{"id":897,"date":"2011-07-26T17:03:17","date_gmt":"2011-07-26T21:03:17","guid":{"rendered":"http:\/\/www.silver-investor.com\/blog\/?p=897"},"modified":"2018-06-10T10:58:15","modified_gmt":"2018-06-10T10:58:15","slug":"bernanke-secretly-gives-away-sixteen-trillion-dollars","status":"publish","type":"post","link":"https:\/\/www.themorganreport.com\/blog\/bernanke-secretly-gives-away-sixteen-trillion-dollars\/","title":{"rendered":"Bernanke Secretly Gives away Sixteen Trillion Dollars"},"content":{"rendered":"

Richard (Rick) Mills
\nAhead of the Herd
\nAs a general rule, the most successful man in life is the man who has the best information<\/em>
\nThe first ever GAO (Government Accountability Office) audit of the US Federal Reserve was recently carried out due to the Ron Paul\/Alan Grayson Amendment to the Dodd-Frank bill passed in 2010. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, while leading the charge for an audit in the Senate, watered down the original language of house bill (HR1207) so that a complete audit would not be carried out. Ben Bernanke<\/a>, Alan Greenspan, and others, opposed the audit.
\nWhat the audit revealed was incredible: between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world\u2019s banks, corporations, and governments by giving them US$16,000,000,000,000.00 \u2013 that\u2019s 16 TRILLION dollars.
\nThe GDP of the United States is $14.12 trillion, the entire national debt of the United States government spanning its 200 plus year history is $14.5 trillion. The budget that is being debated in Congress and the Senate is $3.5 trillion.
\nIn the past debt ceiling votes have passed the House and the Senate without question by the majority party (remember there\u2019s an election next year so there\u2019s a need for political grandstanding). When Republicans controlled the chambers they passed debt ceiling hikes with the Democrats in opposition. When the Democrats are in power they up the debt ceiling while the Republican oppose it.
\nObama opposed raising the debt ceiling when George W. Bush was President. The debt ceiling is simply a limit of how much a government can borrow and owe regarding public debt. By increasing the debt ceiling, a President would be able to avoid spending cuts.
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\nA default would only occur if the US did not make payments on its debt so not raising the debt ceiling will not result in default \u2013 a default can only occur if interest payments were not made.
\nAs the audit of the Federal Reserve has just shown whether the debt ceiling hike passes or not is a moot point. The unelected Federal Reserve will, without Congressional authority, continue to create more money.
\nThe majority of US debt is owned by the Federal Reserve.
\nThe Dow on gold\u2019s terms<\/a> is telling everybody something important is happening:
\nIn 2000 gold made its $260 per ounce low, in January 2000 the Dow was 10,900
\n10,900 \/ $260 per ounce = 41.9 ounces to buy the Dow
\nToday at 12,592\u00a0 DJII and $1,600 gold it\u2019s 7.87 oz to buy the Dow.
\nInvestors are starting to realize that gold and silver<\/a> are a storehouse of value and a safe haven in times of turmoil. Gold and silvers prices have risen because of the abuse and mismanagement of our monetary and currency systems – throughout history, gold has always shone the brightest when trust breaks down, confidence falls and fear climbs.
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\nThe Dow\/Gold ratio has twice before gone through corrections resulting in a transfer of wealth from one asset class to another.\u00a0
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\n\u00a0In 1928 the ratio peaked at 14.5 and then dropped to 2.9 as the stock market crashed and the U.S. entered a deflationary depression.\u00a0 In 1965 the Dow\/Gold ratio peaked at 27.6, then started a long correction to 1.57 in 1980 as Volker aggressively raised interest rates and stopped inflation.\u00a0
\nAs you can see on the above chart we began a third correction in 1999 when the Dow\/gold ratio peaked at 41.\u00a0
\nIt presently would be very hard to mount an argument against gold being clearly the winning major investment of the last decade.
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\nLatest demand statistics from the World Gold Council:
\nGold Demand and Supply \u2013 First quarter 2011<\/strong><\/p>\n