A new Gold Standard is being born?

Campaign poster showing William McKinley holding U.S. flag and standing on gold coin “sound money”, held up by group of men, in front of ships “commerce” and factories “civilization”. (Photo credit: Wikipedia)

Ambrose Evans-Pritchard is an English journalist. (What else could he be with that name?)  He’s intelligent, well-educated and a fine writer.  More, he has so much courage that, during the G.W. Bush administration, his articles on Bush were so insightful and aggressive, that he was forced to leave the United States.  I respect that.

However, he recently published an article entitled “A new Gold Standard is being born?” that included one insight that that I found exciting, and a couple more that strike me as lame.

Mr. Evans-Pritchard observes,

 “The world is moving step by step towards a de facto Gold Standard, without any meetings of G20 leaders to announce the idea or bless the project. . . . My guess is that any new Gold Standard will be sui generis, and better for it.”

In other words, Evans-Pritchard believes that a new, “de facto Gold Standard” is already emerging as one nation after another begins to rely on gold rather than fiat dollars to purchase oil and settle international trade accounts.

No government, central bank, or G20 spokesman has (as yet) “officially” declared a new gold standard.  But Evans-Pritchard believes that a new gold standard is nevertheless evolving “naturally” from the wreckage of the world’s present fiat currency system.

Evans-Pritchard’s observation that the world may be “naturally” gravitating to gold—without official sanction or permission—strikes me as prescient.  I think he’s right, and if he is, that means:

 

2,000 Words

They say a picture is worth a thousand words.

OK.  Here’s two pictures I received in the email, so here’ 2,000 words on our current economic (and political) condition:

Real problem?  We have a bunch of stupid people being led by a bunch of stupid politicians.  When the blind lead the blind, we’re likely to have a problem.  But the problem may not be too bad since the blind know they’re blind and at least have enough sense to go slow.  But when the stupid lead the stupid, we’re likely to have a catastrophe because the stupid don’t know they’re stupid, love to go fast, and think they’re invulnerable.

 

Comin’ Home to Gold

1854 Gold Dollar, Liberty Head, Obverse (Photo credit: Wikipedia)

The Daily Reckoning Australia reports that,

 

“SOMETHING is brewing.  We don’t know what it is, but it feels ominous. . . .  we know the financial system is broken and that the market should collapse. We know you can’t solve a debt problem by increasing debt.

“Jim Rickards reckons the most likely outcome of all this is chaos. . . .  When a system of international finance comes to an end, it normally goes through a chaotic period before another system emerges.

“What will that new system be?  Rickards puts a number of options forward.  All involve something taking over from the US Dollar as the world’s reserve currency.

“The problem with the US Dollar is that it fulfills the dual role of domestic currency and international reserve asset. This gives rise to the ‘Triffin Dilemma’, named after the economist Robert Triffin. The dilemma is that the objectives of managing a domestic currency run contrary to the objectives of an international reserve asset.”

I.e., a currency can serve only one “master”.  The US dollar can serve only the people of the USA or only the people of the world.  If the dollar serves one, it must slight the other.

 

Going Too Far

GOING TOO FAR afghanistan (Photo credit: The U.S. Army)

Last December, the US gov-co enacted the National Defense Authorization Act (NDAA).  This act ignited much controversy by allowing the indefinite detention of American citizens without judicial process.

Less appreciated was the NDAA’s proviso for imposing economic sanctions on Iran and its trading partners.  These sanctions include the power to prevent Iran’s trading partners from accessing US financial institutions.

The gov-co presumed that the world would be so terrified by the thought of being unable to trade with the US, that the world would abandon Iran.  However, some nations need Iranian oil more than US dollars and are therefore beginning to buy crude oil from Iran without fiat dollars and even pay with gold.

Some believe that when the NDAA becomes effective (June 28^th), China (the world’s second largest economy) will begin paying for Iranian crude oil with gold.

The economic implications are enormous.  The political implications are greater.  I suspect that the NDAA is evidence that the almighty forces of American empire have finally gone too far.

 

The Human Comedy?

Nigel Farage. (Photo credit: Wikipedia)

It’s hard to think of a name more classically British than “Nigel Farage”.  The name sounds so pompous that it reminds me of something out of a Monty Python comedy sketch.

But, Nigel Farage is the true name of an English politician who is the leader of the UK Independence Party.  Mr. Farage is ”classically British” in his ability to speak, reason and deliver a presentation of the sort we associate with the glory days of the British empire.    His speech’s are are typically characterized by great intelligence, objectivity and wit.  I wish we had someone like him in our Congress or Senate.

 

America Follows Argentina?

Image via Wikipedia

I received the following Power Point presentation in my email today.  It explains that in A.D. 1902 (just 100 years ago), Argentina was the second most powerful economy in the world.  England was first.  The US was third.  The Argentinians’ standard of living was second only to England.

However, Argentina elected politicians who fed the people of bunch of communist and/or fascists crapola, built up huge bureaucracies, subjected the Argentinian people to enormous debt, and even imposed a fascist dictatorship.  The result was national chaos, decline, violence and “disappeared” dissidents.

Today, the Argentinian economy is the world’s 28th largest.  The Argentinian people’s standard of living is 45th.

The presentation argues that the US is following in Argentina’s footsteps and can therefore expect to suffer a similar economic and political catastrophe.

I disagree with the presentation on one point:  it implies that all of Argentina’s problems were caused by leftists and blames all of America’s coming problems on Democrats.  America’s biggest enemy is big government.  There’s no reason to believe that radical communists at the top of our Democrat party are any more dangerous to this nation than the radical fascists at the top of the Republican party.

So long as our government is divided up between big-government Democrats and big-government Republicans, we’re headed towards national destruction and a New World Order.

We need a third political party that’s fundamentally and permanently opposed to any and all big government–no matter what label that big government operates under.  If they’re raising taxes, raising the deficits, or raising government services, throw the bastards out.  The fundamental issue is not party affiliation–it’s governmental size.  Those who seek more government under any pretext or label are the principle enemies of the American people.

argentina vs America

 

Max Keiser: Greeks Required to Pay Non-Greek Debts?

Max Keiser offers a completely new spin on the Greek debt problem:  Other countries have dumped some of their debts on Greece, and the Greek people are being required to repay debts that they did not incur.  Rather than repay someone else’s debts, the Greeks are rioting.

His allegations are fantastic, but I’ve heard of Max Keiser intentionally fabricating false stories or telling lies.  So, while I can’t speak to the truth of his allegations, Max Keiser–as always–is as full of passion as a mad leprechaun and every bit as entertaining.

Who knows?  He might even be right.

video  00:06:15

http://www.youtube.com/watch?v=coalJcqFpQE&feature=player_embedded

 

Hell No! We Won’t Pay! # 3

Image via Wikipedia

On November 3rd, I published “Hell No!  We Won’t Pay!“.  In that article I predicted that the people of Greece and other debtor nations would soon not only fail to pay their national debts, but might refuse to even try to do so.  It’s one thing for a people to be so broke they can’t pay their debts.  It’s another thing entirely for a people to refuse to pay those debts.  When they’re broke so long as they keep trying to pay their debts, their debt instruments still have value.  Once they refuse to even try to pay their debts, their debt instruments become worthless.  As you’ll read, the prospect of debt instruments coming to be widely recognized as worthless is terrifying to those in charge of maintaining this economy.

 

Gerald Celente Predicts Economic Martial Law

Gerald Celente, founder of Trends Research, warns that the government is increasingly under the control of the military.  He predicts that starting as early as first quarter of A.D. 2012, we will see “economic martial law” in this country.

Note that Mr. Celente predicts “economic martial law” rather than “martial law”.  Perhaps he agrees with my contention that the US military doesn’t have enough assets to deploy tanks and military personnel across the US.  Therefore, while we may see a more overt police state over the next several years, we won’t see US military one or streets except in isolated instances.

However, although Mr. Celente does not appear to anticipate an open application of true “martial law” in this country, he does predict “economic martial law”.  He doesn’t define that term in this video, nor does he clearly describe what that term might mean.  I can only imagine that “economic martial law” might mean increased control over bank accounts, ATMs, credit cards, debt cards, and in general, restricted access to currency or credit.

 

Culture Matters

Image via Wikipedia

China’s economy has reportedly grown by 10% or more annually for several years. This rate of growth is deemed so miraculous that China recently bragged that the “Chinese model” is superior to the American economic system.

But is the “Chinese economic model” really superior? Is China really growing at 10% a year? Can that rate of growth be sustained?

I don’t think so. And my reasons aren’t based on China’s technology, resources, or education level. I believe China’s current cultural values are incapable of sustaining a technological economy.

•A friend of mine lived in China for a year. She had a guide to show her around. She noticed that her guide would never take her to a couple of restaurants near her home. She asked why, and the guide smiled and offered some lame excuse. A week later, my friend asked again. More lame excuses. After several weeks, my friend forced her guide to tell the real reason why she wouldn’t take her to those two restaurants.

Under pressure, the guide finally admitted the truth: those restaurants served meals made with cat and dog meat and the guide knew that Americans loved their pets and therefore didn’t want to take my friend to eat “pet”.

My friend understood the explanation, but was still curious: Why didn’t the guide simply admit the truth several weeks earlier, when my friend first asked about those restaurants? The guide explained that a primary objective of Chinese culture was to maintain “harmony”—even if one must lie to do so. In essence, the Chinese would rather lie than fight.