Gold vs EQE/EBS
(towards a new more solid/transparent monetary foundation)
(transcript of the opening speech on Planck Foundation’s monthly 'Non Toxic QE' Seminar of February 2014)
All Central Banks of the world have on their balance sheets the line ‘gold and gold leases’ (not specified in ratio between those two: which is a very important facet: as there's quite a difference between those two).
Let’s analyse the ‘gold leases’ facet somewhat further: All Governors of all Central Banks of the world meet each other once a month in Basel (at the BIS). Do you remember http://en.wikipedia.org/wiki/Silver_Thursday? This is repeating. But now in the gold market. And not by one party, but by more than one. And not by buying, but by leasing: Only the pleasures, not the burdens.
Do you remember the Reagan ‘gold commission’ investigation conclusion in 1982 (‘gold is legal technically owned not by the nations, but by the central banks)? The Governors come together once a month. Discussing general policies and doing specific/bilateral business. Balancing balance sheets in multilateral deals (to balance those assets that could not balanced bilateral).
Everywhere there’s value stacked, there are thieves in the neighbourhood (stacked value attracts thieves: rule of nature). Outside the realm of the Governors and outside the BIS there are other people. Let’s call them ‘the gold thieves’. They’ve socialized with the Governors. They have taken the time it took. They had a plan with such high stakes that they had all the time of the world: it just had to be done. This is about major league. Room for time. No room for errors. So time and costs are not that important.
They tell the Governors (easy, slow, quiet) is their conversations that holding gold is holding a dead asset. That that is a waste to keep it dead. That even dead gold also could have a ROI. That they are specialized in that. They could give the Central Bank of this one Governor better results (something we all want). The Governor (as being a man) likes this story. Better results… Outperforming his predecessor… This is stuff man like. Testosterone stuff. They get thinking about it. That’s enough.
The gold thieves than stop. They know that the Governor will come back. Speeding up is losing the opportunity. And than the Governor comes back (sometimes it takes months, sometimes it takes years). And he ask: ‘Tell me once again.’ And they do. What they say? We can give dead gold (that only has costs) a ROI. How? We use it as base equity. Equity? The Governor says: that word it don’t like at all. Than they say: you heard the half of what we said. We said base equity. Not equity. ‘O’ says the Governor. I don’t get it. What is base equity? Never heard of it. Than the say: Base equity is about the most safe slices of deals. If it goes wrong other parties will lose their money, you wouldn’t. ‘O’ says the Governor. No risks. I like that. What is the ROI? And they make a deal. The Governors than enters the global financial casino and forget that the main purpose of gold was not being part of the casino.
This above described has already happened and unwinding it will not be possible that easy. All gold of all Central Banks of the world is used as equity. But it gets even worse: The stabilizing factors of the world (Central Banks, Governors and gold) is being used by those thieves to destabilize the financial world/values. As the gold thieves get massive equity at low cost to make high ROIs: gold leasing created huge capital flows that could de-stabilize even the most stable. Of course they don’t go for shaking the most stable trees: they go for the more vulnerable: saves a lot of time and efforts and speed up the ROI. Exploiting each weakness everywhere globally. No matter the consequences.
So the gold of the Central Banks is used against themselves by those gold thieves: The Governors aim for stability, the gold thieves aim for instability: They have nothing in common, except for the fact that the Central Banks are undermined by third parties with by themselves issued/delivered equity. Gold leases feed the enemies of stability: it can’t be said otherwise. This never could have been the objective.
Greece is a perfect example of this: but there are much more examples where those guys have gone short on nations (that they ruined/stole the in decades earned wealth of the population and businesses of that nations is no problem for their pathological mind set).
Some of potential of powers that are designed for delivering stability (like Central Banks) have been hijacked by those who aim contrary targets. The stabilizers (Central Banks) unwanted funded the monetary hooligans (monetary hooligans: some nations named for example George Soros as such before he got more moderated due aging: aging erases extreme views to a large extent)
Gold leasing is the worst deal Governors worldwide ever made: it has turned again themselves and this process is just started. It even gets worse: the gold leasers use the gold as pool to gain more equity: they start to fractional based gold selling practices: They used the gold lease contracts as backing to sell as much naked contracts as they could: they invented a new type of ATM / cash machine.
Central Banks should have regulate, audit and control, but they became in a forced way part of this game: as their was no easy way back (see the Bundesbank troubles on the NY FED stored gold).
By this all gold has become a total virtual asset: Paper gold has no more value than the paper it’s printed on: It’s just not covered by real assets: it’s one big virtual hot air balloon. Add to this the status of the Financial World: which is currently not that good (due to totally fake balances by severe overpriced/unbacked assets).
Stability has transformed itself into a house of cards. Not storms will rock the boat: any slight wind could rock the boat too. Some minor and major collapses are ahead of us: turbulence all over the world: stability has become something of the past.
What happens with the gold if it becomes (planned or accidentally) part of such a collapse? It's rehypothecated. Not one time, but several times. And with each time new/diffent conditions. Unwinding such a serial deal design is not that easy till even not possible. As each new rehypothecation had aslo anti unwinding facets build into it. At the end of this you know what’s happened with the gold: The paper based ownership will be worthless: the gold will be lost. The series of deals done will be designed that the one would holds the gold in storage will be the owner at the end of the chain.
Who has the gold? Not those who made the deals with the central banks. The guys who have designed this: the gold thieves: the gold lessees. What want they do with the gold? Introducing a commercial gold backed currency when everything else collapses? Out phasing the current Central Banks? With a margin for the currency issuing institute.
Is the goal this margin on transactions? No. The goal is starting fractional reserves based banking quiet again than. Buying everything with it. Become the owners of everything. A global feudal society.
Freedom has only gloomed, boomed in 500 years and will be doomed in 10 years. Unless we (as in: everybody who understands finance and money creation) unwind the concept of gold leases or (better) replace it with something else. But we need to know the status of paper gold: they are worldwide quiet voluminous. These gold thieves have an agenda and hate a failure of the plan. But their plan is not good: even not for them and certainly not for their children: Living in a Mad Max world is no dream: no surveillance state can solve that. This was something those in power in around 1850 understood very well: and they changed their policies.
Al this gold stuff triggers the question: Why undergoing all this troubles (with attached concentration/instability risks)? Maybe it’s time to say goodbye to gold. Gold leases i.e. paper gold has become just another type of toxic paper. Time to switch to more smarter, less risky, more secure, more auditable, more productive models. Leave the gold thieves with their gold and out phasing gold as monetary facet totally. (as unwinding these lease contracts and paper gold contracts for gold is not an option: the gold is gone already) (the value of gold leases and gold paper will be pennies on the dollar: worse than CDOs) (everybody will run screaming for the exits as there’s no registered collateral and thereby each physical volume is sold on paper multiple times)
If you want to unwind gold leases quickly: chose for cash settlements and buy new gold direct form producing nations. There is still enough gold mined and buying it at the source as replacement of the paper gold is a smart move. (we know CBs who’ve done this: just cashing 100% on toxic paper and replace it with the real thing) (we know the mines that delivered them stealth outside the market places with some volume discount)
The storage locations of gold will change also paradigmatic: the trust in the USD system is declining at fast pace. We’re moving from an unipolar world to a multi polar world: also monetary (bilateral currency swaps) and in gold storage (bilateral storage). Gold swap storage will become the new normal: nations will storage each other gold in equal volumes (delivering risk reduction).
But are there alternatives that as good as gold or even are better? As described above: any alternative for paper gold is a better alternative. But that has more to do with the low ownership quality/security of paper gold than with the alternatives.
So we need a better than gold alternative. Is such an better quality alternative available? Yes it is: the implementation of the EQE/EBS model (EQE: Energy Quantitative Easing / EBS: Energy Backed Securities).
The EQE/EBS model functions somewhat like the real estate model in the USA (Freddie Mac and Fannie Mae): buying up energy paper of banks. But there are two huge significant distinctions between energy and real estate: energy can be transported and the energy price is transparent. And yes: both are ‘bottom up’ i.e. ‘percolating up’ models, totally contrary in design/function to traditional QE: which is ‘trickling down’ in design) (but it never trickles down to MainStreet: it’s used by WallStreet for ‘carry trade’: investing in speculative investments worldwide with high ROIs) (traditional QE is just a subsidy system for the banks at the cost of watering down the financial values of us all)
The EQE/EBS model also could kickstart the troubled economies of the Global West (which are at the end of their growth cycle and now in decline). The EQE/EBS model delivers the banks the turnover/revenues they need to prevent default (as the losses accumulates and real estate turnover is dead). The EQE/EBS model reduces the energy imports significant: supporting the monetary health of currencies / nations / Central Banks. The EQE/EBS model could also be used bilateral by swaps (see for example: http://www.desertcorp.com/slides/DesertCorp-Slide-Presentation.ppt). The EQE/EBS model is also a multipolar replacement of the dollar dominated global financial system, giving the USA/FRB a managed/stable way out. The EQE/EBS model replaces gold by energy producing investments as backing: dead becomes alive and economic contributing and stability delivering. The EQE/EBS model would make gold irrelevant: Gold only has relevance in times of war. Wars are delivering destruction and instability. The EQE/EBS model preserves peace, builds sustainable prosperity, and fights war and war thinking.
The EQE/EBS model replaces financial capitalism with productive capitalism: Financial capitalism: crony capitalism: wealth concentration by the markets: delivers instability and is destructive even to itself. Productive capitalism: fair capitalism: wealth distribution by the markets: stability and sustainable prosperity created by market driven jobs. (see: http://www.planck.org/publications/Financial-Capitalism-vs-Productive-Capitalism)
The EQE/EBS model is simply just better/saver and more transparent/productive than gold. It delivers both with and without the ‘Energy as ROI’ mode also a hedge against inflation: it could be major tool in fighting inflation. If you want to get in dept explanation of the EQE/EBS model: You’re welcome at our offices in Amsterdam: I’ll make time to lay out the EQE/EBS model in detail for you on your request.
See also International Currency Stability
See also Europe: Diagnosis and Prescription
See also Governmental Funding Turbulence
See also Labour Taxation
See also Money Creation
See also Energy Open Finance Platform
See also Global PV Solar Energy Finance Model
See also EQE/EBS Model Summary Diagram
See also BQE: Bilateral Currency Swaps
See also Gold Backing vs EQE/EBS Backing
See also Secular Stagnation as Denial Term
See also Financial QE vs Productive QE
See also Productive Capitalism Perspectives
See also Emerging Nations - Electricity PPP
See also Emerging Nations - Solar PPP
See also Easy Instant Solarizing Nations
See also Making The Euro More Offensive
See also Structural EU/EC Boat Refugees Solution
See also Global Solar Rollout - Description - Diagram
See also Regional Solar Rollout - Description - Diagram
See also Obama Administration Energy Strategy
See also China As Global Leading Solar Energy Nation
See also Open Finance Platform for Energy Investments
See also Iceland 3.0: Geothermal and Energy as Currency
See also Addressing Economic Decline of the Global West
See also IntraContinental: Continental Rail Schedules
See also Global West Enters Economic Adulthood
See also Global East Driven Globalization 2.0
See also Financial Capitalism vs Productive Capitalism
See also CIRI (China India Russia Iran) Avoids Dollar
See also Global West Gets A Common Currency
See also What Ended Global West Dominance
See also National Economic Development Organizations
See also Desert Investment Economics
See also Ending Global Poverty (By Sea Water Irrigation)
See also Global Deserts Exploration Model
See also WaterTech and MicroCredit Merge
See also Lupin As Soy Replacer
See also Global Seed Cartels Aren't Right
See also Global Food Model: Local to Global
See also Sun / Earth Interactions
See also Telco 3.0 : Telco out of the Cloud
See also National Business Clusters Abroad
See also Scientific Education/Research Funding
See also Iran: National Economic Plan
See also Immigrants and Trade
See also Emerging Nations - Minerals PPP
See also Emerging Nations - Deserts PPP
See also Emerging Nations - Energy PPP
See also National Solar Fund Model
See also Secular Islamic Finance
See also Open Energy Finance Platform
Gijs Graafland / Planck Foundation / Amsterdam 2014
(copyright free transcript of the opening speech on Planck Foundation’s monthly 'Non Toxic QE' Seminar of February 2014)
Back to Main Site