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Here Is Why Modern Unbacked Money Derives Value from Gold

This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: The value behind money, why gold’s price has grudgingly responded to recent market turmoil and what higher energy prices mean for gold and silver.

Money has value, but not because the government says so

In an analysis on Eurasia Review, Frank Shostak goes in-depth in an attempt to answer the question: why does money have value? Opposing the views that the value of money is there because of government reassurances or social conventions, Shostak instead takes a look at history in order to avoid circular pitfalls.

Doing so tells us that money is a byproduct of a bid for convenience, a result of people wanting greater prosperity and better market exchange. In their quest to obtain both, they would put every commodity through a form of trial, and the one that ended up being the most commonly and widely accepted became money.

We now know that that commodity is gold. Even silver or bronze coins served primarily as a form of IOU for gold, although this IOU was far more grounded and sensible than any fiat today. Shostak likewise asserts that central banks were established to prevent market manipulation and monopolization by private banks, which wouldn’t hesitate to print out more gold IOUs than they could cover. (As we’ve seen all too often.)

Yet now, long after these early makings of modern finance, we find that little has changed. Private banks are making monopolies all the same, and despite a gold standard being nowhere in sight, much of their profits come from trading gold IOUs that can’t and won’t be covered by physical gold. That is why the Basel agreement was passed, and why most agree it will only be partially implemented so as to not collapse the global economy.

…click on the above link to read the rest of the article…

“Programmable Digital Currency”: The next stage of the new normal?The war on cash’s endgame is here: money replaced by vouchers subject to complete state control.

October 10, 2021

“Programmable Digital Currency”: The next stage of the new normal?The war on cash’s endgame is here: money replaced by vouchers subject to complete state control.

Building on the bitcoin model, central banks are planning to produce their own “digital currencies”. Removing any and all remaining privacy, granting total control over every transaction, even limiting what ordinary people are allowed to spend their money on.

From the moment bitcoin and other cryptocurrencies first emerged, sold as an independent and alternative medium of exchange outside the financial status quo, it was only a matter of time before the new alternative would be absorbed, modified and redeployed in service of the state.

Enter “Central Bank Digital Currencies”: the mainstream answer to bitcoin.

For those who have never heard of them, “Central Bank Digital Currencies” (CBDCs) are exactly what they sound like, digitized versions of the pound/dollar/euro etc. issued by central banks.

Like bitcoin (and other crypto), the CBDC would be entirely digital, thus furthering the ongoing war on cash. However, unlike crypto, it would not have any encryption preserving anonymity. In fact, it would be totally the reverse, potentially ending the very idea of financial privacy.

Now, you may not have heard much about the CBDC plans, lost as they are in the tangle of the ongoing “pandemic”, but the campaign is there, chugging along on the back pages for months now. There are stories about it from both Reuters and the Financial Times just today. It’s a long, slow con, but a con nonetheless.

The countries where the idea progressed the furthest are China and the UK. The Chinese Digital Yuan has been in development since 2014, and is subject to ongoing and widespread testing. The UK is nowhere near that stage yet, but Chancellor Rishi Sunak is keenly pushing forward a digital pound that the press are calling “Britcoin”.

…click on the above link to read the rest of the article…

One Ring to Rule Us All: A Global Digital Fiat Currency

October 10, 2021

One Ring to Rule Us All: A Global Digital Fiat Currency

We’ve written extensively about the “war on cash.” In a nutshell, governments would love to do away with cash in order to better track and control their citizens. There have been numerous moves closer to a cashless society in recent years, from capping ATM withdrawals to doing away with large-denomination bills. Last year, China launched a digital yuan pilot program and the US has floated moving toward a digital dollar.

We got a first-hand look at what happens when governments restrict access to cash when India plunged into a cash crisis after the country’s government enacted a policy of demonetization in November 2016.

It’s bad enough that various countries are exploring ways to move toward cashlessness, but there’s an even worse scenario — a global digital currency.

Economist Thorsten Polleit compares it to the “master ring” in J.R.R. Tolkien’s classic Lord of the Rings.

The following article was originally published by the Mises Wire. The opinions expressed are the author’s and do not necessarily reflect those of Peter Schiff or SchiffGold.

1.

Human history can be viewed from many angles. One of them is to see it as a struggle for power and domination, as a struggle for freedom and against oppression, as a struggle of good against evil.

That is how Karl Marx (1818–83) saw it, and Ludwig von Mises (1881–1973) judged similarly. Mises wrote:

The history of the West, from the age of the Greek Polis down to the present-day resistance to socialism, is essentially the history of the fight for liberty against the encroachments of the officeholders. (1}

But unlike Marx, Mises recognized that human history does not follow predetermined laws of societal development but ultimately depends on ideas that drive human action.

…click on the above link to read the rest of the article…

Money, Bad Policies, Inflation & You

October 9, 2021

Money, Bad Policies, Inflation & You

How to weather the inflationary and energy storms

The global financial system and economy are a house or cards. Built on an unsustainable underpinning to ever-increasing debt the financial system is, as far as I am concerned, irretrievably insolvent.

To truly grasp this you need to understand the basics of banking and currency (what we call money, but really isn’t because it doesn’t satisfy all three necessary preconditions to be called such). This is briefly covered in this episode.

With that basic grounding we can appreciate the vast gap between the claims on true wealth and the amount of true wealth (lots of currency, not as much ‘stuff’) and now can discuss the immense pain coming to those with fewer resources to combat rapidly rising inflation.

Even worse, a true energy emergency in Europe is going to really create a lot of headaches and financial heartaches for a lot of people. With this essential context you can begin to build up a personal resilience plan to weather it all as best you can. But it all begins by having the right frame of view and sufficient information and context.

The Corporations Are The Government: Notes From The Edge Of The Narrative Matrix

October 2, 2021

The Corporations Are The Government: Notes From The Edge Of The Narrative Matrix

Listen to a reading of this article:

❖

You’d think the revelation that the CIA planned to assassinate an award-winning journalist for journalistic activity would have been a bigger deal.

❖

Capitalism hinders progress because it ensures that all mass-scale human behavior will be driven by the pursuit of profit. For example, a huge global issue we have right now is cleaning up the pollution in our oceans. That is an easily solved issue if you take out the profit motive; you don’t wait for market forces to find some way to make it profitable, you just get in there and clean it up. But with the profit motive it’s almost impossible to conceive of it ever being solved.

How often have you been excited by a great idea only to feel that familiar disappointment wash over you as you realize that it will never happen because it won’t make anyone any money? That’s how the profit motive stunts innovation.

The profit motive will never find a way to leave a forest alone or minerals in the ground. There’s no business plan that makes money out of moms being paid to bring up healthy, happy, secure children. You can’t find a way to make money out of people driving less or buying less. There is no money in curing an illness, only treating it. There is no money in solving poverty, only in setting up a multi-million dollar “charity” that never actually intends to solve poverty because it’s a business and a business requires endless expansion.

People who proffer the market as a solution to our massive problems have either never really thought about the restrictions of the profit motive, or they are heavily invested in pretending those restrictions don’t exist. I don’t respect either of those positions.

…click on the above link to read the rest of the article…

Why the economy must grow

September 26, 2021

Why the economy must grow

There are three main reasons why our economy grows:

• because it is easier to make money in an economy that is growing
• because we all, individuals, companies and governments, borrow money
• because we pay interest on the money we borrow.

Because it is easier to make money in a growing economy

Many people, particularly business people and people in governments, want the economy to grow continually because it’s easier for people to make money in an economy that is growing in size, because a growing economy means an ever-increasing supply of money and an ever-increasing opportunity to get some of that money and the products and resources that it represents.

Those products and resources may provide mere survival, acceptable comfort and security, or the maximum possible excess of luxury. The individual’s drive towards survival, material gain, comfort and security, or luxury, drives the economic system. Of itself, that drive doesn’t mean that the economy has to grow, or even that it will grow, but it is a strong supporting force for economic growth: it supports a positive attitude towards economic growth and a resistance to anything that limits economic growth.

Because we borrow money

Most people in developed countries borrow money for the things they want to own. This money usually comes to us through our home loans, car loans, credit card loans and other forms of credit.

We are able to borrow that money because of our promise to work in the future and to repay it; we spend it now, promising that we will earn and repay it later. This money is available to us as a result of our assumed and promised economic activity (jobs, or other income) in the future.

…click on the above link to read the rest of the article…

The Coming Climate Crisis Shakedown in Scotland

September 25, 2021

The Coming Climate Crisis Shakedown in Scotland

In 2016, an inconceivable event aborted the Paris climate scheme. The Americans elected Donald Trump. Calling the Paris deal a rip-off of his country, Trump swiftly pulled the U.S. out of the accords. Upon what grounds? Put simply, America First.

“Follow the money!”

The old maxim is always sound advice when assessing the motives of those advancing bold agendas for the benefit of mankind.

Invariably, the newest progressive idea entails a transfer of wealth from the taxpaying classes of Western nations to our transnational, global and Third World elites.

For the masters of the universe, establishing justice and equality for the world’s poor are rewarding exercises in every sense of the word.

Consider the 2015 Paris climate accords.

Its declared goal: Save the planet from the ravages of climate change, which is caused by carbon dioxide emissions, which are produced by industrial nations with too many of the world’s factories, farms, ships, planes and autos.

Under the Paris accords, wealthier nations of the West were to set and meet strict national targets for reducing their carbon emissions.

Together, these reductions were to prevent any rise in the planet’s temperature of more than 1.5 degrees Celsius above pre-industrial levels.

This was presented as the world’s last best hope of preventing a climate catastrophe in this century.

Among the warnings the climate has been sending us:

The melting of polar ice caps, killer hurricanes, droughts, wildfires such as we had this year in California, river floods in Europe, rising sea levels, and the swamping of coastal towns, cities and islands like the Maldives in the Indian Ocean.

…click on the above link to read the rest of the article…

Why did the Taliban Win? Lessons From Ancient History

September 22, 2021

Why did the Taliban Win? Lessons From Ancient History

How did the Taliban manage to defeat the most powerful army in the world? One word: corruption. It is not new, it has already happened in many other cases in history. Here, I propose a comparison of the recent Taliban campaign with the case of the Numidian wars at the time of the Roman Republic. (above: these fighters are probably Tajiki, not Taliban, but that does not affect the substance of my interpretation)

During the 2nd century BC, the Roman Republic attempted to defeat the Numidians, a tribal population inhabiting a desertic area of North-Western Africa. Surely, the Numidian fighters were no match for the mighty Roman armies, yet the Numidian kings held on their own for decades. It was only in 105 BC that their last king, Jugurtha, was definitively defeated by the Romans.

The ups and downs of the Numidian wars left the Romans perplexed. How could it be that those unrefined Barbarians could keep at bay the Romans for so long? The opinion of the historian Sallustius was that the Numidians had used corruption to buy the Roman commanders. Sallustius reports that Jugurtha himself said about Rome, “Venal city! You would sell yourself if a buyer were to appear!”.

Sallustius’ interpretation is believable, even though it is not substantiated by historical data. Corruption is an unavoidable side effect of money and Rome was the most monetarized society of antiquity. The Romans had built their prosperity on the precious metal mines of Northern Spain and used their wealth to pay the large armies that they used to dominate the Mediterranean Region. But money is a double-edged weapon: it can be used to pay soldiers to fight, but also not to fight, or to fight someone they were not supposed to fight.

…click on the above link to read the rest of the article…

Wrong for a different reason

September 19, 2021

Wrong for a different reason

Alexandria Ocasio-Cortez – A well-meaning but not particularly bright left-leaning US politician – made a stir earlier this week by wearing a figure-hugging dress emblazoned with the slogan “Tax the Rich” to the prestigious 2021 Met Gala. Since the slogan was clearly political, it wasn’t long before the various political tribes took to social media to pass judgement.

“Hypocrisy!” was the charge made by the libertarian right. As Amanda L Gordon at Bloomberg explains:

“The message itself wasn’t surprising — Ocasio-Cortez has been one of the biggest supporters of raising taxes on the rich to help pay for more social services and narrowing the massive wealth gap between America’s rich and poor. But the latest setting in which AOC — as she is known — chose to express it drew attention.

“The annual event at New York’s Metropolitan Museum of Art is the haunt of celebrities, designers, billionaires and various other members of the jet set that are willing to pay $35,000 a pop for the privilege to attend.”

But, the left ask, “where better to demand that the rich pay their fair share of taxes than in a gathering of the rich themselves?” According to Hannah Selinger at the Independent, for example:

“The truth is, women have always used clothing — the most accessible medium — to express their politics. One might say that such choices in the everyday sphere have been more subtle. Ocasio-Cortez’s dress, of course, was anything but. And that was entirely appropriate for the space in which the statement was made.”

Ocasio-Cortez has also clarified that she did not pay $35,000 to attend and that the dress was borrowed for the evening:

“The time is now for childcare, healthcare, and climate action for all. Tax the Rich.

…click on the above link to read the rest of the article…

The Collapse of Scientism and the Rebirth of Science

August 20, 2021

The Collapse of Scientism and the Rebirth of Science

The oldest image (1228-1229) we have of Francis of Assisi (1182 – 1226). Not a portrait, but probably not far from the real aspect of Francis. He engaged in a bold attempt to reform the corrupt Catholic Church in Europe. He failed, but he left a trace in history from which we can still learn much. In our times, the corrupt organization that we need to reform is Science, turned now into a state ideology to oppress people and destroy nature. Maybe we need a new St. Francis to reform it, or maybe it needs to be dismantled and rebuilt from scratch in a new structure. Here, I discuss this story and I also reproduce a post by Luisella Chiavenuto (a little long, but worth reading) who has perfectly understood the situation and proposes that what we call “science of complexity” is a completely new kind of science, different from the old Galilean version.

With the turn of the 2nd millennium in Europe, the Catholic Church had gone through the involution that’s typical of all large organizations. It had become huge, bureaucratic, corrupt, and inefficient. A once idealistic and pure organization had been defeated by the arch-corrupter of everything human: money.

Earlier on, Europe had emerged out of the collapse of the Roman Empire as a lean, non-monetized society that had no impulse to grow and conquer outside lands. But the re-monetization of Europe started when rich silver mines were found in Eastern Europe with the turn of the millennium.

At that time, Europe was bubbling with a new wealth, a new assertiveness, a new way of seeing the world. Once you have money, you can have an army. Once you have an army, you can search for enemies…

…click on the above link to read the rest of the article…

Gold Standard and Boom Bust Cycles

July 31, 2021

GOLD STANDARD AND BOOM BUST CYCLES

According to the Austrian Business Cycle Theory (ABCT), the boom-bust cycle emerges in response to a deviation in the market interest rate from the natural interest rate, or the equilibrium interest rate. It is held that the major cause for this deviation is increases in the money supply. Based on this it would appear that on a gold standard without the central bank an increase in the supply of gold is also going to set in motion boom-bust cycle.

An increase in the supply of gold is likely to result in the lowering of market interest rates. This in turn is likely to cause the market interest rates to deviate from the equilibrium interest rate. Consequently, following the ABCT an increase in the supply of gold is going to set in motion the boom-bust cycle.

According to Robert P. Murphy “More Than Quibbles: Problems with the Theory and History of Fractional Reserve Free Banking” in the QJAE Volume 22 Spring 2019, Ludwig von Mises held that an increase in the supply of gold could trigger boom-bust cycle.

Whilst suggesting that the gold standard could generate business cycles whenever an increase in the supply of gold causes the market interest rate to deviate from the natural interest rate, or the equilibrium rate, Mises however, viewed this possibility as remote.

Mises regarded the gold standard as the best monetary system as far as keeping the expansion in credit under tight control. Murphy quotes Mises on this,

Even a rapid increase in the production of the precious metals can never have the range which credit expansion can attain. The gold standard was an efficacious check upon credit expansion, as it forced the banks not to exceed certain limits in their expansionist ventures…

…click on the above link to read the rest of the article…

Governments to Control What You Are Allowed to Buy

July 27, 2021

Governments to Control What You Are Allowed to Buy

People are unaware that this drive of central banks to replace paper money with cryptocurrency is far more than they will ever comprehend as an end goal. Aside from the fact that governments could then impose a negative interest rate effectively confiscating money from your account in ADDITION to taxation, they are moving to do what many in the religious right see as the prophecy of the anti-Christ where you will not be able to buy or sell without his permission.

Indeed, the government can restrict what you will even be allowed to buy. They will control every aspect of your life beyond what the most demonized vision of the future might hold. These ideas will create resistance which will also be rooted in religion. Will you accept the number of the beast, or resist their commands? This is not something anyone would have dared to think that a representative form of government would have even talked about.

Too Much Money Chasing Too Few Goods and Services

July 19, 2021

Too Much Money Chasing Too Few Goods and Services

Inflation can be considered a tax, an especially regressive one, falling harder on those with lower income and/or assets.

As we’ve noted previously, the Federal Reserve’s “M2” monetary aggregate began growing significantly faster than the “GDP” measure of economic output in the United States beginning around 2008, amidst the 2007-2009 financial and economic crisis.

With the federal government’s massive fiscal and economic “stimulus” policies arriving together with a pandemic and government lockdowns, M2 growth has recently risen dramatically higher than GDP growth.

Earlier this week, the Bureau of Labor Statistics (within the U.S. Department of Labor) reported that the Consumer Price Index (CPI) rose in June at one of its fastest growing rates in more than a decade. Some people have been pointing to the fact that year-over-year changes in the CPI may be high recently in part because the comparisons to last year’s levels were amidst the onset of the pandemic. But in the second quarter of 2021, compared to the first quarter of 2021 and on a seasonally adjusted basis, the CPI rose at an annualized rate of more than 8 percent, which is the highest quarterly growth rate since the third quarter of 1981.

It’s always worthwhile to keep an eye on alternative inflation measures, given the estimation issues associated with government statistics, and considering the source of those statistics.

Along those lines, a recent survey of small businesses by the National Federation of Independent Business (NFIB) returned a result for prices that hasn’t been reached since 1981.

And the prices component of the monthly Institute for Supply Management survey of business purchasing managers rose in June 2021 to its highest reading since July 1979.

Inflation can be considered as a tax, and an especially regressive one, falling harder on those with lower income and/or assets. Inflation can be considered one cost of government.

…click on the above link to read the rest of the article…

Myth #22: Nate Hagens discredits claim “We Can Always Get More Resources If We Have More Money”

July 13, 2021

Myth #22: Nate Hagens discredits claim “We Can Always Get More Resources If We Have More Money”

“We can create money, but we cannot create energy, only extract what exists — FASTER.”

“We can create money, but we cannot create energy, only extract what exists — FASTER. And importantly, when money is created the interest is not. This creates a growth imperative for our economy to be able to pay interest in the future. Whenever we’ve encountered resource or energy limits – for example, the 1970s – we started to use the social construct of credit to overcome the near-term economic pain. In every single year since 1965, the United States and the world have grown their total debt more than they’ve grown their economies.” —Nate Hagens, from his Myth #22

My transcript of this repost focuses on Nate’s 2:55-minute crash course in economics – a valiant attempt to explain to the untutored (like myself) the relationship between money and resources. Without fully understanding his explanation, I’ll just accept at face value that he effectively discredits Myth #22: “We Can Always Get More Resources If We Have More Money.” Myth #22 is one of 33 myths Nate covered in his May 21st Earth Day talk titled, Earth and Humanity: Myth and Reality. The beauty of his 2hr, 52min long, information-rich Earth Day talk is that it is more of an indexed reference tool for recurrent consultation than a lecture meant to be assimilated in one sitting.

At the bottom of this post is a complete time-stamped list of the titles of all of Hagens’ 33 myths, plus his opening Introduction and closing Interventions (and Wild Ideas). The myths can be watched in any order — but, as Hagens mentions, the order decided on seems logical.

…click on the above link to read the rest of the article…

The Real Digital Plot

June 21, 2021

The Real Digital Plot

The move to end paper money and move toward a national cryptocurrency took a major step recently when the House Financial Services Committee task force expressed support for experiments to create a digital cryptocurrency version of the U.S. dollar. They argued that the United States had to keep pace with China, and in the process, they enable all Americans to access the digital economy. Neha Narula, who is the academic director of MIT’s Digital Currency Project, testified claiming, as they did in creating the euro, that the benefits of a digital dollar will lower costs within the electronic payment system. Of course, China also cracks down on protesters in Hong Kong. Obviously, the United States must crackdown on all dissent and cancel them from society to keep pace with China.

For years, I have watched behind the curtain how they operate. I believe that Bitcoin was “ALLOWED” to be created for the sole purpose of moving to a digital currency. Just as they float a balloon in first to see how the market reacts, which allows them to always deny it.

Nobody knows who invented blockchain. Don’t you find it curious that such a major invention takes place and nobody takes credit? Even the notorious government propaganda site, Wikipedia, states: “The blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin.” This appears to be the perfect COVERT operation, for blockchain allows the government to trace every person who handled that Bitcoin.

This entire cryptocurrency has been sold as somehow circumventing the central banks, and it will defeat fiat currency when in fact it too is not backed by anything tangible…

…click on the above link to read the rest of the article…

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