Video On Gold As Independent Money - Return to Gold Standard Advocated in Print and Video

Tyler Durden's picture

 

From GoldCore

Gold Seen as Less Risky Currency - Return to Gold Standard Advocated in Print and Video

Gold is marginally lower in all currencies today (USD 1,611, EUR 1,113 and GBP 983 per ounce) but remains close to record nominal highs in major currencies on U.S. and Eurozone debt concerns. With the risk free rate of return of U.S. Treasuries (Treasury bills, Treasury notes and Treasury bonds) coming into question, gold is increasingly being seen by many as a less risky asset and as a less risky currency.


Cross Currency Rates

While the focus shifted from the Eurozone debt issues to U.S. debt issues this week, gold is also being supported by currency debasement and rising inflation internationally and the now very real risk of a recession in the U.S. and a global economic recession.

This comes at a time of continued geopolitical risk from social unrest in the Middle East and Africa and from the continued risk of conflict in the Middle East.

Video: ‘Gold – Independent Money’

Asian indices were higher except for stocks in India which fell after the surprise 50 basis point interest rate rise – a sign of risk markets sensitivity to rising interest rates.

European indices are mostly lower and the FTSE is 0.1% lower after UK GDP data showed the UK may be entering a recession. UK GDP rose just 0.2 percent in the second quarter, slowing from the first quarter’s feeble 0.5 percent growth despite historically low interest rates at 0.5%.

Calls for a return to some form of gold standard become louder by the day.

Once the preserve of fringe libertarians and hard money advocates, there are an increasing number of more “respectable voices” calling for a debate on the merits of sound money in order to protect taxpayers and economies from the vagaries of fiat currencies and the modern money printing and digital creation experiment.

In recent months, joining Ron Paul, the presidential candidate, have been the President of the World Bank, Robert Zoellick, the ‘Father of the Euro’, Professor Robert Mundell and publishing magnate Steve Forbes.

World Bank chief Robert Zoellick said it was time to "consider employing gold as an international reference point."

“Gold is nobody’s liability and it can’t be printed,” Mundell told Bloomberg. “So it has a strength and confidence that people trust.”

Mundell has suggested that an improved global monetary system could be achieved by tying together the US dollar, euro and gold ( see article by Judy Shelton in Commentary section).

The Swiss parliament is soon to hold hearings on a parallel Swiss "gold franc".

Utah has already passed a state law that recognizes  gold and silver coins as legal tender in Utah.  A dozen other states are considering similar laws.

As the world monetary system and the twin pillars upon which it rests, the dollar and euro, risk unraveling, gold’s time tested attributes as a foundation of stability is being increasingly accepted.

Contributing editor to Money Week, Dominic Frisby, (who we had the pleasure of meeting with last week) has just released an excellent video - ‘Gold: Independent Money’.

A picture paints a thousand words and a video hundreds of thousands of words and this is a very informative video about our modern monetary system, fiat currencies and gold.

It shows how fiat money has led to wars, massive debt, social inequality, economic bubbles, rampant consumerism, and environmental destruction. It shows that a return to a gold standard would help ameliorate today’s monetary, financial and economic ills.

“A gold standard will not cure every social ill in the world, nor will it stop all senseless wars. Nothing will.

However, by now it should be clear to everyone that the current fiat system is good only for bankers, brokers, politicians, war mongers, and the already wealthy. Everyone else loses as inflation eventually eats away at what's left of the rapidly shrinking 'middle class'.

All fiat currencies including the US dollar are doomed. The only debate is the path it takes to get there.”

‘Gold: Independent Money’ can be seen here or see Commentary section below.

NEWS

(Reuters) -- Gold steady below record; debt talks eyed
http://www.reuters.com/article/2011/07/26/businesspro-us-markets-precious-idUSTRE7592IU20110726

(Wall Street Journal) -- Gold Hits High on U.S. Debt Divide
http://online.wsj.com/article/SB10001424053111903999904576467711152155054.html

Gold Trades Near Record as Obama Warns of ‘Deep Economic Crisis’ From Debt
http://www.bloomberg.com/news/2011-07-26/gold-holds-near-record-as-obama-says-default-would-trigger-economic-crisis.html

(Reuters Africa) -- South African strikes to spread to gold sector
http://af.reuters.com/article/southAfricaNews/idAFL6E7IQ03Y20110726

(Bloomberg) -- Dollar, Treasuries Fall on U.S. Debt Outlook
http://www.bloomberg.com/news/2011-07-26/asia-stocks-gain-u-s-futures-oil-fall-before-obama-speech-on-debt-limit.html

COMMENTARY

VIDEO: ‘Gold: Independent Money’
http://www.goldcore.com/goldcore_blog/gold-independent-money

(King World News) -- Marc Faber - The “Great (Monetary) Reset” Will Destroy Cash
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/7/25_Marc_Faber_-_The_Great_%28Monetary%29_Reset_Will_Destroy_Cash.html

(GATA) -- Murray Pollitt: End price suppression and let gold rise to reliquify world
http://www.gata.org/files/MurrayPollitt-07-19-2011.pdf

(Goldseek) -- Real Performance (Inflation Adjusted) for Commodities, DJIA, Silver and Gold
http://news.goldseek.com/SpeculativeInvestor/1311660540.php

(Weekly Standard) -- Gold Standard or Bust - Fixing the dollar before it’s too late
http://www.weeklystandard.com/articles/gold-standard-or-bust_577314.html

(Wall Street Journal) --  Video discussion on Gold: Simon Constable discusses with Mark Hulbert, John Bussey and Alan Murray
http://online.wsj.com/article/SB10001424053111903999904576467711152155054.html

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williambanzai7's picture

How long until Zoellick gets arrested for a hotel sex crime?

Pladizow's picture

Simply, reversion to the mean - and gold is historically the mean!

JoeSexPack's picture

Central banks own most gold & will control that same as paper.

 

Need competing currencies to keep them out.

 

Oil notes, tobacco certificates, airline credits, gold, silver & copper, whatever.

 

BTW, what do you look like in a wonder-bra?

rsnoble's picture

Before we get to far ahead of ourselves........do you suppose we should at least take a look inside fort knox to see if we actually have something in there besides a stack of IOU's??  Boy wouldn't that be the shits.

Other than that for whatever reason I kinda get turned on by older used up gals.  I just got an erection seeing Hillary Clinton.  Someone please help me.

Sean7k's picture

There is no hope for that level of depravity. You are doomed... :)

midtowng's picture

My only problem with the gold cheerleading is that the phrase should be, "Gold AND Silver Standard."

The Constitution says we should have a bi-metal standard of money. The inclusion of silver should give the monetary base just that hint of inflation that would keep the debt-laden masses satistisfied, while still keeping a lid on government spending. it also helps to democratise the monetary system.

pinehog's picture

Which constitution are you referring to?  Certainly not the US Constitution as there is no mention at all that states US currency must be backed by gold or silver.

baby_BLYTHE's picture

then why did the Founding Fathers bother to put it in there?

I don't see any mention of fiat paper in there either.

TumblingDice's picture

http://en.wikipedia.org/wiki/Contract_Clause

Armed with google, it took less than a minute to find that article. Do your research homie.

Long-John-Silver's picture

Just looking inside would not let you know if most of what's in there is really Gold. It could be a lot of Gold plated Tungsten. 

Gold-Plated Tungsten Bars

http://www.safehaven.com/article/15191/gold-plated-tungsten-bars-yes-or-no

GetZeeGold's picture

 

Heh....that gold in Fort Knox is only worth about $45 an ounce....if it's even there at all.

Pointless to even look I would say.....hardly worth the time.

 

antidisestablishmentarianismishness's picture

"All fiat currencies including the US dollar are doomed. The only debate is the path it takes to get there."

Yes, well, if you accept the premise then the path is the only thing that matters if you're trying to make money off this situation.  Declaring that the path is open to debate is like saying the market will fluctuate...thanks! 

Quintus's picture

So if I told you that the S&P would be at 20,000 by this time next year, the only way to make money out of it would be if I told you precisely how it would get there?

If you want to make money out of the collapse of fiat currency, or more precisely preserve your wealth, then regardless of what path to its inevitable doom it takes, just keep as much of your wealth as possible out of fiat currency and wait.

Vlad Tepid's picture

Gold standard.  The sooner the better.

Freewheelin Franklin's picture

Let the markets decide the currency. Gold is probably the best currency, but it shouldn't be forced on people anymore than a debt-based fiat currency should. Hold banks to the same standards as any other business. I could quote Vera C Smith, but I'm feeling lazy and most of you guys probably already understand free banking and competing currencies.

 

You can print money, but you can't print wheat. - Rick Santelli

JoeSexPack's picture

Agreed, central banks own most gold & will control that same as paper.

 

Need competing currencies to keep them out.

 

Oil notes, tobacco certificates, airline credits, gold, silver & copper, whatever.

cossack55's picture

Try spending it. Here is an experiment. Take an Ike dollar ($1.15 at coin shows) and present it for payment to basically any store in amerika. Most think it is foreign currency and decline. the rest call for a manager.

Id fight Gandhi's picture

Same can likely be said for the current dollar coins. I gotta try going to a fast food drive thru and paying in dollar coins.

RockyRacoon's picture

Your "experiment" falls flat.   I carry Kennedy halves, Ike dollars, and the "gold" dollars instead of the regular coins.   I've never had any one of them refused.  Never.  Some of the younger clerks look at them and ask what they are now and then, but they are to be forgiven for that.   It gives me a chance to educate.  My bank knows to give me back change in odd coins they have in the drawer and $2 bills.   I get a silver coin now and then or a 40% Ike or Kennedy now and then.   The coinage is not that difficult since the U. S. adheres to size parameters and value designations unlike a lot of other countries (like Canada) that put out dozens of different types yearly.   Having a too wide variance in types and denominations doesn't add "interest" to a nation's coinage, it adds instability.

fallout11's picture

Flip side, in 20 years I haven't found anyone yet who would give accept, for even a single cent more, a >1964 coin (90% silver content, worth substantially more than face value) versus the equivalent <1966 one (zero silver content, worth a fraction of face value). Both are worth exactly "face value" for products and services of any stripe.  The fiat currency experiment has been a complete success in terms of human acceptance, at least in the US.

RockyRacoon's picture

Really?   For really real?

How much silver coinage is still in circulation?

That should tell you all you need to know.

fallout11's picture

Really, for real really.  

Used to be quite a bit out there still, 20 years ago (or more). Dimes especially.  Except for the silver run up in 1979-80, I can't remember a single time in my life when most anyone gave a crap about the 90% silver ones, save the handful of coin collectors out there and kids, who thought the old ones were "neat" just because they were old. John Q. Public (i.e. 99% of the population), on the other hand, still traded them at face value, today exactly the same as back in 1965 (yes, I was alive for that changeover too).  No one horded 1964 coins in 1970, they were just used for change.

Rocky, I know that you collect, buy, and sell coins regularly, hence beware of confirmation bias in this regard. You're too close to the tree to see the forest. Pretty much anyone else older than 40 will tell you the same thing though, that "junk silver" collection is and always has been totally off the radar for 99.9+% of the US population. And THAT, my friend, is why there is so little silver coinage still in circulation....much like Action Comics #1, no one thought it valuable for decades, and treated it as such. Go into your favorite restaurant, say nothing, and slip one in with your regular change when you pay. I guarantee they won't even notice, much less approach you with a "discount" for your generosity.  Same as it ever was, at least in my memory.  The junk silver coins available for purchase in bulk today came from sifting through vending machine tills, payphone tills, bank rolls, and the like, where once again the average Joe had treated them at face value, and leftover "good" ones sold for melt value during the 1980 run-up.  A dime is a dime, except when the rare someone thinks otherwise.  Good luck attempting to "educate" a counterparty in a business transaction to the value, perceived or otherwise, of the article in question.  

Sean7k's picture

Very succinct video. About the right length for American audiences and it avoids becoming too complex for the American mind. Unfortunately, it ignores the historical record regarding government, banks and their willingness to suspend law in the face of any difficulty they deem to be injurous to their health and future.

Totalitarians will never willingly curb their abuse of power and influence. The only persuation that the State understands is the one it wields conclusively- coercive power. This points up the deficiency of education in a population easily flumoxed. 

Still, an ounce in the hand can have magical transformative powers. The ability to give American consumers the experience of gold or silver may be the best course of action.

i-dog's picture

"Totalitarians will never willingly curb their abuse of power and influence."

The video addresses that point. Quote:

"The best way to stop the abuse of power is to spread it as thinly and widely as possible."

The Founding Fathers also recognised the same point, which is why the Constitution retained so much power with the states---and also split the power in Washington between Congress, President and SC.

It's a shame that the American people have been so ready to support the growth of central government since the first expansion of the American Empire with the Spanish-American War in 1898 (just 12 years before the Federal Reserve made unlimited central spending so easy).

Once you let go of the horses's reins, it is very difficult to pull it up again. A lesson for "next time".

I think I need to buy a gun's picture

debt jubilee plus 5000 gold or

fofoa 36000 gold and floating gold and dollar

i'm going with fofoa as the end game for now

I think I need to buy a gun's picture

debt jubilee plus 5000 gold or

fofoa 36000 gold and floating gold and dollar

i'm going with fofoa as the end game for now

Smiddywesson's picture

When all the gold is in the hands of the banks, there is every reason for them to reverse the gold price suppression game.  They have sweeping powers to hold down gold prices, just wait when they want higher prices to make their hoard worth enough to balance their doctored books.  It is inevitable.

Roger O. Thornhill's picture

As I read it the article, I was reminded of the phrase "as good as gold." For whatever reason that meme is a deeply held belief, worldwide, and is certainly an older idea than printing limitless paper chits of dubious value.

thadoctrizin's picture

I figured out what the debt ceiling debacle is about this morning. Cnbs had a poll...do you think th US needs a debt ceiling. Imagine how easy it will be to inflate without a debt ceiling. Obviously Obama couldn't get rid of the debt ceiling unless there was a national emergency.

FranSix's picture

Dominic Frisby has an ongoing series of interviews here on Commodity Watch Radio:

 

http://commoditywatch.podbean.com/

Mercury's picture

Imagine working and saving some of the fruits of your labor (as gold), knowing that in 20, 30, 40 years it would retain it's buying power.

Imagine the state not being able to accurately calculate the amount of your personal wealth or easily lay it's hands on it.

Now try and calculate the chances of your soverign government ever fostering or even tolerating widespread personal ownership of gold.

Id fight Gandhi's picture

That's why since the history of commerce gold has been used. It will always by you the same amount of the things you need, so you cam safely save it.

If you worked hard for a whole year say 20 years ago, and saved half of that money your money would buy very little. But if you changed dollars to gold and saved it, your sweat labor would be preserved.

People need to wake up that we have been getting fucked with usury, devaluations and inflations. If anyone had a clue they'd be mad as fuck.

AUD's picture

I turned it off when he said "paper that represented safely stored gold".

That is bunk. The paper has never represented 'safely stored gold' but was merely redeemable in gold since gold is payment.

The paper actually represented real consumer goods. Ergo, consumer goods were 'monetised', rather than government bonds, mortgage debt, 'asset' backed securities......

Sean7k's picture

And who would have traded that money for consumer goods, if it had no ascertained value- based on being able to trade it for gold? Currency had to have value to be used as a subtitute for goods in a barter economy. That value came from the ability to redeem it in gold or silver. 

Futher, that value was present across currencies, eg the US use of Spanish Reales in the early years of the nation. People did not make global contracts in wheat. You even neglect the storability of a wealth instrument. Perhaps you should have watched the whole clip.

AUD's picture

That value came from the ability to redeem it in gold or silver.

Yeah, that's what I said. Maybe you should have read my whole comment

Sean7k's picture

No, you gave stonger emphasis to the idea that currency was valued in commodities, downplaying the idea that gold was the real basis of value. Try again.

AUD's picture

No, you try again. I said that currency never represented 'safely stored gold', rather, consumer goods.

 

Temporalist's picture

If it isn't safely stored how can it be redeemed?  With hope and dreams and fairy fart dust?

fallout11's picture

See also "Comex", etc.  Physical trades at a premium to paper, always has, always will.

Gold Dog's picture

Gold Dog for Treasury Secretary....I will have all this bullshit cleaned up by noon and then let my dog take over the heavy lifting!!

gordengeko's picture

http://www.dailymarkets.com/economy/2008/12/30/why-a-gold-standard-is-a-bad-idea/

~Culling the herd?~
"This is financial Armageddon. The result would be the financial equivalent of mandatory infection of the population with the Ebola virus. Maybe we could get Disney to lend a PR hand as we play “The Circle of Life” while we infect everybody with Ebola so people would be persuaded to sacrifice themselves for the Common Good."

Going to a gold standard will concentrate even more power and control in fewer hands than there is today.  Which one can only assume was the goal from the beginning.

Mercury's picture


Interesting, I think the strongest argument for a gold standard or gold ownership in general is exactly the opposite.

 

Our chief executive has been rather keen on ratcheting up fiat denominated debt in the name of the "common good" as I recall and US private wealth is arguable more concentrated than it ever has been.

Temporalist's picture

Look at the Chinese as an example.  Are they concentrating power in fewer hands by actually telling their citizens to purchase precious metals?  If the U.S. Govt. and Fed weren't so disengenuous and/or corrupt then people that didn't know better, like some of the ZHers, would have been told to purchase PMs for decades.  Instead there has been a propaganda attack on anything that isn't the FRN paper ponzi powerplay.  They want paper because that is the control.  Gold removes that power from arbitrary hands into the hands of anyone that has land and wants to dig or pan by a river or just exchange goods and services for it.

If there is a gold standard or even if it's just a competing currency people can CHOOSE to only offer their goods and services for whatever currency they desire.  Once it starts circulating again in that manner anyone can have it if they work.

gordengeko's picture

People need to wake up... 

Professor Robert Mundell -Professor of Economics at COLUMBIA University ~and~ served as an economic adviser to the United Nations, the IMF, the World Bank, the European Commission, the Federal Reserve Board, the United States Department of Treasury and the governments of Canada and other countries.

Robert Zoellick- president of the world bank ~and~ former managing director at GOLDMAN SACHS.

Steve Forbes- editor and chief of the most influencial financial news publication in the world.

All 3 are touting a return to the gold standard.  Is this the company you fellow serfs want to be with???  Start asking questions and searching for answers for yourself as to why this could possibly be a horrible idea.  Thank your lucky stars we still have ZH pointing out the obvious...

BTW also ask why do these people(and other bankers) hate silver so much but love gold?

RockyRacoon's picture

I'll agree with you in one respect:  These folks may be talking their book.   I suspect that Mr. Forbes owns quite a bit of gold, and the others deal in gold all the time.   Perhaps, and this is a stretch, those mentioned other than Forbes might -- just might -- have good intentions.   Yeah, I know, that's a stretch, but we can't assume that all organizations bigger than your local PTA are out to screw us.   

Nah, never mind.

gordengeko's picture

It never hurts to take a cynical viewpoint once in a while.  It expands the awareness and causes the hamster to run faster keeping him healthy.  Given the advent of how prevelant the pharmaceutical industry is as well as the new and ever expanding technologies that are known (not sot mention the ones that are not spoken of) we need that lil sucker to run fast!

Smiddywesson's picture

Going to a gold standard will concentrate even more power and control in fewer hands than there is today.

Yeah baby, those that hold gold, and that would be me.  :-)

Money moves around, meaning it gets spent eventually.  However, all money comes from the public.  And when that public once again has a way to hold onto their wealth, the opposite of what you are suggesting will happen.  Wealth will become less concentrated.

Leraconteur's picture

It is amazing that no gold as money proponent ever considers why large geo-political entities go off PM standards.

Just like England in 1931 was run out of the gold standard due to speculations, any nation that is on the gold standard puts itself at an extreme disadvantage to all other nations because they open themselves up to speculative attack.

If you put any given nation on to the Gold Standard, then the assets side of your monetary system is taken up by gold and thus any other nation, country, business, organization or person with enough assets will be able to simply buy up your asset side of your money supply and cause you to experience extreme economic volatility.

If you put all nations on the standard, then the smaller ones are prey to the larger ones.

This is why all nations have a fiat system. It places both sides of your monetary system - the assets (issued debt) and the liabilities (currency) - firmly within the control of the government of said nation and keeps control out of the hands of outsiders.

Putting a nation on the standard did not stop depressions, speculation, downturns or credit bubbles throughout world history. It never has. Pull up the economic history of the USA in the 19th. C. and look at what your 'honest gold based money system' caused then.

Sean7k's picture

England was not run off the gold standard due to speculation. Perhaps you can provide a source for that claim. England was rapidly expanding its' money supply to pay for the socialism it was implementing. It didn;t have the gold to support the creation of State largess. When the world economy began to face the excessive exuberance of State socialism and expanding fiat money, in a system that still required gold settlements between nations, we had depression.

The nature of gold, is that it keeps government honest. It contains its' ability to inflate its' currency supply. That is why England and all of Europe went off the gold standard.

Your argument of asset side speculation and buy ups is laughable. The US went off the gold standard because it was creating more debt than it had the ability to pay for. As nations saw the erosion in the dollar's value, they asked for gold. If the dollar had retained its' value, from production of goods and services, rather than just printing- there would have been no need to demand gold. As John Adams once said, "you don't have to force people to accept good money". 

As for the 19thy century, the only monetary problems were caused by excess creation of currency and banks holidays on specie redemption ( see A History of Money and Banking in the United States, by Rothbard). 

Credit bubbles are a result of massive inflation in the money supply and that is always a function of fiat creation.