SGM Metals: Ron Paul on Bernanke's Dilemma & Western Gold Shift to the East

PALM BEACH GARDENS, Fla. - July 29, 2013 - PRLog -- Silverdoctors.com reports: [ Fed Chairman Bernanke's  farewell performance before Congress was full of contradictory comments about the state of the economy & the effects of Fed policies on the market. Bernanke made it clear the needs of Wall Street trump Main street, the economy, & sound money.

Quantitative easing (QE) & effectively zero interest rates have created paper prosperity, but now the Fed must continuously assure Wall Street that the QE spigot will not be turned off. Otherwise even the illusion of recovery will disappear. So Bernanke made every effort to emphasize that the economy was not doing well enough to end QE, while lauding the success of Fed policies in improving the economy.

From Ron Paul:

Bernanke was also intent on denying that Fed policies directly boost financial markets. However, the money the Fed creates out of nothing in order to buy mortgage-backed securities & govt debt for the QE3 program, benefits first & foremost the big banks & the financial class — those people who are invited to the Fed auctions. This new money then fuels stock, bond, agricultural land & other bubbles. The consequences of this are felt by ordinary savers, investors, & retirees whose savings lose value because of the Fed’s ZIRP.

As if Wall Street favoritism & zero returns for savers isn’t bad enough, the Fed wants the rest of America to bear a greater inflation burden. The Fed thinks you should lose 2% of the value of your dollar this year. But Bernanke is not satisfied with having reduced purchasing power by 10% since the 2008 recession. The inflation picture is actually much worse if we look at the old consumer price index —the one that did not assume that ground beef is a perfect substitute for steak.

Using the old CPI metric, as calculated by John Williams at Shadow Government Statistics, we’ve lost close to 50% of the purchasing power in the last 5 years. So what you were able to buy with the $20 before the financial crisis costs more than $30 today. That’s real money for working Americans & theft by the Fed. It is a direct consequence of the trillions of new dollars the Fed has “not literally” printed—as Bernanke put it.

Bernanke’s testimony confirms the Fed has blatant disregard for the extra costs & the new bubbles it is creating. The Fed only understands paper prosperity, not how middle class & the poor suffer the consequences of higher prices, resources misallocations, & distortionary bubbles as well as insidious unemployment.

The only way out of this tailspin of monetary favoritism is to restore sound money, which would end the Fed’s ability to manipulate currency. The Fed has proven over & over again that it has no respect for the real money that preserves the value of people’s labor, wealth, & ability to live free & prosperous lives. It is beyond time for the Fed, Wall Street, & the federal govt to stop manipulating money & stealing from the American people under the false guise of paper prosperity.]

Bernanke CAN NOT stop printing because the entire financial system is a bubble. Proof? When the word “taper” was mentioned the DOW had a convulsion & shed 800+ points in 48 hrs while all EU markets dropped 3-4% overnight & the Japanese market dumped 7% forcing them to shut down the exchange in order to prevent a collapse. Sensing the exposure of the bubbles inflated by his hot air & endless money printing, he rushed to assure the markets that he was not committed to tapering & the DOW immediately rushed up to make an all time record high! How exactly does that work if we are in an actual recovery? He says he will back off on blowing bubbles & ALL markets drop like a rock out of fear & then he reneges which makes our stock market reach an all time record high . . . . this clearly illustrates this is nothing more than a confidence game that is becoming less & less stable!

Add onto that the fact that recent federal data is showing 101M Americans on food stamps while only 97M are employed full time. while the ratio of food stamp users is greater than those with fulltime jobs, you have to remember that there are only 313M in the country. So 1 /3 are dependent upon the govt. to feed their children, while 1/3 are working fulltime (until Obamacare forces fulltime jobs cut down to part time) & the remaining are spread across those who have given up on finding work & govt. employees.

China is aggressively moving to dethrone the USD as the world reserve currency we see Yuan swap facilities popping up all around the world. This is very problematic for Bernanke as China is offering a more stable option that they intend to back with gold to give the comfort to those using it as it will be a hard asset backed currency just like the dollar used to be.

At the same time we are seeing all nations of the world rushing to build their nations gold reserves in preparation for the coming adjustment period when the western banks have their next convulsion. This mad dash to increase national reserves of gold should serve as a wakeup call to all. The western banking systems insidious effort to drag down the paper metals price in order to liberate themselves from the behemoth naked COMEX silver short @ $19 has setup a potential explosion to triple digits.They know exactly how explosive it will be when they release it from the Gold Cartels shackles that have given cover to the Fed for decades so they could print dollars into oblivion & gut the purchasing power of the dollar without the free market warning that would be gold & silver rising to offset the currency devaluation.

A few major western banks, & the banking system in general, are very close to insolvency & know they cant look to govt. to fork over trillions of new monopoly dollars, again. They have been given permission to execute the insidious “DefCon 4 - Nuclear Option, Bail-In” plan where they have been given permission by the western govt.s to confiscate & seize customer deposits in order to recapitalize themselves, but they know once that card is played there is no going back. In light of this concern, they are going with using the long overdue explosion in precious metals which will help recapitalize the banks balance sheets as the gold & silver they have conned US investors out & moved into their vaults will double & possibly triple in value. Why not have an insurance policy just in case this “hopey  changey recovery thing” doesn’t pan out? Globally wealth is being destroyed thanks to the global currency war so it only makes sense that we see tremendous shift of the recently sold US gold & silver bullion being drafted towards the east where they are not disillusioned by the destructive actions of the fed. They see the current recession shifting towards the depression it should have been back in 2008.

Get ready folks as an ounce of silver prevention will soon be worth a pound of paper dollars.