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Of Course There's a Gold StandardSam Mathid Whether or not a reserve currency, or any currency is officially backed by Gold, Gold always remains the standard. Either a fixed amount of paper currency is attached to each ounce of Gold as in a real Gold standard, or there is a variable amount of paper currency attached to each ounce of Gold. The standard still exists. Gold sits in permanent judgement on any currency, whether officially recognized or not. To ignore the warnings of Gold does not mean that Gold ceases to do its job. Gold has an indefatigable integrity and will always do its job, whether or not people acknowledge its presence, whether or not people even understand what that job is. Gold as the standard means Gold as the yardstick, or Gold as the measure. Gold's role is no passive role, it also means Gold as the judge, jury and executioner. Gold is omnipotent and omnipresent. In the material world of no absolutes, Gold is as close as it gets. If paper currencies should cease to exist, Gold would still be there. When a paper currency lets its hair down and goes out on the town chasing excessive and seedy ideas and values, it will find Gold standing by in judgement, like the condemnatory parent of a 14 year old schoolgirl who has stayed out overnight. The currency graveyard is full of the bones of government paper currencies that were found guilty of bad behaviour leading to worthlessness under gold's inscrutable and stern gaze. "it is not the government, but the market that makes gold money..." Professor Antal E. Fekete Ipso facto, it is also the market that makes gold the standard of the value that underpins any currency, at any point in time. Paper coupon currencies are very useful and will, almost certainly continue to reappear in use. They are wonderfully convenient, especially for minor transactions, and as long as no wealth is stored in paper coupons then all is well. It is only when people arrive at the breathtakingly silly belief that the pieces of paper themselves are the value, as opposed to merely the representations of value, that problems occur. It is akin to waving pieces of paper which have 'rain' printed on them and expecting the crops to get watered. Paper currencies are not wealth, they are representations of wealth. The difference is enormous, yet totally overlooked by many. Whilst a currency is in circulation it can always be exchanged for gold. That is where the standard exerts itself. It matters not what the numbers say on the currency. If the American currency will cost you 1000 dollars for 1 ounce of gold, when the Zimbabwean currency will cost you 23 million dollars* for one ounce of gold, then you can be assured that, at that precise moment, 1000 American dollars will purchase the same amount of goods, any goods, as 23 million Zimbabwean dollars. That is because gold is the standard. It could have been anything that was the standard of course... anything that was a 'thing', and not just a promise. It could have been oil, but that is very messy and heavy to carry around. It could have been carrots, but they deteriorate and so are not a good store of wealth. It could have been sea-shells but they are not easily divisible. It could have been all sorts of things, and at various stages of our history it was many things. Eventually gold was chosen by free people everywhere because it was the one standard that worked everywhere. Gold as money has been around for 3000 years, and absolutely nothing has changed 3000 years later except that acceptance of gold as the standard of real value has continued to grow until now it is world wide... with all people of all religions, nations, sexes, colours, political persuasions and cultures. Gold has dramatically increased in acceptance during the last 100 years. Marxist government discussions about building their public toilets out of gold are not heard much anymore. It is a reasonable conjecture that nothing will change in the next 3000 years. State run schools all over the world fail to educate people in the area of money (they fail in most other areas also). Many of the products of these school systems have no knowledge of gold's role or history, and have become impressed by how big the numbers are on government issued paper coupons. _________________ The 19th Century was a time of unprecedented prosperity. It was the time of the gold standard, and consequently a time of relative peace in the world. There were only five wars of any note during the whole 19th Century. At the turn of the 20th Century over 50 nations had currencies backed wholly by gold**. Then in 1914 the world went off the gold standard and in 1922 moved to a gold exchange standard. That was the end of pure gold currencies and the start of almost a century of innumerable wars and deaths. From 1922, not only gold, but the currencies (UK Pounds and U.S.$'s) of the victorious nations in WW1 were used as reserves. The millions of deaths in the 20th Century, including two world wars, and hundreds of wars of 'liberation', were only overtly caused by psychopathic leaders inspiring simple minded idealists to take up arms and kill each other. Covertly the wars were caused by people bearing batty ideas about money and economics. The fact of the matter is, that there is a gold standard, and by that standard the US$, and many other currencies that have lived the wild life of pseudo economic expansion, are currently found wanting. Paper currencies were printed in bulk by politicians the world over who were convinced that in their ultimate wisdom they had discovered the secret to wealth without the need for production. They are now in the process of discovering, too late, that wealth can only come from production. As fast as real estate went from being a no-lose situation to being a no-win situation, will be the same speed that gold goes from being a dog investment, fit only for 'gold bugs' wearing tin-foil hats, to being a must-have investment for Main Street. Indications are that we are very, very close to that point. If you wish to preserve any wealth it is imperative to buy gold (and/or silver) now. Fortunately it is on sale at the moment, and it is available if you look around, though you will almost certainly pay a premium over the so-called 'spot' price of paper bullion. Today Gold sits in judgment on the US$ (amongst other currencies) and has a black hood placed over its head. Gold also sits in judgment on the foolish politicians and central bankers who, without the burden of any self doubt, have led America to bankruptcy. In the words of the worthy Bill Bonner: the day of reckoning has arrived. "We lived our lives in a vacuum and allowed so many things to go wrong. We let go of our freedoms and rights and when we started realising our mistake, it was too late. We ceded power to people we trusted to look after our welfare. We went to sleep and forgot that good governance, democracy and human rights are precious commodities that need to be kept under close and constant guard. What we did can happen to any nation that relaxes and forgets or ignores the fact that absolute power corrupts absolutely and that leaders are people who need to be constantly made to account for their actions." From a blogger in Zimbabwe-September, 2008 * Zimbabwe knocked ten zeros off the end of their currency last month. If not for that, one ounce of gold in Z$'s would now cost just over 229 quadrillion Z$'s. ** "Why Gold-Backed Currencies Help Prevent Wars". Ferdinand Lips The brilliant Professor Antal E. Fekete, economist and mathematician, is conducting a seminar in Canberra, Australia from the 11th to the 14th November this year. Talk about perfect timing. It is the ONLY seminar anywhere in the world where all aspects of the gold and silver basis are discussed, together with a trading system guided by the basis. Meet and hear one of the giants of our age. Bookings for the seminar can be made through: I was privileged to attend Professor Fekete's seminar in Hungary in August of 2006, and will again be in attendance in Canberra. Sadly it will be Professor Fekete's last presentation of Gold Standard University Live. Also in attendance will be the loquacious Mr D.R. Schoon and possibly even Tom Szabo of silveraxis. Sep 17, 2008 © Sam Mathid 2006-2008 321gold Ltd |
