Hoarding Alternative Money & Reforming Banks
Argentina is going through the classic stages of economic collapse. The government seized all pensions. They are destroying everything that gives the people incentive to be a society that emerges from the cooperation of everyone. When government turns against its own people, even as the USA is currently doing, you end up with deflation insofar as the economy collapses and wages are not available, while hoarding emerges as does barter. This is why we find hundreds of cities in the USA issuing their own local currency because there was not much available especially after the sovereign debt defaults and the closure of more than 3,000 banks. In Japan when its currency collapsed, it entered a dark age where there was no coin issued for about 600 years. Rice became the standard of money. It is more often than not, basic commodities that become the alternative money supply. Currently, we are starting to see the very same patterns emerge in Argentina….
The 5 Stages of Collapse
Stage 1: Financial collapse
Faith in “business as usual” is lost. The future is no longer assumed [to] resemble the past in any way that allows risk to be assessed and financial assets to be guaranteed. Financial institutions become insolvent; savings are wiped out, and access to capital is lost.
Stage 2: Commercial collapse
Faith that “the market shall provide” is lost. Money is devalued and/or becomes scarce, commodities are hoarded, import and retail chains break down, and widespread shortages of survival necessities become the norm.
Stage 3: Political collapse
The ‘monarchs of money’ and the war on savers
Power Shift: First in a series on the rise of the central bankers and the global imposition of cheap credit
Most of that generation grew up believing that if you save and exercise prudence that you will earn at least a modest return on your hard-earned money to keep you comfortable in your old age, perhaps along with a pension.
But the money-printing orgy of the last five years looks to have shot that notion to smithereens.
Very deliberately, the central bankers have punished savers, pushing interest rates so low that any truly safe investment — and older people are always advised to play it safe — yields a negative return when inflation is factored in.
British pensioners Judy White and her husband Alan, at their home in Teddington, south of London: ‘I now have 50 per cent less.’ (CBC )
The policy has savaged pension and savings returns worldwide, but particularly in Britain, a nation of savers and pensioners.
There is more money in British pension funds than in the rest of Europe combined, and now that money is just sitting, “dead,” as some call it, not working for its
See the surge in central bank holdings, the printing of new money, beginning in the spring of 2008 with the bank bailouts and the acquistion of long-term securities to keep interest rates down. (International Monetary Fund)
New report exposes a serious problem with “quantitative easing”
I was going through a recent note from SocGen’s Patrick Legland and came across a nice visualization for potential problems from Japan’s QE program.
As I’ve mentioned before, Japan’s Yen strategy is inherently zero-sum. That is, if the lower Yen boosts Japanese growth, then it’s essentially stealing from someone else’s growth.
We’ve seen this most clearly in Europe in recent years where the weak Euro has benefited Germany and not the periphery nations (who are all current account deficit nations). So it’s interesting to note that the decline in the Yen is hurting… Germany!
This is interesting because of some of the recent calls for the ECB to copy the BOJ’s easing policy.
New report says the run on physical gold has gone global
Those who precipitated the recent fall in the gold price may have unleashed a beast that will put future efforts at market manipulation way out of their control. Physical metal is now seemingly becoming key in investors’ minds.
They are no longer putting any faith in paper gold and this is being seen in all quarters with reports from virtually all continents of demand exceeding supply of physical metal, and some hefty premiums being applied on sales of gold bullion.
Add to this particularly strong demand from Asia – reports have put the volume of deliveries into the Shanghai exchange so far this year of over 1,000 tonnes as actually exceeding estimated new mine production over the period.
Now whether this is indicative of actual Chinese demand, or perhaps a liquidation of gold held in the Western ETFs and it being moved into what might be deemed as safer depositories elsewhere is uncertain for the moment – although anecdotal evidence does suggest huge demand re-occurring at Chinese and Hong Kong retail outlets.
That other hotbed of gold demand…
Rick Rule- Are We in for Physical Shortages in Gold & Silver?
Greek parliament passes bill to lay off 15,000
Greeks Unpaid Taxes Soar $1.04 Billion
Moody’s says Italy may still eventually need bailout
Ebbing Inflation Means More Easy Money
Silver Slump Lures Buyers as Waiting Time Rises in Singapore