Authored by Doug Casey by way of InternationalMan.com,
Worldwide Man: For many years, mainstream monetary commentators have dismissed gold as a “barbarous relic.” Federal Reserve officers and policymakers routinely downplay its significance, insisting that fiat foreign money and central banking make gold out of date.
But, regardless of this public stance, the US authorities nonetheless holds one of many world’s largest gold reserves.
So, what’s actually occurring right here? If gold is really irrelevant, why does the federal government nonetheless deal with it as a strategic asset?
Doug Casey: Governments hate gold as a result of it’s a self-discipline on the quantity of foreign money they’ll create. Gold is cash. Governments can’t create it out of skinny air. You may say that gold wants the federal government about as a lot as a fish wants a bicycle.
Gold will not be a strategic asset. It shouldn’t be seen as one thing to purchase or promote, like land, copper, or a manufacturing unit. You don’t purchase or promote cash; that’s nearly a contradictory idea. Gold is cash itself, though fiat currencies are handled as cash in at present’s world. Complicated gold with fiat foreign money is among the horrible notions created by Keynesian economists. It’s allowed mainstream monetary commentators to dismiss gold as a pet rock.
As you stated, the Federal Reserve officers and coverage makers routinely downplay the significance of gold. They imagine that fiat foreign money and central banking have made gold out of date. They’re 100% unsuitable.
Regardless of their theories and acknowledged beliefs, governments all over the world have been shopping for large quantities of gold lately. They’re dumping {dollars}. For 25 years after World Battle II, the foremost asset of different central banks has been US {dollars}.
It made sense on the time as a result of the {dollars} have been handy and assured to be redeemed at $35 for an oz of gold as much as 1971. Now, nevertheless, the US authorities backs its {dollars} by nothing. Overseas governments can see that the US authorities is fiscally and monetarily completely uncontrolled. They’ve seen the US arbitrarily confiscate property, impose sanctions, and levy duties. They’re dumping {dollars} as a result of it’s more and more apparent they’re the unsecured legal responsibility of a bankrupt and unreliable authorities. They’re accumulating gold.
The one answer to at present’s large financial issues is to return to classical banking practices. What which means is gold and solely gold is used as cash. US Authorities debt shouldn’t be monetized. And fractional reserve banking needs to be abolished.
There was once a distinction between the 2 varieties of financial institution accounts—demand deposits (i.e., checking accounts) and time deposits (i.e., financial savings accounts). Banks have usually supplied each, however they’re two completely separate and really completely different companies.
With demand deposits, you pay the financial institution to retailer your gold securely. You may have the correct to withdraw it at a second’s discover and write checks in opposition to it, making it easy to switch it on the financial institution’s books to a different individual.
Time deposits are a completely completely different enterprise. With these, you deposit cash with the financial institution for X variety of months. It should be for a hard and fast time frame to permit the financial institution to lend that cash out for X variety of months. The banks might pay you 3% and cost the borrower 7%, the 400 foundation level distinction protecting overhead, danger of loss, and revenue.
Right now, nevertheless, there’s not any distinction between time and demand deposits. Banks lend demand deposits, which is a fraud. It’s as for those who paid the Allied Van Firm to retailer your furnishings, and so they then rented it to another person.
Worse, when banks lend cash at present, it’s redeposited throughout the system. They lend it out once more, it’s redeposited, they lend it out once more, advert infinitum. It’s a large daisy chain, an inverted pyramid of debt. It’s why banking is such a worthwhile enterprise—till the inevitable occurs. If any vital borrower goes bust, or if depositors need greater than a minimal of money, any given financial institution can be proven to be bankrupt.
That’s why Central Banks just like the Fed are vital to sustaining the fraud. They stand able to create fiat to take care of confidence within the system. And regulate industrial banks to maintain them from abusing the system too badly.
Nearly each financial institution on this planet engages in fractional reserve practices. That observe places all of them at risk of chapter. Sorry for the overly temporary clarification. However the backside line is that your entire system should be, and can be, reset.
Worldwide Man: Given the secrecy surrounding Fort Knox, do you assume the US authorities nonetheless possesses the 261 million ounces of gold it claims to have?
Do you assume the reluctance to conduct a full, impartial audit is because of mismanagement, deception, or one thing extra sinister?
Doug Casey: Chris Weber just lately did an essay about that in his March 3 letter. His publication is one in every of my favorites; I recommend you subscribe.
You’ll see why I say that. In any occasion, go to weberglobal.internet to get that letter, free of charge. You must benefit from a two-month trial for $60 as properly.
In truth, there’s by no means been a proper audit of Ft Knox. I doubt that the US authorities has something like 261 million ounces of gold that it says it owns. In truth, a lot of the gold in Fort Knox will not be even in good supply .999 kind; it’s what we name coin soften.
The US authorities confiscated gold cash from the general public in 1933. They have been in broad circulation and on a regular basis use. The federal government then melted them down—they’re 90% gold and 10% copper. There’s by no means been an precise audit of how a lot gold, of what purity, there’s in Fort Knox. FWIW, the vault itself was inaugurated in 1936.
We don’t know who owns no matter gold there’s in Ft Knox, ostensibly 147 million ounces, as a result of any quantity of it might have been hypothecated for who is aware of what causes. For that matter, the identical is true of the gold saved with the New York Fed, one other 110 million ounces.
Nobody is aware of precisely how a lot there’s, who owns what, or how a lot might have been loaned out. It impresses me as a canine’s breakfast. For a few years, Ron Paul has fought to get an audit, however they’ve disregarded him.
Hopefully, DOGE would be the impetus to dig into it so we will discover out precisely how a lot is there and precisely who owns it.
Worldwide Man: US residents have nearly no monetary privateness, going through extreme penalties in the event that they fail to reveal each element of their monetary lives to the federal government.
Why is monetary disclosure a one-way avenue the place residents are pressured to conform whereas the federal government operates behind closed doorways?
Doug Casey: It’s naïve to imagine that, simply because some individuals name it “our democracy,” that we’re something greater than the capite censi—the “head depend,” because the Romans termed the mob. The individuals who management the federal government, the Deep State, are the boss. I acknowledge that it’s very politically incorrect to say so, however the authorities is an entity onto itself with its personal pursuits.
Regardless that America is exclusive in world historical past for having been based on the ideas of non-public freedom and a strictly restricted State, it’s degraded over time. That’s pure, I suppose; the Second Legislation of Thermodynamics operates in completely each sphere. However at present, it’s a fiction, a fable, that residents not democratically management the State. We’ve devolved into an unstable multicultural home empire. In truth, you’re a topic, a veritable serf—albeit one with a excessive lifestyle.
At this level, the federal government may be very very like The Wizard of Oz, hiding backstage. The Wizard, you’ll recall, was not the good friend of Dorothy and her companions.
Worldwide Man: President Trump just lately acknowledged, “We’re going to enter Fort Knox to ensure the gold is there.” If it isn’t, he warned, “we’re going to be very upset.”
What do you make of Trump’s feedback? Do they sign real concern about US gold reserves, or are they only political posturing with no actual intention of follow-through?
Doug Casey: If it’s true that one thing has occurred to the gold, it would set off a real earthquake which is able to echo all over the world.
I’m afraid that if DOGE digs into the gold holdings in Fort Knox and the NY Fed, there received’t be something close to 261 million unhypothecated ounces of gold.
If that’s the case, it might create such an upset that I’m undecided they’d dare disclose it. It might overthrow the world’s monetary system as a result of it might present that no figures are dependable and that it’s all a sham. That is doubtlessly a really massive deal.
Worldwide Man: What are the funding implications of renewed scrutiny on US gold reserves—each typically and with the potential for a full audit of Fort Knox?
Doug Casey: As I’ve stated many occasions earlier than, at roughly $3,000, gold in all fairness valued relative to the historic price of every thing else—garments, meals, homes, automobiles. However as a result of the world’s monetary state of affairs is so shaky at this level and gold is, in reality, the one monetary asset that’s not concurrently anyone else’s legal responsibility, it appears to me that it is best to proceed shopping for gold. It’s significantly better to personal gold cash than it’s to personal {dollars}, that are simply the accounting fiction of an unsound financial institution.
As Matt Smith has identified just lately—he explains all this in (LINK)—if gold was reinstituted as cash, whether or not simply between governments or typically society, it might in all probability must be revalued at 25, 30, or $40,000 an oz.
At this level, proceed shopping for gold even at $3,000 an oz. Most of the people continues to be completely bored with it. That’s going to vary when panic breaks upon the financial world within the close to future.
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