The advantage of precious metals historically has been they are universally acceptable around the world so that is where they stand a chance if we can transport wealth anymore. The problem metals face is stringent tracking of who buys and sells what. Storing in a bank is now quietly considered to be money laundering (read fine print when renting safe deposit box). Of course, then there is the problem of transportation. You can’t hop on a plane any more or load it in the trunk of your car and drive across country. You will run the risk highway-robbery by the police under ruthless civil asset forfeiture laws.
The question becomes, what kind of a future do we face? Can precious metals serve as a medium of exchange without hiding in the shadows of dark alleyways? This is the hunt for money that the government is engaging in these days. They simply declare they own x-% of your wealth and if you do not voluntarily hand it over you are a CRIMINAL who they they can justify killing on the spot. Indeed, every person already commits 3 felonies a day and do not know it.
Just like Civil Asset Forfeiture, they pretend you have done something to justify them somehow profiting from their own ruling. Is it any wonder the US Federal courts have a conviction rate over 98%when even Adolf Hitler’s rate was 90%? It is always about money and only a FOOL thinks there is any kind of justice. From the government’s perspective, it is always JUST-US not “justice” and the mainstream press allow this to happen by their failure to ever expose the truth.
We face a whole new world. Historically government could not hunt down money with such efficiency. The question becomes in all honesty, just how far down the rabbit hole are we going? Can society stop this insanity before it is too late? In these respect, I must admit, there is no such period in history that holds the answer I can recall. You could have packed up your gold and just left town. That is not possible today. Will shares and diamonds become the international means of capital preservation that can be moved? This is something we will have to experience perhaps for the first time in history. If we go all the way, the only thing that has value is food. Scary thought.
Gold does not rise during times of inflation, or serve as a hedge against a collapsing dollar. Exhaustive correlations prove those assumptions have been sales-pitches only.
Gold is a market – trade it like it is and you will make far more money than yelling, screaming, or pontificating. Everything rises and falls. That’s just life. You cannot fix the value of money and then everything else floats. Do that and money cannot be fixed. When gold was money, it rose in value only when the economy crashed and declined in purchasing power with rising inflation, It had to or else it was not money. Today, gold is a commodity and a hedge neither against the dollar or inflation – but the collapse in the systemic monetary system but all tangible assets perform that function. Gold is movable where as real estate is not.
You may not be able to travel with gold anymore as they close the corral and try to slaughter us for money. History still demonstrates that they will collapse, and that is when gold will provide its historically based purpose as the hedge against government. It is not a hedge against inflation nor will it track with the increase in money supply. It is driven by confidence and the lack thereof. When the latter raises it head, then it is time for gold to rise.
https://www.armstrongeconomics.com/armstrongeconomics101/basic-concepts/money-v-fiat/
QUESTION: Why do you do not see that money must be backed by something tangible?
ANSWER: That is an antiquated barter perspective; you are blind to reality. Your proposition is that only gold has value and you yourself are worthless. This idea of fiat money is just out of line with reality. The traditional definition of fiat currency, such as a paper currency, has no worth unless it is backed by something with a defined tangible commodity value, which is preposterous. That is still a derivative of barter. Paper currency that is not backed by something of tangible value is by no means worthless. China invented paper money during the 13th century and never issued gold coins. You are confusing money with politicians.
This traditional definition of a fiat currency is primitive. A currency is backed by the productive capacity of its people like a share in a corporation. If this were not true then Germany, Japan, and China would never have been able to rise from the ashes without gold. Obviously, it was the productive ability of their people. Under Socialism, currency is also backed by the taxpayers who are shaken down to pay the interest on the debt. That is very tangible for you go to prison if you do not obey their commands.
The wealth of a nation is not its gold, land, or natural resources, for it still takes labor to bring any commodity to market. The wealth of a nation is its people. Look at Germany. Its productive capacity was the highest in Europe and it rightly rose to the top. In Africa and places in South America, the people are not educated as a whole or productive from an international trade perspective, and consequently those countries have been unable to rise to the top at any point in their history.
This idea of fiat is a primitive distortion of reality for it also degrades humanity. Gold is a hedge against government as are all things to varying degrees on the opposite side of money. During a boom, money declines in purchasing power and tangible assets rise. During a recession or depression, money rises in purchasing power and assets decline. Is that so hard to understand?
You are confusing fiscal mismanagement by politicians and equating the problem to the existence of paper money. Not every system has collapsed. It is always dependent upon the integrity of government. That is the distinguishing factor.
https://www.armstrongeconomics.com/uncategorized/forget-the-fiat-its-confidence/
ANSWER: All money is fiat if you define it incorrectly as intangible money rather than An arbitrary order or decree. As long as money floats in value and it is legal tender meaning government accepts it in return for taxes, then it is not fiat in real terms. The idea that money must be tangible also has no basis in fact. Money has been many things to many people. The entire basis of money is you will accept something as money as long as you have CONFIDENCE that in turn someone else will accept it from you.
This idea that somehow gold coin is not fiat has been so misleading. Here is a Roman tax collector gold bar because the government minted gold coins cheating in quality but refused to accept them in return for taxes. Thus, taxes were imposed based upon weight – not coins! Therefore, the gold coins of the day were not trusted and even government had no CONFIDENCE in them, which is why they were NOT legal tender (acceptable for taxes).
HYPERINFLATION has ONLY taken place in minor peripheral economies. It has NEVER taken place in a major economy. All major economies implode from deflation because as they need money, they attack their citizens destroying their own economies as we are doing right now. So while you wait for HYPERINFLATION, your taxes will rise, your rights will vanish, and you will see tanks on your streets before $30,000 gold that will still be the cost of a men’s suit. Forget this HYPERINFLATION and fiat nonsense. Government began getting involved with money first out of just standardizing the weight to facilitate trade as pictured above. That was it.
The whole reason people began to use banks was because the “money” could not be verified. Just because the coins were silver or gold did not mean anything. They could be debased, shaved, or forged. You deposited money in a bank and the bank CERTIFIED you were paying in “good” money. People did not want coins, they wanted the bank paper receipts. Like the moneychanger, the bank was certifying the transaction was taking place with proper value in “money”. Thus, paper money began in middle ages as receipts certifying deposits.
China and Japan were the same. They never had circulating gold or silver coinage. This nonsense that money has to be tangible is NOT supported by the facts. Money has always been based solely upon what someone else is will to accept. Go to a WaWa or Starbucks and try to buy with a gold coin. They will not accept it. Hell, some places will not even take a $100 bill anymore and want plastic. If they do not BELIEVE gold is acceptable for payment or you hand them $1 in 1964 silver quarters to by a $5 coffee, you are out of luck. They will see it as $1 not worth $5. This is the real economy. MONEY is only valuable based upon what the OTHER person believes – not you!
It is NOT the fiat. It is simply CONFIDENCE. Bank and warehouse paper receipts have circulated as money for thousands of years. Even dollars under Bretton Woods gold standard were simply receipts redeemable in gold in international transactions. It was NOT gold that actually circulated. When people as a whole distrust government, then barter replaces official “money” and that can be a lot of things and the worse it gets the more likely it boils down to food. We have run every possible correlation and have the database to do so. It is just hype! Just as the stock market has never peaked with the same level of interest rates, you cannot find any such evidence that if money is “fiat” then it collapses and going into HYPERINFLATION. Good sales pitch – but’s it.
When Genghis Khan invaded China, which was using paper money, he too accepted it and did not devalue the paper money that was in circulation. He too accepted the paper money from the previous emperors. These stories of fiat are totally unsupported by history and rank up there with less credibility than even sea monsters.
By the time this economic implosion is over, you will PRAY for HYPERINFLATION. What we face is far worse. It is loss of everything with the risk of tanks rolling down your streets hunting money!
https://www.armstrongeconomics.com/uncategorized/does-money-have-to-be-backed/
This idea that money has to be TANGIBLE is amazing. Money has always been whatever society agrees on. In Asia, money was ALWAYS simply INTANGIBLE since 246BC. China did NOT issue gold or silver coins and money was worth whatever the emperor (son of God on earth) said it was worth. These stories spun by goldbugs who keep insisting money has to be only TANGIBLE has absolutely no basis in fact or history.
Explain how Rome existed without gold or silver coinage for the first 500 years. They began issuing gold coinage as shown here in 225BC after the Punic Wars. How did Japan exist with no coinage at all for 600 years?
Explain how gold vanished from circulation in Europe after the fall or Rome between about 600AD until the mid 13th Century. how could society possibly function without TANGIBLE money or some currency BACKED by precious metal. Gold is a desirable object. Its value is like everything else, based solely upon what someone else says it is worth.
So claiming money MUST be backed is absurd, unsupported by fact, and if that is the pretense, then please explain why Bretton Woods collapse in 1971 when money was clearly backed. Obviously, that is not the solution unless you are to be brain washed in which case you will probably get 73 virgins with coupon payments in gold, the leprechaun will be there with the pot of gold to bring you good luck, and Santa Claus will give you a ride in his flying slay.
There exists 6000 years of data that proves precisely what money is and we keep ranting and raving like some medieval doctor who swears all illness is in the blood so we have to bleed ourselves to get better. The world is no more flat than money is some tangible fixed entity that is a store of value. That is MARXISM because you are trying to fix money and therefore eliminate the booms and busts where money rises and falls in value. This is pure insanity UNSUPPORTED by history.
Gold can be a personal HEDGE against government and MONEY, but it cannot be FIXED as money nor can you eliminate the business cycle which will ALWAYS tear apart any such system – look at the Euro right now. Gold rose and fell during the 19th century when it was money. So anyone who thinks money MUST BE BACKED please explain what that is supposed to accomplish. A flat line? Money can never be fixed if it is bronze, cattle, cowrie shells or slave-girls as was the unit of value in Ireland as St Patrick reported. It is simply a medium of exchange and EVERYTHING fluctuates in value – nothing remains fixed forever.
REPLY: Gold is not money – sorry! Money began as cattle and then bronze and gold was NEVER money in Asia – that too was bronze. Gold was money in Turkey for that is where it was abundant. Egypt used grain. The Greeks used silver and the Roman used bronze.
MONEY is nothing more than the agreed upon medium of exchange. If gold was money then why has it not risen since 1980? That is a long time to wait for a theory.
The Wealth of a Nation is the total productivity of its people just as the sovereignty of a nation is the people – not the government and that is why Snowden cannot be a traitor.
GOLD is not money. Get over it. There is ABSOLUTELY nothing that is a store of value that is constant – everything fluctuates against everything else. So your concept that something is a store of value is DEAD WRONG. Gold declined for 19 year and no one will address that. The idea you express is pure communism because you do not understand cycles so you want them eliminated.
Gold is a hedge against government – PERIOD. Rhetoric is just sophistry – where is the evidence? In a Dark Age, not even gold has value – only food. You return back to square one. This is a great sales pitch that has hurt a lot of people. Gold is a viable hedge – but understand its purpose and survive. Believe the rhetoric and you will lose your shirt. Everything rises and falls – nothing is constant forever. There is a time to buy gold and a time to sell. It rises and falls with everything else.
RE: Facebook’s Libra + Bitcoin + Trump + Israel = 666 Orwellian Dystopia