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Will Currency Wars End With A Return To The Gold Standard?

Tyler Durden's picture




 

From GoldCore

End Currency Wars With Gold Standard? –Bloomberg Interview and FT Op-ed

Gold continues to flow from the west to east. Reuters reports that U.S. Commerce Department data showed U.S. exports of nonmonetary gold, which excludes central bank transactions, climbed by 43% to $4 billion in December from the prior month. 

That's the highest total and the largest month-on-month jump in U.S. private gold exports since September 2011, when gold rallied to a record nominal high over $1,920/oz. Hong Kong accounted for nearly half of the $4 billion.

The Group of Seven nations have reiterated their commitment to market-determined exchange rates and said fiscal and monetary policies must not be directed at devaluing currencies.

Actions speak louder than the words of the communiqué and the reality is that the fiscal and monetary policies of many members of the G7, and especially the U.S., are directed at devaluing currencies through competitive currency devaluations.

Concerns about the devaluations and the growing risk of a severe bout of inflation have led to calls for a return to fixed exchange rates and a gold standard.

Bloomberg’s Trish Regan and Adam Johnson interviewed TCW Group’s Komal Sri-Kumar and Bank of New York Mellon's Michael Woolfolk about the risks from currency wars on Bloomberg Television's "Street Smart."

Trish Regan asks whether there is a danger that “we have massive inflation worldwide for years to come?”

The answer is yes and both agree that inflation is a real risk as is a loss of credibility by central banks.

Komal Sri-Kumar is asked what the solution is and is asked about his Op-Ed in The Financial Times in which he calls for a return to a gold standard.

He replies that a gold standard today would be no different to “how good it was from 1945 to 1971.”

“It worked, the world was in prosperity, there was economic growth and there was clearly certainty in terms of what exchange rates were.”

He warns that “even in the short term there is nothing to be gained by devaluing. We have tried that in the United States. We have been devaluing through QE1, QE2 and QE Infinity, the most recent one ... we don’t have sustained economic growth.”

In his Op-Ed in The Financial Times, Sri-Kumar called for gold to be fixed just above today’s levels at $1,675/oz:

“A first step would be to fix the price of gold in dollar terms at near its current level of $1,675, with assured convertibility. To ensure that currencies are neither over- nor undervalued, the consumption basket (or the hypothetical loaf of bread) should be valued at roughly similar levels in different currencies at fixed rates against the dollar.”

Bank of New York Mellon's Michael Woolfolk says that you could back the dollar with gold as “the value of gold would have to be astronomically high to back the money supply”.

“At the time of the 1960’s a dollar was a unit of currency and $35 bought an ounce of gold, but the velocity of money is so much greater now the price would need to be higher”, Columbia University educated Kumar said.

The benefit of the gold standard was that there was a fixed exchange rate. 

“If we went back to the gold standard you would be looking at a global recession,” says Michael Woolfolk. “We don’t have enough gold and it’s not growing fast enough”. 

Kumar disagrees that by using a gold standard and that having it fixed exchange rates, the certainty would increase global trade and overall global production.

“The price of gold would have to be astronomically high, plus you couldn’t guarantee that all countries have different interest rates set”?

“Michael, I don’t think the inflation would be much higher if the country submits itself to a fixed exchange rate” said Kumar.

Sri-Kumar  concluded the following:

During the Bretton Woods period the The Vietnam War pushed the inflation up as the U.S. had to print dollars to finance a war. Then Nixon abolished the gold link in August of 1971 was death net. After that, money supply increased by 10% in one year and this was not consistent with the fixed exchange rate. If you had not done that we would have avoided the push up in inflation in 1973-1975 and the subsequent increase in oil prices in 1979.

This debate shows how gold is being seen as money and as a safe haven asset again, and shows the silly nature of the ongoing suggestions that gold is a ‘bubble’.

NEWS 

U.S. gold bars and coins find new home overseas on Asian demand - Reuters

Gold Rallies From Lowest in a Month on North Korean Nuclear Test - Bloomberg

Gold Declines to Lowest in More Than a Month; ETP Assets Drop - Reuters

Gold now oils the wheels of Iran’s economy – The Times

COMMENTARY

Video: Would Returning to Gold Standard End Currency Wars? – Bloomberg

Fix Gold and Exchange Rates To Revive Growth – Financial Times

Video: World's Most Gold-Hungry Country? Not the U.S. - Bloomberg

A Brief 2000-Year History Of Silver Prices – Commodity HQ

Year of the Snake is a Year to Buy Gold – SCMP.com

 

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Tue, 02/12/2013 - 11:59 | 3236738 blindman
blindman's picture

http://maxkeiser.com/2013/02/12/kr405-keiser-report-debt-junkie-nation/c...
[KR405] Keiser Report: Debt Junkie Nation
Posted on February 12, 2013 by stacyherbert
.
“We’ll know our disinformation program is complete when everything the US public believes is false”
= William J. Casey, 1981
.
Tom Waits – Mr. Siegal
http://www.youtube.com/watch?v=YH4KM1uYPq8

Tue, 02/12/2013 - 12:01 | 3236745 gold-is-not-dead
gold-is-not-dead's picture

Nope, the market said it will be BTC standard, gold isn't sterile and transferable as btcs...

Tue, 02/12/2013 - 12:14 | 3236783 BaBaBouy
BaBaBouy's picture

Barbarism Revisited ...

GOLD $50K ...

Thats The Only Way Out Of This Keysenian Karnaige ...

Tue, 02/12/2013 - 12:17 | 3236804 true brain
true brain's picture

"the gold stock will have to be astronomical to have a gold standard."

I am so sick of hearing this. You must adjust fiat currency to fit the amount of gold. POint of gold standard is to make impossible money printing and avoid all ill consequences thereof; not the other way around. Dumb ass economists.

So what if the gold price is 50K. It would be like before when you can buy a slave or bribe Obama with a gold coin. no difference.

Tue, 02/12/2013 - 12:24 | 3236828 LawsofPhysics
LawsofPhysics's picture

"So what if the gold price is 50K. It would be like before when you can buy a slave or bribe Obama with a gold coin. no difference."

-------------------------------------------------------------------

Not quite, unless you know of some new technology that allows you to call a refined ounce of gold or coin into existance with the "click of a button".

Wake the fuck up, the real issues are about trust, power and control and the failure to prosecute fraud and insure REAL CONSEQUENCES for bad behavior.  NOTHING will change so long as a select few can simply create money out of thin air with little to no fucking effort.

Truly free markets insure that compensation is proportional to the true value of one's labor.  Remind me, what's the real value of adding zeros to an account with a fucking computer?  Time to eat the fucking paper pushers and destroy this bullshit faux financialization of everything bullshit eCONomy.

Long anything of physcial value and the means to protect it...

Tue, 02/12/2013 - 12:37 | 3236855 economics9698
economics9698's picture

“If we went back to the gold standard you would be looking at a global recession,” says Michael Woolfolk. “We don’t have enough gold and it’s not growing fast enough”. 

This guy is a ignorant man.  It does not matter how much goal there is prices will adjust.  Companies do not care about prices they care about profits.

Also if gold is monetized then DO NOT fix exchange rates.

If country A gets a trade advantage and gold flows into the country the price of gold will fall and imports become cheaper, the opposite in the country with a trade deficit.

Also when the price of gold goes up more will be mined, and when the price goes down less.  Just like any commodity.

Murray Rothbard destroyed this myth decades ago that there was not enough gold.  It does not matter how much gold there is, prices will reflect the supply.

They throw this shit out there I tell my students to say “okay let’s use silver.” This shuts them up.  Plenty of silver out there.

When the USA went back to a gold standard in 1879 and off the fiat the economy grew 84% in the next 10 years.

These guys are ignorant or tied into the Federal Reserve criminal organization.  They might even be economists paid to disseminate propaganda.

Ignore them.

We know Tyler use to make his living on the Ponzi, some of them old feeling bubbling to the surface?

 

 

 

Tue, 02/12/2013 - 12:59 | 3236953 fourchan
fourchan's picture

no the central bankers wont allow an honest money system, one they cant devalue to zero, neither will the free for all spending govenment.

 

we will get a one world currency or a 3 zone currency controlled by the same people who created the system of theft we have in place now.

Tue, 02/12/2013 - 13:03 | 3236973 blindman
blindman's picture

that is their plan and the sign by which you will know them.
mark on the head and all that.....

Tue, 02/12/2013 - 13:16 | 3236990 LawsofPhysics
LawsofPhysics's picture

So the world ends up with a single "official" currency and multiple markets and currencies in reality.  Sweet, I see numerous opportunities in such a "Bangkok" or "New Deli" world.

Tue, 02/12/2013 - 12:17 | 3236806 LawsofPhysics
LawsofPhysics's picture

That or WWIII.  Human societies have been here before.  Just remember, when fraud is the status quo, possession is the law.

Tue, 02/12/2013 - 12:15 | 3236799 Thisson
Thisson's picture

It's moronic to push a digital currency where: (1) there are no barriers to entry from competing digital currencies; (2) there is a complete digital record of every transaction chain.  You think you have privacy using bitcoins?  Think again!!

Tue, 02/12/2013 - 12:37 | 3236872 blindman
blindman's picture

"what is this mysterious "market" to which you refer?"
he asked. see ...
"We'll know our disinformation program is complete when everything the US public
believes is false"
= William J. Casey, 1981

Tue, 02/12/2013 - 13:17 | 3237014 Renewable Life
Renewable Life's picture

No, it will end in a REAL WAR! A real BIG one!

Tue, 02/12/2013 - 13:42 | 3237097 blindman
blindman's picture

what if they gave a war and nobody came?" ...
the vietnam (conflict overseas) war, that has been studied for
what it was, mostly a "war", attempt at occupation to steal
resources and money from every available source in sight including,
perhaps primarily, the treasury of the usa. people don't think anymore,
they act and play like they are thinking and that is close enough for
t.v. and most audiences.
.
"Though repeated or rephrased in the 1960s to protest the Vietnam War, the original phrase came a poem by Bertolt Brecht, written in the 1930s.

The entire poem is:

"What if they gave a war and nobody came?
Why, then, the war would come to you!
He who stays home when the fight begins
And lets another fight for his cause
Should take care:
He who does not take part
In the battle will share in the defeat.
Even avoiding battle will not avoid battle.
Since not to fight for your own cause
Really means
Fighting on behalf of your enemy's cause."

If you read the entire poem, it has the opposite meaning from what most people get from the first line."
http://answers.yahoo.com/question/index?qid=20080328194631AA3v0ZD
.
but further consideration must lead on to think concerning the
objectives, or are we to fight the biggest global war in the history
of men and women with no objective or coherency? oh my, we are so close.
.
CRAZIER THAN HELL
http://johntrudell.com/
.
Think ft. John Trudell
http://www.youtube.com/watch?v=DsAnIpt3zcE
.
there is nothing new, it is all known and has been
said. is always said but ignored for the objectives
and agenda of the top psychopaths, your leaders. get that
the president, on tuesdays, has his psychopathic expression
sessions with close friends and allies and there, they
decide who they will execute. no courts, legal defense
and no charges. just extermination. that is what we know
to be psychopathic. no? so, who will line up and join the
ranks and be the fodder for the way of life based on
psychopathy? sad truth? ,,, the majority of desperate
young men, or at least a significant minority.
.
the war has come to YOU !
.
John Trudell: Introducing Coherency Into The Reality of Energy
http://www.youtube.com/watch?v=DSct9DcV1hY

Tue, 02/12/2013 - 13:51 | 3237116 walküre
walküre's picture

+1 for your efforts to educate the people on Brecht

I'd argue Brecht on his convictions here though. You can stay away from war, get away with it and see the light of day when those engaging in war are done fighting. Refuse to fight and perhaps get killed in your home by the goons or die on the battlefield. What's the fucking difference in the end? But just like religion, the thought provokes "honor" and "decency" in every man and therefore the man will probably chose to fight. That's how sheep think.

Tue, 02/12/2013 - 14:01 | 3237143 blindman
blindman's picture

the war to which i refer is in the mind and
the battle field is the heart, the ground to be
won. victory is always in the silence of things,
the unknown, unstated spaces between the words and
the senses.
a poem.
.
Sam Stone - John Prine
http://www.youtube.com/watch?v=Sl9ZkYViEIs
.
this song , in the end, should make one think
after the feeling has done its thing.

Tue, 02/12/2013 - 12:46 | 3236906 seek
seek's picture

While I am a proponent of bitcoin, that's a pretty unsupportable statement. However, given that BTC itself can be exchanged for gold, it's not a stretch to think we could have a nation-independent gold standard with BTC as the mechanism of exchange. To assert that BTC is superior to gold is a huge stretch at a bare minimum.

Tue, 02/12/2013 - 12:00 | 3236746 Canadian Dirtlump
Canadian Dirtlump's picture

Any concept that this would somehow be done by mongoloid western governments in any way other than kicking and screaming well after there was blood in the streets in my mind, is unthinkable.

 

They've abandoned many easier smart / responsible things to do. Besides, you need gold for that to work.

Tue, 02/12/2013 - 12:06 | 3236771 Skateboarder
Skateboarder's picture

I think the current nation-state gold hoarding we are seeing is pretty classic. Fiat dies, governing bodies scramble for hard asset. It doesn't matter if Au comes out the winning hard asset - it's at least something physical that can be used to reset the beast with some realistic inputs.

Global overlords behind the curtain are the only surefire winners in this game - everyone else is playing hot potato.

Tue, 02/12/2013 - 12:21 | 3236820 walküre
walküre's picture

Look at the blood lines. They've been winning since Christ was an infant.

Tue, 02/12/2013 - 12:38 | 3236877 FeralSerf
FeralSerf's picture

No -- they're a different group.  They're from eastern Europe.  Jesus of Nazareth was dead for the better part of a thousand years before this tribe started becoming the goldsmiths and jew-elers.

Tue, 02/12/2013 - 13:53 | 3237119 Go Tribe
Go Tribe's picture

The end game here is NO standard. Not US fiat, not gold, not rubles. Standards are counter to the control of the global 1% who do not want to be told what to do by a skank America.  They will like it better when they can pay with whatever the other party wants at the time. Dollars, sure. Derivatives, sure. Gold and silver, sure. The transactional diversity from HFTransaction computers will be dizzying. It will mark the end of representative government as well.

Tue, 02/12/2013 - 12:01 | 3236748 Unprepared
Unprepared's picture

If central banks are engaging in full scale conventional currency wars, are gold-bugs militia?

Tue, 02/12/2013 - 12:08 | 3236774 Desert Irish
Tue, 02/12/2013 - 12:59 | 3236911 blindman
blindman's picture

" ...
These extremists, sometimes known as "sovereign citizens," believe they can live outside any type of government authority, FBI agents said at a news conference.

The extremists may refuse to pay taxes, defy government environmental regulations and believe the United States went bankrupt by going off the gold standard.

Routine encounters with police can turn violent "at the drop of a hat," said Stuart McArthur, deputy assistant director in the FBI's counterterrorism division.

"We thought it was important to increase the visibility of the threat with state and local law enforcement," he said.
( this describes the profile of the banking industry quite accurately.
except for the gold standard part as they believe money creation in the form
of fiat is their gift, from god to them, and by tinkle down theory, as in urine
on your leg, your problem or poopportunity should you be forced into the
arena or coliseum as an entertaining lion snack.).
"... from link above
.
comment: boy oh jeezuz am i glad that i am all for heavy taxes
on anything that shows any sign of life and think there should be
many more regulations, in fact so many regulations that no matter what
your environmental crime might be, there is a suitable regulation
to extract monetary value from the victim. i also do not believe that
individuals have any rights worth respecting unless they are high officials
in a corporate setting, true person. what else? ... uhhh ...
and i'm a pacifist who believes in the afterlife where, when turning the
other cheek proves to be fatal, rewards are received. lastly, i didn't
do it officer and i don't even own a vehicle that can carry more than
485 pounds of cargo.

Tue, 02/12/2013 - 14:19 | 3237204 blindman
blindman's picture

here is what the fbi should be making local law
enforcement aware of.
“We’ll know our disinformation program is complete when everything the US public believes is false”
= William J. Casey, 1981
.
Wall Street Takes Over Its Regulator
Monday, February 11, 2013 at 8:40PM
http://www.testosteronepit.com/home/2013/2/11/wall-street-takes-over-its...
.
"..“Former employees of the SEC routinely help corporations try to influence SEC rulemaking, counter the agency’s investigations of suspected wrongdoing, soften the blow of SEC enforcement actions, block shareholder proposals, and win exemptions from federal law,” laments the author of “Dangerous Liaisons: Revolving Door at SEC Creates Risk of Regulatory Capture,” a report by the Project on Government Oversight (POGO).

At fault: the revolving door at the Securities and Exchange Commission. In September 2012, hedge fund group Alternative Investment Management Association picked a new Chairman: Kathleen Casey, who’d been a commissioner at the SEC from 2006 to 2011. AIMA said in its press release that she’d be involved in “regulatory dialogues,” including “so-called ‘shadow banking.’”
" ......t.p.
.

Tue, 02/12/2013 - 12:01 | 3236752 Quinvarius
Quinvarius's picture

People keep insisting that it won't, but it will end up in a gold standard.  You need a stable unit of exchange for global trade or you get no trade.

Tue, 02/12/2013 - 12:17 | 3236805 Thisson
Thisson's picture

Perhaps more importantly, gold is a mechanism that brings global trade into balance.  Using gold you can't have countries like China and Germany continually running surpluses to infinity.

Tue, 02/12/2013 - 13:02 | 3236967 ATM
ATM's picture

I actually think it prevents countries like the USA from running deficits to infinity. Eventually they run out of gold!

Tue, 02/12/2013 - 13:14 | 3237007 LawsofPhysics
LawsofPhysics's picture

No, it goes both ways.  Are you talking about a "financial" deficit or a energy/materials deficit.  As a farmer, what if I no longer want to purchase your plastic crap and insist on gold for my produce?  What if there is gas, oil, or minerals on my land and I no longer want fiat in exchange for your access.  You won't manufacture shit without resources.

In the end, finance decides nothing, physics does.

Tue, 02/12/2013 - 12:26 | 3236838 walküre
walküre's picture

I'm with you on that. It's all about FAITH in paper promises to pay. The Japanese are inflating their debts away. Crash the currency against other paper and convert that paper at favorable prices to settle debt and liabilities. Japanese are holding US debt and have "earned" a 20% increase on that holding in 6 months. That's huge for them. Nevermind the fact that their own paper is getting worthless. They can live with that. But can the US live with a Japanese government that is going KAMIKAZE when they start selling US debt paper?

Tue, 02/12/2013 - 12:41 | 3236889 XitSam
XitSam's picture

Yes, but.  They will never willingly let the debt/fiat system be replaced by gold. "Anything but a stable unit! Give us a basket of currencies, SDRs." they will say.

Global trade will need to stop during the Chaos Time, while the current financial system collapses, debt is cleared, companies will crash and sadly, people will die. War is almost certain. Prepare accordingly.

Tue, 02/12/2013 - 13:03 | 3236974 ATM
ATM's picture

War is not "almost certain", it is absolutely certain.

Tue, 02/12/2013 - 13:16 | 3237009 Temporalist
Temporalist's picture

Fiat guarantees war and is the sole reason why there is no gold standard.  Making war is the only out for politicians and banksters so they favor fiat.

Tue, 02/12/2013 - 14:55 | 3237339 Freegold
Freegold's picture

“A first step would be to fix the price of gold in dollar terms at near its current level of $1,675, with assured convertibility." Yup, what a great idea! With assured convertibility from the USA stash that gold would be all gone whitin a week. China keeping all those Treasuries or exchange them for gold? Hahahaaaaaahaaaaaa!

History has shown us that a fixed goldstandard will never work. The rules WILL be broken at some point. The only and coming solution is a free-floating "goldstandard" The calassic goldstandard might be tried but I doubt it. But it doesn´t matter, it failed before and will fail much faster in this interconnected world. Freegold is coming by evolution of the money concept whatever polticians or centralbankers decide.

Tue, 02/12/2013 - 12:02 | 3236754 Caveman93
Caveman93's picture

Food Prices...it's whats for dinner. 

 

http://www.youtube.com/watch?v=sp8WezKTuX0

Tue, 02/12/2013 - 12:28 | 3236840 CrashisOptimistic
CrashisOptimistic's picture

Exactly.

Will currency wars return the world to a gold standard?  Of course not.  Gold has no significance to society.

The standard will be the lifeblood of civilization -- oil.  Gold would obviously have its transactions taxed to oblivion were it ever to become a systemic threat to society.  Oil is immune to that because it's a necessity, like air.  Without it, cities die.

The Brent Vigilantes, as coined by Tyler yesterday, are going to decide everything.  They are immune to decree.

Finance decides nothing.  Physics decides everything.

Tue, 02/12/2013 - 12:11 | 3236757 francis_sawyer
francis_sawyer's picture

The golden rule... He who has the gold makes the rules... [aka: 'The LEAD rule']...

Tue, 02/12/2013 - 12:12 | 3236786 Sudden Debt
Sudden Debt's picture

Well... India has a shitload...

 

NEXT QUESTION:

If somebody OWNS AND HOLDS all the gold... but has a army that carries bamboo sticks....

SIDE NOTE:

THEY USE THE SWASTIKA AS A SYMBOL OF LUCK!!!???!!!

AND THAT'S WHY WE NEED TO ATTACK INDIA!!!! ASAP!!!!

 

Tue, 02/12/2013 - 12:15 | 3236797 francis_sawyer
francis_sawyer's picture

I don't see anybody INVADING India...

Tue, 02/12/2013 - 12:26 | 3236839 Sisyphus
Sisyphus's picture

... but has a army that carries bamboo sticks....

 

....rrright....

 

https://en.wikipedia.org/wiki/Equipment_of_the_Indian_Army

Tue, 02/12/2013 - 12:42 | 3236880 francis_sawyer
francis_sawyer's picture

they have their nukes attached to the end of bamboo poles... you didn't know that? 

~~~

All joking aside, that wasn't even my point in the first place... Just as with guns... There is a BIG DIFFERENCE between 'centralized' & 'de-centralized' ownership...

INDIAN(S) have gold... Just as AMERICAN(S) still have guns... Play 'keep-away' from your government for as long as you can...

Tue, 02/12/2013 - 14:32 | 3237267 DosZap
DosZap's picture

Sudden Debt

Don't forget RUSSIA and CHINA.........................Russia in now the worlds largest oil producer, and they are selling their crude and buying GOLD, tons of it,(since Putin came on the scene they have been buying ALL they can get) as is/has been China.

China IMHO is going to pull a fast one and back the Yuan with Au, and will become the defacto Reserve Currency.

Add ALL the East Asian countries and you can see where the WEST's leftover supplies are going, never to return.

The 22,000+ tons of gold held by India is in the hands of their citizens,NOT their Banks,or Government.(official stats show they hold more than all other countries combined(at least that is reported).

You would play hell taking it away from over a billion individual families.

Tue, 02/12/2013 - 12:05 | 3236763 tahoebumsmith
tahoebumsmith's picture

All you have to do is look at who is stacking the most to find your answer? Here is a hint...Who is stacking the most BRICS of gold?

Tue, 02/12/2013 - 15:00 | 3236764 Bastiat
Bastiat's picture

When the stockpiles are pissed away, suppressing price, and the demand rubber finds the supply road, the price will in nominal fiat will indeed be astronomical whether the wise economists like it or not.

Tue, 02/12/2013 - 12:06 | 3236766 cluelessminion
cluelessminion's picture

I know this is a bit off topic but I need some advice.  I have a small amount of savings to invest and I was thinking about getting this:

http://www.jmbullion.com/2013-american-silver-eagle-500-coin-monster-box/

 

It's a 500 ounce box of silver american eagles.  Like I said I don't have much money to invest, but I'd like to have some exposure to PM's.  I was thinking this would be better than gold because small amts of silver would be more "tradeable" than say a gold coin.  Is this a sound idea?  Maybe I should wait and see if silver prices drop a bit more?

Tue, 02/12/2013 - 12:20 | 3236788 Dr. Engali
Dr. Engali's picture

First of all you have to ask yourself why you are buying precious metals. If you are buying them because you don't trust the fiat currency then don't try to be cute and time the market. If you have money to "invest" in precious metals then put it to work, stash them away in your canoe and forget about it. If you are worried about buying at the bottom then buy some now and hold onto some cash to buy on a dip. Personally I buy regularly regardless of where the price is.

Tue, 02/12/2013 - 12:14 | 3236795 francis_sawyer
francis_sawyer's picture

Why don't you just buy a few rounds from a local coin shop [as a starter] to see if you like the idea... Do whatever you want...

Tue, 02/12/2013 - 12:16 | 3236801 achmachat
achmachat's picture

only do this is you can afford to put it away and not look at it or the silver spot price for at least a year.
If you qualify for this, go ahead, get the mint box and be happy.

Tue, 02/12/2013 - 12:19 | 3236814 GrinandBearit
GrinandBearit's picture

90% US junk is better, especially for a first time Ag purchase.

... or maybe you work for JMbullion and are simply spamming (?)

Tue, 02/12/2013 - 12:20 | 3236821 TheGardener
TheGardener's picture

No chance he is spamming, he is only here 2 years and 43 weeks and needs some advice on silver...

Tue, 02/12/2013 - 12:27 | 3236824 GrinandBearit
GrinandBearit's picture

Doesn't mean anything.  JMbullion is one of the new kids in town.

Tue, 02/12/2013 - 14:34 | 3237274 SilverIsKing
SilverIsKing's picture

I vote spamming.  2 year member and still doesn't know the deal?  I find that hard to believe (No Maxwell Smart).

Tue, 02/12/2013 - 12:19 | 3236815 HungryPorkChop
HungryPorkChop's picture

Just be sure to buy from a reputable dealer no matter what you purchase.  There were some recent articles that fakes are beginning to emerge and salted into rolls. 

 

Don't forget about pre-1964 silver coins if you are interested in 'tradeable' silver in small denominatioins.  Be sure to check out actual metal values of the coins on coinflation dot com before spending your hard earned cash.

 

 

Tue, 02/12/2013 - 14:35 | 3237279 whirling tword ...
whirling tword freedom's picture

Yep. Also on the pre 1965 silver, ebay is a good place to find the pulse on what it's going for today. coinflation.com will give you the actual silver price in toay's dollars but, there is a premium on coins... even pre 1965 coins. After that, I'd still find a known dealer of coins. You don't know what will arrive if you get them on ebay. ( unless you know good dealers there )

Tue, 02/12/2013 - 12:26 | 3236837 dick cheneys ghost
dick cheneys ghost's picture

Trade ur Rothschilds Script for Silver, ass wipe, land or cans of peas.............just get rid of that fake money

Tue, 02/12/2013 - 14:37 | 3237282 Bob Sacamano
Bob Sacamano's picture

In that quantity, I would suggest Tulving (www.tulving.com) might have a better all-in price. 

Tue, 02/12/2013 - 12:05 | 3236767 medium giraffe
medium giraffe's picture

The first leader to adopt a gold backed state currency will get eaten by the Creature from Jekyll Island...

Tue, 02/12/2013 - 12:07 | 3236772 Dr. Engali
Dr. Engali's picture

"The Group of Seven nations have reiterated their commitment to market-determined exchange rates and said fiscal and monetary policies must not be directed at devaluing currencies.

 

Can we do away with the pretense that markets exist today? 

Tue, 02/12/2013 - 16:41 | 3236843 TheGardener
TheGardener's picture

"must not be directed at devaluing currencies."

Let`s start to devalue savings, labor, standard of living.

Currencies will be of lesser concern...

Tue, 02/12/2013 - 12:08 | 3236775 walküre
walküre's picture

I'm not done stacking yet. Just let 'em talk some more.

Tue, 02/12/2013 - 12:08 | 3236776 buzzsaw99
buzzsaw99's picture

A return to the gold standard means an end to globalization. Another benefit imo.

Tue, 02/12/2013 - 12:48 | 3236914 ParkAveFlasher
ParkAveFlasher's picture

Nice callout.  Globalization the generational hail mary of the federal reserve's dollar monopoly.  Like a vengeful AIDS victim hitting an orgy unprotected.

Tue, 02/12/2013 - 12:59 | 3236957 Meat Hammer
Meat Hammer's picture

Humanity would slow down and people might actually conduct business in a face-to-face, handshake manner again.  I think a gold standard would be great for mankind.

Tue, 02/12/2013 - 12:08 | 3236778 pragmatic hobo
pragmatic hobo's picture

but which country will benefit from the gold standard?

Tue, 02/12/2013 - 13:00 | 3236958 ParkAveFlasher
ParkAveFlasher's picture

Only those that produce something worth trading gold for, and only if they can produce it efficiently.

Tue, 02/12/2013 - 13:48 | 3237108 youngman
youngman's picture

They will not go to a gold standard until they have stolen or made illegal YOUR gold....

Tue, 02/12/2013 - 14:54 | 3237334 Vooter
Vooter's picture

So if the U.S. government made it illegal for American citizens to own gold, you would just say okay and hand them your gold? I'm confused...

Tue, 02/12/2013 - 17:36 | 3237814 TheGardener
TheGardener's picture

We knew that all along but since they were trying to steal our souls too and have sold it forward anyway, why wait for
what standard they come up with ?

BTW: youngman ever heard of Nicolas Gomez Davila ?

Not asking you to go to Santa Fe de Bogota to visit his shrine-like former home. Bogota still being my favorite
hub because nothing compares to lowering down on some serious land mass and have a feeling of coming home .

Nicolas was a catholic Nietzsche inspired philosopher
that could give you more guidance than you would wish for.

Tue, 02/12/2013 - 14:22 | 3237222 Greshams Law
Greshams Law's picture

Every country would benefit, but few governments would.

Tue, 02/12/2013 - 12:10 | 3236780 Bam_Man
Bam_Man's picture

You would think that Bank of New York guy could afford something better than that $20 toupee he is wearing.

Tue, 02/12/2013 - 12:12 | 3236782 israhole
israhole's picture

"risk a loss of credibility" of the central banks?  LMAO!

Tue, 02/12/2013 - 12:13 | 3236794 Iam Yue2
Iam Yue2's picture

In a word NO.  

Tue, 02/12/2013 - 12:18 | 3236810 kralizec
kralizec's picture

Not until the Unicorn and rainbows crowd have their happy happy sideshow torn down.

Tue, 02/12/2013 - 12:15 | 3236798 alexanderstollznow
alexanderstollznow's picture

Actions speak louder than the words of the communiqué and the reality is that the fiscal and monetary policies of many members of the G7, and especially the U.S., are directed at devaluing currencies through competitive currency devaluations.

Concerns about the devaluations and the growing risk of a severe bout of inflation have led to calls for a return to fixed exchange rates and a gold standard.

 

unfortunately, this bit of self satisfying delusion is where the argument breaks down.  putting idiots on crank websites aside, it is plain to most of the world that the QE programs of the US and UK are policy initiatives with legitimate and identifiable purpose ie to stimulate weak economies. that, one might care to remember IS THE JOB OF STAFF AT THESE INSTITIUTIONS.  the notion that fx rates have been targeted has never been stated or acknowleged by these institutions, and is not necessary to explain their polices.  what does explain them?  try high unemployment and undershooting inflation.  you know those funny little things called "the Fed mandate".

a careful observer might also notice that in fact the USD has not been obviously weakened in any case.  the $index is currently sitting exactly where it was at the end of 2004, a level which happens to be dead in the middle of the range since then.  so not only is the above thesis about targeting fx completly untrue, it is attempting to explain an effect that simply does not exist.  as anyone with access to data history can readily verify.  perhaps ZH should get a bloomberg login and check some facts before writing these articles. 

 then we have the inflation argument.  god, when will this go away? 5 years of QE, and inflation can barely keep its head above water.  and you have the temerity to refer to a "growing risk"!  talk about a slow train coming.

seriously, you guys live in a reality bubble.  i see the talk about $3000 gold has diminished somewhat in the comment section of late....

 

Tue, 02/12/2013 - 12:31 | 3236857 MFLTucson
MFLTucson's picture

As long as the dollar is the prettiest pig in the pen, the US dollar will continue to do ok.  Manipulation, fraud and deception by the banks, led by Bernanke with fiat printed confetti, do nothing to change the long term outlook for Gold.  You understand nothing about currencies, inflation and Gold Bullion!  Wait, watch and see and your $3000 number will be left in the dust!

Tue, 02/12/2013 - 12:33 | 3236860 walküre
walküre's picture

Venezuela is calling. Their CB needs a new speech writer. 46% devaluation overnight and dropping.

After Newtown and the first signs of coming gun legislations, what did many Americans do the very next days and weeks? They bought guns and ammo and started hoarding.

Your friends at the CBs CANNOT ever discuss a coming gold standard in the open. All hell would break loose.

Tue, 02/12/2013 - 14:43 | 3237301 whirling tword ...
whirling tword freedom's picture

I load my own ammunition and, I've called around to some of the manufactuers that supply loading components....they say that even if there are no more orders that it will be late in the fall before we can expect to see ANYTHING on the shelves. Everything is currently being used to produce finished ammo.

If you waited to arm yourself you waited too long or, you're going to pay through the nose.

I'd suggest nobody wait until the grocery stores are bare too.

Tue, 02/12/2013 - 12:33 | 3236861 Thisson
Thisson's picture

Go away, troll!  There is nothing legitimate about the Fed, and you insult our intelligence to point to the Dollar index as evidence of the dollar's real purchasing power. 

Tue, 02/12/2013 - 12:35 | 3236868 pods
pods's picture

Surprised you can type with your head up your ass.

pods

Tue, 02/12/2013 - 12:36 | 3236869 CrashisOptimistic
CrashisOptimistic's picture

There is no question that ZH can and does become an echo chamber, but you have gone too far in the other direction.

The dual mandate of the Fed does explain the actions, but you have not recognized the extreme nature of those actions.  Why were they necessary, 4 years out of recession?  These are actions, globally, beyond extreme.  They are, we might say, desperate.

Inflation is held down by rents.  You might want to spend some time on the BLS site and understand what is actually a very good quality procedure for the computation of inflation.  It is heavily loaded by rent, because rent is the bulk of an American's monthly budget.

But This Is Not So Overseas.  Other countries do not have housing/rent as the bulk of their monthly budgets.  Food costs may be.  They DO have serious inflation problems.  Argentina certainly does.

Beyond all this, as the underlying explanation for it all, spend some time and learn about EROEI.  It decides your future.

Tue, 02/12/2013 - 12:41 | 3236883 medium giraffe
medium giraffe's picture

I think it's quite obvious that the USD has been significantly weakened. The QE mechanism can only derive value for the newly minted currency by stealing value from the existing currency base. The DXY is what? A comparison to other currencies (which are all just iterations of the USD) and a basket of severely overinflated stocks. Under these circumstances, and given where we've been since 2004, it's quite telling that the USD hasn't moved. If it had maintained it's value against everything else, then would this be the case or would it be higher in comparison? Inflation is with us, and has been for some time  - but it's not going to show up in Gold prices as they have been deliberately suppressed in order to maintain the validity of fiat. Please do not be condescending, we're really here for the empowerment of all through shared knowledge and experience. 

Tue, 02/12/2013 - 12:47 | 3236910 LawsofPhysics
LawsofPhysics's picture

" 5 years of QE, and inflation can barely keep its head above water. "

-----------------

Really??!?!!?  What is the cost of food, fuel, education, and healthcare relative to the 2008 price in dollars (my wage) again?

Totally fucking stupid, must be my "lying eyes" then.  Moron.

Tue, 02/12/2013 - 12:48 | 3236916 jimmyjames
jimmyjames's picture

a careful observer might also notice that in fact the USD has not been obviously weakened in any case.  the $index is currently sitting exactly where it was at the end of 2004, a level which happens to be dead in the middle of the range since then. 

***************

Yes the $ index has been trading flat since 04-but another currency has not been trading flat since 04 and who could ask for more--a strong currency in which to trade a stronger currency for--in order to gain buying power-

http://tinyurl.com/alh8qgp

Tue, 02/12/2013 - 14:22 | 3237224 Vooter
Vooter's picture

"5 years of QE, and inflation can barely keep its head above water."

LOLOLOL...using WHAT measurement? You're not going to REALLY try to quote the U.S. government's inflation numbers, now, are you? Tell me you're not going to do that. Because as we know, that would make you a fucking idiot. Do us a favor: Make a list of everything you can think of that's gone down in price over the last five years, and then make another one of everything that's gone up in price over the same period. Let us know what you come up with...

Tue, 02/12/2013 - 12:17 | 3236807 hairball48
hairball48's picture

A "fixed price" gold standard will not work. The price of gold needs to be "fixed" by the free market if it is to work at all.

 

Tue, 02/12/2013 - 12:23 | 3236808 MFLTucson
MFLTucson's picture

 

 

The fiat whores will do their very best to perpetuate the current fraud on the sheep.  As long as the Wall Street Jewish banking whores are making money they don’t give two shits about the rest of the world or the US economy, hence, only if this trash can make money on Gold will the Gold standard be considered.  

 

 

Tue, 02/12/2013 - 12:20 | 3236817 kensdad
kensdad's picture

And despite the fact that more credible people are talking gold & gold standard, and despite the fact that more countries are stockpiling gold, and despite the fact that Germany wants to repatriate its gold, and despite the fact that Japan is about to unleash a new unprecendented round of money printing, and despite the fact that the Swiss central bank has renounced its history of sound money, and despite the fact that some of the smartest money managers with the best long-term track records are going long gold in massive size...

Gold continues to trade like a piece of shit.

Tue, 02/12/2013 - 12:25 | 3236835 MFLTucson
MFLTucson's picture

Gold continues to trade like a piece of shit.,,,,In the US sewers in Chicago.  At least finish the sentence.  In the rest of the world, they are grabbing cheap Gold supressed by the US gangsters!

Tue, 02/12/2013 - 12:29 | 3236852 kensdad
kensdad's picture

Yes.  Thank you for finishing my sentence.  You are correct.

Tue, 02/12/2013 - 14:16 | 3237198 Vooter
Vooter's picture

"Gold continues to trade like a piece of shit."

Then sell yours...what are you waiting for?

 

Tue, 02/12/2013 - 12:24 | 3236829 Smuckers
Smuckers's picture

If you gild it, they will come.

 

Tue, 02/12/2013 - 12:31 | 3236854 aleph0
aleph0's picture

“A first step would be to fix the price of gold in dollar terms at near its current level of $1,675, with assured convertibility.

 

"with assured  convertibility"

 

Ahem ... is this a joke ?

 

More like $10,000 to "ensure" convertibility.

Tue, 02/12/2013 - 13:04 | 3236975 seek
seek's picture

Outstanding US Debt is ~ $15T. 147.4 million ounces of AU in US Treasury.

Just the math on that says value needs to be > $100,000 an ounce.

Tue, 02/12/2013 - 13:32 | 3237060 XitSam
XitSam's picture

I'm ok with that. And at the current ratio of 50:1, silver would be $2,000/oz.

Tue, 02/12/2013 - 15:04 | 3237359 The Heart
The Heart's picture

"...silver would be $2,000/oz."

When this happens, a loaf of bread will cost you $6,000 DOLLARS.

Tue, 02/12/2013 - 23:18 | 3239278 XitSam
XitSam's picture

I don't think so. Like anything, there is more or less demand for money at various times. I believe there will be high demand for (real) money and it will be overvalued in dollar terms. But even at say, nominal 1964 prices, a loaf of bread was about a quarter, roughly 0.25 x .71silvercontent = .18 oz of pure silver or $355 per loaf of bread but probably less. You may want to stock up on wheat if your theory is correct, 3 oz per loaf sound like a profitable business.

Tue, 02/12/2013 - 14:38 | 3237287 DosZap
DosZap's picture

Outstanding US Debt is ~ $15T.

Latest official updates are over 16Trillion and counting.

Tue, 02/12/2013 - 17:58 | 3237960 seek
seek's picture

It's hard to keep up!

Tue, 02/12/2013 - 13:35 | 3237075 Winston of Oceania
Winston of Oceania's picture

" fix the price of gold "

That's where the problem lies, you can't fix the price of gold.  The value of the gold remains relatively stable and the amount of worthless script needed to aquire some fluctuates from paper exchanges naked shorting their shares...

Tue, 02/12/2013 - 12:35 | 3236863 Laser Shark
Laser Shark's picture

There's a reason oil is called black gold.

You can't fly a Boeing 747 by burning gold.

Tue, 02/12/2013 - 12:38 | 3236875 xavi1951
xavi1951's picture


Will Currency Wars End With A Return To The Gold Standard?

Excuse me but we have NEVER been on a Gold Standard.  We were on a Silver Standard with a Gold Exchange.  Big difference.

Tue, 02/12/2013 - 12:42 | 3236892 FeralSerf
FeralSerf's picture

“Money is gold, and nothing else.” JP Morgan, 1912

http://golden-rule.org/2011/08/18/money-is-gold-nothing-else-jp-morgan-1...

Tue, 02/12/2013 - 12:40 | 3236881 KRUZER
KRUZER's picture

,,,,,,,,,,for clueless(is not painless),,,,,do like i did in 08,,,,buy the fucking box and like Ron Poppiel,or Lefty, would say ,,,,forget about it,,,,that what i did.

Tue, 02/12/2013 - 12:53 | 3236918 Flakmeister
Flakmeister's picture

No.....

No oil importing nation would last very long....

 

Tue, 02/12/2013 - 12:55 | 3236940 Paracelsus
Paracelsus's picture

Right,the rest of the world have woken up to the mischief of the FED.

Gold is used as a store of value,or as a hedge against future instability.

With all the toxic derivative trash out there,they are doing to GS what GS has done to them.

If there is a secret cabal trying to destroy the Central Banks fiat system and return to gold,they are looking good on their game plan.

Tue, 02/12/2013 - 13:11 | 3236998 Bunga Bunga
Bunga Bunga's picture

I never made an attempt to ask this question, because it is way too stupid.

Tue, 02/12/2013 - 13:23 | 3237028 strangewalk
strangewalk's picture

The gold depository at Ft Knox and the New York Fed's underground vaults combined contain roughly one troy ounce of gold for each person in the US. But how many digital dollars are out there in the uncountable global data-bases, and in what esoteric forms (i.e. derivatives)? Gold would have to up "astronomically"--yes, that is correct. 

Tue, 02/12/2013 - 14:13 | 3237191 Vooter
Vooter's picture

Well, let's say, for the sake of argument, that the total money supply is $1 quadrillion. If you divide that by the estimated amount of gold ever mined--about 5.4 billion ounces--you get a gold price of about $180,000 an ounce. That's obviously many, many times the current price, but I wouldn't call it astronomical. I'd call it CORRECT...

Tue, 02/12/2013 - 13:25 | 3237031 Tango in the Blight
Tango in the Blight's picture

I also live east from the US here in the Netherlands and recently bought some US silver coins, an Eagle, a Buffalo, ten pre-1965 Roosevelt dimes, two 1945 Walking Liberties. Ebay rules!

Better stack up Americans or you won't see any of these items in your lifetime again.

Tue, 02/12/2013 - 14:15 | 3237194 Joebloinvestor
Joebloinvestor's picture

We could go back to a gold standard, and all that would do is empower even more fraud.

A fiat system would work if they would prosecute and incarcerate, but since it is a government SCAM, forget that.

Tue, 02/12/2013 - 14:20 | 3237213 yrbmegr
yrbmegr's picture

There is a risk of everything.  How's that for a prediction that can't be wrong?

Tue, 02/12/2013 - 14:25 | 3237232 Clesthenes
Clesthenes's picture

The answer is yes.

But the gold standard won’t be established by “official” thieves: they must first answer to crimes beyond counting.

All their posturing on the topic is nothing but diversions, aimed only to buy more time to take more booty, and ruin more lives.

The gold standard, instead, will be established by private parties.

And I suggest that they not make the same mistake I made: do not provide your service until AFTER you have accumulated the power needed to protect it.

I established a gold-based banking service in 1976 and operated it for 28 years before I was judicially assassinated by a classic inquisition perpetrated by the IRS and DoJ.

We are dealing with a network of criminal and useful-idiots classes that has been operating continuously for at least 4,000 years.  Don’t think you can oppose them armed only with the indoctrination they have dumped in your head.

Tue, 02/12/2013 - 14:41 | 3237296 blindman
blindman's picture

when it comes to official standards you can be sure
the officials or their employers have found the way
to avert, disregard or otherwise game it to the
general disadvantage of the general public and for
the good of the community. go figure.
11 February 2013
Expecting the Unexpected: A Litany In Times of Plague - Diogenes the Dog
http://jessescrossroadscafe.blogspot.com/2013/02/expecting-unexpected-li...
.
"The Tale of Alexander and Diogenes
There is a famous and almost certainly apocryphal story about the cynic philosopher, Diogenes, which was related to us by Plutarch.
As you know, Diogenes believed in the mastery of the self. He was considered to be eccentric and did outlandish things such as walking about Athens in the daytime with a lit lamp, 'looking for an honest man.'
"According to one story, Diogenes went to the Oracle at Delphi to ask for its advice and was told that he should 'deface the currency.' Following the debacle in Sinope, Diogenes decided that the oracle meant that he should deface the political currency rather than actual coins.
He traveled to Athens and made it his life's goal to challenge established customs and values. He argued that instead of being troubled about the true nature of evil, people merely rely on customary interpretations."
He was said to have lived simply, 'like a dog,' and that this is how the Cynic school of philosophy received its name. ....
....
There is another version of the meeting between Alexander and Diogenes. In it, Diogenes was staring at a pile of human bones when Alexander approached, and asked him what he was doing. "I am searching for the bones of your father," said Diogenes, "but cannot distinguish them from those of a slave.”
The Corinthians built a pillar in Diogenes memory, on the top of which was a dog made of Parian marble.
And so passed the glory of Greece, and the grandeur of Rome." jca

Tue, 02/12/2013 - 15:05 | 3237352 whirling tword ...
whirling tword freedom's picture

I have a question for you PM guys:

Have all of you guys dumped all your savings in your boating accidents?

I've only currently lost about 1/3 of mine but, given the current circumstances, It may make more sense to pay early withdrawl taxes and such.  Better to get part of something than all of nothing.

I guess I've been hedging but, the more I see.... i don't really see how I could go wrong but, boy that's a big move.... kiind of hard to do for me.  It does seem like now is the time to shit or get off the pot.

Tue, 02/12/2013 - 15:15 | 3237403 The Heart
The Heart's picture

"I have a question for you PM guys:"

A question to answer a question.: It is the summer of 1944 and you are in downtown nazi Berlin stressing the nightly bombings pounding all peace into the bloody ground with the allies fast approaching your county lines asking yourself, what do you do and what is really important to you now?

Follow your Heart!

Tue, 02/12/2013 - 15:50 | 3237548 whirling tword ...
whirling tword freedom's picture

I'm not sure if that made it easier or harder.  heheh

My heart is fickle but, what I see is that our current system can't be sustained.... I know that the folks running the show will never give up and change the rules every time something doesn't go their way.  They'll ban short selling, change mark to market.... whatever works for them... and, they'd be happy to put us all out on the street if it benefited them.

I, like many here have come to learn and almost always only listen because, I really don't have much to offer in the way of financil acumen... but, that is why I'm here.

So, I have no idea what will happen next but, I'm pretty sure it won't work out in my best interest unless I do something.  Well, I have done something but, I'm wondering if I should be doing more.

So, I have a place in the country where my small farm is almost paid off.. no debt and own all vehicles and tractor etc.  Have a lake where you may find some PMs if you looked hard enough for them but, that may still not be enough.

Tue, 02/12/2013 - 15:52 | 3237561 thisandthat
thisandthat's picture

Wouldn't most PM guys have fled way back in the 30s? Otherwise, hide your stash and run for cover...?

Tue, 02/12/2013 - 15:37 | 3237512 Bobportlandor
Bobportlandor's picture

This is so simple to solve going forward. Require a Balanced budget and for every dollar over deduct 1 dollar from government employies pay checks, starting from the top.

Tue, 02/12/2013 - 16:05 | 3237589 thisandthat
thisandthat's picture

So, then...

fix the price of gold (...), the  consumption basket (...) should be valued at (...) fixed rates

I'm not really a (high pay) financial expert or anything, but, as a layman, does this sounds like a really good plan to fix (hah!) a faulty free market or what?

Tue, 02/12/2013 - 17:29 | 3237843 GreatUncle
GreatUncle's picture

People are getting all skittish, all that value they have is written on little pieces of paper that are worth? The value of paper silly.

We could have a gold standard like we could also have a silver, copper, platinum standard. It does not matter what the "asset standard" is the fundamental issue here is an "asset backed currency" that is worth more than a piece of paper. The only difficulty I see here is accepting any kind standard is it will reveal how the absolute value of debt has been growing because there was no metric called an asset to compare its growth.

The effect of Keynesian policies right in your face with no way to hide it.

Think that is why the gold standard was knowingly dumped to begin with because governments of way back had hit a brick wall in maintaining balanced economies and chose to embark on the current path. Was definitely not a way out, more a kick the can down the road until they run out of the infinite road.

Tue, 02/12/2013 - 22:25 | 3238987 Pascal1967
Pascal1967's picture

When the author wrote ... "Bank of New York Mellon's Michael Woolfolk says that you could back the dollar with gold as “the value of gold would have to be astronomically high to back the money supply”....

WAS THAT A TYPO?  Shouldn't this read, "...you COULDN'T BACK the dollar with gold as the value of gold would ahve to be astronomically high .....?

Come on, people, at least a little accuracy or proofreading is in order.

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