Let the Gold Market Trade Freely,

It use to be that businesses did there thing, taking on debt and expanding trade, making profits, and when things got bad for investors, there was always the release valve, GOLD, the safe haven go-to sure bet for investment protection. Yeap, gold has always been viewed as such, a safe haven, until of course, more recent modern times. Yeap, back in the good old days, you could always run to bullion for wealth protection, but a funny thing happened on the way to the bullion bank to pick some up, as an insurance policy, someone made it actually illegal to own gold, if you can really believe that, and then, someone took the US businesses and the currency off of silver coinage, and then, someone decouple gold from the currency all together. Gold and Silver were marginalized intentionally by the US Government. That is the history, so that FIAT would rule the world, and it has. But that was not a problem, so long as one could buy/sell gold at fair and free prices. However, fiat is subject to debasement, and hence, no longer a go-to safe haven, only gold was, in the good old days.

Of course, even during recessions or bank failures, everyone could put their dollars into gold, a safe haven, but a funny thing happened on the way to the coin shop, to pick up some more insurance in unstable banking and currency times, someone started to manipulate gold and silver prices downward, destroying mine supplies, while creating a super low paper futures market price, just to support the fiat dollar, and guess what, now average Joe cant buy "poor man's" gold, at any price, and no longer do businesses and people pile wealth into bullion, because its price is highly, ridiculously so, manipulated to a low value, and so, the story goes, derivatives were born in a world having no real safe havens. So, here comes the mighty derivatives, to save the world, to provide investment insurance, a safe haven, as the currency was debased and bullion prices were manipulated. Currencies were being debased through over expenditures, and gold was manipulated severely down in the futures markets, and that was the death nail of the two true safe havens.

Only one tradition safe haven remained, land, another pillar of personal freedom. But a funny thing happened on the way to the mortgage bank, no income was needed to borrow purchase money mortgages, and hence, the bankster took their fees and pocketing their huge bonuses. But a funny thing happened on the way to the escrow agent, upon the ARM resets, the house declined in value, and hence, the bankster were on the hook.

But not so fast, there was insurance right? The really really smart bankers created an illusion of safety by using derivatives that protected investments against losses. So, in the mortgage bubble, more derivatives were created, and sold everywhere, infecting the financial system with a deadly virus, but wait, as long as all counteryparties pay up, all is dandy, right?

Well, mortgage banks started to get hit with losses. Now get that straight, derivatives were created and are used as an insurance against business losses, and hence, the derivative leverage were disposed in trenches, and of course all was merry, secured by real property, for 20 years, or so. But a funny thing happen on the way FED facility window, to borrow as much money as any bankster needs, the government is now under political pressure to stop bailing out the banksters, and hence, some banks now will not be bailed out, and will have to eat their losses or go BK.

But wait a minute, are not derivatives suppose to be a net sum zero protection and insurance safe haven to the banksters as a whole? Well, a funny thing happened on the way to the FED's bailout window, the jig is up politically, bail-out socialism has run its short course with BSC and GSE, as Lehman is not going to be bailed out, and will go BK, yet LEH represents the paying counterparty to a great hoard of protecting insuring derivatives, meaning that, many many banks will take a huge hit in losses based upon Lehman brothers' derivative failures to pay, and that is what is going to start a real global financial system failure.

How did it all start? The US government made it a crime to own gold, one of the five corner stones of personal freedom, (GOD GOLD GUNS LAND & VOTE) and when that failed, the government then manipulated down the price of gold, destroying its supply, and its safe haven function, the all time financial release valve that hold value to sustain any recovery, and hence, there was no where to run for safety, but to the derivative market, to seek protection, but unlike GOLD, derivatives have a major counterparty risk, and as such, 100T$ in derivatives are going to explode in bankruptcies and in failures, because of, and without the protection of, the safe haven value of gold to absorb the losses and recover, and there is now a pending collapse of the world's fiat complex and the banking industry, all because, THE US GOVERNMENT DECIDED it knew better, and trashed the gold and silver markets, keys to freedom and a necessary release valve for risk as a go-to safe haven. With the currency safe haven debased, with bank mortgage losses setting off a spiral downward in bank losses, with GOLD manipulated down to prevent its use as a traditional safe havens, and with no where to go but to the derivatives, there is now a 100T$ derivatives bubble going POP. Why?

Because Gold does not now function as a safe haven, as it is severely manipulated, which manipulation created and caused the derivative bubble, which will now take down all global fiat and the derivatives. Those who have decided to manipulate bullion prices down, and thereby force the banking industry to engage in exotic counterparty-vulnerable derivatives for investment protection, really are the ones to have pressed the plunger, and the resulting implosion of the fiat complex and the financial and banking markets, which implosion was completely avoidable, had common sense ruled the FED, to just let the bullion gold market trade freely.

Derrick
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