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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

 
Best of Richard Russell
September 23, 2010
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I don't know how to break this news to all my loyal American subscribers, but here's the news -- the world has "had it" with the US dollar. And the world is starting to do something about it.

You don't believe it? Here, I'll give you some examples:

The Gulf oil powers are preparing to launch a single currency modeled on the euro. Saudi Arabia, Kuwait, Bahrain and Qatar are set to start next year on their new Gulf currency. These four nations (total GDP of $1.2 trillion) are set to start trading with each other with their new currency. And it looks as though they will establish a new competitive central bank.

I've thought for a long while that China was sick of taking losses on its holdings of US securities including its huge hoard of Treasuries. China, I'm convinced, wants to own the world's reserve's currency. China has already announced that it will shortly make its yuan convertible. But more than that, China has established arrangements to use the yuan with some of its main trading partners including nations in Asia and South America. Their business will not be done in dollars, it will be done with Chinese yuans. Further, China has become the world's leading producer of gold. China has been urging its population to build up their personal holdings of gold. The Chinese government is no exception. China has been switching its longer-term Treasuries to T-bills, and moreover, China is adding an increasing amount of gold to its reserves.

With its immense reserves, China has been "running around the world" getting rid of its dollars, and buying whatever valuable assets are available. China owns a veritable monopoly on rare earths, so much so that some US manufacturers are forced to manufacture their products in China. While China spends its money for assets, the US spends its money in a useless battle to halt the recession.

Russia is not to be left out of the revolt against the US dollar. Russia is setting up its own commodity exchange to compete with the Chicago Board of Trade (CBOT), and the NYBOT (New York Board of Trade). And the currency that Russia will use will not be the Yankee Dollar, it may be the ruble or some other currency.

The point I'm trying to make is that the world no longer trusts the US dollar, and various major powers are making plans to do business in currencies other than the dollar.

What can the US do? My suggestion would be to utilize the US's huge reserves of gold. They should mark the US's stock of gold to the market price, and back the dollar with a percentage of the newly-priced gold. As it is, the US stupidly prices its reserves of gold at 44.22. So instead of using the power of gold, the US in its ignorance, attempts to keep the price of gold in the cellar.

Incidentally, there are some doubts about how much gold the US actually owns. Congressman Ron Paul has asked for an audit of the US's gold holdings. It's insane that anyone would be against such an audit, but Congress has, so far, not given the go-ahead for an audit.

The gold is the people's property, yours and mine. How dare they not tell us whether the gold is there or not. And by the way, there are some doubts regarding how much gold is really at Fort Knox and in the vaults of the New York Federal Reserve.

The picture I am painting is that the world no longer trusts the dollar. Yet, the US dollar is part of every nation's reserves. The dollar is now flirting with its recent low, and by the time you receive today's site the dollar may have sagged to a new low.

With the dollar sinking, the loss of purchasing power among Americans is both frightening and tragic. Meanwhile, gold continues to climb to new record highs. So far, the new highs in the great gold bull market mean nothing to the average American. This surely cannot go on so quietly and subtly. As commodity prices rise, Americans will slowly "get it." Even the media will get it, and the secret of the decline in our purchasing will be out. The Fed's idiotic "core inflation" statistics will be scorned, and the real story will emerge. This will lead to the third speculative phase of the gold bull market. "Gold fever" will break out, and we'll know that the Fed's immoral and evil game has ended.

 

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