The gullible markets now assume that our Banks are Secure and Safe. This is a huge MYTH IMO. The total American deposits that are now guaranteed are around $19 trillion and growing. How much backstop does the FDIC have to fund bank runs? Are you AWARE that the number is less than 1%. The funds which our FDIC has are less that $150 billion (cash) and the total deposits of all banks are over $19 trillion. This represents only 0.79%. This might last for one major institution. So who is guaranteeing all the deposits? Who is the ultimate backstop?
It's the FED. This institution can counterfeit dollars in the trillions with the click of a computer key. Their Balance Sheet is currently some $8.3 trillion. It is now going UP with the latest policy to backstop banks who need LIQUIDITY. Will the FED backstop all member banks and end up owning all wealth in America? This is possible. Our Central Bank can counterfeit dollars and buy assets into INFINITY? It's all 'numbers' and VIRTUAL one's and zero's in a computer account. What a mess!
So what might investors do to GET OUT of the 'official' banking system with SOME of their savings? Are you aware that GOLD and SILVER coins/bars are a solution? FDR called in all the private ownership of gold in 1934, but we now have a GLOBAL market for these precious metals. I don't think that our government (or the FED) can do anything to investors who decide to OWN physical metals. The best safe haven going forward is likely GOLD and SILVER (held in physical form).
Yes, our Central Bank does MANIPULATE the prices of these precious metals to try and FOOL investors. But this manipulation may be impossible going forward as investors buy up ALL the gold and silver on the planet. The quantity is minimal compared to the virtual currency units which can buy these metals. At some point all the electronic algorithmic price manipulations will prove to be MOOT. Prices will skyrocket as investors choose a SAFE HAVEN which are 'out of the official SYSTEM'.
The END GAME of money is when investors discover that the ONLY safe haven left for their wealth are safe havens which are 'out of the official SYSTEM'. Our official authorities will try to FOOL and MANIPULATE the markets as long as they can. But the WISE will discover that they need some funds 'out of the official SYSTEM'. Gold and Silver are now international money available for trade in Europe, Russia, China, South America, and the rest of our nations. Investors will discover that these metals have BARTER value (internationally). The foundation of all money systems are based upon these precious metals.
When push comes to shove in international trade, virtual (imaginary) currencies could be REJECTED as 'value in exchange'. What are ALTERNATIVES to these official virtual (imaginary) currencies (if they become worthless or rejected)? Items with BARTER value are great alternatives. Items like silver coins, gold coins, copper coins, bread, bakery items, booze, gas, electronic items, health items, autos, and other goods which one can BARTER in the global marketplace become an ALTERNATIVE. Are we heading in a direction where barter could be viable for national and international commerce?
My sense is absolutely! The foundation of trade is based on this concept called MARKET VALUE. What is market value? It's whatever works (for value in exchange) when I desire to trade with another entity. The concept in trade is VALUE IN EXCHANGE. VALUE is subjective and it changes with a changing marketplace. Today's virtual/digital currencies are really IMAGINARY units of nothing. When a NATION wants 'value in exchange' and when a virtual currency is unacceptable, then BARTER value is what emerges. So what items have BARTER value?
During my youth, I learned to BARTER with many of my neighbors when I had no currency to exchange. My neighbors were mostly FARMERS who produced goods from the land. I bartered for eggs, bread, butter, meat, medical items, chickens, cows, corn and much more. The key is to give VALUE in EXCHANGE when bartering in the marketplace. Think of this concept when you choose your SAFE HAVEN going forward. My sense is that gold and silver coins will become internationally acceptable in the near future. These items have VALUE in EXCHANGE!
Our banking system is on needles and pins. The SYSTEM is unstable and uncertain. Can our Central Banks provide confidence and stability to all our markets going forward (indefinitely)? My sense is that this is unlikely. At some point investors will discover the deceptions and criminal activity within these corrupt institutions. What is happening now is shameful. Money gets created 'out-of-nothing' by select decision makers who operate behind closed doors. A computer NUMBER serves as our legal tender. This is unsound and deceptive. We need a SOUND system. It all started with BARTER and it may go back to BARTER.
Think about getting 'out of the official SYSTEM' with a portion of your wealth. For the next few years, a good alternative may be silver and gold (held in physical form). These metals are currently relatively CHEAP. The past price manipulations have kept these prices suppressed. This game is ending, however, as investors buy up ALL the above ground SUPPLY. The manipulation game will then END. It's all a matter of time before these metals trade freely in our international marketplace. That is my perspective as of TODAY!
Think for yourself. I am: Donald B. Swenson, Economist/Philosopher, donaldswenson.blogspot.com.
http://kingdomecon.wordpress.com
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