Great poem ArtieHere is an article that suggests gold is going to stratosphere. Kind of political message though.
Kobyashi Maru
by Doug Tjaden | June 10, 2008
People do not fully appreciate what we are witnessing in the marketsright now. This week and last could very well be a historic landmark inthe unfolding economic crisis. Last week, Ben Bernanke, faced with araging inflation problem that can no longer be denied, came out andmerely talked hawkish, indicating rate cuts were likely over. He took agamble doing this, as the stock market was already weakening. It didnot pay off. When the employment figures were released Friday, eventhese rigged figures showed that the US economy is shedding jobs at arapid pace. The markets all were then gripped by extreme volatility.
The Forex markets are hit with the reality that the Fed cannot raiserates to defend the dollar without bringing down the stock market andthe multi-trillion dollar derivatives mess, thus the dollar sold offsharply. The stock market is beginning to grasp that the Fed cannotlower rates to help the rapidly deteriorating economy without sendingthe dollar into the tank and causing all commodities (and preciousmetals) to take their long awaited trip to the moon, cementing thedreaded increased "inflation expectations" in the public psyche. Yetdoing nothing is not an option either. The inflation that is already inthe pipeline will continue to increase, choking off an economy on lifesupport. What then is the Fed to do?
What began last week is leading to a full realization and acceptance bythe markets what we (Austrian gold bugs) have known for years - the Fedwould eventually get itself into a position where it was in a no winsituation. It’s the Kobayashi Maru.
For those of you who are younger than I, Wikipedia does a good job of describing what this is.
In Star Trek II: The Wrath of Khan, the simulation takes place on areplica of a starship bridge, with the "testee" as captain and otherStarfleet members, officers or other cadets, in other key positions. Inthe scenario of the 2280s, the cadet receives a distress signal,stating that the Kobayashi has struck a "gravitic mine" in the KlingonNeutral Zone and is rapidly losing power, hull integrity and lifesupport. There are no other vessels nearby. The cadet is faced with adecision:
• Attempt to rescue the Kobayashi's crew and passengers, which involvesviolating the Neutral Zone and potentially provoking the Klingons intohostile action or an all-out war; or
• Abandon the Kobayashi, potentially preventing war but leaving the crew and passengers to die.
If the cadet chooses to save the Kobayashi, the scenario progressesquickly. The bridge officers notify the cadet that they are inviolation of the treaty, which is duly noted in the log. As thestarship enters the Neutral Zone, the communications officer losescontact with the crippled vessel. Three Klingon starships then appearon an intercept course. Attempts to contact them are met with radiosilence; indeed, their only response is to open fire, with devastatingresults. The simulation ends with the understanding that the cadet'sship and crew have been lost. There is no way to win the resulting'battle'; but then, the objective of the test is not for the cadet tooutfight the opponent, but rather to test the cadet's behavior andthought processes in the face of insurmountable odds or circumstances.
The no win situation. It is here and it is real. It isn't a simulation.And the markets are beginning to smell it. A rate hike by the Fed andthe stock markets crash. A rate cut and the dollar crashes andcommodities soar. Both would have equal, devastating consequences. Sothe test of character of the current Fed is on the line.
What most market participants do not realize is which direction the Fedwill take. They have begun their hawkish talk, yet their recent actionshave spoken loudly that inflation is not their main worry. Thisuncertainty (and the continued Fed speak obfuscation) will keep marketsvolatile for the immediate future. However, in the end, the Fed existsto protect the banks, so that is what they will do. Eventually theywill ride to the banker’s rescue. Thus the likely path the Fed willtake will be to stand pat as long as possible, using their bully pulpitto try to strong arm the markets in the direction they wish them to go.They may even be so bold as to hike a quarter point. If they do, lookfor an emergency cut within just a month or two, as they begin tomonetize debt across abroad spectrum of markets. At that point it willbe lights out for the US dollar. The Klingons in the bond market andforeign central bankers will fire away, dumping their dollardenominated paper and sending the US dollar into a full blown crisis.What is different today is that the main market players are beginningto realize for the first time that this is not a simulation. They areliving it. The panic in all markets that will ensue will make recentvolatility pale in comparison. Some will crash, others will soar. Therewill be whip saws along with bull and bear traps galore.
For those of you saw the Star Trek movie, you know that Admiral JamesT. Kirk was the only one ever to beat the Kobayashi Maru. He did it byreprogramming the computer - he changed the rules. Look for a similarattempt by those now taking the test. Currency controls, restrictionson investing, limits on positions held in commodities, etc. etc. Sadly,it will all fail.
And why is all of this pain coming? Because the Fed will bail out thebankers. These corrupt and greedy men hijacked our Constitution andimplemented a corrupt monetary system in order to exploit it for theirown financial gain. This is moral failure of the highest degree. It isindeed “the crime of the century”.
What this means for the average US citizen is potentially quite dire.After the cosmic dust settles, commodity prices along with any “thing”that has tangible value will have soared to unimaginable heights in USdollar terms. The economy will likely be in the next depression,brought about by hyperinflation and a collapsed US dollar. We thenenter a new period of testing - where “we the people” will be calledupon to chose who we wish to lead the country as we recover. Our choicewill have repercussions that will last for generations.
Will we have the moral foundation and courage to “root out the den ofvipers”? The only other choice is more of the same failed leadershipwho will impose a new currency and a quasi-dictatorship right here inthe good ole USA. And I don't think that is overstating the case. It'stime to prepare to battle for our freedom like we have not had to sincethe first revolution. By God’s grace, the church will join Ron Paul inhis Revolution and we will have the hope of a better future for ourchildren and grandchildren.