Fiat Currency: Using the Past to See into the Future
A quick history of fiat currency - paper money not backed by a gold guarantee.
Jun 13, 2008, 12:03
Open Lawyer's Letter to Bart Chilton, CFTC Commissioner
Our paper money world has many problems. There is huge incentive for people to push the boundaries and this causes money market and commodities traders to take huge risks. We have seen what happened to an overleveraged Bear Stearns in the high risk mortgage market. This immediately begs the question of who is next and the spotlight seems to be falling on Lehman Bros.
However, all this paper money causes other problems in the REAL world. The silver market is now under increasing scrutiny as the trading positions become more and more extreme.
This letter to the commissioner in charge of the silver future trading market in the USA is very interesting - so are the implications!
Jun 9, 2008, 11:29
A Precious Metal That's Not Just an Investment But a Worldview Too
A life as a coin dealer.
Feb 26, 2008, 10:42
Vancouver Resource Investment Conference
The current state of the gold market - February 2008.
[ Visit Website ]
Feb 8, 2008, 14:36
Go for Gold
Why, after years of the market's neglect of gold, is the paper money price of gold now on the rise? Would it be too far-fetched to assume that it could reflect market agents' growing concern about a forthcoming great inflation of government controlled paper money?
Nov 27, 2007, 15:55
Money for Nothing
Financial chicanery abounds. Fortunately, if you know what is really happening in our world of paper money you are in a position to safeguard your assets. You might also be in a position to profit from distortions produced by the banks and the money men of the western world.
Every paper money system that has ever existed has come to a sticky end. The perturbations we are seeing now in the current "credit crunch" are just another example of the trouble that is building up for all of us. Can our Central Bankers do what no-one has done before? When will China make its move?
Oct 25, 2007, 11:08
'Sovereign Wealth' Funds Will support Gold.
Sprott Asset Management's chief investment strategist, John Embry, predicts in an essay in Investor's Digest of Canada that the new "sovereign wealth" funds of countries with lots of dollars sloshing around will come to support the gold price. Embry's essay can be found at the Sprott Internet site here:
[ Visit Website ]
Oct 17, 2007, 19:10
The Gold Problem
On the question of money and inflation I thought we would do well to consider these words from the Master himself - Ludwig von Mises (1881–1973), dean of the Austrian School. He wrote this in 1965 but it is easier now, with hind-site, to see the truth of the Austrian School of Economics.
Oct 17, 2007, 16:16
Money Supply Statistics
Inflation is the increase in the money supply in a country. This shows up as price inflation when the increase in the supply of money is greater than the increase in the value of the goods and services in the same time.
Since Labour has been in power the money supply (M3) has increased from $98,520m (Aug 1999) to $190,913m (Aug2007). This is an increase of $92,393m or 94% in eight years and of course it has produced inflation.
This shows up mainly in houses. Has your house doubled in price in the last 8 years? What is really happening is that as the government prints paper money and issues credit(debt to us) its value falls. If the print enough its value fals by half. Your house has not doubled in value. The value is much the same as it has always been. It is just that the new dollars that the government is printing are only worth half as much as they were in 1999.
How much has your salary or wages gone up by? Because we are now buying much cheaper goods from China et al in Asia we do not see the inflation so much in consumer items. Also computer and TV electronic gear is greatly reducing in price because of technonlogy. If your cash wasn't getting inflated away they would seem to be even cheaper!
The web site below points to the original information published by the Reserve Bank. Look for yourself. Also be aware that the USA Federal Reserve recently stopped publishing their M3 money supply. I wonder why they felt the need to stop giving the public the real truth.
This is not a conspiracy - it is the natural consequence of politicians being in charge of printing paper money.
[ Visit Website ]
Oct 12, 2007, 11:58
The problems involved in stopping a bank run.
Sep 27, 2007, 18:35
One of the things that I have discovered recently is that the gold and silver markets are being manipulated to keep their price down.
The Central Banks have an incentive to keep the price of gold down so that their fiat currencies do not look too fragile. They can do this by selling their reserves on the open market at strategic times to depress the price.
As gold and silver have always priced themselves in tandem in open markets over the ages this incentive must extend to keeping the silver price in line with gold. The silver manipulation is not certain or proven but the evidence seems strong that the silver price is being artificially held down.
The financial markets are in turmoil to the extent that banks do not wish to lend to each other because each bank does not trust any other bank. Many countries (oil producers and China) are moving away from holding their reserves in US dollars. Are they moving into gold, besides Euros and Yen?
Will countries begin a scramble for gold reserves? If they all know that other countries are printing money like crazy then they know that this inflation will reduce the value of paper money and hence the value of their reserves. As this inflation of paper money heats up (adding more money seems to be the established solution to the current world wide credit crunch), will countries and individuals fight for security in the gold markets?
Sep 19, 2007, 12:24
Gold and Economic Freedom
Those of you who have been following my stumblings through the current Economic Morass will be delighted to know that what I have discovered about Gold, Fiat Currencies and the Welfare State was well known by Alan Greenspan as he explains in this article.
Yes this is the famous Alan Greenspan, Federal Reserve Chairman for the USA and controller of the world currency - known as the mighty US dollar.
In 1966 he wrote the truth but under the influence of Washington political requirements he became the greatest issuer of credit the world has known, solving the periodic busts by printing more money - entirely unbacked by gold.
Alan explains the place of gold in society very clearly and shows why it was cast aside and why we are now suffering the problems of a world of fiat currencies.
Read this carefully and all the blocks will slip into place!
Sep 18, 2007, 14:03
The Gold Price-Fixing Conspiracy
For many years now, a number of people in the financial arena have been alleging that there is an active conspiracy to suppress the price of gold. Some see it as a sinister backroom affair. Others claim that it’s just the way the world works, and that it happens right out in the open, if only you know where to look.
Among the latter is the Gold Anti-Trust Action Committee (GATA), the source of much of the material that has been written on the subject in recent years. In order to get their take, we sent our own Doug Hornig to interview Chris Powell, co-founder and secretary/treasurer of GATA.
Aug 31, 2007, 18:49
When Will Gold Go Ballistic?
Ambrose Evans-Pritchard says, "A lot of readers have asked why I duck the issue of gold when talking about the dollar crisis and the M3 monetary blow-off."
So here we go:
Jul 23, 2007, 18:28
The End of National Currency
As western nations expand their currencies each year they produce more stresses and strains on their economies. Inflation in the form of more printed money and the issuing of more credit leads to a boom and this will be followed as night follows day, by a bust. New Zealand's system is a bit out of whack with a trade deficiency of 9% and a very highly valued currency - one that the government cannot seem to control. Every move seems to make things worse.
There has been talk of monetary union with Australia or the USA but not much has been done in that direction. Is that a good idea or should we aim for a world currency?
Benn Steil has written a rather long but interesting article in this subject. Worth reading.
[ Visit Website ]
Jul 12, 2007, 17:25
The Coming Collapse of the U.S. Dollar
For some time now we have been concerned about the state of the world's finances. Our currency is under pressure and the Reserve Bank is hoping that they can control the price of our money by buying and selling on the international market.
All the western currencies are inflating as governments seek to help their exporters and keep people "happy". What is interesting is that more and more people are starting to notice what is happening and to worry about the consequences.
What we have discovered here at the Foundation for Economic Growth is that currencies in the past that were not backed by gold or silver (fiat currencies) have all vanished. It is an inevitable result as far as I can see. In the process the currencies have a continual round of boom followed by bust (fast or slow) which is what we have been experiencing since 1971.
Our Central Bankers are desperately trying to keep the lid on the boiling pot but at some point they must fail. As more and more people come to understand that our money is just paper with no inherent value, so the concern will rise. This article is written about the USA situation - not dissimilar to our own - by an Indian accountant working in Chennai.
Our government is holding an enquiry into the causes of inflation at the present time. If they would read Milton Friedman they would have the answer: "Printing too much paper money". This current situation of large debts amongst the population and continual inflation of the currency cannot continue indefinitely. Therefore it must stop.
With our money supply increasing at more than 10% per year (16.5% last year) our statistic of GDP growth rate at 1% is a bit of a nonsense. We are already going backwards. When enough people know this then the fun really begins.
And for us, the only answer is to pay back debt and own real assets like REAL estate and gold and silver. Or find a currency that is sound. Best of luck!
Jun 18, 2007, 17:35
The End Of Dollar Hegemony.
In a speech before the U.S. House of Representatives, Congressman Ron Paul stated that the United States’ dollar dominance is coming to an end...and when this paper money runs out, wealth and political stability is lost. You can read the first part of his speech, below...
Jun 18, 2007, 17:15
The Rule of Planned Money
"Public money is like holy water. Every man helps himself." — Italian proverb.
More perspective of fiat money and the gold standard from the early half of last century. This is a very interesting explanation of the rise of modern fiat currency over the period it was happening but before Nixon nixed godl for good. The world is now being strung out with paper money and at some stage we will either go the way of Zimbabwe or of Japan; Hyper-inflation or deflation. What lies in store for us?
May 8, 2007, 16:30