2020 Vision

By USAGOLD – Re-Blogged From Gold Eagle

Five charts to contemplate as we prepare for the New Year

 1. Gold’s annual returns 2000 to present

In the February edition of this newsletter, we ran an article under the headline:  Will 2019 be the year of the big breakout for gold? Though we would not characterize gold’s move to the upside so far this year as ‘the big breakout,’ 2019 has been the best year for gold since 2010 even with the recent correction taken into account.  Back in September when the price gold reached $1550 per ounce – up almost 22% on the year – 2019 was looking more like a breakout year. Now with the move back to the $1460 level, the market mood has become more restrained. As it is, gold is up 15 of the last 19 years and still up 14.45% so far this year.

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What’s The Price Of Gold In The Gold Standard

By Keith Weiner – Re-Blogged From Gold Eagle

Let’s revisit a point that came up in passing, in the Silver Doctors’ interview of Keith. At around 35:45, he begins a question about weights and measures, and references the Coinage Act of 1792. This raises an interesting set of issues, and we have encountered much confusion (including from one PhD economist whose dissertation committee was headed by Milton Friedman himself).

Gold, Paper and Redeemability

Back in the 18th century, three facts were obvious and not questioned. One, gold and silver are money. Two, the paper receipt evidencing the deposit of money is not, itself, money. And three, depositors had the right to get their money back plus interest.

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Gold And Silver Prices To Head Dramatically Higher

By Mike Gleason – Re-Blogged From Gold Eagle

Mike Gleason: David, we had you back on at the beginning of the year and you shared some amazing insights on palladium, and we’ll get to that in a bit because that market is still very interesting. But first off, you’ve been watching the Fed balance sheet closely here and I wanted to get your comments about that to begin with. Now, after the extraordinary expansion, which followed the 2008 financial crisis and a few rounds of QE, the Fed began contracting the money supply in 2017. You’ve been making the case that the withdrawal of liquidity could trigger another catastrophe.

So, let’s start with the basics here. If you would, please explain the history of the Fed’s balance sheet, and why it is something investors should be carefully watching.

David Jensen: Yeah, I think that the root of it all, the reason we’re watching so closely is the tremendous imbalance between the amount of cash, liquid cash that’s in the system versus the amount of debt. And the Fed has run interest rates from around 20% in 1980 down to 0% or 0.25% here a couple of years ago. And what they’ve done is expanded the greatest debt bubble in history. The total debt in the U.S., now on all levels according to the Fed’s flow of funds report is about $72 trillion. And to serve as that $72 trillion of debt that’s in extent, there’s only $14 trillion of liquid currency in deposits and in physical cash. So, what we’re seeing now is that the Fed needs to continually to expand the money stock with the money supply. The money supply is the annual change or the addition to the outstanding money stocked addition to the $14 trillion that’s out every year. And they need to add a substantial amount so that the debt can be serviced and so that the economy can continue to move forward.

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Plans for a Global Dystopia

By Alasdair Macleod – Re-Blogged From GoldMoney

Global policy planners intend to deliver replacements for both dollar hegemony and fossil fuels. Plans may appear uncoordinated and in their early stages, but these issues are becoming increasingly linked.

A monetary reset incorporating state-sponsored cryptocurrencies will enable exchange controls to be introduced between nations by separating cross-border trade payments from domestic money circulation. The purpose will be to gain greater control over money and to direct its investment into green projects.

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Time To Reset Portfolios For Inflation

By Stefan Gleason – Re-Blogged From Gold Eagle

As investors reset their clocks to accord with the end of Daylight Savings Time, they may also need to reset their expectations for future returns.

A strong body of research suggests that artificially changing the time twice a year – forward, then backward an hour – does more harm than good.  It leads to sleep disruptions, heightened stress, missed appointments, wasted time (ironically), and a diminishment of productivity around these biannual time changes.

As reported in HeadlineHealth, “Circadian biologists believe ill health effects from daylight saving time result from a mismatch among the sun ‘clock,’ our social clock – work and school schedules – and the body’s internal 24-hour body clock.”

That mismatch can have dire consequences: “At least one study found an increase in people seeking help for depression after turning the clocks back to standard time in November.”

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Why “Monetary Policy” Will Always Distort the Free Market

By Richard M. Ebeling – Re-Blogged From Savvy Street

Money is not a creation of the State. A widely used and generally accepted medium of exchange emerges spontaneously.

Carl Menger (1840-1921), the founder of the Austrian School in the 1870s, explained in his Principles of Economics (1871) and his monograph on “Money” (1892), that money is not a creation of the State.

A widely used and generally accepted medium of exchange emerges “spontaneously”—that is, without intentional government plan or design—out of the interactions of multitudes of people over a long period of time, as they attempt to successfully consummate potentially mutually advantageous exchanges. For example, Sam has product “A” and Bob has product “B”. Sam would be happy to trade some amount of his product “A” for some quantity of Bob’s product “B”. But Bob, on the other hand, does not want any of Sam’s “A”, due to either having no use for it or already having enough of “A” for his own purposes.

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16 Tons And A Briefcase

By GE Christenson – Re-Blogged From Gold Eagle

Tennessee Ernie Ford sang about the plight of coal miners decades ago. His song remains relevant in today’s increasingly crazy world.

“You load sixteen tons, what do to you get

Another day older and deeper in debt

Saint Peter don’t you call me ‘cause I can’t go

I owe my soul to the company store.”

The owners paid in script which coal miners used as currency. Script had no intrinsic value and was only good at the company store. The owners increased profits by coercing miners to buy goods at higher prices. Script cost next to nothing to produce.

We use dollar bills (paper and digital) that have no intrinsic value as currency in the U.S. The dollars cost next to nothing to produce and are used because of ‘legal tender’ laws.

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