Fiat Standard

https://twitter.com/saifedean/status/1613474102672506883?s=20&t=_CGgiBDsaVvKVXhECBzleg

The fiat money quantity FMQ

http://www.goldmoney.com/research/research-archive/The-fiat-money-quantity-FMQ

BoE Finds Gold Standard Leads To Less Crises Than Fiat Regime

Well, golly gee, the Bank of England, one of the worst offenders of the printing press with their quantitative easing(s), wrote a paper advocating the gold standard.  Next thing you know, Bernanke will write a white paper on the advantages of preparing for financial Armageddon.

http://www.zerohedge.com/news/2012-10-10/gold-standard-vs-bretton-woods-vs-fiat-standard

Gold As A Store Of Value

http://www.zerohedge.com/news/gold-store-value

Mike Krieger Explains Why Fiat Money is Immoral

http://www.zerohedge.com/article/guest-post-why-fiat-money-immoral

Gold and silver gain

http://www.bloomberg.com/news/2010-09-17/gold-may-drop-as-advance-to-second-record-this-week-prompts-investor-sales.html

“All the debt and deficits are so high, the only perceived way out of this mess is a global synchronized devaluation of all fiat currencies,” said Michael Pento, a vice president at Euro Pacific Capital Inc. in New York. “Gold is replacing the dollar as the world’s reserve currency.”

It's talk like this that got Pento kicked out of his CNBC interview with Erin Burnett.

Rant

I've been immersed in these games the government and banks play, so I incorrectly assumed everyone believes what I believe about Wall Street, our government, central banks, fiscal and sovereign debt problems, Iceland, Dubai, Greece, etc.

The problem is this: most people don't have a clue about basic economics and financial models, even people much smarter than me, including the experts. Have they been that influenced by the media and teachings? Why do they cling to a Keynesian school of thought which clearly has failed? Why do they believe the only way to fix a huge debt problem is to add more debt, induced by a few privileged men? Why do they continue to believe the economic equivalent of a flat earth?

I've managed to piss off Ivy Leaguers, industry experts, financial insiders--you name it--for being the messenger. I've talked to economists, historians, and academicians from top schools and they believe the system is sound--that outlying events spoiled it for all of us, they reckon. They don't see the systemic breakdown in our fiat, fractional reserve financial systems--or how leverage has created huge pools of toxic derivatives, vulnerable to manipulation. Our financial system is a gigantic, rigged casino. Our profligacy has turned unfunded entitlements like pension funds, social security and healthcare programs into giant Ponzi schemes.

My friends in the real estate and equities markets have shunned me. What are they running away from--me? I'm one data point, unable to move my old dishwasher, much less markets. I haven't been a popular member of the cocktail circuit or at family dinners. And I thought to myself: why are these very bright people so unaware of what has been so coherent to me? I've ranted endlessly the basic economic laws of supply and demand for a certain asset class. Why are educated, bright, authoritative, and influential people missing out on something so luminous? I leave these questions to ponder, unsure of the correct answers. And I exit hoping I am completely wrong in my conclusions.

Another gem by Greenspan

Alan Greenspan did a complete 180 degree turn from his free market youthful days to a Keynesian, market-manipulating Federal Reserve Chairman. I presume that's how one climbs pay-grade levels within the Fed.

In this expose on how Gordon Brown sold the UK's gold reserves at the absolute bottom, plundering the country's wealth in the process, we learn several things:

1) Germany's gold reserves aren't in Germany at all. They are stored in New York.
2) Gordon Brown is a terrible market timer.
3) Greenspan's warning to Brown to not sell his country's gold needs no explanation: "Germany in 1944 could buy materials during the war ONLY with gold. Fiat money paper, in extremis, is accepted by NOBODY. Gold is always accepted." - Alan Greenspan, 1999

He should have added Germany lost World War II.

The return of the gold standard? Why gold is poised to explode...

Blue-collar, white-collar, manufacturing, services, etc.---it doesn't matter what type of jobs--the more the merrier, altho it would be nice to have higher-skilled job growth.

If you think about it, who invented the internet? (No, it wasn't Al Gore). It was a British scientist educated in Switzerland (or it was a Swiss educated in the UK). But as far as monetizing the technology, most of the $$ were generated here, as well as accompanying technologies and services. It's okay to be a consumer-oriented economy, as long innovation continues domestically.

I think that's what dawg was sarcastically inferring--we can't go backwards.

To be honest, the only way we go back to real economic growth--without inflation and the abuse of leverage, is to go back to the gold standard. History has shown time again that when sovereign governments abandon gold-backed currencies, paralyzing hyperinflation becomes the unintended consequence down the road. With fiat currencies, central banks are permitted to print money unjudiciously--most of the time to try to dampen deep recessions (sounds familiar?). Deflation and avoidance of The Great Depression category 5 is the concern du jour, but the Coming to Jesus day will arrive soon enough, and we will all pay for these bailouts, literally with higher taxes and a higher cost of living (and accompanying lower standard of living).

Think about it: with our reserve banking system, a 20% run on demand deposits would make every single one of our major banks insolvent. This is not just a mortgage crisis, a credit crisis, etc.--it's a crisis of confidence. And with flimsy fiat, finance-based economies, confidence is everything (since there is no gold backing up the currency).

Of course, resetting of a new gold standard would mean a level of around $1500/ounce, which would cut everybody's cash accounts in half, but that's what it would take. It happened in the early 30's, when FDR declared gold would be set at $35/oz, instead of the previous $20/oz. The federal government then went on to confiscate all individually held gold (with the exception of wedding rings), or citizens risked 10 years of prison and a $10,000 fine. All that gold is now at Fort Knox. This was due to the profligate Treasury printing presses during the easy money 20's, which in turn caused the Great Depression of the 30's. (See any parallels?).

I could go on and on about what's going on with the currency and gold markets right now, with the manipulation and placating of short-sellers, but I'll summarize with this: if JP Morgan and Citibank are openly predicting $1500/oz gold for next year, and if they are accumulating gold bullion as we speak (as are Dubai, Saudi and Chinese governments), then why are they selling short gold? Could it be they want to keep its price artificially low, in order to boost their purchases? Thing is, it's a dangerous parlor game, as short sellers have to deliver against futures contracts, and there are rumors that these shadow contracts entail no deliveries. But that is precisely why the two major banks are accumulating physical gold bullion, because when the shorts are covered (i.e. gold explodes upward in price), their inventory will (partially) offset their losing sales contracts.

Another compelling case for gold: The Treasury is printing trillions of dollars for bailouts--equal to half the US GDP. What happens when you have oversupply of a commodity--including a local currency? It removes scarcity, plummeting that currency. What happens when your currency is devalued? Gold soars--it's a mathematical reality, not some wild rantings of a gold bug.

Look, gold has been the absolute worst investment vehicle from 1980 - 2000.

But in the 70's, it was the absolute best--even with inventory costs taken into account. Gold went up 23-fold in that decade. Gold mining shares went up twice that level. If many prognosticators are saying this run is much worse than 73-74 and 78, what does that say about the price of gold? Does anybody think post-2008 will be a replay of the roaring 80's and late-90's stock market booms? Or are we headed for a very subdued 70's-like stagflation scenario? You decide.

BTW, the Big 3 is old news, despite the headlines. I called their demise 18 months ago, and their shares are down a nice 98%. It's done, finito. The next shocks will be a result of de-leveraging and the precipitous decline of most currencies and US long-term debt. Whoever buys US 10-year notes or Treasury bonds is going to get crushed. Taking on all that risk (after all, one could argue the US government is insolvent), and yet earning 2% on your money? When inflation rears its ugly head, and interest rates are in the double digits, those bonds will be worth less than Monopoly money.