By Monty Pelerin, on March 3rd, 2010
There is no greater scam than that being perpetuated by fiat money.
It is plausible that the gold market might be manipulated because of its critical importance to the current economic crisis. Gold is to Central Bankers and governments as The Cross was to Dracula. It threatens their existence.
Before governments got into the state of bankruptcy, gold hindered them from spending money they did not have. To truly increase spending and power, it was necessary for governments to remove the constraints gold imposed. Once that was accomplished the welfare/warfare state was off to the races.
Now, after almost forty years or nothing but fiat money, many governments are so bloated that they are no longer sustainable. Their key to survival (at least for some period) depends upon maintenance of the myth that fiat money is real. Gold is a huge threat to this scam.
Gold has been an alternate currency for thousands of years. It is the only currency that is not someone’s liability. It is not dependent upon the performance of some government. It stands on its own and always has.
Governments do not go bankrupt in the manner that businesses or individuals do. They do so by dishonoring their debts and obligations. The default can come as an outright refusal to honor claims or it can come via inflation. Most governments prefer the latter.
The soundest government in the world, until recently, was the United States. In spite of its enormous wealth and economic growth, its
Continue reading Dracula Government Meets Its Nemesis
By Monty Pelerin, on December 21st, 2009 Getting Gold and Silver may not be enough to protect your wealth according to Stansbury.
Another excellent read by Porter Stansbury. While primarily focused on precious metals and currencies, and the possibility of returning to some commodity-based currency, Stansbury touches on many interesting topics. We are entering the period where government failure becomes apparent. Ultimately, it will result in a redefinition of government unlike anything we have experienced in our lifetimes. The history books written a hundred years from now will refer to our time and the preceding century as “The Myth of Government.”
As we approach sovereign bankruptcies and the utter uselessness of government as currently constructed becomes apparent, sacred laws and traditions will come under attack. Governments, especially the most powerful ones, will do everything to resist loss of power and revenue. The analogy of a wounded and cornered animal willing to do literally anything to survive is probably a reasonable one.
Governments will not go quietly or quickly. The next twenty years are apt to produce actions and reactions that were previously unthinkable. Stansbury speculates about the need to raise revenues:
“You wouldn’t want to underestimate the perfidy of the government. I have no doubt that the government will need to increase revenues substantially to avoid default on either debt or social welfare promises. How they will increase those revenues, I can’t predict. It seems unlikely that they’ll be able to effectively increase revenues by raising taxes because it just doesn’t work. People will find ways to
Continue reading Stansbury on Precious Metals, Currencies and Government Desperation
By Monty Pelerin, on December 20th, 2009 Here is an interesting, one might say insignificant, piece of news. The US Treasury Department is apparently going to block an investment by the Chinese in a small gold mining company. Why? The claim is for “security reasons.” On its face that is laughable. So, why be troubled by such a blip?
It could signal something more important. There are three possibilities that come immediately to mind. First, we are “getting tough” with the Chinese. This possibility is not very likely. One does not try to push their banker around, especially with trivial, annoying actions. Second, is that the US has longer term plans/needs for gold that they have not explicitly communicated. It is possible that US officials recognize the remaining life span of the dollar fiat currency is short and that it will eventually be replaced. If they envision gold as part of the solution, it would make sense to control gold within their own borders. China adopted a strategy more than a year ago of gaining control of gold and other critical resources using methods similar to the Nevada deal. If this speculation is correct, it is just another bullish sign for gold.
Finally, when dealing with the government, one can never rule out bureaucratic incompetence. The hypothesis that some muddle-headed official believes he has another good idea should always be in play.
Treasury Tells Obama To Block Chinese Investment In Nevada Gold Mine
Joe Weisenthal|Dec. 19, 2009, 6:49 PM | 1,527 |8
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Continue reading China To Be Blocked in Gold Grab?
By Monty Pelerin, on December 9th, 2009 Ron Paul on CSPAN’s Washington Journal, Dec. 3, 2009
This is a highly recommended watch. There are four parts, each about 10 minutes. Links are provided for the last three at the bottom.
Part 2
Part 3
Part 4
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By Monty Pelerin, on November 27th, 2009 Gold rush forces US to clip Eagle sales
By Javier Blas in London
Published: November 26 2009 17:12 | Last updated: November 26 2009 17:12
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The rush by retail investors into gold has forced the US government to suspend sales of the world’s most popular bullion coin, the American Eagle, after running out of inventories.
The shortage, the second since the start of the financial crisis in August 2008, is the latest sign of investors seeking a safe haven into bullion amid the US dollar woes. Safe-haven buying spurred by concerns about the health of Wall Street and a spike in inflation due to a lax monetary policy have also benefited gold sales.
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Friedrich von Hayek
Friedrich von Hayek founded the Mont Pelerin Society.
“Monty Pelerin” is a pseudonym chosen by this blogger to convey general agreement with the philosophy, goals and spirit of the Mont Pelerin Society. No other connection exists between the blogger and the Society.
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