Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19
Where is the Top for Natural Gas? - 7th Nov 19
Why Fractional Shares Don’t Make Sense - 7th Nov 19
The Fed Is Chasing Its Own Tail; It Doesn’t Care What You Think - 7th Nov 19
China’s path from World’s Factory to World Market - 7th Nov 19
Where Is That Confounded Recession? - 7th Nov 19
FREE eBook - The Investment Strategy that could change your future - 7th Nov 19
Is There a Stock Market Breakout Ahead? - 6th Nov 19
These Indicators Aren’t Putting to an Economic Resurgence - 6th Nov 19
Understanding the Different Types of Travel Insurance - 6th Nov 19
The Biggest Gold Story Of 2020 - 6th Nov 19
Best Money Saving FREE Bonfire Night Fire Works Show Sheffield 2019 - 5th Nov 19
Is the Run on the US Dollar Due to Panic or Greed? - 5th Nov 19
Reasons Why Madrid Attracts Young Professionals - 5th Nov 19
Larger Bullish Move in USD/JPY May Just Be Getting Started - 5th Nov 19
Constructive Action in Gold & Silver Stocks - 5th Nov 19
The Boring Industry That Hands +500% Gains - 5th Nov 19
Stock Market Chartology vs Fundamentals - 4th Nov 19
The Fed’s Policy Is Like Swatting Flies with Nuclear Weapons - 4th Nov 19
Stock Market Warning: US Credit Delinquencies To Skyrocket In Q4 - 4th Nov 19
Stock Market Intermediate Topping Process Continues - 4th Nov 19
Stock Market $SPY Expanded Flat, Déjà Vu All Over Again - 4th Nov 19
How To Buy Gold For $3 An Ounce - 4th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

Gold, Silver, and Blue Dollars

Commodities / Gold and Silver 2014 Nov 24, 2014 - 12:43 PM GMT

By: Dr_Jeff_Lewis

Commodities

“Whether the single medium is gold, silver, seashells, cattle, or tobacco is optional, depending on the context and development of a given economy. In fact, all have been employed, at various times, as media of exchange. Even in the present century, two major commodities, gold and silver, have been used as international media of exchange, with gold becoming the predominant one. Gold, having both artistic and functional uses and being relatively scarce, has significant advantages over all other media of exchange.


Since the beginning of World War I, it has been virtually the sole international standard of exchange. If all goods and services were to be paid for in gold, large payments would be difficult to execute and this would tend to limit the extent of a society's divisions of labor and specialization. Thus a logical extension of the creation of a medium of exchange is the development of a banking system and credit instruments (bank notes and deposits) which act as a substitute for, but are convertible into, gold.”
- Alan Greenspan, former Chairman of the Federal Reserve

The political-financial elite will never formally acknowledge gold as a currency. Formally, it is more likely that standard drawing rights, via the IMF's balance, will dovetail with the U.S. dollar's drift away from reserve status.

The irony of course, is that the political-financial elite of the West is basically synonymous with the IMF - especially the United States. But formal admission or official re-institution will never occur.

Instead, a return to hard money will grow from the shadows, as more and more mainstream investors are forced out of the current financial ponzi. Awareness lies buried in the libraries of bureaucracy in the form of suffocating regulations that protect the elite from us.

Outside of the dirt road grass roots, nationally elected officials are powerless and ignorant.  Leaders have very little idea of what is happening. Re-election tactics require an appeal to the superficial, paid for by the military-industrial handlers. 

The darker and more complicated these unnatural systems become, the systems become more fragile. Confidence across institutions goes hand in hand with social volatility as the political financial elite become further detached from reality.

Today, thanks to the Internet and social media, we can see the financial infernos many years in advance. Yet the mainstream will not listen. Everything is conspiracy. Then a fact. Then it breaks.

Except for cultures predominantly in the East, most people are disillusioned by money or the concept of wealth. Western culture is distracted and running on an endless hedonistic treadmill like a mouse in a cage. But change can come from the ordinary.

If you are reading these words, then you are a part of that. The perception won't be pretty, but the damn will break. Will it be more like the Argentinean currency crisis with an official value and a street value?

The precious metals physical divergence could take some of what happened in Argentina. It will occur slowly, then all at once. 

As Giles Powdrill writes:

http://thefuturescompany.com/business-categories/business-economy-posts/argentinas-blue-dollar/

“What do you get when you mix greenbacks with black markets and red tape?

In Argentina today, the answer is a ‘blue’ exchange rate: An informal market where $1USD currently trades for around 7.5 Argentine pesos (as of 23rd January 2013), or around 50% higher than the official rate of $1USD to 5 pesos.

Rampant inflation (conservatively estimated by the government to be around 10% but measured by independent assessors at around 25+%), draconian capital controls and a population that remembers clearly the dramatic collapse of the peso at the turn of the century, have resulted in a huge rise in the number of people seeking out the security of alternative currencies by whatever means are available. The rising popularity of the ‘blue dollar’ demonstrates both the level of concern consumers have about the ongoing stability of the peso, and the entrepreneurial spirit of the people.

Argentines are no strangers to alternative currencies. When the peso was pegged to the dollar in the 1990s, people became accustomed to using both. And during the height of the crisis in 2001, the government introduced the patacón, a state-backed bond that was used to pay bills and salaries and provide some liquidity whilst pesos were scarce.

What is different during the present economic uncertainty are the channels and tools that people are using to exchange their money and to secure their savings..."

And of course, paper still wags the dog in every market. But it’s certainly not hard to envision a shortage, where the premiums make up the difference between physical and paper even if things were to get truly out of hand.

Ban sales or prohibiting ownership would go about as well as 100 tax or banning firearms in this country.

While the gold propaganda hit piece that followed Greenspan’s outrageous reassertions have been all over the map, the hope must be that confusion leaves the institutions out of the precious metals space.

Formal return to hard money may be an anathoma to the foundation of what they are - a ponzi for debt-tickets, notes used to destroy in the name of profits and so-called capitalism. Driven by rising premiums, the physical retail market takes on a mind of its own.

Bitcoin and other cryptocurrencies will certainly evolve over time. But widespread ownership will be limited, mainly due to technical barriers to access.

Certainly not as easy as precious metals. Once precious metals shortages become widespread rampant, sellers disappear.

The CME or COMEX or government can "fix" the price all they want. But at that point, it's all a street game.

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2014 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules