Friday, August 21, 2015

Ready for the Federal Reserve to come to the 'rescue', again?

If a nation prints more money,
like cutting a 16 inch pizza into 16 slices instead of 8,
is each slice worth less?

Nations are not ruined by one act of violence
but quite often, gradually, and almost imperceptibly
by the depreciation of their currency through excessive quantity

Nicolas Copernicus
Discovered Earth was not the center of the Universe

If Nathaniel Rothschild accumulated gold
essential for supporting an army upon Napoleon’s return
in anticipation of an extensive military conflict
and rapidly increasing government borrowing
and profitably exchanged relatively high priced gold
for lower cost debt
in anticipation of sovereign debt stability
upon Napoleon’s defeat by Britain's Wellington at Waterloo in 1815,
could current circumstances reflect something like the same thing
only opposite?

If Germany’s central bank suspended the right
to redeem gold backed Reichsmarks during World War I
and 170 Reichsmarks bought an ounce of gold in January 1919
why did an ounce of gold cost 87,000,000,000,000 Reichsmarks
in November 1923?

"Now in modern markets
it is striking that exactly the reverse…applies

Governments all over the world
are about to flood the bond markets with paper
to finance their bank bailouts and economic stimulus plans...

…governments are about to need to raise the funds
to fight another Napoleon

This massive new supply of [electronically 'printed' money]
[could]depress the price of existing bonds

…governments all over the world
have embarked on massive money creation"

Peter Cooper
Seeking Alpha
(Hat tip for the Rothchild metaphor)

What if the pizza shrinks 
while the number of slices rise?