I recommend this book.
After you read mine, of course. ;^)
Is there any reasonable expectation that gold will hit this level?
I recommend this book.
After you read mine, of course. ;^)
goldbug ping
James Rickards (”former general counsel of Long-Term Capital Management” — oops):
“Another attack on gold is that there’s not enough of it to support money supply; but of course there’s always enough gold; it’s just a question of price.
“The U.S. has never truly gone off the gold standard. The U.S. gold hoard today has a dollar value equal to about 20% of U.S. M1 money supply – a respectable ratio even in the heyday of the fractional gold standard. A gold price of $5,500 per ounce would comfortably support a broader U.S. money supply on a one-to-one ratio and maintain confidence in the dollar and U.S. sovereign debt.”
This article is also linked at zerohedge with some good comments here http://www.zerohedge.com/article/ltcm-general-counsel-debt-denial-there-little-time-avoid-catastrophe-and-almost-no-exit-sugg
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Get towards the end and you find out that it’s a gold hawk article. He may be right. But, when the fan becomes soiled gold can’t be eaten, worn or used to heat your house.
Time to invest in lead, copper, and brass.
I work at a job where I meet with clients from all walks of life, at all income levels. Every week I meet more and more people who are buying weapons and ammunition, and stockpiling food. This is serious, and people are taking it seriously.
My 60’s+ poker playing buddies have been saying for almost two years now that there is not a peaceful or bloodless way back from here.
The perfect storm. Jim Jones’ America elected a communist who is pouring gas on the fire.
He’s not only doing everything wrong but to the nth degree.
I’ve never thought the U.S. could go critical—[chaos and riots] but I think it’s coming.
Stock up.
This set of graphs is a very sobering warning about what is in store for most of the developed world:
see also the article on ZeroHedge.com
Bank Of International Settlements Sees US Debt/GDP At Over 400% By 2040
link:
http://www.zerohedge.com/article/bank-international-settlements-sees-us-debtgdp-over-400-2040
link to full PDF of Band of International Settlements report:
http://www.bis.org/publ/work300.pdf?noframes=1
Don’t worry, they are going to use inflation once again to pay of large parts of the debt with cheap dollars.
Buy gold.
Gold and Economic Freedom
by Alan Greenspan (1987)
...
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.
bookmark
Can easily be substituted with George Washington, Thomas Jefferson, etc.
I noted that the ONE thing he didn’t mention at all is “debt repudiation.”
While unpleasant, this is the fastest, and easiest way for the nation to get back on its feet.
And only those people most responsible for our current situation are willing for our nation to suffer for decades, just so they can continue their merry japes.
What happens when the US renounces its debt? To start with, import trade ends. Except for commodity swaps, like food for oil, the US will get no more foreign made goods. And I very specifically mention oil, because that is our #1 import.
Right now, in the US, there is a normal backlog of crude oil waiting to go to the refineries. There is also the Strategic Petroleum Reserve, which has about a six month supply of oil for critical functions. Between the two, this means that the US has between six and eight months to get every unused oil well in the country pumping. That may be enough time, as long as the government doesn’t mess around.
Gasoline will jump to maybe $8-10 a gallon.
Those parts of the stock market dependent on imports will crunch, but because everything America previously imported will now have to be made in America, there will be a big jump in new industries.
The days of deficit spending will be over. The government will not just have to have a balanced budget, but a surplus budget. This means an end to Social Security, Obamacare, Medicare, and Medicaid. As well, Defense will have to be severely cut, perhaps as much as 50%, as well as the overall size of the US government.
This will mean the recall of the vast majority of US personnel stationed overseas.
Internationally, there will probably be a massive depression, as socialism dies all at once, everywhere.
Fortunately for the US, right now we have a housing and food surplus, both of which are relatively stable, and will do much to alleviate suffering.
The end result is that debt repudiation will result in 5-10 years of economic downturn, and the US will emerge from it with much better footing. But if the government tries the hyperinflation and re-denomination of our currency route, we make look forward to 30 or more years of misery, with America left impoverished at the end.
Today’s dollar = tomorrow’s dime.
yikes!
bump
If it takes so little to unravel, how come endless doom screeched by half the world for centuries hasn't made the slightest impression?
The reality is government credit stands on government power to tax very wealthy and growing economies, and remains as strong as ever.
The reality about the supposed horror of unfunded liabilities is they are not debts, and only cost something if someone also receives them.
A further reality is that debt service is not a loss but about the most justified government expenditure imaginable, right up there with national defense, and practically everything else governments do is less defensible.
As for the dreams of a gold standard, it never worked as advertized when we had one and it died of natural causes, definitively. It is a horrible idea. And no, a commodity money doesn't prevent government spending or even currency debasement - the term "debasement" itself ought to tell anyone that.
The modern capitalist world is rich and will remain so, is not built on sand, and a gold bug telling you otherwise is no more plausible than a communist telling you otherwise. They've all been predicting the immediate demise of capitalism for as long as there has been capitalism and they are all idiots.
Please read and consider Au ownership.
Easy to understand this man’s reasoning