The US dollar is just a government fiat token not redeemable in anything, merely backed by the "full faith and credit" of the US government. The gold price is saying that its "faith" and "credit" are going down the tubes, its "backing" is going down the tubes. The more there is of something, the less it is worth. The less value it has. What is a real restraint on the US Treasury's and the Fed's ability to create more US dollars. Nothing much other than politics.
The gap up in the gold price and the silver price yesterday will probably not be filled, probably a break-a-way gap.
Here are just 2 examples of the implosion of the "full faith and credit of the US government", right out of reality. But, also right out of Atlas Strugged. So, if you are wondering what's going on, what's happening, read Atlas Shrugged.
Atlas Shrugged Sales
"Washington, D.C., February 23, 2009--Sales of Ayn Rand’s “Atlas Shrugged” have almost tripled over the first seven weeks of this year compared with sales for the same period in 2008. This continues a strong trend after bookstore sales reached an all-time annual high in 2008 of about 200,000 copies sold."
"From fiction to fact in 50 years..."
From Chris Laird’s PrudentSquirrel.com…
The US congress is proposing new very restrictive mining regulations like yearly inspections and a whole gamut of new regulations specifically on precious metal miners….in the name of the environment… it’s hard to say the effect on big US mines, but the smaller ones will have lots of trouble with this if it gets through.
Rahall Proposes Bill to End All Mining in the U.S.
by Scott Harn
Nick Rahall, chairman of the House Resources Committee, reintroduced mining reform legislation in the House of Representatives on January 27, 2009. The Congressman has obviously been away from real work for far too long. H.R. 699, the Hardrock Mining and Reclamation Act of 2009, should be labeled H.R. 666 because it appears to have been written by the Devil himself. If it passes as written, it will completely destroy an entire industry.
· Casual use would be redefined to allow only those activities that do not cause “any disturbance of public lands and resources.” The collection of samples, use of gold pans and non-motorized sluices would be the only activities allowed without a Notice or Plan. Taking a vehicle off-road would also require a Notice or Plan. Any extraction of minerals for sale or use would require a Notice or Plan.
· H.R. 699 would be retroactive. Existing mining that is not already operating under a Notice of Plan would require proof of a valuable discovery to retain a mining claim, and those operating under a Notice or Plan would have ten years to bring their operation under compliance with the new regulations.
· The patenting of mining claims, which has been suspended by yearly legislation since 1994, would be permanently discontinued.
· The federal government would be entitled to an 8 percent gross royalty for all locatable minerals for any new mining operation.
Link to article…
Government Regulators Aided IndyMac Cover-Up, Maybe Others
Darrel Dochow May Not Be the Only Official Who Helped Banks Hide Financial Problems
By BRIAN ROSS, JUSTIN ROOD, and JOSEPH RHEE
Jan. 16, 2009—
A brewing fraud scandal at the Treasury Department may be worse than officials originally thought.
Investigators probing how Treasury regulators allowed a bank to falsify financial records hiding its ill health have found at least three other instances of similar apparent fraud, sources tell ABC News.
In at least one instance, investigators say, banking regulators actually approached the bank with the suggestion of falsifying deposit dates to satisfy banking rules — even if it disguised the bank’s health to the public.
Treasury Department Inspector General Eric Thorson announced in November his office would probe how a Savings and Loan overseer allowed the IndyMac bank to essentially cook its books, making it appear in government filings that the bank had more deposits than it really did. But Thorson’s aides now say IndyMac wasn’t the only institution to get such cozy assistance from the official who should have been the cop on the beat.
The federal government took over IndyMac in July, after the bank’s stock price plummeted to just pennies a share when it was revealed the bank had financial troubles due to defaulted mortgages and subprime loans, costing taxpayers over $9 billion.
It looks like the "full faith and credit" of the US government is struggling, or shares of USA, Inc. are struggling.
Current M3 "money" supply.
More "money" related supply charts at A world of possible futures.
Despite the decrease in M3 "money" supply (debt default, debt pay off) it can be astounding what people in power will do to hang on to political power, as in a freeking 100 trillion dollar token:
Wait for the Treasury and Fed to put the pedal to the metal. The more they stomp on it, the more the gold price does its protection job. Heck, the Treasury and Fed can burn rubber if they want. The gold price and the silver price will just burn rubber, too.