Good article from Martin Armstrong. He 'hits' you over the head with his logic. http://www.armstrongeconomics.com/archives/37416 A couple of excerpts: "MONEY is solely what another will accept because they know someone else will accept it from them. You cannot dictate to the world what you think should be money. This is not a bubble where metals will replace the dollar. This is a bubble in government. Regardless of what becomes MONEY after this event, the dollar will not be the reserve currency and has nothing to do with paper. It has to do with politics. As Milton Friedman said, "If you put government in charge of the desert, within a few years there would be a shortage of sand." It really does not matter for you are focusing on the wrong piece in the puzzle." Did gold rally because of fiat? No. Gold rallied because the banking system was collapsing. These people kept buying gold, swearing QE1-3 was inflationary, and lost all the way down because they failed to comprehend that this is not a battle against fiat. "Those who preach of a return to the gold standard are one mark short of being declared insane. They live in the past and are incapable of understanding economic evolution. Bretton Woods failed because they fixed gold at $35 but increased the amount of issued dollars. A two-year-old could have figured out that such a system would collapse. ALL attempts at fixing money have failed, right down to the Swiss/euro peg. So what collapsed was the GOLD STANDARD, yet people WRONGLY think that returning to some gold standard will stop the volatility and create the perfect world of Marxism by eliminating the business cycle. The problem was not the gold standard: it was the politicians. Returning to a gold standard today will not solve anything without political reform." "Gold WILL RISE along with stocks and commodities against whatever is money. The "safe haven' will return ONLY when the public questions the survivability of banks and government not fiat and inflation. If you disagree, then keep buying for the wrong reason just as the Japanese did for more than 20 years. This is the outcome we face, so stop the nonsense. Gold cannot possibly react as it did between 1929 and 1932 against everything else because it is not MONEY, nor the unit of account or the medium of exchange. So get over it. It will be time to buy gold for the right reason not for fiat or this hatred of the dollar. That is like blaming your wife because you got into an accident driving to work. Get on point if you want to survive this game. This is the real world, not fiction. If you create a theory, it better work every time or it is just propaganda. If you insist on unrealistic outcomes, as they say, a fool and his money are quickly parted. We are in the middle of a major crisis. ALL assets will rise against MONEY, provided we do not go all the way to a Mad Max event for then only food will have value.
Oh I'm sure they'll be haters who lambaste the article. Always good to see the other side of the coin. The haters probably bought too much gold and silver at the 2011 highs. lol.
I think he charges for that Intel. I'm not a paid subscriber, but I do love my gold and silver. lol. I don't care what he says. Just good to understand other points of view. )
Holy crap! He just gained another reader. And I am contemplating putting this one in my sig.: Awesome.
In my humble opinion gold is money of last resort. It's a panic metal where people will turn to when they've got nowhere else to go. What paper currency are you going to go when the whole world is printing money like crazy. I disagree about gold not being money or a medium of exchange. If gold is not money why is it a reserve asset? If gold is not money why is it part of a currency cross? I can take my gold anywhere in the world and exchange it for local currency at a set price with which I can then purchase goods and services. The gold standard keeps politicians in check so they can't do what they're doing now. The same way the founding fathers created the constitution so they can't do what they're doing now, because they've experienced what we're experiencing now. The problem is every few generations the rules get broken and then we get into the mess we're in now, which will collapse and the cycle will start all over again, back to a gold standard. Then in another 100 or 200 years this same period will be repeated again. It's human nature. This is not new. It has happened many times over in history.
I want back the 5 minutes I spent reading that article. My favorite part was this part: "Gold was DEVALUED in 1934 since gold was MONEY. What it could purchase for $20.67 then cost $35." Funny, I thought the USD was devalued by Roosevelt to create inflation. Who knew that when something rises in value, it has been devalued?
I shuddered just reading the title. Dude uses some truth to twist things. Entertainment purposes only and should carry a warning.
I think there's more logic in John Rubino and James Turk, what we have is a money (read 'debt') bubble, which has allowed government to expand. I've listened to a few Armstrong interviews and half the things he says makes sense but the other half makes no sense to me at all.
I disagree with the author. It isn't about gold, or paper, exactly, what it's about is trust. Money is trust, and the more people trust one another the more illusory the money can be, but it is when there is a crisis of trust that people start to demand increasingly substantial (even physical) kinds of money. This has been proven throughout history. During the most peaceful and prosperous times, and especially during bubbles, people are so full of faith in the future that they're willing to use the most ephemeral kinds of currencies, even just an oral agreement is often good enough to make a transaction. They say that during the Florida real estate boom in the United States that the market was so frantic that people would purchase property they had never seen with nothing more than their word, and even here in the states now during this stock market boom people are willing to buy paper for companies that don't even make profits, that may never make profits, simply because they believe it will be worth more tomorrow than it is today. Many speculators don't even know what the companies financials are, where the company is headquartered, or even what they do, all they know is the paper is priced higher today than it was yesterday, except that you can't even call it paper because it so non-corporeal that it is just digits in a computer that they can only read with their web browser when the Internet is working right. Many people wouldn't even know how to prove they owned stock if these computers went down. Contrast that with war time when only the most substantial of currencies are used in trade, precious metals, tools, parts, gasoline and oil, and even ammunition. During many conflicts paper currencies become worthless, and less substantial currencies such as checks, letters of credit, etc, aren't even used. My theory is that the reason people are so happy to trade in digits on a screen is because we've been living in a relatively peaceful world for the past generation, even the newsworthy conflicts have been limited to isolated regions of the world far from the largest markets. To say that another way, it's one thing to accept that the bank transferred some digits around in computers when you're fat and happy, another when people are running on banks and the world's financial markets are crashing down around you.
