Is Gold, and a ‘Gold Standard’ really for the benefit of the rich… or is Gold and a Gold Standard actually of benefit to the average person? The short answer is; remember the Golden Rule… no, not the Golden Rule that says ‘Do onto others as you wish others do onto you’… but the other Golden Rule, the one that says ‘He Who Has the Gold Makes the Rules’.
Today, the American G’man and his top bankster boast over 8,000 Tons of Gold in their vaults. The German bankster has over 3,000 tons, the Italian near 3,000 T… and on and on. The final numbers are a bit vague, but the world’s central banksters collectively ‘own’… or hoard, or control or whatever you want to call it… tens of thousands of tons of Gold.
In the meantime, average people have almost no Gold… the world population is estimated to hold less than ½ OZ per capita… and the total amount of Gold in (legal) circulation is Zero. Guess who makes the rules?
One example of ‘making rules’ is setting the rate of interest. Mr. Bankster has decreed that he will set a ‘ZIRP’ policy… that is, a Zero Interest Rate Policy… supposedly to ‘stimulate the economy’… and to bring about ‘full employment’. By the expedient of buying bonds with newly created Fiat paper, Mr. Bankster keeps the price of bonds artificially, fraudulently high… which is the same as keeping interest rates artificially, fraudulently low.
Explaining exactly how and why high bond prices equal low interest rates is beyond the scope of this article. If you are interested, Google ‘bond equation’ and you will see the answer for yourself.
Getting on with it, the claim that ‘low interest rates stimulate the economy’ is a Big Lie. Really? Let’s ask our average persons; like our retired couples who live off their life’s savings… does ZIRP benefit their ‘economy’…? With their hard earned cash bringing a miniscule income, far less than the ongoing destruction of purchasing power… so called ‘inflation’… having to live off their rapidly disappearing capital… ZIRP is hardly of benefit to them, is it?
How about our middle aged couples, saving to pay for their children’s education… does ZIRP help their economy? With their savings earning negative real income, with their accumulated wealth being robbed by monetary depreciation… when prices grow far faster than whatever their savings earn… and their wages never even match the rate of monetary depreciation? Hardly. ZIRP is destroying their ‘economy’ as well.
But surely, the young graduate about to embark on his career, who has borrowed a bunch of money to pay for his education… surely HE must benefit? What? He says “no, man… I borrowed a bunch of money for my schooling, and I can’t possibly pay the loan back. I am doomed to live as a debt slave…
I can’t get a job in my field of studies… the best I can do is flip hamburgers part time for a pittance. I am not even allowed to declare bankruptcy… I am Doomed.”
But didn’t Mr. Bankster tell us that he was introducing a ZIRP to ‘stimulate the economy’? If this were true, if the economy were really ‘stimulated’, how come our new grad can’t find a job? If even he doesn’t benefit, then who does? Maybe a businessman? That is another claim by the G’man. That the ZIRP will stimulate business investment, by making ‘money cheap’… and surely more business investment will reduce unemployment? Just another Big Lie, I am afraid.
I ran a business, manufacturing metal forming machinery in Canada, for over thirty years… still run the business in fact, but now the work is all being done in China… and the prevailing rate of interest never had a noticeable effect on our business. The only thing that moved our business, either up or down, was demand for our products.
Demand depends on the financial health of our customers, and of the economy. If ZIRP impoverishes most people, it does not do anything but destroy the economy… and this destruction takes most business with it. Believe me, I know… ZIRP took my business into bankruptcy!
Does anyone benefit from ZIRP… fraudulently low interest rates? Come on, it’s obvious… big time debtors benefit big time. Can you guess who is the biggest ‘big time’ debtor of all? Why, surprise surprise… it’s the G’man. Uncle Sam owes… wait, I will check usdebtclock.org… geez, hard to read, the numbers keep flashing higher and higher… every second the G’man’s debt grows…but as I write this, the official US debt is over $16,800,000,000.
Savor that number for a second or two; it is beyond astronomical… 16 trillion, 800 billion Dollars. Mind numbing. No human mind can imagine even a trillion, never mind multiple trillions… but there it is. The truth is out; Uncle Sam can’t afford higher interest rates, so he tells his bedfellow bankster to push interest rates down… regardless of the economic destruction this causes. This is the true reason behind ZIRP… ignore the Big Lie… and just follow the money; Cui Bono… to whose benefit… The G’man is the big beneficiary of ZIRP.
Thus dies the Fiat world economy… but a Gold Standard economy goes in exactly the other direction; not towards death, but towards prosperity. Remember the Golden Rule; he who has the Gold makes the Rules…
During the nineteenth century, the heyday of the Classical Gold Standard… and of the British Empire… England ruled nearly 85 percent of the ‘civilized’ world… and the Bank of England ran the whole show under the graces of Gold. Care to guess how much Gold the Bank of England had in its vaults during the nineteenth century? During the ‘peacable days’? It was not the 8,000 Tons that Uncle Sam has… not the 3,000 Tons that Germany has… no, it was an incredibly tiny 150 to 250 Tons…
This number is in the public records of the Bank of England… if you doubt me, check it your self. The commerce of practically the whole world was well conducted on the basis of a few hundred Tons of gold. Where was the rest of the Gold? Where were the thousands of Tons that were in existence? Why, in the hands of average people; Gold was in circulation as money. Guess Who Made the Rules?
It was every man who made the rules, not a handful of banksters and G’men. But how… how could hundreds of millions of men, nay billions of men make any rules? The answer is laughably simple, once you see the truth. The rule for setting interest rates works like this;
When I earn money, there are only three things I can do with it; spend it, hoard it, or put it to work to earn more money… somehow. There is no other possibility… if you concede that giving money away as a gift is spending. Some spending is mandatory… as I need to buy food, fuel, shelter, clothing… the essentials. Hoarding and ‘saving’ are optional.
Hoarding has some less unpleasant connotations; we are constantly being told that hoarding is somehow wrong, anti-social, ‘primitive’… like a Gold standard is called ‘primitive’… but even squirrels have enough brains to hoard, saving food in balmy summer days to last them through the tough winter days to come. Are humans as smart as squirrels?
As far as putting money to work, only entrepreneurs and businessmen truly put their money to work. Average, ordinary people are far too busy earning a living to go into business for themselves. Instead, they look for ‘yield’ with ‘safety’.
This is impossible under Fiat paper… as we already saw. There are no real returns possible without all-out gambling, er speculation. Under Gold, the story is very different. After all, simply hoarding Gold is profitable. The purchasing power of a Gold hoard increases as prices decline. Any earnings from lending money at interest are a bonus.
I would not lend my Gold money… unless I was absolutely certain of getting it back, and was offered sufficient interest income. If you get Gold money, would you not think the same way? Spend some, hoard some… but only lend some if the interest being offered was sufficient to make it worth your while?
I believe you think the same way, although what you consider ‘worth your while’ may not be the same as what I consider ‘worth my while’. Nevertheless, this is the crux of the matter; this is where the rubber meets the road.
If hundreds of millions of people think the same way… that is, choose NOT to lend their money unless they believe it ‘worth their while’… then anyone who wants to borrow must offer more interest. The ones who hold the Gold make the rules. Borrowers must follow the rules set by the Gold holders, or they luck out.
With paper this does not work; the ‘powers that be’ will simply print up more paper, and force rates down… regardless of what I, or what you, or what a hundred million others wish for.
This is why only a true Gold Coin standard can work; actual Gold must be in circulation, in the hands of all… else the teeth are not there. No monetary system with Gold ‘backed’ (paper) money can ever work. If fraudulent paper is in circulation, and if fraudulent paper is accepted as money, more fraudulent paper will be printed… regardless of promises of ‘backing’ Indeed, Mr. Bankster may open the door to his vault, show us the Gold sitting there ‘backing’ our paper… and then print as much paper as he wishes… but he cannot print Gold.