The Coming New Barbarism

Hugo Salinas-Price is a very successful businessman who has long been an advocate of sound money. Having seen first-hand the disastrous effects of fiat currency devaluation in his home country of Mexico, Mr. Salinas-Price has been tirelessly crusading for sound money principles for over thirty years.

In this new column published to his website (http://www.plata.com.mx/mplata/articulos/articles.asp), Mr. Salinas-Price discusses again of the inherent flaws of a world built upon debt and he warns of the dangers that are inevitably coming.

THE COMING NEW BARBARISM

by Hugo Salinas-Price

http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=222

When the world’s present troubles surfaced about five years’ ago, I recall reading articles whose central theme was: “There is excessive debt in the world. The amount of debt in the world exceeds the capacity of the world’s economies to service it and pay it down.”

To address the excess of debt in the world, four courses for action were mentioned:

  • The debt burden could be reduced by paying it down, via a policy of increased taxation.
  • The debt burden could be reduced by a policy of allowing mass bankruptcies to take place, which would write off substantial portions of the debt.
  • The debt burden could be reduced by a policy of massive monetary inflation which would devalue all debts and make them payable.
  • Alternatively, the intolerable debt burden and its absolutely inevitable reduction, nolens volens, would probably be achieved by a combination of all three policies.

In the intervening five years, the world’s excessive debt burden has not been reduced; on the contrary, it has increased. The governments of the world have behaved ostrich-like, burying their heads in the sand to ignore the problem, adopting infantile “extend and pretend” policy to debt and allowing further increases in debt in the hopes of spending their way out of difficulties by adding more debt to existing debt.

What can we expect of all governments in the world, today?

Not one single government is going to raise taxes to pay off debt. Such policy is contrary to the prevailing Keynesian religion. Besides, the debt burden is so gigantic that the idea of paying it down is out of the question. Governments are not even capable of raising taxes to prevent increases in debt, let alone to pay it down. So the first policy mentioned above, is out.

A drastic reduction of the world’s debt burden by cancelation of debt would require its cancelation at national, state, municipal, corporate and individual levels. Cancelling debts means simultaneous cancelation of assets, because every debt is someone’s asset. Massive cancelation of debt would be extremely painful and the last thing that democratic governments want is to inflict pain. Therefore, a process of reducing world debt could not come about by any plan or agreement; it would have to be ignited by some financial fire breaking out, and governments are quite alert to the least signal of fire and will proceed to extinguish any such accident by all means. We may as well forget about cancelation of debt as a remedy for the excessive debt burden weighing on the world -though accidents do happen.

The fact remains: The world’s excessive, un-serviceable and un-payable debt shall be reduced; this is an unavoidable event, as unavoidable as the force of Gravity.

Therefore, what we will see, from here on, is the world’s great slide into the third avenue for policy: massive inflation of the money supply. We are given notice that the slide is now seen as imperative policy: it is announced as “Whatever It Takes”. See zerohedge.com (http://www.zerohedge.com/news/2013-09-26/whatever-it-takes-comes-us-here-what-it-means). Now, inflation is not painful like paying taxes or seeing your financial assets go up in smoke. For the majorities, inflation is downright pleasant, like sniffing cocaine or shooting heroin. It is only in the advanced stages of inflation that its painful effects become apparent. So this is unquestionably the policy that will be implemented to deal with excessive debt in the world.

Take Mexico as an example. In 1970 Mexico began an inflationary party that only ended twenty years later; in the meantime, the rate of exchange went from $12.50 pesos to the dollar, to $3,100 pesos to the dollar. Consequently, by 1990 Mexico was quite free of internal debt. When the US applies such a program, the effect will be to cancel world debt, since all debt in the world is tied to the dollar as the reserve currency of the world.

We have only limited knowledge regarding what massive monetary inflation really means. Those who are going to apply it know only some of the effects, not all of them. There remain the known-unknowns, and besides these, the unknown-unknowns. Thus the hand that will implement massive inflation trembles in doubt. Yet, there is no other recourse.
The world will plunge into the darkness of massive world inflation. There is no other alternative. It must take place, but what will happen then is obscure. We are going into uncharted waters.

                                                                                                            CODA

Massive monetary inflation in the world will cause massive social disruption, which will give rise to political revolution. The inflation will end at some point. We can only conjecture about what sort of political organizations will prevail when the inflation ends. It is not likely that “democracy”, as we have known it, will survive. More likely, democracy as the present touch-stone for legitimate government will give place to dictatorship, under the force of circumstances.

When the Barbarians invaded the Roman Empire, frightened Romans hid away their treasure in the form of silver and gold. These treasures are still being discovered today.

In the coming world-uncertainty and fear, humans will adopt the same measures spontaneously, and a flight into gold and silver will take place.

Perhaps some investments in some parts of the world may survive the great purge which is to take place. But, which investments, and where? Nobody can tell us this, with any certainty.

The ruins of the Roman city of Volubilis are situated in what was once the Roman province of Morocco. Thirteen hundred years ago, when the then-Christian citizens of Volubilis perceived the imminent menace of Muslim conquest, those who could do so buried their silver. Their little treasures are still being dug up today amid the ruins of Volubilis. Alas, their foresight was of no avail to those good citizens of long ago.

To store away gold and silver is one of the important things that humans can do to face the upheavals of the coming New Barbarism. Such foresight provides no certainty, but at least it is a reasonable attempt to prepare for the future with some instrument for survival.

42 Comments

Strongsidejedi's picture

FIRST!

YES!  YES!

I came in First!
I have a GOLD MEDAL!

chrtoo's picture

second

Now to read...

Edit: Won't confiscation fit in there, before the last ditch effort to massively inflate?

No sense leaving any stone unturned before giving up, all together; no sense allowing (unintended) pockets of survivable wealth, after the Great Leveling.

CHR.

prius_driver's picture

fourth

I always wanted to be "thurd" but "Turd" beat me to it.

Mr. Fix's picture

5th

Nice post, I guess we could sum it all up with “how many ways we are totally screwed”.

Storing precious metals is indeed no guarantee, but not storing them, absolutely guarantees complete poverty.

Keep stacking until the system implodes,

but make sure you have enough food to wait it out.

It is entirely possible that the price of food will skyrocket long before the metals do,

but it'll still be well worth your wait.

Adolf_Hitler's picture

@Turd

I remember you mentioned the US mint had changed its mandate to "satisfy all the demand for gold eagles" to " issue as many gold eagles as it considers enough" 

Can you provide a NEWS link for this change? Many thanks.

I Run Bartertown's picture

Here's the legislation

6162 passed in 2010. It amended 5112 of title 31.

http://www.govtrack.us/congress/bills/111/hr6162

SEC. 4. MEETING DEMAND FOR SILVER AND GOLD NUMISMATIC ITEMS.

Subsections (e) and (i) of section 5112 of title 31, United States Code are each amended by striking ‘quantities’ and inserting ‘qualities and quantities that the Secretary determines are’.

from 5112 prior to amending:

  • (e) Notwithstanding any other provision of law, the Secretary shall mint and issue, in quantities sufficient to meet public demand, coins which— (1) are 40.6 millimeters in diameter and weigh 31.103 grams; (2) contain .999 fine silver; (3) have a design— (A) symbolic of Liberty on the obverse side; and (B) of an eagle on the reverse side...

  • and after:

  • (e) Notwithstanding any other provision of law, the Secretary shall mint and issue, in qualities and quantities that the Secretary determines are sufficient to meet public demand, coins which—  (1) are 40.6 millimeters in diameter and weigh 31.103 grams;

  • (2) contain .999 fine silver;
    (3) have a design—
    (A) symbolic of Liberty on the obverse side; and
    (B) of an eagle on the reverse side;
     
    (i)
    (1) Notwithstanding section 5111 (a)(1) of this title, the Secretary shall mint and issue the gold coins described in paragraphs (7), (8), (9), and (10) of subsection (a) of this section, in qualities and quantities that the Secretary determines are sufficient to meet public demand, and such gold coins shall—
    (A) have a design determined by the Secretary, except that the fifty dollar gold coin shall have—
    (i) on the obverse side, a design symbolic of Liberty; and
    (ii) on the reverse side, a design representing a family of eagles, with the male carrying an olive branch and flying above a nest containing a female eagle and hatchlings;

     

     I notice you emphasize NEWS link. This is the actual legislation as it was passed into law. I'm not holding my breath for a CNN special.

     

     

Robski's picture

I wanted to share this, I

I wanted to share this, I just found out that Professor Albert A. Bartlett (Physics) passed away on Saturday, September 7, 2013 at the age of 90.

Why is this important to me? I never met him, but I watched a video of his a few years ago that changed how I look at the world. One doesn’t have to watch it all, the first 5 minutes will convey his message.


“The greatest shortcoming of the human race is our inability to understand the exponential function.”

Mad5Hatter's picture

Nine?

Just say nine.

Greta calling the count down, 30 minutes to go?

boomer sooner's picture

(2) contain .999 fine silver

Anyone had a sample tested lately?

I would think it should read just .999 silver.  If I take a sheet of lead, melt it down and throw in some .999 silver, would I be lying if i claimed it "contained"?  I know I'm splitting hairs, but it makes me wonder if dilution at some point may happen.  Notice how it also states diameter and weight, but not thickness.

Eagles may start to look more 'American' with a tubby tummy.  Make up for all the carbs being added.  Still "contains .999" though.

Adolf_Hitler's picture

@I Run Bartertown

Many thanks. But the link you have provided seems to be about silver eagles only. I'm talking about gold eagles...

DeaconBenjamin's picture

Silver bullion from sunken WWII ship makes it to the Mint

Sunday 29 September 2013 11.08 EDT

Commemorative silver coins are being struck from shipwrecked bullion that arrived at the Royal Mint more than 70 years late, after a German torpedo sent the ship carrying it to the bottom of the North Atlantic during the second world war.

The coins, intended for collectors, are made from part of a haul of almost 100 tonnes of silver recovered from a wreck lying three miles down, deeper than the Titanic. The silver is valued at up to £150m, the largest quantity of precious metal ever recovered from such a depth. The coins show the doomed ship SS Gairsoppa, which sank on 17 February 1941 off the Irish coast after it was hit by a single German torpedo fired by U-boat U-101 weighed down by 7,000 tonnes of cargo including thousands of tons of pig iron.

Most of the 83 crew members and two gunners died immediately. The impact of the torpedo brought down the foremast, instantly destroying the wireless antennae, so the crew could not even send a distress call. Two of the ship's lifeboats were swamped in the stormy waves, and though the third made it to Cornwall 13 days later, only second officer Richard Ayres survived – the last of his comrades drowned when the boat capsized within sight of the shore.

The US salvage firm Odyssey, working under contract to the UK government, recovered the record amounts of silver over the past two summers using remote controlled vessels. In 2012, 1,218 ingots weighing 1.4m troy ounces were brought to the surface, and last July a further 1,574 ingots, adding up to 1.8m troy ounces, were recovered. Under the terms of the contract, Odyssey keeps 80% of the silver, the rest goes to the Treasury, and a small amount is being returned to the Royal Mint for which it was originally intended.

In 1940, the decision was taken to import silver from India when the Mint's supplies were running low during the war. The ingots from Bombay were loaded onto the SS Gairsoppa, a British steam merchant ship, built on Tyeside in 1919. The convoy hit stormy weather. Heavy laden and running short of coal, unable to keep up with the other vessels the Gairsoppa decided to leave the protection of the convoy and head for Galway harbour. A few days later, still hundreds of miles from safety, the ship was spotted by a German aircraft, torpedoed just after midnight and sank within 20 minutes.

Correspondence between the Royal Mint and the Bank of England reveals that there was such concern over the loss of the bullion, valued in 1940 at £600,000, that it was feared the Mint might run out of silver completely and be forced to suspend production of coinage. The price of the new coins has not been disclosed, but coin collectors' websites suggest they are being marketed in boxes of 300 coins for $5,000 (£2,885)).

http://www.theguardian.com/science/2013/sep/29/silver-bullion-sunken-wwii-ship-royal-mint

boomer sooner's picture

Where's Nigel when you need him

Could someone ask the House/Senate if they would approve a guest speaker.

At least early drive in morning will be light.  Curious to see how light, probably half, haha.  Conservation at its best.  Last customer this evening was told by senior (FAA) to watch til midnight.

Harry Reid just said the shutdown is due to the Tea Party and Anarchists 

philly's picture

Government shutdown

Looks like the government is shutdown...why do I still feel like I'm not safe from it??? Even when it's shut down, it still monitors my phone calls, reads my emails, listens to my private phone conversations (at least this has been alleged), and is actively trying to take away any means I have of protecting myself. If I didn't know better, I'd say these are conditions placed on people who are imprisoned. When the fuck did I agree to that?!? What kind of a mind comes up with that as a solution for anything. It is absolutely clear that the U.S. Government IS the ENEMY.

Sorry for the rant...back to your normal programming!

Mr. Fix's picture

It's 12:01am, do you know where your government is?

 

 

Shut Happens

It's 12:01am, do you know where your government is?

*WHITE HOUSE BUDGET OFFICE DIRECTS AGENCIES TO BEGIN SHUTDOWN

*U.S. GOVERNMENT SHUTS DOWN FOR FIRST TIME IN 17 YEARS

S&P Futures are 1677 and 10Y yield 2.65% - let's see where we open tomorrow...

Full White House Statement below...

 
 
 
 
 
 
 
AlienEyes's picture

@ Robski

The good professor was possibly the only thing worth a damn to ever come out of Boulder, CO.....the Berkeley of the mid-west.

agNau's picture

everyone......

should be on their knees tonight.......praying that it stays shutdown.

praying that they are unable to restart it....even with ether sprayed down the throat of the carb!!!!!!!

This Mutha is BROKE BEYOND REPAIR...... and it should be thrown in the scrap heap.

Dust off the old Constitution.....have a few fireside chats over the radio....start over with the real deal.

ONE ADDED AMENDMENT.........Any person that attempts to alter our Constitutional money from any other than Gold or Silver, shall be publicly hung by the neck till dead. This includes ALL branches of the government. Congress CANNOT ALTER THIS AMENDMENT, OR THEY SHALL AS A WHOLE BE HUNG BY THE NECK TILL DEAD.
THE RIGHT TO REAL MONEY SHALL NOT BE INFRINGED.

Am I on a rant?.....yes.
IS THIS AN UNREASONABLE AMMENDMENT? With the state we are in today, I think not. In fact, I believe it is necessary.

All in favor?.........The Ayes win!
SO BE IT!

* Anyone stating a claim against the United States of America shall forward that claim to Goldman Sachs.

JY896's picture

Regarding quality and quantity of Mint coinage

The text of the 2010 amendment  to the law '31 USC § 5112 - Denominations, specifications, and design of coins' can be found here.

The relevant passage of the amendment:

"4. MEETING DEMAND FOR SILVER AND GOLD NUMISMATIC ITEMS. Subsections (e) and (i) of section 5112 of title 31, United States Code are each amended by striking ``quantities'' and inserting ``qualities and quantities that the Secretary determines are''."

The amended, full current text of the law governing silver and gold coin production can be found here at the Cornell-run Legal Information Institute.

The relevant section on gold coins:

"(i) (1) Notwithstanding section 5111 (a)(1) of this title, the Secretary shall mint and issue the gold coins described in paragraphs (7), (8), (9), and (10) of subsection (a) of this section, in qualities and quantities that the Secretary determines are sufficient to meet public demand, and such gold coins shall—

(A) have a design determined by the Secretary, except that the fifty dollar gold coin shall have—

(i) on the obverse side, a design symbolic of Liberty; and
(ii) on the reverse side, a design representing a family of eagles, with the male carrying an olive branch and flying above a nest containing a female eagle and hatchlings;
(B) have inscriptions of the denomination, the weight of the fine gold content, the year of minting or issuance, and the words “Liberty”, “In God We Trust”, “United States of America”, and “E Pluribus Unum”; and
(C) have reeded edges."
Incidentally this was the bill that instructed the Treasury to conduct research into replacing currently circulating coinage.
 
" AUTHORITY TO CONDUCT RESEARCH AND DEVELOPMENT ON ALL CIRCULATING COINS.
 
(a) In General.--To accomplish the goals of this Act and the
requirements of subchapter II of chapter 51 of title 31, United States
Code, the Secretary of the Treasury may--
            (1) conduct any appropriate testing of appropriate coinage
        metallic materials within or outside of the Department of the
        Treasury; and
            (2) solicit input from or otherwise work in conjunction with
        entities within or outside of the Federal Government including
        independent research facilities or current or potential
        suppliers of the metallic material used in volume production of
        circulating coins,"
 
I wonder if they include ASE and AGE in the definition of 'circulating'?
AlienEyes's picture

Dollar takes a dive

USD at 79.88.

Gold gets a nice bump.

Mariposa de Oro's picture

boomer sooner

I remember when that legislation passed.  I immediately stopped purchasing US coins.  I smelled a rat and figured I'd put my fiatscos somewhere else.

mac's picture

beyond rational, beyond common sense

...can the world just move on as the USA collapses in bankruptcy?

Is the Big Boss busted broke? The Japs, well they will do as they are told, buy some dollars, as will many other puppets...but how long must they hold their noses away from the stench of monetary insanity...Ponzi Number One  : USD.

atarangi's picture

Barry goes camping - -

 Barry should be fine   -   he's got a nice little set up on the Whitehouse lawn next to the organic garden.                                                                                                                                                       Likeaboss.jpg

El Gordo's picture

Soundbites

I tried to isolate the "shut it down" sound bite but was unable to do so, but some of the others are worth listening to as well.  Tell me that someone like this who serves in our United States Congress is not about the best reason for the government being shut down that you can find.  Ask not who takes the blame for the government shutdown, ask who takes the credit.

http://www.soundboard.com/sb/michaelberryshow

Just A Regular Guy's picture

Opppps

Kuchek's picture

Shut it down, Shut it down now.

Hammer's picture

http://www.bbc.co.uk/news/wor

Who will be affected

http://www.bbc.co.uk/news/world-us-canada-24302508

Couple of zoos and parks get closed. Big deal.........

Keg's picture

Since the government is shut down

Since the government is shut down I guess we can say anything today and not worry about the NSA listening in.

silver foil hat's picture

6:37 am on the east coast

...and yes, the sun is rising.

Guess the (rest of the real) world didn't end, Harry.

Boehner and the republicans finally earned these. Let's see if they can keep them.

DeaconBenjamin's picture

Indian gold imports pick up, rise 7.24 tonnes in September

 

The govt, battling with a record high trade deficit and a weak currency, is trying to curb imports of the dollar-denominated gold, the most expensive non-essential item in its import bill.The govt, battling with a record high trade deficit and a weak currency, is trying to curb imports of the dollar-denominated gold, the most expensive non-essential item in its import bill.
 
NEW DELHI: Gold imports into India, the world's biggest buyer of the metal, rose to 7.24 tonnes in over three weeks in September, up from 3.38 tonnes in August, the finance ministry said in a statement on Tuesday.

The September figure was way below the record 162 tonnes in May, which prompted the government to raise import taxes to 10 per cent and tie exports to domestic consumption, under the so called 80/20 import rule.

The government, battling with a record high trade deficit and a weak currency, is trying to curb imports of the dollar-denominated gold, the most expensive non-essential item in its import bill.

http://economictimes.indiatimes.com/news/economy/foreign-trade/gold-imports-pick-up-rise-7-24-tonnes-in-september/articleshow/23354156.cms

Turd Ferguson's picture

Re Gov shutdown

MODERATOR

There very likely WILL NOT be a BLSBS, a CoT or a BPR this Friday.

Syndicate contentComments for "The Coming New Barbarism"