Tipping point passed. Point of no return now reached.

Kia Ora,

It is interesting times right now. Information from various sources have being basically backing each other up probably without knowing it.

Recently in the US there has being a call to cancel the fractional reserve altogether. For those that are unaware for every dollar you put in an account a bank can create a larger number of dollars, but it must keep a reserve to cover emergencies.

So for every dollar you put in which the bank may pay you 3% interest, it can then loan anything from 10 to at times 40 dollars for your one dollar at say 10% interest.

But they have generally being required to hold something like 10% of money held just in case it is called upon. It is called fractional reserve banking & that means for the economies to survive they must keep creating money out of thin air to keep the supply expanding.

Well it has now being suggested that that is holding the economy back so they shouldn't be holding any in reserve. This will allow banks & central banks to print (or quanittive ease) at will, making the end problem worse.

In the US the Federal Reserve has failed in its original announced mission when it was established in 1913 to maintain the value of the US dollar. The US dollar is now worth 3 cents in value to what the dollar was worth in 1913. That affects all other countries as all currencies are tied to the US dollar because of Bretton Woods in 1944.

Currently in the US many people are upset with the US government over the healthcare program. Combined with the bail outs in partiuclar the on going ones of Freddie Mac & Fannie Mae the US government is taking control of areas that were before the domains of private companies.

Here in NZ the Government has taken more control over local bodies firstly in the set up of the new 'Super' city of Auckland & more directly the disestablishment of Ecan, an elected council, as well as several health boards.

History shows that when things are getting tough or about too, then the governments start to exercise more control & people enjoy less freedom.

So as to the title of this blog. What is the tipping point?

Actually it was worked out some time ago through a group that follow Austrian economics.

The Tipping point of an economy is reached when a) Debt exceeds 73% of GDP & b) when Debt exceeds 230% of external exports.

Now as problems broke out with Greece there were figures saying Greece was close, but they were manipulated & in fact Greece & the whole of Europe, Britain & the US (not to mention here in NZ) were much higher according to the Daily Reckoning at the time.

For example this was the figures for the US just two days ago that came via a Robert Kiyosaki source.

a) Debt in the US now exceeds 96% of GDP
b) Debt in the US now exceeds 748% of External Exports.

This is a quote from Alan Greespan, the previous Chairman of the Federal Reserve, as quoted in the USA today.

"Regulators (the federal reserve etc) almost certainly will be unable to prevent future crises, so the focus should be on structuring the financial industry, so that it can better absorb unexpected blows".

A point made in the article by Robert Kiyosaki is that in 1914 the German people had no idea that anything was wrong, until the hyperinflation hit in 1923. That is why the German people are so upset with their government now for helping bail out Greece. they do remember that lesson.

This time is no different & in fact the title of the book opposite is what the economists would have you believe that "this time it is different" we have it under control.

In NZ that would call for a Tui's advert with the NZ laconic saying "yeah right".

The US  has printed more money in the last year than in the whole previous 200 years of its existance.

To control inflation as the economies get close to collapse, governments will impose wage & price freezes as New Zealnders will well remember Sir Robert Muldoon doing in the early 80's as world inflation started to spiral out of control. Of course once he took them off then things like house prices just went through the roof.


Something that came up amongst all this was that all four US Presidents that have being assasinated were trying to or had implimented a return to the dollar based against gold or silver.

When he was shot President Reagan was also trying. He had implimented a report into taking the US dollar back on the gold standard only to find he couldn't, because all the US gold is actually under Caveat to the IMF. So effectively although the US is often touted as the country with the most gold, it in effect is like Britain & has none.

Britain has none because Gordon Brown sold it all when gold was at its lowest price.

An even more interesting  case is the Credit Rivers case in 1968 where a Judge Mahoney ruled in the US that upheld the Jusitces ruling that fiat currency was not real therefore a bank could not foreclose (mortagee option) on a property. It was also ruled that their appeal was not legal as they used fiat currncy to file it &that was illegal. He died in a fishing 'accident' shortly afterwards.

His judgement was never followed up on.

More recently a whistle blower on the manipulation of the precious metal markets was involved in a hit & run accident & all reports about what he exposed have not being followed up in the US by mainstream media.

Examples of what he found where in the london market there were 100 paper gold trades to every oz of gold. So if people try to take delivery of the gold & find it is not there then it would result in a huge spike in the price of gold.

Also recently in the US the ability to exchange ETF's & other paper trades for actual gold & silver has being removed. It is quite possible, in fact likely probable, that most holding those paper trades have no idea.

Now a lot of that sounds like cloak & dagger, with conspiracy thrown in & the stuff of movies.

It is not.

In the 80's as a soldier I spent sometime on a vacation talking to a former US special forces operator who had being offered hit jobs in the US & Europe. My mate & I found him very crediable & once we were away from him found we were being followed across Europe by different people.

I was offered one myself when in the US. & I have a mate who has carried out 'black ops' as they are called for the US government.

People need to educate themselves to see what is coming. Thereby prepare themselves for that by using the secrets of the Rich. Robert Kiyosaki has a book out called 'Conspiracy of the Rich' which for some reason I can not find on here today. Read it.