MCViewPoint

Opinion from a Libertarian ViewPoint

Posts Tagged ‘gold’

The Most Inflation-Resistant Money the World Has Ever Known

Posted by M. C. on August 17, 2022

In other words, Bitcoin is the first—and only—monetary asset with a supply that is entirely unaffected by increased demand.

That is an astonishing and game-changing characteristic.

by Nick Giambruno

Hardness is the most important characteristic of a good money.

Hardness does not mean something that is necessarily tangible or physically hard, like metal. Instead, it means “hard to produce.”

By contrast, “easy money” is easy to produce.

The best way to think of hardness is “resistance to inflation,” which helps make it a good store of value—an essential function of money.

Would you want to put your savings into something that somebody else can create with no effort or cost?

Of course, you wouldn’t.

It would be like storing your life savings in Chuck E. Cheese arcade tokens or airline frequent flyer miles.

Unfortunately, putting your savings into government currencies isn’t that much different.

What is desirable in a good money is something that someone else cannot make easily.

The stock-to-flow (S2F) ratio measures an asset’s hardness.

S2F Ratio = Stock / Flow

The “stock” part refers to the amount of something available, like current stockpiles. It’s the supply already mined. It’s available right away.

The “flow” part refers to the new supply added from production and other sources each year.

A high S2F ratio means that annual supply growth is small relative to the existing supply, which indicates a hard asset resistant to inflation.

A low S2F ratio indicates the opposite. A low S2F ratio means that new annual supply can easily influence supplies—and prices. That’s not desirable for something to function as a store of value.

In the chart below, we can see the hardness of various physical commodities.

Monetary commodities such as gold and silver have higher S2F ratios. Industrial commodities have low S2F ratios, typically around 1x.

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“A Paradigm Shift Western Media Hasn’t Grasped Yet” – Russian Ruble Relaunched, Linked To Gold & Commodities

Posted by M. C. on April 4, 2022

Buyers would then scramble to buy physical gold to pay for Russian oil exports, which in turn would create huge strains in the paper gold markets of London and New York where the entire ‘gold price’ discovery is based on synthetic and fractionally-backed cash-settled unallocated ‘gold’ and gold price ‘derivatives.

https://www.zerohedge.com/commodities/paradigm-shift-western-media-hasnt-grasped-yet-russian-ruble-relaunched-linked-gold-and

BY TYLER DURDEN

MONDAY, APR 04, 2022 – 05:44 AM

By Ronan Manly of Bullionstar.com

With Russia’s central bank having just profoundly altered the international trade and monetary system by linking the Russian ruble to both gold and commodities, journalists in Moscow asked me to write a Q and A article on what these developments mean, and the ramifications of these changes on the Russian ruble, the US dollar, the gold price and the global system of currencies. This article has been published on the RT.com website here

Since RT.com is now blocked and censored in many Western locations such as the EU, UK, US and Canada, and since many readers may not be able to access the RT.com website (unless using a VPN), my Questions and Answers that are in the new RT.com article are now published here in their entirety.

Who would have thought that citizens of ‘free speech’ Western countries would need a VPN to read a Russian news site?

Why is setting a Fixed Price for Gold in Rubles significant?

By offering to buy gold from Russian banks at a fixed price of 5000 rubles per gram, the Bank of Russia has both linked the ruble to gold and, since gold trades in US dollars, set a floor price for the ruble in terms of the US dollar.

We can see this linkage in action since Friday 25 March when the Bank of Russia made the fixed price announcement. The ruble was trading at around 100 to the US dollar at that time, but has since strengthened and is nearing 80 to the US dollar. Why? Because gold has been trading on international markets at about US$ 62 per gram which is equivalent to (5000 / 62) = about 80.5, and markets and arbitrage traders have now taken note, driving the RUB / USD exchange rate higher.

So the ruble now has a floor to the US dollars, in terms of gold. But gold also has a floor, so to speak, because 5000 rubles per gram is 155,500 rubles per troy ounce of gold, and with a RUB / USD floor of about 80, that’s a gold price of around $1940. And if the Western paper gold markets of LBMA / COMEX try to drive the US dollar gold price lower, they will have to try to weaken the ruble as well or else the paper manipulations will be out in the open.

Additionally, with the new gold to ruble linkage, if the ruble continues to strengthen (for example due to demand created by obligatory energy payments in rubles), this will also be reflected in a stronger gold price.

Gazprom – Natural gas powerhouse and Russia’s largest company

What does this mean for Oil?

Russia is the world’s largest natural gas exporter and the world’s third largest oil exporter. We are seeing right now that Putin is demanding that foreign buyers (importers of Russian gas) must pay for this natural gas using rubles. This immediately links the price of natural gas to rubles and (because of the fixed link to gold) to the gold price. So Russian natural gas is now linked via the ruble to gold.

The same can now be done with Russian oil. If Russia begins to demand payment for oil exports with rubles, there will be an immediate indirect peg to gold (via the fixed price ruble – gold connection). Then Russia could begin accepting gold directly in payment for its oil exports. In fact, this can be applied to any commodities, not just oil and natural gas.

What does this mean for the Price of Gold?

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#GotGoldorRubles? Russia Just Broke the Back of the West

Posted by M. C. on March 29, 2022

Instead of using physical men to subjugate the locals through superior weaponry and bribes to get them to extract the mineral wealth which the colonialists take back home, today we use the post-WWII institutions to run that same system through debt issuance for capex and the interest payments (in this case pure economic rent – unearned wealth).

Author: Tom Luongo

I don’t think everyone has yet caught the significance of Russia announcing they are putting a floor under the price of gold.  But, to be clear, Russia just broke the paper gold suppression scheme.

On Friday the Bank of Russia announced:

RUB5000 to the ounce at an exchange rate of 100 RUB/USD implies a $1550 per ounce gold price.

For a few days previous to this announcement, which they knew was coming, The West was running around with multiple bits of legislation to try and keep the Russians from selling their gold.

The G7 think the sanctions are hitting so hard that Putin will be forced to sell his gold to evade sanctions to pay for things.  They are literally running a script in their heads that is not actually playing out in the real world.

But, whatever, Neocons never met an ugly stick that they didn’t want to use to beat someone over the head with.  Too bad all they’re doing is hitting a rubber tire.

Boing!

Because here’s the gig, Russia won’t be selling any gold. They’re buying it.

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Who’s Got the Gold?

Posted by M. C. on February 22, 2022

One school of thought has it that, although the US has long claimed that it possesses roughly 8,000 tonnes of gold in Fort Knox, there has not been an audit of Fort Knox since 1953. (That’s not encouraging.) Is it 8,000 tonnes? 4,000? None? We’re unlikely to ever get a truthful answer on this question.

by Jeff Thomas

In 1971, the US abruptly went off the gold standard, and in making the public announcement, US President Richard Nixon looked into the television camera and said, “We’re all Keynesians now.”

I was a young man at the time and had previously bought gold, albeit on a very small scale, but I recall looking into the face of this delusional man and thinking, “This is not good.”

However, the world at large apparently agreed with Mister Nixon, and within a few years, the other countries also went off the gold standard, which meant that, from that point on, no currency was backed by anything other than a promise.

Party Time

It didn’t take long before countries began playing with their currencies. At one time, the German mark, the French franc, the Italian lire, and the British shilling had all been roughly equivalent in value, and four or five of any one of them was worth about a dollar.

That had already begun to change prior to 1971, but following the decoupling from gold, the governments of the world really began to see the advantages of manipulating their own currencies against the currencies of other nations.

From that point on, a currency note from any country, which was already no more than an “I owe you,” was increasingly degraded to an “I owe you an undetermined and fluctuating amount.”

This fixation with monetary manipulation began much like the 1960s youths’ experimentation with drugs, and by the millennium, had morphed into something more akin to heroin addiction. Unfortunately, those who had become the addicts were the national leaders in finance and politics.

Well, here we are, in the second decade of the millennium. The party has deteriorated and is soon to come to a bad end.

As we get closer, those of us who have, for many years, predicted an eventual realisation that Mister Keynes and Mister Nixon were dead wrong and that the world will once again look to gold are, at this late date, gaining a bit of traction.

We’re seeing an increase in the number of people who recognise that all fiat currencies eventually come to an end and gold will continue to shine.

But there are two remaining questions that have even the best of prognosticators puzzling.

1. What Will the Role of Gold Be in the Future?

When currencies collapse, will there be an immediate and complete switch to gold? Unlikely.

Will further fiat currencies be put forward as solutions to paper money? Almost definitely.

Will future currencies be backed by gold? Probably, especially as so many governments and banking institutions are quietly scrambling to buy gold whilst trying not to let on the extent of their stockpiling.

Will gold-backed currencies stabilise money for the rest of our lives? Quite unlikely.

Even those countries who may agree to audits to demonstrate they own the gold they claim to own will, at some point in the future, look for ways to “do a Nixon” and once again get off the gold standard. (The short-term benefits of fiddling with currency is too tempting.)

2. Who’s Got the Gold?

Currencies come and go in the world with remarkable frequency (the last hundred years has been witness to over twenty hyperinflations worldwide).

In that quiet scrambling we were talking about, no one is being really truthful about how much gold they have. In addition, even between the foremost experts on the subject (and here, I refer not to the pundits on television, but to those economists that I personally hold in the highest regard), there is broad speculation as to who holds what.

One school of thought has it that, although the US has long claimed that it possesses roughly 8,000 tonnes of gold in Fort Knox, there has not been an audit of Fort Knox since 1953. (That’s not encouraging.) Is it 8,000 tonnes? 4,000? None? We’re unlikely to ever get a truthful answer on this question.

In addition, the US has held roughly 6,000 tonnes of gold for European countries since the Cold War.

Now that the US has become the world’s foremost debtor nation, Europe is getting a bit antsy, and some are asking to have it back. In response, the Federal Reserve has sent Germany a small portion of their gold but avoids shipping the remainder and denies them even the ability to inspect the remainder. (Again, not encouraging.)

On the other hand, we have equally astute economists—US government insiders—who state that they are fairly certain the gold is there—in both Fort Knox and the New York Federal Reserve Bank’s underground vault. In the latter case, they state that, although much or all of the gold has been leased to the bullion banks, it has never left the building.

What does this mean to the rightful owners? There are multiple legitimate claims on the very same bars of gold.

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Understanding the inflation problem

Posted by M. C. on January 21, 2022

More difficult, perhaps, will be the discipline sound money imposes on government spending. From the state’s point of view, the purpose of inflation is to permit it to spend more than it raises in taxes. For money in the form of gold coin to back a fully exchangeable currency requires abandoning inflation as a source of finance.

https://www.goldmoney.com/research/goldmoney-insights/understanding-the-inflation-problem

By Alasdair Macleod

In recent weeks inflation has become a major economic concern. Nearly all the commentary emanating from monetary policy makers, economists, and the media is misguided, believing inflation is rising prices and must be addressed accordingly.

They are only the symptoms of inflation. The true cause is the expansion of currency and bank credit, which, reflected in the US dollar’s M2 money supply has increased substantially since March 2020, and now stands at nearly three times the level when Lehman failed.

After defining the differences between money, currency, and credit which together make up the media of exchange, this article explains how changes in the quantities of currency and credit translate into prices.

The solution to the inflation problem is not price controls, which are always counterproductive, but to return to a regime of sound money. This article shows what must be done to achieve this outcome and concludes that it is impossible to do so without a sufficiently serious financial and economic crisis to discredit government intervention in markets and to then allow governments to stabilise their currencies and reduce their spending to a bare minimum.

Defining inflation, money, currency, and credit[i]

A resolution of the inflation problem requires an understanding of inflation itself. It is an increase in the quantity of the media of exchange, whether it be money, currency, credit, or a combination of any or all of them. It is not a rise in the general price level. That is the consequence of inflation when the media of exchange loses purchasing power.

To avoid misunderstanding, it is important in any discussion about money to provide an accurate definition of what is money and what is not money. Let us clarify this at the outset:

That which is commonly referred to as money is more correctly any form of circulating media used for the payment of goods and services in an economy based on the division of labour. The term “circulating media” or “media of exchange” more accurately represents the common concept of money as the term is used today.

The amount of circulating media is never fixed. Indeed, the quantity of metallic money — gold, silver, and copper, but particularly gold, which we can simply define as pure money with no counterparty risk, has increased over the millennia since weights of these metals first evolved to replace barter. The population of active users of metallic money has also increased. Throughout history, the pace of increases of above ground gold stocks and the human population have been similar. The quantity of gold has therefore broadly kept pace with the population increase.

Over the long term, therefore, money proper has ensured a stable purchasing power despite the increase in above-ground stocks. An important advantage of gold as money is that its use is dominated by the twin functions of ornamentation and as the medium of exchange — unlike silver and copper it is never consumed. Gold’s utility is set by its users, who collectively decide how much circulates as money and how much is used for ornamentation. Its use switches between these two functions as its possessors collectively impose their needs, and gold’s purchasing power is determined by the quantity circulating as money. As well as the flows between its use as money and ornamentation, the quantity of money can also be affected by variations in mine supply from its general correlation with global population growth.

Gold’s purchasing power is stable due to these self-correcting factors. Currency is a different matter, always bearing in mind the counterparty risk of the issuer and its propensity to inflate its quantity. Today, these are central banks. A central bank’s balance sheet always shows currency in circulation as a liability of the bank, along with deposits owed by it to its depositors, normally confined to licenced commercial banks. The quantity of currency in circulation is set not by its users, but by the central bank managing its balance sheet.

In accordance with their monetary policies, Central banks can and do vary the amount of currency and the deposits recorded on their balance sheets, the latter more normally termed the reserves of commercial banks. Setting the level of these reserves in addition to a commercial bank’s shareholder capital used to be the means of regulating the quantity of credit that a commercial bank could issue. But today, central banks actively buy financial assets, payment being credited to the reserve accounts of the commercial banks. It is now the principal source of central bank inflation, and the regulation of a commercial bank’s lending capacity is now controlled more by other forms of regulation.

A commercial bank is a dealer in credit. It lends money to borrowers at a higher rate than it pays to its depositors. By lending money, it creates an asset on its balance sheet, and at the same time a counterbalancing liability is credited to the borrower, representing the amount of credit that the borrower has available to draw upon. The borrower’s bank statement will not usually reflect the counter-deposit, but double-entry bookkeeping demands that it exists. By a few strokes of a bookkeeper’s pen, credit which is indistinguishable from currency is created out of thin air and put into circulation.

We therefore have three types of circulating media: money, currency, and credit. A central bank sets the quantity of currency, and the commercial banks the quantity of bank credit and therefore deposit money, which is bank credit’s counterpart. The only circulating media whose use-value is set by its users is money. For the modern state which demands control over what circulates as the circulating media, money is actively discouraged in favour of its own substitutes, currency and bank credit issued by its licenced commercial banks, which it controls. Even under a gold coin standard, very few transactions involved money, being almost entirely settled by currency and credit.

The consequences of inflation

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Why Does Money Have Value? Not Because the Government Says It Does. | Mises Wire

Posted by M. C. on October 10, 2021

Contrary to the popular way of thinking, the value of a paper dollar originates in its link to gold—and not government decree or social convention. Following Ludwig von Mises’s regression theorem, money must have originated as a commodity. Furthermore, the fact that an entity has established a purchasing power with respect to various goods and services does not automatically qualify it as money, i.e., as the general medium of exchange. For the entity to become money, it must have wide acceptance.

https://mises.org/wire/why-does-money-have-value-not-because-government-says-it-does

Frank Shostak

Why does the dollar bill in our pockets have value? According to some commentators, money has value because the government in power says so. For other commentators the value of money is on account of social convention. What this implies is that money has value because it is accepted, and why is it accepted? … because it is accepted! Obviously, this is not a good explanation of why money has value.1

The difference between Money and Other Goods

Now, demand for a good arises from its perceived benefit. For instance, people demand food because of the nourishment it offers them once consumed. This is not so with respect to money. According to Murray N. Rothbard,

Money, per se, cannot be consumed and cannot be used directly as a producers’ good in the productive process. Money per se is therefore unproductive; it is dead stock and produces nothing.2

Why, then, is there demand for money? Why do individuals desire to have something which cannot be consumed and produces nothing? To provide an answer to this one must go back in time to establish how money emerged.

In trying to improve their lives and well-being, individuals discovered that by replacing direct exchange, where individuals exchange one good for another good, with indirect exchange they could enhance the marketability of their produce. The introduction of indirect exchange means that the produce of an individual is exchanged for some more marketable good and then this good is exchanged for the produce of another individual.

The key to a good’s emergence as a mediator of indirect exchange is that it must be widely accepted. On this, Ludwig von Mises observed that, over time,

there would be an inevitable tendency for the less marketable of the series of goods used as media of exchange to be one by one rejected until at last only a single commodity remained, which was universally employed as a medium of exchange; in a word, money.3

Similarly, Murray Rothbard wrote that,

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Frank Shostak‘s consulting firm, Applied Austrian School Economics, provides in-depth assessments of financial markets and global economies. Contact: email.

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We Don’t Need a Central Bank to Deal with Changes in the “Demand for Money” | Mises Wire

Posted by M. C. on September 8, 2021

If the market will settle on gold or any other commodity as money the amount of this commodity is going to be in line with people’s requirements.

Given that a commodity that is selected as money is part of the stock of wealth the increase in the supply of such commodity is not going to set in motion the menace of boom-bust cycle. This should be contrasted with the increase in the money supply out of “thin air”.

https://mises.org/wire/we-dont-need-central-bank-deal-changes-demand-money

Frank Shostak

Historically, many different goods have been used as money. On this, Ludwig von Mises observed that, over time,

[T]here would be an inevitable tendency for the less marketable of the series of goods used as media of exchange to be one by one rejected until at last only a single commodity remained, which was universally employed as a medium of exchange; in a word, money.1

Similarly, Murray Rothbard wrote in “What Has Government Done to Our Money,”

Just as in nature, there is a great variety of skills and resources, so there is a variety in the marketability of goods. Some goods are more widely demanded than others, some are more divisible into smaller units without loss of value, some more durable over long periods of time, some more transportable over large distances. All of these advantages make for greater marketability. It is clear that in every society, the most marketable goods will be gradually selected as the media for exchange. As they are more and more selected as media, the demand for them increases because of this use, and so they become even more marketable. The result is a reinforcing spiral: more marketability causes wider use as a medium, which causes more marketability, etc. Eventually, one or two commodities are used as general media-in almost all exchanges-and these are called money.

Through the ongoing process of selection, people settled on gold as their preferred medium of exchange. Some commentators, cast doubt that gold can fulfill the role of money in the modern world. It is held that, relative to the growing demand for money because of growing economies, the supply of gold is not growing fast enough. On this according to Insider from June 15, 2011,

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Frank Shostak‘s consulting firm, Applied Austrian School Economics, provides in-depth assessments of financial markets and global economies. Contact: email.

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Doug Casey on Currency Debasement and Cultural Degradation

Posted by M. C. on August 5, 2021

Doug Casey: There is a relationship. It’s perhaps not directly provable as cause and effect, but there’s a high correlation between junk money and junk culture. And it’s not just a question of arbitrarily changing taste.

https://internationalman.com/articles/doug-casey-on-currency-debasement-and-cultural-degradation/

by Doug Casey

International Man:  How instrumental do you think the debasement of their currency was to the eventual fall of the Roman Empire? How did it affect their culture?

Doug Casey: In ancient pre-industrial societies—just like today—you became wealthy by producing more than you consume and saving the difference.

One of the best things about money is that it allows an individual to set aside capital, the product of his labor, in a form that retains value. A farmer, for instance, can’t save fruit from year to year, nor can a baker save bread. Sound money is critical for lasting gains in wealth and economic progress. Sound money is why wealthy societies become dominant, and a reason other societies are poor and ripe for conquest and domination.

Rome provides a meaningful long-term template. The Roman government, in search of revenue, started debasing the denarius under Nero in the 1st century, taking it from 90% silver to 75%. As late as the reign of Marcus Aurelius, which ended in 180, the denarius was still about 75% silver. By the end of the 3rd century, it was pot metal that was simply plated with silver. The 3rd century was notable for numerous coups, civil wars, assassinations, and secessions. There are plenty of reasons political chaos goes hand in hand with economic chaos; they reinforce each other.

Roman coins weren’t worth saving by the middle of the 3rd century, and the collapse of the currency was a major cause of the collapse of the empire. In some ways, sound money was even more important in ancient times than it is today because they didn’t have sophisticated banking, financial markets, credit, accounting, or ways of measuring the rate of currency depreciation. Physical cash was king.

Currency inflation creates chaos, whether in a relatively primitive economy like that of the Romans—where there was still a lot of barter. Once the rulers found they couldn’t depreciate the currency anymore, direct taxes went up substantially, but it became hard to collect them simply because the currency had no value. The soldiers didn’t like being paid with worthless tokens. This is why after the reign of Aurelius, the next century was a time of civil wars and general chaos. There was no new construction of roads or public buildings. Those who were able holed up at their country estates, which were internally self-sustaining. It was the beginning of feudalism, a foreshadowing of the coming Dark Ages. By the accession of Diocletian in 295, Rome had lost all touch with its republican roots and had become an oriental-style despotism.

Is Rome a distant mirror to today’s West? It’s entirely possible, even likely.

International Man: What parallels can be made today with the US in terms of monetary debasement and overall degradation?

Doug Casey: The parallels are very direct. We can just look at the pictures on the coins.

During the Roman Republic, the consuls didn’t put their images on the currency. The coins bore images of the gods, heroes, or personifications of various virtues. Julius Caesar was the first ruler who dared put his own image on a coin. It amounted to free advertising.

Caesar signed the death warrant for the Roman republic, followed by Augustus, his adopted son, who was the first actual Roman emperor. From that point until the end, all Roman coins featured the image of the current ruler.

In the US, we didn’t have a picture of a president on a coin until 1909, when Lincoln was deified and put on the penny; before that, pennies featured an Indian. All the other coins had allegorical images, as did Roman coins during its republic. After Roosevelt was elected in 1932, however, things changed. The coins all featured past presidents. Washington replaced a walking Liberty on the quarter in 1932. Jefferson replaced the Indian on the nickel in 1938. Roosevelt himself replaced the image of Mercury on the dime in 1946—that was a big step since he was so recently dead. Benjamin Franklin replaced Liberty on the half dollar in 1947.

Since Lincoln, Washington, and Jefferson were basically mythical-level presidents, I suppose an argument can be made for their images on money—but it was unwise since they were really just politicians. And Lincoln had the nerve to have his picture placed on a $1 bill in 1861.

Kennedy replaced Franklin on the half-dollar in 1964. Replacing allegorical symbols, or long-dead founding fathers, with recently deceased politicians is a sign of degradation. We haven’t yet put a current ruler on the coinage, but we’re getting close.

Of course, gold was the first to go, in 1933, with the accession of Roosevelt. Then in 1964, all silver was removed from coins. Current coins look like silver, but they aren’t. It’s a subtle fraud, symptomatic of the entire US—and world for that matter—monetary system. Technically since, then, the discs you may have in your pocket are tokens, not coins. Coins have value in themselves; tokens have no intrinsic value. Then in 1982, the penny—which had been 95% copper and 5% zinc—was changed to zinc with a copper wash on it.

The trend of money has been negative since the creation of the Federal Reserve in 1913, followed by World War I. Currency debasement and war underlie the ongoing moral and economic bankruptcy of the West.

The next step will be the removal of coins from circulation. Few are still worth enough to bother picking up from the ground. They’re no longer even useful in parking meters or video games. It costs three cents in metal to create a zinc penny and eight cents for a nickel. Both are entirely useless. But all coins are on their way out, to be replaced by digital currency.

This has interesting societal implications because kids won’t be able to collect coins anymore. It’s hard to save money digitally. Digits aren’t tangible, and kids like real stuff if they’re trying to save. Taking the physical reality out of money devalues the concept of money itself.

International Man: Much of the spectacular art, music, and architecture in recent history was created in times when the average person used gold and silver coins as money.

Do you see a relationship between the use of hard money and culture?

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6 Reasons Franklin D. Roosevelt was the WORST

Posted by M. C. on July 22, 2020

Joe left a few out.

Goading the Japanese into declaring war, leaving the Pacific fleet unprepared and refused to fight his “Uncle Joe” for Eastern Europe, particularly Poland.

England entered WWII to save Poland and Churchill and FDR ended up letting Stalin take it. It defeats the point.

https://www.thedailybell.com/all-articles/news-analysis/5-reasons-franklin-d-roosevelt-was-the-worst/

By Joe Jarvis – July 22, 2020

 

Can you believe that there are at least three statues of Franklin D. Roosevelt in Washington DC? There is one in South Dakota too, another in Virginia, and even more in London.

It appears all these places are overrun by racists and fascist sympathizers. How can people celebrate a man who:

1. Literally Rounded Up 120,000 Japanese Americans, and put them in Concentration Camps.

Executive order 9066 authorized the arrest and detention, without charges, or American citizens of Japanese ancestry. Franklin D. Roosevelt signed it into law on February 19, 1942.

Two reports which Roosevelt commissioned in the years prior to their internment found that Japanese Americans posed little to no risk to the government. But FDR ignored the reports’ recommendations.

70,000 of those arrested and detained, sometimes for years, were American citizens. And a simple executive order–no due process– allowed them to be arrested for no reason other than their race and nationality.

How is FDR not widely accepted as the biggest American racist of the last century?

2. FDR Outlawed Private Ownership of Gold.

With Executive Order 6102, signed on April 5, 1933, everyone living in America was given 25 days to turn in their gold. Their property–gold coins and bullion–was confiscated. It became a criminal offense for any American to own or trade gold anywhere in the world– except for some exceptions like jewelry and collector’s coins.

The government paid about $20 per ounce for the gold they forced citizens to sell them. Shortly after, the government set the price of gold to $35 per ounce.

They could do that, because at that point, a dollar was still backed by a set amount of gold. Increasing the dollar value of gold, allowed them to print more money. That is even easier today, unhindered by a gold standard.

The law wasn’t repealed until 1974. Only then was private ownership of gold once again fully legal in the US.

3. FDR was Pen Pals With Mussolini, Whom he Admired.

Benito Mussolini was the fascist Dictator of Italy in league with Adolf Hitler during World War II.

The book, Three New Deals, shows how similar the movements of the 1930’s were in America, Italy, and Germany.

It also recounts how Roosevelt said:

‘I don’t mind telling you in confidence,’ FDR remarked to a White House correspondent, ‘that I am keeping in fairly close touch with that admirable Italian gentleman,’

And Mussolini reviewed FDR’s book Looking Forward.

“Reminiscent of Fascism is the principle that the state no longer leaves the economy to its own devices.… Without question, the mood accompanying this sea change resembles that of Fascism.”

Mussolini and FDR were two peas in a pod.

4. The Roosevelt Administration was Infested with Soviet-Russian Spies.

Diana West describes in her book, American Betrayal, just how well the Soviet Union infiltrated the White House. Top officials close to the President were supportive of the Soviet Regime. Some were almost certainly actual Soviet spies.

In one sketchy encounter, soldiers were told to stand down when they witnessed American secrets being smuggled out of America on a plane bound for Russia, guarded by Soviet soldiers. This may be how the Soviet Union was able to make nuclear weapons.

Many other policies were directly influenced by socialist sympathizers and possibly outright spies in the government appointed by FDR. For instance, Soviet troops were given American supplies during World War II through the “Lend-Lease” program, while American troops went without.

5. FDR Hated the Press and Suppressed Free Speech.

Reason Magazine describes FDR’s War Against the Press:

Roosevelt warned in 1938 that “our newspapers cannot be edited in the interests of the general public, from the counting room. And I wish we could have a national symposium on that question, particularly in relation to the freedom of the press. How many bogies are conjured up by invoking that greatly overworked phrase?”

He’s basically saying he wishes he could shut down “fake news”.

Roosevelt also started the FCC (Federal Communications Commission) and limited licenses for radio broadcasting to six months. That way the government could revoke a license, and silence critics of FDR.

It did not take long for broadcasters to get the message. NBC, for example, announced that it was limiting broadcasts “contrary to the policies of the United States government.” CBS Vice President Henry A. Bellows said that “no broadcast would be permitted over the Columbia Broadcasting System that in any way was critical of any policy of the Administration.” He elaborated “that the Columbia system was at the disposal of President Roosevelt and his administration and they would permit no broadcast that did not have his approval.” Local station owners and network executives alike took it for granted, as Editor and Publisher observed, that each station had “to dance to Government tunes because it is under Government license.”

FDR’s government illegally intercepted telegraphs and used the ill-begotten information to subpoena journalists, chilling any dissent, and drying up the flow of information to reporters. A law was even proposed to give prison sentences to anyone who knowingly published fake news.

6. The Roosevelt administration seized and destroyed crops while Americans starved

The Agricultural Adjustment Act of 1933, reauthorized in 1938, was allegedly to help struggling farmers. The point was to raise the prices of crops, to keep farmers from going broke and abandoning their farms.

Of course if farmers were abandoning their farms because prices were too low to make a living, that would have naturally decreased supply…

Instead, power-hungry leaders like FDR just had to intervene. And the consequences were disastrous.

Remember this was during the Great Depression, which meant already struggling families had to pay more for food.

Then when not enough crops were grown in the US, America had to import crops, making the country more dependent and less self sufficient.

There are plenty more reasons to despise Franklin D. Roosevelt. But if we are putting in requests to destroy racist, fascist statues, FDR should top the list.

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China’s Stealth Plan to Use Gold for World Domination

Posted by M. C. on February 27, 2020

Russia bought $100 billion worth of euros, yuan, and yen in 2018… the Keyser Söze of gold won’t make that mistake again.

And over eleven trillion U.S. dollars’ worth of global investment opportunities have a negative yield. So Russia would end up paying money to hold them.

Gold, on the other hand, has paid off handsomely for Putin.

The real plan-Some feel this is why the US is trying to topple countries that are looking to alternative currencies.

In short, China and Russia want a world where the U.S. dollar is no longer the reserve currency.

To do that, both Russia and China (specifically China) have a lot of gold buying to do before they can realistically back up their currency.

It won’t be a return to the gold standard, certainly. It will be more of a “gold support.”

https://internationalman.com/articles/red-gold-china-stealth-plan-to-use-gold-for-world-domination/

by Marin Katusa

Gold used to be important.

During and after World War II, every major developed country amassed as much physical gold as they could. It stabilized currencies and signaled independence.

But with the end of the gold standard in 1971, most countries began to sell off their reserves.

So much so that in 1999, an agreement was formed to limit the amount of gold that central banks could sell. Fast forward to today, and Canada’s central bank owns ZERO gold.

Despite the agreement, most countries continued to shed their gold reserves as fast as possible.

Central bank gold reserves

That is until a few years ago, when a handful of countries reversed course. Central Banks started buying gold with fury, and they haven’t let up since.

In the final quarter of 2018, central banks purchased more gold than in any other quarter on record.

By the end of the year, central banks collectively held around 1.064 billion ounces of gold (equivalent to 33,200 tons).

That’s about one-fifth of all the gold ever mined.

In the first half of 2019, central banks purchased 11.97 million ounces of gold (374 tons). Once again, that was far more than ever before. And it’s equivalent to one-sixth of total gold demand in that period.

And total central bank gold purchases for 2019 were the second highest they’ve been in the last 50 years (2018 being the first).

The Unusual Suspects in Central Bank Gold Purchases

And the Keyser Söze of gold is Vladimir Putin.

I’ve been very quiet about Russia and Putin the last few years as I’ve been swamped with media requests following the success of my NY Times Bestseller The Colder War.

Don’t underestimate what the Russians are doing, as others are starting to follow…

While the world focuses on China, Russia has positioned itself at the center of the global political chessboard.

Here’s what’s interesting about the recent central bank gold purchases: the vast majority of that unprecedented purchasing came from just four countries.

These are places you’d never expect.

  • One of those countries is Kazakhstan, whose GDP is smaller than Kansas’s. Kazakhstan grew their reserves from 2.4 million ounces (75 tons) in 2011 to 12 million ounces (375 tons) in 2020 — A 400% increase.
  • Turkey moved far faster. In 2017, they had 3.71 million ounces (116 tons). Now, they have 12.32 million ounces (385 tons) of gold. That’s a 232% increase in just the last two years.
  • In 2018 alone, Russia bought 8.78 million ounces (274.3 tons). That’s the most it’s ever purchased in one year, and its fourth year above 6.4 million (200 tons) ounces of gold. For reference, that’s $15.7 billion worth of gold.

Putin is undertaking what’s called a “de-dollarization.” Aware of sanctions from the United States, Russia is positioning itself to not be dependent on U.S. Dollar holdings.

So, the central bank in Russia has sold nearly all of their U.S. Treasury notes. And it’s used the proceeds to buy gold.

Like I said, the Keyser Söze of gold is Vladimir Putin.

Pay attention to the world’s master strategist. This is very bullish for gold.

Russian gold purchases

You might be wondering why Russia doesn’t buy a yielding investment with the cash.

The problem is that other reserve currencies, like the euro or the yen, are extraordinarily weak against the dollar and Putin knows this will continue.

Russia bought $100 billion worth of euros, yuan, and yen in 2018… the Keyser Söze of gold won’t make that mistake again.

And over eleven trillion U.S. dollars’ worth of global investment opportunities have a negative yield. So Russia would end up paying money to hold them.

Gold, on the other hand, has paid off handsomely for Putin.

In 2019, the value of Russian-held gold has increased from $86 billion to more than $112 billion. The rising gold price has generated a windfall for the Russians of nearly $20 billion that the Russians can leverage.

That’s providing plenty of incentive to keep Russia buying in the long run, stoking further demand.

The problem is that Russia’s buying is fairly well-known. Unless it continues to step up gold purchases, its effect on gold prices has mostly already been taken into account.

China’s New Golden Rule

With WuFlu (the Coronavirus) now having infected more people than SARS did in 2003, will China continue their gold purchases?

China stockpiled huge amounts of gold every single month last year.

You’re probably wondering why…

Well, you’ve probably heard the saying, “He who has the gold, makes the rules.” Xi Jinping, President of China, agrees with Putin’s strategy.

WuFlu no doubt has sidetracked China here in the near term, but it’s been proven that the gold insurance strategy is a very wise one.

The Chinese elite are aware of their aging demographics and high debt loads.

The gold will be valuable to potentially backstop any shortfalls without being overly dependent on their foreign exchange reserves.

China is diversifying its foreign exchange reserves away from the USD and towards gold. This will take many years, but it’s a sound strategy.

The major Western countries hold upwards of 60 percent of their foreign exchange reserves in gold.

China is currently at just 2.9%. Russia is currently at 20%.

China knows it has to pick up its gold to reserves ratio and WuFlu will accelerate this belief.

The chart below shows where Russia and China will want to be at—with the western superpowers. They will get there. And the price of gold will be positively impacted as a result.

gold percentage

Of course, China has much larger foreign exchange reserves than most other countries. So its gold holdings represent a lower percentage of its total reserves.

But even when looking at actual gold holdings, you can see that China and Russia have long lagged behind the west. Only now are they catching up.

gold reserves

If – and it’s a big if – China were to shoot for the same gold-to-forex reserve ratio as the United States, that would take 1.98 billion ounces of gold (62,000 tons) of gold off the market—or fourteen years’ worth of 100% of the world’s gold demand.

The subsequent rise in the price of gold would be unlike anything the world has ever seen. But it seems impossible… right?

Here’s the thing: Russia’s own gold-to-forex reserve ratio fell below 2.5 percent in 2007. Now it’s at 20 percent—and climbing.

Not only that, but China has a much longer-term vision in mind with their gold purchases.

According to one of my favorite people to debate on stage at conferences, Euro Pacific Capital CEO Peter Schiff, Russia and China are “preparing for the world where the dollar is no longer the reserve currency.”

China can’t do this, and they know it. Peter knows it too, until China’s reserves grow 10-fold.

In short, China and Russia want a world where the U.S. dollar is no longer the reserve currency.

To do that, both Russia and China (specifically China) have a lot of gold buying to do before they can realistically back up their currency.

It won’t be a return to the gold standard, certainly. It will be more of a “gold support.”

The Angry Dragon

So here are the trillion-dollar questions: exactly how much gold is China planning to buy?

And what will it do to the price of gold?

The problem with China is that it doesn’t update its gold reserve numbers very often. When the numbers are updated, their accuracy is impossible to verify.

Few believe the official WuFlu numbers, never mind gold numbers.

China lacks global trust.

Real gold reserves are one step towards building that trust.

China buys its gold extremely quietly via back channels to avoid running up the price via its purchases. (Remember Kazakhstan’s huge gold buys? Guess who they share a border with…)

From 2009 to 2015, the Chinese government didn’t provide any updates about its gold holdings. Then it suddenly announced a massive 57 percent jump in its reserves.

What we do know is that China purchased nearly 3.2 million ounces (100 tons) of gold in the past year. But, they need to buy 1.9 billion ounces to be on par with America. 3.2 million ounces is a lot of gold, but relative to where they need to be—it’s not.

Moving forward, that’s set to rise—dramatically.

Zhang Bingnan, vice president of the China Gold Association, forecasted the optimal gold reserve capacity for China for the next two decades…

He found that in 2020, China’s optimal gold reserves should be between 185.6 million ounces and 217.6 million ounces (5,800 and 6,800 tons) of gold.

Remember, China’s gold reserves currently sit around 58.94 million ounces (1,842 tons).

That means it would need to buy 128 million ounces (4,000 tons) at a minimum, this year, to meet Zhang Bingnan’s optimal rate.

But even that would be short by 1.77 billion ounces to meet the ratio that U.S. reserves are at.

Another way to look at it is, even if China doubles their gold reserves, they’re still short of meeting the same ratio as the United States by 93%.

A Dragon’s Appetite for Gold

According to a precious metals analyst at Standard Chartered Bank…

Just to achieve the diversification it’s looking for, China would need to buy two years of global gold production.

In short, when China really starts buying, it’s not going to be able to disguise it any longer. And that could cause a run on gold like the world has never seen before.

Central reserve banks are already snatching gold up at record levels… when prices are at record levels. These central banks themselves anticipate prices going much, much higher.

When central reserve banks begin to see gold both as diversification, insurance and leverage there will never be enough of it to go around.

I wouldn’t want to bet against them. I’d never bet against the Keyser Söze of gold, Vladimir Putin.

Because gold still matters—a lot.

And with any shakiness in the global economy, it’s going to matter a lot more.

Editor’s Note: In this shaky economic environment, big buyers like China and Russia, are accumulating as much gold as possible.

It’s no question that negative interest rates and the devaluation of currencies will only put fuel on the fire.

In a newly released video, legendary speculator Doug Casey and resource expert Marin Katusa breakdown exactly what is coming, and exactly how you can profit from the rally in gold. Click here to watch it now.

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