Can't look away

Morning free chickens everywhere. FBR will be up by 10am today which is now your time if you're on the west coast, same as me here in AZ! Kunstler was rambling about a bit on an old topic this morning, still worth the read, and the piece that struck me was this succinct paragraph, and I quote:

"The US faces a pretty stark choice right now: it can let the losers take their losses -- both the big institutions who created and traded in fraudulent securities, and all the "little guys" who borrowed too much money trying to get rich quick, or trying live like the millionaires they see on TV. We can let them go down, and suffer the consequences of their bad choices (and maybe prosecute some of the culpable bankers and corporate executives), OR, in an effort to let these losers off the hook we can wreck the whole machinery of capital by making our medium-of-exchange worthless." -Kunstler, his blog today - click on Clusterfuck on the right.

The medium of exchange that is becoming worthless is the dollar. I myself am going to try to stop watching the price of gold in dollars which is confusing because not only is gold increasing in value, the dollar is losing value, so a rise in gold prices can mean either that gold is actually going up or that the dollar is becoming less valuable - for example perhaps the feds are going to reduce the prime rate by another .75 this week (wait for it) which causes all dollars to become less valuable (including the ones in your wallet and purse right now), and thus gold will appear to go up, when in fact in other currencies it might be the same. Perhaps we should forget about the dollar (and I suggest you do, and if you're holding dollars, don't look now, but they are shrinking in your hand every day), and watch the price of oil and gold only in Yuan, Loonies, and Euros. Each of them have their own movements but are less volatile than our free fall dollar at the moment. In fact the one you should be watching is oil, as gold really is stable unto itself. That is so hard for many people to understand. There is not much gold in the world, and there is only a little found and refined each year. It is durable but jewelery siphons some off to be hidden away and in thus gold maintains it's scarcity at about the same value. It is all the currencies that change and the increase in the number of dollars it takes to buy gold is a direct indication of loss of value of the dollar, not an increase in the value of gold.

That is not true for oil however. It is rising against all currencies because it has peaked and there ain't no more being made (at least not at any rate that would make a difference - though you could stop back in 120 million years and check). The rise of oil is real. Gold is just a safe place to store your work and asset energy while you wait to see what happens. No, you can't eat gold, but it is scare, and universally understood, two of the requirements of a medium of exchange. The dollar is not scarce, is not understood, except that you have to take dollars for oil purchases world wide, or we will huff and puff and put our military on your doorstep. Reserve currency status goes to the biggest prick. So money is actually a poor choice for money.

Lest you think I have any real knowledge of the markets and finance and money, please disabuse yourself of that notion. I'm not a real scientist, just another incredulous face pressed against the glass of change, unable to look away. An example, gold plunged $20 this morning, but for no reason that I can see, and when the Fed lowers the interest rate this week, it should go up to new unexplored heights. Will it? I don't know, but I know this, if you're holding a bunch of dollars in hand, in cash, it is time to exchange them for things of durable value, gold, silver, booze (good stuff - not Ripple), ammunition (especially shotgun shells), guns, handguns, tools, solar panels (if you got the space), and of course, OPEN POLLINATED seed.

But my not knowing what the fuck is going on does not give me comfort, nor should it, you. The insanity of wealth based on nothing but agreement -no value supports our printed currency except the belief of one retarded banjo player in Appalachia, who luckily can't be found because he's out back with the pigs. Heaven forbid he awake to the illusion and start the cascade of the dollar collapse and subsequent worldwide economic collapse. That is why he is kept in the dark - just like you and I.

I'm writing the end of chapter five of Foreign Body Reaction this morning, and if I can write it as I feel it -I think it is pretty good! Watch for it after 10am. That will complete chapter 5 and I'll have the pdf of one through five up later today or tomorrow.