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Chris Martenson Interviews James Turk: "Gold Is Our Defense Against the Fiat Currency Graveyard"

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Submitted by Chris Martenson

James Turk: Gold Is Our Defense Against the Fiat Currency Graveyard

"The rule of law has basically been thrown out the window. Money printing is the order of the day. And when politicians take control of central banks, which they have done in the United States and they are also doing in Europe, that basically destroys the currency. It puts the currency on the road to what I call the Fiat Currency Graveyard, so I expect there are going to be massive currency problems as we go forward. The financial crisis that we have been dealing with for the last several years has not been solved."

So cautions James Turk, widely-respected precious metals expert and founder/chairman of GoldMoney. In this detailed interview (recorded in June), Chris and James explore the probable outcome of the current US debt-ceiling operatics, the likelihood of future Fed money printing, and strategies for preserving wealth. In short, James believes we are witnessing the decline of the world's major fiat currencies, and expects gold to be remonetized in the aftermath.

James explains why he expects:

  • The US Government to raise the debt ceiling in August, which will require the Federal Reserve to print more money in order to soak up the new debt, sending gold and silver prices much higher this summer.
  • Holders of fiat currencies to experience increasing losses in the purchasing power of their wealth; contrary to those who hold precious metals, who will see the reverse.
  • This pattern of currency devaluation to be similar to the many other examples seen throughout monetary history. In short, the “unthinkable” event of a dollar collapse is a much more probable event than most consider.
  • Precious metals to be an excellent vehicle for preserving purchasing power through this next transition, and whatever future currency emerges, their historic role as money to be restored.
  • The end of the bull market in precious metals is years away. We’ll know its ending when holders of PMs begin trading them for other assets (e.g. property, securities) that have become overly undervalued.

Click here to listen to Chris' interview with James Turk (runtime 49m:11s):

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Or start reading the transcript below:

Chris Martenson: Welcome to another Chris Martenson.com podcast. I am your host of course, Chris Martenson. And today we have the distinct privilege of speaking with James Turk, founder and chairman of GoldMoney which offers investors an easy and inexpensive online solution for buying precious metals with international storage options. James is one of the foremost authorities on precious metals and has long offered market forecast commentary including co-authoring The Coming Collapse Of the Dollar and How to Profit From It, with our good friend, John Rubino, of DollarCollapse.com. He has built his career on decades of experience in international banking and finance spending many of those years living outside of the US, which gives him a critical advantage to look at our economy with an outsiders eyes. I am really delighted to have you here, James, and I have a tall stack of questions prepared for you. Are you ready to dive in?

James Turk: I sure am, Chris. It is a pleasure to speak with you.

Chris Martenson: The pleasure is mine. So, short-term, what I’m really interested in here is to start diving into where gold is going to go short-term, where do we buy gold? Do we buy it now? Over the short-term people are very concerned about the price of gold and where it’s at and where it might be headed. So with QE2 ending here at the end of this month, -we are in June right now - how do you expect the precious metals to be impacted?

James Turk: Well I think the precious metals are going to do quite well this summer. And I don’t agree that QE2 is going to end in June. It may “end” in June but it is not going to end on August 2nd because on August 2nd the US government is going to increase its spending limit probably by $2 trillion and the Federal Reserve is going to have to step in and start buying some of that government debt and run the printing presses again with all this new money creation. And I think that is what is going to light a fire under both gold and silver this summer. 

Chris Martenson: So you are of the view that QE whatever, 3, is a done deal because they are in something of a box. The federal government has enormous borrowing needs and you are of the opinion that really without the federal reserve being there, there is insufficient buying power for all the borrowing needs they have?

James Turk: Yes that’s exactly right. Look at what has happened since August of 2010 when the Federal Reserve announced QE2. During that period of time, up to the present, the US Government debt has increased about $900 billion, about $500 billion of that has been purchased by the Federal Reserve. What is happening is that the US Government is spending so much money it is forcing it to borrow more money than the market is willing to lend to it. When that happens, only two things can happen: spending has to be cut back or the Federal Reserve steps in and buys that government debt and turns it into currency. And that is what QE is all about. This policy of buying government debt is going to continue once the debt limit is increased on August 2nd. Maybe the Federal Reserve will claim victory and say that they will stop QE on June 30th but the reality is it is only going to happen until the debt limit increase is approved. And I do believe at the end of the day, despite all the posturing we are seeing now Congress and the President are going to approve a $2 trillion debt increase by August 2nd

Chris Martenson: So really we are talking about July as a possible pause. And I have my concerns about that because we are looking at the data here for the first week in June roughly and what I’m seeing is a lot of weakness out there. The Feds’ so-called mandate around employment, around economic growth, there is a lot of weakness in that data right now. So you are of the opinion that QE if it does pause will only maybe for a month. 

James Turk: Yes, maybe for a month unless Congress finally chooses to act sooner than August 2nd, although I don’t expect that to happen. It is really just a question of numbers and mathematics, Chris. The US Government has to stop spending so much money or the Federal Reserve has to come in and turn that government debt into currency, those are the two alternatives. And I don’t see any discipline or intent by Congress to stop spending.

Chris Martenson: Yes, everything they have done so far is a bit of a dog-and-pony show without much substance; $30 billion, $90 billion. Please, that is meaningless at this point. And when we go over to the other side of the pond we see that Europe also has just extraordinary funding needs right now. They are using all sorts of fancy terms for a Greek default which will probably be the first of several shoes. But when you add it all up it looks like there is, again, enormous funding gaps there and the need for a massive amount of liquidity. What is your view of Europe then? Is Europe going to print? The ECB - are they too in a box or will they actually go for austerity and allow the chips to fall where they lay?

James Turk: No, they have been printing all along and, in fact, I think they are going to continue to print as well. You know, the turning point here in Europe was last May, May 2010, when the politicians got together when the Greek crisis sort of erupted and became quite serious. And on Monday morning after the politicians met, Mr. Trichet, the President of the European Central Bank, said that he is going to start buying Greek bonds, despite his pledge not to buy sovereign debt of any country. And despite the fact that it is against the EU Constitutional Principals for the ECB to be buying and sovereign debt. You know, the law is basically just being ignored. It is being ignored by 13 of the 16 Euro-zone countries who have debts exceeds 3% of – deficits, excuse me - 3% of GDP. So the rule of law has basically been thrown out the window. Money printing is the order of the day. And when politicians take control of central banks, which they have done in the United States and they are also doing in Europe, that basically destroys the currency. It puts the currency on the road to what I call the Fiat Currency Graveyard, so I expect there is going to be some massive currency problems as we go forward. The financial crisis that we have been dealing with for the last several years has not been solved. 

Click here to read the rest of the transcript.

 

Note: listeners interested in the conclusions expressed within this interview will also want to read Chris' recent report on The Screaming Fundamentals For Owning Gold And Silver, which takes a deep dive into the data behind the supply and demand imbalances in the bullion markets.

 

 

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Tue, 07/12/2011 - 12:51 | 1448104 YesWeKahn
YesWeKahn's picture

I am pretty sure that Bernanke advices his family and relatives to buy gold.

Tue, 07/12/2011 - 14:15 | 1448555 DC
DC's picture

How could you possibly know that?

Tue, 07/12/2011 - 12:52 | 1448106 packman
packman's picture

"And when politicians take control of central banks..."

LOLOLOLOL.... Um.... yeah.

 

Tue, 07/12/2011 - 13:30 | 1448241 Screwball
Screwball's picture

That's where I stopped.  Maybe someone can explain, but don't get this statement at all.

Tue, 07/12/2011 - 15:12 | 1448907 thesapein
thesapein's picture

It's like when the actors in a film try directing, maybe? But I hear you; he speaks as if chickens and eggs are two different creatures today and to really get what he (a real banker) is saying you gotta pretend or guess at what exact political maneuvers in history he is referencing given that these two powers have a complex history. But, please, don't discount James Turk based on his own biases that we all have. He is still a very good source of info in his industry. Cheers.

Tue, 07/12/2011 - 14:03 | 1448443 CIABS
CIABS's picture

packman, screwball, et al:

right.  "...when politicians take control of central banks..."

politicians, central banks, central bankers, bankers, et cetera, ad nauseum.

economic history might move slowly enough that ordinary people can keep adjusting to the "status quo" so as to believe that there is such a thing.  but the process is like a raging fire, if not an explosion.  it will leave only a world of ashes.

Tue, 07/12/2011 - 14:40 | 1448115 Mr Lennon Hendrix
Mr Lennon Hendrix's picture
Calling JPM's Naked Silver Shorts

The COMEX has been looted of its silver during the last few months to little fanfare.   Not only have not many people noticed, but the ones that have have not asked who and why this happened.  It happened because JPM and other proxie banks were forced to cover their naked short calls, and they had to go out on the market and get the collateral.  This because long calls exercised their strikes and wanted payment....

Calling JPM's Naked Silver Shorts:

http://lhmarketwatch.blogspot.com/2011/07/calling-jpms-naked-silver-shor...

 

Tue, 07/12/2011 - 12:56 | 1448118 topcallingtroll
topcallingtroll's picture

Houston we have a problem.

Obama said he wont accept a short term deal nor a deal without tax increases. The republicans cant go back on Grover's tax pledge they signed or they will be voted out of office.

I hate to be chicken little, but prepare for fireworks. Gold, not silver, diversified cash, diversified ultra short term sovereign bonds.

This is not the time to speculate or play games. The market can have the next upside five percent move. Batten down the hatches.

Tue, 07/12/2011 - 13:01 | 1448138 vast-dom
vast-dom's picture

I believe Silver will rise faster than gold, as relative %age.

Tue, 07/12/2011 - 15:23 | 1448970 thesapein
thesapein's picture

it's one of the few things i'm most sure about. one day, silver will trade like a precious metal again.

Tue, 07/12/2011 - 13:04 | 1448148 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Gold, not silver?  Yeah, ok.

Tue, 07/12/2011 - 13:12 | 1448176 hack3434
hack3434's picture

 diversified ultra short term sovereign bonds

 

This is not the time to speculate or play games

 

Talk about oxymorons...Why do people with less than a billion net worth even bother? gotta chase that 0.03% yield heh!


 


Tue, 07/12/2011 - 13:00 | 1448133 Magnix
Magnix's picture

Help me understand how is gold defense against currency if the market price is $1500+ and then when they standardize the gold then it will be worth $20 face value and lost $1500????

Tue, 07/12/2011 - 13:08 | 1448162 BigJim
BigJim's picture

If 'they' standardize at a $20 face value that's fine. I'll buy it all and tile my house with it.

Are you fucking serious?

Tue, 07/12/2011 - 13:10 | 1448167 baby_BLYTHE
baby_BLYTHE's picture

Gold should be viewed as an alternative currency to the dollar, not just another investment vechile.

Tue, 07/12/2011 - 14:09 | 1448487 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Gold should be viewed as "insurance" against the stupidity and theft of governments.

 

Tuco Benedicto Pacifico Juan Maria Ramirez

Tue, 07/12/2011 - 18:54 | 1449789 thesapein
thesapein's picture

Should? Really? Why not let some people view gold as insurance but why me? I hate insurance, yuck. It's just another form of gambling, hoping you'll get lucky and pay less into the scam than you'll get back, tho lucky isn't the right word if you just had a car accident. It also encourages reckless behavior. So, if there should be a "should" let's say not to view gold as just another legally inforced scam.

Tue, 07/12/2011 - 13:10 | 1448171 Quintus
Quintus's picture

If you don't understand how gold has been a defence against every currency collapse in history then you need to do some reading my friend.  If, during your research, you can find a single instance where gold holders fared worse than paper holders during a currency crisis scenario, please point it out to us, because I've never seen or heard of such an occurrence.

Tue, 07/12/2011 - 13:14 | 1448182 Bastiat
Bastiat's picture

If they "standardized" gold at 20 "new dollars", then $20 would be around average monthly income . . .or it may be 4 months income.

 

Tue, 07/12/2011 - 13:17 | 1448194 JollyRoger
JollyRoger's picture

It is what you can trade for a specified weight of gold that will matter, not the dollar number they attach to it.  The relative weight will retain it's purchasing power.  www.silvercointrader.com

Tue, 07/12/2011 - 14:03 | 1448444 Smiddywesson
Smiddywesson's picture

Help me understand how is gold defense against currency if the market price is $1500+ and then when they standardize the gold then it will be worth $20 face value and lost $1500????

They have had three years to stock up on gold.  Why would they peg the price lower????  They have massive debt.  They don't want to default any more than is necessary.  In order to deleverage, they want their gold valued higher, not lower, and they have the means to drive is as high as they want.

 

Tue, 07/12/2011 - 14:07 | 1448468 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

It's all about "purchasing power"!  Nominal values mean nothing.

 

Tuco Benedicto Pacifico Juan Maria Ramirez

Tue, 07/12/2011 - 14:22 | 1448610 ian807
ian807's picture

"They" can standardize until the cows come home, within the borders of the USA.

So I get the gold out of the country and sell it at fair market value, convert to some preferred currency, fly back home.

The USA is not the world. Whatever shenanigans they try and pull here, will not be pulled everywhere. When travel and removal of gold are restricted, there will immediately be a cottage industry dedicated to both. In an internet connected world, governments are finding their limits.

 

 

Tue, 07/12/2011 - 15:28 | 1449005 thesapein
thesapein's picture

An answer is only as good as the question.

Tue, 07/12/2011 - 13:03 | 1448143 Sudden Debt
Sudden Debt's picture

It will not only be gold and silver.

It will be any hard asset that will gain in fiat value.

but silver and gold are the most prefered once.

 

Tue, 07/12/2011 - 14:05 | 1448464 Smiddywesson
Smiddywesson's picture

It will not only be gold and silver.

It will be any hard asset that will gain in fiat value.

but silver and gold are the most prefered once.

Sure, if they don't tinker with the economy.  I could see TPTB pressuring for price ceilings on most hard assets "to protect the public", thereby increasing inflationary pricing in gold.  These people have all the power and tricks on their side.

Tue, 07/12/2011 - 14:14 | 1448552 Sudden Debt
Sudden Debt's picture

untill they don't.

If you look at the silver, it's pretty clear they really want to keep it below 40$.

AND THAT'S OKE!

They will keep it below that price untill they can't anymore.

When all stocks are empty.

When everybody wants it.

And then, whatever power you've got, SUPPLY/DEMAND will kick in.

I kind of hope I can buy more on the cheap for the next 12 months. But afters weeks like this, I don't think so.

But just imagine we could! I would love it. I would be kind of sad if the price would rocket up now. Kind of like less profit because I could have bought more in 1 more year.

 

Tue, 07/12/2011 - 13:04 | 1448149 cougar_w
cougar_w's picture

There can never be anything wrong with a currency that cannot be corrected by warfare.

Tue, 07/12/2011 - 13:55 | 1448393 packman
packman's picture

Yes of course.  Remind us - exactly how much is a 1920 Papiermark, or for that matter a 1924 Reichsmark worth at this point?

Tue, 07/12/2011 - 14:03 | 1448450 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

That is a myth.  Wars destroy lives, currencies and economies.  Only the banks benefit as they lend to both sides at interest as is becoming of demons!

 

Tuco Benedicto Pacifico Juan Maria Ramirez

Tue, 07/12/2011 - 13:08 | 1448159 Fix It Again Timmy
Fix It Again Timmy's picture

Life is difficult enough without having to worry about the purchasing power of the "fruits of your labor", yet TPTB have constantly eroded it since 1913 - you need to think about how to foil that "theft" - that's all you need to do and we all know a simple way of doing that...

Tue, 07/12/2011 - 13:08 | 1448164 janchup
janchup's picture

No one mentions the fact that governments can and will do anything. A new tax on gold will appear. How about 95%?

Tue, 07/12/2011 - 13:21 | 1448187 Popo
Popo's picture

The gold transaction tax is indeed the biggest fear.  

It would allow you to keep your gold,  but selling it would incur a hefty tax. 

This effectively bashes the gold price down as buyers leave the room.

And for those who say "I'll take my gold abroad" -- good luck with that.  You can't even fly with more than $10k, and customs in most countries isn't going to let you bring in tens of thousands of dollars worth of gold.

Getting around the tax is *not* going to be easy.

As someone who got his investing-ass kicked when the government passed the "no shorting" rule on financial stocks in 2008 -- I now know that the goverment *will* change the rules right under your feet -- even if it seems completely unfair or illegal.

Tue, 07/12/2011 - 15:23 | 1448973 KingdomKum
KingdomKum's picture

most will surely sell on the black market, eliminating all taxation  .  .   .  

Tue, 07/12/2011 - 17:05 | 1449479 Nage42
Nage42's picture

$10K of "financial instruments" words are important.
That means 200 x $50 Canadian Maple Leaf coins (legal tender).
If you've got north of $320K (current spot) in liquid wealth then you've got better methods than this (GM or BV in Switzerland), but still, that's a boatload of starter funds...

Tue, 07/12/2011 - 13:16 | 1448190 Quintus
Quintus's picture

No problem.  Gold is a currency in its own right accepted anywhere in the globe.  I'll take my metal abroad (in fact I already store some of it abroad) and exchange it into currency as and when required in a jurisdiction that does not levy a 95% tax on gold.  Switzerland maybe.  

Of course we could see global capital controls implemented in every country in the world and a system for tracking every ounce of gold everywhere on earth, but I doubt it.  In circumstances where a tax such as you propose would be implemented, I suspect the Governments of the world will not be in a mutually cooperative frame of mind, and will each be seeking to attract wealth to their jurisdictions at the expense of the others.

Tue, 07/12/2011 - 13:22 | 1448209 Popo
Popo's picture

LOL.  Sure.  You can just take all that gold right out of the US, and into customs somewhere else.

No, there won't be a problem with that....  

</sarc>

Tue, 07/12/2011 - 13:25 | 1448216 Quintus
Quintus's picture

I don't live in the US, but even if I did are you telling me that the US customs are so efficient that nothing ever gets in or out without their knowing about it?  How's that world-leading drug industry you have there working then?  Or the millions of illegal immigrants residing in the US?  How can they possibly be just walking in and out when Customs and border controls clearly make that impossible?

Tue, 07/12/2011 - 13:36 | 1448271 gdogus erectus
gdogus erectus's picture

Yes, but in America, if you are going to be a smuggler - it helps if you can use the company's C-130.

Tue, 07/12/2011 - 17:42 | 1449598 poor fella
poor fella's picture

niiice

Tue, 07/12/2011 - 13:39 | 1448290 Popo
Popo's picture

Oh, so your plan is to *smuggle* the gold through customs. 

Ok.  Well that's always an option.  But if you're investing in gold to *limit* your exposure to risk, then smuggling gold through customs is what you definitely *don't* want to to.

Tue, 07/12/2011 - 13:48 | 1448348 Quintus
Quintus's picture

Don't be silly.  

The risk I am hedging with gold is the inevitable collapse in the value of fiat currency.  More correctly, since this event is inevitable, I am hedging the timing of it.  IF that event happens in my lifetime, taking across borders that portion of my gold that is not already abroad (in the unlikely event that this is even required) will be a minor inconvenience compared to, say, begging in the streets for sustenance like paper holders will likely have to do.  Just read some accounts of what happened to the middle classes in Argentina during their currency crisis.

Tue, 07/12/2011 - 14:40 | 1448736 JOYFUL
JOYFUL's picture

 taking across borders that portion of my gold that is not already abroad (in the unlikely event that this is even required) will be a minor inconvenience compared to...

 

 

umm, nice try, but I suggest you return the fee charged for your course in rhetoric and demand a complete refund...ya, like, living in Gulag Camp X34(aka DHS 'temporary relocation facility 666) is a lot better than, lets say...bein a chicken with it's head cut off!?!? 


After asking a series of leading questions that dare the reader to suppose that you are either being like, totally ironical, or, alternately, have just arrived here from planet (...fill in space 51 on Form ABD here.......)

 

 

 

are you telling me that the US customs are so efficient that nothing ever gets in or out without their knowing about it?  How's that world-leading drug industry you have there working then?  Or the millions of illegal immigrants residing in the US?  How can they possibly be just walking in and out when Customs and border controls clearly make that impossible?...

 

you dare demand of others to avoid being "silly"!?!?

Most folks(even non Merikans....er, perhaps make that especially non Merikans) know that it's the gubberment itself masquerading behind various acronyms like DEA FDA FBI CIA NSA DHS TSA...ad nauseum which run the drug trail which starts under the protection of NATO 'liberators' in Afghanistan, runs through central Asia to liberated KOSOVO on into Europe and across the pond to various veins on both coasts of the USA....if you don't, then I suspect any words of wisdom about your forthcoming encounter with the folks what get profiled on these pages EVERY DAY, (or more particularly their tax payer supported front line minions!) and their hatred of shiny stuff and those what hold it would be entirely wasted on thee..."Don't be silly" sayest thou!?!?

Sorry bud, you the last stop on that line! 


 


Tue, 07/12/2011 - 15:02 | 1448827 Quintus
Quintus's picture

Man, I thought I had a big tinfoil hat.  I defer, sir, to your altogether superior paranoia levels.

But seriously, back to the topic at hand.  You have convinced me.  There is clearly absolutely no way that anybody who was threatened with a 95% tax on his gold could take it to somewhere that it was not so heavily taxed.  Not without the mind-reading all-knowing super-efficient Government finding out about it and stopping them.  No, they'd have to just sit quietly at home and wait for the man from the Fed to knock at the door and take their metal from them.

What was I thinking?  Now if you'll excuse me, I have to go buy some NFLX to protect my wealth.

Tue, 07/12/2011 - 15:30 | 1449011 JOYFUL
JOYFUL's picture

I recommend you get a stretch limo for the trip to the airport, then give the driver a super BBbbig tip...at least you'll have given one last tip o da hat to small bizness! Assuming you to have libertarian tendencies from your purported need to hold gold, that at least will feel better than letting the state have it all! 

My hat is not tinfoil but it is super big, like bigger than the biggest Pancho Villa Mejicano sombrero yu never seen....it's Taxco silver over a base of Dia de los Muertes huesos gringo! 

 

as for paranoia, don't defer to me,(i'm just a bump on da log!) but rather, ponder the words of Claude Steiner(from way back in the good ol days): "

Paranoia is a state of heightened awareness. Most people are persecuted beyond their wildest delusions

Tue, 07/12/2011 - 17:35 | 1449582 knowless
knowless's picture

One doesn't need to smuggle it personally, merely pay a fee to a smuggler during the sale, say gold can get you so many fiats, you know this, they know this, so you negotiate a price, you would never need to cross a border, they have mules for that.

it's really not that difficult of a concept.

Tue, 07/12/2011 - 13:16 | 1448191 Abitdodgie
Abitdodgie's picture

But taxes are voluntary so who cares , unless you are a slave then sorry.

Tue, 07/12/2011 - 13:21 | 1448206 Bastiat
Bastiat's picture

And will they impose that worldwide?  Will the Chinese and Indians be subject to that tax?   If your idea is to decrease demand it is mistaken because it affects a miniscule segment of the international market. It would also not raise much money for the US Treasury since the extent US taxpayer cap gains in gold is trivial in the big picture. 

Tue, 07/12/2011 - 13:51 | 1448367 au_bayitch
au_bayitch's picture

How many people pay a sales tax on the gold coins they purchase now? If a new tax is put in place, why pay? Go to another shop.

Tue, 07/12/2011 - 13:13 | 1448179 throughthewire
throughthewire's picture

This guy's predictions are much too early for the destruction of the dollar. The final, final bubble will come in the US dollar when the world realizes there's no where near enough dollars (despite the printing press) in the world to pay off the worldwide dollar denominated debt. When the final bubble arrives the mother of all depressions will be well underway.

Tue, 07/12/2011 - 13:17 | 1448192 cpnscarlet
cpnscarlet's picture

Today, I paid my barber with a Franklin half. He was more than happy to take it instead of cash.

I will keep silver in my pocket from time to time and try this more.

Tue, 07/12/2011 - 13:19 | 1448200 Sofa King
Sofa King's picture

If Gold becomes legal tender for the settlement of debt does it then not become a Fiat.  Not only does it become a Fiat, but it allows bankers to get a stronger hold.  I don't think gold is the answer to break free of all the cocksucking financiers. 

Bitcoins are scaring the hell out of the establishment...must be something to them.  I'm not saying that they are perfect, but they seem like a modern day tally stick system to me... and that shit worked great.

Tue, 07/12/2011 - 13:58 | 1448407 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Gold is not "fiat" as it cannot be created out of thin air and its production is extremely limited.

 

Tuco Benedicto Pacifico Juan Maria Ramirez

Tue, 07/12/2011 - 14:03 | 1448445 Sofa King
Sofa King's picture

So the people that mine, hoard and control gold will be wealthier than those that must barter with it.  Sounds like a raw deal to me, brother.

Tue, 07/12/2011 - 14:43 | 1448749 theman
theman's picture

Hi Sofa.  I am among giants here, so too are you.  I strongly suggest you

research the history of money.  It is not that gold is so good - it is that

governments, nor anyone else can create it.  Please include in your research

the "science" of alchemy

Tue, 07/12/2011 - 14:46 | 1448772 fiftybagger
fiftybagger's picture

Bitcoins baby!!!  You don't need to carry them across the border because they are already everywhere in the world.  You just take your password with you, IN YOUR HEAD!!!  Scan that bizatches!

 

The Bitcoin Channel

http://www.youtube.com/user/BitcoinChannel

 

 

Tue, 07/12/2011 - 17:01 | 1449463 gwar5
gwar5's picture

No, because gold is rare, valuable, accepted globally and cannot be reproduced or created.

Paper fiat money is really just a paper promissory note from the bank to redeem to it's holder something of similar value ----- except there is no longer anything of value behind the promise. People may choose not to accept dollars one day, but most will always accept physical gold or silver as the real deal just as they have for thousands of years. 

Your money even says what it is, right on the front ---- FEDERAL RESERVE "NOTE"

Tue, 07/12/2011 - 13:34 | 1448245 caerus
caerus's picture

Article 1 Sec. 10. Clause 1...at least a few states (Utah) are passing or considering passing legislation recognizing gold and silver as legal tender and not an asset subject to (state) taxation when used in commercial transactions / settlement of debts...of course it seems redundant to codify a right already explicitly granted to the American people (or to be precise, the States) by the contracts clause...

 

 

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

 

http://www.silver-investor.com/blog/silver-market-update/david-morgan-interviewed-on-the-fox-business-channel-regarding-the-utah-legal-coin-act/

Tue, 07/12/2011 - 13:39 | 1448288 oldmanagain
oldmanagain's picture

Gold can only be gold.  In a fractional system, a few molecules backing is worthless.  It does it's best purpose exactly as it is doing now.

The first thing in a monetary gold system is outlawing of gold ownership.

Tue, 07/12/2011 - 13:53 | 1448378 Threeggg
Threeggg's picture

Did you see that close on the Comex today ?

INSANE !

Someone is loading the ship while they try and peg the price lower at the close ! translation=failed chart painting.

Margin increase in 5,4,3,2 .................thing is I think everyone expects it !

Moot !

Tue, 07/12/2011 - 14:07 | 1448471 Fix It Again Timmy
Fix It Again Timmy's picture

Crossing borders is not difficult, done it many times - you just don't cross at the border crossings - how difficult is that?

Tue, 07/12/2011 - 14:09 | 1448476 newbee
newbee's picture

Sure, I have my silver stash and plan to get some more.  But a few things are bothering me wondering if there's not a setup here.

1)  We all know the PM market is manipulated to no end, why couldn't the TPTB move their PMs around so it appears there's an immediate shortage just to sucker in some more small players - like me.

2)  Wasn't one of the causes for the Great Depression the fact that the world's currencies were pegged to gold and they couldn't deflate their currencies which pushed them into the deflationary spiral - similar to Greece now?  If so and if there are real plans to go back to a gold backed monetary system, what's to keep this from happening again?  Sure, centeral banks are buying gold by the truck load, but is this just a short term hedge?

I hate being just another sucker, thoughts?

Tue, 07/12/2011 - 14:13 | 1448536 DC
DC's picture

How could you possibly know that?

Tue, 07/12/2011 - 14:29 | 1448663 ian807
ian807's picture

Of course, the time to move your gold and silver abroad is now.

Tue, 07/12/2011 - 14:37 | 1448721 newbee
newbee's picture

If / when SHTF, then they nationalize it ... then what?  That's assuming you keep it in some Perth like thing and not bury it somewhere.

Tue, 07/12/2011 - 15:35 | 1449041 proLiberty
proLiberty's picture

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

From the last two paragraphs of Gold and Economic Freedom by Alan Greenspan.  1966.

see: http://www.constitution.org/mon/greenspan_gold.htm

Tue, 07/12/2011 - 15:52 | 1449134 newbee
newbee's picture

Yep, makes all good sense from the serf's perspective.  But from TPTB view, they give up all power if they go to a gold standard and hand this power over to the serfs.  No more infinite wars they can finance, no more countries they can enslave with debt, etc. etc. 

So why again would TPTB choose this option?  I just don't see it happening.  I see yet another bunch of fiat currencies, maybe one for the globe similar to the dollar - they just call it something different with someone else in control of it (BIS?).

Tue, 07/12/2011 - 20:14 | 1449971 UgglyBetty
UgglyBetty's picture

I agree. My guess is that whenever all currencies are rejected by the general public, the powerful will replace them with another currency, setting the conversion rate (example, 1000 dollars to 1 XXX) BUT ALSO they need to give this new X currency something different in order to be accepted. This will be its credibility, X pegged to something credible, as someone posted above, 20 X to 1 ounce or any other equivalence. Of course it will bring deflation and recession, so later on this pegged scheme will change again. Cycles are inevitable, and I'm sure that before every move, the powerful will know and act so as to protect the wealth they have and get more out of every change of scheme.

Tue, 07/12/2011 - 17:23 | 1449535 Nage42
Nage42's picture

Bah, bound to be another round of fiat with a "bigger and better big-brother regulator" (read IMF + ECB + US + China + Japan + Europe). edit: looks like Newbee had the same idea.

Emergecy meetings yield new "financial cabal^H^H^H^Hcouncil" that will issue the equiv of special drawing rights.  Ties into issuing a new global single currency that will be electronic-only.

End result is power brokers have total control over serfs and full decouple from any tangible asset reality.  Everyone in finance will issue a collective sigh of relief as "we're saved, now stop worrying about it and buy stocks with your new Currency of United Nations Treaty Signers - the thing about governments is they always have unfortunate acronyms...

Can, road, kick.

Tue, 07/12/2011 - 21:39 | 1450168 johnnysize
johnnysize's picture

GOLD, my teenie brained 20 something muni bond investors, is going ALOT HIGHER. Its not a matter of when, but how much. After the government makes it prohibitive to invest in gold we will see the true value. The value that will make you sell your fillings to pay for private school. I'd guess 2014 we are at 5k an ounce...EASY. Im preparing right now shatting gold bars and harvesting precious metals from my Grand parents mouths.

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