Why The "1%" Hates The Gold Standard

Tyler Durden's picture

By now everybody knows that the primary consequence, one which we originally predicted back in 2009 - and many have since agreed - was completely intended, of the past 6 years of unprecedented monetary policy has been to push wealth inequality to record levels, not just in the US but across the world. What may not be so clear is precisely when this period of unprecedented wealth disparity started. The answer, as the following handy chart from NPR shows, is that long before QE, the wealth gap for the 1% really started in the early 1980s, courtesy of none other than Greenspan's "great moderation."

 

More importantly, and what is certainly not known, is that between 1930 and 1970, it was only the "bottom 90%" that saw their incomes rise, as can be seen on the next chart.

 

This is how the NPR qualified this dramatic variance in wealth gaps, the first of which benefited most Americans, especially the middle-class, and which ended with a thud in the early 1970s, and the second which was unleashed in the early 1980s:

In the first phase, known as the great compression, inequality fell. Incomes rose for people in the bottom 90 percent of the income distribution, as the postwar boom led to high demand for workers with low and moderate skills.

 

At the same time, income was basically stagnant for the top 1 percent of earners. A combination of high marginal tax rates (around 80 percent) for the wealthy, and social norms, may have kept a lid on wages at the top, according to the economists who gathered the data we used to make the graphs.

 

In the last 35 years, the reverse occurred. Top marginal tax rates fell sharply. Incomes rose for those in the top 1 percent, largely driven by rapidly rising pay for top executives.

And this is how NPR tries to describe the transformation that took place: "a combination of global competition, automation, and declining union membership, among other factors, led to stagnant wages for most workers."

Sure, why not.

But while we are all speculating, there is one far more important and very critical event on the calendar that happened just as the ascent of the non-1% peaked.

 

This:

Which should also clarify just why to the "1%", including their protectors in the "developed market" central banking system, their tenured economist lackeys, their purchased politicians and their captured media outlets, the topic of a return to a gold standard is the biggest threat conceivable.

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HonkyShogun's picture
HonkyShogun (not verified) Feb 20, 2015 1:19 PM

<- Precious Metals

<- Jew bux

Cliff Claven Cheers's picture

OT:  Any one looking for a job:  This guy gets his rctm examined for a living, about 6 thousand times in the last few years.

Mark Manning knows his body well. In fact, if you were to take your index finger (gloved, of course) and insert it into his rect...

overexposed's picture

Wonder why they compare the "top 1%" to the "bottom 90%"?

What statistically does the data show (that NPR doesn't want you to see) when they compare 1% to the other 99%?

Latina Lover's picture

Anti Gold Banksters:  they hate us for our freedoms.

Bunghole's picture

These charts are barbarous.

Manthong's picture

Yeah, but they have all covered their (risk) tails with stashes.

froze25's picture

Its also impossible to be a world reserve currency and be tied to a gold standard.  You have to have a trade deficit in order to supply the dollars needed for foreign countries to trade in US dollars.  I don't support it but its a reality of mathematics.  For the record I am sure that having any entity being a "reserve currency" is not good for humanity as a whole.

Anusocracy's picture

The market will never be free until the last central banker is strangled to death with the fiber optic cable from the last algo trader.

A L I E N's picture

The NPR rendition is straight out of Robert Reich's talking book.  They completely ignore the fed/gold factor and choose political pandering instead.

Four chan's picture

gold is the enemy of the state.

Paveway IV's picture

Liberty and freedom are enemies of the state. 

GetZeeGold's picture

 

 

 

Why the 99% should own gold....but don't.

Creepy A. Cracker's picture

"The one percent" are mostly government workers.  Many get multimillion dollar (equivalent) pensions, with health care paid for, for harassing tax payers for 20 to 30 years.  On average they earn more than their private sector counter-parts.  On top of that there is zero risk of losing one's job so the pay isn't higher due to risk.  Oh, and don't forget four weeks of vacation per year after a few years of showing up to work.  Government employees are the one percent.

True Blue's picture

Because Gold itself would be the world reserve currency QED. It does not depend on pretty pictures and fiat currency "legal tender" laws to give it some arbitrary "value"; it simply Is.

It is the best possible thing (and only prima facie honest thing) that could be used as a reserve 'currency' for humanity as a whole.

Ghordius's picture

"Its also impossible to be a world reserve currency and be tied to a gold standard.  You have to have a trade deficit in order to supply the dollars needed for foreign countries to trade in US dollars. "

because without the dollar, those foreign currencies would not trade, or just not trade in USDs?

the USD greases the world trade machine, yes. and this allows the supplyier of this grease... to have a permanent trade deficit

works like a credit card

Mister Ponzi's picture

Well, ok, but these graphs don't prove causality. Maybe the fact that the marginal income tax rate was 75% in 1939, 94% in 1944 and 92% in 1953 are equally important? Today, the tax code allows Warren Buffett to pay taxes at lower rate than his secretary. These tax loopholes were also not there historically. Another reason.

FoodStampPrez's picture

Libertarians like me will say there should be no taxes because free markets. However, in our modern economy, excessive greed needs to be held in check for the benefit of society as a whole.

Mister Ponzi's picture

I haven't argued for higher taxes. I just explained which other differences than the monetary regime may have caused this result.

GoldSilverBitcoinBug's picture

The wealthy can always escape high taxes especially with Trust and Foundation who existed already at that time and enable a lot of tax evasion more or less legally, so don't try to explain this because of the "high Marxist marginal tax rate will solve everything" rhetoric because it don't works.

Search rather from QE and the drop of the gold standard.

Tax is theft, be it from 10k a year to 1 billion a year income, period.

neidermeyer's picture

Nobody ever really paid 92% or 94% ,,, there were NUMEROUS loopholes ,, most 1%ers back then paid about the same as the middle class... of course to do that they had to be funneled into tax sheltered investments ,,, my father had to buy into many of those schemes to preserve his income ... apartment complexes and such where much of the return can be written off as return of capital...

 

Warren Buffet doesn't pay income taxes on income , he pays AMT or cap gains tax ,,, don't fall for his crap... his sexretary pays income tax.

maskone909's picture

we have been on an undercover gold standard this whole time.  that is the reason CB's buy the stuff.  if we wernt on a gold standard, they wouldnt be liquidating peeps national gold reserves.  the catch is they cant admit it.  because the last thing they want is for peeps to trade FRN's for gold.  only they can have the gold.  currency of kings, not slaves.

Cliff Claven Cheers's picture

I agree, I think each is waiting for the other to go back on the gold standard so all want to be ready at a moments notice without letting on.

froze25's picture

The debtor is always slave to the creditor.  -Some where in the Bible.

graspAU's picture

“While boasting of our noble deeds, we are careful to conceal the ugly fact that by our iniquitous money system we have nationalized a system of oppression which, though more refined, is not less cruel than the old system of chattel slavery.”

-Horace Greely -1872, in writing his opinion of the National Banking Act. Greely served a short term in the US House of Representatives (NY 1848-1849). He was editor of the New York Tribune, and ran for president in the new liberal Republican party in 1872. He was the only presidential candidate to ever die during the electoral process. He died before the electoral votes were cast. Sited in US Senate Doc. 23, 76th Congress, 1st Session – January 24, 1939

LooseLee's picture

You think Al Greenspan and Bernanke were buying gold? Are you serious? I doubt the US has much in physcical form.

graspAU's picture

"Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves."
–Norm Franz, Money and Wealth in the New Millennium

gatorboat's picture

We don't have money anymore, we have scrip.  Same scrip that was printed by US Treasury in late 1700s.  It's where "worthless as a Continental" came from.  Now it's printed by the Fed.  That's the only difference.

Ok there's another difference.  Sheeple have been conditioned to using this scrip, which wasn't the case back then.  

Ok another difference.  Back then debt never would be viewed as backing for a currency.  The whole idea would be laughed at.

Mountainview's picture

It must be physical gold, paper gold is bank crap.

froze25's picture

If you really want to puke look at the .1 or .01% comparied to the bottom 90%.

tmosley's picture

This looks like two seperate events.  First the closure of the gold window halted ALL wage growth, then something else, perhaps increased Fed intervention in the markets after the S&L crisis, caused the 1% to start gaining ground.

BrosephStiglitz's picture

Financial deregulation during Reagan/Thatcher, as well as Major/Clinton, and the hammering of trade-unions.

These last few years have been unparalleled for finance, but we will soon see a transition back toward the real economy. 

That's why all of the hedge-fund managers and investment bankers are cashing in their chips (banker bonuses) despite poor performance. 

He_Who Carried The Sun's picture

Should have a different title:

 

WHY ZH HATES THE ONE PER CENT ! lol

Consuelo's picture

Gawd those are Perfect Tits...

 

froze25's picture

Too bad they are ON A MAN!

He_Who Carried The Sun's picture

You don't have enough brains to find out for sure... :-D

LooseLee's picture

Only because the 1% cheat, lie and steal. Qualities they excel in. Very few got their riches justly and morally.

reTARD's picture

AAPL and the stock market are going to the moon, while precious metals keep getting shafted. Evil pays and good gets punished.

Latina Lover's picture

They hate it because they cannot print it. No way to cheat the 99.9% by depreciating their dollars surreptitiously with the hidden inflation tax.

Thirst Mutilator's picture

With all the 'can kicking', 'extend & pretend' activity going on, the sad truth is that eventually they'll be able to PRINT THEMSELVES enough worthless currency [& otherwise use that process to manipulate prices], to be able to incrementally use it to re-purchase these & other physical assets for themselves.

 

THAT's the real tragedy... The more you stack, the more you'll eventually be ON THEIR SIDE when the switch is flipped.

 

Trust me ~ Whenever PM prices start to rise, that'll be the moment YOU KNOW, that the end is near.

BurningFuld's picture

What you want to do is create money out of thin air and give it to people that have no chance of paying it back. Then you can (in your mind) have justification to take everything they have from them. See: Greece etc.

Four chan's picture

they tried it in detroit to loot the art institute, the tribe is always at work.

GetZeeGold's picture

 

 

Who's been in charge of Detroit the last 50 years?

 

Hold on....it will come to me.

neidermeyer's picture

Detroit? You mean the city with the enormous "Black Power" fist statue at the entrance warning all that they are entering hostile territory.

 

I have no idea who is in charge there... https://www.youtube.com/watch?v=f96p-IhcZhQ

HopefulCynical's picture

you've nailed it. The whole idea is to flood the world with fiat, use it to purchase real wealth (land, PMs, other commodities, etc.), then collapse the fiat system and "own" the whole world, lock stock and barrel.

This, in a nutshell, is the banksters' agenda, which they've been implementing for centuries. Parasitic psychopaths in power suits, every last accursed one of 'em.

Thirst Mutilator's picture

What is almost hysterically funny is that it seems that they didn't even understand this for an entire decade [from about 2001 ~ 2011].

 

Then ~ ALL OF A SUDDEN realized their miscalculation in May 2011 [& tossed in the Bin Laden bullshit for good measure as a smokescreen]... I really believe that they'd previously calculated that they could 'SELL' the Lehman collapse debacle as yet another in a long series of natural 'boom/bust' cycles [which, as we all know, aren't NATURAL at all, but instead, engineered 'cullings' of exchanging debt & accrued value added labor for resource ownership title, & control].

 

They're a bunch of fucking oafs! The hamhandedness is actually comical... I'm serious when I say they're gonna have to shut down the goddamned internet to really have any hope of #winning. Dog knows they're trying to do that as we speak.

 

Edit: to be precise, they're not 'flooding the world' with FIAT. All the 'flooding' is contained strictly within, and to the benefit of, their own buyer accounts. Saavy 'outsiders' of this rigged game only, perhaps, get rewarded if they ignore the parallel propaganda, and avoid getting themselves to raid grannys tea set cupboard, to bring down the street to sell to Rube Goldberg & Sons

HardAssets's picture

It doesn't matter if they shut down the free internet. People will get creative. Thomas Paine's 'Common Sense' was nothing but a pamphlet, but it had a tremendous impact.

It is unimaginable to many people that there would be no free internet. But the underlying principles are well known - including the dangers of paper fiat money as a means of theft and control. We tend to get tied up in the day-to-day details and drama of events, but this isn't absolutely necessary.

It's too late. The cat's already out of the bag & had tons of kittens. They can't get them back in the bag again.