The Currency of the Elite in the Great Financial Crisis


"'Elements of inflation, reduced living standards and totalitarianism are already present to a greater or lesser extent,' says Paul Mylchreest in his Thunder Road December report."

Paul Mylchreest's Thunder Road Report always makes for fascinating reading, and his take on the global economy, gold and silver is frightening and disturbing. Read, learn and inwardly digest.

I have a particularly soft spot for Paul Mylchreest's occasionally published Thunder Road Report. The basis for the best read article ever on Mineweb, which on its own picked up almost 100,000 page views, came from an edition in 2009 (see: China Pushes Silver and Gold Investment to the Masses) . The information and insights in these reports is invariably controversial, illuminating and extremely prescient. I urge you therefore to beg, borrow or steal a copy of Paul's latest 52-page document, which primarily looks into the politics and history behind the current financial crisis—indeed you don't have to do that—just download the report (Thunder Road Report December 2011). As a window into Paul's view of what is happening to global politics and the economy, it makes for fascinating and disturbing reading, from which you can then draw your own conclusions. We may not agree with everything in it, but it is certainly food for thought on the way the world order is changing.

Paul is a former analyst with a number of investment banks and brokers. He started work the month before the stock market crash in 1987, covering the metals and mining, oil and gas, and chemicals industries for a number of brokers and banks, including S. G. Warburg (now UBS), Credit Lyonnais, JP Morgan Chase, Schroders (now Citibank) and, latterly, at the soon-to-be-mighty Redburn Partners. He has since left the sector but continues his analytical output. Indeed one friend and former colleague recently introduced him as, "This is Paul. He used to work with us before he went mad." Unfortunately, those with nonmainstream viewpoints may well be so described by those wedded to the perceived status quo, and may only be recognized as prophets after it is too late!

So what is the context of the latest Thunder Road Report—at 52 pages there is way too much to cover here, which is why I suggest you read it for yourselves. But the gist is summed up in the repeated line: Inflationism—Interventionism—Socialism—Reduced Living Standards—Totalitarianism.

"Elements of all of these are already present to a greater or lesser extent," he reckons. "Of course," he continues, "the earlier ones, inflationism and interventionism (which Ludwig Von Mises described as 'socialism by installments'), are the most obvious. What we are experiencing was prophesied in fictional form by Ayn Rand in her masterpiece Atlas Shrugged, when it was published in 1957." As Mineweb readers may have surmised from the above, reading the Thunder Road Report was the major influence behind my recent article Gold: The Protector as Democracies Move Towards Totalitarianism.

As well as finding huge parallels with Ayn Rand's best-selling novel, he draws heavily on Kondratieff wave theory (where his model of the Kondratieff Cycle is "screaming" depression and reduction in living standards ahead. Ludwig von Mises and the Austrian School of Economics is another obvious source of his thinking and analysis.

He looks at interventionism with an extremely jaundiced eye and comments on political corruption and its influence, market manipulation and gold price suppression. Indeed, on gold and silver, he quotes, inter alia, "The key point is to remember that gold and silver are fractional reserve markets—huge volumes of paper trading versus a much smaller amount of metal—and the theft of futures accounts in MF Global has made the importance of securing physical even more important. The scramble for physical metal is overwhelming these markets and continues unseen. Let me relate a story told by Lindsey Williams about a conversation he had with one of his inside contacts, the late Ken Fromm:

'There's only one protection for your assets,' he said, 'and that's our currency.' And I said, 'What's your currency?' And he said, 'Gold and silver, that's the currency of the elite.'"

All this and much more is noted in the latest report. Do read it over the holiday season. It will give you insights not readily available elsewhere. You may find Paul's views alarming and dismiss them, but certainly some of what he describes is happening is at least awfully close to current reality. Happy Holidays!

Lawrence Williams, Mineweb

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