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THE GOLD STANDARD RETURNS

Saturday, May 19th, 2012

By Mark Rogers

Is the Gold Standard set to make a return and is that return inevitable?

The answer must be yes to the first question and an interestingly qualified yes to the second.

There is little to no consensus amongst politicians and academics that the crisis we are passing through is a crisis of paper money, but even the most died-in-the-wool quantitative easer cannot but notice that QE is (a) a stop-gap and (b) that the gap refuses to be stopped.

Academic Blindness

Part of the perhaps inability to see that this is the paper money crisis to end paper money crises, is the hold that the consensus as to what caused the Great Depression has on such a wide range of academics and policy makers, the most important exponent being Ben Bernanke.

While faulty analysis is to be blamed for the position that Bernanke assigns to gold in the Great Depression, this position is also the result of the fallacy of assuming that the coincidence of two things necessarily entails cause and effect, in this case that because the gold standard existed at the same time as the Great Depression, ergo the gold standard caused the depression.

As James Rickards points out in his exceptionally informative book, Currency Wars (Portfolio/Penguin, New York, 2011), Bernanke’s argument depends on the observation that “[c]ountries that left gold were able to reflate their money supplies and price levels, and did so after some delay; countries remaining on gold were forced into further deflation.” (Bernanke, “The Macroeconomics of the Great Depression: A Comparative Approach” Journal of Money, Credit and Banking 27, 1995). Rickards extrapolates: “Gold was at the base of the money supply; therefore gold was the limiting factor on the expansion of money at a time when more money was needed. … the evidence showed that gold had helped to cause the Great Depression and those who abandoned gold first recovered first. Gold has been discredited as a monetary instrument ever since. Case closed.”

But, while this academic case against gold is proved beyond controversy in the minds of policy makers, it is simply untrue. It was policy decisions that caused the problems: “As gold flowed into the United States during the early 1930s, the Federal Reserve could have allowed the base money supply to expand by up to 2.5 times the value of gold. The Fed failed to do so and actually reduced money supply, in part to neutralise the expansionary impact of the gold inflows.”

This then was what the Fed chose to do, and as a policy option was actually independent of the supply of gold. “It is historically and analytically false to blame gold for this money supply contraction.”

Bernanke’s Real Fear of Gold

“One suspects that Bernanke’s real objection to gold today is not that it was an actual constraint on increasing the money supply in the 1930s but that it could become one today. … [He] may want to preserve the ability of central bankers to create potentially unlimited amounts of money, which does require the abandonment of gold. Since 2009, Bernanke and the Fed have been able to test their policy of unlimited money creation in real-world conditions.” [Emphasis in the original.]

With the Bank of England recently following hard on the heels of the Fed. Pun intended. And one should note that the word “creation” in this context is an irony… but one that is almost certainly lost on those with an academic agenda to pursue: Mr Rickards’s last sentence above is a masterpiece of understatement!

Rickards summarises his conclusions on the false attribution of the Depression to gold thus: “the crime of tight money was not committed by gold but by the central bankers who engaged in a long series of avoidable policy blunders.” (Readers are well advised to get hold of Mr Rickards’s book: his analysis of the inaccuracies of the enemies of gold is extremely well done – as is the rest of this very important book.)

Which brings us up to date: avoidable blunders by policy makers. For how long have we been reading headlines that essentially declare Greece/Italy/Spain/the euro/the EU all to be teetering on the brink, when it is quite obvious that they are all well over the cliff and clutching at clouds to reassure themselves even as they plummet.

How does the current situation presage a return to the gold standard?

The gold standard must return, and in one of two ways. Either it is deliberately courted through enquiries as to the best form it should take and how it should be introduced, whether unilaterally at first, or in some form of international cooperation, or a unilateral introduction leading to other economies tagging along, pegging their currencies to a revitalised dollar anchored to a clearly defined gold standard… the options are adroitly canvassed by Mr Rickards.

Or, in the interestingly qualified yes to the question as to its inevitable return, it is reintroduced on the sudden as part of the emergency procedures that the President of the United States adopts to halt the chaos resulting from the unwillingness of politicians and economists and central bankers to do anything about the paper money crisis until it is too late.

Mr Rickards is extremely good on the possible agendas that will result from the present impasses: paper, in the form of multiple reserve currencies and Special Drawing Rights; Gold; or Chaos – with gold making its back door entrance as an emergency measure because by that time nobody will be able to stop it. And true to that emergency requirement, of course, gold will make its entrance by way of confiscation and the prohibition of all exports of gold from the States.

So if gold is going to make a comeback anyway, why wait? Why not prepare for its orderly reintroduction now, which will have the effect of avoiding the chaotic melt-down of value that will otherwise ensue?

“A studied, expertly implemented return to the gold standard offers the best chance of stability but commands so little academic respect as to be a nonstarter in current debates.”

In other words, there are none so blind as those who will not see.

Currency Wars

Mr Rickards has written an immensely important book. He is dry and unalarmist; he is not scaremongering – the situation is already too scary for that. His recommendations are measured, and as a plea for a change of mind and heart are couched in terms of compromise – for example, he insists that the only way to defeat the Bernanke thesis is for gold advocates to take it seriously and argue the evidence on its own terms, something which he does brilliantly.

He is also illuminating on how the gold standard can live comfortably with occasional central bank manipulation of the money supply – indeed his argument with Bernanke shows just how it was the failure to do this that caused the problems that Bernanke and co. blame on gold – but in such emergency circumstances that gold will still act as a constraint on the possible solutions – i.e. will keep the interventions in check. As well as, I would say, provide the yard-stick by which such interventions can be properly evaluated as necessary.

He even suggests reviving Keynes’s suggestion, made at Bretton Woods, for an internationally gold-backed currency; he goes further and suggests that Keynes’s rather inelegant name for this substance, the “bancor”, could be adopted. Now there’s an olive branch for you.

If only Keynes had not held all his other prejudices against gold… his thinking seems to be that gold was a barbaric relic perhaps in so far as it supported nation states, but was alright as the support for a supra-government supervised international currency of last resort. Well, the European Union is teaching us a lesson about supra-government international arrangements that we should heed before the chaos that Mr Rickards so calmly describes engulfs us all.

[At a later date, I will continue reviewing the whole of this illuminating book.]

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Tags: Banks, crisis, Currency, Debt, deflation, DOLLAR, Economy, European Union, Gold, History, inflation, Investment, Money, USA
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The BRIC attack: A major political event

Friday, April 27th, 2012

Translated from an original article by Charles Sannat, Director of Economic Studies, AuCOFFRE.com, Paris

The Fourth Summit of the BRIC nations, a major political event.

This is a huge story and yet has gone largely unreported by the major western media. On the 29th of March in New Delhi, the Fourth Summit of the BRIC nations took place (Brazil, Russia, India, China).

“The BRIC nations (Brazil, Russia, India, China and South Africa) should no longer use the US Dollar in their bilateral exchanges. That is what was decided on Thursday the 29th March, 2012, during the Fourth Summit of leaders of these five nations in the Indian capital”.

Source: algeriedz.info and rian.ru

The following was decided during this meeting: an essential step was taken towards a “multipolar” global monetary system. March 29th 2012 will undoubtedly not be the date remembered in history as marking the end of the era of the Dollar. Nonetheless, the change is major.

Towards an overhaul of the IMS

We are entering a phase of disintegration of the International Monetary System as we know it. Our monetary system dates back to the Bretton Woods agreement of 1944 which was brought to an end by the Jamaican agreement of 1976 (this ended the gold standard).

So what will happen now? Stock markets are starting to fall because the issuing of European bond funds is doing badly or is disappointing (depending on your degree of optimism about the outcome of this policy), which is the case for Spain and now Italy.

What one must understand is that according to the current economic system it is the surpluses of some which finance the deficits of others, thus creating a balance. In other words, western countries are in a chronic deficit which has been, and I stress has been, financed by the major Asian exporting nations on the one hand (China and India) and the oil-producing nations on the other.

For the last few years, nobody was lending to western states (by this we mean the US and Europe) which now find themselves in an irreversibly compromised situation.

It is this lack of external funds which is pushing the central banks, the FED and the ECB to massively intervene in the markets. The only option that remains for us is indeed the use of the printing press and the creation of money with all the negative consequences that follow.

Though this Fourth Summit of the BRIC nations is a founding step towards the overhaul of the IMS this is certainly not the ultimate goal.

Ground-breaking events in international relations

Discussing the topic of the monetary system without mentioning the political dimensions would be a mistake. The future International Monetary System will be shaped by the international balance of power and alliances between the major players in the context of the fight for access to energy and agricultural resources and in the broader sense to raw materials. A strong axis is taking shape amongst the BRIC countries, and Iranian diplomacy is also far from insignificant.

The trans-Atlantic relationship remains strong despite the strains and divergences. Lastly, one should not imagine that the United States of America will let their status as world leaders slip away without a colossal “fight”. American policy has always been based on a simple concept: “America First”.

We are thus entering a new phase in the current crisis:

In 2007, the subprime crisis led to a financial and stock market crisis.

The financial crisis led to an economic recession.

The economic recession lead to massive state intervention in the form of stimulus packages which resulted in massive debts for these states.

The debt crisis can only lead to a major monetary crisis.

The monetary crisis (which is on its way) will lead to the restructuring of the International Monetary System.

And… the manoeuvres have already begun. The global repercussions will be deeply felt, as the International Monetary System is to the global economy what tectonic plates are to geology. We are touching upon the essential part. The tremors will truly be felt.

Will you be ready?

Tags: Asia, Brazil, China, crisis, Currency, Debt, DOLLAR, Economy, European Union, Gold, India, Iran, Italy, Money, Russia, South Africa, Spain, USA
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THE UNITED STATES FEDERAL RESERVE’S GOLD HOLDINGS

Friday, March 2nd, 2012

By Mark Rogers

The Federal Reserve’s holdings of gold are not only non-existent, contrary to what many people understand, they do not even amount to paper gold.

In 1933, the first year of his presidency, President Roosevelt ordered the seizure of private holdings of gold (with some exceptions for jewellery and dentistry); this was followed in 1934 by the confiscation of gold from the banks. This was allegedly in response to the shortage of gold caused by the great depression.

In 1934 the United States fixed the dollar price of gold at $35/troy ounce (devaluing the dollar thereby). This became known as the “statutory” or “legal” price. In spite of all that subsequently happened, the U.S. refused to consider an increase in this price of gold, not the establishment of the Bretton Woods agreement and the International Monetary Fund, nor the devaluation of the pound sterling in 1949 which in effect raised the price of gold in the sterling area without a rise in its price in the dollar area.

In the 1950s the volume and value of the world trade in gold kept on increasing, leading to the idea that a universal rise in the price of gold could be brought about by its dollar revaluation. The growth of the world’s monetary gold reserves as then valued fell far below the increase in the current volume/value; thus, it became clear that the annual yield of new gold (at the same valuation) could not express the increasing volume of goods produced. The U.S. gold reserves had by now fallen to well below the level at which they guaranteed paper money. Nonetheless the U.S. price of gold remained the same.

Decoupling the dollar from gold

In 1972 the “statutory” price was adjusted to $38/ounce and again in 1973 to $42.22/ounce. These movements were followed in 1975 by the revocation of the prohibition on ownership of gold by private parties.

Amongst the banks that had had its gold reserves confiscated was the Federal Reserve – the Treasury was the authority which performed the confiscation. The fact that the Federal Reserve is quasi-independent of the government (somewhat analogously to the Bank of England before it was nationalized in 1946), explains the apparent anomaly of the state confiscating its own reserves.

The Federal Reserve was obliged to sell its gold to the Treasury at $20.67/oz, in return for which it received gold certificates worth around $3.617 billion.

So why does the idea persist that the Federal Reserve has any gold reserves at all? Because the deal done with the Treasury issued in those certificates just mentioned, which is why the Federal Reserve lists them, as the “Gold certificate account”, in its accounts, consistently valued at the final price of 1973.

The Fed’s “paper gold” not even paper gold

Dr Ron Paul, member of the House of Representatives, is the champion of getting the Federal Reserve to be audited by the Government Accountability Office: that task has always been undertaken by the Federal Reserve itself (surprising as that may seem). Hitherto his efforts at getting this into law have met huge resistance and evasion by the Federal Reserve (which is not surprising at all).

On the first of June, 2011, testimony by Scott G. Alvarez, General Counsel, and Thomas C. Baxter Jr., General Counsel, Federal Reserve (formal testimony here) before the Subcommittee on Domestic Monetary Policy and Technology, Committee on Financial Services, U.S. House of Representatives, Washington, D.C., of which Dr Paul was the Chairman, on Federal Reserve Lending Disclosures, exposed the nature of the “gold certificate account” in exchanges between Dr Paul and Mr Alvarez.

Crucially, it transpires that these certificates are not even claims to the actual gold that the Treasury confiscated. Said Mr Alvarez: “No we have no interest in the gold that is owned by the Treasury. We have simply an accounting document that is called gold certificates that represents the value at a statutory rate that we gave to the Treasury in 1934.″

In a fascinating analysis of this extraordinary statement, GoldNews.Com discusses what this means in terms of the relationship between the Treasury and the Federal Reserve: “The Treasury, however, in a desire to realize the value of the gold without selling it, used their gold as collateral against gold certificate issuance to the Fed in exchange for fresh cash for the Treasury to spend. The Treasury is able to print as many gold certificates as they choose, under one restriction from the Gold Reserve Act: the amount of gold certificates outstanding shall at no time exceed the value of gold held by the Treasury, priced at the statutory rate. This meant any increase in the value of the Treasury’s gold could be matched by printing gold certificates and those certificates could be used to acquire new Federal Reserve Notes (dollars) from the Fed.”

This is Quantitative Easing with a vengeance! In order to have more money to spend, the Fed is asked to print more notes, in return for which, and in order, presumably, not to disturb the “statutory” price recorded on the Fed’s accounts, the Treasury then prints more gold certificates.

An upshot of this is that the dollar is worth a good deal less than is assumed. And a corollary of this is that the manner in which the Treasury acquired the gold and its subsequent valuation as “gold certificates” would explain why, as noted above, the U.S. insisted on maintaining the dollar price at $35 for so long: it was an accountancy exercise and no more, and continues as such to this day.

Does this, at least in theory, mean that should there ever be a deal whereby the Fed buys its gold back from the Treasury, it would do so at that “price” on its books?

The analysis of this extremely complicated state of affairs by GoldNews.Com can be found here (Part One) and here (Part Two, from which the substantial quotation above has been taken).

Credit no measure of true value

Here, in the light of the above discussion, is a sobering observation made by C.H.V. Sutherland, then Keeper of Coins at the Ashmolean Museum, Oxford, in “Gold: Its Beauty, Power and Allure” (published by Thames and Hudson, 1969): “Collapse of the gold standard was followed by the era of credit currency. We accept a bank-note for the payment of £1, but in accepting it we receive in fact only the bank’s promise to pay £1. We accept a cheque, similarly; but a cheque again is no more than its drawer’s promise that his bank will pay us another bank’s promises. The growth of ‘money’ in this sense – and of course it is not money at all, in any true sense, but an extension of credit – is one of the most remarkable features of economic life since 1914 [emphasis added].”

There is considerable historical irony in the fact that President Roosevelt ended Prohibition in 1933, only to enact another prohibition on the private ownership of gold, with consequences which are still unravelling in the “current” financial crisis: I say “current” because the problems of paper money have been unravelling ever since the decisions about gold related above were taken – just as the same President’s New Deal, with its state-backed savings and loans funds, is a fundamental cause of the subprime crisis.

Tags: Banks, Buy Gold, crisis, DOLLAR, Economy, History, Money, USA
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THE CHINESE GOLD RUSH

Thursday, February 23rd, 2012

By Mark Rogers

This street 观前街 Guan Qian Jie, in Suzhou, near Shanghai, is full of Gold shops

During the seven days of the Chinese New Year’s holidays, people have bought 3.62 billion yuan’s worth (0.5761 billion dollars) of gold in Beijing, 15.5% more than last year. It was also reported that just two shops in Beijing during this same period managed to shift 1.5 tonnes (GoldCoin.org Chinese source). At GoldCoin.org we have previously reported on the expansive buying of gold in China in our article “Chinese queue at malls to beat Bernanke’s inflation with gold“.

John Stepek, editor of Money Week, recently pointed out that “Chinese citizens don’t have many options as far as saving their money goes – you can’t get an above-inflation return from your bank account, and the local stock market is a casino.”

What is happening? And why is it happening?

As with the eurozone, the flight – on this scale – into gold indicates extreme economic uncertainty and a desire to shore up one’s savings in the only real safe haven. Yet isn’t China supposed to be an economic powerhouse? Isn’t Beijing planning to float the renminbi (yuan), in an attempt to replace the dollar? Isn’t the Chancellor of the Exchequer actively working with the authorities in Hong Kong to make “sure that London is the western trading centre for the Chinese currency”, turning “the City into an offshore trading centre for the renminbi” (The Financial Times, 16 January, 2012)? The renminbi is about to become fully convertible this year – isn’t it?

Well, perhaps not: “capital account liberalization looks off the table … At the moment, the transfers out of China are manageable, but then again the economy has only begun to falter. No officials, even ones less obsessed about control than Beijing’s, would open up a capital account in a quickly deteriorating economic environment. Therefore, events are working against Zhou Xiaochuan [Governor of the People’s Bank of China], and so is Chen Deming, the boss of the Ministry of Commerce. Chen has tenaciously defended the interests of exporters by blocking currency liberalization, and with the country’s trade surplus set to decline—to about $150 billion last year from $183.1 billion in 2010 and $196.1 billion in 2009—it is unlikely that Chen will now let central bank reformers get their way. … If Beijing opens the currency wall and the markets are not ready, flows of investment cash could—and probably will—lead to a catastrophe. At this time, it will take years to get China’s banks and markets in shape for unregulated flows of currency. So don’t expect capital account convertibility this year or even next.” This is the analysis of Gordon Chang (author of The Coming Collapse of China, and Forbes contributor, here: “China says Yuan will be fully convertible soon”).

Declining demand for Chinese exports

Certainly the Chinese economy gives plenty of reasons for this degree of pessimism. One of the most important indicators of China’s burgeoning woes is the troubled eurozone: Europe was China’s biggest export market, but Europe has practically ceased importing. The immediate consequence of this is that recession is perceptibly looming in China, indeed there are, for example, reports that China’s steel industry is seriously struggling with the potential closure of many mills (The Economist, Jan. 23-Feb. 3, 2012). Add to this the optimism expressed at the recent Davos summit by American business leaders that the coming on stream of shale gas in the United States is going to dramatically reduce manufacturing energy costs there, thus enabling American manufacturers to repatriate production.

So does this explain the Chinese flight into gold?

Inside a typical gold retailer in Suzhou, China

See a previous article on Goldcoin.org called “1 Billion to buy gold as Chinese gold rush grows” for some facts and figures.

The figures are certainly impressive – not to say astonishing. But is it certain that these figures represent only concerned citizens anxious to preserve their wealth? The active encouragement of the People’s Bank of China, referred to in the cited article, that “1 Billion Chinese citizens buy gold as a way of preserving and protecting their wealth against inflation, economic crisis and the falling values of major currencies” could bear another interpretation: namely that the Chinese authorities are contemplating at some future tipping point to announce a patriotic handing over of individual gold holdings to the state – i.e. confiscation.

Moreover, let us look again at the declared intention of that same People’s Bank of China to make the renminbi fully convertible this year. The massive purchases of gold may have yet another interpretation: as a means of supporting the value of the renminbi when it floats in spite of the problems that both Mr Chang and Mr Stepek discuss in their articles cited above. And that raises another enigma.

China remains, politically, a Communist state, and remains fundamentally unfriendly to the Western powers – witness its recent active unwillingness to censure the Syrian butchers. That it has liberalised its economy since the reforms of Deng Xiaoping, and that this has opened trade barriers and brought prosperity to millions of Chinese is not to be doubted; but this has all taken place in terms of a closed political system that holds the whip hand over the economy, “state capitalism” interpreted in the interests of the Chinese Communist Party, that is, a fascist-corporatist economic model.

This raises intriguing possibilities in terms of those thousands of purchasers of gold. For while there are corporations that clearly function under the rubric of the Chinese State there are many more enterprises that appear to be private corporations but are in fact shells for the State (the Chinese corporate structure emulates in many ways the systems of incorporation that for a long time successfully hid the fact that ultimately it was the shameless and cruel King Leopold II of Belgium who owned the Congo Free State). And just as this operates at the corporate level, so may it operate at the individual level: there is simply no way of knowing how many of those individual or smaller-scale enterprises who are buying up gold may in fact be agents of the state.

A Chinese Gold Standard?

Remember that according to the World Gold Council and GFMS reports, China is the World’s largest producer of gold and is second only to India for gold consumption (but catching up fast). No coincidence here either!

So to answer the questions raised at the beginning of this article: What is happening? We don’t actually know. And why is it happening? One shudders to think….
…. But then imagine if one day the Chinese government “requires” private investors to place their gold in the People’s Bank for the good of the Nation – the national gold stock would swell considerably – maybe enough to back the Yuan with a Gold Standard and thus achieve its ambition to be the World’s Reserve currency?

A young investor contemplates the potential of gold

Tags: analysis, Banks, China, crisis, Currency, Demand, DOLLAR, Economy, Environment, Europe, Gold
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GOLD IN IRAQI KURDISTAN

Tuesday, February 21st, 2012

The Kurdish people have traditions in buying and using gold that are the same as the Indians of the sub-continent: the yellow metal forms an integral part of their marriage customs. Last year about 17 tons of gold were imported into Kurdistan, according to the Directorate for the quality control of gold in the Kurdistan region. The bulk of the gold imports came from Turkey and the United Arab Emirates, and this suggests that it was largely in the form of jewellery, essential for weddings.

However, this statistic for 2011 compares less favourably than the imports for 2010, which were more than 23 tons. By May 2011, the price of 21 carat gold had crept up from 228,000 dinars ($195 or £123) per ounce to 255,000 dinars ($218 or £138) per ounce. A consequence was that brides, who were the only people buying gold in 2011 (everyone else was selling), had dropped the amount purchased from about 50 ounces in 2009 to around 20 ounces in 2011.The rise in price has been attributed to the fall of the value of the dollar, encouraging more and more people in Kurdistan to move out of the dollar and into gold, with the consequence that prices were pushed up until only those intending to get married were purchasing it.

Another likely candidate for the rise in price, and increasingly so as the recent gold rush in Europe has proved, is the eurocrisis which has sent the price rocketing with no end in sight to its trajectory.

A custom in Kurdistan is to arrange for hundreds of marriages to take place on the same day; because of the organisation required, couples register with the agencies that arrange this in advance only to find that they have to postpone their weddings. The Kurdistan Regional Government had established a marriage loan for government employees, but because of the crisis caused by the rising price of gold, decided last year to extend the loans to all.

Gold and Oil Resources in Iraqi Kurdistan

Iraqi Kurdistan has had an annual growth rate of about 10%, which is similar to India’s, though Kurdistan has a much smaller population of course, around 4 million. This was spurred by the no-fly zone policy carried out by the RAF and USAF between 1992 and 2003. The main impact of this policy was to facilitate the development of Kurdistan’s oil fields: reserves are estimated at 45 billion barrels of oil, extraction of which was begun in 2007. There is so much oil that the revenue from it pays for infrastructure and there are no taxes.

A downside to the oil wealth is that although Kurdistan has gold deposits these are not mined because no one sees the point.
That may change of course with the rising price of gold – and the observation that the Iranian government is facilitating gold exploration in the neighbouring Iranian Kurdish province, one of the projects being in conjunction with Rio Tinto. More on this development in a later article.

by Mark Rogers

Tags: crisis, DOLLAR, Europe, Gold
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The Perils of Paper Gold

Thursday, February 2nd, 2012

“The physical gold market is actually being drained by euro gold buyers. People are converting their euros to gold and there is only a finite amount of physical gold available.” The “London Trader” made this assertion to King World News on January 17, 2012.

He also expressed concern over the amount of “paper gold” being created: “Yes, you will still see games being played and yes you can create paper gold out of thin air. But there comes a point where each time you do that the physical buyers are taking it and it has a lagging effect that will catch up, and eventually it gets reflected in the price.”

What is “paper gold”?

As might be inferred, it amounts to a trick.

“The IMF actually invented what became referred to as “Paper Gold” in 1971 – months before the U.S. severed the tie between the Dollar and Gold.

The IMF knew this step was coming, and so it invented the “SDR” (Special Drawing Right).

It was touted as a Reserve “Currency” that would replace both the U.S. Dollar and Gold in the basements of the world’s Central Banks.” source: The Privateer

This is astonishing: the yellow metal, something solid, something of genuine value was going to be replaced by – paper! It gets worse: in discussing StreetTracks Gold Shares (ticker symbol: GLD), the NYSE-listed exchange-traded fund sponsored by The World Gold Council, James Turk (Founder, Gold Money) explained on March 5, 2007 just how this paper gold “functions”:

“Investments in gold can be nearly anything gold related. For example, they can be gold certificates and other promises to pay gold. Importantly, they do not have to be physical gold. Therefore, all GLD has to do to satisfy its auditor is to show them the bank statement (i.e., a piece of paper) that says gold is stored in any Subcustodian appointed by the Custodian. The auditors do not have to go to the vault of the Subcustodian to prove that the gold actually exists, is not encumbered in any way, is securely placed in allocated storage, and accurately records the ownership of the fund.

“If GLD declared its asset to be “Gold”, the fund’s auditor would have to substantiate that the gold really exists, which GLD of course cannot do because of the inability to audit or even inspect gold stored in subcustodians and sub-subcustodians, which is a risk noted in the prospectus. This reality just re-confirms what I and others have concluded all along – GLD is just a paper scheme. It should not be considered as an alternative to physical gold ownership because it is not.” source: The Paper Game

This happens because what is being traded is called “Investments in Gold” rather than “Gold” as such. So in effect this is trading on a promise, and a loose one at that. One must wonder why the World Gold Council endorses what looks suspiciously like a fraud: read more of Mr Turk’s article to discover how trades in these “assets” can result in two people owning the same piece of gold!

Friedrich Hayek pointed out that merely putting the word “social” in front of a legitimate concept (e.g. “social justice”) automatically deprived that concept of meaning; the word “paper” clearly fulfils the same function in high finance….!

by Mark Rogers

Tags: Banks, Currency, DOLLAR, Euro, Gold
Posted in Buy Gold, Gold, Investment | No Comments »

Gold Censored by US TV Networks

Thursday, December 29th, 2011

Watch the Ads they didn’t want you to see here – read on

There are many theories surrounding the manipulation of the Gold Market and the Gold Spot price but few doubt that it takes place, orchestrated by some greater beings that seek to control the money supply.

In a recent cynical twist, gold has been effectively censored off the air of a host of major US TV Networks working in collusion with the Obama administration and the Fed.
An established gold investment company recently made two TV ads to be aired across the networks. The ads feature caricatures of Obama, Bernanke and Pat Boone who narrates the story. The latter works for the company Swiss America and has long been an advocate of the virtues of gold versus dollars.
The first of the ads takes a humorous jibe at Bernanke’s Wall Street reputation for being “helicopter Ben” , ready to dump money on a crisis.

“made-up” reasons for ban?

The reasons given for rejecting the ads vary from ;
• Comcast who explained that it “doesn’t meet our standards on public symbol. The Comcast Public Symbol Policy apparently specifies that the “use of the name or likeness of the President of the United States and/or the Presidential Seal for endorsing commercial purposes must be authorized by the White House.”
• Fox News said the “representation of public figures is something we try to avoid.”
• CNN/HLN told Swiss America the commercials were “not appropriate for the current political landscape.”

Swiss America CEO Craig Smith said “The networks’ reaction shocked me,” Smith said. “It’s a threat to First Amendment rights when a commercial message is rejected not because it is inaccurate or misleading, but because it makes what is perceived to be a political statement the networks want to avoid.”

Smith told WND he was concerned that the networks were protecting Obama and Bernanke.
“All we are saying in these two commercials is what dozens of responsible professional economists are saying every day,” Smith said;

“Gold investment as a responsible diversification strategy when governments printing of fiat currencies with abandon risk unleashing inflationary principles.”

Inflationary pressures are building globally and no-one has an answer to them rising and the consequent economic impact.
It is a common known fact that storing gold through a crisis and inflation is the BEST way to protect your wealth value and its purchasing power. This has been the case for 6000 years.

Gold can never be worth zero – it has intrinsic value.
Fiat currency can become worthless – its only value is that of a piece of paper

The Ban backfires

However, the censorship has backfired as Google TV accepted the ads which will eventually be shown throughout the networks via Google TV!
These humorous videos tell a very straight and simple story and the only possible reason for banning them is because of how close to the TRUTH they really are – and that hurts the Politocrats who believe they are all supreme and mighty to judge over us, control us and bankrupt us.

They are so desperate to cling on to power they will do anything – except we are not the fools they take us for – are we?

Tags: Banks, crisis, Currency, Debt, DOLLAR, Economy, Gold, Gold Price, inflation, Investment, Money, USA
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European interest rates to stay low

Friday, November 4th, 2011

Last May in an article with the heading “Has Jean Claude Trichet gone mad”, we explained why the move to increase interest rates initiated at that time had, in our eyes, little chance of being sustainable.

Confirmation came on November 3rd, 2011 with a fall in the official market rate of the European Central Bank, the ECB.

On taking up his post, its new governor, the Italian Mario Draghi, decided for his baptism of fire in the media to lower the interest rate by 0.25 points – this whilst he is supposed to give his first official press conference next Thursday.

What is necessary to understand by the taking of this decision that we had largely anticipated, is that Europe and generally all of the said developed countries have now fallen into the “trap of low rates”.

The best example to illustrate this phenomenon “of the trap of low rates” is of course Japan which for several decades now has been in the situation of financial impossibility with regard to increasing its interest rates.

To finance not the refunding of the debt but solely the interest on the debt, it is vital that the rates should be as close as possible zero. The slightest increase puts the public finances of all nations in danger.

The second reason it is not possible to raise rates is that there is quite simply no growth, nor return to growth, and that here too Japan perfectly illustrates this situation of lack of growth over the very long term.

This decision is excellent for gold. This news is excellent for the banks which will be able to increase their margins through cheaper recapitalization with the ECB and by lending at a higher price to their customers (reconstitution of margins). This news is good for companies because by lowering rates that can make it possible for the euro to drop slightly compared to the dollar giving some breathing space to our exporters. This news is excellent for borrowers at variable rates. This news is excellent to limit and support the risks of a new unavoidable recession (which the ECB expects) in Europe because of the massive austerity plans affecting almost all of the European countries.

The Italians had nicknamed Mario Draghi… super Mario! Our new governor of the ECB has only to finally announce an “unconventional program of quantitative easing” to ignite a bullish trend in the financial markets. This barbaric expression simply means that the ECB would use the money printing instrument according to needs. Like Switzerland. Like the USA. Like the United Kingdom.

The message communicated today by Mario Draghi is an important reorientation. We have from now on one certainty. Rates can no longer go up. We expect for the next few months that the money printing machines will be brought into use. If the attacks continue against Italy, it will be the only solution possible.

Until now the Germans totally reject this solution. If the situation worsens, they will have to accept the recourse for the printing of money, or… leave the euro.
Germany’s exit from the euro is the less considered scenario and yet for us it is the one that is most likely to occur.

It would undoubtedly be the best solution to put an end to the European psychodrama.

Translated from an article by Charles SANNAT
Director of AuCoffre.com
Economic studies
www.aucoffre.com

Tags: Banks, Debt, DOLLAR, Euro, Europe, Germany, Gold
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Crisis, what crisis?

Wednesday, November 2nd, 2011

The G20 in Cannes is in crisis as its host President Sarkozy remains distracted by the Greek referendum announcement and the implications for his cunning Franco-German solution, hatched with best chum Chancellor Merkel to the European debt crisis.
The G20 group accounts for 80% of global wealth but also brings together huge differences in perception of where the world is at.

The Chinese have 3 Trillion dollars to help out the troubled western economies if it chooses. But then the Chinese are a nation of savers, hard earned cash they earn from long days of toil, often in self-enterprise ventures, is regularly put aside as investment for their future. On average the Chinese put aside 25% of monthly income for a rainy day. However their view of our crisis is somewhat different as one guy likened it to “ a bankrupt wealthy old man asking a poor man for money”. Some Chinese also remember the past experiences of decadent Western capitalism and imperialism. As Holly Williams from Sky News said “They don’t see why they should invest their hard-earned savings to help out economies and people to continue to have much more than they ever have had or ever will.

It is worth remembering that the average Chinese citizen lives below the poverty line and the new found wealth and middle class does not benefit the majority of China’s population – just like every other country you may care to analyse. The distribution of wealth always remains top heavy to keep our governing powers in the manner they’re accustomed and the bankers with enough profits to pay for it as well as their own hefty bonuses.

If you want to know to whom all the “money” has been paid that has resulted in this planet-sized debt then look no further than Goldman Sachs, their lawyers, all ex-heads of state and the personal fortunes of other prominent world politicians over the last 40 years, the Federal Reserve, the history of the Rothschild fortune and the IMF.

Will this debt ever be properly accounted for or ever paid back? No and No.

That’s why China does not want to lose value of its accrued wealth to the whims of US or European debt. Both lack a credible and coherent plan. Obama and Sarkozy have both got one eye firmly on domestic matters as they prepare for re-election next year.

Greek Tragedy?

The joke is they were all so smug thinking they’d sorted out a plan to buy time with Greece and then Papendréou goes and drops a bombshell with his referendum offer as a democratic gesture to the Greek people – oh yeah!
Trouble is he doesn’t actually care because he has nothing to lose and he knows what is coming as we wrote in “Greeks prepare a coup d’état ?”

He has taken this opportunity, his last on the European and G20 stage, covered by the world’s media, to play centre stage and enjoy his moment. He was called before the Headmaster and Headmistress of the Franco-German alliance, to explain his unilateral approach to life and to discuss the question that will be put on the referendum.
He indicated that sovereignty of Greek affairs remained the jurisdiction of the Greek parliament and its decisions are binding before all others and not open to outside interference. So not your average pro-European stance!! As I’ve said he’s got nothing to lose and knows what is coming.

US upgrades priority on plans for Iran airstrike

I also heard that the US and therefore by default the UK as well are bringing forward their plans to conduct air strikes on Iran. Seems they’re centrifuges are back in business as is the possibility of producing weapons grade nuclear material. Looks like they’ll hit their not-so-secret secret mountain production facilities. Intelligence reports backed up by International Atomic Energy Agency gives this story more than usual credibility. The word on the street is that Obama is nervous.
Israel says report proves “we told you so” for years that Iran posed a significant threat to its existence.

UK General strike will paralyse a nation

In the UK a massive general strike looks set to take place at the end of the month over public sector pension reform plans. The nation could be brought to a standstill with a 3 Million walkout planned. Negotiations between the Government and Trade Union leaders are not making any progress even if there is an improved offer on the table. The taste of austerity is always bitter.

Silvio doesn’t want to spoil a party

Finally Italy rushed out a message on the eve of the G20 to announce a package of austerity measures no doubt to comply with some previous handshake and just to make sure drinks with the others went well in Cannes! We’ll believe them when they’re implemented, successful and have brought about the desired effect.

Ever wondered why the announcements of “new improved measures and offerings to us all” from politicians always get great airtime but we rarely see a “results show” – then again fixing figures is a way of life for some so don’t settle for less than “seeing is believing” proof.

Crisis, what crisis?

So the world, its economies, all nations and globalization are working fine and there’s nothing to worry about – fine – and remember in this case do nothing, just enjoy every moment of a beautiful daily life.

If you thought for one minute this may be in jeopardy would you insure against it? Just like you would a car against an accident so you can afford to replace it if necessary, or against a fire so you could rebuild your home?

How do you insure yourself against a crisis?

Transform some of your wealth into an inflation-proof, crisis-proof physical asset to protect yourself against devalued or worthless currencies, loss of income and employment, contagion, bank collapse and debt default.
The problem with hindsight is that it’s too late to take preventative action. Only acting before the event gives insurance cover so find out about owning gold and gold coins as a real alternative for a safe place to store wealth.

Tags: Banks, China, crisis, Currency, Debt, DOLLAR, Economy, Gold
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Stock trading payable in gold!
Friday, October 28th, 2011

While many players in the stock market decry gold because it brings nothing in, “it doesn’t work”, the yellow metal will soon become the currency of the Swiss stock exchange! A good way to make equity investments more attractive!

The Six Securities Services Company, specialized in the settlement and the delivery of equities, is totally innovating by offering payment of stock trading in gold: a world premiere.

Customers will soon be able to buy shares in Zurich and set in units of gold, the XAU (a unit of XAU equals one ounce of gold in US dollars). In order to pay their trading in XAU, investors must have an account in XAU with the SSS Company and that it is of course supplied.

This news provides opportunities as the introduction within weeks of quotation and trading of structured products negotiated in XAU.

Gold is back on the market as the currency exchange
We can consider several reasons for this initiative: in the current floating exchange rate system, the dollar is losing more value, from the urge to print, and the euro is endangered by the threat of Greek bankruptcy, the recapitalization of the banks and the likely printing of more paper money. As for the other hard currencies, like the Swiss Franc, they prevent their issuing country from exporting because they are too strong. So the central bankers do everything to prevent their currencies becoming too valuable and consequently a haven for Forex investors.

On the other hand investors bought a lot of gold in recent years. The gold fund is therefore to carry out the transactions XAU. But the other reason is that the market and the global monetary system being more uncertain than ever, they wisely invested in a wealth that would never lose its value : gold. It has become the new currency of trust. “We already have three foreign exchange settlements, gold is the new currency”, said the spokesman of Six Securities.

Evidence if need be is by becoming the currency of financial transactions gold does not only benefit from being a trend or a passage linked to the crisis. It should be seen as differently as the crisis and the lack of confidence in markets and economists is much deeper than it seems. Previously considered as “the currency of last resort”, gold became the official currency exchange. A sign that should worry everyone… except those with gold!

Tags: Banks, crisis, Currency, DOLLAR, Euro, France, Gold
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Gold demand mid-year review
Sunday, July 31st, 2011

We are late July and it is time to look at the gold accounts for the first half of 2011! Hinde Capital Fund Management conducted a study in June 2011 entitled “A Golden Renaissance, Precious Metal Dynamics ” which confirms the upward trends in physical gold (but not in “paper gold”).
Another analysis conducted by Goldsphere Edmond from the Rothschild Fund also confirmed this rise in demand in countries with a strong geopolitical risk despite stagnant mining production.
We were expecting a correction in the Gold Trend this summer and yet just the opposite has happened.
The Eurozone and American debt crises have helped this push upwards which has not been this significant since the beginning of the century.
Gold has risen an average of 19% per year since 2001. It is now facing an unprecedented demand.
Since the United States imposed the dollar as the world’s reserve currency and then subsequently flooded the market with it to increase consumption, the dollar has been heavily devalued. Their ability to stifle the price of gold has waned and globally investors have sought to ditch large reserves of weakening dollars for something safer. These investors initially thought the Euro may be the path to take but they got it wrong again and are now flooding into the only sure refuge which is physical gold. It is incredible how so many of these high flying know-it alls seemed oblivious to the obvious risks in the Dollar and then the Euro. Do they really research their options or just deal over expensive meals and golf holidays. Could they not see the blatant crisi of Sovereign debt affecting the major economies of the world? One has to ask what they have been doing for the last ten years and how apparently well-informed intellects make such poor judgments? (Must be the constant intoxication of self-appreciation, greed, drugs and alcohol)

A steadily increasing demand since 2003

Particular strength can be found in emerging nations where the demand for gold is rising to the detriment of the Green-back: 12% for India and 21% for China. Also, Mexico has filled its coffers of 93 tons of gold in the 1st quarter of 2011. Asia accounts for 62% of the demand, some of it cultural such as in India, but also other countries now active in the market are seeking to catch up for lost time (private investment now allowed in China) but also because “Governments wish to increasingly diversify their foreign exchange reserves and to disinvest from the US dollar or other currencies in trouble” (Option Finance Agency, France).

Other sectors such as jewellery are also in high demand (+ 55%) despite the rise in the price of gold (+ 3.1%). For this first half of 2011, the demand increased overall by 25%.
The paradox is that the demand for investment is still low, which proves that the course gold has nothing to do with any speculative flows. Indeed, it is also estimated that there is a mass of net flows out of “paper gold” (such as ETFs) equivalent to 55 tonnes. Overall, investments in gold are less and less by speculators, which is positive for the gold price trend. The attraction of a safe haven and sure value during these difficult and uncertain times is populating the gold investment market with serious investors, both private and institutional. This is hardly surprising when one calculates the increasing risks attached to most other forms of investments (which are largely based on owning bits of paper and have proved catastrophic to large funds in recent years).

Physical gold, a healthy investment

This study also shows that despite a growing demand, mining production did not increase accordingly and in fact was virtually stagnant. Recent fears have also surfaced that South African mines will be closed by strike action.

Another surprising finding is that gold sold by individuals to be recycled is steadily declining. This shows that the masses wish to hold on to something of value and also that they are fed up with being ripped off by those crooks who run incessant TV ads.
Even in Greece and despite the crisis, gold plays its role as a life insurance and safe haven since it is often kept in the home. Despite the attractive gold prices Greeks will not sell that they already have and they are still likely to buy more as a protection for their future survival.
Finally, another unexpected discovery, physical gold investment is disconnected from gold shares (the gold shares represent only 1% of world market capitalization). This disconnection is partly explained by the increase in the costs of production for mining companies and the difficulties encountered by countries which are politically unstable (Burkina Faso, Côte d’Ivoire).

“Khrysos (Gold) is the child of Zeus, neither moth nor rust devoureth it; but man is devoured by this supreme possession” (Pindar, c. 522-422 BC).

Gold companies should eventually be seen as worthwhile value but for the moment it is physical gold that is benefiting from investment because it is a real, tangible asset that you own and not just a promise.

On Goldcoin.org we have always preferred physical gold to “paper gold” for many reasons, but if one were to cite a single reason it is that the providers/suppliers of ETFs (Exchange Traded Fund) can fail themselves as a Company which means you lose everything as you do not own a specific piece or pieces of gold, they do. On the other hand, if all ETF holders asked to recover in physical form their investment in gold, it would be impossible because they have sold more ETFs than they have Gold– sound familiar? It is the equivalent of Fractional Reserve Banking but applied to gold because these providers work and think like banks – and we know where that type of mentality led us to!!
Unbelievable Shallow Arrogance
Finally, as we approach the eve of the US debt deadline it is worth paying note to the despicable behaviour of so called elected democratic representatives who would be chastised in primary school for the same childish squabbling. Worse still is listening to them speak as they grandstand before the world’s media playing out their silly games. They sound like caricatures from the Simpsons with their phony accents and voices and yet we are to believe these are the best the “greatest nation in the free world “has to offer – I pity regular Americans who are governed by such an inconsiderate bunch of self-interested marionettes. Here at Goldcoin.org we have previously discussed the true nature of these politocrats in “Conspiracy, Collusion and Con-men – Why don’t they want you to buy Gold?”

As they push ever closer to the deadline it seems that they actually want the US to default and let’s face it so should we all – it’s about time the Fed and the Financial giants got their come-uppance by losing everything so we could start again and hopefully with something better- honest would be a start. Their brinkmanship may just backfire as the markets decide to take them down anyway even if they agree!
We have previously referred to this in “Financial Meltdown and Black Swans – Myth or Reality?” .
Should the Dollar collapse, which is an increasing possibility even when they introduce QE3, Americans and the rest of us should prepare for hard times not yet witnessed by most of the generations alive.

To give you an insight we suggest reading “The chaos of a currency collapse” and multiply the effects by millions!

The stage is set for the Chinese Yuan to take the place as the World’s Reserve currency and the American politicians are doing their best to make sure it happens!!

The strengthening demand for physical gold investment is no accident as more and more regular folk know they need to protect themselves before the chaos and crisis ahead.
Don’t miss the opportunity, buy some gold now as insurance against losing everything when the Wall St bell falls silent!

Tags: Asia, Banks, Buy Gold, China, crisis, Currency, Debt, Demand, DOLLAR, Economy, Euro, France, Gold, Gold Price, Investment, USA
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The chaos of a currency collapse
Thursday, June 16th, 2011

Last month Belarus witnessed the effects of a collapsed currency when the Government cut the rouble’s value against the US dollar by almost half. Previously 3155 roubles would buy a dollar but in the blink of an eye they decided 4930 would be needed. This was not even the reality because perception of the collapsing currency meant the situation was even worse as people scrambled for foreign exchange on the black market where you needed at least 6000 roubles to buy a dollar.

So what sparked this crisis?

President Lukashenko had promised to raise public sector wages by a third during his election campaign, which he duly carried out. This was sustainable only because of the support Belarus received from Moscow in terms of loans. However, as fears grew about the country’s finances, support from Russia waned and even near neighbours from the EU didn’t fancy the risk thus sparking a sharp drop in confidence in the currency.
To exacerbate the problem there was a shortage of foreign exchange currencies, dollars or euros, in the country.

The consequences of a collapse

Shelves quickly emptied of food and any "tangible asset" that would hold value better than their currency

Wide spread panic broke out as the economy effectively became paralyzed and people suddenly realised their currency was of diminishing worth. Shops were quickly emptied of everything that could be bought. Everyday food was snapped up at “luxury” style prices as people thought of survival but also they also bought electric goods like toasters, microwaves, canned goods and virtually anything that was for sale as they rushed to convert their currency into “any tangible assets” that were not losing value as quickly as their roubles.
The empty shelves throughout the towns seemed eerily reminiscent of the Soviet controlled days.
Shoppers knew that anything they could purchase could be more useful as a form of barter than the diminishing currency in their purses and wallets.

The human cost was quickly evident from the stories of employees sent on unpaid leave as companies also struggled to cope and comprehend the impact. Andrei, a computer company employee explained how he queued for a week in Minsk trying to buy dollars but didn’t even get one. “In just one month, I have been made bankrupt, the entire country is bankrupt” he said, adding that “even during the Soviet collapse we never suffered such a nightmare”.

There are many more stories of hardship, families without food or the means to buy any, shops without stock for them to buy even if they had the means.

Dmitry who is a 48 year old factory worker explained how he closed his bank account to get out 5 Million roubles in cash so he “could buy something before my money turns to dust”.

Tensions are growing as many people blame the President for mismanaging the economy.
Staple food supplies are now hoarded but people feel anxious that unrest is starting that could spill over into conflict at any time.
Revolution is always more likely when the population are starving.

Which country is next?

This may all seem so far away from wherever you are reading this but the causes of currency collapse may be closer to your doorstep than you think.

How many countries are in deep debt and reliant on support loans and bailouts right now?
Greece, Ireland, Portugal, Spain, Italy, Japan, USA, Belarus and virtually all of Eastern Europe and the Euro zone (only they never put it in the headlines!)

What happens when the support cannot be maintained?
Currency Collapse.

It could be the US Dollar, the Euro, the Yen who knows?
But even if it isn’t your currency that collapses what will be the knock on effects in every developed country if one of these currencies collapses?
The same as in Belarus.

Globalisation has been the buzz word for expanding Capitalism but it also means that economies are now inextricably linked and inter-twined to such an extent that when one sneezes they all catch a cold!

Remember the level of Sovereign Debt is spiralling out of control in the US, Greece, Ireland, Portugal and others are close behind such as Spain and the UK. Austerity measures in all countries are hurting normal folk badly – they are losing their jobs, suffering pay freezes, inflation and pension erosion. Social unrest and industrial action looms large across Europe and this will itself impact the recovery and debt repayment. This has already started in Greece, Portugal, Ireland and large scale protests in the UK are gathering momentum with the Autumn likely to be the boiling point of anger.

The discontent and despair of regular folk is understandable as they are bearing the brunt of all the hardship and it just isn’t fair.
Politicians spout their practiced rhetoric about how to fix things but the reality is they just don’t care that much as they are not the ones affected. They have means to isolate them from the hardships and many of them are actually responsible for producing the mess. How can they care about regular people or preach what we need to give up when they don’t – ever met a poor politician? Enough said!

There is now even talk of a “sub-prime” type problem in China because of over-indulgence in property speculation, leaving huge swathes of developments empty or under-occupied and therefore leaking money and ready to default.

We need more than lip service!

Mainstream news outlets are all controlled by self-interest groups (private and Governments) and they never provide the whole story about global economic frailty as there would be worldwide panic if they told the truth. The situation right now is on a knife edge and the next Belarus is not far away. Politicians won’t admit it but then again they won’t suffer like the rest of us as they’re all rich enough and well connected to see out any storm. They care too much for their own popularity to be honest.
Posh boys and rich kids rule the world and their assets are well protected in advance.

Remember what happened when panic struck in Belarus, people bought any tangible asset they could because it would maintain value better than their currency.
This phenomenon is happening daily – your bank account is the best place to keep currency if you want it to devalue!

Currency is not a means of preserving wealth because it has no inherent value especially when confidence is lost – then it is just a piece of paper.

The only real money available is a tangible asset that maintains its value whatever happens to printed bits of paper currency – and that is gold!

A lesson on Money and currency

We need to understand the difference between money and currency as one is real and the other a promise. Money can be defined as a medium of exchange and a store of value and until fairly recent times was in fact coins made out of precious metal with an intrinsic value or for ease of use, notes backed by precious metal.
Money, when considered as the fruit of many years’ industry, as the reward of labor, sweat and toil, as the widow’s dowry and children’s portion, and as the means of procuring the necessaries and alleviating the afflictions of life, and making old age a scene of rest, has something in it sacred that is not to be sported with, or trusted to the airy bubble of paper currency. Thomas Paine (1737 – 1809)
Currency is still a medium of exchange but is not a store of value as it only derives its value by government degree or “fiat”. It’s value is based on the issuing the authority’s guarantee to pay the stated (face) amount on demand, and not on any intrinsic worth or extrinsic backing. All national currencies in circulation, issued and managed by the respective central banks, are fiat currencies.

A days wages in Germany 1923

The problem is that fiat currency runs the risk of central bankers printing too much and causing large inflation or worse. The more that is printed the more the currency is debased just as the Fed is doing now with the dollar. This has been going on for decades with central banks indiscriminately creating money to cover expenditure and ever increasing debt. There are examples throughout history and in the 20th Century most of us are aware that in Germany in 1923 it would take a barrow load of Deutschmarks to buy a loaf of bread but an ounce of gold could buy a reasonable house and one dollar was worth 4 trillion marks.

This irresponsible printing of money has eaten away at the value of the world’s reserve currency the USD dollar and dollar based assets, to such an extent that they have lost 82% of value since 1971, the year the US cut links with the gold standard. The GBP has fared even worse that the USD losing around 85% of value since 1971. There are many illustrations of then and now and how owning gold with intrinsic value would have more purchasing pro rata than currency. E.g the latest model Cadillac Eldorado would have taken 180 ounces of gold at $42.02 to pay the showroom price of $7,546. This same 180 ounces is now worth over $200k and would buy two Cadillac convertibles with enough left over to fuel to first service. In the UK an average family car cost £1000 around 60 oz of gold and now the same would cost £17000 around 23 oz of gold. The 60 ounces would have bought the same family car for you a sports car for your wife and a hatchback for your son or daughter. Gold retains its purchasing power year after year.

Not long ago the gold standard imposed monetary discipline on countries as they had to hold enough gold to cover the money in circulation but this all changed with the Jamaica agreement in 1971 when the decision was taken by President Nixon on the 15th August 1971 to suspend the direct convertibility of dollars into gold, the keystone of the financial system created in July 1944 (the Bretton Woods Agreement). On the 1st October 1971 the general assembly of the IMF asked the board of trustees to study and propose a comprehensive reform. This would be adopted by member States during a meeting held in Kingston (Jamaica) on the 7th and 8th January 1976, and included a set of provisions which put an end to the reign of gold. The US money supply in 1971 was $776 billion and quickly became an upward curve which rose dramatically over the last decade where the US money supply doubled from below $7 trillion to $14.3 trillion indicating that spending is out of control.

The US National debt is now greater than this!

The US though still likes to play the rich kid on the block and bizarrely gives aid to those supporting its debt as a report in the Daily Mail of London illustrates:
The U.S. is providing hundreds of millions of dollars of foreign aid to some of the world’s richest countries – while at the same time borrowing billions back, according to report seen by Congress.

The Congressional Research Service released the report last month which shows that in 2010 the U.S. handed out a total of $1.4bn to 16 foreign countries that held at least $10bn in Treasury securities.

Four countries in the world’s top 10 richest received foreign aid last year with China receiving $27.2m, India $126.6m, Brazil $25m, and Russia $71.5m. Mexico also received $316.7m and Egypt $255.7m.

And yet despite the massive outgoings in foreign aid, the receiving countries hold trillions of dollars in U.S. Treasury bonds.

China is the largest holder with $1.1trillion as of March, according to the Treasury Department.

Brazil held $193.5bn, Russia $127.8bn, India $39.8bn, Mexico $28.1bn and Egypt had $15.3bn.
Maybe it’s just additional interest on the debt to keep them sweet!

Greece figures predominantly in the spotlight and unrest is growing – will the Government have to mortgage the Acropolis and Parthenon or even sell them off to pay their debts?
Clearly they can never work their way out of this debt because they would have to increase GDP by 12% a year for 30 years in order to grow their way out of debt.
The Sovereign Debt crisis is well and truly out of control and the only solution will be to default on the debts and devalue currencies.

As discussed in the example of Belarus, chaos ensues when currencies collapse and regular folk suffer badly as they don’t see it coming or refuse to believe it could happen to them.

Be warned: A currency collapse is coming near you.
Be prepared: don’t put faith in bits of paper which have no inherent value.
Protect yourself: Invest in tangible assets that hold real value at all times, especially during a crisis.
Remember: Real money has inherent value, it is worth something because of what it is not because of what is written on it.
Now you know why people buy gold to protect themselves from crisis – it always holds value and is the only real money.

In summary:
• Currency is not money and its value can be changed by monetary policy makers
• Currency can be created and printed at will with no substance to support it
• Currency depreciation in value is accelerating with subsequent loss of purchasing power
• National debt is increasing to disastrous levels with threat of sovereign debt default
• Confidence in the USD is waning and its use as a reserve currency is under threat
• Countries and investors are shedding their dollar assets
• Central Banks are diversifying into gold and out of dollar assets
• Smart investors are diversifying their portfolios with a proportion of gold
• The value of gold has been consistent in retaining its purchasing power
• Gold is insurance for your wealth
• Gold is the only real money

I rest my case!

Tags: Banks, Buy Gold, China, crisis, Currency, Debt, deflation, Demand, DOLLAR, Economy, Euro, Europe, Germany, Gold, gold coin, Gold coins, Gold Price, Greece, History, inflation, Investment, Money, USA
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Gold coins for investment – the importance of coin condition
Thursday, June 2nd, 2011

Electronic scales help identify used and worn coins. The photo demonstrates a French 20Franc Napoleon Marianne Coq which is perfect according to its weight.

When it comes to gold for investment too many buyers pay little attention to the quality of coins at the time of purchase and all too often they realise the importance of this to their investment when it is too late, at the time of resale. In effect, at the moment you wish to sell your gold investment coins they briefly revert back to a numismatic object that will be evaluated and priced as such.

In other words “it’s a gold coin, a twenty franc Napoleon which I should be able to sell with a 20% premium during a period of crisis” quickly loses meaning if you haven’t taken the time before you bought it to verify the quality.

You see when trying to sell on gold coins to professional dealers they will be intractable about the coin quality. In fact they will know so much more than you that every little imperfection they can describe downgrades the value of your coin to them. They will use this to negotiate the price down by reducing or eliminating the premium you were expecting. Additionally they may only offer to buy your coin by its weight and relative gold content weight, minus their commission and a little extra because you have devalued the coin by “handling” it. Finally you will arrive at a price considerably less than you were expecting and certainly less than you’d worked out using the spot gold price or professional quotes for coins.

You may act surprised but then why would you be knowing that any investment in physical assets of such value requires or even demands that you do your homework on what you are buying and how it is assessed or valued. You would certainly need to consider the eventuality of resale and how that should be best done for the best price and at the profit for you – wouldn’t you?

Well gold is no different and you should familiarise yourself with the important factors to consider when procuring gold coins.

Obviously there are some coins that are so rare they demand an ever increasing price but this is solely based on its numismatic (collectible) value. That is to say an extremely rare coin is not as sensitive to a period of crisis or the ups and downs of the gold price but moreso its value is determined and measured by the availability (or lack of it) of other coins like it. An example we can use is the French 100 Franc Bazor which is highly sought after but very rare. Its price is very high (given its gold content alone) because there are very few left in the world. The price will rise in time for its “collectible” value but it is unlikely to double within 3 weeks which a 20 Franc Napoleon of good quality can because of its premium. Rare coins are also being looked at slightly differently in terms of taxation and whereas investment gold coins are exempt from VAT (Value Added Tax) throughout Europe, these rare coins are no longer automatically exempt.

What is the minimum quality of condition for coins still considered to have a premium?

Generally speaking a quality of “very fine (VF)” upwards, “extremely fine (EF)” and “mint state (MS)” are considered as coin conditions that still enjoy the benefit of a premium. These are the types of coins you should consider for gold investment. Apart from some rarities, the qualities of condition “fine (F) and “very good (VG)” will be bought and sold for their gold content weight and often finish up in the smelting pot for recycling.

Coins declared as “uncirculated (UNC)” are basically new coins that have never been in circulation or were never meant to be circulated. These will have an elevated basic premium due to them being issued direct from the Mint or in some cases may be very rare. In both cases the elevated premium makes them less attractive as an investment because their premium differential is weak. The premium differential is the % difference between the premium associated with the coin during normal economic conditions and the premium it may rise to during a period of crisis. A high starting premium as with UNC coins means there is less room for growth. Many of these UNC coins will be of interest to pure numismatists ie. Collectible.

A Good Magnifying glass really helps to identify the features and any faults

Things to avoid

Even once you have seen the table below you may not feel sure of what to look out for or feel capable to accurately judge a coins condition. It is exactly for this reason that we advise you to avoid buying coins from small ads, individuals or maybe through bid sites like eBay. It is hard enough to know which coins are in which condition but the photos you see are not necessarily going to help and who knows what a seller really knows about their product if you know even less! The trick is to buy from professional sources where you will find fully certificated, verified and referenced coins that are what they say they are. Coins which are professionally inspected and sealed in their packaging maintain their quality so they will still be as valuable when you come to selling them. If you were to keep your coins in a box , unpackaged, taking them out occasionally to admire them you are effectively damaging your own investment by downgrading their quality through handling. Of course that is the difference with gold coin investment and gold coin collecting. An investment produces maximum yield when its integrity is protected and the physical asset is in no way altered to undermine its value.

Please also note that it is the most worn side that determines the condition quality so be sure to look at both sides of any coin.

Be aware of over-shiny coins: these will have been cleaned using polish, chemicals or abrasion to buff up the look and hide imperfections. It is recommended to use a magnifying instrument to inspect any coin as the naked eye cannot always detect the craftsmanship of the precision engraving. These are a great indicator of condition as wear & tear erodes precious detail of the design. Naturally one should always check for the obvious dents and scratches caused by rough handling or shocks. Do not be swayed – these will affect the value of your coin because they affect its condition quality.

It’s also worth noting that some damage inflicted like scratches and dents may have removed gold from your coin. A simple test for this is to weigh your coin accurately on an electronic balance. A French 20 Franc Napoleon should weigh between 6.44 and 6.46g to be considered as valuable. Anything from 6.43g down should be left alone.

You will find some useful information in our glossary as well as some photos that may help you choose wisely.

Similarly we would suggest you browse through the Gold Coin buying guide from our friends at LinGold.com who have kindly let us provide this for you.

Below is a summary of the basic qualities associated with the gradings of coin condition and some useful translations for those looking internationally.

Gold Coin Gradings

Brilliant Uncirculated (UNC) or “Fleur de Coin”(FDC) – A perfect coin ( no traces of use, handling, shocks, scratches) which has 100% of its design remaining and still has a full mint sheen. These coins as the name indicates have never been in circulation and are exactly as the moment they were struck. They are indeed rare because even uncirculated coins may have been transported together from the mint to a vault and therefore have tiny abrasions or scratches from the journey. A coin in this condition must be flawless. Their rarity means they are of more interest to Numismatists and their elevated basic premium means they are not considered as a logical investment.

In other countries this is referred to as

USA: MS65

France: Fleur de Coin (FDC)

Germany : Stempelglanz (STG)

Italy : Fior di Conio (FDC)

Spain: Flor de Cuño (FDC)

Uncirculated (UNC) or Mint state (MS) – as implied these coins have never been in circulation and therefore have no visible traces of use, design erosion or scratching. However , they do not have the full mint sheen all over the coin which is usually due to transportation. Some countries still consider these coins as FDC.

In other countries this is referred to as

USA: MS63

France: Splendide (SPL)

Germany: Fast Stempelglanz

Italy -

Spain – SC

Extremely Fine (EF) – This is a condition of a coin that is almost perfect but which has had a little circulation and therefore will possess some small faults although often difficult to detect with the naked eye. Using a magnifying glass one can see some light scratches and some erosion of certain raised details such as hair, beards, moustaches, feathers that form the design. The mint sheen is missing and there may also be evidence of some little dents from transportation of coins.

In other countries this is referred to as

USA: AU 65

France: SUPERBE (SUP)

Germany: Vorzüglich (VZ)

Italy: Splendido (SPL)

Spain: Extraordinariamente bien conservada (EBC)

Very Fine (VF) – A coin in this condition shows obvious signs that it has been in circulation but it still has a good appearance. The coin rim can be slightly worn but still apparent and the relief features of the design can appear “tired” but not worn away. The signs of use are visible but the coin srtill has an agreeable appearance. This type of condition is considered as an average “plus” state of conservation which still allows the coin to attract a premium to its value.

In other countries this is referred to as

USA: XF 40

France: Très Très Beau (TTB)

Germany : Sehr Schön (SS)

Italy Bellissimo (BB)

Spain : Muy bien conservada (MBC)

Fine (F) - This condition indicates a coin that has been well circulated. Some of the engraving detail has started to flatten (ribbons, hair, inscriptions etc). The metal surface is dull or in some cases much too shiny because of polishing. Deep scratches are clearly visible as well as dents from impacts with some deformation of the engraving being apparent. This condition of coin can still be of interest to a numismatist but it no longer supports a premium and is therefore not recommended for investment which is better served by coins in the conditions above.

In other countries this is referred to as

USA: F 15

France: Très Beau (TB)

Germany : Schön (S)

Italy Molto bello (MB)

Spain : Bien conservada+ (BC+)

Very Good (VG) – Even though these coins are considered “very good” they are nevertheless traded purely by weight. They are very worn coins which have a mediocre appearance and have been circulated a lot. We can still just about distinguish their designation but some details are completely worn away or missing. The rim detail, engraved relief features are all but indistinguishable and any images are no longer sharp. These coins inevitably find their way to the foundry for melting unless they happen to have numismatic significance. However, in the light of being investment coins they are to be avoided. One doesn’t know how much gold has been eroded, the weights can vary greatly and there is absolutely no premium attached to these coins.

In other countries this is referred to as

USA: G6

France: Beau (B)

Germany : Sehr Gut Erhalten (SGE)

Italy Bello (B)

Spain : Bien conservada (BC)

This covers the principal gradings of coin conditions applicable to gold although one may also hear certain other terms used for « intermediate » grades such as ;

About Uncirculated (XF/UNC) which falls between Uncirculated and Extra Fine. It does not have an equivalence in every country and is therefore less used.

One may find various numbers attached to certain conditions particularly in France which allows grading within any given condition eg; SUP 55-62 which grades the “Superbe” from 55 to 66. However this should not be a concern for coin investors as the grading is a purely numismatic tool for specialists. The gold investment quality of all “Superbe” is the same as is their premium.

Finally there are even lower conditions such as “Good” and “Poor” but these are frankly of little interest to us because their condition is well below those required for investment and they are only good for the smelting pot!

Remember:

Gold Coins are an investment that you own!

They are not linked to Sovereign Debt like other investments.

You can buy them when you like.

You can sell them when you like.

Gold Coins have a better potential than Bullion because they have a dual leverage – Gold price and Premium.

Gold coins are transportable, great for liquidity and easy to resell.

Related articles include:

Half-Napoleon 10 Francs Gold Coins

The Premium on Gold Coins

Should I Buy 32 Krugerrands or a 1 Kg Gold Bar?

Krugerrand – The original Bullion Coin

Investment Gold Coins

Latest Gold Coin Prices

Paper money or Gold?

Gold Money, a currency of the past…. and the future?

Tags: Buy Gold, crisis, Demand, DOLLAR, Europe, France, Germany, Gold, gold coin, Gold coins, Gold Price, Investment, Sell Gold
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Financial Meltdown and Black Swans – Myth or Reality?
Monday, May 16th, 2011

“A black swan is the illustration of a cognitive bias (error in decision-making or of behaviour adopted when faced with a given situation).

If one encounters or observes only white swans, one will quickly deduce in error that all swans are white and that is what Europeans believed, for a long time, before making the discovery of the existence of black swans in Australia, in the 17^th century.

In point of fact, only the observation of all existing swans may give us the confirmation or invalidation that these are indeed still white but taking the time and means to observe all swans on Earth before confirming that they are all white is just not possible.

It is thus preferable to make the hasty assumption that they are white, in the expectation of seeing the theory dropped by the observation of a swan of another colour.

Thus we create arguments by starting off with incomplete information, which leads us ending-up with false certainties.”

What is the relevance of this story to the economy and your investments?

Quite simple really. Read on and observe the trend emerging.

- The University of Texas uses gold for its cash-flow….
Important information that has gone unnoticed is that the University of Texas has just invested approximately 1 billion of its cash-flow in gold. You will find below the article by Bloomberg.

The Board members see gold “just as another money but one which cannot be devalued by an additional printing of notes”.

Interestingly, they asked to take delivery of their gold – 6,643 gold bars, which is stored in a New York vault because of the fear of a Comex paper gold scam.

It should be noted that this university also trains economists.
So what should one think of such a strategy? Only that more and more private individuals and institutions are starting to have increasing doubts on the continuity of the global economic system in its current make-up. It also suggests that those in the know prefer hard physical assets to “paper promises”.
Yet “experts” previously thought that this was unimaginable and impossible!

.

But that is not all. These last weeks have been exceptional in terms of alarm signals.

- Two year rates for Greece exceed 25% for the first time ever. It means that Greece is perhaps only a few days away from a re-scheduling of its debt over which inevitably world banks, starting with French banks, will ruffle a few feathers. For information purposes, it is the Crédit Agricole which is the most exposed to the Greek risk, with all banks being nevertheless concerned.
Yet “experts” previously thought that this was unimaginable and impossible!

- The monitoring of the US debt by the credit rating agency Standard and Poor’s,

For those who have not yet understood or who really do not wish to understand, the US economy remains the leading global economy. A US default in payment would lead the world into an economic chaos without precedent. Inveterate optimists tell us that they do not believe in it. The very same people who did not believe in a seism of a magnitude higher than 9, followed by a tsunami of more than 15 metres in height, coming to destroy 6 reactors of a nuclear plant… and which exposed a whole country to radiation if not making people tremble with fear over the prospect of the entire contamination of the Northern hemisphere.

Yet “experts” previously thought that this was unimaginable and impossible!

- So what else have we learnt? – that the Morgan Stanley Bank has just made a voluntary default in payment of $3.3 billion on a 32 storey tower building which it owns in Tokyo. This repayment failure is significant because it was the largest of its kind in Japan and marked the latest fallout from a series of highly leveraged investments by Morgan Stanley, one of the most aggressive investors in worldwide property markets before the global financial crisis In short their loss seems of little importance to them because the value had plummeted and they just had to get rid of this building. What can be the motive of such a decision which is a historical first for this “venerable” institution?

Yet “experts” previously thought that this was unimaginable and impossible!

- To this we can add that CDSs (Credit Default Swaps) currently reflect an anticipation of cancellation of debt of some European countries able to reach 75% (CDSs act as “insurance” against the risk of bankruptcy).

Yet “experts” previously thought that this was unimaginable and impossible!

- And then there is China which wishes to diversify its foreign-exchange reserves and significantly reduce its holding in American dollars. Indeed, the depreciation of a currency is a means of refunding one’s debts only in devaluated monopoly currency. But it is done at the cost of the currency holder. Our Chinese friends no longer seem to want to be the guinea pigs and are looking to diversify into the Euro.

Yet “experts” previously thought that this was unimaginable and impossible!

- More dramatically, Mc Donald’s (the restaurant chain) launched a big campaign to recruit 50,000 jobs in a single day. Pathetic scenes showed to what extent the situation of many American families is disastrous. Almost 3 million people turned up to get work, some even camping the day before just to be sure of being interviewed. The situation simply turned to drama in Cleveland (click here to see video ) when a crazed driver ran over 4 people in the car park!.

Yet “experts” previously thought that this was unimaginable and impossible!

- And finally, on a lighter note, after the initiative by ex-footballer Eric Cantona even Mayors are having a go, at least the Mayor of the city of Ghent in Belgium for one, who has just taken the decision to withdraw his funds from two banks, namely Dexia and KBC, in order to protest against the policies of these two institutions and has invited all cities to follow his example…

Yet “experts” previously thought that this was unimaginable and impossible!

It is now obvious that more than ever before how vital it is to adopt a particularly defensive investment strategy.

I invite all private investors to take their potential profits out of the share market and to quit the financial markets. Particular caution is advised with regards to all the securities of insurance companies and banks.
A share in gold of approximately 10% of the total financial assets is to be seriously considered in order to protect one’s financial assets.
It is also strongly advised to get out of bond investments, except from a speculative point of view, starting first with Euro funds in life insurance contracts. These Euro funds are overwhelmingly made-up (approximately 75%) of sovereign debt, i.e. government bonds. Imagine how vulnerable they are to default and complete collapse.

… and remember this is NOT impossible, unimaginable or unthinkable – it is highly likely to the point of being inevitable.

I do not know if you have noticed, but I find that lately we can see more and more black swans.

Yet, as everyone knows, swans are white…. until proved otherwise.

Translated and Adapted from an original article by Charles Sannat

Tags: Banks, Buy Gold, crisis, Currency, Debt, DOLLAR, Economy, Gold, Gold Price, Greece, History, inflation, Investment, Money, USA
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Conspiracy, Collusion and Con-men – Why don’t they want you to buy Gold?
Thursday, April 28th, 2011

Here at Goldcoin.org we have always been suspicious of the Politocrats, Bankers and Global fortunes that endlessly manipulate markets and misinform the masses through the mainstream media.

Let’s face it they all have one thing in common and one goal – looking after themselves by milking the masses to increase their own personal wealth.

Governments around the world tell their voters that they are “doing it for the country”, “thinking of the future, the families, the under-privileged etc. etc.”

They lie. The only interest a politician has is keeping the power, its privilege and saying whatever it takes to stay there.

In reality nothing ever changes even when the ruling party does because they’re all in it together. They talk of democracy yet if you are not born into privilege, educated with privilege and financed by the wealthiest (who you must subsequently appease with policies that suit them) you have no chance of ever approaching the dizzy heights of Government where you can begin to change things for the common good.

Even Obama, the charismatic President of Hope, had to bow to the rich lobby with backroom deals to ensure he got into the race for the top. Where does the money come from to organise the campaign needed? Unless you’re a multi-billionaire you have to play along. So where is the democracy? It’s always the same interests that pay the candidates bills therefore buying the White House and controlling policy.

Look at the British model – Cameron, Clegg, Osbourne etc. – all posh boys with a lifetimes supply of money, public school and Oxbridge education. Same before with Blair, Brown, Darling and the dark lord himself Mandlesson (the biggest hypocrite on the planet). What do any of these have in common with their voters apart from the same type of passport. How can they have the audacity to preach what is right for the country and “sharing the pain” of austerity when it will never affect their own privileged lives.

Have you ever met a poor politician?

Have you ever met a politician apart from Nelson Mandela who has experience of real life, who has known hardship and suffering?

The political class all over the world are the same – self-centred, greedy, hypocritical, power-hungry and serve themselves before thinking about their peoples or country.

Yet when they spout their prepared rhetoric they expect us to believe what they tell us, they even convince themselves that they know what they’re doing. They’re ready to take the credit at the hint of a success yet they remain completely unaccountable for all the failures and the misery they create. No such thing as performance related objectives and pay for them. How many failed politician end up as a well paid consultant, after dinner speaker or in the House of Lords like Prescott (Socialist in only the drivel from his mouth and very much Capitalist in his lifestyle, cars and bank account)!

The Rothchilds, Rockerfellers, Murdochs and other similarly rich and shady “families” control everything from Governments, Fiscal policy and of course the markets.

One particular example is the manipulation of the Gold markets. This has long been explored and proven by our friends at GATA and it is worth reading some of their factual proof at http://www.gata.org/.

The Federal Reserve don’t want you to own Gold because they need you to borrow their printed bits of paper to make even more money for themselves. If they were a serious organisation would they have allowed a $14 Trillion + debt to run out of control? Would they be paying it off with bits of paper they keep printing (and therefore creating a devalued dollar by flooding the currency pool)?

In France, private investors hold more gold than the Bank of France and their affinity with the yellow precious metal goes back through history. The private investment in gold is continuing to increase as they arm themselves against this crisis. Eurozone sovereign debt issues are of great concern and people are taking no chances. The Greeks and Irish will default on their bailout packages and move to restructure. Portugal will follow.

The Euro will face a complete collapse or severe devaluation.

This is not a prediction but an eventuality. These three countries have no hope and no means to be able to cope with their debts and the austerity measures crippling their economies means growth is impossible. They face decades of misery, low standards of living and with inflation biting on daily necessities will soon be faced with civil unrest on an unprecedented scale.

However, a recent article by a prominent government adviser in France shows the unscrupulous lengths they will go to. His name is Philippe Chalmin who is a Professor of Economics and sits on the Governments advisory committee. He gave a ridiculous outburst decrying and demeaning the value of Gold and called it “completely stupid”.

This from a country that survived WWII because of hidden gold.

This from a government puppet trying to put investors off the scent!

Similarly an article posted on the Marketwatch website by a Wall Street journalist, David Weidner, completely trivialises Gold. He should know better and his views are akin to a rabbit caught in the headlights! You can see the detail via our friends at GATA here.

There is a stark contrast in the East where the Chinese are stocking up on gold. The Government, the Central Bank and private investors are actively being encouraged to buy. This shows intent to replace the weakening Dollar by the Yuan as the world’s reserve currency and to back it in gold. The irony is that the biggest attack on the US Dollar is from The US Federal Reserve by excessively printing bits of paper to buy off the US defecit.

The Establishment is petrified that people will ditch currency because Gold is a better protection against crisis and inflation – FACT.

The Establishment is petrified that people will stop investing in paper promises, stocks, shares, ETFs because they are all linked to debt and are vulnerable to collapse in a crisis – FACT.

The Establishment is petrified that they are losing control of the masses because we are not as stupid as they would wish and the real information flows freely and quickly via the net – FACT.

The Establishment is petrified that mere mortals like us are buying gold which leaves less for them and impinges on there “privileges” – FACT.

This is why don’t they want you to buy gold.

Greed, jealousy, protectionism, elitism.

Conspiracy and collusion by Con-men who seek to control everything.

So hit back and spit in their face

Buy what you want not what they tell you.

Beware of the mainstream media which is edited by those seeking to control.

Buying gold have never been so accessible and that scares them.

Buying gold protects your wealth against inflation and the effects of a crisis.

Central Banks, Governments and the Biggest fortunes in the world are all investing in huge quantities of Gold right now – do they know something you don’t?

Not now!

Tags: Banks, China, crisis, Currency, Debt, DOLLAR, Economy, Euro, France, Gold, Gold Price, Investment
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