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Virtually no investor studies history and the few who do always think it is different today. The most important lesson is that people never learn. If they did, they wouldn’t be invested in a stock market that on any criteria is now at a bubble extreme. And they wouldn’t be invested in a global debt market which has grown exponentially in recent decades and which will become worthless in the next few years as debtors default. Nor would anyone hold paper money which is down 97-99% in the last 100 years and which is guaranteed to soon fall the final bit to take the value to zero.

The history of money clearly illustrates that “Plus ça change, plus c’est la même chose” (the more it changes, the more it is the same thing). The most constant factor in the history of money is the cycle of boom and bust or euphoria and despair. Cycles are part of nature just like the change of seasons.

But throughout history, mankind has always believed that they know better than previous generations and can eliminate the cycle of boom and bust. This is what the British prime minister Gordon Brown proudly declared before the economy collapsed in 2007. And the Nobel Prize winner in Economics, Paul Krugman, also believes that eternal prosperity can be generated by creating endless debt and printing unlimited money.

But history has time and time again turned hubristic know-it-alls into humbled has-beens.

FOR 6,000 YEARS GOLD HAS OUTLIVED ALL CURRENCIES

Whenever mankind has deviated from sound money, the consequences have without fail been catastrophic. The only money which has survived since it first came into use around 6,000 years ago is gold. All other money has been destroyed by greed and economic mismanagement. I believe I have quoted Voltaire for over 20 years and will continue to do so: “Paper Money Eventually Returns to its Intrinsic Value – ZERO”.

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

Euro – a disaster – failed monetary unions past and present

January 18, 2018

Euro – a disaster – failed monetary unions past and present

A glance at history

The beginnings of monetary union can be traced back to attempts to unify the coin standard. Emperor Augustus successfully unified the coins in the Roman Empire – for over 400 years the gold coins were minted almost exclusively with the seal of the Roman Emperor. The fall of the Roman Empire, caused among other things by its multiculturalism and multinationality, led to the disintegration of the state and to the deterioration of the coin value through a lower proportion of gold or silver. Until the 19^th century, the fragmentation of the right to mint coins to the regional rulers led to the fact that the profit resulting from the creation of money from the difference between metal value and production costs and the value of the coins issued was no longer allocated only to a feudal ruler. In the 19^th century, completely new methods of creating money emerged for the ruling classes – paper standards were gradually introduced. The paper standard should no longer be based on gold or silver parity, but should be secured by appropriate policy of the central bank, especially by influencing interest rates. In the 19^th century, monetary unions were developed, on which the idea of the euro was based. All failed.

In 1865, the Latin Monetary Union unified the currencies of France, Italy, Belgium, Greece and Switzerland. A French franc corresponded to an Italian lira, which corresponded to a Belgian franc, etc. Greece and Italy were then as now debtor countries. The Union’s objectives were similar to those of the euro zone today: to simplify trade and make countries more competitive on world markets.

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

The Death Of Cash – New Tech To Revolutionize The Payments Industry

August 28, 2017

The Death Of Cash – New Tech To Revolutionize The Payments Industry

p2p-blockchain

The world has had enough of paper money.

Now that consumers are done with physical wallets, the multi-billion-dollar mobile pay app market is minting new digital barons at breakneck speed.

And we’ve just identified one company at the forefront of the revolution which has a very compelling story.

Glancepay is already the no. 1 mobile payment app in Canada, ranking at over 92 percent of mobile payment app downloads. It’s also making big waves across North America, where it ranks 37 percent of all mobile payment app downloads.

This could be a timely opportunity for early investors who understand what’s about to happen.

For example, when Alipay hit the Chinese market with its instant mobile app pay features, it was an overnight sensation. Now, it’s conducting a massive $1.7 trillion in business annually in China.

And this story is very exciting because GlancePay (CSE:GET; OTC:GLNNF) is also making inroads in the billion-dollar cannabis market in a deal that gives them direct ownership in Canapay Financial Inc. and they are planning moves into cryptocurrency markets, too.

Mobile payment technology is one of the fastest-growing markets in the world, and GlancePay is hoping to be the major market disrupter—filling a gap that not even the trillion-dollar Chinese turnover is filling, nor major players on the North American scene.

How? By focusing equally on merchants and consumers, losing cumbersome and security-plagued hardware, and offering much more than just one-click payments: rewards, choices, and even tab-splitting.

In short, GlancePay (CSE:GET) has apps that can simply take a glance at where you are… using proprietary and patented GPS / micro-location and image identification technology… and pays your merchant…in seconds.

It’s holistic, streamlined, and has the technology with patents to protect it, an issue that has kept major players from securing greater market share over the past few years.

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

Government Monopoly Money vs. Personal Choice in Currency

July 4, 2017

GOVERNMENT MONOPOLY MONEY VS. PERSONAL CHOICE IN CURRENCY

For more than two hundred years, practically all of even the most free market advocates have assumed that money and banking were different from other types of goods and markets. From Adam Smith to Milton Friedman, the presumption has been competitive markets and free consumer choice are far better than government control and planning – except in the realm of money and financial intermediation.

This belief has been taken to the extreme over the last one hundred years, during which governments have claimed virtually absolute and unlimited authority over national monetary systems through the institution of paper money.

At least before the First World War the general consensus among economists, many political leaders, and the vast majority of the citizenry was that governments could not be completely trusted with management of the monetary system. Abuse of the monetary printing press would always be too tempting for demagogues, special interest groups, and shortsighted politicians looking for easy ways to fund their way to power, privilege, and political advantage.

The Gold Standard and the Monetary “Rules of the Game”

Thus, before 1914 the national currencies of practically all the major countries of what used to be called the “civilized world” were anchored to market-based commodities, either gold or silver. This was meant to place money outside the immediate and arbitrary manipulation of governments. Any increase in gold or silver money required private individuals to find it profitable to prospect for it in various parts of the world, mine it out of the ground and transport it to where it might be refined into usable forms, and then mint part of any new supplies into coins and bullion, with the rest made into various commercial and industrial products demanded on the market.

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

Gold In Uncertain Times: “The West Doesn’t Get It… They’ve Been Indoctrinated By Paper Money”

March 12, 2017

Gold In Uncertain Times: “The West Doesn’t Get It… They’ve Been Indoctrinated By Paper Money”

In this fascinating interview on RealVision TV, Grant Williams and Egon von Greyerz cover a very broad range of subjects from gold, wealth preservation to debt, interest rates, Brexit, the EU and much more.

The interview was recorded in London at the end of 2016 but the discussion is timeless and extremely relevant in regard to future events and risks.

The biggest risks ahead according to Egon is the global bond markets. He predicts rates going to very much higher levels like in the 1970s. That will lead to more money printing, faster currency debasement and the demise of the bond market.

Grant and Egon also discuss that in every period of panic and crisis combined with economic mismanagement, which we are seeing today, gold has always acted as insurance. The setup is now perfect for gold to act to protect wealth against the coming problems in financial markets and the world economy…”the Indians know this, the Chinese know this but the West doesn’t understand because they have been indoctrinated by paper money…”

As inflation rises institutions will be obliged to hold gold as a hedge. Since gold production is coming down substantially over the next 8 years there will be less gold available. No one will trust paper gold. This will lead to major upward pressure in the price of physical gold. Future increases in demand can only be satisfied at much higher prices.

* * *

Full interview below: One of the most respected names in the gold market, Egon von Greyerz illuminates the discussion on the long term trend for the precious metal, against the current climate.

Source: GoldSwitzerland.com

Hamilton’s Curse (Reprised)

July 17, 2016

HAMILTON’S CURSE (REPRISED)

The following article is (after very light editing) something your author wrote early in October of 2008, when the padlocks on the Lehman office building doors were still swinging. The reader will, he hopes, find that most of the presentiments expressed and the analysis submitted sadly turned out to be more accurate than otherwise.

It is to our collective detriment that, eight long, painful, underemployed, increasingly indebted, more societally divisive years on, few if any of these lessons seem to have been drawn by the Powers-that-Be.

…The general confusion, and the introduction of paper money, infused in the minds of people vague ideas respecting government and credit. We expected too much from the return of peace, and of course we have been disappointed. Our governments have been new and unsettled; and several legislatures, by making tender, suspension, and paper money laws, have given just cause of uneasiness to creditors.

By these and other causes, several orders of men in the community have been prepared, by degrees, for a change of government; and this very abuse of power in the legislatures, which, in some cases, has been charged upon the democratic part of the community, has furnished aristocratical men with those very weapons, and those very means, with which, in great measure, they are rapidly effecting their favourite object.

And should an oppressive government be the consequence of the proposed change, posterity may reproach not only a few overbearing unprincipled men, but those parties in the states which have misused their powers.

Letter from the Federal Farmer to the Republican, Oct 8th 1787

After a blizzard of unco-ordinated initiatives and the usual spate of grossly unintended consequences, state intervention in the banking system seems to have reached a near apotheosis this week as the authorities finally seek a comprehensive solution to the extraordinary bank-on-bank run which has so roiled world markets in recent months.

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

The Follies and Fallacies of Keynesian Economics

February 22, 2016

THE FOLLIES AND FALLACIES OF KEYNESIAN ECONOMICS

Eighty years go, on February 4, 1936, one of the most influential books of the last one hundred years was published, British economist, John Maynard Keynes’s The General Theory of Employment, Interest and Money. With it was born what has become known as Keynesian Economics.

Within less than a decade after its appearance, the ideas in The General Theory had practically conquered the economics profession and become a guidebook for government economic policy. Few books, in so short a time, have gained such wide influence and generated so destructive an impact on public policy. What Keynes succeeded in doing was to provide a rationale for what governments always like to do: spend other people’s money and pander to special interests.

In the process Keynes helped undermine what had been three of the essential institutional ingredients of a free-market economy: the gold standard, balanced government budgets, and open competitive markets. In their place Keynes’s legacy has given us paper-money inflation, government deficit spending, and more political intervention throughout the market.

It would, of course, be an exaggeration to claim that without Keynes and the Keynesian Revolution inflation, deficit spending, and interventionism would not have occurred. For decades before the appearance of Keynes’s book, the political and ideological climate had been shifting toward ever-greater government involvement in social and economic affairs, due to the growing influence of collectivist ideas among intellectuals and policy-makers in Europe and America.

Keynes on Time Magazine Cover

Before Keynes: Wise Free Market Policies

But before the appearance of The General Theory, many of the advocates of such collectivist policies had to get around the main body of economic thinking which still argued that, in general, the best course was for government to keep its hands off the market, maintain a stable currency backed by gold, and restrain its own taxing and spending policies.

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

Are You Ready for a Crack-Up Boom?

February 12, 2016

Are You Ready for a Crack-Up Boom?

Crack Up!

BALTIMORE – The Dow rose on Wednesday morning… after Janet Yellen made soothing remarks about a “gradual” return to normal interest rates. Then investors must have realized that returning to normal is not on the Fed’s agenda. The Dow finished the day down 99 points.

We haven’t seen normal central bank policy since the Nixon years. Normal is a currency backed by gold, not by PhD economists. Only briefly and episodically, over the last 2000 years, has the world flirted with pure paper or “fiat” money. Every time, the affair was over in a short time… and regretted for a long time.

1-Fate_of_Currencies The result of the usurpation of money by government

Under a gold standard, credit comes from savings. Thus limited, interest rates typically stand somewhere in the 3% to 6% range. They do not roll around on the barroom floor with the spilt beer, drunks, and sawdust.

Real credit comes from money that is saved… taken out of the consumer economy so that it can be used for emergencies and capital investments. When it is paid back – usually out of increased output – the world is a richer place.

But try to trick the economy with phony credit – money that was never earned and never saved – and you are just asking for trouble. Said Jörg Guido Hülsmann, a senior fellow at the Mises Institute:

“In no period of human history has paper money spontaneously emerged on the free market. In all known historical cases, paper money has come into existence through government-sponsored breach of contract and other violations of private property rights.”

Guido_Huelsmann2 Jörg-Guido Hülsmann – a staunch proponent of a free market in money (you can read his book “The Ethics of Money Production” for free here, pdf) Photo via mises.de

Giving out more money always gives the economy a temporary lift. People think they are richer.

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

Paper Money Versus the Gold Standard

December 15, 2015

Paper Money Versus the Gold Standard

We are living in a time that can only be considered monetary chaos. The U.S. Federal Reserve has manipulated key interest rates down to practically zero for the last six years, and expanded the money supply in the banking system by $4 trillion dollars over that time. And with the true mentality of the monetary central planner, the Fed Board of Governors are now planning to manipulate key interest rates in an upward direction that they deem desirable.

The European Central Bank (ECB) has instituted a conscious policy of “negative” interest rates and planned an additional monetary expansion of well over a trillion Euros over the next year. Plus, the head of the ECB has assured the public and financial markets that there is “no limit” to the amount of paper money that will be produced to push the European economies in the direct that those monetary central planners consider best.

We also should not forget that it was the Federal Reserve that earlier in the twenty-first century undertook a monetary expansion and policy of interest rate manipulation that set the stage for the severe and prolonged “great recession” that began in 2008-2009, in conjunction with a Federal government distorting subsidization of the American housing market.

The media and the policy pundits may focus on the day-to-day zigs and zags of central bank monetary and interest rate policy, but what really needs to be asked is whether or not we should continue to leave monetary and banking policy in the discretionary hands of central banks and the monetary central planners who manage them.

Central Banking as Monetary Central Planning

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

A Warning to Indian Citizens – Your Government Wants Your Gold

November 5, 2015

A Warning to Indian Citizens – Your Government Wants Your Gold

The notion that the Indian government considers its citizens’ gold “idle” and would like to get its hands on personal holdings of the metal, as well as bullion held in temples, has been circulating in the media for several years now. What’s interesting about today’s article, is that Prime Minister, Narendra Modi, has introduced concrete plans to make it happen.

Bloomberg reports:

There’s about 20,000 metric tons of gold stashed away in India’s temples and households — more than four times the amount that’s held in Fort Knox in Kentucky — and Narendra Modi wants to get his hands on it.

India’s prime minister on Thursday unveiled three state-backed plans to try to tap the stockpiles of the precious metal to trim physical demand and reduce imports by providing people with alternative avenues for investment. At an event in New Delhi, Modi announced the formal start of a gold-deposit plan, a sovereign-bond program linked to the metal’s price and introduction of locally minted coins, some bearing the face of Mahatma Gandhi.

Also known as the “please trade in your gold for paper promises and government tokens” plan.

“The expectations from the schemes in the short term must be tempered as it will take time to build the infrastructure and products and for customer acceptance to grow,” said P.R. Somasundaram, managing director at the World Gold Council in India. “We should see this announcement and launch as a strong indication of an intention to put gold at the heart of the financial system and make it work for the Indian economy.”

Yes it will take a while to properly propagandize the population, and if that fails, there’s always coercion or violence.

Meanwhile, I remain confused as to why it would be advantageous to place a barbarous, pet rock relic, owned merely for tradition at the “heart of the financial system.”

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

Austerity or Hyperinflation. Which is the Precursor to Revolution?

October 5, 2015

Austerity or Hyperinflation. Which is the Precursor to Revolution?

QUESTION: Mr, Armstrong;

I recently read an article claiming to be a case study that it was somehow the French hyperinflation that led to the revolution. It seems that as you say they are again mixing facts to support a rise in gold with hyperinflation. I am a collector of French monetary history and the paper money came after the revolution not before. Unquestionably, there was austerity prior to the revolution and that seems to be repeating in Europe once again. Would you care to comment on this issue for it seems they are distorting history once again to sell gold.

Your debut here in Paris was super. It has really made some impact starting a discussion.

ANSWER: Yes you are correct. The French hyperinflation came after the French Revolution for they defaulted on their national debts accumulated by the crown and then confiscated the property of the Catholic Church to try to back their post-revolutionary currency. The nation went into hyperinflation because the revolution defaulted on all prior debt and they were then hunting the rich, taking everything they had, and beheaded them. This was not an atmosphere that promotes CONFIDENCE.

These people try to claim the hyperinflation is caused by paper money rather than revolution which results in hunting the rich. The German hyperinflation was the same sequence. It was a communist revolution in 1918 which also defaulted on the national debt of the prior government. It is not the paper money, it is the default that distinguishes both hyperinflation events for CONFIDENCE simply collapses and the economy implodes. By attributing this to “fiat” paper they then assume that we must go into hyperinflation simply because we too have paper money. That is just an unsupported analysis which distorts the entire sequence of events. This analysis is highly dangerous and amounts to consumer fraud.

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

Today’s Money Regimes Are Doomed To Failure

April 10, 2015

Today’s Money Regimes Are Doomed To Failure

Centrally issued money centralizes wealth and generates systemic inequality.

A Thought Experiment on Money

Let’s imagine a small mountain kingdom with only ten very scarce and thus highly valued seashells in circulation. These few shells are certainly valuable in terms of scarcity, but there aren’t enough of them to act as a means of exchange.

One solution to this innate problem of scarcity—money has to be scarce enough to retain value but not so scarce that there isn’t enough of it in circulation to grease trade—is for the kingdom to issue 100 slips of paper for each shell, each slip of paper representing 1/100^th of the shell’s value. Now there is enough money in circulation to facilitate trade and each slip retains a store of value equal to 1/100^th of a shell. The slips are paper money, i.e. currency.

This system works well, but the rulers of the kingdom aspire to consume goods and services in excess of what their share of the shell-backed money can buy in the open market. The kingdom’s leaders print another 100 slips of paper without acquiring a shell to back the new slips with intrinsic value. Nobody seems to notice, and so the leaders print another 100 slips. Note that the kingdom didn’t produce more goods and services; its leaders simply produced more money.

Eventually this excess of paper slips reduces the value of each slip in circulation. What once cost 10 slips now costs 20 slips. This reduction in the purchasing power of money is called inflation, as the price of goods inflates as the money supply is increased while the production of goods and services remains unchanged.

Let’s assume the kingdom’s leaders avoid the temptation to expand their consumption by printing money rather than first increasing the production of goods and services.

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

Richard Duncan: The Real Risk Of A Coming Multi-Decade Global Depression

April 6, 2015

Richard Duncan: The Real Risk Of A Coming Multi-Decade Global Depression

One that unwinds the past 50 years of globalization

Richard Duncan, author of The Dollar Crisis and The New Depression: The Breakdown Of The Paper Money Economy, isn’t mincing words about the risks he sees ahead for the world economy.

Essentially, he sees the past 50 years of economic prosperity fueled by globalization and easy credit in serious danger of being unwound, as the doomed monetary policies currently being pursued by the word’s central banks result in a massive multi-decade depression that spans the globe.

The first version of The Dollar Crisis, the hardback, came out in 2003, so I wrote it in 2002. And at that time, the dollar against gold was $300. So the dollar has lost more than 75% of its value since The Dollar Crisis was written, and I don’t think it’s going to stop here. I expect it to continue to lose value over the years and decades ahead.

But what we’re seeing is that the real theme of The Dollar Crisis was that the post-Bretton Woods international monetary system was fundamentally flawed because it couldn’t prevent trade imbalances between countries. And the US had developed an enormous trade deficit with the rest of the world and this blew the trade surplus countries like Japan and China into bubbles. And then, the dollars boomeranged back into the United States and blew it into a bubble, as well. I didn’t know when the housing bubble was going to pop in the US but I knew it would. And I wrote in The Dollar Crisis that when it did, we would have a severe global economic recession/depression that would involve a systemic banking sector crisis in the United States and necessitate trillion-dollar budget deficits and unorthodox monetary policy to prevent a Great Depression from occurring.

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

Here’s what I think the financial system will look like in the future

November 13, 2014

Here’s what I think the financial system will look like in the future.

Thousands of years ago whenever the Pharaohs of Ancient Egypt passed away, they were buried with all of their gold in a specially constructed tomb.

The idea was to ward off thieves with booby traps and other perils so that these perceived demigods could enjoy their riches for eternity.

It worked. In the case of Tutankhamen, his gold was untouched by both thieves and desperate government tax collectors for thousands of years.

In the Pharaohs’ day, gold was money. Today, it might be even more important than ever.

As advanced as our modern civilization may be, we’ve been playing with fire for more than a century. Every single experiment with unbacked paper money throughout history failed.
…click on the above link to read the rest of the article…

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