Let's Return To The Gold Standard

Mon, Feb 13, 2012 - 6:41pm

Last week, I was perusing the latest issue of The American Spectator (yes, I'm a subscriber and have been since 1994). In it I found a terrific article about returning to The Gold Standard.

First, though, you should read this note from Santa. It fits in well here as he discusses the future and a likely return to a gold-based monetary system.

by Santa Sinclair
My Dear Extended Family,

The replacement of lost liquidity is NOT arithmetic. Booms, like busts, turn geometric on their liquidity effect because of the impact of mass financial psychology. Management of Perspective Economics primarily operated by mainstream media can make the gestation period of this event long, but it cannot reverse the underlying process.
With there being no question whatsoever that a credit event is on the near horizon for Greece, there is no avoidance of a further haircut in the valuation of Greek debt held by international banks, primarily Euroland institutions. What you take away with one hand you must provide with another if the banking system of Euroland is to remain viable. As you haircut (reduce in value for balance sheet considerations) Greek debt you reduce the value of that debt held as assets of financial institutions, therein reducing their viability to borrow in order to conduct their banking activities. This mark down is in full gear as speculation advertises to the world that the next step in this Greek tragedy is a haircut of value to just 30%.
How is it possible for the Euro wizards of words to punish Greek debt severely but not hammer others equally now under assault both by mainstream media as well as the undertakers of bond ratings in the USA?
The argument takes a position that the International Swaps and Derivative Association, which is made up of the manufacturers of these devices, will not self immolate by declaring credit events to be credit defaults. This is the ultimate irreversible can kick directly into the dead end sign at the end of the road of postponement to perdition.
Financial currency inflated hell by global debt monetization is the condition from which there is no escape, except though burning down the old system and making a new one. This is the dead end sign at the end of the road for can kicking. It is the condition of financial perdition. It is not something coming in a distant future. It is here and now, clear and present, if you have the eyes to see.
The means to this end is the combination of sick sovereign debt, risk insurance issued against the default of debt without sufficient liquid capital to do so, and the fact that those entities who issued this insurance are themselves and in truth illiquid under strain thanks to the capitulation of FASB on true market value of their legacy and other assets. This is the construction of the house of financial cards that will not survive intact during the period of 2012 to 2015. This is what gold at $1700 is indicating to those unfortunate enough to understand the practical workings of a system whose life force has been stolen to a degree that can only be deemed epic.
Never in written history has anything this size occurred where trillions has been bled away from an economic system with impunity. In all history when this has occurred the then monetary system imploded, to be replaced always by a commodity based money. That is what the Retenmark was in the Weimar experience. This is what the virtual reserve currency will be that replaces the US dollar in the next three years. The commodity currency definition will be derived by a connection to the gold held by the central banks of all the currencies that make up the Western world averaged virtual currency. This virtual currency will be a computer based settlement mechanism that cannot be traded in by other than central banks on behalf of trade settlement. Each contributing nation will also contribute to a universal M3 that will be the percentage measure of gold’s value to determined percentage-wise appreciation of depreciation, constituting value of the position held by each central bank in gold. Few if any central banks need to make transactions to adjust value as the squids of the world will invent derivatives upon which to speculate on the value of gold as a product of the growth or contraction of the western world M3.
This is not by any means a gold convertible system. This is not by any means a perfect system. There will be automaticity in this system but an agreement only by members to perform as above. However this system will work the same as the Retenmark worked. When the need becomes so great to believe in something solid anything that sounds solid has and will again work.
Only a resurgence of business based on solid foundations of equity and not debt can do the final clean up and provide a door to a better future.
No politician anywhere can do the necessary without causing the explosion of the results being heard almost as a new big bang. We are going to inflate this debt away or those in power will be swept away by the violence inherent in the suffering citizen.
Gold and only those things gold will provide the bridge to maintaining a lifestyle, maintain some freedom of choice and most importantly give you options you would not otherwise have. This has been as it always has been and will continue so. The drama of the market is nothing but that – sound and fury presaging but not defining change.
Do not allow anything to deter you from holding that which will build your bridge to tomorrow safely.
I am personally 100% in. It is my intention to hold as much gold as possible lending to me leverage without borrowing or margin. What was done in the 70s cannot be done now because we are only on the cusp of the volatility in the price of gold and it is already impossible to carry leverage except in the manner I have devised for myself participated in by others. I invite you to join with me.
This is a lonely road we are on where its direction does not tend to make friends. The road to freedom of any kind never does.
Stay focused. “Non Carborumdum Est,” do not let the hateful, vengeful bashers get you down.

So, anyway, back to the article in The American Spectator. After I read it, I immediately headed to my MacBook to see if I could find a digital copy. No such luck...the article wasn't yet available. Then, today, turdite "Kevin" published a link in the previous thread. Hooray!

Here's the thing: We all know that the current, fiat-based system is failing and will likely soon die a spectacular death. However, there is so very little good information on a gold-based monetary system that anyone looking for something useful to help persuade others is often frustrated by the ignorance and outright disinformation that permeates academia and the media. This article by longtime WSJ writer and editor George Melloan successfully refutes the nonsense spouted by gold's opponents while simultaneously making a clear and understandable case for a gold-based system. First up, here is a link to Mr. Melloan's bio:


And here is a link to the article, via The American Spectator website. I encourage you to read it carefully and perhaps consider printing it and/or sending it to your friends.


Have a great evening. TF

p.s. My fledgling presidential campaign is off to a slow start. Anyone interested in supporting the group AmericansElect and/or my candidacy can visit the site here:


(thanks, Pining!)

About the Author

turd [at] tfmetalsreport [dot] com ()


Be Prepared
Feb 13, 2012 - 9:10pm

We're the Ones who need a Gold Standard...

A gold and or Silver Standard would take away power from the elite. I don't think they need a gold standard but we (peons) do.

Credit to SilverTree, fellow Turdite, who posted this last June

Feb 13, 2012 - 9:14pm

Turd for president?

Because those other fools suck (meaning you too are a fool, except that you don't suck)? Sorry for busting your nads, Turd, but you may wish to consider rewording your campaign poster. Just saying. Sharp looking photo, however.

Feb 13, 2012 - 9:15pm

Dream of the 1890s

Should go well with the gold standard...

Dream of the 1890s
Feb 13, 2012 - 9:23pm



"But investors headed for the exits in recent days, with a particularly sharp selloff Friday, on fears that Greek politicians might scupper austerity measures demanded by international bodies as a condition of a bailout. Now that Greece's parliament has approved the package, the market's fear of a disorderly default or a Greek withdrawal from the euro zone has receded, at least temporarily—although more tests lie ahead in gaining bailout approval from the euro zone."


This argues the contrary. We'll see in the morning.

Feb 13, 2012 - 9:28pm

gold as money-- paper by Antal Fekete


I would recommend everyone spend the time to read this whole paper, takes awhile but well worth it.

Note, it is from 1996. Its wealth of information was at times hard to digest, but in the end taught me about money, the mechanics of free market capitalism, and why gold will naturally reassert itself as money.


Feb 13, 2012 - 9:30pm

The link to the article BP

The link to the article BP referenced earlier. The last tax listed in the article is the one that really made my blood boil. How the f*** does Zero think this is gonna help the friggin' economy???


Taxes raised on families who consume energy by at least $100 billion over the decade. A whole series of tax increases on oil and gas companies, coal, and other producers of oil are proposed in this budget. Companies don’t pay taxes–people do. These higher taxes will be passed along to families in the form of higher energy bills, skinnier 401(k) balances, and lower wages.

Feb 13, 2012 - 9:37pm

Anyone here like gold?

A little bit dated. Overall, a nice infographic.


Green Lantern
Feb 13, 2012 - 9:52pm

Re: Mr T (and Santa)

Velocity makes alot of sense. And he is historically correct as far as what worked. The gold standard which goes back to China in 600 bc and adopted by many countries based on an agreed upon standard all eventually debased the money supply. Often they went to a silver standard, but neither one guaranteed a stable money supply for two reasons. Goverments are able to debase any money standard including gold and silver due to debt spending to pay for their appetite for power and domination.

Here is an excerpt from Douglas Rushkoff author of Life Inc. (https://hilobrow.com/2011/11/04/douglas-rushkoff/ ) A book I highly recommend.

Douglas Rushkoff: The corporation is the result of two innovations: the creation of centralized currency, and the creation of the chartered monopoly. In the late 1300s the upper classes — the aristocrats, the people who had been feudal lords — were becoming less wealthy relative to real people. As the merchant class and people in towns were producing and doing, the relative wealth of the aristocracy was going down, and this was a problem; the aristocrats wanted to continue the system that had been working for them for the last 500 years wherein they didn’t have to “do” anything to be rich. So they hit upon the idea of passively investing in other people’s industries.

Suppose I am the monarch. I want to make money through your shipping company; how do I get you to let me invest? Well, I use what power I have as a monarch to write up a charter, which means I give you a monopoly in a certain area, and you give me 30% of the shares in the company. The chosen merchant avoids competition and gains protection from bankruptcy, while the king receives loyalty, because the merchants’ monopolies are based on keeping him in power. He doesn’t mind if a few of the merchant class are as rich as he is, as long as he is able to get still richer as a result.

But this was not the promotion of free-market capitalism. It was the promotion of monopoly, non-market capitalism. It was locking into place a set of players and a set of systems that had nothing to do with the free market. And it changed the bias of these merchants away from innovation; in other words, from “how do I innovate and maintain my competitive edge” to “how do I extract wealth from the realm that I now control?”

PN: Then they’ll tend to be conservative because they’ll want to maintain what they have and not risk losing it.

DR: Conservative in that sense, but rapacious in another. Say I’m now in charge of the Colonies. What I want to do is extract their wealth; I want to prevent the people who live in the Colonies from creating any value for themselves. If the colonists are going to grow cotton, that’s fine, but they’re going to use my seeds, my agricultural tools, they’re going to use everything from me. If you are a farmer you’re allowed to grow the cotton but you have to sell it to me at my prices. You’re not allowed to make fabric out of that cotton! Fabricating is creating value. And then you’re going to — what? You’re going to make it into clothes? Those are clothes you could have bought from me! No, no, no, you must give all the cotton to me, I’ll put it on my ship and bring it back to England, then the king’s other chartered monopoly, the clothes manufacturer, will make it into clothes, and then I’ll ship them back and sell them to you — at a profit.

PN: So it’s all export crops?

DR: So for about three centuries, the middle and merchant classes were doing really well. Towns that had been in shambles since the fall of the Roman Empire and had lived under strict feudalism were finally coming into their own. This all hinged on the use of local currencies — grain receipts — through which people transacted. They were what we would now call “demurrage” currencies that were earned into existence. Towns ended up creating more value than they knew what to do with. They started investing in their infrastructure and their windmills and their water wheels; and also in their future in the form of cathedrals and other tourist attractions.

PN: They didn’t get money from Rome to fund their cathedrals?

DR: They did not. The Vatican and central Rome did not build the cathedrals. The funds came from local currency, which was very different than money as we use it now. It was based on grain, which lost value over time. The grain would slowly rot or get eaten by rats or cost money to store, so the money needed to be spent as quickly as possible before it became devalued. And when people spend and spend and spend a lot of money, you end up with an economy that grows very quickly.

Now unlike a capitalist economy where money is hoarded, with local currency, money is moving. The same dollar can end up being the salary for three people rather than just one. There was so much money circulating that they had to figure out what to do with it, how to reinvest it. Saving money was not an option, you couldn’t just stick it in the bank and have it grow because it would not grow there, it would shrink. So they paid the workers really well and they shortened the work week to four and in some cases three days per week. And they invested in the future by way of infrastructure — they started to build cathedrals. They couldn’t build them all at once, but they took the long view — with three generations of investment they could build an entire cathedral, and their great-grandchildren could live in a rich town! That’s how the great cathedrals were built, like Chartres. Some historians actually term the late Middle Ages “The Age of Cathedrals.”

They were the best-fed people in the history of Europe; women in England were taller than they are today, and men were taller than they have been at any point in time until the 1970s or 80s (with the recent growth spurt largely the result of hormones in the food supply). Life expectancy of course was still lower; they lacked modern medicine, but people were actually healthier and stronger and better back then, in ways that we don’t admit.

That was right before the corporation and the original chartered monopolies were created, before central currency was created and local currencies were outlawed. When everything gets moved into the center, things began to change.

PN: It seems like the Dark Ages were not perhaps so “dark.”

DR: Yes, I think that’s disinformation. I’m not usually a conspiracy theorist about these things, but I think the reason why we celebrate the Renaissance as a high point of western culture is really a marketing campaign. It was a way for Renaissance monarchs and nation-states, and the industrial age powers that followed, to recast the end of one of the most vibrant human civilizations we’ve had, as a dark, plague-ridden, horrible time.

Historically, the plague arrived after the invention of the chartered corporation, and after central currency was mandated. Central currency became law, and 40 years later you get the plague. People got that poor that quickly. They were no longer allowed to use the land. It shifted from an abundance model to a scarcity model; from an economy based on annual grain production to one based on gold released by the king.

That’s a totally different way of understanding money. Land was no longer a thing the peasants could grow stuff on, land became an investment, land became an asset class for the wealthy. Once it became an asset class they started Partitioning and Enclosure, which meant people weren’t allowed to grow stuff on it, so subsistence farming was no longer a viable lifestyle. If you can’t do subsistence farming you must find a job, so then you go into the city and volunteer to do unskilled labor in a proto-factory for some guy who wants the least-skilled, cheapest labor possible. You move your whole family to where the work is, into the squalor, where conditions are overcrowded and impoverished — the perfect breeding ground for plague and death.

Green Lantern
Feb 13, 2012 - 9:58pm

I'd also point out that those

I'd also point out that those of you who are attempting to grow your own foods and are concerned about the availability of seeds and monsanto. Please note the last two paragraphs of the interview I just posted by Douglas Rushcoff. It seems the same tactic is being used to control resources. The elite just takes it out of an old playbook.

Feb 13, 2012 - 10:07pm

Final thoughts on tax policy

I hear much whining in this blog on higher capital gains and dividend tax rates. One of my favorite posters at Mish's blog Leo Chen wrote:

Here is the deal. If we want government services

-- like Social Security Retirement Benefits and Medicare and Madicaid
-- like the Federal Aviation Agency and the Federal Communication Agency and the National Bureau of Standards and the National Institutes of Health
-- like the FBI and the CIA and the US Army, the USMC, the USAF, the USCG, the USN
-- like the Executive Branch, the Legislative Branch, the Judicial Branch, US State Department and the Defense Department and the Commerce Department and the Agriculture Department, etc.,etc.,

we have to PAY for it. We have but TWO choices on how-to-pay for our Government Services.

We either BORROW-the-money to make ends meet -- the Greek practice and what has gotten them into the fiscal mess that they're in.

Or we INCREASE Taxes in order to increase Government Revenue.

Let us analyze it.

  1. Borrowing = inflation (due to currency debasement) + debt service to the Fed and banking cartel. Which means the poor pay the cost as they only have labor income but no inflation-protected assets. The rich do not pay as they have factories, stocks, mines, farms, gold, etc. that go up with inflation. The middle income are in between so they pay but not as much as the poor.
  2. Raising taxes = the rich (high income and capital gainers) pay more taxes. Which means the billionaires and millionaires pay the cost. The poor and middle income do not share the cost as they have very little capital gains and dividend income, and their labor income is under $250K.

Predictably, many people in blogs all over the internet are angry with option 2. They want option 1, so they label option 2 as socialism, fascism, etc. Pretty ridiculous, if you ask me, especially if you think option 1 is what concentrates power and wealth in fewer and fewer hands, which is what leads to fascism.

My opinion? The right option is shared sacrifice. Raise taxes + cut gov spending + cut entitlement. Everybody must sacrifice, but especially the capital class they had it so good the last 20 years, whereas the working class has had their austerity for the last 20 years.

  • Who benefits from the gutting of unions in the last 20 years? The capital class, not the working class.
  • Who benefits from labor outsourcing in the last 20 years? The capital class, not the working class.
  • Who benefits from easy credit policy and the ensuing inflation in the last 20 years? The capital class, not the working class.
  • Who benefits from legal and illegal immigration policy of the last 20 years? The capital class, not the working class.

Is it too much to ask the capital class to sacrifice more than the working class, by paying a higher rate of capital gains and dividend? It is their turn to chip in. You can flame me away after my post, go ahead do that, my conscience is clear and I know what I am talking about.

Feb 13, 2012 - 10:08pm

10 Kilo Silver Dragon

A very nice coin and only 500 being made. Too bad the premium over spot is $15.55 per ounce. Would really be a nice addition to the stack.


Feb 13, 2012 - 10:21pm

For the Californians here

Phil Angelides, the gift that keeps on giving. (I am sooo happy I'm an EX-Californian.)


Feb 13, 2012 - 10:24pm

Full Throttle Johnny

U.S. Throttle Should Be ‘Wide Open’: Fed Official

By Aki Ito and Caroline Salas Gage - Feb 13, 2012 9:45 PM ETTue Feb 14 02:45:00 GMT 2012

Federal Reserve Bank of San Francisco President John Williams said the U.S. central bank should keep trying to boost growth because it’s missing its goals for both full employment and price stability.

“It’s vital that we keep the monetary policy throttle wide open,” Williams said today in the text of remarks given in Claremont, California. “This will help lower unemployment and raise inflation back toward levels consistent with our mandates. And we want to do so quickly to minimize total economic damage...


Feb 13, 2012 - 10:24pm

Ben's Song for the

Ben's Song for the world

It's only Words and Words are all i have

To take your money away

Feb 13, 2012 - 10:25pm

Yes Let's

Fat Chance

Feb 13, 2012 - 10:28pm

PN: It seems like the Dark Ages were not perhaps so “dark.”

Thanks Green Lantern for the post.

Douglas Rushkoff author of Life Inc.

Looks like a book worth finding and reading; your excerpt explains much in a realistic way as to what we're seeing today with food and seeds and control. So sad. It just doesn't have to be this way.

Feb 13, 2012 - 10:32pm

Looking for some feedback here... Am I completely crazy?

This town is voting on whether or not to pay employees in silver:


And out in the Western part of the state we've been looking for other ways make improvements for years:


Why local currencies?:


Now what if we could get these local currencies backed by gold or silver by partnering with local, smaller banks that had REAL reserves? Where would the reserves come from? Would you and I become investors in, or lenders to, the bank? I suppose it would have to all start at a local level if the sh*t does in fact hit the fan. At some point wouldn't the Federal Government have to rely on smaller, state and local governments to facilitate this?

I don't think the long term concerns are really at the local levels. The impact that a failing monetary system can have at a local level is far less scary than that at a global/international level.

So It Goes
Feb 13, 2012 - 10:33pm

Off topic

Haven't been around today, so I'm not up to speed.

But I saw this just now, and I haven't seen anything this funny for ages.

So I thought I would share.

I laughed and laughed - I laughed so hard I cried. Can you imagine?

Coming to a neighborhood near you. ALL IS WELL!!!!!!!!

Enjoy and keep stacking


Feb 13, 2012 - 10:34pm

I'll say this

When the collapse really gets going, the first states to 1.) Print their own money and 2.) Legalize all recreational drugs will do better than the ones that don't. This is a first mover advantage though, only the first 2 or 3 states that do it will benefit.

Feb 13, 2012 - 10:39pm

But CC.....

We don't want the etc., etc., etc.,.... or the Ag dept either for that matter!

Feb 13, 2012 - 10:39pm

@ CreditCrumbs

And if I don't want most of the agencies you listed, or think any member of Congress should enjoy any remuneration I still have to pay for all that crap, or go to jail.

The Dept. of Agriculture, Energy, Education, ad naseum all need to go away. Those agencies exist for the benefit of the connected, not "the people". Hell, the government can't even get a veteran into a VA hospital in a timely manner, but they sure as hell can cover Holder's azz when it comes to F&F. This bigger the government is the more opportunity there is for "them" to wallow in the corruption that is Washington, D.C.

The man who stole a leopard
Feb 13, 2012 - 10:41pm

Gold confiscation? Pfft... move to Utah

From last May...

Breaking: UTAH monetises gold and silver
Feb 13, 2012 - 10:42pm


Eric Sprott is already onto this idea. I posted this a few months ago. Have a look.


Feb 13, 2012 - 10:55pm

Thanks redwood

I wish this would all just happen already so we can sit back, relax, take a deep breath and carry on with the rest of our lives.

Now how do I become buddies with Mr. Sprott?

Feb 13, 2012 - 11:06pm

Silly me, but all of sudden

Silly me, but all of sudden all these avatar names seem contrived to create a story. One day Blackhawk took her green lantern and spotted a silverhawk in territorial struggle with a magpie way up yonder on the redwood.

Couldn't resist.....so silly. I think its time to go to bed.

Feb 13, 2012 - 11:31pm
Feb 13, 2012 - 11:35pm
Dr Durden
Feb 13, 2012 - 11:37pm

Follow the yellow brick road

Into serfdom.

Velocity said it first (well after mirroring Armstrong and others thoughts). And I'll say it too: bad idea. Let's not return to a gold standard. Let's do a lot better.

How about this?

The bank does have an account with the Federal Reserve Bank, but deposits are not insured by the Federal Deposit Insurance Corporation, instead being guaranteed by the general fund of the state of North Dakota itself and the taxpayers of the state.[3]https://en.wikipedia.org/wiki/Bank_of_North_Dakota

Money for the people, buy the people. Interesting.

Dr G
Feb 13, 2012 - 11:49pm

That Obama poster is full of

That Obama poster is full of lies. He didn't quit smoking.

Feb 14, 2012 - 12:03am

midnight already!

it's officially feb 14th.

let me be the first to wish everybody



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