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What I try to do
on this blog is to put concepts, or thoughts, into words. I don't want to
simply draw your attention to interesting articles I come across. But
instead, I want to draw your attention to thoughts and concepts that develop
after interpreting those articles in the light of FreeGold theory. The
subtext in most of my posts is a concept that I have not seen hashed out
anywhere else, at least not in the same way as I am trying to explain it. For
the most part, that is the criteria by which I make new posts here.
This one is a doosy. So it will likely be as difficult to explain as it is to
understand.
The basis of this post is --> this article.<--
Read it slowly and read it twice, especially the section titled "Capital
Destruction". This is important yet difficult to understand. I had to
read it three times myself. Here is my simplified explanation:
First, watch this two
minute video from "Rich Dad", Robert
Kiyosaki on assets and liabilities.
This is an income statement and balance sheet in it's most basic form. The
bottom is the balance sheet, with assets and liabilities. This is the same
whether you are an individual, a multi-national bank, the Federal Reserve, or
even an entire country:
The situation the banks are in right now is that, thanks to fractional
reserve banking, they have almost no real capital, but their balance sheets
are loaded up with assets on one side that are liabilities on another bank's
balance sheet. And vice versa. So as we see these behemoths merge, or
consolidate as the Fed, the FDIC and the Treasury are orchestrating, these
assets and liabilities CANCEL EACH OTHER OUT.
All that will be left in the final analysis is the liability to the
depositors who provided the capital which was washed away by these games they
played.
The banks MUST be recapitalized!
PROBLEM: What is being done to "rescue" our banks like Wamu and
Wachovia, consolidation, is exactly what will destroy the whole worldwide
banking system. We are watching an implosion, a self-destruction, happen
right before our eyes. Just like what happens when matter and antimatter come
in contact with each other.
SOLUTION: What is needed is a recapitalization of these banks, not an
asset-destroying consolidation. And ONLY FreeGold has the available capital
to make that happen. NOTHING ELSE. In fact I would challenge anyone to
propose even a theory of some other way to recapitalize our system. It is
impossible.
Antal Fekete is talking about FreeGold, and I'm not sure he even realizes it.
He has formulated a solution, but the one missing ingredient is for gold to
find it's true value which not only draws it out of hiding, but makes the
world bulk of gold more than enough to start acting like a sponge.
Quotes from the above article:
What is needed is
the mobilization of gold hoarded by the Treasury, as well as of gold hoarded
by the private sector.
Mobilization of
gold is the only way.
Save the pension
funds!
This crisis is a warning, possibly the last one, that the recapitalization of
banks with gold cannot be further postponed without risking the total
collapse of the financial system.
Here is the dead canary in the coal mine: WaMu Employees' Pension Fate Unclear. Yes,
they will
lose their pensions. And so will many others. This is just the beginning.
Summary: The banks are broke. They have no capital, only debt related assets
and the associated liabilities. What our leaders are doing will make the
assets they DO have just disappear along with the related liabilities. But
the liabilities to the depositors will remain. A vicious cycle has begun
which will leave all banks insolvent and savers broke.
Printing new money for those savers will not recapitalize the banks. Only
gold can do that. Only gold can go in an asset column and not be in the
liability column of another bank.
The only way to mobilize the gold so it can serve this function is for it's
price to float freely on the world stage.
This is the ONLY solution, and it will come to the world one way or another.
Please try to convince me that I am wrong.
FOFOA
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