Problem is Fractional Reserve Banking-we don’t need Gold standard

Problem is Fractional Reserve Banking-we don’t need Gold standard

Naysayers and Dr’s of Gloom keep chanting the same song of doom that all paper money will cease to exist one day and that everyone will revert to the gold and silver standard in the not too distant future. In a rebellious or romantic manner, this story has a nice ring to it.  However, these people are about 1000 years too late and second of all, they are in sore need of a mental check up.  One must always pay attention to what the masses are embracing or willing to embrace.  The masses are not even aware that Gold was once considered money and most of them will rebel at the notion of having to return to the Gold standard. The Gold standard did not prevent theft and outright robbery; bankers were known for shaving gold coins and other shenanigans

No one wants to run around with a heavy sack of gold or silver coins to purchase the things they desire or need. We live in a world where if it’s not convenient it’s not embraced and the Gold standard is not convenient at all.

Another reason why this will never take place shortly is that 90% of the current generation is brain dead when it comes to understanding the true function of gold. In fact, one can state that they don’t even understand the true function of money. In particular aspects, this generation has received what amounts to a frontal lobotomy regarding education, hard money, and inflation.  (Hard assets are gold, silver, palladium, antiques, collectables, timber, etc. )

What might unfold one day is that individual governments will decide it’s time to back their money with a basket of commodities say oil, gold, silver, palladium, etc. It does not necessarily have to rotate around one commodity; this will give investors all over the world the confidence to change their money into this country’s currency. Three nations are in a position to do this United States (but they have embarked on the “we are the toughest and we know it all mission” and hence the chances of them implementing it are at the moment slim at best). The other two nations are China and Russia; Russia is technically in a better position when one looks at things from a resource perspective but when one takes a strategic look at things the main country that comes to mind is China. In approximately 30 years they have achieved more than most nations have in 90 years and they continue to progress at a rapid fire rate. They understand the fact that real democracy is nothing but a fallacy whereby idiots are elected into power and these idiots then have to cater to the morons that elected them in the first place. Thus, a perfectly prosperous country gradually becomes nothing but one huge welfare state.

Thus, our advice to our subscribers is not to worry about this nonsense when there are very little facts to support these assumptions. A full generation would have to be financially wiped out before this concept becomes embedded in the mental psyche of the masses. Until then the best way to preserve one’s wealth is to invest in assets that inflate at a faster rate than the governments are inflating the money supply. One way to do this is to make sure you have a portion of your money in Gold and or Silver bullion. We cast a more favourable eye on silver also known as the poor man’s Gold.

In the end, who cares if the governments are inflating the money supply (as in reality there is very little one can do to stop them and if one cannot do anything to stop them then why  worry over nonsense); the only thing we care as investors is that we do not want to catch a falling dagger. So let them inflate away for there is a secret benefit to inflation; certain assets over compensate for the rate of inflation by a huge factor. Thus, for example, the government might inflate the money supply say by 10% a year but certain assets could rise by  30%-100% a year.

The problem we have now is that most central bankers have embarked on the concept of “devalue or die” as they compete to make their products the most affordable in the world markets. The best thing would be for them to all sit on the same table and decide on a fixed rate of inflation. As the real definition of inflation is an increase in the supply of money; they could all decide to inflate their respective money supplies at the same rate. However such a simple concept is beyond the foresight of most central bankers; thus, make sure you have some insurance and the best way to do this is to own a bit of Silver and or Gold bullion. The way to end the problem is to put the following rules into play

 Is there a viable Solution? Yes, there is

There is a very simple solution that can quickly end the current mess  without reverting to the Gold standard

  • The power banks have of creating money out of thin air should be eliminated. This means that they should not be allowed to lend money they do not have. Now via the fractional banking system, they can create nine new dollars for every dollar of deposit they have. This outright theft, they are creating money they don’t have and charging a fortune for it.
  •  All Governments should be banned from creating debt. Before any new project is approved the government should have the money to pay for it

Other small refinements can be added, but if those two important rules are enacted, we won’t need the Gold standard.  We have inflation and artificial boom and bust cycles because bankers control the money supply. Cut their supply and the dirty game comes to an end


Other articles of interest 

BBC Global 30 Index Signals Dow industrial Index will trend higher (11 May)

Stock Market Bull not ready to buckle (4 May)

Fear mongers are parasites that profit from your fear (2 May)

Gold Bugs think & stop listening to Fear mongers  (1 May)

Fear mongers are parasites that profit from your fear   (27 April)

Plain evidence that financial experts know even less than Jackasses (26 April)

Negative rates fantastic for speculators but terrible for global economy (16 April)


robert lishan

You might be on to something if we can get rid of the bankers-a minor flaw in the plan.

Tactical Investor

The minor flaw in the plan as you put is not so easy to fix. For now the world is hooked on hot money. So this scam will continue, The idea here was to show the Gold bugs who think that everything will end if we are on Gold standard that there is an alternative and that an all or nothing approach is fool hardy. In the mean time, expect hot money to continue flooding the markets. After all it can be created with the click of a mouse.

Samuel Saint

The million dollar question is will the people support such an effort and can they. Most don’t even know the difference between Fiat and real money, so asking them to implement something along these lines is a long shot at best.

J. Philip Jimenez

The problem is the monetarist system. What we need is a credit system, as elucidated by Alexander Hamilton. Money itself has no instrinsic value. It is a medium of exchange only. It is human energies and innovation that drive development. This must be directed by the government, which alone should have the power to create money–being that only the government owns all the territory and can properly direct national development. Gold and fiat play off each other, each insufficient as concepts in and of themselves. Each obfuscates the real issue, which is the monetarist system. Money is a social contract and a currency is only as healthy as the society itself. The health of society cannot be trusted to bankers. The real economy is the physical economy and this must be tended and regulated by the government, not by private international bankers.