The New Manna: A Zimbabwe Dollar - In God We Trust

Evil and Amalek don't play the game of life with logic and of course not with Torah wisdom; it's a game of odds and basic math patterns, based on sub-par algorithms. The article presented says doomsdayers [i.e. blogs about moshiach, etc.] are fear mongers who exploit the facts as he presents in his case. The hand that he tips actually says that the nature of evil is a gambler and a risk taker as long as the odds are good enough; lets call it socio-blackjack, with a cheesy Vegas dealer name Bazza at your service.

Their view is that Zimbabwe was simply under-managed, and with American brass it can be steered, righted, and brought back to prosperity; throw in a few wars for the cause [not WWIII standard as a doomsdayer would suggest] and soon we'll be back to decadence, which is a right that every American has [as per their indoctrination] while the nations abroad are sold [or told?] to endorse, worship, and push the agenda of America enjoying its eternal birthright [Esau anyone?].

There are two possible key issues here: either they lose, and welcome Moshiach, or they try to win, and, well, yes, Geulah will be extended - but the fiasco and charade that they put on display for public will be quite pathetic, as probably every prophecy in Tanach will now have an easy platform to inform the people of God's intentions. What do we say to this - have fun? Buckle up? oy vey.

By the way, I'm going on record as agreeing with him, as I think God wants this elongated as possible to allow for teshuvah, save lives, etc. as outlined by the Vilna Gaon - who says its like being decreed a big rock to crush you; only God has mercy and agrees to throw the rock on you, but only as sand pebbles - many of them - like American dollars will be.

The Geulah process has already begun in certain sectors, and this will allow people to get on board and gain merit, again, thanks to an elongated process. And at the end of the day, I think Hashem just wants in his heart that one day he should pay an Avreich in Kollel a  Billion dollar monthly check, just in principle the World must see that day, for fate must contain a sense of irony.

Forbes.com:

From all the doom and gloom about U.S. and European economics you would have thought the end of the financial world was nigh. In fact a lot of people are saying that right now. Want some good news? It is not going to happen. That is not to say I haven’t written a lot of gloomy economic stuff myself. Yet, to be honest, I’m over that now. The economic accident happened in 2007/2008. The developed world’s economy didn’t die. It is now recovering. It is only a start but we have entered a new era nonetheless.

The idea is, U.S. and Europe are on a binge of deficit spending and this has created a titanic overhead of sovereign debt that can’t be supported or repaid.

This is correct. But do not panic.

The conclusion of the doomsters is that consequently the economic world will implode and the globe will spin off its axis into outer darkness. Well, the bit about spinning out of the orbit of the sun is an exaggeration, but not by much.

The doomsters see a collapse of so called fiat money, i.e. money as we know it and an economic and social breakdown will follow. Gold and bullets are to be the only currency.

According to this line of prediction, we should all be rearing chickens in anticipation and ready to grow bean shoots in our closets for food. While you are at it, get some plans to create a stealth smokehouse. Forget zombies; the marauders of the future financial collapse are going to be real people.

Woe on us, prepare!

This prepper-view is nonsense. The view that fiat money is going to disappear is mad and silly. Fiat money is going nowhere, except down in value.

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Whatever the political and economic rights and wrongs of the matter, what happens next is as close to the doomsters fall of the Roman Empire part 2, as a roller coaster ride is to a plane crash.

Why?

It is infuriatingly simple. Let us say the U.S. government got to a state that it owed 120% of GDP in debt. The U.S. is not there yet but it will likely get there soon enough.

What happens next? The U.S. simply engineers a 7% rate of inflation, all other things being equal and in two Presidential cycles U.S. debt to GDP is roughly halved to the old sweet spot of 60% to GDP. Of course modelling that with all the possible variables is way more complicated than that, but you get the idea.

Halving the value of money does the trick of sorting out this whole sorry mess. Now that might sound horrendous but it is not.

So okay you are a doomster and you think the end is nigh and that gold is money. Well, gold has gone up roughly 10% a year compounded since the end of Bretton Woods in 1971. This implies an average compound rate of inflation of 10%; if you believe that gold is real, inviolate, hard money, which as a doomster you most definitely do.

The world didn’t end over those 40 years as money was devalued forty fold. The fiat system didn’t implode, in fact everyone got a lot richer, even though in the meantime 2.5 cents of gold became worth a dollar or put in gold standard terms, 2.5 cents in 1971 has been inflated to $1 today.

If the dollar got devalued in real terms at 10% a year, as we have enjoyed in gold terms on average for 42 straight years, a 120% debt to GDP would hit 60% in around 6 years. This is why it is not a good idea to panic and get doomy.

The key is to be positioned for the denouement of current economic rescue attempts. The solution is the dilution of debt, through the devaluation of money. The governments of the west will not run out of money. That’s impossible. What will happen to rebalance the debts of the U.S. and Europe is what we need to focus on.

In a nutshell, bonds are going to get monetised. Sovereign debt will be turned into cash. Operation twist has put a large proportion of that mountain of debt at the short end of maturities. The economy of the U.S. is going to get very liquid indeed. That is the one thought to hold.

If you believe the developed world is going to get into a tail spin, it won’t be that fiat money will disappear. Instead there will be much more of it about.

The question therefore is how to play the outcome of cash flooding everything.

You can do worse than look back to the seventies to see what happened and use that period as a model of what to do. The answer isn’t to prepare for Armageddon. It is to invest in inflation linked assets producing index linked yield.

So perhaps buying bits of mountain desert to rent out to terrified ‘preppers’ is the way to go, because not only will the property value and rent rise with real inflation, you’ll also be paid in gold.

Forsight in Klippah?

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Oriental Exile: Path To Pax Judaica

ManPower. China. Erev Rav.
The Great Recipe For The Kibbutz That Will be The World Headquarters Out Of Zion Called:
Pax Judaica.
The Last Ruling Power.
...And Then There Was The Ani Riding On A Donkey!
What may seem like "all day" is actually Sunset fast approaching.
Shabbat Shalom! [B''H (5772-6000)]

Jweekly:

The Israel China Cultural Festival taking place around the Bay Area this month has provided a marvelous opportunity to celebrate the growing ties between the two countries.

It’s a sign not only of positive bilateral relations but also of close bonds between the Chinese and Jewish people.

Unlike much of the rest of the world, there is no history of anti-Semitism in China. Jews have had business connections there for centuries, and Shanghai’s embrace of European Jews fleeing Hitler is a kindness never to be forgotten.

In addition, there is abundant evidence that the Chinese have a favorable view of Jews, admiring them for their intellectual achievements and ability to survive. They also see Jews as sharing Chinese values such as family and education.

Twenty years after China established diplo-matic ties with Israel, this has all translated into warming relations between the two. According to figures cited in the March issue of Foreign Policy magazine, bilateral trade amounts to nearly $10 billion, with China being Israel’s third largest export market.

More than 1,000 Israeli companies have opened for business in China, and there is talk of a bilateral free trade agreement sometime in the future. On the other side, Chinese delegations regularly turn up in Israel, clinching deals with Israeli high-tech companies.

To cite just one recent example, in February the countries’ finance ministers signed a $300 million deal to export Israeli water technology to China. Beyond business, last year China took part in the China-Israel Strategy and Security Symposium in Herzliya, signaling closer cooperation on security issues. This matters because, as the world’s second largest economy, China exerts enormous influence on world affairs.

That China is not in the pocket of Iran, Syria or the Arab bloc (though it does business with them) signals that China has chosen to be even-handed when it comes to the Middle East. Growing closer to Israel can only help. Which brings us back to the Israel China Cultural Festival.

With Silicon Valley and some 40,000 Israelis living in our region, and with China’s strong Pacific Coast presence, the Bay Area is a nexus for relations between China and Israel, between the Chinese and Jewish people. What with spiking Hamas rocket fire and Iran’s nuclear intransigence, it’s easy to get caught up in the bad news when it comes to Israel. Here’s something to feel good about. Thank you, China, and the Chinese people, for what we hope will be an enduring friendship.

Am Yisrael comes from Yaakov Avinu. We learn about "Plag HaMincha" from Yaakov Avinu, as when Yaakov wanted to daven Maariv at the site of the Beis Hamikdash, Hashem made a miracle:
He made the sunset on Yaakov and he the ground moved from under him, and he ended up at Har Bayis, and ushered in the night.
May Shabbos of "6000" find its way here in 5772, in the merit of Yaakov Avinu!

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Amalek Owns You - Wakeup

The Torah demands, "Do Not Covet" - Where the late George Carlin would chime in, "That happens to be how the economy works."

George was right, unfortunately, that the transgression of the last of the 10 Commandments is what fuels the World as we know it: "I only want what you have!"

The Middle Class is the basis of Torah Society: Righteousness and Deliberation within the Power of Purchase.

Torah teaches and offers perspective of how to use and view money, and largely even economics as a whole. As God demands in Torah the Middle Class with a Utopian View, the World is responding diligently, ushering it out the door.

"You shall not covet" can be seen as the composite of the 10 Commandments, the benchmark of righteousness and obedience to God's Will; excluding it from society, would mark the end of faith within society.

To be rid of the Middle Class could in many ways be, the end of democracy in its latest incarnation; just another futile attempt of getting it right, whereas a Torah Government, is what the World needs, even if Planet Earth is unaware of God's message of Enlightenment embedded within the Torah, and the last of the 10 Commandments in particular - You Shall Not Covet. (and yes George, the Torah demands a thriving economy too)

Haaretz.com:

The middle class is shrinking, and its purchasing power is shrinking, too, found a Bank of Israel report due to be released this month. The report gives a concrete basis to the sentiments underlying last summer's cost-of-living protests.

Since 2007, goods and services became more expensive, while the middle class's real income remained steady, the bank found.

In contrast, since 1997 the middle class's purchasing power has increased significantly. However, over that period, the percentage of individuals and households in the middle class shrunk.

The central bank's researchers defined middle class as all households with net income between NIS 7,275 and NIS 12,125, which included about one-quarter of all households in 2010 and 2011. Upper-middle class was defined as households with net incomes of NIS 12,125 to NIS 19,400, which includes another quarter of all households. Above NIS 19,400 was defined as upper class, and below NIS 7,275 is lower class.

In 1997, 25.4% of all households were in the lower class; in 2011 the figure was 30.2%. Meanwhile, 28.8% of all households were middle-class in 1997, versus only 24.7% in 2011. The upper-middle class contracted from 26.9% to 25.7%.

Since 2007, the price of basic goods such as housing, rent, food, electricity, cooking gas and water have increased more than incomes, the bank found. The high cost of many of these items helped spark the social protest.

The report was prepared in response to that protest.

"The growing social gaps in Israel, coupled with the political and economic changes around the world, led to dissatisfaction among the core of Israel's society - the middle class. These are the people who are generally said to bear the brunt of the social, economic and defense burden, and they feel that their quality of life and state services are eroding," it states.

The overwhelming majority of middle-class households - 90% - are non-Haredi Jews, as are an even larger percentage of upper-middle class households - 95%.

Half of all households within these two groups include two parents and children, while one-quarter are childless couples. Of those with children, the majority have only one or two. Only 2% of middle-class households and a negligible percentage of upper-middle class households have five children or more.

Over the past two decades, the average age of people in these groups has increased. While the number of people over 65 in the middle class has decreased, their number has increased among the upper-middle class.

Most of these households include two wage-earners. More than 40% of middle-class households and 50% of upper-middle class households include two full-time workers, while the remainder have at least one person who works full-time or is self-employed.

One of the main arguments during last summer's social protest was that the middle class's purchasing power was eroding as expenses increased. The middle class's expenditure on costs such as education and health care grew significantly over the past few decades, while the public expenditure was low compared to that in developed nations, argued protesters.

The central bank said the items that cost middle-class households a significant proportion of their wages were: rent and mortgage payments, public transportation and vehicle maintenance, and preschool.

While the disposable income of the middle class and the upper-middle class increased more quickly than prices until 1997, the trend reversed in 2007, with real wages stagnating while prices continued to increase, stated the bank.

Somehow the Path to Moshiach Must Resolve Economic Issues -> Torah Economics of Novelty in 5772?

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The New World Order[ed by Bernanke?]

Will Ben Bernanke bring the U.S. to the grips of Hyper-Inflation? Inflation is already on record levels, and soon you may be buying bread for about $100 a loaf.
If that happens, we have Germany to look to on how war and economics are evil twins...NWO anyone? Nazi Germany 2.0 anyone? Erev Rav aiding the cause 2.0 anyone? The pieces are there, and there is not much of a need to read between the lines; it's pretty obvious where the World is headed [before Moshiach].


Money Morning [Australia]:

The Fed announced its plan to keep interest rates at zero until the end of 2014 last week.

This is becoming a joke.

US interest rates were slashed to zero more than three years ago as an emergency measure.

Then that got pushed out by 18 months to mid-2013.

Now the Fed has added another 18 months of zero interest rates by pushing it out again to the end of 2014. That’s three more years.

This will make it a total six years of emergency-level interest rates.


The theory is this stimulates the economy – by reducing debt repayments and making it easier to take out new loans.

It’s sinister. Rather than encourage people to pay debts off, the Fed is making it easier to stay in debt, and also go further into debt.

Anything to get indebted consumers spending money they don’t have!

But it gets worse. This policy also punishes savers, and other investors looking for fixed-income returns. It gives people less incentive to save.

Now it will be three years before money in US banks will earn any interest. That’s if the Fed doesn’t extend this policy again!

And because US inflation is now 3%, the purchasing power of money saved in US banks is in fact falling at 3% a year. It’s like swimming against a tide.

The interest rates are effectively negative. It’s the same situation in China and Europe.

Savers also face the ever-growing risk of the bank going belly up. Instead of a ‘risk-free return’, savers are getting ‘return-free risk’.

So, if savers want to get a return on their cash, they are now forced into higher-risk investments to find it.

This policy will divert more money away from savers’ and funds’ cash holdings, and towards riskier assets, like stocks.


The Solution to the Problem

Somehow, many people still believe holding precious metals is riskier than holding cash. So now that cash holders have to move into ‘riskier assets’ to get a return on their money, gold and silver have both jumped 5% in a few days.

One argument you often hear against buying gold and silver is that neither metal will pay you interest. Now US banks won’t pay interest to savers either. Savers won’t feel like they are missing out on interest payment if they invest in gold and silver over the next three years. Or even longer if the Fed extends this policy yet again, which is quite possible.

Having another three years of zero interest rates in the US is a game changer for gold and silver prices. Gold may be up 14% since late December, and silver more than double this with a 30% gain in the same time. But both stand to keep rising this year on the Fed’s latest move.

Analysts will need to increase their precious metal price forecasts.

Institutional investors rely on precious metal price forecasts to work out how to value gold stocks. So, higher gold and silver price forecasts will lead to higher gold and silver stock valuations and prices.
Something very interesting has already happened with analysts’ gold price forecasts recently. For the first time, they are starting to forecast gold prices to go up.

Year after year, mainstream analysts forecast the gold price to fall. And year after year, it has risen. Back in 2007, the average gold forecast for the following five years looked like this.

By this reckoning, gold would have been US$500 by now. It is in fact 250% higher than this today.

Gold didn’t fall in 2007. It finished the year UP BY 31%, closing around $800 an ounce.

This was a bit embarrassing for the forecasters, so in 2008 they came up with a new five-year forecast. It had gold starting at $800, then falling for five years from there.

But despite everything that happened in 2008, gold didn’t fall. It gained 5.6%.

So the forecasters started higher again in 2009, forecasting prices to fall from there for five years. But again it rose in 2009.

This has happened every year since. Each year the analysts forecast a falling price, get it wrong, and try again.

For the first time, the consensus view is that gold may actually rise. The Fed’s plan to keep rates low for three more years will now just send these forecasts higher. To add fuel to this fire, Bernanke also said the Fed would consider another dose of quantitative easing this year.

This is another reason why gold and silver prices are rising. Quantitative easing devalues the US dollar. Anything priced in US dollars has to rise in price to compensate.

The Fed can’t raise interest rates while it floods the market with cheap money. So the extension of the Fed’s zero interest rates to the end of 2014 gives it space to use more quantitative easing.

The prospect of the Fed forcing money back into the stock market, at the same time as causing higher precious metals prices, is a powerful combination for gold and silver stock prices.

Riskier gold stocks, like explorers, are now really starting to fly. They had a tough time in 2011, but 2012 is looking very different.

This chart shows a junior gold stocks index (GDXJ) over the last two years – and I’ve highlighted in red the bounce we have seen this month.

The four gold explorers I’ve tipped in Diggers and Drillers are now up by 57% on average. The best performer is up by 150%.

These stocks are early stage, and I expect them to rise in price much further as they develop successfully on the road towards production in coming years.

The market conditions for them to thrive are perfect now the Fed has forced investors into riskier assets, as well as turbo-charging the gold price. I’ll be looking to tip more gold explorers for Diggers and Drillers to capitalise on this set up this year.


Don’t Forget Silver

The Fed’s moves are also very bullish for silver stocks. A silver producer I tipped last year is down overall but has rallied 15% over the last month and is following the silver price up strongly.

A more recent silver recommendation, an early stage explorer, is up 14% in a few months. This is only just getting started. With successful exploration, the same forces carrying gold explorers up will carry this silver explorer much higher.

Silver usually outperforms gold in a rally, and has done twice as well as gold in this current one. So this silver explorer could be the most explosive of the precious metals tips this year.

The Fed’s answer to everything is to print money. It’s scary that after more than three years since the start of crisis, they are handing out the same medicine. Like a scene from Groundhog Day, it’s not hard to imagine them still keeping rates down and printing money beyond 2014.

Clearly Bernanke has no grasp on economics – just a grasp on the money printer. If he understood anything, I’m sure he’d put his own money into precious metals and precious metals stocks. Somehow I don’t think he’s smart enough to spot the opportunity.

Will Ben Shalom Bernanke be a real Ben Shalom - helping usher in peace in 5772? I hope so, otherwise we'll all be millionaires...just not the kind we used to dream of.

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