The Golden Truth: Things Just Got Interesting

Thursday, May 3, 2012

Things Just Got Interesting

Reminder of things to come from the Telegraph UK archives...

Russia backs return to Gold Standard to solve financial crisis...

Russia has become the first major country to call for a partial restoration of the Gold Standard to uphold discipline in the world financial system....

Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week...

A long-time friend and colleague had told me early last week that someone he knows who lives in Switzerland said that the financial circles had been buzzing with a rumor that the BRICs were going to unveil a new currency trading/clearing system that would enable the world to conduct commercial trade without using the dollar or the nefarious SWIFT system.

Looks like there may be some truth to that rumor - here's the article: LINK
I want to point out and correct one egregiously incorrect statement in the article. The author avers that the dollar inflation caused by the Viet Nam War and the Great Society social welfare programs forced Nixon to "close" the gold window.

Actually what happened was that the Bretton Woods Agreement created a gold-backed system in which the United States could only issue debt to the extent that it had gold to back the amount of debt outstanding. Foreign sovereign creditors had the option of redeeming their debt claims for gold at the Fed "window." Eventually it became obvious to those paying attention - i.e. Charles De Gaullle - that the U.S. had issued debt well in excess of its gold holdings. The French began to redeem their Treasury notes for gold. When it was rumored that the Swiss were going to start doing the same, it became necessary for Nixon to close the gold window or risk a run on the U.S. gold "bank" and being exposed for violating Bretton Woods by issuing more debt there was gold in Ft. Knox to back it.

The rest, as they say, is history. Many of us have been arguing that eventually the Chinese/Russians/etc would eventually reassert a gold standard. When this happens the dollar price of gold will do a space launch and the standard of living in this country - for those who don't have any gold and silver - will decline to 3rd World standards...

12 comments:

AnonymousThursday, 03 May, 2012
Dave that article is dated 2009.
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Funky TapeThursday, 03 May, 2012
I'll believe it when it finally happens, but I fear for many it will be too late.

Lending to this a little bit is what Jim Willie has been saying for the past couple of weeks in interviews and in articles. Namely, the death of SWIFT as we know it is "imminent." As much as i hate the word imminent (which usually means it's really not, more like a year away) you have to give the man some credit for corroborating the story/rumor.
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AnonymousThursday, 03 May, 2012
Rickards was right.
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AnonymousFriday, 04 May, 2012
We need to go back to the gold standard in order to make the banks behave.
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AnonymousFriday, 04 May, 2012
I find it interesting that no one has picked up on Mikael Charoze's single link on his facebook page regrading collateral contagion. Yes, this is the BIS FX and gold "market maker" who removed "interventions" from his LinkedIn profile.

Dave, your rumors in Staad may be a trickle down from Basel.

As Ferdi Lips well knew, and Another, the run on physical will create a paper inferno of EPIC proportions.

"Those who trade in derivatives will be paid in derivatives"

-Wil (of the posthumous letthemfail)
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AnonymousFriday, 04 May, 2012
Release Gold! Free it please!
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AnonymousFriday, 04 May, 2012
see his december 28, 2011 post from scribd
http://www.facebook.com/pages/mywebmarketcom/318666518164603?ref=tn_tnmn#!/mikael.charoze
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.