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I don't usually
like to simply repost stuff, but this one is just so on the money. It also
sounds very similar to some of my recent posts. This is FreeGold by dictum!
What I would suggest to Steve is that this same outcome can be reached
through free market means by simply monetizing gold. But what the hell, if
they will accept this plan, I won't complain:
The Golden Bailout Plan
(in answer to CNBC’s request for a plan)
By Steve Hickel - Posted on USAGold forum (Steve's writings from 1999-2000
can be found in this post.)
CNBC has asked business leaders, CEO’s to come forward with their plan
to bailout the economy. They claimed that few were taking the challenge. Well
here is a simple plan that may be crazy enough to just work.
CONFESSION
Before any bailout plan can be implemented, it is a must that all financial
skeletons be brought out into the light. If all the skeletons see the light
of day, then transparency will reign. Confession is good for the soul and
apparently ultimately financial markets. The problem is some financial
entities hold secrets too powerful for the confession called the Public.
Despite that, all time bombs need to be made known. Until that happens, we
will not rise above the current financial debacle.
The most important confession of the day needs to be from the folks who are
holding back the price of gold. They need to inform JQP (John Q. Public) how
they have worked in conjunction with the Federal Reserve, the Treasury
department, the Plunge Protection Team, and all the other cohorts involved in
suppressing the price of gold to keep it from reaching its natural level. We
just need a few insiders in the above “conspiracy” to come
forward on the QT (quiet) and confess. They will feel better, I assure them.
Why is this particular confession important?
Primarily because the Dow to Gold ratio has seen a ratio of 2:1 or better in
the last 100 years at least twice. We are currently in a third such
correction of this ratio. In fact, we are well on the downward leg of this
correction that promises – based on past performance – to be
swift and brutal. As the Dow appears to be headed towards 7,000 (or lower),
that would mean that gold will either raise to meet the DOW at $7,000 or the
DOW will lower to meet gold at 860.
The author believes that most of us would prefer the DOW to not fall so low.
Logic dictates that gold rise to the level of the DOW (and the sooner the
better). Some have predicted that the DOW to Gold ratio will actual surpass
historical corrections and go to a .25 to 1 ratio. That would mean that if
gold holds its own currently, that the Dow will go to 200.
Ridiculous as this sounds, the confession of the gold suppressors needs to
come as soon as possible. Once they have confessed to suppressing the price
of gold, then those involved can reverse their position on the long side and
keep the DOW from dropping further.
Once the skeletons expose themselves through contrition of those involved, it
will be time for action.
ACTION
In order to prevent the DOW from reaching 1000 (or less), the financial
powers (that got us into this mess in the first place and who confessed and
now feel much better) need to make an immediate adjust in the price of gold.
What about the matter of free markets that would normally perform this function?
Well we know that such matters of free markets no longer matter in the
current crisis. Besides, someone confessed to Gold not having been privy to a
real free market anyway. So, stop kidding around. Raise the price of gold to
a level that allows the US and Europe and the rest of G-11 countries to pay
off their imbalances with gold and retain half their gold in the process.
What level would gold have to “be risen” to in order to
accomplish the above?
That is a tough question because we don’t even know if the US or Europe
has the gold we think they do. So perhaps we should have a public inventory
of the gold (since the above confession will have made the holders of gold
feel better in the knowledge that all skeletons are in the public realm).
Once we take an inventory of gold held (and owned) by the US and Europe and
the remainder of the G-11 countries, we will then need a true accounting of
all the debt that needs to be “paid off.” The author believes
that these steps (inventory and an accounting of debt) should be done in
parallel. Don’t wait to do one until the other is completed. Keeping
the DOW from falling further is imperative.
As a point of discussion, let’s say that we limit our discussion to the
US Debt levels (both on the books and any that might be confessed above to
not be on the books – until now). Let’s just say that $20
Trillion is the actual number of US debt obligations. We will know more once
the GAO or some independent organization let’s us know our real debt
levels and the counters of US gold let us know the actual amount of Gold held
free and clear in US depositories.
For argument sake (based on public domain information), lets assume that the
amount of gold held by the US (free and clear) is 8,000 tons of gold. Eight
thousand tons of gold equates to 8,000 X 32,000 troy ounces (there are 12
troy ounces in 1 troy ton). This adds up to 256,000,000 ounces. Current
market value of gold (based on COMEX, the US-based futures market –
which some folks believe is one of the culprits involved in the prices
suppression scheme of gold – but this will already have been confessed
so no worries) is $860. For some unknown or forgotten reason, US gold appears
to be priced at $42.22 per ounce. So much the better for reasons explained
below.
In order to determined what value gold needs to “be risen” to in
order to pay off $20 Trillion in debt and still have one-half of US gold free
and clear, we simply need to divide $20 Trillion by 256,000,000 ounces and
double the value (keeping half – remember?). The author’s
calculator suggest that amount to be $XX per ounce ($XX per ounce doubled).
Or, if you prefer, divide $20 Trillion by one-half of 256,000,000 or
128,000,000 ounces. In any case, the answer is 20 trillion divided by 128
million = one hundred fifty-six thousand two hundred fifty or $156,000 per
ounce.
We need to factor in the current value of the audited US gold at $42.22.
Subtracting $42.22 from $156,000 gives us the amount that the gold needs
“to be risen to” in order to pay of the assumed $20 Trillion in
US debt and to keep half of US gold in the process. That amount is
$156,182.78. To put this in perspective, gold needs to rise from $860
(current value last Friday) to $156,128.78 – that is a 181.54 increase
in the current price of gold. If someone disagrees with the above math,
please speak up now.
As far fetched as this plan would seem and to account for any variances that
may arise due to European confessions and audits and accounting of debts and
other countries such as China and Russia factoring their thoughts, it will
actually keep the DOW from falling to 1,000 and will put the US and Europe
and other countries on much more solid financials. DEBT Free!
If some financial institutions failed to confess that they may have been
naked short gold as this process unfolds (and failed to go long), they may
find having to buy gold at $156,128.78 per ounce daunting. In fact, it would
most likely bankrupt them and their 3rd generation offspring. But that was
what the process of confession was to accomplish – show us where all
the skeletons are so we can deal with them prior to “having gold
rise” to $156,128.78 per ounce.
Some may take exception here and state that this is the same as inflation
rising by a factor of 181 times. They may also claim that it is the same as
going on the gold standard. The author respectfully disagrees. He thinks that
this a one-time adjustment. Raise the price of gold, pay off the debts, then
figure out a better way to do things going forward.
In case the confessors believe that gold should be kept from the hands of the
masses by attempting to confiscate gold or make it illegal for common man to
own, the author believes they are missing the point. The points is to raise
the price of gold one time very quickly to $156,128.78. Pay the debts public
and private and come out the other end with a better system that those
smarter than the author would know how to do.
The author is not sure why CNBC has not had any business leaders come forward
to suggest the plan of Confession and Action but no one has heard of another
better plan other than create more debt to pay off other debt. It is time to act
NOW.
FOFOA
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