Gold and Paper 1951 – 2016

argentina-1951

argentina-2016

 

us1951

us2016

 

 

From Raymond Chandler in “The Long Goodbye:”

Learn How to Exploit the Gold Frenzy!

There is no trap so deadly as the trap you set for yourself.” (Think deficit spending, central banking, QE, and “printing money.”)

Images that come to mind are:

E-printing press

E-Skull_and_crossbones_2

 

Future Possibilities for dollars/euros/pounds/yen:

  • More debt, “money printing,” central bank desperation, currency devaluations, QE, and more of the same failed policies – will produce higher gold prices.
  • Inflationary blow-off and gold prices go astronomical in devalued currencies, as they have in many other countries in the past century.
  • Deflationary depression, tens or hundreds of $Trillions of debt defaults that make the 1930s look like a “walk in the park” by comparison to the “Greater Depression.” Gold prices are … unpredictable.
  • The dollar is gradually replaced by some other currency – a Special Drawing Right (IMF), a gold backed “something,” a digital currency, something new, or:

E-Gold One OZ

 

From: Pierre Lassonde:

“… very sure the five-year bear market for gold is over” … “gold could surge to $8,000 an ounce or even higher…”

Gary Christenson
The Deviant Investor
My books: www.gechristenson.com
Amazon Author Page

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  • Fred762

    In 1964 the dollar bills were ” $1 silver certificates”..redeemable in silver specie at any bank. I still have some of those paper notes from the late 1950s, and they have redeemability printed right on the note. [I was in college in 1964 and made $2.80/hr at a part time job..and thought that was fine].
    In 1964 the minimum wage was “only” $1.25/hr. Back then it was 5 quarters/hr as minimum wage..but they were 90% silver coins. I could take a $1 bill into any bank and get a silver dollar or 4 silver quarters any time! Today it will take about 18 $1 Federal Reserve notes to buy 5 1964 quarters..ie the minimum wage has dropped by 50% thru gvt-caused inflation. If you want US silver dollar coins, they will cost you over $18 federal reserve notes at least..and those coins will be in terrible condition. Bankers and gvt goons are ROFLOL on us. http://www.apmex.com/category/25865/90-silver-singles-rolls-bags-culls-damaged

  • Randy

    Then since you are aware of what’s going on, Fred, you just might enjoy reading my little treatise here from 1996. Please excuse the less than ideal transfer of the file here.

    What
    is Money?

    One
    of the most esoteric, confused, convoluted and obfuscated subjects
    that has ever been debated in the history of mankind, is the subject
    of money. And from money, we go into other subjects such as banking,
    inflation and finance. But let’s start with money first and get it
    properly defined, so that we can make some sense out of the whole
    mess, OK? And after we get money properly defined, we can then use
    that concept to think with and come up with good answers to some very
    perplexing questions. When you start to think about a problem with
    the components of that problem properly identified and named, it will
    be much easier to see the real causes and effects going on. So here
    we go now.

    All
    that money is, is “an idea backed by confidence”. That’s
    all, nothing more or less than that. And in that word confidence is
    buried the fact that certain people have agreed upon something to
    function as a medium of exchange. That medium of exchange is money,
    regardless of whether it is wampum, diamonds or precious metals. The
    confidence factor then comes into strong play here and is the whole
    basis of that medium of exchange. Money acts as a sort of
    “lubricant” in the dry mechanics of an economy. It’s just
    not always feasible for a person to haul around his crops, goods or
    livestock in search of someone who is willing to trade with him
    somewhere for what HE needs. So what do people do to get around
    that? Well, they use an intermediary which we call money.

    When
    people agree that some quantity of the money represents a certain
    amount of labor, it can then be exchanged with someone else for a
    similar amount of represented labor. And that’s the main thing that
    money does. It represents the fact that a person had to do some kind
    of work to come into possession of that amount of money. Usually.
    Now when someone either steals goods or money, or creates some
    “money” through some bogus means, then the confidence
    factor suffers and it becomes worth less and less over time. When
    governments print up fiat currency which has no real value behind it,
    it’s not worth as much as actual money, something which DOES have
    real value behind it.

    When
    you have two people, and one of them has to sweat out in the hot sun
    or work in freezing cold to earn a living while the other one does
    little or nothing, then there is a disparity and animosity between
    them. Why should one toil away while the other one is able to loaf
    and still eat? Welfare programs, and this includes government jobs
    which produce no real products (almost all government jobs fall into
    this category by the way!) run by governments with unlimited access
    to fiat currencies ALWAYS cause at first an “inflation” of
    the fiat currency, and then a total collapse of it. Now I’m not
    saying that we shouldn’t look after and care for those who cannot
    work due to some kind of disability, but it should be done with real
    compassion, and NOT with the viewpoint of making someone dependent
    upon the government so that they then agree with all kinds of insane
    laws just to keep the bread and butter coming in. These economic
    collapses are always the result of a socialist/communist/fascist type
    of government. And they never last more than several decades at
    most. The saddest part of the whole thing is that through the
    manipulation of the history books, people do not know the true causes
    of these engineered monetary debacles, and so repeat them with great
    regularity.

    Let’s
    look at gold as money. It takes a certain amount of labor and
    equipment to locate and then collect this metal. Now back in 1925,
    an ounce of gold would buy a man a pretty nice suit, and today, an
    ounce of gold will still buy a man a pretty nice suit. Why is that?
    It’s because back in 1925, the ounce of gold required a certain
    amount of time and labor to locate and collect it. Today, it still
    takes about the same amount of time and labor to locate and collect
    an ounce of gold. Please don’t get confused now over the fact that
    “dollars” today don’t equate with dollars in 1925. If we
    were still on the gold standard, the number of dollars that were
    equal to one ounce of gold in 1925 would still be the same today.

    Because
    of the fact that our “money” is no longer backed by
    anything of real value, it takes more “dollars” to equal
    the one ounce of gold. Why is that? There are several reasons why,
    so let’s take a look at a few of them now. First off, when these
    “dollars” are printed up willy-nilly, they lose most of
    their value right there. A big reason is that the “dollars”
    are all printed up with the exact same amount of ink and paper to
    them, regardless of their denomination. There isn’t twenty times
    more ink and paper in a twenty “dollar” bill than there is
    in a one “dollar” bill, is there? So with each bill having
    the exact same value, they all become worth the same as the lowest
    one. And not just according to what’s printed on it, but what it’s
    actual intrinsic worth is. As it costs less than 5 cents to print up
    a fiat currency “dollar” bill of any denomination, that’s
    about what it’s really worth. And in actuality, these pieces of
    inked paper are Federal Reserve Notes with no value to them, other
    than the fact that someone down the street or around the corner may
    be willing to trade something of real value for them. They are also
    known as debt bearing corporate notes, because the corporation known
    as the U.S. Government has been bankrupt since 1933, but not formally
    acknowledged as such until 1939 with the court case of Erie R.R. v.
    Tompkins case.

    Another
    reason that these fiat currency, debt bearing corporate notes lose
    value is because of computerized electronic bookkeeping entries being
    used instead of actual money changing hands. Every time that some
    government agency buys some goods or services with nothing but a
    change in bookkeeping entries, a bit more confidence is knocked out
    of the “money” and thus we have “inflation”. All
    that inflation is is “a decrease in the perceived purchasing
    power of a fiat currency”. That’s all it is, folks!! Forget
    all of these stupid proclamations that inflation is due to an “over
    supply of money” or some such clap trap. If that were really
    true, then just by taking money out of circulation we would be able
    to solve inflation. But it doesn’t. What it DOES do is make it even
    harder to purchase goods and services, and then the economy really
    tanks, big time.

    When
    John and Jane Doe perceive that they will need a greater amount of
    fiat currency tomorrow in order to maintain their lifestyle of today,
    they then have two choices. One, they can work more hours in the
    day, or two, they can charge more for the goods or services that they
    provide to the society in general. And since they can work only so
    many hours per week, they must then increase the rates which they
    charge. And so begins a vicious circle of everyone down the line
    doing the exact same thing until it comes back around to John and
    Jane Doe and then it starts all over again. And when thinking of
    inflation, think of it not in terms of things becoming more
    expensive, but rather in terms of the fiat currency becoming worth
    less and less, which is the truth of the matter. The instability of
    fiat currencies and economies becomes much easier to understand once
    you can do this.

    When
    fiat currency is given to people for no reason, or loans are
    defaulted on, there too, more and more confidence is knocked out of
    the fiat currency and it becomes worth less and less. This idea that
    there are “money multipliers” in an economy is just so much
    hogwash. There is absolutely NOTHING which can multiply human labor,
    and since money is supposed to be based upon human labor, there
    cannot be any money multipliers. See how simple this is? Granted,
    there may be more efficient methods found to do certain things, but
    they always come with some kind of a cost attached to them. There’s
    no such thing as a free lunch. Someone, somewhere, somehow is paying
    for it.

    Let’s
    go back to gold mining for a moment and look at a few things in more
    detail. When a person goes out into the wilderness to look for some
    gold, he must take with him food, clothing and equipment to survive
    with and make the discovery and collection of the gold possible. And
    while he is collecting that gold, he cannot possibly be planting and
    growing food or weaving cloth for his clothes or making a shovel
    either for that matter. So the prospector come miner must EXCHANGE
    some of his labor for these items in order to start his new pursuit
    and continue in it once he has found a place that has some gold in
    it.

    Mining
    is not like farming or ranching where the product grows and
    multiplies itself. It costs pretty much the same to obtain an ounce
    of gold no matter where it’s found or the process used. The result
    of a man panning a few nuggets and flakes out of a riverbed by
    himself, or a huge mine employing thousands of workers which makes
    several ingots per day equates to about the same overall cost.
    People must be paid a wage unless they are slaves, and machinery must
    be bought, powered and maintained in order to get the gold out of the
    dirt each day. This is why there’s no economy of scale (cheaper due
    to more volume) in mining and consequently the value of the gold
    stays on par.

    When
    Mr. Tailor sells his fine suit for an ounce of gold, it’s because of
    several reasons, but the most important one is that the sum of the
    labor involved in the making of the suit from raising the cotton or
    wool to the weaving of the cloth and then the sewing of the pieces
    together requires the amount of labor that the ounce of gold
    represents. With some allowance for a profit of course! If there’s
    no profit in a venture, it will fail of course. And when governments
    step in to prop up a failing venture or support one which never had a
    chance of succeeding in the first place, we again get a lessening of
    the confidence in the monetary system and that’s our old “friend”
    inflation coming to pay us another visit. And with friends like
    that, who needs enemies?

    Where
    actual gold and silver specie are used, there’s NEVER any inflation,
    if a free market enterprise economy is used. The reason for that is
    very simple. If someone gets out of line and tries to get rich
    quick, someone else will come along and pick up the business that the
    first person loses due to the price increases. And if the quality
    level between the two providers is about the same, the first one will
    drive himself out of business rather quickly!

  • Spartacus Rex

    It is amazing how many Americans still do not know the difference between Money and mere Commercial Paper/ Debt Obligations.

    The actual U.S. $ (Dollar) is defined in Statutory Law. Statutory Law also mandates that same is the Official Unit of Account / Metric throughout these United States.

    Anyone not understand what “Statutory” means, and the weight in law that it carries?

    Think along the lines of “Statutory” Rape.

    Even though it should be obvious to anyone with an I.Q. above 50 that no one, no where, can exchange/ redeem a Federal Reserve Note ( Debt Obligation/ IOU for a $) for an actual U.S. Dollar ($) at full face value anywhere on the entire planet, yet look how many utter morons / complete imbeciles will nevertheless put that exact numerical figure right next to the $ (sign) on their Federal Income Tax forms every single year, year after year, rather than to actually redeem those FRN IOUs pursuant to 12 USC 411, into actual lawful money U.S. $, thus enabling them to take the massive Write Off / Tax Loss that the Internal Revenue Code (Title 26) expressly provides, which will massively reduce/ eliminate anyone’s tax liability.

    All the perplexities, confusions, and distress in America arise, not from defects in their constitution or confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit, and circulation.
    John Adams Letter to Thomas Jefferson, August 25, 1787

    “Federal Reserve Notes are not dollars.”
    RUSSELL L.MUNK, former Assistant General Counsel, Department of the Treasury

    Stealing the world can be fun
    It doesn’t require a gun

    Just hire some guy
    To print to the sky

    Then buy all the assets and run!

    ~ @TheLimerickKing

    Cheers,

    S. Rex