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Saturday, May 14, 2011

Druckenmiller Calls Out The Treasury Ponzi Scheme

Fiat currencies have a 100% record of failure.  Money backed by nothing WILL fail.  Always.  The longest run was in China centuries ago, it lasted around 90 yrs.  Email DH for the details, I'm sure he has them.  
Our money and economic system is going down.  Every gov't move since the founding of the FED (with a few exceptions in the 1920's) has moved us toward the disintegration of the greatest experiment in libertarian freedom known to human history.  Trying not to sound tinfoil hattish, the attempt at world gov't needed the US to have a fiat currency to cause the economic catastrophe we are staring at now.  With a gold backed dollar you can't have the endless wars and welfare / social programs. Since the founding of the FED the dollar has lost 94% of its value.  There has been no move to stop this.  Buy precious metals, farmland, whatever you can that has intrinsic value, and have a network of like minded resourceful people near you.  

"Mr. Druckenmiller had already recognized that the government had embarked on a long-term march to financial ruin. So he publicly opposed the hysterical warnings from financial eminences, similar to those we hear today. He recalls that then-Secretary of the Treasury Robert Rubin warned that if the political stand-off forced the government to delay a debt payment, the Treasury bond market would be impaired for 20 years. "Excuse me? Russia had a realdefault and two or three years later they had all-time low interest rates," says Mr. Druckenmiller. In the future, he says, "People aren't going to wonder whether 20 years ago we delayed an interest payment for six days. They're going to wonder whether we got our house in order." Which begs the question: if interest rates are so low today, is the market not appreciating the current path of "financial ruin"? And here is where Druckenmiller joins the Grosses and the Granthams of the world. Asked if the future is not so bad judging by today's low bond rates he says, "Complete nonsense. It's not a free market. It's not a clean market." The Federal Reserve is doing much of the buying of Treasury bonds lately through its "quantitative easing" (QE) program, he points out. "The market isn't saying anything about the future. It's saying there's a phony buyer of $19 billion of Treasurys a week." 

Here's the article from ZeroHedge:

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