I constantly study governments and their paper money. I have never seen an author who sees it clearly that the U.S. government does not and never has intended to pay anybody anything.

What makes the grand theft work and how do they get away with it?

The answer is that it is a gradualism not perceived by the people. Government theft is intentionally clouded by all matter of manipulations and delusions that system-trained accountants cannot begin to grasp, let alone see through the veil.

How many taxpayers will be “late” paying their “fair share” after last week’s deadline because the tax code is indecipherable, confusing, and meant to obscure its true purpose? Millions, I’d guess.

Paper money and its modern version called credit has one purpose and that is to transfer wealth from the producers to the nonproducing government bureaucracy.

They know perfectly how to enshroud their scheme with confidence that only the most savvy can discern. The public mind prefers the bliss of the moment (instant credit) rather than the reality that survives time (goods and services must be bartered or paid for with real money). Politicians and bureaucrats know this and they parasite upon it.

Breaking the piggy bank

What might trigger a crack in the edifice? A gradual perception by the crowd that they are losing financial ground and are gradually becoming poorer. This occurs at the point that government has sucked the vital life out of the public and their assets.

This has been happening for some time. For example, husbands and wives must both work to survive even poorly. This is a modern sign that the people are falling behind. More and more there seems to never be enough and so families are getting smaller.

Children are economic liabilities so government resorts to mass illegal immigration to replace the failing population that they have sucked the lifeblood from.

The masses that have been behind financially for so long now ushered Donald Trump into the White House to fix the imbalance. But the elites have mechanisms to obfuscate, and prolong the illusion.

How is it accomplished? The American people don’t know that we have in the United States a real economy and a financial economy. The financial economy does not represent real valuations but was created by the Federal Reserve to avoid deflation and consequently turned into multi bubbles.

It is this bubble aspect of the economy that creates the illusion of prosperity and wealth. At some point all the bubbles will pop and the real economy based on productions and savings will come down to earth. Profits will be foremost and inflated debt will vanish after many years.

Crash or soft landing?

Trying to figure a timetable for hyperinflation or deflationary depression is only a guess. Keep in mind that we can instead have stagflation, which we might be starting to experience now, or a prolonged inflationary depression, the worst of all.

“Acting Man” publisher Pater Tenebrarum recently wrote: “Like many of President Trump’s promises, we are certain the promise of 4 percent GDP growth will be broken. But Trump’s only fault in the matter is promising it to begin with. It’s been over 13 years since the U.S. economy had a single year of 4 percent GDP growth. The simple fact is, the U.S. economy’s too larded over with debt and intervention to attain it.”

So prices are rising yet we have no growth, nor the prospect of growth due to extreme debt and intervention. Yet if the philosophical monetary position of government holds, no deflation or depression will occur in the near term.

I think that it is more than clear that the authorities will rely on the printing presses to keep up the float hoping for a soft landing.

Thus, the need for a plan to spend $1 trillion on infrastructure, even though it will mean yet more fiscal inflation. But, as I have explained before in these Alerts, the people want inflation no matter the long-term consequences because it provides the illusion that they are “making more money.”

As lord Keynes said, “In the long run, we are all dead.” But I have to admit that socialist or fascist governments can sometimes continue to pull rabbits out of the hat. I think now that the government is relying on inflation plus a huge revaluation of the U.S. dollar.

This is no little thing as this duet is the prop that is and will hold up the world economy. This is the last option.

We have a temporary dollar rally now but a new phase will begin when you see the U.S. dollar break below 90 on the USDX. This may now take months or even years. The U.S. wants and has to have a weak currency. A weak dollar is the only thing left for a nation of indebted people.

I know that public pronouncements say that the U.S. wants a strong dollar, but they are of course lying. What they really want is an orderly crash known officially as devaluation. Devaluation is a euphemism for theft on dollar debt.

Part of maintaining the illusion of prosperity is to raise interest rates in the midst of slow growth or no growth. Yet curiously, the first rate hike coincided neatly with the lowest U.S. gold price since it’s correction from the post-crash high. In fact, gold has rallied by almost 20 percent since then instead of falling due to a stronger dollar.

Why? Usually a gold rally is only a rally where the valuation rises against what the expected nominal price would be. Gold is currently rising in this fashion.

Mr. Tenebrarum explains correctly: “Gold is an asset that isn’t offset by a corresponding liability, i.e., it is not dependent on any counter-party promises. Thus it becomes the go-to asset in times of systemic crisis. In terms of discounting the future, it also reflects the inevitable response of central banks to a bursting bubble.”

What does that mean for you?

It means the smart money is getting in on gold, supporting the price where it would normally be expected to fall. Someone is buying gold, but it’s not the public.

The sign that this smart money buying is ending comes when gold to breaks out against the strong foreign currencies as the public still avoids gold and silver but institutions will begin to do substantial buying. The public will buy in at the height of the market, just before a correction. They buy high and sell low. Please remember that bull markets always climb a wall of worry and bear markets slide a slope of hope. This is human nature and mass psychology.

No market goes straight up or straight down, but people expect them to. Long term investors need pay no attention to corrections.

There is only one thing you need to be certain of and that is the trend of the market. As we have repeatedly told you since 1998, the trend of both gold and the gold stocks is still net trending upward even after a 2011 correction and we certainly expect the trend to be up for a long time.

In these Alerts we will tell you in plenty of time to get out before the trend reverses. Keep in mind that even though there is now a confirmed uptrend in the gold market, the psychology of markets is tricky and many, many things happen to upset and worry the investor. You know this is the way markets work. They work to dislodge and discourage the public. It is not intended that everyone should become rich like Warren Buffet.

Shall we call it the herding instinct? Now in the current correction is the time to buy gold coins and gold stocks. If you don’t trust in a rising gold market, average in slowly. If you want to learn how to do this, or if you are new to the whys and hows of buying gold, I spent many months putting all my best gold and silver buying advice into a special report that you can get a copy of by going to the bottom of this page. When the trend is up, corrections and consolidations don’t matter. Get on the gold trend with the smart money.

Yours for the truth,
Bob Livingston
Bob Livingston
Editor, The Bob Livingston Letter™