Martin Armstrong

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Rasta
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Re: Martin Armstrong

Post by Rasta »

Rasta wrote:Will Gold Be Confiscated?

Answering Your Questions

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I won't give away Martin's answer :x
Two lines I want to quote:
Trading futures has been based upon the confidence that the exchange stood between all parties. The disgraceful confiscation of all assets at MF Global and the refusal to honor the client segregation of funds from those of the brokerage house is beyond belief.
The futures market has too far discoupled with reality. This has to converge back to reality. Not disappear, but promises have to be trusted again.
We need an old world private bank where they do not lend out your money or sell it behind your back in REPO, and you pay a fee for them to be the custodian.
Ah, old-fashioned boring banking, no financial engineering. Just wiring money and being a good custodian. That will limit the fractional reserve madness (without even the need to outlaw it).

Reading between the lines, I don't see many difference in where Armstrong is heading for a solution, then freegold.
Eventually there will be an awakening, a balancing of the scales and a bill to be paid, and for that I hold gold - Jim Sinclair
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Malcolm
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Re: Martin Armstrong

Post by Malcolm »

Rasta wrote:Ah, old-fashioned boring banking, no financial engineering. Just wiring money and being a good custodian. That will limit the fractional reserve madness (without even the need to outlaw it).
It strikes me that this exact option exists today at GoldMoney, BullionVault and perhaps others.

If the confiscation question is restated as 'Will the EU, US or China confiscate the bullion vaults?', Armstrong really fails to give a direct answer. Instead, he offers two disconnected comments. First: "Government will NEVER return to a gold standard. That is simply off the table. Any confiscation of gold will not be to create a monetary system, but to simply grab wealth to fill the pockets of the bankers." Second: "Since there is no intention of returning to a gold standard, ... Everything will go to keep the power."

A couple of years ago, Martin wrote a piece on Roman debt around the time of Julius Caesar. He suggested that Roman deficit spending was so great that political office was necessary to avoid bankruptcy. Like now, the republic was in a ponzi-scheme end game. Debt was far more than assets. Since debt repayment was in practice an uneven application of force, only by being in government could you insure the tax collectors skipped your manor. Loss of political office meant bankruptcy, hence you might as well engage in civil war when your position was threatened politically.
Anatomy of a Debt Crisis http://www.martinarmstrong.org/files/An ... d-6309.pdf

This seems an appropriate parallel for answering the confiscation question. Martin is saying governments will not confiscate the bullion vaults. Instead, the banks will confiscate them and governments will ignore the theft, just as they are doing with MF Global.
Rasta wrote:Reading between the lines, I don't see many difference in where Armstrong is heading for a solution, then freegold.
Perhaps, but at best he suggests nothing contrary to the idea. In my view, the primary issue preventing any realization of freegold is general 'protective services'. In other words, freegold requires communal protection of personal gold. Armstrong doesn't seem to suggest anything towards that end.
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Rasta
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Re: Martin Armstrong

Post by Rasta »

Malcolm wrote:
Rasta wrote:Ah, old-fashioned boring banking, no financial engineering. Just wiring money and being a good custodian. That will limit the fractional reserve madness (without even the need to outlaw it).
It strikes me that this exact option exists today at GoldMoney, BullionVault and perhaps others.

If the confiscation question is restated as 'Will the EU, US or China confiscate the bullion vaults?', Armstrong really fails to give a direct answer. Instead, he offers two disconnected comments. First: "Government will NEVER return to a gold standard. That is simply off the table. Any confiscation of gold will not be to create a monetary system, but to simply grab wealth to fill the pockets of the bankers." Second: "Since there is no intention of returning to a gold standard, ... Everything will go to keep the power."

A couple of years ago, Martin wrote a piece on Roman debt around the time of Julius Caesar. He suggested that Roman deficit spending was so great that political office was necessary to avoid bankruptcy. Like now, the republic was in a ponzi-scheme end game. Debt was far more than assets. Since debt repayment was in practice an uneven application of force, only by being in government could you insure the tax collectors skipped your manor. Loss of political office meant bankruptcy, hence you might as well engage in civil war when your position was threatened politically.
Anatomy of a Debt Crisis http://www.martinarmstrong.org/files/An ... d-6309.pdf

This seems an appropriate parallel for answering the confiscation question. Martin is saying governments will not confiscate the bullion vaults. Instead, the banks will confiscate them and governments will ignore the theft, just as they are doing with MF Global.
Rasta wrote:Reading between the lines, I don't see many difference in where Armstrong is heading for a solution, then freegold.
Perhaps, but at best he suggests nothing contrary to the idea. In my view, the primary issue preventing any realization of freegold is general 'protective services'. In other words, freegold requires communal protection of personal gold. Armstrong doesn't seem to suggest anything towards that end.
You are entirely right. In so far, you are describing a paper world. Not that it matters. Banks of the future deal with paper, period. Odd, hybrid solutions like goldmoney are not necessary. Goldmoney should be simply be custodians, and interpreted like that. Once they start offering creditcards against your collateral, they start off the fractional reserve game. I wouldn't trust my money there (neither would I participate into a shared storage account).

Part of the problem is that government has sunken too deep. Especially in the US, as Armstrong is the living example, where the justice system rules exclusively in favor of the lawmaker. This is something not true (or not yet) in most of Europe.

The US will see hyperinflation because of that. The US will be the last to adopt Freegold because of that. The rest of the world will be a few steps better off.
Eventually there will be an awakening, a balancing of the scales and a bill to be paid, and for that I hold gold - Jim Sinclair
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Paul
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Re: Martin Armstrong

Post by Paul »

I would suggest Europe and USA are in the same political sunken boat.
we are not better off.
on the contrary, we may still have better rule of law, but we also do NOT have a democracy anymore !

it is the accumulated debt. it was always just a promise bound to be broken. no intention of ever paying anything back.
this HAS to change. stop the state borrowing and start living within means.

there is no choice,
this will happen. imo not through freegold but through general marketforces gold is just a part of.
"Taxes are a barbaric relic of the past"
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Rasta
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Re: Martin Armstrong

Post by Rasta »

Coordinated Central Bank Intervention
The Immediate Outlook
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Eventually there will be an awakening, a balancing of the scales and a bill to be paid, and for that I hold gold - Jim Sinclair
Adamus
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Re: Martin Armstrong

Post by Adamus »

Rasta wrote:Coordinated Central Bank Intervention
The Immediate Outlook
Image
Weinig nieuws onder zon dus :-) "een ver van ons bed show" voor de meeste burgers.

Btw: in mijn buurt is nu de helft van de tweeverdieners baanloos of draait minder uren. Zowel koopgarant (lage inkomens) als vrije sectorhuur (iets hogere inkomens en 40+ leeftijd). De buurman: "hallo ja, wat bedoelen ze met geld bijprinten om schulden af te lossen?"
Ook een aantal gescheidenen die hun huis nog niet hebben kunnen verkopen......QE gaat ons redden? BULLLLLL
Adamus
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Re: Martin Armstrong

Post by Adamus »

Rasta wrote:Coordinated Central Bank Intervention
The Immediate Outlook
Image
"Waarom is ECB geen FED?" Waarom wel hé? 't is toch nooit de bedoeling geweest lijkt mij. Hoewel de toppertjes in de FI inmiddels Hans Hoogerworst heten (en geen Duisenberg); € niks, £ niks, maar over $$$$ geen woord!
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Indiana Jones
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How Does Europe Borrow Dollars From the Fed?

Post by Indiana Jones »

Published: Wednesday, 30 Nov 2011 | 11:26 AM ET
By:John Carney
Senior Editor, CNBC.com


The Federal Reserve and other banks announced Wednesday that they were engaging in a coordinated action to provide liquidity to Europe's credit markets.

What essentially happened is that the Fed cut the interest rate it charges the European Central Bank to borrow dollars.

The ECB wants the dollars so it can lend them out to European banks, which have been having trouble borrowing dollars at affordable rates due to fears about their financial health.

It’s worth taking a moment to see what actually happens with these swap facilities because they can create the illusion we’re sending boatloads of dollars overseas and the ECB is sending us boatloads full of euros.

Would-be pirates will be disappointed that no currency flotillas cross back and forth on the Atlantic.

What really takes place, for the most part, is down on Maiden Lane in Manhattan’s financial district. That’s where the headquarters of the Federal Reserve Bank of New York is located.

Like most interbank transfers these days, everything is done electronically.

When the ECB wants dollars, it gives notice to the New York Fed. The notice contains:
- how many dollars the ECB wants
- when it wants them
- what the exchange rate is at the time
- when it will pay back the dollars, and what the interest rate will be.

Until today, the interest rate was one percent plus something called the US dollar Overnight Indexed Swap Rate (OIS). Today's announcement cut the spread in half, so that the ECB now borrows at just half a percent over the OIS. (It’s very telling that only the ECB has to pay interest. There’s no price for the Fed getting to hold euros.)

Next—and this is important—nothing happens. Not really, that is.

Nothing moves anywhere. No currency flotillas leave for the high seas.

All that happens is that an account at the NY Fed that the ECB has designated as its swap account gets credited with the dollars. This account is really just a line on a spreadsheet in a computer in that Fed building on Maiden Lane. Crediting the account just means that someone enters numbers into a spreadsheet.

At the same time, the ECB enters numbers onto a spreadsheet housed in a computer in Frankfurt, Germany, where the ECB is headquartered.

Those numbers represent Euros that are now “in” an account for the NY Fed.

Neither the dollars nor the Euros come from anywhere. They aren’t moved or debited from anywhere. They are invented right on the spot with a few taps on the key pad. And that’s all. There’s no printing press fired up to make new dollars or euros.

This is sometimes called “fiat money.” But that makes it sound as if some command from a sovereign created the money. It’s really closer to “keyboard money,” since it is created by data entry in a computer.

While the swap is outstanding, the ECB can lend the dollars in its account to European banks. It does this simply by telling the NY Fed that it wants to credit the account of a European bank and debit its account. This all happens, again, by someone typing the data into a computer.

Flash forward to the maturity date—the date when the swap is supposed to be unwound. On that day, the Fed simply zeros out the ECB’s account. This means there are no dollars left in it to be lent out to banks, although that’s really just a metaphor. What it really means is that the Fed will not credit the accounts European banks if asked to do so out of the zero’d out account.

If the ECB’s account on the maturity date has the right amount in it, then the swap is closed off. If there’s a shortfall, then a new swap is created to represent this amount. This means that it’s pretty much impossible for the ECB to default on this loan, since any shortfall is just rolled over into a new loans.

Why might there be a shortfall? Remember, the ECB is borrowing dollars so that it can lend them out to European banks. If those banks haven’t repaid those loans, it must “purchase” the dollars from elsewhere—most likely other banks.

What’s more, the ECB must pay interest on the swap—which means that it must always purchase a few dollars more than it borrowed or collect those dollars in interest from the banks it lent to. If it doesn’t purchase the dollars or get those interest payments, you get a shortfall.

By the way, there’s nothing in the swap agreement about what happens if the Fed doesn’t have the euros to refund the ECB. That’s because it is impossible for the Fed not to “have” those euros. You see, the ECB created the euros “held” as collateral for the loan by entering data on a spreadsheet. As far as I can tell, there is no provision at all for the Fed to “draw” from the “account” in which the euros are held.

They just “sit” there—although, again, since its just numbers on a spreadsheet, nothing is physically sitting anywhere.

To be honest, I don’t think there is an economic point to the existence of the Fed account with the ECB. What do we care if there is a spreadsheet in Frankfurt that represents the conceptual Fed possession of a bunch of euros?

I suspect the reason for this is entirely legal and optical. It’s good for all the central bankers to be able to tell the world that these loans are fully collateralized. Depending on how you read the regulations, the Fed may even be required to be able to claim it has collateral for the loans—even if that collateral is just a line entry on a spreadsheet in a computer housed in the very central bank that is borrowing dollars.

I’m not even 100 percent confident that anyone in Frankfurt does enter the numbers into a spreadsheet. Why would they? There’s no point at all to having them entered and automatically erased at the end of the swap.



And since the Fed doesn’t use those euros during the period of the swap, there’s no need to keep track of how many are in the account.If you’re a Frankfurt central banking clerk, why not just take a smoke break instead of opening the computer file that has this totally made up account in it?
Everything that needs to be said has already been said.
But since no one was listening, everything must be said again.
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Rasta
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Re: Martin Armstrong

Post by Rasta »

MF Global Disaster
Trading with other people's money
Collapse of the world's financial system
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Eventually there will be an awakening, a balancing of the scales and a bill to be paid, and for that I hold gold - Jim Sinclair
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Rasta
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Re: Martin Armstrong

Post by Rasta »

Unconstitutional American Police State
Answering Your Questions
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Eventually there will be an awakening, a balancing of the scales and a bill to be paid, and for that I hold gold - Jim Sinclair
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