The Sauds, The Dollar and Income Inequality

So far, there's not much going on today with an absence of economic datapoints and other news. So let's take the day to discuss two other items that have been on my mind recently.

As I type, we've (mostly) avoided the 8:30 Comex beatdown. I say "mostly" because the usual selling was still there...just not as overwhelming as it has often been over the last two weeks.

So with everything (mostly) stable, today seems like a good day to prompt a discussion of two things that have been on my mind quite a bit lately.

First, here's an item that received some news coverage last week...but not much. The US has been assisting the Sauds in their war against Yemen through the supply of bombs and materiel as well as aerial refueling for their warplanes. Some place the Yemeni death toll of this war as high as 70,000 with images of the war-ravaged and famine-stricken country easily found on the internet.

Two weeks ago, both houses of the US Congress passed a War Powers Resolution that, by invoking the War Powers Act, aimed to limit future US involvement in assisting the Sauds. Trump vetoed this resolution, effectively killing it unless Congress can muster the 2/3 votes to override the veto. https://www.politico.com/story/2019/04/16/trump-vetoes-resolution-yemen-...

Now why would Trump (and ALL other US presidents!) seemingly support the Sauds at all costs...regardless of their internal and external policies? By the way, did you see this story yesterday? https://www.cnn.com/2019/04/23/middleeast/saudi-executions-terror-intl/i...

The "traditional" talking point is that "Saudi Arabia is a key ally in the region" as they are aligned against the Great Satan of Iran...blah, blah, blah. Instead and FAR MORE IMPORTANT is the Saudi protection and control of the petrodollar system, and this is the key, primary rationale behind US Middle East policy.

The article below is from April 4 and we referenced it at the time. However, it's worth linking again in light of these recent events. Here's the link from Reuters but below are the key (and very rarely stated) paragraphs. https://www.reuters.com/article/us-saudi-usa-oil-exclusive/exclusive-sau...

Simply put: The U.S. will always blindly support the Saudis as their participation in the Petrodollar Recycling Scheme is the key linchpin in maintaining the US$ as the global reserve currency. Period. End of story. https://www.investopedia.com/articles/forex/072915/how-petrodollars-affe...

The second item worth discussing was brought to my attention again this morning through Twitter where I found this NYT opinion piece from the esteemed Nobel laureate, Joe Stiglitz. Here the buffoonish "economist" attempts to make the point that income inequality flows from the misgivings of capitalism. What a quaint, little thought. https://www.nytimes.com/2019/04/19/opinion/sunday/progressive-capitalism...

Instead, the current state of income and wealth inequality is simply a by-product of our corrupt monetary system...where the monopolistic control of the money supply by The Fed and their Banks is at the root of the problem.

As you can see and read below, prosperity across income groups was growing steadily until Nixon closed the gold window in 1971, effectively ending the monetary stability of the sound money, Bretton Woods system. Almost as soon as unlimited fiat creation became the new normal, wealth and income disparity began to grow.

Current politicians like to blame each other for this dire situation. Instead, the blame lies with ALL of them AND their central bank enablers.

You may be asking yourself, what do these two issues have to do with the price of gold and why are they being discussed on a precious metals website? Well, if you have to ask yourself that, then I invite you to think more deeply about these subjects and then be sure to freely participate in what I hope will be a lively discussion below.

As I close, I now have $1274 and $14.82. Go make it a great day!