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Eric Sprott Says Gold Is Now The World's Reserve Currency, Says Silver Was Manipulated Lower

Tyler Durden's picture


Eric Sprott making headlines in Vegas:


Naturally he will be called a nutjob and a tin foil-hat wearing moron, until he is, of course, proven right, at which point the conspiracy theory becomes non-conspiracy fact.


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Thu, 05/12/2011 - 15:36 | 1269110 palmereldritch
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Thu, 05/12/2011 - 15:41 | 1269132 Zero Govt
Zero Govt's picture


Thu, 05/12/2011 - 16:02 | 1269268 Sophist Economicus
Sophist Economicus's picture

Charlie SAYS

Thu, 05/12/2011 - 16:46 | 1269449 nope-1004
nope-1004's picture

Gold always was, always is, and always will be the world reserve currency.  The only difference is that the last 50 some years has been influenced by a military complex intent on settling oil in fiat, thereby giving the fiat some credibility.

Really, when you look at the last 50 years on a global scale, it's nothing in geologic time.  It was a short experiment in gaming other nations at the behest of the US military.  Nothing has changed with gold, it still has its same molecular structure and chemical composition.  The dollar, though, has been through many changes and will continue to lose its military backed oil significance as faith around the world declines due to its subversive intentions brought about by crooked and criminal banksters.


Thu, 05/12/2011 - 17:41 | 1269683 Whalley World
Whalley World's picture

From my studies, one of the reason for a gold standard is it reconciles the obligation between the creditor and debtor.  A set interest rate is inefficient when there is no check on inflation.  Nathan Lewis in his Gold The Once and Future Money states that for over 200 years inflation was stable under the British Gold standard.  Great book high recommendation.

Fri, 05/13/2011 - 03:13 | 1270969 Urban Redneck
Urban Redneck's picture

The original Aramco concession (when Aramco was US owned) provided that the Saudis would be compensated in gold for their oil.

Thu, 05/12/2011 - 23:52 | 1270743 Saxxon
Saxxon's picture

Excellent post nope-1004.

Thu, 05/12/2011 - 17:49 | 1269731 Cui Bono
Fri, 05/13/2011 - 01:12 | 1270862 FlyPaper
FlyPaper's picture

Quite humorous.  I assume the person who junked you didn't wait long enough to hear the lyrics...

Thu, 05/12/2011 - 17:22 | 1269611 metalsman22
metalsman22's picture


Thu, 05/12/2011 - 21:43 | 1270433 Al Gorerhythm
Al Gorerhythm's picture


Go fuck yourselves!


Fri, 05/13/2011 - 02:08 | 1270919 Xanadu_doo
Xanadu_doo's picture

And we say..."CME: get bent!"

I'm using this dip to buy more physical, bitches (and by bitches I mean the fab folks here who have taught me so much in the last few months I've been stalking).

Thank you, all. :)

PS: I think the trolls are entertaining, but only in very limited doses (like my friend Richard...). And I'm glad they were right about their "top" call last week because it let's me buy MORE PHYSICAL!!! Too bad (for them) they're too short sighteded (like the rest of the US sheeples) to see that a correction was necessary and GOOD for the long-term growth.


Ride the silver wave, baby!!! Whoo-hoooooooo!!!

Thu, 05/12/2011 - 15:57 | 1269241 Bay of Pigs
Bay of Pigs's picture

"he is the manipulator"? that is funny, takes the cake Math Boy. 

The guy has almost his whole net worth in PM's you stupid fuck.

Thu, 05/12/2011 - 16:12 | 1269299 Arttrader
Arttrader's picture

Why do you think this altruistic soul is so interested in you profiting from PM's rather than selling out at a profit?  Whole net worth in PM's?  Wouldn't he like us to think so? 

Thu, 05/12/2011 - 16:22 | 1269361 Bay of Pigs
Bay of Pigs's picture

Altruistic soul? So he's secretly piling into Apple and Netflix? LMAO. Some of you guys are wearing the fucking Tin Foil Hats now...


Thu, 05/12/2011 - 16:44 | 1269441 Problem Is
Problem Is's picture

The Most Outrageous Conspiracy Theory I Ever Heard:

"The US dollar is a store of value. We are not priniting money. There is no inflation. We have a strong dollar policy."

Timmay Jeethner & Bennie "Sayonara" Bernank

Thu, 05/12/2011 - 17:19 | 1269590 gmrpeabody
gmrpeabody's picture

Too funny... +++

Thu, 05/12/2011 - 21:47 | 1270462 Al Gorerhythm
Al Gorerhythm's picture

Too sad... ---

+++ for the insight tho'.

Thu, 05/12/2011 - 16:46 | 1269464 Canucklehead
Canucklehead's picture

I suspect these two guys are simply Aaron Barr operating in his new role as "Protector of the Ponzi".

Thu, 05/12/2011 - 17:41 | 1269718 strannick
strannick's picture

Maybe he's secretly trying to unload his silver sos he can buy Munis?

Thu, 05/12/2011 - 21:31 | 1270410 lawrence1
lawrence1's picture

Projecting your own
devious disposition?
Maybe Sprott is just walking his talk. Would it make sense for him to invest in unrelated and, for him, perilous assets?

Thu, 05/12/2011 - 16:00 | 1269243 Catherine007
Catherine007's picture

Sprott sold PSLV and reinvested the proceeds in silver mining shares. Do your homework before you call Eric a "lying prick"!!

Thu, 05/12/2011 - 16:13 | 1269306 buck4free
buck4free's picture

He bought more physical too, bringing his physical position to "highest to date"... at least he claimed on King World News.

Thu, 05/12/2011 - 23:51 | 1270746 Saxxon
Saxxon's picture

So Sprott took profits at the top then piled into miners which have been pounded.  I hope he kept some in "worthless FRNs".

Thu, 05/12/2011 - 15:59 | 1269244 Rynak
Rynak's picture

I'm sure if he had done the opposite, you would claim that he's an idiot because he makes bad decisions. Poor Sprott.... no way he can get methmans approval.

Thu, 05/12/2011 - 16:04 | 1269279 Sophist Economicus
Sophist Economicus's picture

no way he can get methmans approval

And right about now, poor Sprott is concerned about that too....


Thu, 05/12/2011 - 16:38 | 1269412 akak
akak's picture

I could see the careworn lines in his face during his most recent interview with James Turk.  And if you listened very closely, you could hear him repeating under his breath, over and over, "only $5 to dig from the ground ..... only $5 to dig from the ground ....."

Thu, 05/12/2011 - 17:47 | 1269730 strannick
strannick's picture

Only cheaper monetary instrument to get is infinitely printable Treasuries. Problem is that no one wants em since their infinitely printable.

Silver junior miners Bitchez. SVL. CMA.

Thu, 05/12/2011 - 21:56 | 1270494 DavidPierre
DavidPierre's picture

ECE Silver !!!

A Billion Oz. in Mexico!!

female canines!

Thu, 05/12/2011 - 21:52 | 1270482 Al Gorerhythm
Al Gorerhythm's picture

If he even cared to think about it, I doubt he would give MM's opinion much credence. He'd only be joining the queue.

Thu, 05/12/2011 - 16:06 | 1269285 SRV - ES339
SRV - ES339's picture

One of his primary concerns I'm sure!

Thu, 05/12/2011 - 16:11 | 1269308 tmosley
tmosley's picture

You keep telling those half truths, lying troll.

Sold PSLV and bought physical silver and silver equities to start a silver mutual fund.  He did NOT miss the crash.

Thu, 05/12/2011 - 17:07 | 1269550 Korrath
Korrath's picture

If there had ever been a point where I needed confirmation that Mathman is a bottom feeding, lying sack of shit, today I got my proof.

Thu, 05/12/2011 - 19:23 | 1270023 Keri at Bankste...
Keri at Bankster Report's picture

I wish I would have seen what the post was, but it appears that it was junked away in record time, or something.  What did it say, anyway?

Thu, 05/12/2011 - 19:34 | 1270046 tmosley
tmosley's picture

He claimed that the only thing that mattered was that Sprott sold PSLV.  He was accusing Sprott of using his clients as bagholders, rather than being a real silver bull.

I mean, what kind of moron would know in advance that the silver was going to fall, and use that opportunity to get out to OPEN A NEW FUND FOCUSED ON SILVER?

But basic logic is utterly lost on this "person".

Thu, 05/12/2011 - 19:40 | 1270058 akak
akak's picture

Allow me to hypothesize, and summarize:

Silver is going to plunge --- it only costs $5 to dig from the ground!


Eric Sprott is a liar and a thief, because he took some profits from his own PSLV (to put into other silver investments, but I mustn't acknowledge that fact).


Silver is going to plunge --- it only costs $5 to dig from the ground!


The SLV ETF is fully backed by physical silver, and is perfectly safe --- in fact it is infinitely better to put your hard-earned savings into promises from known criminals than holding that dirty, physical silver yourselves, which only survivalist nutcases would do.


Silver is going to plunge --- it only costs $5 to dig from the ground!


Eric Sprott strangles puppies for fun, and eats babies for breakfast (with a silver fork).


Silver is going to plunge --- it only costs $5 to dig from the ground!


JPMorgan, the Federal Reserve, and Ben Bernanke are selflessly working in all of our best interests, and for the good of the entire nation.


I heart fiat!

Thu, 05/12/2011 - 20:44 | 1270247 DoChenRollingBearing
DoChenRollingBearing's picture

Thank you akak for the summary, as I had missed the original...

Thu, 05/12/2011 - 20:45 | 1270261 akak
akak's picture

Well, DoChen, it is not like he ever has anything original or truly intelligent to say, does he?  Once you've read one MethMan post, you've read all 666,666 of them.

Thu, 05/12/2011 - 21:52 | 1270484 Keri at Bankste...
Keri at Bankster Report's picture

LOL, "I heart fiat!"

Thank you.  I'm glad I missed it, as it saved me the trouble of responding to it, too.

Thu, 05/12/2011 - 22:19 | 1270537 geekgrrl
geekgrrl's picture

Thanks! I was wondering what got everyone so worked up, especially since it only costs $5 to dig it out of the ground! (sarc)

Thu, 05/12/2011 - 22:23 | 1270549 akak
akak's picture

And the shit is everywhere!


Fri, 05/13/2011 - 00:58 | 1270843 Ahmeexnal
Ahmeexnal's picture

And you can't eat it!

Fri, 05/13/2011 - 01:16 | 1270864 WaterWings
WaterWings's picture


Thu, 05/12/2011 - 23:56 | 1270751 Saxxon
Saxxon's picture

How do you really feel, korrath?

Thu, 05/12/2011 - 16:17 | 1269329 Sierra Hotel
Sierra Hotel's picture

Oh Math Man, that's so simple minded. Just because he likes

Silver he's never allowed to sell any?

The man took advantage the fact

that the price was rising out of control, profit took and then

re-positioned himself at the lower price. As one of his clients,

I am greatly impressed with his maneuver and so should you.

Thu, 05/12/2011 - 21:40 | 1270436 lawrence1
lawrence1's picture

Gold, the "closet currency." What a waste of energy even responding to this guy. If Central Banks are buyers of gold, if many other non western countries are buying gold, if
Euro reseves are over 50% gold and gold has increased many fold in the last decade, gold is unofficially poviding important backing of currencies.. a closet currency that the ponzi artists want to keep in the closet.

Thu, 05/12/2011 - 16:21 | 1269357 AR15AU
AR15AU's picture

WOW, epic trolling... why not just log into democratic underground and call Obama the N word. I'm sure you'd get more attention.

Thu, 05/12/2011 - 21:27 | 1270381 equity_momo
equity_momo's picture


Thu, 05/12/2011 - 16:45 | 1269459 Threeggg
Threeggg's picture

Sprott on Max Keiser today here !

Thu, 05/12/2011 - 21:54 | 1270488 Keri at Bankste...
Keri at Bankster Report's picture

Thanks---this is good video!

Fri, 05/13/2011 - 01:22 | 1270871 tiger7905
tiger7905's picture

Robin Griffiths out saying silver going to $450 and gold likely to $5000 and $12,000 possible.

Fri, 05/13/2011 - 02:19 | 1270932 Xanadu_doo
Xanadu_doo's picture

+1 - thanks for sharing this!

Sprott has his finger on the pulse if anyone does.

Of course MM is smarter and Bernank is more trustworthy...(/sarc)

Thu, 05/12/2011 - 21:41 | 1270423 Al Gorerhythm
Al Gorerhythm's picture

Simon Says ..... Go Eric!

Fri, 05/13/2011 - 09:51 | 1271444 falak pema
falak pema's picture

I'm sprottless!

Thu, 05/12/2011 - 15:38 | 1269112 Sophist Economicus
Sophist Economicus's picture


Thu, 05/12/2011 - 15:41 | 1269145 bobby02
bobby02's picture

The guy is a marketing master extrodinaire!!! Gotta keep fanning those conspiracy theories lest PHYS premium to NAV collapses!

Thu, 05/12/2011 - 15:44 | 1269167 Putty
Putty's picture

PHYS premium did collapse.  It's now 1.34%.  PSLV, on the other hand, is at 17%.

Thu, 05/12/2011 - 15:55 | 1269218 bobby02
bobby02's picture

The day is still young. (And the guy is a genius.)

Here's my contribution to this noble cause: "I can widen that premium to NAV, I bet. More talk of market manipulation will widen it yet."

Thu, 05/12/2011 - 16:15 | 1269316 tmosley
tmosley's picture

What was it before?  It was never astronomical like PSLV.  More like 3 or 5%, IIRC.

Thu, 05/12/2011 - 16:27 | 1269380 bobby02
bobby02's picture

I replied to your comment regarding the CME here:

Understanding how the exchange actually works in no way diminishes the bullish (or bearish) case for PMs, or any other asset for that matter.

Thu, 05/12/2011 - 16:40 | 1269442 tmosley
tmosley's picture

Thanks for the update.  I replied to you, and I agree with the above statement.

Thu, 05/12/2011 - 17:47 | 1269737 strannick
strannick's picture

Why not quote the Hunts on COMEX's actual workings? Or ask former CFTC Justice Painter.

Thu, 05/12/2011 - 15:42 | 1269158 DoChenRollingBearing
DoChenRollingBearing's picture

And just what is wrong with wearing tinfoil hats?  Huh?  Huh?

Who is right:

1)  ZeroHedge PM trolls

2)  Eric Sprott

Thu, 05/12/2011 - 15:44 | 1269166 Sophist Economicus
Sophist Economicus's picture

Lemme see, Math Man, Tex-ass GunSwinger or Sprott


Hmmmm, can the Bearing give me a few minutes....

Thu, 05/12/2011 - 17:21 | 1269599 cccmachine
cccmachine's picture

Is that minutes or milliseconds?

Thu, 05/12/2011 - 18:29 | 1269857 Texas Gunslinger
Texas Gunslinger's picture









Thu, 05/12/2011 - 18:38 | 1269885 akak
akak's picture

OK, all caps --- this must be Operative #2.

Operative #1 is the religious nut with the fragile sensibilities.

Operative #3 is the one who actually seems to know a fair amount about the silver market, and is particularly disingenuous when spreading his misinformation and disinformation regarding it.

Am I missing anyone, or does that cover it?

Thu, 05/12/2011 - 18:48 | 1269920 Hephasteus
Hephasteus's picture

I think you covered it. Looks like the whole Airhead Force Internet Troll team.

Based out of "texas" making quote marks with hands.

Fri, 05/13/2011 - 00:59 | 1270850 Ahmeexnal
Ahmeexnal's picture


Fri, 05/13/2011 - 02:20 | 1270935 Xanadu_doo
Xanadu_doo's picture


Fri, 05/13/2011 - 01:24 | 1270872 Keri at Bankste...
Keri at Bankster Report's picture

Yes, there's a 4th who only comments on the price of dog food every Saturday at Walmart, I do believe.

Thu, 05/12/2011 - 16:15 | 1269333 bobby02
bobby02's picture

I should think that alloys display superior characteristics.

Thu, 05/12/2011 - 16:26 | 1269391 Slim
Slim's picture

Difficult to say, Sprott is obviously conflicted and biased so must be heavily discounted.  PM participants MAY be conflicted and biased but given anonymity and low barriers to entry should be heavily discounted until pattern of logic/thought appears to judge over a longer time frame.


Trust no one. 

Thu, 05/12/2011 - 17:51 | 1269748 strannick
strannick's picture

Yeah he's so biased by the sad reality of Keynesian economics, Bankster corruption and their Central Bank shills that he put his money where his mouth is. You should do the same.

Thu, 05/12/2011 - 15:47 | 1269170 Arrowflinger
Arrowflinger's picture

Sprott pot shot....

Thu, 05/12/2011 - 15:39 | 1269115 apberusdisvet
apberusdisvet's picture

One thing about Sprott; he puts his money where his mouth is.

Thu, 05/12/2011 - 15:41 | 1269126 Azannoth
Azannoth's picture

But but you can't eat gold! (get the pun :)

Thu, 05/12/2011 - 15:42 | 1269159 dexter_morgan
dexter_morgan's picture

but those cheaper iPad 2's are quite tasty, with a few shots of Jameson

Thu, 05/12/2011 - 17:11 | 1269557 legal eagle
legal eagle's picture

Jenna Jameson?

Thu, 05/12/2011 - 15:39 | 1269137 ZeroPower
ZeroPower's picture

..And thus a bias exists in whatever he would proclaim.

Thu, 05/12/2011 - 15:44 | 1269168 DoChenRollingBearing
DoChenRollingBearing's picture

I own gold and silver and platinum and palladium.

I recommend buy one or more!

Disclosure: Bias exists!

Thu, 05/12/2011 - 15:51 | 1269197 ZeroPower
ZeroPower's picture

Currently (still) short silver, but ya i will definitely be on your side one day, a few bucks lower is all. 

Thu, 05/12/2011 - 16:06 | 1269270 DoChenRollingBearing
DoChenRollingBearing's picture

Ahh.  You trade.  I never had the knack, lost almost every time.

I just buy and hold PMs (although I traded some of my silver for gold a week or so ago).

Gold, maybe the last Buy & Hold left?

Fri, 05/13/2011 - 04:12 | 1270999 Al Gorerhythm
Al Gorerhythm's picture

Now isn't that a coincidence! Me too, same story. In fact, every trader who I know, shares a similar experience. Traded the fundamentals with a little technical thrown in and what do you know?  Blind-sided by pulled bids and stopped out until broke. Like a true gambler, I always knew that I would get my losses back.

Now, I'm not going to cry about my losses or cry foul. I did, however, learn from the (costly) experience of taking on the big boys. They forced me to buy physical and I thank them from the bottom of my vengeful heart.

Thu, 05/12/2011 - 16:03 | 1269277 sabra1
sabra1's picture

the bernank puts his little timmy where janet napolitanos mouth is!

Thu, 05/12/2011 - 16:41 | 1269443 akak
akak's picture

And Janet "Short on top, long in the back" Napolitano puts her little jimmy in Bernanke right where Timmy so often has his nose.

"Move aside, Beavis --- I got a man's job to do here!"

Thu, 05/12/2011 - 16:55 | 1269487 DoChenRollingBearing
DoChenRollingBearing's picture

Funniest reply of the day goes to akak!

Thu, 05/12/2011 - 18:37 | 1269887 Texas Gunslinger
Texas Gunslinger's picture

"Move aside, Beavis --- I got a man's job to do here!"


THAT'S SO FUNNY!!!!!!!!!!!!!




Fri, 05/13/2011 - 04:20 | 1271003 Al Gorerhythm
Al Gorerhythm's picture

You must be from Texas. Your writing is soooo BIG! (Or you are over-compensating:)

Thu, 05/12/2011 - 15:37 | 1269118 Lets_Eat_Ben
Lets_Eat_Ben's picture

If gold is the world's new reserve currency, then silver is the worlds ____

Thu, 05/12/2011 - 15:38 | 1269128 Internet Tough Guy
Internet Tough Guy's picture

Good question.

Thu, 05/12/2011 - 15:56 | 1269205 Zero Govt
Zero Govt's picture

Silver is . . . . a more devisable means of exchange, far lighter than Gold so easier to carry round Gold it is to store your wealth, Silver it is to do your weekly trading/shopping when the Federal Reserve IOU's implode in an 'I'm Backed by a Zero (Benny) Promise and Worth Precisely (Ponzi) Nothing'  

Thu, 05/12/2011 - 16:00 | 1269242 Lets_Eat_Ben
Lets_Eat_Ben's picture

Surely we won't carry around satchels of metal regardless of what monetary system is in place.

On-screen credits and folding money is a better way to go IF the money is backed.

Thu, 05/12/2011 - 16:26 | 1269369 palmereldritch
palmereldritch's picture

Hey, there's a reason for banks to exist.  To store, protect and confirm possesion of your physical PM in vaults as the basis of your credit.  Works for countries.

Who knows...probably Sprott's plan for a bank.

Fri, 05/13/2011 - 10:49 | 1271709 prole
prole's picture

Um, were you trying to say this: There is a reason for thieves to exist, they pretend to store protect and confirm your PM in vaults so they can periodically steal it all then start over.

Sat, 05/14/2011 - 00:37 | 1273783 palmereldritch
palmereldritch's picture

No I was trying to say physical PM backed banking can work.  Your point is well taken tho.  My original comment was going to be that it works for countries and despots but that would have undercut my own argument or required a greater here we

I just failed to specify that this approach has to be applied non-centrally as open source with the PMs distributed throughout retail banks and local accredited holders. Let every deposit holder of PMs be their own store of wealth for credit accordingly.

Central banks do indeed breed highly efficient centralized theft and should be democratized like banking co-ops as much as possible.  It’s just data tracking. We have an abundance this technology as demonstrated by the incipient police state emerging around us.

Time to put this tech to good use. We have to stop following the money and start leading and growing it for our own individual purposes.

Free independent physical silver wealth is individual economic liberty.

Thu, 05/12/2011 - 16:46 | 1269448 akak
akak's picture

Surely we won't carry around satchels of metal regardless of what monetary system is in place.

On-screen credits and folding money is a better way to go IF the money is backed.

I can't help but note that if we had stuck to "satchels of metal" for our money, NONE of the problems we currently face today would be, or could have been, an issue.

Thu, 05/12/2011 - 17:01 | 1269521 tmosley
tmosley's picture

Indeed.  The longest lasting civilizations in the world had this model.  Gold, silver, and bronze coins were carried in little bags or purses (not a modern woman's purse, but what we would recognize today as a change purse).  This is literally the ONLY way to preserve a government for more than two hundred years.  Any other economic system will be rapidly corrupted until you wind up with some form of hyperinflation or war (just another form of government excess).

Thu, 05/12/2011 - 17:55 | 1269755 strannick
strannick's picture

The alternative to satchels of metal is wheelbarrows of paper

Thu, 05/12/2011 - 18:02 | 1269771 tmosley
tmosley's picture

That's a quotable quote right there.

Thu, 05/12/2011 - 18:29 | 1269860 Papasmurf
Papasmurf's picture

It would at least have limited how much a bankster could steal at once.

Fri, 05/13/2011 - 06:48 | 1271075 TerraHertz
TerraHertz's picture

Annnnd... it's... oof... grunt... pant... wait, it'll be gone as soon as I fetch a trolley.

Fri, 05/13/2011 - 02:10 | 1270924 Keri at Bankste...
Keri at Bankster Report's picture

There are really so many rammifactions from the abandonment of hard money.  One that I had not of thought before was mentioned in passing by my father when he was talking about his father, who was a small business man at the turn of the century.  He stated that at that time, people like his dad and other middle-class folks had safes in their homes as furniture.  He said it was not uncommon to find a 700-pound dail-op safe in the corner of a friend's house, with a lamp on it.  These days your "crazy" if you have a safe, because that means you like (gasp!) guns or (double gasp!) metals!  But at that time, people had safes because they had something physical--their savings in gold---that they needed to protect.  Unlike us modern dopes, they didn't trust the banks because  banks were very risky places to put money.

(As a sidenote, I advocate for a dissultion of the FDIC as a federally-insured entity because I understand its history and purpose, and recognize its role in vastly increasing the stifling control of banks over the national economy and currency value by claiming to replace the capital risk involved in placing deposits in the hands of banks through the socialization of losses and the privatization of gains. If the FDIC was not there encouraging everyone "trust" the banks, a massive amount of capital would be removed, and banks would very quickly lose their ability to deleteriously lever our own money against us.  Furthermore, the popularization of debit cards to tap these insured deposits is an effective consumer price increase mechanism of 2% due to the prevalence of the cards and the extraordinary fees that issuers collect.  Rant over.)

Anyways, so you have this cool-looking safe in your house with a coaster on top of it and a flowerpot.  And so does your neighbor, as do the other people on the block.  What do you think such a position does for the "neighboorhood watch" when you all have some serious skin in the game?  Do you think people just turned up the radio when they heard a window break next door, or just ignored suspicious looking people lurking around at night?  No--and they didn't call the "police", because they were the police and if you broke into someone's house, the owner was going to kill you if he possibly could because he knew you weren't there for biscuits.  Property rights were taken very seriously because people really did have property.  

Thu, 05/12/2011 - 23:50 | 1270744 Estrella
Estrella's picture

And, in truth, you don't really carry all that many FRNs either. Mostly we all use credit cards. And that is how it will be with a gold standard. Not my idea, but it is true. As FOFOA pointed out: dollars for accounting, credit cards for means of transaction and gold for store of value.


Now, if only someone would please explain to me the difference between a gold standard and the Freegold he speaks of...

Fri, 05/13/2011 - 00:03 | 1270776 Maos Dog
Maos Dog's picture

This guy explains freegold a little simpler than FOFOA:


Basically with Freegold you have a hard money and easy money system at the same time, with the store of value being gold not printed dollars. 

Fri, 05/13/2011 - 00:26 | 1270809 Fiat2Zero
Fiat2Zero's picture

That's actually what happens during a currency collapse.  This has not been the case with "modern collapses" as the US dollar acted as the safe currency.

But what happens when the US dollar is trash?

People will transact in the alternative currency for awhile, until they get tired of carrying around the heavy little satchels.  Once they forget about the currency collapse, and a few laws are passed (e.g. legal tender), a new paper currency is introduced.  People lose their fear, and the whole cycle starts over again.

If managed well, a paper currency can last about 100-150 years before once again going to zero.

Paper currency wins out because of its convenience and the ability to expand credit (i.e. print).

Fri, 05/13/2011 - 01:09 | 1270855 Ahmeexnal
Ahmeexnal's picture

"Modern collapses" were engineered in order to suck wealth from the collapsed nation into another more powerful nation.

But when the reserve currency implodes, what will happen will be similar to what occurred when Rome went down: dark ages await us.

Fri, 05/13/2011 - 01:25 | 1270875 palmereldritch
palmereldritch's picture

But what happens when the US dollar is trash?

That reminded me of this advertising tactic from the late 80's:

The WORST ADVERTISING IN HISTORY used to plague New York City Streets in the late 1980s and early 1990s. Tiny leaflets folded to look like a twenty dollar bill with an ad on the back for a strip club, dial-a porn or some other shady, sleazy, cruddy business. Junior mobsters were hired to dump the litter as they walked down city streets, often at dawn, which allowed the tricky things to blow around a bit before commuters hit the streets.

Look for the selling of ad space on FRNs as a sign of the final collapse

Coming soon...from 33 Liberty

Thu, 05/12/2011 - 15:45 | 1269156 Hearst
Hearst's picture

Unless central banks around the world open up their vaults and allow their bullion to be coined Gold will not be easily used as currency.  Silver has historically always filled this role.  Not implying that Gold could never circulate again, but more likely Gold will be used for wealth preservation and Silver circulated.

Thu, 05/12/2011 - 15:46 | 1269179 Manthong
Manthong's picture

Anti-bacterial suppository?

Thu, 05/12/2011 - 15:50 | 1269194 hambone
hambone's picture

No, gold or silver will not likely circulate as money again.  It may be the basis or backing of money but at most radical banks would hold your PM's and give you a debit card against them...still cards passing money back and forth but for real assets sitting safely elsewhere.

More likely is a currency of some sort again backed by tangible - gold, puca shells, whatever so long as it is somewhat fixed in quantity and growing similar to the population growth.

Thu, 05/12/2011 - 16:09 | 1269300 Dental Floss Tycoon
Dental Floss Tycoon's picture

As long as banks use a fractional reserve system they will still be in the counterfeiting business.

Thu, 05/12/2011 - 18:39 | 1269895 Hacked Economy
Hacked Economy's picture just hit the "other" nail on the head.  Fractional Reserve Banking...

Back when the Reserve Requirement was capped at 40% (a 2.5:1 ratio), we had things under control.  But when FDR changed it to 25%, and then LBJ later changed it further, things got out of hand.  Now, in 2011, federal regulation allows a 10% cash reserve requirement for standard (savings) accounts, and only 3% for transaction (checking) accounts.

Only 3%!!  That means that for every 30 bucks or so in fiat floating around in the system (whether in electronic or loan document form), the bank only needs to have 1 paper dollar in their possession to "handle" daily consumer demand.

Good frickin' grief.  A return to a more sane 40% requirement would be nice.

Thu, 05/12/2011 - 17:26 | 1269637 Fiat2Zero
Fiat2Zero's picture

"No" is too strong a word.  Chinese can now open gold accounts in a bank which hold their gold for them.  Even JPM's clients can settle in gold bullion.

You are correct that paper/digital money is more convenient.  This is why, despite currency crashes throughout history, that paper money always comes back to the fore (well that and you can PRINT LIKE CRAZY to take care of those pesky wartime loans).

But gold and silver may be traded for a window of time.

Thu, 05/12/2011 - 21:30 | 1270394 lasvegaspersona
lasvegaspersona's picture

FOFOA and his site are devoted to just this topic, the term used is Freegold. Worth the effort to understand why.

Thu, 05/12/2011 - 16:17 | 1269326 SRV - ES339
SRV - ES339's picture

He said Reserve Currency... it represents the true value of the USD, which is of course the reason they raid the price on a regular basis... can't let the sheeple understand they are being sold out to keep the banks awash in fiat now can we!

Thu, 05/12/2011 - 17:54 | 1269757 strannick
strannick's picture

If the central banks, along with GLD and SLV opened up their vaults, sos the public could watch the butterflys fly out of empty caverns, then you would see some real price discovery.

Thu, 05/12/2011 - 15:43 | 1269164 faustian bargain
faustian bargain's picture

also new reserve currency.

Thu, 05/12/2011 - 15:59 | 1269257 tarsubil
tarsubil's picture

Article 1 Section 10 of the US Constitution: "No State shall ...; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; ..."

Thu, 05/12/2011 - 16:27 | 1269381 Dental Floss Tycoon
Dental Floss Tycoon's picture

You must learn to be more flexible and less literal in your interpretation of words.  Surely that does not say what you think it says else the current state of affairs would be unconstitutional.

Thu, 05/12/2011 - 16:44 | 1269455 JustPrintMoreDuh
JustPrintMoreDuh's picture

Constitution schmonstitution ... 

Fri, 05/13/2011 - 01:11 | 1270860 Ahmeexnal
Ahmeexnal's picture

You are behind the times. Constitution was ammended years ago.

Now not only silver and gold coins are legal tender, but silver, gold, and platinum credit cards.

Fri, 05/13/2011 - 07:30 | 1271097 TerraHertz
TerraHertz's picture

It's just a damned piece of paper after all. Bush said so, presumably he's correct.

Thu, 05/12/2011 - 16:29 | 1269403 Dental Floss Tycoon
Dental Floss Tycoon's picture

You must learn to be more flexible and less literal in your interpretation of words.  Surely that does not say what you think it says else the current state of affairs would be unconstitutional.

Thu, 05/12/2011 - 17:40 | 1269703 mt paul
mt paul's picture

then silver is the worlds

spare change ...

hey buddie

can you spare some bullion 

for a cup of coffee...


Thu, 05/12/2011 - 15:40 | 1269124 frippy
frippy's picture

But but but Krazy Karl Denninger says that we're all broke for owning Silver.

Thu, 05/12/2011 - 15:47 | 1269189 Arrowflinger
Arrowflinger's picture

Some are still up 7x......'broke', eh?

Thu, 05/12/2011 - 17:43 | 1269717 mt paul
mt paul's picture

about ready to fire up 

this partagas maduro styck...

and go reballast the boat... 

Thu, 05/12/2011 - 17:50 | 1269736 Nathan Muir
Nathan Muir's picture

KD still brings a lot to the table.  I don't side with him on PM's, or Ron Paul for that matter, but he is smart and sees the ponzi for what it is.

Thu, 05/12/2011 - 18:18 | 1269820 akak
akak's picture

Yes, the idiot savant Denninger clearly sees the Ponzi for what it is --- so what is his recommendation to his readers?  Flee from the manipulations and snares of the Ponziconomy and right into the paper scams of the Ponzimasters themselves!  It would be comical if it were not so tragic.

Away from his disingenuous and idiotic rantings on gold and silver, the fact that he runs his gulag of a forum (is it even still operating, or has he banned EVERYONE by now?) with such an intolerant iron fist tells me a lot about his arrogance and his intellectual insecurity over matters about which he must subconsciously realize that he knows little to nothing, such as monetary theory and history, despite pontificating about them on a regular basis.

Thu, 05/12/2011 - 19:19 | 1270009 Francis Dollarhyde
Francis Dollarhyde's picture

Oh, it can be both. Karl is definitely a tragicomic character. But I enjoy the form, so I enjoy his work.

Thu, 05/12/2011 - 15:38 | 1269131 NOTW777
NOTW777's picture

finally - some straight talk

Thu, 05/12/2011 - 15:49 | 1269182 jus_lite_reading
jus_lite_reading's picture

Who is Sprott?...

Just joking of course but this is some real shit. I think the whole world has gone mad and only a handful of people are still sane and 75% of those can be found here on ZH.

Fact--- silver WAS manipulated because its the poor man's gold. TPTB can't have the poor man invested in silver which can not be created out of thin air. 

Thu, 05/12/2011 - 16:00 | 1269258 DoChenRollingBearing
DoChenRollingBearing's picture

Newly enlisted Space Cadet in the Tinfoil Hat Brigade member DoChenRollingBearing resents the fact that you imply he is sane.

Thu, 05/12/2011 - 17:29 | 1269656 gmrpeabody
gmrpeabody's picture

There you go again..., ASSuming he considers you a part of that group. ;- )

Thu, 05/12/2011 - 18:19 | 1269835 Hephasteus
Hephasteus's picture

I resent it to. I can't stant being sane.

Thu, 05/12/2011 - 16:09 | 1269287 Magnix
Magnix's picture

Amen to that! Been reading too many scarastic talks on every posts.

Thu, 05/12/2011 - 15:41 | 1269133 RobotTrader
RobotTrader's picture

My prediction that at least half of the biggest gold equities funds will be shutting down soon.

The year is pretty much ruined.

Way too many redemptions piling in, it is impossible for these funds to stay alive when they are constantly chain-selling their positions to meet margin calls and redemption requests.

It will be years before these guys recover.

Thu, 05/12/2011 - 15:41 | 1269148 Sophist Economicus
Sophist Economicus's picture

Can I have your old Avatar?    I promise to be nice to her

Thu, 05/12/2011 - 15:45 | 1269172 ldotf
ldotf's picture


Thu, 05/12/2011 - 18:46 | 1269911 Hacked Economy
Hacked Economy's picture

The new one's nice, too.  Too bad his girls don't stick around with him long.

Thu, 05/12/2011 - 15:45 | 1269157 Internet Tough Guy
Internet Tough Guy's picture

Another prediction from this morning:

We could see a 200 point down day, SPY gapping below key moving average
RobotTrader - Thu, May 12, 2011 - 08:56 AM

Lots of horrific gaps down in:


Might be enough to trigger a waterfall decline in stocks today


Thu, 05/12/2011 - 16:38 | 1269427 Transitory Anomaly
Transitory Anomaly's picture

" . . . biggest gold equities funds . . . constantly chain-selling their positions to meet margin calls and redemption requests."

If you mean the ETFs, don't they charge the APs a fee for redemption. It seems volatility could work for them. The spread between market value and NAV could get widened but that not there problem, they won't lose money on it.

Thu, 05/12/2011 - 18:03 | 1269772 strannick
strannick's picture

Good riddance. Get physical. Get miners.

Thu, 05/12/2011 - 17:28 | 1269653 Fiat2Zero
Fiat2Zero's picture

Here's my $5 momo.  Start digging...

Thu, 05/12/2011 - 18:45 | 1269907 Great Dane
Great Dane's picture

I Object!  You can't just go an change such a great Avatar without ZH reader concensus....Who do you think you are?

Thu, 05/12/2011 - 19:22 | 1270020 Hephasteus
Hephasteus's picture

A catfish mouth that made a bad bet.

Thu, 05/12/2011 - 15:39 | 1269134 Temporalist
Temporalist's picture

Sprott is a liar!  Methman said you can pay him $5 to manipulate 1000oz bars up his ass.

Do NOT follow this link or you will be banned from the site!