Exeter’s Pyramid, CDS and Gold

 

“We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system…. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.”

— Robert H. Hamphill, Atlanta Federal Reserve Bank

To answer your question about gold/silver and the markets, I’ll start off explaining Exter’s Pyramid:

John Exter was an American economist, member of the Board of Governors of the United States Federal Reserve System, and founder of the Central Bank of Sri Lanka. He also was a Keynesian, but rejected that false religion.

The idea here is that you have a solid base of “wealth” which, as it goes up the pyramid, shows that you can derive even more wealth by leveraging what is at the bottom. This is the essence of “derivatives” which I am sure you have heard of.  You can think of it this way – it only takes a fraction of gold to be able to own a large quantity of items near the top. This is similar to “fractional reserve banking” (which, if you don’t understand that, it is a prerequisite for understanding what is wrong with everything today).

As the cycle expands from the bottom upwards, one is able to reap tremendous rewards by owning shares of items higher up. However because this system (our world economic system) is debt-based and fractional reserve based, there is a mathematical LIMIT on how much debt can be accrued, serviced, and expanded. We live in a world of LIMITATIONS (which seems logical to us, but not to Keynesians who teach that there is no PHYSICAL limit to debt). When the debt saturation limit has been reached, then wealth flows backwards DOWN the pyramid. What I have described is the classical “pyramid scheme”. As we near the point of debt saturation, the cards are all stacked, and the pyramid is very unstable. It takes only a very slight “wind” to set in motion the entire RAPID collapse of this sort of system, which it took a hundred years to build it.

One thing that you will discover when you start studying this structure is that monetary/wealth history is circular, not linear. This pyramid scheme has been tried before and it has collapsed. In fact, versions of this have been tried thousands of times throughout history and every time it ends the same way. What on earth gives us the impression that Sir Issac Newton’s laws that have been proven thousands of times will all of a sudden not apply in today’s world?

If you want to be extremely wealthy, then you need to understand this scheme because once you do, there will be great temptation to want to keep it this way, slowly building your wealth, and then at the last moment before it collapses, switching to the other side and then collecting even more wealth – all the while the unenlightened masses are working for you to build your system of wealth transfer. THIS is what has drained the wealth from the “99%” to the “1%”.

If we have a “Credit Default Swap event” then the entire pyramid will come crashing down in short order. The powers that be are determined to keep the system alive and they know that they must prevent this event from happening.

I am giving you this information in a very digested form. There is a lot more to understand about it but this should suffice.

To get to your question: “How come the price of Gold and Silver goes down when the markets go down?”

There are several reasons:

1.       Tradition. Traditionally minded people think of “cash” as the base and not gold. Everything in this world is denominated in US Dollars (world reserve currency), not gold. Generations of humans have been taught by the bank-owned educational system that “treasury bonds” are the ultimate “safe haven”. When things get shaky we can expect that people will choose to keep their money “safe” by buying US Treasury bonds which are backed by the “Full Faith and Confidence in the US Government” to back them up. Remember that the masses have not yet woken up to the fact that US Treasury bonds are a DERIVATIVE of the US Dollar, and the US Dollar is a DERIVATIVE of gold.

2.       The bank-owned “media” pumps up US Treasury bonds as the safest of all investments, and people pile in, thus “proving” that yes indeed people are seeking the “safe-haven”. They never tell you about how bonds work, that they are derived from US Dollars which are an “I-owe-you-NOTHING”.

3.       The manipulation in the precious metals markets is well known. If gold and silver were allowed to trade freely then we should already have at least $5,000 gold and $350 silver. The world’s central banks right now are interested in keeping this Ponzi scheme going, so they “lease” gold at ever increasing amounts to suppress the gold price. Keep in mind that the single largest owner of gold is the world’s central banks – and they are carefully using that gold right now, and dumping it into the markets to keep the price down and to accomplish their brainwashing mentioned in points 1 & 2 above.

4.       The laws of supply and demand state that if one was to keep the price suppressed for an extended period of time, then the supply would run out. It appears that this basic truism does not apply to gold and silver, since they have kept the price down for a very long time and yet there seems to be an infinite supply of both metals. This again reinforces the banker’s points that there is no shortage and there will never be a shortage of gold since they can keep on leasing it out for eternity because John Maynard Keynes and a bunch of Ph.D. Nobel Prize winning economists from Princeton University as well as all the major financial newspapers and TV stations say so. This is where being intellectual causes a cognitive dissonance, because it appears that the supreme unmovable universal laws of the universe are suspended and that just cannot be – but it appears to be so and the Ph.D’s tell us that the laws of the universe do not matter because they have figured it out.

5.       The last point is that gold does not go down when the markets go down if you take a long term view. All of the manipulation in the world can not cover over the long term perspective. In 2000, gold was at $250 per ounce and the DOW was at $11,500. Eleven years later, gold is at $1,750 and the DOW is at $11,800. Gold has had a seven fold increase (700%) and the DOW has not even moved at all for ELEVEN YEARS! It absolutely boggles the mind why anyone would invest in the stock market any more (with the exception of mining stocks).

Those are some answers to your question. Each one can be discussed at length ad nauseum.

Keep in mind that there is a time and a place for owning all of the asset classes. The time for stocks has long passed. The time for gold is drawing long in the tooth (but still has a long way to go). Soon it will be time to get back into stocks, but not until the reset happens. RIDE THE CYCLE, don’t get run over by it.