Got Gold?

Good friend Chuck Butler, editor of The Daily Pfennig, is a world currency expert. He constantly asks, “Got Gold?”

Currency is generally thought of as government-printed money; Euros, Yen, dollars, etc. Gold isn’t normally considered currency.

I’m concerned about the Fed’s lame attempt to tame inflation, fearing they will yield to pressure from member banks and/or politicians to restart their printing press – resulting in even higher inflation.

Chuck regularly critiques my articles; always suggesting I ask readers, “Got Gold?”

Today we are going to find out why.

DENNIS: Chuck, thanks for taking the time to educate our readers.

Since the 2008 bank bailouts, many felt inflation was inevitable and gold would go (ala Jackie Gleason) “To the moon, Alice!” High inflation arrived, yet gold has not taken off.

Why the constant reminders?

CHUCK: Dennis, thanks again for allowing me to opine in your valuable letter…

I started following Gold in the early 2000s when everyone was saying it was a “dead market.” That got me thinking in the contra-state of mind that I’m usually in. I researched the history of Gold, and learned something that never crossed my mind before; historically, EVERY currency ever created has eventually failed….

I realized how the U.S. debt, which at that time was less than $5 Trillion, was soaring with no resistance. Eventually the dollar would collapse under the weight of all that debt…

That’s when I began buying physical Gold, and talking about it in my letter titled: A Pfennig For Your Thoughts, alerting my readers. While I believe that most of my readers have heeded my call…. There are still millions of people that I still need to reach…

And ask the question: Got Gold?

DENNIS: Bloomberg tells us,

Bull Case on a Stock Crash Sees End of Fed Gifts to One Percent

(Quoting Vincent Deluard, StoneX’s director of global macro strategy) “The process which started in 2022 cannot – and should not – be reversed.”

Doesn’t this create a bad ending either way?

If the Fed continues the process, we should expect a real recession. Bill Bonner feels, after 40 years of Fed juiced markets, we should expect a decade or more of challenging times.

If the Fed reverses policy, then inflation continues to skyrocket.

Chuck, can you tell readers where gold fits into both scenarios?

CHUCK: First and foremost, Gold is real money…. Everything else is fiat; paper political promises by governments with nothing backing it.

I’ve explained this in my letter, …. if the Fed/Cabal/Cartel (aka Fed Heads) continues to hike rates they will eventually bring the economy to its knees, just like Volcker did in the early ’80s; costing the first G. Bush reelection… It took Volcker a little over five years to work through a recession and tame inflation.

The difference today is we have gone on a 40-year spending spree; our debt is unsustainable; the Glass Steagall Act was repealed allowing banks and investment houses to merge. The top five investment banks control almost half of the nation’s wealth. The 1% got much richer than the rest of us.

Remember, Volcker let up too soon, inflation skyrocketed and he had to jack rates close to 20%, and hold them high until he finally brought it under control.

If the Fed reverses course because of pressure from the casino banks or the deep state, they would simply reignite inflation. Under the weight of runaway inflation, the economy would be brought to its knees.

Adam Smith told us, “All money is a matter of belief.” When people no longer believe in the currency, it becomes worthless. Gold will hold its value.

DENNIS: Readers ask about the government ignoring gold price manipulation by the banks.

In 2001 Peter Warburton wrote:

“What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts.

On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur.

On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities or anything else that might be deemed an indicator of inherent value.

Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the US dollar, but of all fiat currencies.” (Emphasis mine)

By keeping gold prices artificially low, aren’t they making it easy for Russia, China and other countries to increase their gold reserves?

CHUCK: Yes, they are! And China is amassing more physical Gold than they report… Russia has no bones about telling us how much physical Gold they have… India, and many other countries. are bulking up their Gold reserves too.

My dad always taught me to “follow the money.” If Central Banks all over the world are buying Gold, what does that tell you?

I see the collapse of the current financial system because of all the debt.

I envision the countries of the world meeting at a huge round table, and bringing their warehouse receipts for physical Gold and laying them out on the table, with the old saying, “He who has the Gold makes the rules” coming into play…

I’d expect China to reveal that they have 20 metric tons and Russia to have more than the US’s reported amount of 8 metric tons…

The U.S. will not be in the driver’s seat, and I’m sure that a Gold backed system of some sort will evolve …

Those of us that have physical Gold will be in the driver’s seat at that point… Got Gold?

DENNIS: Russia Briefing reports:

“Russia is now ranked in the global top four countries in terms of gold and foreign exchange reserves with a total of US $582 billion. ….the top five China (US$3.31 trillion), Japan (US$1.27 trillion), Switzerland (US$924 billion) and India (US$563 billion).”

The US treasury reported:

“The Department of the Treasury records U.S. Government owned gold reserve…. The market value of the gold reserves based on the London Gold Fixing as of September 30, 2020 was $493.4 billion.”

Based on those numbers, the US is certainly not in the driver’s seat, and could end up near the back of the bus. If the big boy gold holders decide to go to a gold-backed currency, what does it mean for the dollar and all fiat currencies?

CHUCK: A gold-backed currency would garner all attention from investors, traders, hedge funds, etc.

And that would leave the fiat nations scrambling for the crumbs. The US isn’t the only country that would scramble. The NATO nations and Japan are well past the point of no return. Russia and China would love to see that happen.

The price of Gold would soar…fiat currencies would sour…. Got Gold?

DENNIS: Do you see the US being forced to go back to some sort of gold standard? What would happen?

CHUCK: I’d think they would have to. Much like FDR, the dollar would be devalued; but more importantly, the gold standard would cause all kinds of political upheaval as it would require governments to rein in spending.

DENNIS: One final question. We see a lot of gold-related articles from companies in the gold business; implying a conflict of interest. I’ve received some vile comments accusing me of just trying to sell something.

How do you respond to those concerns?

CHUCK: Our readers realize we write FREE newsletters, it’s a labor of love for both of us! We’re trying to help hard-working people protect their wealth from out-of-control governments. If readers buy gold to protect themselves, we don’t make a dime!

Alasdair Macleod gets to the point:

“…. We will discover that…while the fiat world sinks into a currency collapse, nations which embrace sound money are set for a new phase of economic prosperity.”

Individuals who embrace “sound money” will also be “set for a new phase of economic prosperity.” I want all our readers to be among them.

Dennis here. Wow! I do too. Thanks again Chuck.

Alan Greenspan said: (Emphasis mine)

“The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.

Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”

When Greenspan became the Fed head, he became a statist, enabling the “unlimited expansion of credit.”

Ludwig von Mises got it right:

“The classical or orthodox gold standard alone is a truly effective check on the power of the government to inflate the currency. Without such a check all other constitutional safeguards can be rendered vain.”

Hopefully the politicos will be forced to return to the gold standard and become fiscally responsible. The clash between the elite and the people will not be fun. Those who protected themselves by owning gold will fare better than most. Got Gold?

A little help means a lot! Eight years ago, I vowed to keep our newsletter FREE! I plan to keep my promise. It’s an expensive, time-consuming hobby, but also a labor of love. Recently a reader asked why I didn’t charge for our weekly letter. I explained that I want it available for everyone. Some readers may be on limited budgets and may benefit the most from our advice. He pressed on with his questions. How much does your letter cost? How many readers do you have? He concluded, “If each reader paid $10/year, you would be fine. I responded, “Yes, $10 per reader would work, BUT I am committed to keeping it FREE even if it costs me money.” Several readers suggested we add a donations button to help us offset the cost of our publication. It helps when people pitch in and we certainly appreciate it. If readers want to donate, it sure helps out, however, it’s strictly voluntary – no pressure – no hassle! Click the DONATE button below if you’d like to help. You do not have to sign up for PayPal to use your credit card. And thank you all!

On The Lighter Side

I’m frustrated! I’m trying to increase our number of readers; which in turn helps cover our costs through donations and advertising.

Promoting our newsletter is becoming increasingly difficult. For example…I recently wrote about The Debt Ceiling Charade Amid Screams About Social Security…and tried to promote the article on Facebook. I received the following response:

“Your ad was rejected because it doesn’t comply with our Ads About Social Issues, Elections or Politics policy. This means that your ad isn’t running and will not be delivered to your audience.”

The speech police at Twitter and Facebook don’t take our money because they don’t like the message.

How can you help? I have a Miller On The Money page on both Facebook and Twitter. Each day I post one quote, sometimes motivational, sometimes political, quoting famous figures. If you are on either of those venues, feel free to follow, like, share and comment on my posts.

With each passing day it looks like any growth in our reader base will come from word of mouth and recommendations.

Quote of the Week….

“I warn you that politicians of both political parties will oppose the restoration of gold, although they may outwardly seemingly favor it.

Unless you are willing to surrender your children and your country to galloping inflation, war and slavery, then this cause demands your support. For if human liberty is to survive in America, we must win the battle to restore honest money.”

— Congressman Howard Buffett, 1948

And Finally….

Subscriber Robert G. sends along some clever Questions and Answers about retirement:

Q: When is a retiree’s bedtime?

A: Two hours after falling asleep on the couch.

Q: What is considered long term planning?

A: Buying green bananas.

Q: Why don’t retirees mind being called seniors?

A: It comes with a 10% discount.

Q: Among retirees, what is considered formal attire?

A: Shoes with laces tied.

Q: What do retirees call a long lunch?

A: Normal

Q: What’s the best way to describe retirement?

A: The never-ending coffee break.

And my favorite:

Question: What is the best thing about turning 100?

Answer: No peer pressure.

Until next time…

Dennis Miller

“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken

 

Affiliate Link Disclosure – This post contains affiliate links. If you make a purchase after clicking these links, we will earn a commission that goes to help keep Miller on the Money running. Thank you for your support!