The globalists have enslaved us.
Only gold can free us.
The dangers of money printing:
Printing an avalanche of fiat money to flood the world with dollars was the solution to the bursting real estate and credit bubble in 2007. Unfortunately for Bernanke and now Yellen, the Fed’s protector in chief for the value of the US Dollar – the world’s reserve currency- they didn’t solve the problems, they only made them worse.
The bubbles weren’t resolved and the extra liquidity went in 2008 into the energy and agricultural markets, raising the price of crude, gasoline, and food. This caused the collapse of a fragile global economy that was already suffering from the real estate implosion. The end result was the exact opposite of what Bernanke intended. Instead of halting the real estate collapse, he magnified the severity of the recession. Ben Bernanke hasn’t learnt from his previous mistakes. His 2010 QE2 caused a severe purchasing power decline in 2011. He may have printed up more dollars with which to buy wares and shares, but when the Fed prints more money, that doesn’t increase your purchasing power. To the contrary it is reduced even further. It is quite simply monetary policy practiced outside the limits of prudence!
The dangers of money printing are extensive; while the unintended consequences punish the public. Beyond currency devaluation, it creates asset bubbles and inflicts chaos when these burst. Even more immoral, money printing disproportionately punishes the lower classes, causing volatile social and political tensions.
Mark Faber says: I do not believe central banks around the world will ever, and I repeat ever, reduce their balance sheets. They’ve gone the path of money printing… And once you choose that path, you’re in it and you have to print more money.
The history of fiat money, to put it mildly, has been one of failure. In fact, every fiat currency since the Romans first began the practice in the first century has ended in devaluation and eventual collapse, of not only the currency, but of the economy that housed that fiat currency as well.
Why would it be different this time? The fact is, it isn’t. In fact, there have been multiple failed attempts with paper currency, and today’s currencies are nothing different. Fiat currencies have not been successful, and the only aspect of fiat currencies that have stood the test of time is the inability of political systems to prevent the devaluation and debasement of this toilet paper money by printing more money for economic stimulus as Bernanke described it.
Today’s monetary situation has many similarities to the historical stories that led up to the eventual collapse of currencies. The reality of the world’s economy has been obscured by a perceptual illusion. Fiat currency has value based only on perception. It can only function with proper management and controls. The most obvious thing is that the banking and monetary systems have flaws in their foundation. The base design of fiat currency is related to interest. Inflation could be considered theft. When reality meets the illusion of mismanaged fiat currency, the bubble will burst and what was perceived to have value will be seen for its true worth.
The French have been particularly unsuccessful in their attempts with fiat money. John Law was the first man to introduce paper money to France. The notion of paper money was greatly helped along by the passing of Louis XIV and the 3 billion livres of debt that he left. When Louis XV was old enough to make his own mistakes, he required that all be paid in paper money. The new paper currency rapidly became oversupplied until nobody wished to own the worthless junk anymore and demanded coinage as currency.
It looks like Law didn’t think that anyone would actually want coins ever again. After making it illegal to export any gold or silver, and the failed attempts by the locals to exchange their paper currency for something of actual value, the currency collapsed and John Law became the most hated man in France and was forced to flee to Italy.
In the latter part of the 18th century, the French government again tried to give paper money another chance. This time, the pieces of garbage they issued were called Assignats. By 1795, the inflation of Assignats was running at approximately 13,000%. Then Napoleon stepped on the scene and brought with him the gold franc. One of the good things that Napoleon realized is that gold is the way to a stable currency, and that’s what pretty much ensued during his reign.
Post-World War I Weimar Germany was one of the greatest periods of hyperinflation that ever existed. The Treaty of Versailles was essentially financial punishment imposed on Germany to make war reparations. The sums of money to be paid by Germany were enormous, and the only way it could make repayment was by running the printing presses.
The huge un-payable debt owed by the U.S. and the E.U. functions as an open invitation to repeat the Weimar experience. Inflation got so bad in this period that German citizens were literally using stacked up piles of marks to heat their furnaces.
Fiat Money failures in recent times: In 1932, Argentina had the eighth largest economy in the world before its currency collapsed. In 1992, Finland, Italy, and Norway had currency shocks that spread through Europe.
In 1994, Mexico went through the infamous “Tequila Hangover,” which sent the peso tumbling and spread economic hardship throughout Latin America.
In 1997, the Thai baht fell through the floor and the effects spread to Malaysia, the Philippines, Indonesia, Hong Kong, and South Korea.
The Russian Ruble was not the currency you wanted your investments to be denominated in, in 1998, after its devaluation brought on economic recession. In the early 21st century, we have seen the Turkish lira experience strokes of hyperinflation similar to that of the mark of Weimar Germany.
Nowadays in Zimbabwe, which was once considered the breadbasket of Africa and was one of the wealthiest countries on the African continent, Mugabe’s attempts at price controls, combined with hyperinflation, have the nation unable to supply the most basic essentials such as bread and clean water to its citizens.
Today the USA and the EU have all the signs in place that led to the collapse of all other fiat currencies in history. The financing of the war in Iraq was extremely inflationary. In fact, since 1914 the U.S has engaged in over 17 military conflicts. The overwhelming majority of military conflicts have resulted in monetary inflation.
Now US and EU debt is similar to that of Weimar Germany. Although the reasons for the debt are different, the supply of Dollars and Euros are currently being increased at a rate of over 15% per annum. This over-issuance of currency in the past was the leading indicator of a currency on the brink of demise.
The Dollar has lost over 97% of its value since its initial issuance in 1913. After the revaluation in 1934, the dollar dropped another 41%. It is on the inevitable path of becoming toilet paper money. At risk is the confidence in the US financial system as the world’s reserve currency. If creditors sense that a flood of new money supply puts their reserve holdings at risk, posing a threat to their wealth, a mass exodus might occur out of the US$-denominated securities. After all, a fiat currency has as its basis, foreign confidence in its value due to prudent management, which does not hold true for the dollar.
What is next?
The entire economy functions without real money; it has practically disappeared. It has become a supply and demand for credit; it’s not money that determines the level of inflation.
After government debt, corporate debt has become the second most rapidly expanding category. Today, businesses have high debt levels too, for the time being still supported by high earnings. But the problem is, as earnings disappear steadily, they do so much faster than debt, which becomes increasingly difficult to service. Without profits, businesses have to deal with decisions they will wish they hadn’t made, and debt they will wish they didn’t have.
As businesses depend on expanding credit, they need customers with credit cards, and confidence, willing and able to increase spending, since, as real wages go down credit becomes the only alternative.
An increase in credit is needed to keep growing:
These days, banks don’t lend pre-existing money which they have in their vaults. When they lend, they create money that didn’t exist before. And over the last 30 years, the world economy has come to depend on it. This credit helped the economy expand. It allowed borrowers to command the resources needed to build their houses. Under the gold standard, borrowing was anchored to available savings, but not in the new credit economy. Today, the sky’s the limit! In other words, this is more or less how the world economy grew over the last three to four decades – using money from nowhere, which was turned into real assets for the financial sector.
The western world needs to increase credit at 2% per year to keep growing. If credit expands below that rate, the economy enters into recession. Assuming a 2% inflation rate, this means credit would have to increase by $2.3 trillion per year for the USA only, added to the EU and Japan this would amount to $ 7 trillion on an annual basis. But who would borrow that much?
The US federal deficit is falling this year; it’s projected to be less than $600 billion. The Fed is in its fourth or fifth tapering spree. So, who will account for the other $1.7 trillion? As far as is known, nobody.
When non-hedonic inflation measures are applied, as was painstakingly calculated by John Williams of Shadowstats.com, price inflation is really running around 8 – 9 percent, meaning that real GDP, when deflated with the actual price inflation, is collapsing at 7% or more!
If a number of these things come together, the world could experience financial warfare, deflation, hyperinflation, market collapse. And yet, the markets are merrily plodding along. Do we live in a fictitious world? With all that is known, there is something bound to happen causing the world economy to collapse sooner, rather than later.
The long-Term Financial Implications are a weakening dollar, which is great for gold. A weakening dollar means higher prices for all things, especially imported goods like oil. Higher prices will push up interest rates. As Russia expands its energy sales to China, the residual supply available for Europe will be smaller, driving European energy prices higher. Escalating international conflicts will lead to larger military budgets, increasing future deficits and weakening not just the dollar, but also all other currencies.
Let’s suppose as a starter we will be bestowed with deflation. In that event, gold investors must read: ‘The Death of Money” written by Jim Rickards. He explains how an executive order raising the gold price to $7,000 will be the only way to break a deflationary downward spiral in the US if money printing reaches its limits and the Fed pulls back, which should be executed as quickly as is necessary.
‘The Federal Reserve could make this price stick by conducting open market operations…” he says. ‘The purpose would not be to enrich gold holders but to reset general price levels… this kind of dollar devaluation against gold would quickly be reflected in higher dollar prices for everything else.”
‘The world of $7,000 gold is also the world of $400 per-barrel oil and $100 per-ounce silver. Deflation’s back can be broken if the dollar is devalued against gold, as occurred in 1933 when the United States revalued gold from $20.67 per ounce to $35 per ounce, a 41 per cent dollar devaluation.” Although that was a far too low price setting for gold, causing the failure of the intended gold backing.
His conclusion is that “if the Unites States faces severe deflation again, the antidote of dollar devaluation against gold will be the same because there is no other solution when printing money fails.”
Real money is different from debt. It doesn’t need to explain itself. It doesn’t need to lay out where it’s been or what it’s been up to.
For example; Take a gold coin as it is. No backstory or balance sheet is necessary. That’s the way real money works: It closes transactions. You accept payment and the account is settled.
But debt is different. It comes with question marks: Who issued this debt? What is it really worth? Will I get paid?
Here is the key to understanding debt money, as opposed to real money: Real money is the fruit of past efforts – distilled and preserved for future use.
Debt money is a claim on wealth that has never been produced and perhaps never will be.
As the quantity of real money increases, society becomes richer and more financially stable. Because it’s real wealth. But as the supply of debt money increases, more people owe more and more money; the economy becomes more fragile, and eventually goes broke.
But if the authorities want to increase the supply of money, the only kind of money supply they can increase is the fake kind. Real money must be earned; like wealth, it cannot be printed. That is also true of bitcoin.
Like gold, either you “mine” it (using real-world inputs of energy and computer processing power), or you trade something for it. The supply of bitcoin is governed by an algorithm and theoretically capped at 21 million. Central banks cannot create more bitcoins simply because they think there are not enough. – Whether bitcoin will ever become real money or not, people will have to wait to find out. That is why gold is such good money. The supply of it increases more or less at the same rate as the economy. More gold usually means more wealth.
Gold and bitcoin, and other cryptos, are the only two widely distributed, decentralised methods of exchanging value as currency. They have no central authority issuance, unlike every other fiat currency. Likewise, neither bitcoin nor gold can just be “printed” at the push of a button by an anxious central banker. But there’s one big difference between the two; Gold is the very opposite of new technology.
Gold is a physical, tangible, and real asset. You can pick it up and feel its satisfying weight in your hand. It can’t be altered. Gold is gold. Once one owns it, it remains just that, unaltered and unalterable No need to rely on a functioning Internet, or a computer. It has pure, tangible value.
Moreover, gold has unquestionably been money for thousands of years. A gold coin can still sit in your pocket, even while fending off mobs, zombies, or the like. On the other hand, bitcoin is nothing more than a code that exists somewhere on the Internet. You can’t pick it up and put it in your pocket. If you lose that code; you lose your bitcoins, or other cryptos.
In contrast to fake money; the more the amount thereof increases, the poorer we get. In practice, what it really does is siphon away the real wealth of some people – the outsiders, to redistribute it into the hands of other people – with better connections to the central banks, known as the Deep State insiders.
The Crypto Revolution
The first 35 min. gives a comprehensible explanation about blockchain technology.