Showing posts with label Gold. Show all posts
Showing posts with label Gold. Show all posts

Friday, March 8, 2024

Gold Breakout - Target 2,530 to 2,700 | Peter L. Brandt


This is a FOR REAL breakout in Gold. Goldfinger points to a target range of 2,530 to 2,700.
 
 
June is typically the lowest month for Gold. 
The graph is based on the average prices; there are times when June tops rather than bottoms. 
Buy dips around monthly pivot levels. 

Friday’s Commitment of Traders (COT) Report from the CFTC had an interesting point about gold. The big money "commercial" traders responded to the rally in gold this week by posting the biggest jump in years in their collective net short position. This marks this week’s pop as at least a short term price top.

There has also been a big jump in total open interest lately. Usually such events mark a blowoff top in gold prices, although occasionally they are seen at a breakout point.

 Curiously, though, the small speculators in the "non-reportable" category were not chasing this week’s rally, and instead they reduced their net long position. They have not been net short as a group since 2016, so the analysis task consists in evaluating their relative net long position as a group. Having the small specs feel scared by this rally says it has some enduring legitimacy, once the short term overbought condition can get worked off. 

Tuesday, November 28, 2023

The Financial System Has Reached The End | Egon von Greyerz

The world is now witnessing the end of a currency and financial system which the Chinese already forecasted in 1971 after Nixon closed the gold window [...] History tells us that we have now reached the point of no return. So denying history at this point will not just be very costly but will lead to a total destruction of investors’ wealth. 
 

History never lies but politicians do without fail. In a fake system based on false values, lying is considered to be an essential part of political survival. Let’s just look at Nixon's ignorant and irresponsible statements of August 15, 1971 when he took away the gold backing of the dollar and thus all currencies. Later on we will show how clear-sighted the Chinese leaders were about the destiny of the US and its economy. So there we have tricky Dick’s lies:
  • The suspension of the convertibility of the dollar in 1971 is still in effect 52 years later.
  • As the dollar has declined by almost 99% since 1971, the “strength of the economy” is also declining fast although using fiat money as the measure hides the truth.
And now to the last lie: “Your dollar will be worth just as much tomorrow”. Yes, you are almost right Dick!  It is still worth today a whole 1% of the value when you closed the gold window. The political system is clearly a farce. You have to lie to be elected and you have to lie to stay in power. That is what the gullible voters expect. The sad result is that they will always be cheated. So in 1971 after Nixon closed the gold window, China in its official news media the People’s Daily made the statements below: 

 
Clearly the Chinese understood the consequences of the disastrous US decision which would destroy the Western currency system as they said:
  • Seriousness of the US economic crisis and decay and decline of the capitalist system.
  • Mark the collapse of the monetary system with the US dollar as its prop.
  • Nixon’s policy cannot extricate the US from financial and economic crisis.
I am quite certain that the US administration at the time ridiculed China’s official statement. As most Western governments, they showed their arrogance and complete ignorance of history. How right the Chinese were. But the road to perdition is not immediate and we have seen over 50 years the clear “decline of the capitalist system”. The end of the current system is unlikely to be far away. Interestingly it seems that a Communist non-democratic system is much more clairvoyant than a so called Western democracy. There is clearly an advantage not always having to buy votes. 
 
As the whole currency system is about to implode,  it is in my view totally irrelevant where the US dollar is heading short term measured against other fiat currencies. The dilemma is that most “experts” use the Dollar Index (DXY) as the measure of the dollar’s strength or weakness. This is like climbing the ladder of success only to find out that the ladder is leaning against the wrong building. To measure the dollar against its partners in crime (the other fiat currencies) misses the point as they are all on the way to perdition. So the dollar index measures the dollar against six fiat currencies: Euro, Pound, Yen, Canadian Dollar, Swedish Kroner and Swiss Franc. The Chinese Yuan shines in its absence even though China is the second biggest economy in the world. But here is the crux. The dollar is in a race to the bottom with 6 other currencies. Since Nixon closed the gold window in 1971 all 7 currencies, including the US dollar, have declined 97-99% in real terms. Real terms means constant purchasing power. And the only money which has maintained constant purchasing power for over 5,000 years is of course gold. So let’s make it clear – the only money which has survived in history is GOLD!

All other currencies have without fail gone to ZERO and that without exception. Voltaire said it already in 1729: "Paper money eventually returns to its intrinsic value – zero." And that has been the destiny of every currency throughout history. Every single currency has without fail gone to ZERO. And this is where the dollar and its lackeys are heading. To debate if a currency, which has fallen 98.2% in the last 52 years, is going to strengthen or weaken in the next year or two is really missing the point. It is virtually 100% certain that the dollar and all fiat money will complete the cycle (which started in 1913 with the creation of the Fed) and fall the remaining 1-3% to ZERO. But we must remember that the final fall involves a 100% loss of value from today.
 
 
[...] The world’s reserve currency has had a sad performance based on lies, poor real growth, all due to a mismanaged economy based on debt and printed money. So although most currencies have lost 97-99% in real terms since 1971 there are shining exceptions. When the gold window was closed in 1971 I was working in a Swiss bank in Geneva. At the time, one dollar cost Swiss Franc 4.30. Today, 52 years later, one dollar costs Swiss Franc 0.88! This means that the dollar has declined 80% against the Swiss Franc since 1971. 
 

So a country like Switzerland with virtually no deficits and a very low debt to GDP proves that a well managed economy with very low inflation doesn’t destroy its currency like most irresponsible governments. The Swiss system of direct democracy and people power is totally unique and gives the people the right to have a referendum on almost any issue they choose. This makes the people much more responsible in their choices as a winning vote on any issue becomes part of the constitution and cannot be changed by government or parliament. Only a new referendum can change such a decision. Swiss Debt to GDP is around 40%. This was the level of US debt back in 1971 before the gold window was closed. [...] US debt to GDP is now 132%. In 2000 it was 55%. 132% debt to GDP is the level of a Banana Republic which is frantically trying to survive by printing and borrowing ever increasing amounts of worthless fiat money.
  
 
 Agustín Carstens, general manager of the Bank for International Settlements (BIS) — the central bank of central banks in Basel, Switzerland — admits that Central Bank Digital Currency (CBDC) will grant central bankers 
» absolute control « over how it can be used, and the technology to be able to centrally enforce that. Not 'up to date' with your injections? Exceeded your weekly carbon allowance? Ventured outside of your designated '15 minute' district? Oops, no money for you!  
 
» Digital ID and CBDC is the essence of scientific dictatorship «, says Patrick Wood, author of the 2014 book 'Technocracy Rising: 
The Trojan Horse of Global Transformation'. He breaks down the all-encompassing digital open-air prison
that CBDC and digital ID are designed to facilitate.
 
Joe Rogan, host of the world's most popular podcast, is now wide awake to the grave dangers posed to freedoms by CBDC, and the social credit systems that it facilitates. » If you get a bad social credit score because you tweeted something they didn't like, now you can't buy a plane ticket, now you can't buy a car, now you can't get a loan. «

See also:

Thursday, November 16, 2023

The Bretton Woods International Monetary System | Imran N. Hosein

Gold and silver have continuously functioned successfully as money all through our history as a civilization, until modern Western civilization emerged with an agenda of establishing its dominion over the rest of the world. In the wake of the first and second world wars a new European monetary system was formally established at the Bretton Woods Conference held in 1944. Agreement was reached amongst the Western rulers of the world on a monetary system in which only one currency, the US dollar, would be redeemable in gold at the rate of $35 per ounce of gold. All other currencies in the world would have their value determined in relation to the US dollar. Secondly, only governments, through their central banks, could redeem dollars for gold. Ordinary people who would be required to use paper currencies, could not redeem any currency for gold. An institution known as the International Monetary Fund (IMF) would be established and each member state of the IMF would be required to deposit with the IMF 25% of all gold reserves that the state possessed.
 
 The US was founded by Satanists and is ruled by Satanists ever since. This is their 'Great Seal'.
» Annuit Cœptis. MDCCLXXVI. Novus Ordo Seclorum. «
» He has favored our undertakings. 1776. New Order of the Ages. «
Most of the 'Founding Fathers' of the United States of America were freemasons following the Ancient and Accepted Scottish Rite. In their Great Seal » He « is radiating above a 13 layers pyramid. The realm between » He « and the pyramid below is enlightened by  » He « and reserved for the chosen few most blessed, most obedient and most ablest amongst his masons. 13 is the number of the founding federal states of the United States of America. So who is » He « ? His freemason worshipers call him Lucifer and Lord Satan and consider him bearer and bringer of light, great insights and mundane powers. The above original Great Seal of the United States of America was crafted in 1782, six years after the American Revolution in 1776 and one year after constituting the United States of America as an all-embracing imperial federal republic in the model and spirit of the Roman Republic's Empire. The United States of America was founded as the epicenter of an universal empire to come, as the shining fortress of » He «named 'New Jerusalem', from where an unprecedented conquest and rule over all worlds beyond was to begin.
After the establishment of the Bank for International Settlements in 1930, after the abolition of the US dollar's gold standard and after the seizure of the goyim's gold in 1933, the original Great Seal of the United States of America was added in 1935 to the dollar bill's design along the words 'In God We Trust' by Franklin Delano Roosevelt, a 32nd degree Grand Master of the Ancient and Accepted Scottish Rite and the 32nd US President.
 
 
In fact, gold that was deposited with the IMF functioned merely as a means through which states could seek loans on interest (backed by something of value) from the IMF. More importantly, to the extent that member-states faithfully complied with the requirement of depositing that gold, the IMF would know the extent of gold reserves of each member-state. This was further assured through a requirement that member-states must report to the Fund all sales and purchases of gold. Why would the US-controlled - and hence Zionist-controlled - IMF be so interested in knowing the quantum of gold reserves in the possession of all countries in the world? 
 
 » The IMF claimed 25% of the world's gold and prohibited the use of gold as money. «
 
What was not disclosed however was that the US dollar would remain redeemable in gold only for as long as it was convenient for the US government to honor the legal obligation to do so. And just as ominous was the other possibility that if the US government could renege on its legal obligation to redeem US dollars for gold under the Articles of Agreement of the IMF, it could also refuse to repatriate 25% or more of the world’s gold stored in USA in accordance with IMF requirements. 
 
'The House of the Temple', officially: 'Home of The Supreme Council, 33°, Ancient & Accepted Scottish Rite of Freemasonry, Southern Jurisdiction, Washington D.C., U.S.A.'; and 'The George Washington Masonic National Memorial'.
 
Let us pause for a moment to remind those who are unaware, that the US government has already abandoned its legal obligation to redeem US dollars for gold in August 1971, and now refuses to even audit gold belonging to the rest of the world, that is stored in the US. Strangely and mysteriously, the use of gold as money was prohibited in the Articles of Agreement of the IMF. Nowhere was an explanation offered for this strange prohibition. The likely reasons for the prohibition of the use of gold as money are as follows:
  1. To prevent the possibility that gold used as money could threaten, and cause a collapse, of the bogus paper money monetary system.
  2. To ensure that gold belonging to the rest of the world, but stored in USA, would remain undisturbed in US territory until the time arrived when the monetary system of paper money collapsed and the world returned to gold as money. At that time the legal prohibition of the use of gold as money would be removed, and gold stored with the Zionist owned and controlled Federal Reserve Bank in NY, could then be secretly and illegally transferred to Israel (the transfer may already have taken place) so that Israel’s rule over the world of money might remain unchallenged and unchallengeable. The gold stored in USA would remain largely undisturbed since there would be no reasons for a member-state to seek to repatriate its gold. What would they do with their gold, other than keeping it as a store of value? It could not be used as money.
  3. Once the member-states of the IMF had deposited 25% of their gold reserves with the IMF (i.e., with USA), member-states had begun to take IMF loans that were secured by that gold, and it would then be possible to encourage them to store more and more of their gold reserves with the IMF. If they held on to their gold, they could not use it in any way that would benefit them. And so this provision of the Articles of Agreement opened a way for USA to eventually be entrusted with storage of most of the gold reserves of the world.
Is it by accident or by design that decolonization resulted in the rest of the non-European world becoming part of a mysterious and ominous new European monetary system in which, for the first time in human history, mankind was prohibited by international law from using gold as money, and in which money with intrinsic value was replaced by money with no intrinsic value?
 
» First we plunder the Americans, then the Mexicans, the Tsars, the Germans and the Ottomans. Then all of mankind. «
Paul M. Warburg (1868 - 1932), German-born investment banker; Rothschild agent at Wall Street since 1895; 
Philantropist and brother of Otto H. Warburg, head of the World Zionist Organization in 1911;
Architect of the US Federal Reserve System and the Federal Reserve Bank; Spiritus rector of the Federal Reserve Act in 1913;
Original member of the Federal Reserve Board of Governors in 1914; Second Vice Chairman of the Federal Reserve 1916 - 1918;  
Issuer of Liberty war bonds in 1917; inventor of the post-World War I gold reparation and confiscation schemes enforced upon the defeated German, Austrian and Ottoman empires during the Versailles and Sèvres conferences 1919-1920, where his German brother Felix M. Warburg is part of the German empire's delegation reaching for a peace treaty;
Visionary and pioneer of the Bank for International Settlements, the International Monetary Fund
and of a globalized New Deal for Lord Satan's New Order of the Ages.
 
Is it by accident or by design that the new European monetary system supported a European banking system which together operated in such ways that they and their clients grew incredibly wealthy while the rest of the world was imprisoned in increasing poverty and destitution?
 
Has that economic impoverishment lead to political servitude? Is it true or is it false that modern political servitude invariably implies conformity with a Zionist agenda? Is it by accident or by design that European Zionist Jews and Zionist Christians have a firm control over that monetary and international banking system and are using it to the advantage of the State of Israel?
 
Is it by accident or by design that the modern secular West continued the Jihad, known as the crusades, waged by medieval Christian Europe to liberate the Holy Land from Muslim rule, until success was finally achieved in 1917? Why did non-European Christians refrain from participating in an ostensibly Christian Jihad? Why did western European Christian crusaders fight their eastern Christian brothers-in-faith while making their way to the Holy Land?
 
Is it by accident or by design that the West then presided over the birth of a State of Israel in the Holy Land some 2000 years after Holy Israel was destroyed by divine decree, and the Jews were then brought back by hook and by crook to reclaim the Holy Land as their own some 2000 years after they were expelled from it? 
 
Did all of the above take place by accident, or was it part of a grand design that would eventually make it possible for Israel to rule the world? Why would Israel want to rule the world?
 
Quoted from:
 
See also:
 

For the first time in history the world is witnessing mass murder and genocide live on television. 
The United States and the State of Israel will both be held accountable for their crimes in the Holy Land.

Thursday, October 26, 2023

BRICS+ Destroys The US And EU Currency Monopoly | Michael Hudson

There is no way that today’s international debt overhand can be repaid. That is as true for the United States as it is for Global South debtors. The US Treasury owes much more to foreign governments in the form of their holdings of US securities than it can foreseeably repay. It has post-industrialized its own economy, and has committed to spending enormous sums abroad, while its dependency on foreign imports is rising and its prospects for collecting its existing debt claims on deficit countries is looking shaky. The past half-century’s foreign investment has taken the form of privatization of the public domain of debtor countries. This investment has not helped them develop but has merely transferred ownership of their oil and mineral rights, public utilities and other assets. A viable international financial system requires productive investment such as China’s Belt and Road Initiative that can help countries prosper, not asset stripping. Dollar dominance will continue over Europe and other US satellites. Other countries that still need dollar reserves for their trade and investment with the United States can continue as it has. But what will be changed is a new basis for the international economy itself. There will not be a new BRICS currency in the sense of a dollar or euro that could become a medium for trade, investment or international speculation. There will only be a mutual "currency of settlement" of payments imbalances among central banks joining the new system. And that system itself will be based on principles opposite from the financialized neoliberal model being promoted by the Dollar/NATO bloc. That is the real context for the current discussion of BRICS+ economic reform.


President Putin was very clear when he recently talked in Valdai about a single settlement currency: "This definitely deserves our attention. It's a complex issue, and we have to solve it in one way or another." The Western press talks about how much wealth and reserves do the BRICS countries have. Naturally, you count their gold as a large part of their reserves. But where is the gold of the BRICS countries? Much of their gold is not in their own countries. It's in the New York Federal Reserve Bank, it's in the Bank of England and the gold of African countries is in the Bank of France. Right now, this gold is being held hostage. But countries can ask the US, the UK and France to give them back their gold. Germany tried to do that a few years ago and said, "Can't you begin to give us our gold back that was moved to your banks during the last seventy-five years of  US occupation? " And the US said, "Oh I'm sorry, we can't. We've already done something else with your gold. There are legal problems and we are not giving it back to you!" Now, let's say the BRICS countries would ask for their gold and if the United States and England and France will not return it, those countries could take compensation, including all of the foreign investments in their countries. They could do another thing: If, especially the African countries, say, "You've stolen our gold. You cannot expect us to pay our foreign dollar debts if you have come and seized our gold. Give us back our gold. You owe to us. And by the way, we're going to join the Shanghai Cooperation Organization so you can't send your troops in and do what you did in Libya and simply grab it." This is an element of the financial future that nobody in the West has talked about.

Quoted from:

Saturday, October 7, 2023

Islam and the Future of Money | Imran N. Hosein

The modern monetary system emerged out of the Bretton Woods Conference of 1944 and collapsed in August 1971. It was then replaced by the petro-dollar monetary system. The ‘Ulama - Islamic scholars - lack both the knowledge and the tools of analysis with which to be able to come to the conclusion that the petro-dollar monetary system is bogus, fraudulent, and Haram - unlawful and impermissible in Islam. Unless and until the ‘Ulama of Islam study international monetary economics and summon the courage to stand up for truth and justice (al-M’aruf) while exposing and opposing all that is false and unjust (al-Munkar), it would remain impossible for Muslims to escape from this poisonous financial web which has been spun around us.

» No one in history has ever experienced the unique injustice and oppression that mankind now experiences by the
international monetary and banking system. Allah Most High made the use of gold and silver as money Halal  - lawful.
Whoever makes Haram - unlawful - what Allah has made Halal, has committed the ultimate sin of Shirk , blasphemy. «
Sheikh Imran N. Hosein

We need to confront our ‘Ulama with the argument that the Shari’ah - the sacred law of Islam - cannot be enforced unless and until we restore Dinar and Dirham - gold and silver - as money, and we cannot restore Dinar and Dirham as money while yet we remain member-states of the International Monetary Fund. This is because the Articles of Agreement of the IMF, mysteriously so, prohibit the use of gold as money. If the world is to ever know why the Zionist-fashioned IMF prohibited the use of gold as money, the question must be put to Dajjal, the Antichrist. Dajjal needs a fraudulent monetary system so that he can reduce one part of the world to abject poverty and financial slavery, while enriching that part of the world which supports him and works for him. 


 

Monday, July 3, 2023

The BRICS+ Currency | James G. Rickards

A new BRICS+ currency will be announced in Durban, South Africa, at the annual BRICS Leaders’ Summit Conference on August 22–24, 2023 [...] In all likelihood, the new BRICS+ currency would not be available in the form of paper notes for use in everyday transactions. It would be a digital currency on a permissioned ledger maintained by a new BRICS+ financial institution with encrypted message traffic to record payments due or owing by participating parties. (This is not a cryptocurrency because it is not decentralized, not maintained on a blockchain and not open to all parties without approval.)

BRICS stands for Brazil, Russia, India, China and South Africa, representing about 27% of the world's land
surface, 41% of the global population, and 32% of global GDP PPP.
The most important development in the BRICS system concerns the expansion of BRICS membership.
This has led to the informal adoption of the name BRICS+ for the expanded organization.
Currently 10 additional nations formally applied for membership:
Algeria, Argentina, Bahrain, Bangladesh, Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia and the UAE.
24 countries have expressed interest in joining the BRICS:
Afghanistan, Angola, Belarus, Comoros, Cuba, D.R. Congo, Gabon, Guinea-Bissau, Honduras, Kazakhstan, Mexico,
Nicaragua, Nigeria, Pakistan, Senegal, Sudan, Syria, Thailand, Tunisia, Turkey, Uganda, Uruguay, Venezuela
and Zimbabwe.
By every measure — population, landmass, energy output, GDP, food output and nuclear weapons — BRICS is not
just another multilateral debating society. They are a substantial and credible alternative to Western hegemony.
The BRICS are developing an optical fiber submarine telecommunications system that would connect its members.
It is being developed under the name BRICS Cable. Part of the motivation for BRICS Cable is to foil spying by
the U.S. National Security Agency on message traffic carried through existing cable networks.


[...] It appears likely that the new BRICS+ currency will be linked to a weight of gold. This plays to the strengths of BRICS members Russia and China, who are the two largest gold producers in the world and are ranked sixth and seventh respectively among the 100 nations with gold reserves.
 
[...] Reserve currencies are essentially the savings accounts of sovereign nations that have earned them through trade surpluses. These balances are not held in currency form but in the form of securities. When analysts say the dollar is the leading reserve currency, what they actually mean is that countries hold their reserves in securities denominated in a specific currency. For 60% of global reserves, those holdings are U.S. Treasury securities denominated in dollars. The reserves are not actually in dollars; they’re in securities. As a result, you cannot be a reserve currency without a large, well-developed sovereign bond market. No country in the world comes close to the U.S. Treasury market in terms of size, variety of maturities, liquidity, settlement, derivatives and other necessary features.

[June 29, 2023]
Jail break acceleration:
Ethiopia, one of Africa's fastest-growing economies, is
aiming to become the latest brick in the firewall against U.S.-imperialism.

[...] The BRICS+ currency offers the opportunity to leapfrog the Treasury market and create a deep, liquid bond market that could challenge Treasuries on the world stage almost from thin air. The key is to create a BRICS+ currency bond market in 20 or more countries at once, relying on retail investors in each country to buy the bonds. The BRICS+ bonds would be offered through banks and postal offices and other retail outlets. They would be denominated in BRICS+ currency but investors could purchase them in local currency at market-based exchange rates. Since the currency is gold backed it would offer an attractive store of value compared with inflation- or default-prone local instruments in countries like Brazil or Argentina. The Chinese in particular would find such investments attractive since they are largely banned from foreign markets and are overinvested in real estate and domestic stocks. [...] The sheer volume of retail investing in BRICS+-denominated instruments in India, China, Brazil and Russia and other countries at the same time could absorb surpluses generated through world trade in the BRICS+ currency. In short, the way to create an instant reserve currency is to create an instant bond market using your own citizens as willing buyers.
 
The United States exploits the world's wealth with the help of "seigniorage."
It costs only about 17 cents to produce a 100 dollar bill, but other countries
had to pony up 100 dollar of actual goods in order to obtain one (HERE)
 
[...] This entire turn of events — introduction of a new gold-backed currency, rapid adoption as a payment currency and gradual use as a reserve asset currency — will begin on August 22, 2023, after years of development. Except for direct participants, the world has mostly ignored this prospect. The result will be an upheaval of the international monetary system coming in a matter of weeks.

 
See also:

Thursday, November 17, 2022

S&P 500 Performance by Weekday

Bespoke (Mar 28, 2022) - On a trailing 12-month basis, the S&P 500 has performed poorly on Mondays and Tuesdays before gaining steam from Wednesday through Friday. This diverges from the patterns seen over the last thirty years, in which Thursday and Friday struggled relative to the performance over the first three trading days of the week. This year, oil has averaged gains on every day of the week, but the strongest performance has occurred early in the week, which is interesting as Monday and Tuesday have tended to be the worst days of the week for oil over the last 30 years. Bonds have performed poorly in the beginning of the week over the last twelve months but have partially recovered in the last two trading days. Over the long run, the safe asset has traded narrowly with only Wednesdays averaging a loss. Tuesdays and Thursdays have been strong days for the US Dollar over the last twelve months, but these days tend to result in flat to negative performance when looked at over the last 30 years.
 

Below we summarize the cumulative performance by weekday for the S&P 500 over the last 30 years. As you can see, Tuesday has been the best performing day by far, booking performance gains of 160.5%. Wednesday has posted a cumulative gain of 83.6%, which lands the day in second place. Friday and Thursday have been the weakest days, booking a cumulative gain of just 27.4% and 28.2%, respectively. Monday lands in the middle, recording a cumulative gain of 41.3%. As outlined above, the recent shift in weekday performance deviates from the norms of the last 30 years as investors have come out of the weekend with fears but concluded the week with optimism.
 
 
 
Quoted from:
 

Tuesday, October 4, 2022

On Fiscal Mismanagement | Martin A. Armstrong

Martin A. Armstrong (Sep 13, 2022) - Don’t mix the problem of the quantity of money with what is actually money. They are two separate issues. The theory that inflation is tied to the quantity of money truly extends back to when metal was the money supply. The sudden discovery of America led to a huge wave of inflation in Europe. The FISCAL MISMANAGEMENT of Spain led to its total collapse. They were borrowing against the next shipload of gold coming in from the New World. They would not wait even to get it in, and they were so excited to spend it before it arrived.
 

[...] The amazing Decline and Fall of Spain is perhaps the greatest lesson if someone wishes to write “How NOT to Manage Government For Dummies.” The Spanish became both the richest nation and the greatest debtor, not that dissimilar from the United States, and succeeded in ending up as the poorest. Spain became a serial defaulter beginning in 1557, followed by 1570, 1575, 1596, 1607, and 1647 ending in a 3rd world status without hyperinflation. Their economic model was one of conquest and plunder rather than developing domestic industry and a viable economy.

[...] The endless increase in the supply of dollars is not the problem [...] Our problem is NOT that money is paper. The problem is those in charge of the government [...] No matter what is money, it CAN NOT be fixed in value. It must be allowed to float, for there are always trends that shift back and forth. Therefore, the relentless creation of money is not because they are paper dollars. As I said, you are blaming the gun rather than the shooter. This is fiscal mismanagement created by Marxism, where the politicians no longer know how to run for office without bribing the people for their votes. This is the system that is completely doomed.

Wednesday, August 24, 2022

The Magic of Money | Hjalmar Schacht

Hjalmar Schacht (1967) - Man needs money and cannot exist without it. The diabolic magic of money is here clearly visible. It has helped mankind to make immense strides in economic development, and has at the same time enslaved him. Regression to a money-less condition, or the modern method of exchange by means of money any kind of money, but still money - these are the alternatives. Money plays the role of the sorcerer's apprentice - created to serve a master who cannot now rid himself of his indispensable sprite. It is the master now. 


Hjalmar Schacht (1877 – 1970), President of the Reichsbank.

[...] Modern paper money, the banknote, is backed by its creator, the State. It is true that John Law, the inventor of paper money, recommended a kind of cover based on landed property, but Law too saw that the principal security for paper money lay in confidence in the government, which has legal control over all kinds of things which would provide security. The failure which put an end to Law's measures was not so much caused by a paper money inflation, as by a collapse of speculative activity in the shares of the overseas enterprises he had founded. The value of his paper money was not based on these public companies, but only on their relationship with the state. Law rightly recognised that money, if it does not consist of tangible metal, is purely an internal affair of the national state. This remains true today.

For this reason there is no such thing as international currency. It is unlikely that it will ever come into being. International money would have to be granted the status of legal tender in all countries in which it circulates. In all these countries it would have to be possible to settle every state and private obligation in this currency. Any institution controlling this. currency irrespective of whether it is a bank or a government department would dominate the world an unthinkable situation. Currency is the most nationalistic factor in political life. Every central bank responsible for issuing it is dependent on the government of the country by whose laws it was instituted, and which makes its notes legal tender in the country's home territory.

The granting of credit is unthinkable without a central bank. No central bank can be allowed to act against the government of the country. The government is over the central bank, and influences its policies. It is thus also in a position to inflate the currency by taking up too much credit with the central bank. No international central bank could countenance such a situation. It cannot permit one of the governments with which it is associated to misuse its facilities unless every other government is in agreement. This however is a condition which cannot be reconciled with the fight of all against all in time of economic difficulty. No state will surrender so much of its sovereignty that its partners or competitors are given the power to prescribe its economic and financial policies. Standing over and above central bank and government, both of which are led and administered by changing personalities, there is a higher, impersonal, and substantially necessary law: the stability, the constancy of value, of money. This higher law has in the past granted the central banks an autonomous, independent position. Governments change, and can pursue good or bad currency and credit policies according to whether or not it is to the advantage of the party in power. 
 
Schacht in an Allied internment camp, 1945.
"Dr. Schacht, you should come to America. We’ve lots of money and that’s real banking".
Schacht replied, "You should come to Berlin. We don’t have money. That’s real banking".

[...] Even if common currency is regarded and desired as the crowning achievement of the European Common Market, it would be wrong to leave the relationship between the government and the central bank out of account. [...] The closer the economic ties between various countries, the easier will it become to reach agreement on currency policies. Whether these will ultimately lead to a unitary currency will always depend on the extent to which the participants are prepared to surrender their sovereignty. Here in fact is the Common Market's chief problem.