This is the reality behind the desperate and futile actions of TPTB, in the form of TPP, TiSA, NIRP, banning cash and whatever other way they can steal your wealth to forestall the inevitable.

Your personal solution is easy-Dont be one of the Deluded.

By JAMES WEST

MIDAS LETTER

Gold Price holding as U.S. Treasuries dumped in record volumes

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If you’re one of the throwback gold enthusiasts likely to now number in the hundreds judging be mainstream media’s portrayal of “gold bugs”, you’re likely enjoying the apparent strength in the gold price currently evident. Observers and supporters of the standard by which all other currencies have historically been measured before their inevitable disappearance into the footnotes of history can draw from a short list of the fundamental reasons why a gold price resurgence is always its own inevitability, and today’s price action is yet another confirmation.

Bloomberg’s report yesterday of the wholesale abandonment of U.S. d... is the outcome of one of the prime reasons gold will always survive as a monetary commodity, and fiat currencies never can; namely, the idea of scarcity. In the most basic rules of supply and demand, any item’s scarcity not only impacts its demand, but also the price which buyers are willing to pay. When the available pool of capital is dominated by buyers who are convinced that the value proposition inherent in fiat currencies is superior to gold, gold’s scarcity value neither increases nor decreases; it remains constant.

That’s because it is governed by the effort required to produce it to a monetary grade commodity standard,  i.e. the gold bar or coin of guaranteed purity and weight. While the process of exploration, discovery, production and refining are layers of difficulty in the procurement of gold coins and bars, the potentiality for these processes to ever become part of the global inventory of gold is limited by the scarcity of occurrence of economic deposits of gold in the earth’s crust.

Gold is ranked 72nd out of 79 chemical elements that comprise the earth’s crust, making it somewhat of an anomaly for the occurrence of economic deposits of sufficient scale to justify the investment in the abovementioned processes.

Fiat currencies, on the other hand, require relatively little effort to procure, though the effort required to induce the population into accepting the value of fiat currencies is an aspect that is not statistically available. Suffice to say that any commodity whose procurement value rests below its value proposition marketing value can never retain its value over time.

Gold in demand, debt in decline
As a fundamentally delusional species, we are susceptible to the marketing tactics of our most ambitious brethren, to whom we constitute prey. That the massive capital pools only made possible by the predation of the banking and government class against the general population are viewed as legally amassed wealth is evidence of just such delusion. There will come a time in the future, assuming humanity’s survival, when advanced education will consist of a study of the larcenous, delusional and predatory nature of mankind presently, which will be presented as evidence of our backwardness.

If this seems elementary, my apologies. Its just that the rhetoric prevalent in the most popular financial drivel seems to regard such economic reality as a quaint attitude more appropriate to neanderthals, and discusses fiat currencies as if their permanent and final position at the leading edge of financial transactions is some sort of fait accompli. Such discourse discounts completely the unbroken historical record of fiat currencies failure (which are uniformly instruments of debt), and the equally unbroken record of gold’s eventual and inevitable reversion to the basis against which such junk is measured.

One could say the gold price as measured in any given fiat currency is the degree to which the delusion of artificial and temporary value has become imbued in the popular consciousness.

But to get back to the point, central bankers the world over are beginning to shed treasuries and refrain from debt market participation because they are not convinced that the rhetoric supporting the viability of the fiat currency regime now underlying the world monetary system is sustainable. They see the Trump administration’s deteriorating credibility as a progressive deterioration in the creditworthiness of the United States of America.

And who can blame them?

If the president of your bank turns out to be a pathological liar, the time until you abandon all faith in his ability to protect your wealth is measured in fractions of a second, not in 4-year terms. That what takes a reasonably intelligent human being mere microseconds to process takes a financial institution exponentially longer to conclude should be another measure of the delusional mindset prevalent in the global economic order.

So while Trump undermines the credibility, and thereby, the creditworthiness of the world’s largest economy, gold shines through as these historical and fundamental realities become visible through the opaque layers of fabricated history promulgated by education and media alike. After all, they are determined and controlled by those who stand to benefit most from the collective hypnosis supporting the otherwise blatantly baffed out American dollar.

That is not to say that the current trend cannot and even will not be reversed. As we have witnessed time and again since the end of the last decade, the invocation of dollar and gold derivatives to further obfuscate the fundamental value propositions in each respective asset class has reliably induced a rebalancing of the prevalence of delusion in favour of U.S. debt. Nothing has occurred to undermine that primary aspect of the human character.

And so we continue to buy gold at discount prices, waiting for the re-assertion of reality to remind the next generation why gold is, and always has been, humanity’s benchmark store of value.

 

And just in case you didn't know and were unlikely to have been taught in school

5 Timeless Reasons Why Gold Is the Best Form of Money

5 Timeless Reasons Why Gold Is the Best Form of Money

5 Timeless Reasons Why Gold Is the Best Form of Money

We’re sharing one of the most important essays on gold we’ve ever published.

It’s an unfortunate historical anomaly that people think about the paper in their wallets as money. The dollar is, technically, a currency. A currency is a government substitute for money. But gold is money.

Now, why do I say that?

Historically, many things have been used as money. Cattle have been used as money in many societies, including Roman society. That’s where we get the word “pecuniary” from: the Latin word for a single head of cattle is pecus. Salt has been used as money, also in ancient Rome, and that’s where the word “salary” comes from; the Latin for salt is sal (or salis). The North American Indians used seashells. Cigarettes were used during WWII. So, money is simply a medium of exchange and a store of value.

By that definition, almost anything could be used as money, but obviously, some things work better than others; it’s hard to exchange things people don’t want, and some things don’t store value well. Over thousands of years, the precious metals have emerged as the best form of money. Gold and silver both, though primarily gold.

There’s nothing magical about gold. It’s just uniquely well suited among the 98 naturally occurring elements for use as money…in the same way aluminum is good for airplanes or uranium is good for nuclear power.

There are very good reasons for this, and they are not new reasons. Aristotle defined five reasons why gold is money in the 4th century BCE (which may only have been the first time it was put down on paper). Those five reasons are as valid today as they were then.

When I give a speech, I often offer a prize to the audience member who can tell me the five classical reasons gold is the best money. Quickly now—what are they? Can’t recall them? Read on, and this time, burn them into your memory.

Money

If you can’t define a word precisely, clearly, and quickly, that’s proof you don’t understand what you’re talking about as well as you might. The proper definition of money is as something that functions as a store of value and a medium of exchange.

Government fiat currencies can, and currently do, function as money. But they are far from ideal. What, then, are the characteristics of a good money? Aristotle listed them in the 4th century BCE. A good money must be all of the following:

• Durable: A good money shouldn’t fall apart in your pocket nor evaporate when you aren’t looking. It should be indestructible. This is why we don’t use fruit for money. It can rot, be eaten by insects, and so on. It doesn’t last.

• Divisible: A good money needs to be convertible into larger and smaller pieces without losing its value, to fit a transaction of any size. This is why we don’t use things like porcelain for money—half a Ming vase isn’t worth much.

• Consistent: A good money is something that always looks the same, so that it’s easy to recognize, each piece identical to the next. This is why we don’t use things like oil paintings for money; each painting, even by the same artist, of the same size and composed of the same materials is unique. It’s also why we don’t use real estate as money. One piece is always different from another piece.

• Convenient: A good money packs a lot of value into a small package and is highly portable. This is why we don’t use water for money, as essential as it is—just imagine how much you’d have to deliver to pay for a new house, not to mention all the problems you’d have with the escrow. It’s also why we don’t use other metals like lead, or even copper. The coins would have to be too huge to handle easily to be of sufficient value.

• Intrinsically valuable: A good money is something many people want or can use. This is critical to money functioning as a means of exchange; even if I’m not a jeweler, I know that someone, somewhere wants gold and will take it in exchange for something else of value to me. This is why we don’t—or shouldn’t—use things like scraps of paper for money, no matter how impressive the inscriptions upon them might be.

Actually, there’s a sixth reason Aristotle should have mentioned, but it wasn’t relevant in his age, because nobody would have thought of it…it can’t be created out of thin air.

Not even the kings and emperors who clipped and diluted coins would have dared imagine that they could get away with trying to use something essentially worthless as money.

These are the reasons why gold is the best money. It’s not a gold bug religion, nor a barbaric superstition. It’s simply common sense. Gold is particularly good for use as money, just as aluminum is particularly good for making aircraft, steel is good for the structures of buildings, uranium is good for fueling nuclear power plants, and paper is good for making books. Not money. If you try to make airplanes out of lead, or money out of paper, you’re in for a crash.

That gold is money is simply the result of the market process, seeking optimum means of storing value and making exchanges.


Editor’s note: We highly recommend owning gold for the long term. It’s the ultimate safe-haven asset. Once you own enough, you can consider speculating on gold stocks for more upside.

– Doug Casey

Now that you know what is going to happen, and why, there is no need to worry any more. Its not the end of the world, only the biggest wealth transfer in history, to make sure its not your wealth being transferred you need to have it in Gold or Silver (or anything tangible valuable), in your own possession and control, not somebody else's liability.

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