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The answer is Gold.
How do you crack a currency calamity?
The Corrections
Society is bursting with inefficiencies that should have been rooted out by recessions long ago. Today big government and big business share the same bed and insatiable addiction to money printing. It must be cured if we are to move into any genuine period of prosperity.
Safe and Sound
The world needs a financial system that preserves confidence again. Small business owners deserve a stable currency to accurately plan for the future. Instead in its place, a relentless flood of paper money offers no reliable medium of exchange. There is little security in dollars to preserve purchasing power or store value. The lack of currency confidence worldwide is increasing at an unsettling rate. Eventually the same politicians that bought elections and reelections with promises and easy money will admit paper money is not working as the basic component of the monetary system. Citizens will seek an alternative currency and many are already turning to gold. Gold, through the centuries has proven to be unmatched as a standard of measurement, a medium of exchange, and store of value. The more distressed conditions become, the more of people’s money governments will try and get their hands on. The rate at which money seeks gold as a less detectable form of capital preservation will continue to mount.
The Adversary
Our generation will finally begin to understand inflation is the enemy, a slayer of freedom and culture. It has a long history of taking away from former nations in prior inflationary advances. A collapse and depression is likely inevitable in order to reset the system and clear the economic vices of the past. When mutual funds collapse, small investor’s anger will fuel the masses. Even though failures in the banking and insurance industries are evident citizens are still unprepared. A massive reshuffling of fortunes is approaching. As the currency continues to break down, the number of people who decide to take delivery of commodities futures will escalate. Gold and silver will rise above the burn and monetary skeletons of the Keynesian romantics.
The Flood
The advances from investing in gold are representative of a hedge against inflation and deflation. The ultimate goal of owning will be to have trading power at the end of the currency calamity. Until a return to gold, fiat currency will be in crisis. The people with a board to surf the next wave will be those who survive the coming economic tsunami. As we have seen, stock prices can rise but the main trend of the stock market measured in gold will be down. A significantly higher price for gold will be the solution to wash out the sea of paper money.
The King
There will be a homecoming to a currency connected to gold. The visiting paper tigers go home loser and take rightful place and just value of zero. The world will realize the need to turn the clock back to what made it great. All things paper are flagging measured
against gold. The shaky foundation is crumbling, and those that relied on paper, like pension funds are in sad shape. Assets like stocks and land continue to tumble when priced in gold. As more pieces of paper money are needed to buy each ounce of gold, its price will increase. In the 1980 gold bull market the price of gold rose dramatically from around $35 to $850. This gold bull market will go much higher, and $1,475 an ounce will have seemed a bargain. Targets between $3,000 and $5,000 could even prove to be too low, believe it or not.
~MV
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"Because gold is honest money, it is disliked by dishonest men."
-Ron Paul, The Case for Gold
Soros, Reich, Bernanke, Keynes, Galbraith, Munger, Buffett, Nadler, Denninger: he means you.
Capt. Ray
accumulate silver
;)
I did, do, and will do! Plus<'82 pennies, freight loads of them.
- Gold is where "exchange money" goes to rest.
I'm not at rest. Neither is my capital.
+++
You answered your question better than I did above.
Hi to you too dumpster!
Myzery
a person with out gold but a stack of charts
I work, pay bills and save; in today's environment, I sleep much better by parking my excess capital in precious metals - it's a personal preference that requires very little effort, skill or time. As to whether it will be the best move in the later innings of the game, who knows? It just feels good in this moment which is not a bad thing.
One of the 239mm people in the US living from payc2payc speaking:
Please tell me; how can I accumulate gold when, now, and in the future I have to tap into renewable food sources. Gold is a one way street.
-I can't do it now, won't be able tomorrow. I'm not a farmer.
@ Capt. Ray,
If you can scrape up about $170, you can buy 1/10th oz Gold Eagles at a coin shop (call first to make sure they have them in stock).
If you are living paycheck to paycheck, you desperately need some savings in case things get worse! Almost everyone can cut spending somewhere.
I'm not a farmer either.
"Uncommon Cents - Benjamin Franklin's Secrets to Achieving Personal Financial Success", ISBN: 0-939817-06-3, by Lynn G. Robbins
Find your answers...
OK, I hope you read this.
What I did in the beginning was save enough to open a trading account. Then I invested. Learned more than I lost.
So, open an account and buy a physical bullion ETN, such as PSLV, PHYS, or CEF. I own them all, but do please do your own due diligence.
You can save a little from that paycheck (I would guide you to keep 10% for yourself) and this will be ok over time.
And remember, Mad Max is not coming, the "system" will not suddenly fail, and you should do well.
Keep reading and learning always.
The "system" has failed many times in the last 50 years. It has not failed at the core of an integrated global economy. We are still paying the price for the prevention of the "system" in the fall of 2008.
There are still a few around with clear recollections of Weimar & the Great Depression in the US. There are many more who witnessed Brazil, Argentina, Peru, Nicaragua (all late 80's), the former USSR (mid 90's), and most recently Zimbabwe. In these situations the Mad Max analogy doesn't apply universally, but a Sound of Music analogy would never apply.
That said, PM's are not a panacea for financial cises.
Good article. The China Gubberment has been repeatedly telling its Hoi Poloi to invest in gold as a wealth preserver....they must have something up their sleeves.
That seems to be the rumor round the internet these days.
I don't see any "BUY GOLD" billboards in Shanghai tho. Nor did Hu Jinto post it on his blog.
"The world will realize the need to turn the clock back to what made it great."
WTF?
Like the "world" is some unanimous body? And, pray-tell, when was the time that the world was "great?" When was that time when groups of people weren't being slaughtered, as I'm sure that they wouldn't have felt that time to be "great."
Please, let us not forget the trajectory that we're all on, regardless of fiat, gold and anything else used to facilitate trade. The cliff. Basing trade/commerce in gold only SLOWS down the speed at which we're charging the cliff. It's guaranteed that as gold extraction tapers off that it will be pushed aside, seen as an impediment to the approach of the grim reaper- growth (perpetual growth on a finite planet).
Fiat is just a display of our inherent deception, our deception from the fact that we cannot exploit the planet at ever increasing levels into eternity.
Is the surface of a planet the right place for an expanding
technological civilization?
Guess you've figured out the answer!
I believe you may have mistaken the author's intent. The antecedent for "it" is gold, not the world. That should clear up some of the misconception.
I'm not certain of that, in either sense of: 1) that gold itself is "great;" or, 2) that the world was "great."
Gold is a token. The proper way to word it would have been: to return to using the best form/representation of money- gold.
Using the word "great" start to sound like a cheap marketing pitch. Just kind of the way that I, as the reader/consumer of the article, took it.
He could take it even further by explaining why he believes it to be "great"...
..to return to using the best form/representation of money- gold.
...Where productivity is rewarded with a monetary system that allows a stable building and storage of wealth through labor and savings. A system built on prudent capital alocation, reasonable fractional reserve banking and real interest rates (in other words, sound money).
+1
Price targets for gold are meaningless. If you think that the paper currencies (all of them, this is not exclusive to USD) are going to collapse and reach their intrinsic value of zero, then what is the point of measuring the "price" of gold in terms of paper that is collapsing to zero? If you don't think the paper currencies are going to zero, then you have some reading and thinking to do. :)
One of the under-appreciated aspects of a gold standard is that gold becomes the numeraire. You don't ask what the *price* of money is. When you ask the price of anything else, it is given as grams or ounces of gold/money.
does the world go back to barter trade based on gold as peg???
Hurrah for medieval times! Next we will need a king with divine rights and a Pope of IMMACULATE CONCEPTION!...like all women... (dammit! there goes my dream)...
Unlike Physics/Relativistic Mechanics, Economics does have a frame of reference: Gold. Ignore at your financial peril!
Maybe this will help. Gold has to be "priced" if it is to be used as a store of value since other assets/commodities/chattels will be priced in the fiat du jour. Fiat will not disappear instantaneously. Gold, thusly, will have a translatable value for conversion purposes. Does that help? It's not a silly proposition.
Sure am happy about my silver purchases : )
I took Bearster to mean that gold's value would be measured against actual goods and services, not worthless fiat. At some point fiat won't be considered (well, that's what we're hoping for, which is the more logical outcome).
Well put!
The question, unstated, is what am I going to buy during the next dip?
Thanks for the answer.
Fiat is becoming worth less on it's journey to becoming worthless, as has happened to all fiat currencies, I would rather have a gold coin in my pocket than a roomful of facts, a houseful of charts and a barnful of analysis.
Who reads articles or looks at charts when you can read zerohedge comments?
There are some very smart people commenting here on ZH who dont drink any flavor of kool aid.
What was the question?
"- when you don't even know what the question is, what's the only answer?"
(rhymes with Mould Britches)
@ tawdzilla
"How do you Crack a Currency Calamity?"
"The Answer is Gold."
The question is right up there at the top of the article.
what is something you can't eat?
;-)
Dollar bills?
A wheelbarrow of German Marks?
"What do you get if you multiply six by nine?"
No facts
No charts
No analysis
More worthless then fiat.
Don't allow this dribble on zero hedge.
I know we should be open to other people's opinions..
However - let's state the obvious.. you're a troll - or a dumbass. What's next? You going to ask for illustrations and crayons to color in the pictures?
Amen. This is real horse shit.
I don't recall any charts in Shakespeare or Dumas (?).
Do you need quantifiable data to think or reason?
The Atomists of ancient Greece conceived of atoms and sub-atomic particles with nothing but words.
This is a thematic piece, with headings and descriptive text like this:
"Gold, through the centuries has proven to be unmatched as a standard of measurement, a medium of exchange, and store of value."
That is a fact, but one you can't easily quantify across time, cultures, currencies, and measures but most recognize it to be true.
Leave a gold coin or gold piece of jewelry on any thoroughfare in the world and it will be a magnet.
Shakespare and Dumas had original thought and thier agenda was to educate, not sell adspace or talk thier book.
Thematic pieces belong on Netflix or Hulu. This is 100% sell-side bullshit.
Shakespare and Dumas had original thought
Original expression and expression takes thought but there's not much original thematically in Shakespeare.
and thier agenda was to educate
A good part of Shakespeare's agenda was to sell theater tickets and the plays were written to work on a number of levels, including the cheap seats, the original "peanut gallery" so called because they cracked and ate peanuts where they stood during the plays.
Dumas, the educator?
After writing more successful plays, he turned his efforts to novels. Although attracted to an extravagant lifestyle, and always spending more than he earned, Dumas proved to be an astute marketer. . .
Dumas' writing earned him a great deal of money, but Dumas was frequently insolvent as a result of spending lavishly on women and sumptuous living.
http://en.wikipedia.org/wiki/Alexandre_Dumas
Educate and amuse, alight reverie of mysterious muse, light the fuse of adventure, infuse values, defuse bigotry; Make you cry and laugh with joy, hope and despair like nowhere else, image of living life.
Now for Gold : Midas's touchstone, focal point of power and greed, all that glitters...it is the ultimate refuge of stultified minds not capable of seeing the real meaning of life. As a life saving buoy in a sea of destruction, gold is fine... like any safe haven in lethal storm. But as ultimate mantra of civilization, as be all and end all, reversal of time's arrow in civilization, it is as sterile as a dry well, as rancid wine, as the tomb of Tutunkhamun...unless you be a son of Indiana Jones!
If all you ask were present, it would be a rehash of previous articles. Sometimes the pretty pictures and the technical analysis has to be suspended to demonstrate the raw thesis.
The opening sentence was a "fact":
That's a fact.
BTW: The word you were looking for is "drivel" -- which it ain't. Your comment, on the other hand...
It's just pure gold blog pumping keyword loaded BS. SEO loaded bullshit like this is the HFT of true news media. Pretty much the gold bug equivalent of CNBC. Rehasing basic "truths" about why gold is so great and important to the world.
The author spends several paragaphs finding new ways to say "gold is currency" without any foundation as to why, when, etc. We already fucking know this... I guess this piece is for those who are less aware?
There are lots of reasons to own gold. Just because your beliefs align with the author doesn't mean it's "journalism."
Did you click the link?
It didn't claim to be journalism, any more than the Declaration of Independence did. Would you say the Declaration of Independence was worthless?
Some things can me measured well; some things can not. That doesn't make the things that can't any less real. Some musicians play by feel; some play by memorizing and regurgitating a system. Every time you measure something, you try to fit a finite map onto an infinite reality; i.e. you make lots of assumptions. Anyone who doesn't understand this doesn't have a clue. Go to any midlevel nerd intellectual site and you can see this ignorance in action, e.g., boingboing, reddit.
Is the human mind more apt at synthesizing data in the abstract, or in the technically detailed? Hard to say. I try to balance the two. Hence my avatar.
Oh and don't forget http://en.wikipedia.org/wiki/LTCM
Whether a musician plays by "feel" (you mena by "ear") or by memorization is an artifical division and, either way, th result is absolutely measurable - both produce ptiches that are either in tune or not. Music is mathematics - some musicians underst and the actual mathematics and the rest intuit it, but it is inherently measurable.
What you are saying is that some things are "real" even if you Don't understand the process by which it works. Ok, but there is still a mechanism, and those who understand the mechanism will be better able to predict the next move.
And, BTW, go to a medieval cathedral and tell me that they were stupid back then. Don't make the mistake of thinking that being a pseudo-intellectual makes you smart.
Ok, you want more analysis regarding gold. If you've been reading at ZH for a while, you've already gotten that. Here is what I took away from this article:
"Society is bursting with inefficiencies that should have been rooted out by recessions long ago. Today big government and big business share the same bed and insatiable addiction to money printing. It must be cured if we are to move into any genuine period of prosperity."
The USA makes too many decisions that are "politically correct" and economically deadly. This must end. We must allow the market to clean out the inefficiencies. Government interference that is inefficient must curtailed. Government regulation that is needed must be effective.
Changing the way things operate is far more effective than budget cuts or tax increases.
moved