Understanding the Potential Events of 2010 and Beyond

By Michael McKay

President, Iowa Capital Management, Inc

February 19, 2010

Executive Summary: The Fed has exploded the Basic Money Stuff (Excess Reserves) that is used by Banks to create and then lend out money (out of thin air). Banks are not yet substantially lending this money out. The Monetary Model (Keynesianism) which the Fed uses demands that this money be lent out. The Government is then forced to get that money into circulation through Welfare and Warfare – the two most expensive things the Government can do. The Gigantic Pool of Basic Money Stuff will get into circulation. Purchasing Power will collapse and here will be a hyper-inflationary event. Gold and Silver will be very important. There is a way out; Stop Fractional Reserve Banking altogether and go to a 100% Reserve System – however this is very unlikely.

1. The explosion of “Excess Reserves” from $1.4 Billion in January 2008 to $1.119 Trillion in February 2010 is a big problem and it will become a bigger problem since the Federal Reserve will likely add even MORE excess reserves in the future.

Sunday, January 17, 2010 

Thomas E. Woods, Jr.

MM Comment:
We could also call Crony Capitalism 'Privilege-ism' since it uses the force and influence of Government for a privileged few. Those who must merely compete in the Marketplace have to rely ALONE on Product Quality, Persuasion and PAID-FOR Advertising. This entire show is worth watching.

Commentary by Michael McKay:

This is a significant event that all users of money, which all of us, should be made aware of.

The Federal Reserve is being sued to disclose how it has manipulated the Gold Markets.

It is encouraging that this lawsuit has traction.

The Fed is also currently being sued by Bloomberg for the Fed's refusal to disclose $2Trillion (yes, Trillion) that it has (created out of thin air and) allocated to various favored banks, businesses, or other entities. In August 2009 the Fed lost that case and it is currently being appealed.

It is valuable to see how the Fed is being pulled out from behind the curtain into the light of greater transparency.

Now all we need is for the Public to understand - better - what all these machinations mean.

Please read this article by William Murphy of the the Gold Anti-Trust Action Committee (GATA). Following his article I have made a few comments that you may find useful.

************************************************************

1/2/2010 - by William Murphy, published on www.thedailybell.com

The Gold Anti-Trust Action Committee Inc. today (Dec. 30th, 2009) brought suit against the U.S. Federal Reserve Board, seeking a court order for disclosure of the central bank's records of its surreptitious market intervention to suppress the monetary metal's price.

All,
Professor Rozeff shows us why Gold is still cheap and is likely to be seen much higher.....maybe $7700/ounce!
MM

Gold remains undervalued, even at its current price of $1,150 an ounce. One signal of this is that at current market prices of gold, the notes of the FED – its dollar bills – are not fully-backed by gold. That is to say, gold’s price is lower than the Zero Discount Value (ZDV) of gold by a wide margin.

A Short Course in Brain Surgery highlights the plight of an Ontario man with a cancerous brain tumor who crossed the border to the U.S. to get the medical care that is rationed in his home country.

Written, Directed, Produced, Edited and Narrated By:
Stuart Browning

The Lemon demonstrates how single-payer health care systems have a lot in common with the failed economic systems of Soviet-era eastern Europe.

Written, Directed, Produced, Edited and Narrated By:
Stuart Browning

Please take a minute to be entertained by Tim Hawkins in this hilarious video that will make you laugh (or cry!).
MM