Gold standard = fiat money in disguise

[shikamaru]

http://the-moneychanger.com/articles...m_standard.php

The always interesting, Money Changer

[stoneFree]

Equating gold to fiat is hyperbole, but you never fail to entertain, Franklin, thank you. I will take gold, a gold standard, or a gold/silver standard over unbacked paper debt notes & electronic blips any day of the week. Yes, the gold & silver markets are a rigged game. The banksters control the Comex & LBMA exchanges via massive unbacked paper derivatives (naked shorts) while regulators look the other way. Every day every trade. But even in the face of that control, gold & silver have proven to be an excellent store of wealth, a preservation of purchasing power. While America was on a metal standard (prior to central banking), we witnessed stable prices (little inflation) and unprecedented prosperity:
http://oregonstate.edu/cla/polisci/s...665-2005-1.pdf

Furthermore, the banking cartel is collapsing, fiat is ending, legal tender laws will be repealed and we'll use whatever we want as money. The end game is upon us, and that controlled market will be ending soon and then true price discovery will begin. At that point you'll be quite pleased with what you've buried under the barn. I received this in email today:

A subscriber sent me a link to the London Gold Exchange which closed their doors PERMANENTLY today. Here's the link:

www.londongoldexchange.com

At first I thought they might be related to the London Metal Exchange but they are not. Just similar names. Here's the description of the London Gold Exchange from Wikipedia:

"London Gold Exchange is a digital currency exchanger founded in 2001. The London Gold Exchange is owned by LGE International LTD., an offshore company registered in Belize, with offices in London, England and Hong Kong. London Gold Exchange operate 2 franchises, one in the UK and one 'International' which covers everywhere other than the UK. The UK administration office in Central London, with staff based in locations around the UK. The International administration office is in Hong Kong, with staff also operating from mainland China. Technical staff also operate from locations in Australia."

Yes. This was a DIGITAL gold exchange playing in the gold DERIVATIVE markets. From other articles the London Gold Exchange claimed to be the LARGEST e-gold exchange in the world.

Hmmm...

This surely can't be good news for their customers or the COUNTER PARTIES on the other end of these paper/electronic gold derivative transactions. The ripple effect of an implosion of gold and silver derivatives will set off the long awaited "Weapon of Mass Financial Destruction". I doubt this will be big enough to start the crash but it is definitely a sign of things to come.

Then again, there is not much difference between an e-DIGITAL market and the COMEX market as both are just electronic derivatives of gold and silver. It's possible that September will be the largest volume month for COMEX silver in history... meaning north of 3,000,000 contracts traded representing over 15 Billion Ounces of SILVER! To add some context there's only about 30M ounces of physical silver available for delivery in the COMEX warehouses which represents a 500-1 ratio of paper trades against physical silver available for delivery in the month...and this is how the price is set for physical commodities in this age of paper Ponzi Schemes.

I know it is difficult to ride out these slams but this IS the end game so...

STAND STRONG!!!

Obviously, it looks like we are going to have to EARN the future rewards on our physical gold and silver investment once again. So be it!

We saw it coming long ago and IF you survive another few months with your METAL IN HAND then you will be one of the ONLY investors in the world to have preserved their wealth after the CRASH.

Keep and eye out for the END of the THIRD quarter as there should be MANY surprises in OCTOBER.

For those of you sweating this one just pop this in your mouth!

Your Silver Pacifier
http://www.roadtoroota.com/public/584.cfm

May the Road you choose be the Right Road.

Bix Weir

[shikamaru]

Bimetallism has its own problems mainly Gresham's Law during shortages.

I do know that Europe was on a de facto silver standard for hundreds of years prior to the gold standard.
I also know that the gold standard is not all its cracked up to be.

A gold standard means gold as reserve currency. Reserve currency means the initial pool of assets to back whatever notes some institution may issue. There is nothing really stopping an institution from issuing more notes than reserves to back it.

[shikamaru]

Equating gold to fiat is hyperbole, but you never fail to entertain, Franklin, thank you. I will take gold, a gold standard, or a gold/silver standard over unbacked paper debt notes & electronic blips any day of the week.

The article was written by someone else. Franklin presents it on his site.

I have to say that I agree with the article that the gold standard is fiat money in disguise.

The reason it is fiat is that the gold is exchanged for paper and vice versa instead of valuing gold in silver in a bimetallic standard.
Silver is demonitized.

A note or bill of credit represents the value of money.
Money is gold, silver, and copper coin.

[shikamaru]

Boom!!

I knew I would find it

Source: http://en.wikipedia.org/wiki/Currency_Act

The Currency Act is the name of several Acts of the Parliament of Great Britain that regulated paper money issued by the colonies of British America. The Acts sought to protect British merchants and creditors from being paid in depreciated colonial currency. The policy created tension between the colonies and Great Britain, and was cited as a grievance by colonists early in the American Revolution.

Act of 1751

The first Act, the Currency Act of 1751 (24 Geo. II c. 53), restricted the emission of paper money by the colonies of New England. These colonies had issued paper fiat money known as "bills of credit" to help pay for military expenses during the French and Indian Wars. Because more paper money was issued than what was taxed out of circulation, the currency depreciated in relation to the British pound sterling. The resultant inflation was harmful to merchants in Great Britain, who were forced to accept the depreciated currency from colonists for payment of debts.

The Act limited the future emission of bills of credit to certain circumstances. It allowed the existing bills to be used as legal tender for public debts (i.e. paying taxes), but disallowed their use for private debts (e.g. for paying merchants).

................

The Currency Acts created tension between the colonies and the mother country, and were a contributing factor in the coming of the American Revolution. In all of the colonies except Delaware, the Acts were considered to be a "major grievance". When the First Continental Congress met in 1774, it issued a Declaration of Rights, which outlined colonial objections to certain Acts of Parliament. Congress called on Parliament to repeal the Currency Act of 1764, one of seven Acts labeled "subversive of American rights".

[stoneFree]

Harvey Organ had this to say yesterday:

Wow!! please read the following carefully. Early this morning it was announced that China has not added any new USA debt paper and actually it contracted from 1.3 trillion usa dollars to 1.15 usa trillion. Where did this money go? The answer is now been provided to us...China has bought massive amounts of physical gold. Last month they bought an astronomical 68 tonnes of gold imported through Hong Kong. In the last 6 months they have hoarded 383 tonnes of gold. The world produces ex China approximately 2,400 tonnes of gold per year. At this rate China will be accumulating approximately 31% of annual gold production.
I will tell you that almost all of this gold is procured through England, the dominant physical supplier of gold.
When the last ounce of gold leaves London, then the Comex and then GLD and then finally the Bank of England will default.

(courtesy zero hedge..also very important)
http://www.zerohedge.com/news/hoardi...-gold-reserves

[KnowLaw]

The world produces ex China approximately 2,400 tonnes of gold per year. At this rate China will be accumulating approximately 31% of annual gold production.
I will tell you that almost all of this gold is procured through England, the dominant physical supplier of gold.
When the last ounce of gold leaves London, then the Comex and then GLD and then finally the Bank of England will default.

Very interesting. I wasn't aware that China's gold buys were originating in England. Thirty-one percent of world production is quite scary (although not from the Chinese viewpoint) and telling. They've been working at creating a gold-backed currency for the past several months if not years. The recent precious metals company that they bought and moved to Shanghai (or wherever) to compete with London and Chicago (Comex) is part of their strategy. They want in on the Precious Metals market, and the big players are scrambling to keep them out.

Makes you wonder whether it's really gold they are getting from London, or just gold plated tungsten. Wouldn't be the first time something like that happened.

[shikamaru]

When the colonies were running out of gold and silver coin, they used colonial script backed by some agricultural products.
This worked quite well for them.

The Bank of England, through Parliament, put the brakes on the colonies usage of colonial script.

Benjamin Franklin was of the opinion that THIS was the cause of the American Revolution.

[Michael Joseph]

It should be noted that the American colonists were restricted to the gold standard by the Lords of Trade and Foreign Plantations (a committee of the Privy Council).

When the colonies were running out of gold and silver coin, they used colonial script backed by some agricultural products.
This worked quite well for them.

The Bank of England, through Parliament, put the brakes on the colonies usage of colonial script.

Benjamin Franklin was of the opinion that THIS was the cause of the American Revolution.

check this out...

seems interesting in light of this

[stoneFree]

Nice $20 coin but only weighs 7.96 grams.

With silver at $30 an ounce, calculating its silver value...

(30 × .0321507466 × 7.96 × .9999) = $7.68 USD