That illusion was all that was required. If everybody with dollars had tried to do that, it would have fallen over then. Instead it was left to the French in the sixties to expose the scam, by doing precisely what you say.
How could the dollar have been fully backed by gold in the thirties, when it could be devalued by 75% overnight?
couple that with an extreme low vix,tells me to raise some cash ! for the next 4-6 weeks
On the other side looking for value Greek stocks ote, nbg , greek shippers dsx,gnk coming off some pretty bad lows look very good to me.
Baltic dry puts a push behing Greek stocks .
I think you are both right.
You are correct in that you could exchange paper for gold at the bank. However, I don’t think everyone could if they all did that at the same time. In other words, the US was practicing a “Fractional Reserve” gold standard. I read somewhere it was 4 paper: 1 gold.
Still, better than what we have now
In 1911, one could go to the bank and exchange a $20.00 bill for a one ounce gold piece. (Liberty Gold Coin) Or for that matter go to the bank and exchange 20 silver dollars for a twenty note OR again, for a 1 ounce gold coin. So it would seem that the paper dollar was then fully backed by precious metal. Am I missing something here?
I don’t hold Semafo directly but it is the 6th largest holding in VanEck’s junior gold miners’ EFT. (GDXJ) I have been moving some of my individual junior’s portfolio dollars over to it. It looks like they certainly picked a winner with this one!
would go back to $600 -$650 was “dilusionary thinking.”
www.voiceamerica.com/voiceamerica/vepisode.aspx?aid=44852
Listen to Gross after about 20 minutes.
The dollar was only partly backed by gold. A while back I dug out the data for gold held by the US, compared to the money in circulation. With some missing years, I got back to 1911. At no time was the USD ever fully backed by gold.
Thank you for that post. I have come to similar conclusions. I also think that we are nearing the end of a long inflationary period.
[ I would like to add a nod towards Kitcoblows here. His thesis that borrowing money into the economy is inflationary is an important contribution to this discussion, imo. ]
I think that your thesis that credit markets are deflating is also very important. I think that this is where all the big deflations begin, and where they destroy most imaginary wealth as they deflate. It was so in the Chicago Land Boom that collapsed in 1837, and others. The paper proxies of money that were seen as equivalents of money eventually collapsed in value. This collapse then started the deflationary debt collapse spiral. The theory (or the thinking) behind these inflationary speculative booms has been described, and it is clear that it is a false way of thinking, that it is based upon delusionary thinking and a kind of self-feedback loop (circular thinking) generated in a group of increasing size.
TQ
thanks for your input ….. all opinions welcomed.
I’ve read some about Argentina in the early 20th century. They had one of the highest standards of living in the world. And then…
It’s incredible to me that these same huge thieving economic destroyer banks are up to their tricks again, issuing more and more of these roulette derivatives, heads they win, tails the taxpayer pays. And our politicians are letting them do it, our bought and paid for politicians. It makes me sick.
We are setting up for a big run. Despite the weak closing, the stocks did pretty darn good - at least in my PF. Not to say I wasn’t surprised. But to me, that is an indication of latent buying power, and who knows, maybe next week is the week of movin’ on up…if not, the week after.
we’d uh seen an actual reversal-with gold down 5-10-silver down 20 and the HUI down–these kind of days are just setting up for a bull run–these are compression days-I could be wrong but that’s how I see it–reminds me of the action just before the 950-1230 run. It’s easy to miss what’s really happening amidst the grousing [by me and others]-of “howz come gold isn’t up with crude up and the $ down”—the Cartel has won this week but the same overpowering buying we “seen” last October is about to overwhelm them…
before wwi, the u s and argentina were behind britain in economic and military power. argentina started down the socialistic path that led to economic disaster and is now firmly implanted in the third world. the u s is now firmly implanted on that path. sleazy politicians will destroy the future of their country and children for lust of power they never have to accept accountability for. i wish we could “look ahead” and act accordingly.
goldman, citi and j p morgan now have over 6 times the gdp of the u s out in derivatives. they are pushing to make sure they collect. they started with their customers, then the u s government and now greece is next to take a hit. after that comes the entire european union. our only hope for our future is to maintain a strong military and hope to get the domestic economy going again.
rno
It’s a run away boom I tells ya! 
rising wedge forming right shoulder?
stockcharts.com/h-sc/ui?s=:GLD&p=W&st=1981-07-20&en=1975-12-31&id=p56105482872
The producers have been bad investments compared to gold for years. I think a large part is because the big players buy the metal and short the stocks. As far as the exploration stocks are concerned they are promoted more to allow them to raise capital.
JMHO
Looks like a strong close for the general markets
Silver had a nice comeback this week
Too bad some of my uraniums won’t get up off the floor……..what “dead money” looks like…..
Cheers to the Tent
Winedoc
surprise - surprise - surprise
Gobber - Mayberry
Received an e-mail from a newsletter source taunting an up-and-coming “blue sky” potential. Gave several clues regarding certain aspects of the company and if you wanted the name of the company …. well you get it. However, they gave a few clues too many ….. 4+ million ounces, located in Guyana, run by former Goldcorp G.M. …… took me about 3 minutes to google it up as “Guyana Goldfields. The company is in the process of a feasability study and planned mine but, won’t be producing until 2012 (providing all other aspects go accordingly) ….. and the current share price is almost $7.00.
I Don’t Get It ….. most “producing juniors” (ex: Northgate Minerals - Golden Star & etc.) are currently trading between the $2.00 - $4.00 range …… how does a non-producing company two years away from producing their first ounce justify trading at $7.00/share with the possibility of something going wrong ….. especially in a S.A. country !!
I sometimes wonder about this investment arena I got myself into …. (strikerrod)
By comparison, Wal-Mart imported 720,000 containers of sophisticated manufactured products
(from Genco Shipping report)
Same patterns