Inflation, deflation, gold and currencies

[vincecate]

Higgie, you have pointed out that if there is a "bank holiday" where nobody can get money out of their bank accounts then cash which can still be spent in a hurry is much better than electronic credits at a bank which may sit frozen till after a huge devaluation.

There is another situation though that comes to mind after watching the video in the article below (checkout lady dealing with bag of cash for beer). I could well imagine that supermarkets had a special slow "cash line". The other lines would all move alone fast as people used electronic payment cards and the cash line would be painfully slow as they had to process piles of cash. Probably they would get counting machines for that line and say that was why people had to go in that line. But really they don't want to deal with cash because it is so much trouble. Anyway, while I agree with your point, I can also imagine electronic money having the advantage during hyperinflation.

http://www.zerohedge.com/news/2013-01-1 ... r-bag-cash

[vincecate]

Nuclear and Monetary Meltdowns

The central planners at the government and central bank think they can print some money and control the inflation rate like a thermostat on a room. You want things a bit hotter you turn it up a bit, a bit colder you turn it down a bit. The reality is it is like a Nuclear Reactor. If you do things wrong there are feedback loops such that events spiral out of control. Hyperinflation is how it spirals out of control. Most people don't really understand hyperinflation, so when it comes most people are surprised. Having people in government and central banks who do not understand hyperinflation controlling your fiscal and monetary policy is like having people who do not under understand nuclear reactors controlling a nuclear power plant. Things are just bound to end badly.

http://howfiatdies.blogspot.com/2013/01 ... downs.html

[mannfm11]

I doubt there would be a bank holiday. There is no gold for one thing. Secondly, the banks are full of so much cash that it would take a massive run to create a problem. The government deals with bank insolvency like we change lightbulbs and it is all make believe. The 1933 bank holiday was a shield to set up a dictatorship under the trading with the enemy act and nationalize much of the US economy. Once they filled the banks with paper and the government said it was good, it all died down.

If you don't believe this works, look at Europe. Are any of those teetering countries any more solvent than this time last year? No. All that happened was Draghi said the ECB would be a buyer of last resort and speculators reversed position on the debt. I bet they get a 50% haircut when the time comes at least, but that is beside the point. The bazooka might merely be a pop guy with a big cork if the time ever comes. Nothing changed

[Higgenbotham]

Higgie, you have pointed out that if there is a "bank holiday" where nobody can get money out of their bank accounts then cash which can still be spent in a hurry is much better than electronic credits at a bank which may sit frozen till after a huge devaluation.

I remember talking about a list of scenarios where deflation could happen. One of those would be if there was a cyber attack, nuclear attack, EMP attack or solar flare that disabled the computer systems and the electronic money was frozen or disappeared. Then there would be a shortage of money and the Federal Reserve would have no way to flood the market with money.

More and more, it's been my thought that instead of a bank holiday, they are getting ready to launch a "false flag" cyber attack on the computer systems to wipe out all the bad debt and blame it on China. This is what the news seems to be telling us, where there is this constant drumbeat about how "Big Bad China" is getting ready to attack our computer systems. If China were really a threat to our computers, they would say the opposite, that there is no threat, or more likely just ignore it. When they do this "false flag" attack, they will wipe out all the electronic money, electronic debts and electronic derivatives, blame China for destroying our records, and then start over. If someone has a recent paper statement, they will say, sorry pal, we don't have any way to verify this. This is another reason why putting money in gold is good, regardless of what happens to the gold price.

[Higgenbotham]

Searching for false flag cyber attack brings up quite a bit of information. I haven't been paying much attention. My thought is that, if it does happen, it won't be until after the crash. My focus now is on the upcoming crash. I think it's more likely they will wipe everything out, rather than just steal the money, but who really knows? We all know what Corzine got away with.

Gauss, which is an online banking surveillance virus, has the capability of electronically transferring information out of customer accounts to be redirected to another location. The banking industry would be devastated if suddenly they were infiltrated by Gauss which would cause every banking customer to become insolvent overnight.

This sets the stage for the banking holiday that we’ve all been warned about. For example, the mainstream media would be used to announce that Gauss has infected the all domestic banking computer systems. In order to purge the virus, all banks would need to shut down for a specified amount of time in order to reconfigure their computers. Perhaps on a Friday afternoon, the major banks will all announce that they will shut down to customer activity so they can “get rid of” Gauss from their system. The banks might say that they will reopen to the public on Monday morning.

Customers would not be able to conduct any financial transactions, either in the bank or online over that weekend. And with the promise that everything will be ok on Monday, there is no threat of a banking holiday because the cover story is that a virus must be purged before regular banking can continue.

However this would be a false flag meant to pacify the public to avert mass panic. While the general public would fall for the cover story, the banking cartels would simply electronically transfer all customer funds from private checking accounts out to off-shore banks where they could not be touched and cover their tracks.

Then on Monday morning, while the reports that the banking industry suffered greater infiltration than expected, the DHS and US armed forces would be poised to enact martial law to control the potential for domestic insurrection caused by the realization that every American has had their money stolen from them by the banking cartels in one fell swoop.

http://occupycorporatism.com/be-warned- ... our-money/

[Higgenbotham]

My thought is that everyone will be wrong again.

Everyone is now convinced there cannot be a bigger crash than in 2009 and that 2009 was the real generational crash, like 1929, and either that was the worst or the grind down to the low will happen slowly. I think a massive crash is coming, the biggest in the history of the world. There will be a bounce out of that crash that may last 1-3 years, then it will be lights out.

The "false flag" cyber attack will be launched after this massive crash occurs. The reason it will be is because at that point the banks will be insolvent but so will the Fed and there will be no way to bail out either. Plus the US government will be completely bankrupt to the point where "business as usual" cannot prevail. In a desperate attempt to save themselves they will attempt this "false flag" to wipe the slate clean. It won't work and that's when Washington and New York will utterly collapse and the world will then enter the new dark age.

As I've been saying repeatedly, sustainable economies and market value are not built on money and more money; they are built on solvency, profit and energy flows. WIthout profit, a company is worth zero. Force feeding electronic printed money into a company and calling it profit can't work. The US economy is insolvent, it does not and cannot operate at a profit, and net energy flows into the US economy are decreasing.

[Reality Check]

More and more, it's been my thought that instead of a bank holiday, they are getting ready to launch a "false flag" cyber attack on the computer systems to wipe out all the bad debt and blame it on China.

Just a clarifying point here. The Bank Holiday in the 1930s and any bank holiday that occurred in the future: was, and would be, part of the U.S. Government's solution to the "banking crisis". The "crisis" which "forced" the U.S. government to act in the 1930s was sporadic runs on various "private" banks in various regions of the United States over an extended period of time..

Today the crisis could be computer failures at banks caused by "attacks from China".

In the 1930s the Banking Holiday allowed the U.S. government to replace, virtually over night, existing banks, with new U.S. Government regulated and guaranteed banks.

The U.S. government did not take over the debts of the old banks, the government merely shut the old banks down and created a new bank in the same building.

Any number of people had access to the money of account holders in the "old banks" before, during and after the Bank Holiday in the 1930s, the problem was that the account holder was barred, on many occasions and for extended periods of time, from visiting the old bank to receive an accounting and also barred from withdrawing his/her money,

The U.S. Government, after taking possession of the old banks' records and thoroughly investigating for an extended period of time what happened with the money, could make up any story they wanted about what happened to the money, and no one would be able to dispute them.

A Bank Holiday is not the cause of the crisis, it is the tool the U.S. government uses to help you by temporarily, or permanently, barring you from demanding an accounting of your monies, and barring you from withdrawing your money from your bank account with the "old bank".

The question is who the fall guy will be when it is "discovered" all the money is "gone".

[Reality Check]

.
.
The Communist Chinese do appear to be the perfect fall guys.
.
.
Which would also be a great excuse for the U.S. government not paying the Communist Chinese the small percentage ( 1.2 Trillion out of 16.5 Trillion ) the U.S. government owes China.

[Higgenbotham]

More and more, it's been my thought that instead of a bank holiday, they are getting ready to launch a "false flag" cyber attack on the computer systems to wipe out all the bad debt and blame it on China.

Just a clarifying point here. The Bank Holiday in the 1930s and any bank holiday that occurred in the future: was, and would be, part of the U.S. Government's solution to the "banking crisis".

Exactly. Once the "false flag" cyber attack is launched and the records disappear, then the US government will "reorganize" the banking system and reopen it. Which I think also shows how and why the financial crisis this time will be tied more directly to the war, rather than having a long separation in time like between the Great Depression and WWII, and why a war is almost inevitable.

[Reality Check]

More and more, it's been my thought that instead of a bank holiday, they are getting ready to launch a "false flag" cyber attack on the computer systems to wipe out all the bad debt and blame it on China.

Just a clarifying point here. The Bank Holiday in the 1930s and any bank holiday that occurred in the future: was, and would be, part of the U.S. Government's solution to the "banking crisis".

Exactly. Once the "false flag" cyber attack is launched and the records disappear, then the US government will "reorganize" the banking system and reopen it. Which I think also shows how and why the financial crisis this time will be tied more directly to the war, rather than having a long separation in time like between the Great Depression and WWII, and why a war is almost inevitable.

A cold war would work just as well as a hot war for these purposes. Obama is a man of peace. He could simply refuse to start a "kinetic war" with China even though he was sorely provoked by the Chinese Cyber attack that wiped out all Bank records.

Given the need to rebuild the American economy it would be understandable why the U.S. failed to come to the assistance of Japan, The Philippines, Vietnam and Burma in their minor border disputes with China. It would also be regrettable, but totally understandable, that the U.S. avoided a nuclear confrontation with North Korea and China, when China was forced to station Chinese Communist troops in all parts of the Southern half of the Korean Peninsula in order to protect South Korea form the nuclear threat from North Korea. After all North Korea was primarily a creation of China, so China should have been responsible for fixing the problem. The United States continues to support South Korea by maintaining South Korea's most favored nation trading status.

Taiwan, as Republican President Nixon recognized decades ago, has always been a part of mainland China, so the negotiated agreement of one China, three systems, which led to Chinese Communist troops taking over national defense responsibilities on Taiwan was a logical, and brilliant, piece of diplomacy on the part of the Obama administration, which preserved the capitalist economic system in Taiwan and allowed the United States to continue to trade with Taiwan as a most favored nation trading partner.

The United States government would be "forced by the Chinese Cyber attack" to increase the control the U.S. Federal Government has over every aspect of each American citizen's economic and financial life, to keep "the people of the United States" safe from another such cyber attack by China. Iron fist control of the Internet within the United States was of course the first priority of the United States government after the cyber attack.

Obama did take stern action against China, however, by imposing a total trade embargo on shipments of goods directly from, or to, the Communist Chinese mainland. Hong Kong, Taiwan, occupied South Korea and the occupied portions of Vietnam were of course excluded from this embargo as a means of supporting the free enterprise systems in those countries.