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Gold Surges On Spain Downgrade, Euro Crashes As End Of Fiat System Approaches
Fiat down, gold up. Any questions? Algos finally found where Europe is on googlemaps. Europe closing so US is isolated in its schizobubble for the rest of the day.
EUR killed:
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I try to prepare for ALL possibilities. "V" shaped recovery, "L" shaped depression and the "O" shaped passage of civilization down the proverbial economic toilet.
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Don't get me wrong --- I am not saying that it could NOT happen. But if civilization does in fact collapse, then most of us will die one way or the other, in which case there is very little I could possibly do about it. So, as for a hostile alien invasion, I am not going to lose too much sleep over the possibility, as there is little I could do to save myself in that extreme case in any event, and quite possibly would not even want to.
There is a great passage in Cormac McCarthy's book "The Road" (a post nuke novel) where the hungry and tired father and son come across a storm/bomb shelter. It is stocked with canned food, ammunition, clothes and a small bag of Krugerrands. The father spends a couple minutes holding the gold in his hands looking at it, then lets them drop to the floor. The the other items are loaded up and taken, while the gold is left behind.
I am optimistic that gold will hold it's value (history is on it's side), but there are times and places when the scarce, shinny metal is deemed useless.
Maybe you read the wrong books as well? The issue of societal collapse is multi-dimensional and is not the exclusive realm of monetary standards, relative to the former nation in question. As a matter of fact, all the regimes who were on a gold and/or silver standard and went through economic crisis and/or collapsed, debased their coinage, look it up. I suggest you'd start with the fairly recent work on the topic:
Monetary Regimes And Inflation: History, Economic And Political Relationships by Peter Bernholz
Then, when it comes to societal collapse I suggest the seminal work on the topic by archaeologist Joseph Tainter:
The Collapse of Complex Societies (New Studies in Archaeology)
According to Tainter, societal collapse is primarily caused when the cost of maintaining complexity exceeds productive output (law of diminishing returns). The monetary framework plays a minor role in this process.
The primary benefit of a metallic standard, as put forth by hard money advocates, is that it is a significant check on the artificial expansion of the money supply (and by extension a check on the expansion of speculative credit and governmental budgets) so as to curb governmental largess and the inflation tax. I have never read a hard money advocate who said such a regime would bring social stability. Though given we live in a world of over six billion people, odds are that there exist some hard money advocates who make such a claim, but they are no where near being in the majority. When making such a counter argument, you are engaging in the logical fallacy known as "cherry-picking data."
Mako,
You're correct about the inevitable collapse of a compounding interest based system but the distinction is between one based on fiat currency or one based on a commodity with intrinsic value such as gold. The fiat system will eventually crash to zero, the commondity based system crashes back to underlying value of the commodity it's based on.
No, more like the US adopted a central bank every 60-80 years.
The founding fathers were all dead by the time they started issuing paper money again to fund the Civil War. Before that, it was gold and silver. After the collapse following the Civil War, it was gold and silver again.
To add, the Civil War bonds were issued by the House of Morgan, and the House of Delano.
hmmm....can EUR 1.3100 be broken today?
and if so can the FOMC add into today's communique language to the effect...... "extended period in perpetuity".
"extended period in perpetuity".
LOL
The ultimate oxymoron.
Slightly off topic, but inspired by yesterdays silver take-down.
Has the London Police released any information about the hit-and-run incident involving Andrew Maguire yet? Anything?
Yes, their official comment was:
"Nothing to see here... move along."
Yes, it was Prince Charles, leaving a nearby pub, smelling of Guiness. That's why there's no news.
The title predictions rely on nothing.
-The Euro is not the key to the commodities world market. No country has to buy Euros to support vital needs of its society. Contrary to the USD.
-The EU cannot back a QE policy to a common taxation structure. This renders quantitative easing a difficult to carry out tasks. More and more, the environment of the EU is shrinking and might in the end resemble with 1930s when both Europe and the US had grown insulated and could no longer flush their troubles outside their borders.
-When entangled in an extortion game, the best place to protect your properties is to place them in the ganglord's turf. The ganglord is the US so if you do not want to be extorted or be extorted less than the others, put your wealth in the US.
-The US as little insulated in its little bubble as it is possible. On contrary, the US is growing more and more as the only society in the world who can throw its troubles out by the window, knowing others will have to cope with the consequences.
Predicting an end to fiat money is preposterous. It simply shows that not every fiat currencies display the same features. The Yen, the Sterling pound have some features the USD has but not all.
You are right. It is as preposterous as predicting the end of the mighty Soviet Union.
And the sun never sets on the British Empire.
And Rome is "forever".
The only thing preposterous here is your naivete and historical cluelessness.
I am glad your self inflated ego still allows you to see something else than your navel.
My comment was clear in the comment. The title announces the end of fiat money to be close.
I presented a list of weaknesses the Euro exhibits as a fiat currency among other fiat currencies. The Euro failing does not mean the fiat currency system failing.
It simply underlines how the non possessed features can be determinant in a certain situation.
So what about silver, dammit? It's just sitting there on the tarmac. Maybe it's just going through the pre-flight checklist, but it should be moving with gold, right? WTF?
Silver isn't gold. Ever wonder why central banks don't have a silver hoard?
Because the rich men that run the central banks wanted it all for themselves.
Industrial uses were found for it, so they found that they would be richer if they sold off the silver to get more gold, which has only minimal industrial usefulness.
Now, the silver is almost all gone, but only a few people realize that. Those who buy up the remaining real supply now will be the next elite.
The next monetary system won't be based on silver. Silver is a commodity and will trade like one. Gold has much more upside.
Yes, gold has minimal industrial usefulness, except for in the small computer and medical equipment and military aviation industries. Other than those miniscule applications, gold is just a shiny lump of stupid, dumb metal.
I am Chumbawamba.
That makes it good money (as you know, but others seem to dumb to understand). The supply doesn't vary, so the only variable is "price" in terms of goods and services.
Of course, when you find a use for a monetary metal, as we have with silver, its value should go UP not down. This is why I have a very large amount of it sitting in a safe. I anticipate that silver will go to parity with gold at some point in the future, in terms of purchasing power, but that will be a quick spike. It will eventually return to its historical ratio with gold. That is, unless the economy takes off again somewhere, in which case the demand will be up. In ground supply may also be an issue.
The silver/gold ratio has been going the wrong way for a long time; it's broken. Silver isn't the poor mans gold, it never was. The Hunt bros. spike was based on cornering the market, nothing more.
Silver isn't gold, so it won't behave as gold.
The ratio has been broken since we went on a paper standard. Perhaps when we leave the paper standard, it will go back?
And you are wrong on the Hunt Bros. The price spiked because they were demanding delivery (the supply didn't exist). If the government hadn't stepped in and manufactured a margin call, the dollar would have collapsed way back then. Since that time, we have added another 30 years worth of exported inflation into the system. When it unwinds, it ain't gonna be pretty. Unless you own gold and silver.
I bought both over several years, in case I was wrong and silver outperformed. But silver trades like a commodity, it crashes with other assets, and it is devaluing against gold. I'm trading silver for gold now, will be out of silver in a month. I'll take my chances all in AU.
I like your analogy. Sitting on the tarmac...
Personally, I like silver's moves lately, and money is pouring into SLW. Silver is very volitile, and considering that 9/10 of its "reserves" sit in the pocket of Barclays ishares silver trust (owned and operated by none other than the infamous deRotheschilde family clan), it is easily manipulated...for now. Once we find out that just like all the other "reserves" of the world, this one is empty, well.....Also, it tracks oil verbatim, so....since oil is priced in "petro-doelarrs" (for now) it is in wait. HOLD!!!!!!!!
Braveheart Strategy:
http://www.youtube.com/watch?v=tr8bZ25uo1USilver finished REAL strong today, and is looking REAL strong now too!!!!!
If you want gold, why buy silver? Not a rocket science is it.
Because silver is also real money and is the "poor man's gold". It is also trading at a ratio of 65/1 or that is to say 65 ounces of silver to one ounce of gold and the historical norm is 12/1 - 20/1. There is also less silver above ground than gold currently.
Need any more reasons than that?
In other words, buy silver now to get more gold in the future.
yep
THE POSSIBLE DREAM:
http://williambanzai7.blogspot.com/2010/04/adventure-begins.html
Well, I've got to run to keep from hidin',
And I'm bound to keep on ridin'.
And I've got one more silver dollar,
But I'm not gonna let 'em catch me, no,
Not gonna let 'em catch the Midnight Rider.
And I don't own the clothes I'm wearing,
And the road goes on forever,
And I've got one more silver dollar,
But I'm not gonna let 'em catch me, no
Not gonna let 'em catch the Midnight Rider.
And I've gone by the point of caring,
Some old bed I'll soon be sharing,
And I've got one more silver dollar,
But I'm not gonna let 'em catch me, no
Not gonna let 'em catch the Midnight Rider.
No, I'm not gonna let 'em catch me, no
Not gonna let 'em catch the Midnight Rider.
No, I'm not gonna let 'em catch me, no
Midnight Rider-The Allman Bros. Band:Not gonna let 'em catch the Midnight Rider.
http://www.youtube.com/watch?v=K7A2acBVENA
http://www.youtube.com/watch?v=6XfHvcuCgTk&NR=1
All is WELL! Nothing to see here people, please disperse in an orderly fashion. See DOW's up 45, nothing to see here.
I think calling Schiff a moron is a bit harsh
he is more right than 90 percent of the crowd
BUt I agree most do not see the rout cause of the problme
but if he is a moron so is Rogers
he thinks the sun shines out of Chinas arse
the whoile world is a bubble
how can anyone NOT see that. AS mako says either feed the credit system exponentially or die
I wrote about Australia before too. Nobody is immune. Aus house prices are 7.5 times salary which is worse than the U.S. had. Consumer and mining powers the economy.
A China/global blip and this sucker goes down.
Where is Peter Schiff that bum. Shows how writing books and giving investment advice and trading for a living are two differne things.
EMERGENCY:
http://www.youtube.com/watch?v=qOZuLD1u_K4
Anyone buying gold at current 1170+ or have a reason has to why/why not there will be a fall in price from here?
Just bought a few hundred ounces more of silver. I picked up another 20 of gold after the GS/Paulson sell-off as well as some more NovaGold.
I'm patiently waiting to add more.
But I truly think that people who are knocking gold right now will look back at this time 10 years from now and think, "how the fuck could we have been so ignorant?" I've been begging people I work with for the past year to buy at least a little. I work with a group of probably 50 or so supposedly affluent and intelligent finance professionals and I guarantee I'm the only one that owns even an ounce of gold.
Translation? Any gold price under $1,500 is an absolute bargain.
the gold zits kids ..have a time line of three squeezes .
then preen in front of the mirror to make sure the red marks are okay.
gold is going to 1600 at which time nation states will be buying . then off to higher numbers to balance the books .
silver also will be used as a currency.
iraq for hell to betsey is a walking time bomb still.. and those with gold are doing just fine
the idea tanks will run us over so don't buy gold lol is the bottom of the crud barrel as an excuse /
just read the crap , the little anal remarks about gold ,
a nation of real time pot heads for sure as gold makes record highs on record highs in all currencies
like king that told the water to stop.. as it ran his ass for cover .
the very movement of gold up ward and the troll say no. lol
Simple: infinite, unending bailout via currency debasement. This has all happened before, and it will all happen again.
I'm trading silver for gold. Silver, like everything else, is devaluing against gold.
Enjoy that. I am taking the other side. Why buy gold when it is at a historically high price in silver? It will go back to at least 50 at some point.
It's cool, takes two sides to make a market. I think the ratio is going a lot higher. Good luck.
You don't really mean that ,you talk like a Goldman guy.
But talk is cheap even for the Alumni
Before responding to the virtually ubiquitous ZH poster "HarryWanger", please be aware of just whom and what you are dealing with in this person:
http://www.minyanville.com/businessmarkets/articles/AAPL-apple-gm-psycho...
His real name is James Kostorhyz, and he is here posing as a troll in dishonesty and in disregard for the fundamental purposes of this forum. He is NOT posting here in good faith, but is purposely antagonizing those with independent, anti-establishment views and opinions for his own selfish and cynical purposes, as part of a study on "the psychology of permabears".
He believes that anyone who opposes the current widespread fraud, corruption and rampant lies within our societies and governments are "utopian" and unrealistic, pollyannish dreamers.
And for those ZeroHedgers who are advocates of sound money backed by gold, this bankster shill is already out there with one of the most disingenuous, dishonest pieces of pro-establishment propaganda on the topic, expounding on how such financial integrity is "impossible", and merely "the rants of an ideological fringe":
http://finance.yahoo.com/news/The-Gold-Standard-Solid-as-minyanville-285...
Please do NOT respond to this reprehensible troll, here or anywhere else on ZeroHedge. He is NOT here in good faith, and should be shunned!
I was pleased to finish reading all of the comments on this thread without any replies from Johnny Bravo and yipcarl.
Thank you !
Out here in the Pecos partner, we believe in three things.
BIG GUNS
BIG GRUB
BIG GOLD
Anyone have a problem with that?
You keep your toilet paper that goldman shit out. We'll take the real currency.
You really only need two of those items to survive. Make sure you have plenty of food and the means to defend it. To a starving man a can of soup is worth more than an oz. of gold. See my above post of 13 reasons gold is problematic in a post collapse scenario. If you are an optimistic person, gold should store wealth as it always has.