Several FACTS about gold are
not often considered.
1)
If each American had a 1 ounce gold coin that
would be 316 million ounces. There are 32,150 troy ounces in a metric ton. Do the math. That is 9,829 T of
gold. The US government is supposed to hold
8,500 T of gold in Fort Knox and at the NY Fed.
The entire world supply ever mined is about 175,000 T. All gold holdings by all national governments(central
banks, IMF, etc.) worldwide are about 35,000
T. About 2,800 T is mined every
year. So if everybody in America had ONE
gold coin it would take more than 3x what is mined every year to get them TWO......
2)
In 1920 a 1 ounce gold coin was equal to $20
and having TEN would not be uncommon. Any
person could go into any bank and exchange a $20 bill for a one ounce gold
coin.
3)
It is estimated
that there are 9 million financial asset millionaires in the USA today. If half of them put 10% of their savings into
gold it would be a minimum of $450 billion.
With 1 ton of gold worth approx $42 million, their gold would be approx
10,000 T or more than US government holdings.
There are millionaires in a lot
of other countries too….
4)
The Federal
Reserve “emits” $85 billion every month to purchase MBS and Treasury
bonds. That is approx equal to one
year’s total world production of gold.
Which is easier? To find, mine,
and refine $85 billion worth of gold or push a button to ‘acquire’ a financial
“asset”?
5)
If a dollar is
worth a dollar, what is gold worth?
The government likes
political money because they can create it as needed. That puts those of us who need to work to
earn it in something of a quandary. The government’s position is that for the greater
good it can create whatever money is necessary. They have developed a pretense
of accounting by talking about “The Debt” but there is actually no “accounting”
if debts can be created and then paid back with MORE debt. Just
as there is no “debt” associated with a counterfeiter that produces perfect
hundred dollar bills , there is then no
difference in “good”(trustworthy) or
“bad”(counterfeit) money.
Printing whatever money is
necessary to pay expenses and then requiring everyone to use that money is the
antithesis of “sound” money. It is
legalized counterfeiting. The government
can create bonds and sell them or hold them itself and then cancel them at
will. It is a right pocket left pocket
scam. Who can protest? Once you have
accepted that it is the right of the State to issue as much money as it needs
to do what it must, what control, besides a pitiful little vote every 4 years,
is possible? The whole concept of money
itself dissolves into irrelevance. What
you hold and what you work for is a political construct determined at every
moment by the power that can issue it at will.
Why, in fact, do we pay taxes if the government can create whatever
money it needs?
The “Debt” is actually a
moral partnership between the government and the people. The moral part comes in when considering how
the new money is to be used and how the Debt is to be paid back. Many analysts have commented that the current
debt is too large to be paid back and it is inevitably going to be defaulted on
or inflated away. I think that likely. If it is cancelled or defaulted on, then,
through the money power, the government has the full and complete power to do whatever it wants irrespective of citizen’s votes. It can create National Security State,
American Empire, Nanny State, or it can just pay itself whatever it wants. It
can pay newspapers to write nice stories.
The result is that we “citizens” are all beggars for crumbs from the Kings’
Table.
Debt could be considered “the
negative” of the positive that is known as money. Practically speaking we consider money a unit
of comparative value. A dollar is defined by its purchasing power. It is not
based on anything. It has a customary
value that is understood to change gradually. I do not think people consider how immoral
debt cancellation by the State is. A
person goes bankrupt and fails his creditor but a government that goes bankrupt
fails the entire citizenry. How can a
State fail its people? When it
mismanages so stupendously that it must cheat them to remain in power. Here have a dollar—it’s not worth anything.
The government defines what money will be – a dollar- and defines what it will
be worth. Does it reserve the right to
change these determinations at any time if repaying its obligations is
difficult? The Fed could theoretically expand the balance sheet to $10 T. Then cancel it. Of course the Fed would then be insolvent but
would the Treasury? No. The Treasury could create another Fed or take
the money creation role in house. Old
bonds held by others would be redeemed with new bonds and the Treasury would
lose the income from the old cancelled bonds but what does a counterfeiter care
if people burn the money he issues them?
Debt cancellation sounds like
a good thing but it is a flagrant injustice.
It certainly seems so to me who
have saved what I have. What loyalty does the government deserve if it is busy
picking favorites to benefit? Let’s consider an alternative scenario that would
benefit me but not as much as some others:
why don’t we cancel everyone’s mortgage?
We have just made some Americans $5T richer. But then we require the government to pay its
debts and balance its books. WWG(Government)D? The same lousy options it has
now would still be facing the government:
it could change some of its future promises, trim some current expenses,
and increase taxes on its suddenly wealthier citizens. Its huge debt would
still be there and our government representatives would still have to work out which of the poor
options available to them would be chosen.
But of course some would have
already benefited. So cui bono? The
specific debt holders that are forgiven.
Everyone else pays.
A counterfeiter does not need
or care about “accounts”. He produces
all that he can get away with. Why does the
government not allow counterfeiters to make people ‘richer’? At that critical point—it is all about the
power. I make the money, I call the
shots, you do what you are told. That is
how it works. In this model, the concept
of freedom extends only to consumer choices not the social contract we live
under. That is where we are fellow
citizens, do we like it?
Why is honest money like gold
or silver not playing a larger role in our current monetary arrangements? People
don’t understand the problem and they do not WANT to understand it. Essentially,
gold is inconveniently rare, they don’t have any, and have no reason to prefer
dollars (that they don’t have enough of) to gold(that they can’t actually BUY
anything with). If you ask most people,
who is responsible for deciding how much money needs to be printed for
everybody to use? The answer will be,
the government. If you ask them how does
the government know how much to print, they will answer, that is their job and
why they have all those economists and departments full of civil servants. If you ask them can the government print as
much money as it wants? They will say yes. I ask, so YOU cannot print
money or it is 10 years in the slammer as a counterfeiter, but the government
CAN print as much as it likes and buy whatever it likes? Do you feel there is a problem with this
system? No, they say, it is complicated
and the government knows best.
This makes for a very long
and involved process of education. What
percent of the population actually thinks the government has the right and OUGHT to have the right to print
all the money it wants and spend it on whatever it wants? I think it is at
least 75%. To them, it is like a “perk”
of being a government official. A
majority of people unwilling to think or become informed citizens would
necessarily reduce the value of gold and silver as money. People are satisfied with how things work, even
if they have to work 3 jobs and don’t themselves have any money. It’s OK that some rich people get to fly
private planes to Tahiti because they know the government official that makes
up the money. If they could get a job
like that, they would do it for their friends too. Is this where we are? 75% of the populace completely clueless
about the benefits of a money that functions as money i.e. a store of value? What will it take for a majority of people to
become aware that their interests are being ignored and desire to do something
about it? Why don’t people engage more
with politics? I can answer that
question, all those meetings that lead to no substantial changes are
boring. Politics would have to be REAL
for people to put any time or effort into it.
The entire society works
because people think they have an idea of what money is. What if they realize they everything they buy
and work for is determined by what the government says it is worth? There is no “number” for financial
security. Financial security only exists
under rules of the game that are going to have to change . If everybody’s money is someone else’s debt
then it is surely the case that someone is not going to be paid. How will this be determined? Let me ask another question. Should you “save” money if it is government
policy to reduce it’s value? It is axiomatic that prudent people save for
a rainy day but what exactly are they “saving”?
They are saving the government the aggravation of balancing its books by
stealing current income and repaying with false promises. Does the government “know” it is going to
default? Who is the government? The Treasury Secretary will say growth in the
economy will repay all debts just as a person in hoc will say their raise next
year will pay off their credit cards. If
the economy does not “grow” it is already bankrupt. So to what end working and saving? The quicker people remove their money from
systemic risk the better they will feel when the System implodes.
So how can the government keep
the unsustainable rocking along? Boil
all the frogs in different pots slowly….
Squeeze everybody and pay the army and the police....
