Tag: gold is money

Gold & the Worsening Deflation

| July 1, 2012 | Articles: Insights
Gold & the Worsening Deflation

The decaying state of confidence is assisting in the deflationary process that is slowly, inexorably, moving forward, writes Julian Phillips of the GoldForecaster. Action from central bankers is increasingly limited, and there is in fact very little action at all from politicians. Christine Lagarde of the IMF has stressed the need for value and measures of value to keep the monetary system under control. But the loss of money velocity, plus deflation, is doing serious damage to the solvency of banks and nations. Most recently, the process has moved forward with 28 Spanish banks downgraded by the Moody’s ratings agency, while the Spanish government has formally asked for financial assistance from the European […]

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The real cost of not owning gold

The real cost of not owning gold

Bloomberg recently published an illustrative slideshow titled “The Real Cost of Owning Gold”. As usual when dealing with precious metals, in an attitude that is widespread among the mainstream financial press, the tone is dismissive, disdainful and almost mocking of those that advocate ownership of hard assets – and especially gold. The reasons for this hostility are fairly obvious. First, ignorance: precious metals have been out of fashion for over 30 years, and financial analysts (average age 35) know little about them. Most would have came of age, professionally and intellectually speaking, during the early part of the last decade – at a time when gold investors were the crazy-old uncles of […]

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Currency collapse dynamics

| May 20, 2012 | Articles: Insights

The reason we accept paper money as a store of value is habit. This habit has its origins in history, when banks took our gold as deposit and issued paper receipts for it. The gold has gone, but the paper with its habitual value remains, and we accept it without question. The only backing is a vague government promise. There is no sound theoretical basis for why unbacked government-issued money should retain a store of value: it depends for its value on a market-based acceptance of financial credibility. So it follows that if a government loses all financial credibility in markets, its paper becomes worthless. This is confirmed by experience […]

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Why gold money?

| May 7, 2012 | Articles: Insights

Recently Rob McEwen of McEwen Mining Co. and Michael Crofton of Philadelphia Trust discussed the pros and cons of the gold standard. In this debate, Mr McEwen made an excellent case for gold as “the ultimate currency”. He argued that using gold as currency could help restore fiscal discipline in governments; and that, in essence, it already is the world’s reserve currency. Conversely, Mr Crofton stated all the typical arguments against the gold standard: that there is not enough gold in the world for everyone; that it would prevent the authorities from controlling the monetary system; that it would hinder the government’s debt financing, etc. Here are some of my responses to […]

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Missouri politicians aim to simplify use of gold as money

Missouri is the latest US state that is trying to follow Utah’s example by allowing physical gold and silver to be used as legal tender. According to the Constitution, gold and silver coins – such as the American Gold and Silver Eagle – should be accepted as legal tender in all of the US, but of course this has long since ceased to apply in practice. But now some members of the Missouri House of Representatives are working on simplifying the payment process with precious metals, and are hoping to introduce special gold and silver accounts for all monetary transactions done in the state. This plan is similar to a law passed […]

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Asia’s golden future

| March 24, 2012 | Articles: Insights

For most of the last century the default currency for international settlements has been the US dollar. This has given America ultimate power over international trade. In recent months, the US wielded …

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Iran Says “Gold Is Money”

| March 20, 2012 | Articles: Insights

By Louis James, Casey Research Economic crises signal that the current system isn’t working as expected and needs improvement. When it comes to monetary systems, questioning their fundamentals can lead to doubts about whether the preferred medium of exchange will continue to be preferred for long. The large-scale whirlwind of economic trouble around the globe has pushed some to rethink the role of gold in the economy – and to actually move toward bringing it back. A month ago, a rumor that India is going to pay in gold for oil imported from sanction-struck Iran sent shockwaves through the markets. It was no small deal, both in principle and volume: […]

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Gold Drops 3% in 1 Hour After Bernanke Comment

Gold Bullion prices dropped 3.2% to $1727 per ounce in less than an hour Wednesday afternoon in London, after US Federal Reserve chairman Ben Bernanke appeared before Congress. Higher gasoline prices are “likely to push up inflation temporarily while reducing consumers’ purchasing power,” Bernanke told the House Financial Services Committee. Bernanke’s comments “eased speculation the central bank is moving closer to providing more monetary stimulus,” news agency Bloomberg reports. The Fed chairman added however that the Fed’s policymakers judge “that sustaining a highly accommodative stance for monetary policy is consistent with promoting both objectives” of the Fed’s mandate, namely price stability and employment. ORIGINAL REPORT Gold Bullion prices held steady around $1785 per […]

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If Gold Could Talk

| February 26, 2012 | Articles: Insights
If Gold Could Talk

By Jeff Clark, Casey Research Have you ever had any doubts about gold? Does it sometimes feel like it should be performing better? Are you concerned about its volatility? Do you worry about how it might perform in the future? Have you ever wondered about its true purchasing power? Maybe you’re nervous about a big drop in price again? I decided to go directly to the source to address these concerns: Gold himself. He put his arm around me and asked me to tell you a few things… I hear that you’ve had some worries about me. I understand. Your world is a very uncertain place right now. And when […]

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Gold Speaks Up

| February 21, 2012 | Articles: Insights
Gold Speaks Up

By Jeff Clark, Senior Precious Metals Analyst at Casey Research Have you ever had any doubts about gold? Does it sometimes feel like it should be performing better? Are you concerned about its volatility? Do you worry about how it might perform in the future? Have you ever wondered about its true purchasing power? Maybe nervous about a big drop in price again? I decided to go directly to the source to address these concerns: Gold himself. He put his arm around me and asked me to tell you a few things… I hear that you’ve had some worries about me. I understand. Your world is a very uncertain place […]

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Gold Coins Discount for India Rail Employees

INDIA’S LARGEST commercial bank, the State Bank of India, has turned out a special salary package for railway employees. Though employees can avail themselves of car loans, home loans and personal loans at reduced interest rates, the biggest draw is the discount offered on purchases of Gold Coins, writes MineWeb‘s Shivom Seth in Mumbai. For a country where the love for gold is almost a religion, the State Bank of India, which is the largest lender in the country, has decided to discount the purchase of Gold Coins for every salary holder. “Gold has become an inseparable part of the Indian society and fused into the psyche of every Indian. The special privileges will be offered […]

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Doug Casey: Is a US-Iran War Inevitable?

Interviewed by Louis James, Casey Research US-Iranian saber-rattling or impending shoot-out? In his usual, candid manner, contrarian investor Doug Casey talks about why he believes it’s serious this time… why the US is the greatest threat to peace today… why Iran might move towards a gold standard… and what smart investors should do. L: Doug-sama, I’ve heard you say you think the US is setting Iran up to be the next fall guy in the wag-the-dog show – do you think it could really come to open warfare? Doug: Yes, I do. It could just be saber rattling during an election year, but Western powers have been provoking Iran for […]

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Hayek on Money: let the people choose

| February 12, 2012 | Articles: Gold Silver Prices

“With the exception only of the 200-year period of the gold standard (1714 to 1914 in Britain), practically all governments of history have used their exclusive power to issue money in order to defraud and plunder the people.” In 1976, Nobel laureate economist Friedrich Hayek wrote these bold words in a published address called Choice in Currency: A Way to Stop Inflation. In it, Hayek makes the direct and commonsensical argument that the only true way to fight inflation was to keep government honest, and the only way to keep government honest was to take away government’s legal privilege to issue money exclusively. Hayek’s proposal was simple: repeal “legal tender” laws […]

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Rumours about Iranian oil-for-gold programme persist

Despite official denials by the Indian government, rumours are spreading that India and China are planning to use gold to pay for future purchases of Iranian crude oil. According to unconfirmed speculation, the Indian government is planning a swap agreement with Iran which will assure future deliveries of Iranian crude oil to be paid in gold and Indian rupees. At the end of 2011 the US imposed an embargo on Iran, which was endorsed by the European Union last week. India and China are two major Iranian crude oil importers. Both states purchase roughly 30% of yearly Iranian production, amounting to a total of US$30 billion. Should these persistent rumours be […]

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