President Trump’s Trade Tantrum Triggers Slump

By Alasdair Macleod – Re-Blogged From Silver Phoenix

For decades, Western governments have been pursuing a policy of transferring wealth from the public to themselves, their licensed banks and the banks’ favoured customers by means of interest rate suppression and monetary inflation. Consequently, inflation of financial asset prices has benefited the financial sector to the detriment of those employed in the productive economy. Over time, this has badly weakened productive capacity and the long-term ability of the market economy to fund future government spending.

It is a situation which seems bound to eventually lead to major economic and monetary problems. Additionally, global economic prospects have worsened considerably as a result of President Trump’s tariff wars against China and others. Empirical evidence from the 1930s as well as economic analysis illustrate how trade tariffs have a devastating effect on domestic economic activity, a prospect wholly unexpected by today’s economists.

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Rising Interest And Prices

By Keith Weiner – Re-Blogged From Gold Eagle

For years, people blamed the global financial crisis on greed. Doesn’t this make you want to scream out, “what, were people not greedy in 2007 or 1997??” Greed utterly fails to explain the phenomenon. It merely serves to reinforce a previously-held belief. Far be it from us to challenge previously-held beliefs (OK, OK, we may engage in some sacred-ox-goring from time to time), but this is not a scientific approach to explaining observed events. To properly understand a crisis, you have to look for the root cause. And if the crisis did not occur previously, your theory needs to explain why not then, and why only now.

Suppose an old company, XYZ, goes out of business. “Times change,” people say, to explain an economic phenomenon. Or, perhaps slightly less imprecisely, “the market changed.” Sometimes they’ll get even closer to saying something. They say, “Company XYZ did not adapt to changes.”

These statements are copouts.

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Money, Fake Money, And Sound Money

By JP Cortez – Re-Blogged From Gold Eagle

Americans no longer carry gold and silver money in our pockets and purses as our grandparents did. But we still carry the history, legacy, and spirit of those gold and silver coins in our language.

“Sound money” embodies a clear message recognized for centuries around the world. It describes the musical, metallic ring of a gold, silver, or copper coin dropped on any hard surface of glass, stone, wood, or metal.

Sound money literally refers to real wealth, with a natural, unmistakable signature of authenticity, as opposed to the paper, plastic, and electronic debt instruments used almost exclusively today.

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Price Of Gold In Venezuela

By Frank Holmes – Re-Blogged From http://www.Gold-Eagle.com

Last month in Venezuela’s capital city of Caracas, a cup of coffee would have set you back 2 million bolivars. That’s up from only 2,300 bolivars 12 months ago, meaning the price of a cup of coffee has jumped nearly 87,000 percent, according to Bloomberg’s Café Con Leche Index. And you thought Starbucks was expensive!

But that was July. Prices in Venezuela are doubling roughly every 18 days. The International Monetary Fund (IMF) now projects inflation to hit an astronomical 1 million percent by the end of this year. This puts the beleaguered Latin American country on the same slippery path as Zimbabwe a decade ago and Germany in the 1920s, when a wheelbarrow full of marks was barely enough to get you a loaf of bread.

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Inflation Has Always Been About Theft

By Steven Saville – Re-Blogged From http://www.Silver-Phoenix500.com

In 262 AD, plans were being put in place to celebrate the “decennalia” (10 years on the throne) of Roman emperor Gallienus. The following excerpt from the fourth book in Harry Sidebottom’s “Warrior of Rome” series is part of a discussion between Gallienus and his senior advisors regarding how an appropriately-grandiose “decennalia” would be funded:

“The a Rationibus, in charge of the finances of the imperium, did not hesitate. “Celebrating your maiestas is without price and, as you know, Dominus, plans are in place to debase the precious metal in the coinage again. It will be a few months before the merchants catch up.””

In the end Gallienus decides to pay for the celebrations using direct theft (by confiscating and then selling the estates of his enemies and those of their families), but the final sentence of the above excerpt from a work of historical fiction reveals more knowledge of how monetary inflation works than is found in the writings of most Keynesian economists.

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Life Cycle Of Money

By Mickey Fulp – Re-Blogged From Geologist Musings

In the aftermath of the global economic crisis of 2008-2009, governments throughout the world have fostered a tenuous recovery predicated on massive increases in money supplies and debasement of currencies.

Note, however, that monetary debasement is not a recent phenomenon; it is simply the natural life cycle of money.

There are six well-defined stages in the life cycle of money. This progression has occurred in every dominant civilization over the 5000 years of recorded human history:

Stage 1: A Barter Market Begins.

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How 4,000 Roman Coins Found Buried In Swiss Orchard Reinforce Gold Ownership Today

By Michael Kosares – Re-Blogged From http://www.Gold-Eagle.com

“The coins’ excellent condition indicated that the owner systematically stashed them away shortly after they were made, the archaeologists said. For some reason that person had buried them shortly after 294 and never retrieved them. Some of the coins, made mainly of bronze but with a 5% silver content were buried in small leather pouches. The archaeologists said it was impossible to determine the original value of the money due to rampant inflation at the time, but said they would have been worth at least a year or two of wages.” –  The Guardian/11-19-2015

I was initially at a loss to explain why anyone would go to so much trouble to hoard so many coins with such a low silver content – about 5%.  The only rational explanation is that the hoarder had decided that even worse debasement was on its way.  And, a quick review of Roman history tells us that this indeed was the case.

In the next generation of the denarius, issued by Emperor Diocletian, bronze coins were simply dipped in silver and passed into circulation.  By 294AD, the latest date in the hoard, Diocletian abandoned silver coinage entirely and began issuing bronze coins instead. Prior to that, prices had risen over a roughly twenty year period by 1000%.  Value-conscious barbarian troops hired by the emperors demanded to be paid in gold aureus and for good reason as you will discover below. By the end of the third century, the currency was crumbling and along with it the empire.

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