ARE THERE ANY CURRENCIES BACKED BY GOLD?


by SIMON BLACK

Dumbfounded.

That’s the only way to describe the reaction that future historians will have when they look back and study the utter perversion that is our global financial system.

We live in a time when a tiny handful of people have their fingers on a button that can conjure trillions of dollars, euro, yen, and renminbi out of thin air. In the United States, it comes down to one man. Just one.

With a single decision, he controls the lever that dominates the entire economy. When you control the money, you control everything– financial markets, consumer prices, risk perceptions, investment habits, savings rates, hiring decisions, pay raises, sovereign debt, housing starts, etc.  One man.

This irrational, arrogant system presupposes by design that a central banker is smarter than everyone else; that markets are incapable of determining appropriate risk and value; that he is more effective at allocating our time, capital, and labor than we are.

Future historians will probably also be dumbfounded when they see how long people allowed worthless, unbacked fiat paper to pass as money.  It’s extraordinary that most people today happily accept a digital abstraction of paper currency controlled by a single individual as ‘valuable’.

It was more than 5,000 years ago that primitive commodity money was used in Mesopotamia, and it’s been over 3,000 years since metal coins began circulating.  For more than 99.2% of human civilization, money actually meant something… right up until 1971 when Richard Nixon ended any remaining link between the dollar and gold.

Ever since, the US government has refused to acknowledge precious metals as money… yet if the Treasury’s financial statements are to be believed, Uncle Sam is still holding  261,498,900 troy ounces of gold. Let’s dismiss the tungsten possibilities for now and presume that it’s real gold. At today’s prices, the value would be about $437 billion.

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One Response to ARE THERE ANY CURRENCIES BACKED BY GOLD?

  1. Great post. I am totally on board with the fiat debasement. Bring them all down and lets try again. I for one have put my family in position to not just survive the coming collapse, but prosper. I do not think that metals are enough. You have to have a solid local network, not a bunch of facebook friends, and you need a hearty home garden. Two things that we have lost our ability to produce. Take back what is yours. Do not let another day pass by without preparing you and yours for what is inevitable. And do not be lulled into a false sense of security by thinking it is not inevitable. All debts come due.

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