Sometimes, it is best to get back to some foundational understanding about the current monetary system and where it went astray. Man’s carnal desire to manipulate and control moved us off the gold standard. The term “good as gold” was used for U.S. currency since you could exchange paper money for the equivalent value of gold bullion. The problem for those in power, this fixed relationship kept them from manipulating the economy for their own interests. Gold reserves can only increase about 2% per year from mining.
Gold has no liability attached to it. What you see is what you get. On the other hand, fiat currency has the liabilities of the issuing country attached to it. If a country increases its money printing by 10% relative to the other countries around the world, their currency will be devalued by 10%. So, if you live in that country, your savings loses 10% in purchasing power. If you are a borrower, your debt will be paid back in cheaper currency. Who are the largest borrowers? The Federal Governments around the world. Inflation is not measured by price increases but is defined as the increase in money supply.
Gold is anti-inflationary. You cannot manipulate its value and you cannot increase its supply by the press of a button. It provides a fixed measure of value and that is why it has been used time and time again as a nation’s currency. It provides an inherent stability to the monetary system of the country and the globe.
The Genoa Conference of 1922 (April 10–May 19, 1922) was the cause of the Great Depression. At this conference representatives of 34 countries convened to discuss the Gold Standard and decided to convert to a “Gold Exchange Standard” which effectively double the money supply. We then had the bubble of the Roaring 20’s which burst, creating the Great Depression.
This was not enough. The U.S. government decided to seize the gold held by the public and then immediately devalued the value of the U.S. Dollar. Executive Order 6102 is an Executive Order signed on April 5, 1933 by U.S. President Franklin D. Roosevelt "forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates" by U.S. citizens. Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933 all but a small amount gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($166,640 if adjusted for inflation as of 2008) or up to ten years in prison, or both. Once the gold had been confiscated, the value of the Dollar was changed from $20.67 to $35.00 per ounce. That’s inflation! Notice how they used another law redefined to fit their purpose and justification for the confiscation. There are enough laws on the books to just about do anything imaginable.
The price of gold held steady until France decided it wanted to convert its dollars to gold. On August 15th, 1971, President Richard Nixon ended the Gold Exchange Standard. This allowed those in power to exert greater control over the economy without regard to retaining “value” for the common man. This exploitation has continued and allowed unfathomable amounts of money to be created by the issuance of debt and credit.
We are now in a currency bubble and when you are in the middle of a bubble, you don’t know it. From the inside of the bubble, you don’t see the reflections of light (revelation) defining the bubble’s size. Only after the bubble bursts does the size and impact get fully revealed. Light travels about 6 trillion miles in one year. I suspect Congress will begin to use the term “light years of debt” instead of $60-70 trillion. Doesn’t 10 to 12 light years of debt sound smaller and less ominous?
