to Congress in 1912. As the world is about to find out paper money is just not the same thing as REAL Money. Professor Fekete provides an interesting explanation of our current situation. His use of words to explain a positive feed-back loop makes his description more interesting than accurate but never-the-less his theories still come across very clearly. A number of books have been written over the years about the errors in Keynes' theories - I have one myself - but still we use his ideas to run the world. Our only solution is to prepare for the inevitable introduction for the use of gold and silver as money. Better to prepare now and survive the world crash that is coming than to forge ever onwards down the wrong path. [ Visit Website ] Jan 19, 2012, 13:57 Newsletters : Current Newsletters : 23 January 2012 Putin, a thorn in Washington's flesh Here is an interesting article showing how global politics and money power are entwined. Economies are tools for political power. Markets and people are all controlled. Does this effect New Zealand? Of course! [ Visit Website ] Jan 18, 2012, 18:35 Newsletters : Current Newsletters : 23 January 2012 Why ECB's Tricks Won't Solve the Crisis Some of the regular press are now talking about Central Bank paper money tricks. Here we see more of the printing of new money which is lent around in a circle and apparently keeps all parties happy. For a while. [ Visit Website ] Jan 18, 2012, 17:54 Newsletters : Current Newsletters : 23 January 2012 Keep Blowing a Big, Fat Bubble The facts are leaking out. This will be an interesting year. [ Visit Website ] Jan 18, 2012, 12:53 Newsletters : Current Newsletters : 23 January 2012 London Trader - Staggering Gold Demand Creating Shortages The flow of gold from Western vaults to Eastern vaults is the most important symbol of the decline of the West. [ Visit Website ] Jan 18, 2012, 12:23 Newsletters : Current Newsletters : 23 January 2012 Iran Cracks Down on Dollar Trades When a government owns the Central Bank it owns the country. When a country owns the central bank for central banks it owns the world. These currency wars are heading in one direction; A world currency owned by the BIS and the implemented by the IMF. Then that will inflate at an increasing rate. [ Visit Website ] Jan 18, 2012, 10:08 Newsletters : Current Newsletters : 23 January 2012 Capitalism in Crisis This article from the Financial Times shows just how well hidden is the cause of all our malaise. The moral hazard of the Central Banking system which has been foisted on the world since the inception of the Federal Reserve Bank of America where freshly printed paper money is regarded as of similar value to that obtained by hard work. This false money idea has now shown up as the disaster that Ludwig von Mises and other economists from the Austrian school predicted all those years ago. The establishment continues to ignore this REAL Problem and blames capitalism. Everyone forgets that capitalism assumes that the money used has been saved from people's REAL Work. Just printing up counterfeit currency doesn't work as we are all finding out now. Until we move back to using REAL Money which can't be magically produced from thin air this disaster will continue. Read about REAL Economics at http://www.economicgrowth.org.nz/artman/publish/real-economics.shtml [ Visit Website ] Jan 11, 2012, 12:20 Newsletters : Current Newsletters : 23 January 2012 All The World's Gold An interesting analysis of the amount of gold in the world and who has it. [ Visit Website ] Jan 10, 2012, 13:13 Newsletters : Current Newsletters : 23 January 2012 90% of Dutch Gold Reserve Is Held Abroad Venezuela has brought its gold home. Now the Dutch are starting to ask questions about their gold. They seem to be more open with their gold information than other countries and are discussing the situation in the press and on the internet. Gold is money. In fact it is real money and paper currencies are merely promises to pay - but what is to be paid is not specified. As the world money problems multiply, banks and countries are becoming worried about the ability of others to pay their bills. If banks and countries are concerned shouldn't citizens also be concerned? This is the fiat money problem. Just like any ponzi scheme, when confidence is lost then the game is over. [ Visit Website ] Jan 9, 2012, 12:16 Newsletters : Current Newsletters : 23 January 2012 Some Additional Reflections on the Economic Crisis and the Theory of the Cycle The most important thing for economists to understand is the Austrian Business Cycle. It is simple as ABC if you start from a base of fact and logical deduction. Modern economics has ignored this basis of economic understanding. This is most unfortunate. So we have a huge financial problem around the world at the moment and this article helps us to understand what is happening and it tells us what can happen and what is likely to happen. Good luck. [ Visit Website ] Dec 30, 2011, 12:28 Newsletters : Current Newsletters : 23 January 2012 Quote for the Week Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly...and applying the wrong remedies. Grouch Marx Dec 29, 2011, 14:59