Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Ultimate Market Regulator Failed

Politics / Market Regulation Jun 13, 2010 - 07:36 AM GMT

By: Shelby_H_Moore

Politics

Best Financial Markets Analysis ArticleEmail sent to: Brooksley Born,

I know your fought for the regulation of OTC derivatives: http://www.marketoracle.co.uk/Article14485.html


I am for the most scientifically efficient regulation.

In 1988, Larry Summers wrote a critical research paper which implied that for the fiat (money=debt, fractional reserve, i.e. ponzi) financial system to be able to escape return to an intrinsic value of zero (as fiat systems have done in every example in history of man), that this most efficient regulator had to be suppressed:

http://www.gata.org/files/gibson.pdf

What Summers discovered was that gold is the regulator of real interest rates. The people vote and the market corrects itself. If interest rates are lower than the inflation rate, gold ALWAYS increases in fiat price (because gold pays no interest). Interest rates are the regulator of all financial activity. I want you to think outside the small box of incidences of "fraud" and think about the larger containing box of "opportunity cost". Interest rates regulate humanity's opportunity cost. If interest rates are not regulated by the market feedback mechanism (the mother of all fraud), then regulation of individual incidences "fraud" is analogous to putting a bandaid on cancer sores.

But gold failed to regulate from at least 1992 (especially 1996) forward. Why? Because CPI statistics were increasingly lies to make it appear that real interest rates were positive:

http://www.shadowstats.com/alternate_data/inflation-charts

And because Central Banks were leasing their gold to suppress the gold price. And because as the BIS confirms, up to 100 times more derivative silver (and gold) promises (effectively naked shorts) were sold than exists physical metal (more supply of "metal" means lower price):

http://silverstockreport.com/2009/OTC-silver-fraud.html

Greenspan misapplied the freemarket theory, because there is no way that markets can self-regulate if the feedback mechanism for interest rates is suppressed. I have a hard time believing that Greenspan did not know gold was being suppressed, since he stated, "central banks stand ready to sell unlimited quantities of gold".

Had your regulation of OTC derivatives pushed through, you would likely have revealed the interest rate manipulation, and caused the fiat system to self-correct earlier, which would have caused a massive recession if not depression and a skyrocketing gold and silver price.

Instead the boys kicked the can down the road, and what is coming now is horrific beyond description. What we are likely to get now is a backlash of socialism so severe (because decades of mis-allocation due to incorrect opportunity costs), that the freemarket will be crushed for decades. For example, even now the freemarket can not buy gold and vote, because mathemetically gold can only keep pace with inflation, and yet gold is taxed at 28% (and probably higher soon), so thus anyone who buys gold is going to lose at least 28% in terms of purchasing power (although this will be better than what is coming for people who don't buy gold).

Macro-economics trumps micro-management. Socialism is central decision making and freemarket is individual decision making. Capital is not money, and when money has incorrect oppportunity cost, then capital is destroyed (for a looong time). The freemarket did not fail, Summers and the boys suppressed the feedback mechanism that allows individuals to vote and regulate. The fraud was at the very top, at the macro-economic level. It was 100% socialistic (central management).

And now we are going to pay for it with horrific hyper-inflationary, greatest depression since Rome.

An interesting confirmation is the mathematical fact that when gold is money, savers gain 33,900% greater return per century:

http://www.marketoracle.co.uk/Article16212.html

God bless,

By Shelby Henry Moore III

antithesis@coolpage.com

short bio, I have published articles on FinancialSense.com, Gold-Eagle.com, SilverStockReport.com, LewRockwell.com. I am the sole or contributing programmer of numerous (some million+ user) commercial software applications, such as Corel Painter, Cool Page, WordUp,
Art-O-Matic, etc.. I have an education in engineering and math.

Disclaimer: My writings are my personal opinions, not to be construed as statements-of-fact. Do you own research. Licenses to think and communicate have never interested me too much, so I am not a licensed research, journalism, investment, legal, nor health professional. Please consult the proper authorities for all matters covered in my writings. I disclaim all liability for what you do after reading my writings. No one can predict the future, and if there is a physical world investment that never loses value, I haven't found it yet in my 44.1 years here on Niribu.

© 2010 Copyright Shelby Henry Moore III - All Rights Reserved


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Shelby Moore (author of this article)
15 Jun 10, 10:38
Delay not escape

Correction:

"Larry Summers wrote a critical research paper which implied that for the fiat (money=debt, fractional reserve, i.e. ponzi) financial system to be able to escape return to an intrinsic value of zero (as fiat systems have done in every example in history of man), that this most efficient regulator had to be suppressed"

Should be:

"Larry Summers wrote a critical research paper which implied that for the fiat (money=debt, fractional reserve, i.e. ponzi) financial system to be able to DELAY its return to an intrinsic value of zero (as fiat systems have done in every example in history of man), that this most efficient regulator had to be suppressed"

The point is that the suppression of gold as a regulator of interest rates, is necessary to extend the ponzi system.


Paul
15 Jun 10, 15:02
Larry Summers

Larry Summers wrote a paper outlining how the final financial reckoning can be delayed a little longer while he and his kind loot the system just a little more.

There, that sound better.


paul blanch
18 Jun 10, 07:38
gold taxation

Shelby,

I've read your theory as to the eventual taxation of gold, under a new gold standard controlled by our elite bankers. Your theory unfortunately has several FATAL flaws. For instance, if just ONE country, like China, refuses to join the banking cartel and establishes their own gold standard, then the price of gold cannot and will not be controlled. What chance is there that virtually every nation in the world will allow themselves to be subjugated to the elite bankers? I say there isn't a "snowballs chance in hell". China is already disdainful of the banking elite and any effort on their part to extend their control would be met with fierce nationalistic self interest..>>.. paulb


Shelby Moore
18 Jun 10, 12:01
re: gold taxation

Paul, don't be so naive. China has been controlled by the elite for a long time, since at least the opium wars. China is one of the main battering rams driving the NWO strategy.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in