Last Updated: Oct 22nd, 2010 - 15:35:08 Newsletters : 2007 Newsletters : 26 January 2007 Thought for the Day Life is short. Live it up. Nikita Khrushchev Jan 23, 2007, 12:32 Newsletters : 2007 Newsletters : 26 January 2007 Irreparable Cracks in the Financial System This is one of the clearest articles I have read on the current dangers caused by our fiat money system. With control of the Reserve Bank and Teasury and the compliance of trading banks the governments of the western world are in a position to retain power by continually inflating their currencies which makes people feel wealthy and beholden to the politicians who provide such largess. The problems arising from these actions are well hidden from the general population but this article describes our current situation with great clarity. Although it is mainly concentrating on economic conditions in the USA this will have serious spin-off effects on us. Not only that but we are suffering the same asset inflation problem as the rest of the western world. Dr. Faber's analogies remind me rather spookily of Fiji and of New Zealand. With our money no longer tied to the value of gold and the banks and the Reserve Bank able to issue money and credit at will, we are condemned to continual cycles of boom and bust. Booms are fun but being caught in the bust is no fun at all. The scary thing is though, that current economists in charge of these systems continue to alleviate the busts by increasing liquidity and shifting the bust on to a later date and by different causes. The scariest thing of all, however, is that the longer the bust is postponed the larger and more devastating it will be. The big question remains unanswered. Jan 23, 2007, 12:15 Newsletters : 2007 Newsletters : 26 January 2007 Use Your Noodle, Or Else I have said that, "Politicians are not the answer - they are the problem", and here we are proving this once again. For November 2006, Year on Year inflation of M2 money supply was 15%. So was M3! Notes and coin held by the public was up 9.4% for that November year. We are asked to believe that "inflation" is only 3%. Housing has continued to inflate by 10% over the year reflecting the extra cash floating about. Politicians and a fiat currency unbacked by anything is a recipe for disaster. I believe that around 84% of the population voted to reduce the number of our MPs from 120 to 100. Unfortunately, the MPs had the last say and voted themselves all in for the duration. It must be time to have "binding" referendums where the MPs agree in advance to implement any vote agreed by more than, say, 60% of those voting. Switzerland works well under this type of arrangement and California isn't doing too bad either. Have a read of this and let us go for binding referendums before our politicians produce too much of a mess. Jan 5, 2007, 15:25