Such Total Nonsense … by Larry Edelson

I don’t agree with all that Larry says here, but I felt the need to post the entire Newsletter. Read, and make your own decision. . . ~J

headline
YOUR BEST SOURCE FOR THE UNBIASED MARKET COMMENTARY YOU WON’T GET FROM WALL STREET  (via personal email)

The talk that’s circulating that the U.S. Treasury can circumvent the debt ceiling by minting a one trillion dollar platinum coin is pure nonsense.

First, to the best of my knowledge, the U.S. Treasury does not own any platinum. That means it would have to go into the market and buy up platinum to mint such a coin.

But the Treasury is broke, so where would the money come from to buy the platinum?

The Federal Reserve, presumably. But I doubt the Fed is going to print another trillion dollars in one fell swoop to let the Treasury go buy 625.78 million ounces of platinum.

Yep, that’s right. It would take 625,782,227 ounces of platinum to make a trillion dollar coin.

And even if the Treasury could come up with the money via the Fed, where would that much platinum come from?

The total global above ground supplies of platinum are estimated to be roughly 7.5 million ounces, and the total annual production is about the same.

That means there would be about 15 million ounces of platinum available, assuming the Treasury could purchase 100 percent of available above-ground supplies and 100 percent of the production for 2013.

Even if Washington could pull off buying every single one of those above-ground ounces, it would take another 82 years of Washington buying up every single ounce of the world’s annual platinum production.

Utterly and ridiculously unrealistic, to say the least.

Ok, so let’s say that $1 trillion coin has “seigniorage” in it, its value — because it’s sovereign money — is worth more than the platinum in the coin.

And let’s say the government’s “seigniorage” or profit is as high as 50 percent and only half the amount of platinum I just mentioned is required.

You’re still looking at 312 million ounces of platinum that would be needed. Still an utterly impossible feat to accomplish.

And then there’s another problem: Who, or what country, in their right mind, would buy a platinum coin or coins from the U.S. Treasury knowing full well the metal is not worth a trillion dollars and that the Treasury has a large seigniorage markup on it?!

Let’s try another angle: Let’s say Washington dumps some of its gold reserves or borrows against them to buy platinum. Would that work?

Hardly. Washington owns some 287 million ounces of gold, worth roughly $474 billion. In other words, Washington would have to dump or hock our entire gold reserves. Not going to happen.

Second, even if any of the above were logistically possible, what would it say about the U.S. and the U.S. dollar?

Minting a trillion dollar platinum coin or even 657 million one-ounce platinum coins to pay our current debt, with more borrowed or printed money, would just send the signal that Washington is so desperate, it’s resorting to loony acts of desperation.

The dollar would plummet in value, and our government’s credibility would be toast. So would the dollar’s.

Even the platinum market doesn’t buy the idea of a trillion dollar platinum coin. If it did, the price of platinum would be soaring, and it’s not.

Will all this nonsense lead to something else, like more talk of going back to a gold standard?

For sure, you’re going to hear a lot more about that in the months and years ahead.

But let me go on record again about a gold standard: Washington will never go back to a gold standard. Period. It robs Washington of accountability, the ability to overspend.

Nor will Europe. A gold standard is outright deflationary. If we went to a gold standard the world would collapse, like it did in the 1930s, into a massive deflationary depression.

Let me make something else perfectly clear: In the months and years ahead you’re going to hear all sorts of nonsense, rumors and rhetoric about gold, about silver, about precious metals. 99 percent of it will be just that, nonsense.

Yes, gold is headed much higher over the longer-term. So is silver, and so is platinum.

But the next leg up in the metals is not yet here and when it does come (from still lower prices), it will not be due to any of the above nonsense.

It will simply be due to the fact that the governments of both Europe and the United States are flat broke … and that there is nothing that can be done about it …

Short of all the governments of the world getting together … cancelling all debts … and designing a new, debt-free based monetary system.

It’s going to happen. The problem is that the world is going to have to go through hell to get to the other side.

Chief reason: We have leaders in Washington (and to be fair, other governments, like Europe) … and economists and analysts who are absolutely harebrained.

Stay tuned, very tuned in to my columns, my writings, my recommendations and alerts. We passed through the eye of the hurricane last year …

And this year, the back wall of the greatest financial hurricane of all time will start to hit.

Best wishes,

Larry

Enhanced by Zemanta
This entry was posted in Financial/economic information, Illuminati/Terrorism/Corruption, Political and tagged , , , , , , , . Bookmark the permalink.

3 Responses to Such Total Nonsense … by Larry Edelson

  1. L.B. White says:

    Larry’s logic is flawed: the same basic amount of material goes into the printing a $1.00 bill as does a $100.00 or $1,000.00 and higher. Same with coinage. You simply change the number of zeros. It’s all a corrupt virtual reality shell game anyway, and it’s going to unravel at some point; most likely, before March 2013 Spring Equinox. If not, I’ll once again be surprised, which seems to happen a bit more lately! Best, Zany

  2. So, J.P. Morgan/Chase/Manhattan Bank can make a substantial “loan” (creating debt) by just typing the amount in the space on the loan document that says: “Amount of Loan” thereby creating instant cash out of thin air (as no one calls over to Secretary Geithner and asks: “Say, Tim, could you print up another batch of 100’s to cover this loan we just created?”) BUT the U.S. Treasury (which has Constitutional Powers to MINT MONEY) can’t create “value” in the same way?

    Well, since J.P. Morgan/Chase/Manhattan is a privately owned commercial bank and since I’m a privately owned commodity of the Central Bank (the FED) why couldn’t I just “create” a generous salary out of thin air by writing the amount down on a piece of paper and handing it to my bill collectors. Think on this idea for a moment. If we could actually do that, the IRS could then tax us on that imaginary income and we could pay them with the same imaginary script! Presto! The National Debt is no longer an issue!

    I guess we’re not allowed, huh? Only the top 1% of the 1% are allowed (by custom and precedent) to invent value and create money out of thin air. Yeah … forgot about the American tradition.

    Well, you guys invented the problem now YOU guys solve it because my cashometer is pointing to “E” and while that’s always stood for “Excellence” in my book, I guess it means I’m out of cash boys!

    Love and Light, with hope that you’ll pull your heads out of your behinds soon,
    SaS :o

  3. Ken says:

    Not even close Larry, not even close. You left out way too much information. Too much to even start a reasonable reply…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s