THE BEER ECONOMY – By Bron Suchecki

20 Jul 2016
Key words: Finance, Gold, Gold Standard, World Gold Council

Proponents of a Gold Standard look forward to the day when people use gold and silver coins as money but it seems that beer and spirits have a head start. This article sheds light on hundreds of secret Facebook groups in Australia where people barter goods and services for alcohol in various forms, with one group claiming 50,000 members.

Australia had an early history with an alcohol based barter economy, with rum as the medium of exchange from 1793 onwards due to a shortage of coins in the colony. The New South Wales Corps established a monopoly on the importation of rum and profited from its trade. The appointment of William Bligh (known for the mutiny on the Bounty) as governor of the colony and his outlawing of the rum trade resulted in the Rum Rebellion of 1808, “the only successful armed takeover of government in Australian history”.

While gold has been coined and used as money for over 2,500 years, with the World Gold Council noting that“gold coins were first struck on the order of King Croesus of Lydia … around 550 BC”, it appears that beer pre-dates that by thousands of years, with historians speculating “that prehistoric nomads may have made beer from grain & water before learning to make bread”.

Gold’s advantage is the uniformity in the unit of measure whereas with alcohol based units one would have difficultly converting between a 6-pack of light beer, full strength, or spirits of various proof/percentage. Read more »


FALLING OIL + RISING DOLLAR = CRISIS FOR A WHOLE LOT OF PEOPLE – By John Rubino

18 Jul 2016
Key words: crisis, Fitch Ratings, Moody's, Oil, Oil & Gas, US Treasury, USD

Oil is plunging again, this time in the wake of OPEC’s inability to limit its members’ production. The US dollar, meanwhile, is up on the divergence between Fed tightening and ECB/BoJ/BoC easing.

Dollar and oil Dec 15

This widening gap is a perfect storm for the many, many entities that have borrowed dollars to speculate in foreign currencies or drill for oil. Some examples: Read more »


THE LULL BEFORE THE STORM – AN IDEAL CHANCE TO EXIT THE CASINO – By David Stockman

17 Jul 2016
Key words: BOJ, Deflation, ECB, ETF, Malinvestment, PBOC

Last night’s Asian action brought another warning that the global deflation cycle is accelerating. Iron ore broke below $40 per ton for the first time since the central banks kicked off the world’s credit based growth binge two decades ago; it’s now down 40% this year and 80% from its 2011-212 peak.

Embedded image permalink

As the man said, however, you ain’t seen nothin’ yet. That’s because the above chart is not merely reflective of too much supply and capacity growth enthusiasm in the iron ore industry or even some kind of worldwide commodity super-cycle that has gone bust. Read more »


50 YEARS OF SUPPRESSING SILVER – By Jeff Nielson

15 Jul 2016
Key words: Fed, Federal Reserve, JP Morgan, Silver, United States, US Dollar

Sophisticated precious metals investors are well-aware of the rampant manipulation of the gold and silver markets. They are also generally aware of the reason for such manipulation. A rapid rise in the price of gold and silver is like an economic “warning siren” – alerting savers that their wealth (i.e. the purchasing power of their currency) is being rapidly eroded by the monetary depravity of bankers.

 

In a world with a “gold standard”, this isn’t a problem. With currency which is redeemable in gold (or silver), the value of a currency (i.e. its purchasing power) is anchored by the gold and silver backing it. However, in a world of nothing but “fiat currencies” (i.e. money backed by nothing), a loss of public confidence in paper “money” is the worst nightmare of bankers.

 

This fear can be most easily illustrated by simply looking at the example of Alan Greenspan. In 1966, Greenspan was a respected academic, who wrote a famous essay extolling the virtues of a gold standard, where he simply stated the evils of “fiat money”: Read more »


GOLD AND THE FULL MOON – By Bob Moriarty

13 Jul 2016
Key words: Gold, HUI, Moon, Tom McClellan

For the last three years we have had a tradable low twice a year. Once in the summer, once in the winter. The bear market in the metals has gone on longer than any in the last fifty years. As of today, is four years and three months old more or less. One day there will be a major bottom and shares will go up a lot. The HUI is down some 83% in that timeframe.

I wrote an interesting paragraph in the start of a piece I posted for November 6 of 2014. Here it is in full:-

“November 6, 2014 is the full moon and it’s common for either markets to accelerate in the direction they are moving or to do a U-turn in direction. With the washout in gold, silver and mining shares of all sorts in the last week or so, investors should be watching for a bottom and sudden move higher.”

As it turns out, that was a good call. Gold dived on the 6th to a new low for the year of $1130 before zooming higher.

On July 30th of this year I mentioned the strange relationship between the phases of the moon and what happens at a full moon. The market began its climb for the year. Read more »


INTELLECTUAL SUPPORT FOR GOLD-BASED MONEY IS NOW LEADING TO POLITICAL SUPPORT- By Nathan Lewis

13 Jul 2016
Key words: Asset, Bretton Woods, Fed, Federal Reserve, Finance, Financial Times, Gold, Nixon, Smithsonian Agreement

Around this time last year, I remarked on how far we had come in providing real intellectual support for gold-based money in the United States. This was a core principle that the United States embraced from its founding in 1789, until 1971 – a period of over 180 years, during which the U.S. became the most economically and politically successful government in the world; and perhaps, even, in the history of the world.

It’s working: In July 2015, Paul Krugman wrote that “Gold bugs have taken over the GOP.” The Financial Times reported that “Republicans eye return to gold standard.” The realization is dawning, in conservative circles, that the Milton Friedman Monetarism popular during the 1980s is really just another flavor of seat-of-the-pants funny-money manipulation, not much different than what Krugman himself advocates. The real monetary alternative is the approach that the United States embraced for most of its history.

If gold-based money was a mistake, then, you would have expected that, sometime during those nearly-two-centuries, we would have noticed. Aren’t mistakes supposed to have negative consequences? And yet, the era of gold-based money ended with two of the most prosperous decades in U.S. history, the 1950s and 1960s. Even at the very end, in 1971, the Chairman of the Federal Reserve, Arthur Burns, thought it best to keep the gold standard policy. Read more »


PUTIN “PREPARES FOR ECONOMIC WAR”, BUYS WHOPPING 55 TONNES OF GOLD IN Q3 – By Tyler Durdin

11 Jul 2016
Key words: crisis, Economic War, Gold, Putin

Just as China is buying ‘cheap’ oil with both hands and feet, so Russia, according to the latest data from The World Gold Council (WGC) has been buying gold in huge size. Dwarfing the rest of the world’s buying in Q3, Russia added a stunning 55 tonnes to its reserves, as The Telegraph reports, Putin is taking advantage of lower gold prices to pack the vaults of Russia’s central bank with bullion as it prepares for the possibility of a long, drawn-out economic war with the West.

Russia bought more gold in Q3 then all other countries combined…

Read more »


THIS IS WHAT GOLD DOES IN A CURRENCY CRISIS – By John Rubino

11 Jul 2016
Key words: Asset, CAD, crisis, Default, Gold, Goldcorp, USD

Along with the currencies of most other commodity-exporting countries, the Canadian dollar has been in near-freefall lately.

Canadian dollar 2015
Gold, meanwhile, has been sucked down with the rest of the commodities complex, falling hard since 2013. But only in US dollars. For Canadians, with their weak domestic currency, gold has been behaving just fine. It’s up 17% in C$ terms over the past two years and looks ready to rally from here: Read more »


IS BLOOMBER HIDING SOMETHING? – By Hugo Salinas Price

09 Jul 2016
Key words: bloomberg, Bretton Woods, Debt, Depression, Finance, International reserves

Bloomberg has been gathering data on the total of Central Bank International Reserves for many years. Since December 1, 2010, the information has been updated every Friday, and has been available on a Bloomberg website, accessible only by subscription.

On Friday, December 11 of the present year, Bloomberg published no information regarding International Reserves as of that date.

On Friday, December 18, once more, Bloomberg published no information regarding International Reserves as of that date.

Curiously enough, on Monday, December 1, 2015, we published an article on this website, click here “The Crumbling World Order, and Who Will Pick Up the Crumbs?” which pointed out that International Reserves have been contracting since August 2014 and up to November 27, 2015, had diminished by $752 billion dollars, or 6.25% of the total achieved at the peak back in August, 2014. And we remarked that this contraction was unprecedented, since we have data going back to 1948, and never, ever, has there been a sustained contraction in the total of Central Bank International Reserves since the creation of the present international monetary system in 1944, at Bretton Woods.

In our opinion, the present contraction of International Reserves announces a secular change of trend to liquidation of international debt and consequently to Depression. Read more »


HOW 4000 ROMAN COINS FOUND BURIED IN SWISS ORCHAD REINFORCE GOLD OWNERSHIP TODAY- By Michael J. Kosares

09 Jul 2016
Key words: Asset, Finance, Gold

“The coins’ excellent condition indicated that the owner systematically stashed them away shortly after they were made, the archaeologists said. For some reason that person had buried them shortly after 294 and never retrieved them. Some of the coins, made mainly of bronze but with a 5% silver content were buried in small leather pouches. The archaeologists said it was impossible to determine the original value of the money due to rampant inflation at the time, but said they would have been worth at least a year or two of wages.” –  The Guardian/11-19-2015

by Michael J. Kosares

I was initially at a loss to explain why anyone would go to so much trouble to hoard so many coins with such a low silver content – about 5%.  The only rational explanation is that the hoarder had decided that even worse debasement was on its way.  And, a quick review of Roman history tells us that this indeed was the case.

In the next generation of the denarius, issued by  Emperor Diocletian, bronze coins were simply dipped in silver and passed into circulation.  By 294AD, the latest date in the hoard, Diocletian abandoned silver coinage entirely and began issuing bronze coins instead. Prior to that, prices had risen over a roughly twenty year period by 1000%.  Value-conscious barbarian troops hired by the emperors demanded to be paid in gold aureus and for good reason as you will discover below. By the end of the third century, the currency was crumbling and along with it the empire.

For a fascinating short course on the connection between the fall of the Empire and inflation, I would recommend this lecture by professor Joseph Peden in 2009, titled “Inflation and the Fall of the Roman Empire” and published at the Mises Institute. Peden quotes a 5th century account of the Roman inflation by a Christian priest named Salvian. Says Peden, Read more »