The Consequences For Europe

The consequences for Europe are significant, with potential erosion of the European Central Bank's credit and that of stronger nations like Germany and France. In parallel, there's an impending need for substantial bank recapitalization in Europe, perhaps concealed by purchasing distressed sovereign debt from peripheral nations at inflated prices.

The burden of these bad loans will persist within the system. As the market detects this, the credibility of the euro could remain uncertain, leading to a potential uptick in investments in gold. The cost of bank recapitalization could reach trillions.

At the grassroots level, there's considerable demand for owning gold driven by distrust in both banks and governmental policies. While some may seek triggers to stimulate the gold market, those buying for security and safeguarding their assets do so independently of such triggers.

While the US dollar retains its role as the world's reserve currency, figures like Krugman advocate for increased borrowing. However, it's important to note that in the early 1980s, the ten-year note yielded 16%, a stark contrast to the current 2%. This lower rate has masked the underlying financial vulnerabilities of the US economy.

Presently, the gross national debt stands at 99% of GDP, manageable due to declining interest rates. However, the shift away from the dollar as the world's reserve currency is underway. This shift could reveal the country's insolvency, triggering a drop in the US dollar's value, heightened inflation, increased import costs, and unsustainable debt servicing. This highlights the importance of global investors safeguarding their wealth through gold ownership.

Despite Keynesian suggestions to increase government spending for economic recovery, the consequences warrant consideration. The concern is the potential loss of jobs due to decreased capital allocation for the private sector.

Comparing today's debt levels to the Great Depression era, the current situation is much worse. This would suggest a severe depression, but policymakers, like Bernanke, strive to prevent this outcome due to its political infeasibility.

Presently, the strategy involves debt monetization and expansion. However, each dollar of government debt represents a deferred future tax on production, compounded by interest payments. The crux lies in the need for a deflationary depression to rectify the imbalances stemming from the gold standard's abandonment under Nixon and subsequent decades.

It's crucial to secure protection against the impending challenges. This involves safeguarding against the recurring cycle of expansive monetary policies and quantitative easing, a role that gold has fulfilled for thousands of years.

The failure of Dexia Bank underscored the vulnerability of the European banking system. Despite initially passing stress tests, the bank later required recapitalization and nationalization, highlighting the potential need for trillions of euros to stabilize the European banking landscape.

Western regimes and financial institutions continue to receive substantial amounts of money, a situation that appears undeserved and misallocated. This prompts contemplation on whether the only option is to delay addressing the underlying issues. Alternatively, some view the bailouts as part of a broader, perhaps conspiratorial, effort to create chaos and distress, potentially paving the way for global governance and a new world currency.

For reasons not always apparent, the illogical trend of ongoing bailouts persists and faces mounting resistance. The resistance isn't just due to the draconian consequences of these actions, but also because technology empowers people with knowledge. This ongoing bailout drama has been exceptional, not only due to the vast amounts of wealth involved but also because it's unfolding before a global audience.

The repercussions continue to reverberate. The resistance movement began in the US with TARP and gained momentum with the revelation of over $16 trillion (potentially more) in short-term loans extended by the US Federal Reserve to financial institutions worldwide, not just within the US.

US Congressman Ron Paul's efforts in conducting the first audit of the Federal Reserve reflect growing scrutiny. While Ben Bernanke spoke, his influence pales in comparison to his predecessor, Alan Greenspan. Organized protests against the Fed, led by figures like Occupy Wall Street and alternative journalist Alex Jones, have become increasingly prevalent. In Southern Europe, protests and riots, as seen in Greece, emerge in response to attempts by the EU and its financial institutions to impose austerity measures.

The advent of the Internet has granted people unprecedented insight into ongoing events. In a pre-Internet era, mainstream news outlets might have provided vague explanations for the actions of institutions like the Fed. However, the Internet era has given rise to millions of articles and videos that expose the true nature of central banking as monetary manipulation. Central bankers' ability to "create money from thin air" to benefit select groups at the expense of the broader population has been dissected and exposed.

The system once thrived on its complexity, making it seem impervious to critique. However, that veil has been lifted. People worldwide now comprehend the intricacies and are no longer passive. Their frustration is breaching even the complacency of the political elite. With the dissemination of crucial knowledge, it's plausible that the elites might need to step back, as previously predicted. A wave of resistance is spreading.

The monumental misjudgment by Washington and Wall Street was assuming they could control the moral hazard after unleashing it. They believed they could exploit this phenomenon to amass trillions of taxpayer dollars for personal gain, then confine it before its corrupting influence pervaded society. This belief rested on the assumption that the public would remain oblivious. Moreover, even if awareness dawned, they anticipated acquiescence to the suffocating chains of debt imposed by the financial elite and their allies in Washington.

The origins of the Occupy Wall Street movement are not shrouded in mystery. It emerged from the same fallacious narrative that absolved the government and led to the Dodd-Frank Act. This narrative attributed the financial crisis and subsequent recession to a recklessly greedy private sector operating with inadequate regulation. Understandably, individuals subjected to this narrative in the media direct their frustration toward Wall Street. However, the true culpability lies with those who shaped and endorsed the government's housing policies, which were at the core of the financial crisis.

In recent times, Peter Wallison, a senior fellow at the American Enterprise Institute and a member of the Financial Crisis Inquiry Commission, has garnered significant attention. He has authored multiple articles in the Wall Street Journal, placing blame on the government rather than the private sector for the 2008 meltdown.

As the world's leading oil exporter, and the primary holder of dollar assets among Gulf Arab nations, Saudi Arabia's riyal currency is pegged to the US dollar. A substantial portion of its budget revenue, around 85%, stems from crude oil.

With robust oil prices exceeding $75 per barrel, the Saudi central bank's net foreign asset reserves surged, reaching an all-time high of 1.879 trillion riyals ($500 billion) by August. Interestingly, gold reserves have remained constant at 1.556 billion riyals since 2008, according to central bank data. Addressing this situation, Saudi central bank Governor Muhammad al-Jasser stated that a substantial 62% of global reserves are still invested in US assets, indicating a stable commitment to these holdings.