TFMR Podcast #22 - John Butler, author of "The Golden Revolution"


Of all the podcasts I've recorded, this is certainly one of the most important.

Our pal, Ned Naylor-Leyland, introduced me to John Butler a few weeks ago. I'm grateful that he did because John's new book, "The Golden Revolution", is the most important book that I've read in quite some time. At just 200 pages, the book neatly summarizes the history of global sound money, the circumstances surrounding the exit of the previous gold standard and the likely events that will effect and implement the next, global gold standard. Read this book and you will begin to understand how and why this new gold standard is inevitable.

I implore you to purchase this book for yourself and/or someone else. Father's Day is right around the corner and it would make a terrific gift, too. Most importantly, John's book is indispensable in the preparation for the end of The Great Keynesian Experiment and you simply must read it.


May 26, 2012 - 9:26am

from JSMineset and GoldMoneyNews

Adam Fleming and James Turk on Precious Metals and Mining

Adam Fleming and James Turk discuss gold and indicators

Daedalus Mugged
May 26, 2012 - 9:31am

I haven't read the book (yet)...

I haven't read the book yet, and it sounds like it would generally reinforce my belief about where things are going with one major exception. John Butler has enough faith in the market to allow it to price the gold to determine the benchmark fixed price going forward, but not quite enough faith in the market for the next step. The market shouldn't just help determine what the fixed price should be at one time, the market should, on an ongoing basis continue to determine the price. Ultimately, gold becomes the 'clearing currency' between various currencies. And the forex exchange rate between gold and various paper currencies should float with time, policy, and ultimately supply and demand. There is no 'right' price for gold in dollars (and euros, marks, pounds, drachmas, rubles and yuan etc.) that will be right in 2014, right in 2019, right in 2024 and right in 2050. Any attempt to fix it, will just lead to it being broken again.

Essentially, the solution is not a new fixed gold price, but a new floating gold price. AKA freegold, see FOFOA.

bam DavidDavid
May 26, 2012 - 10:52am


The reason we are having such incredible flux and gyrations in international monetary markets is that you are witnessing tremendous change. Great change is almost always violent (to the observer). This change is loss of control from a perspective of the Fed.

The Fed in complete control was the last 30-40 years (or 100 depending on how you view it).

I think you'll find that at the end of this process, it will be the Chinese and other Eastern powers who are pulling the strings, in what was formerly the Fed's role.

stalking wolf
May 26, 2012 - 11:18am

Deflation, Cash, and T-bills?

Sup all, this guy makes a decent case when he talks about the coming deflation, and population cycles. In the end he says Cash and T-bills are where you want to be. I can't figure out why he's wrong. The only thing that comes to mind is that, gold is real and cash is trash?

Harry S. Dent, Jr. Interview (Mind of Money)

May 26, 2012 - 11:25am

I'm sorry but...

...Harry Dent is a complete idiot with zero credibility. Dow 36,000. Really?

The man who stole a leopard
May 26, 2012 - 11:31am


In my understanding to-date of Freegold, I find it analogous to when people believed in geocentrism.

From wikipedia with [my markup FWIW]...


Heliocentrism [Freegold], is the astronomical [monetary] model in which the Earth and planets [fiat currencies] revolve around a relatively stationary Sun [gold] at the center of the Solar System [global monetary system]. The word comes from the Greek (helios "sun" and kentron "center"). Historically, heliocentrism [Freegold] was opposed to geocentrism [Bretton Woods system], which placed the Earth [US Dollar] at the center. The notion that the Earth [US Dollar and other currencies] revolves around the Sun [gold] had been proposed [posted] as early as the 3rd century BC [October 1997] by Aristarchus of Samos ["Another" on], but had received no support from most other ancient astronomers [hard money socialists].


Enjoy the long weekend. Turd - thank you for the great material here. Also, lots of additional reading available at:
FOFOA: Defending the Precious

May 26, 2012 - 11:51am

Butler needs to get an avatar

And join the fray at TFMR... because he is clearly one of us. This sounded like a podcast with a well-informed and articulate Turdite!

There is a term I have heard the libertarian law professor Glenn Reynolds use, a "preference cascade". It describes an event when a tired, no longer applicable paradigm is suddenly replaced in people's minds by a new, and better paradigm. When a critical mass of people drop their normalcy bias, the obviously superior alternative is adopted with shocking speed, as almost overnight it is "OK" to do something different. Sound money is going to see a preference cascade one of these days.

May 26, 2012 - 12:36pm

I Have the Same Feeling

About Dent!! No need to be sorry.

R man J
May 26, 2012 - 1:01pm

Preference Cascade

Pining, I never heard this before. It seems that there are so many logical reasons for PMs, that intelligent people buy in when they hear the story. I have seen six family members and work associates buy in to PMs. All share at least two of the following traits: hard working, high IQ, strong spiritual life willing to learn, flexible.

shortages, historically low ownership, increased cost of mining vs market price, central bank balance sheet explosion, derivatives, default swaps, percent investment in PMs versus paper, historic value for gold/silver which is universal (at least was until 1981-2012)

all of the above and many other reasons await to give birth to your "cascade". Though strenuously denied by the intellectually tired or unwilling these facts will win out.

May 26, 2012 - 1:19pm
May 26, 2012 - 1:26pm
May 26, 2012 - 1:40pm

yes by all means orderly vs disorderly

yes by all means orderly vs disorderly fashion is paramount though having recently returned from a road trip to Washington DC, I am not quite sure how it will be possible to manage order in such a place as DC the level of entitlement and dependency is beyond the averages found in more rural flyover locations of the republic. goob is already aware and is making preparations for high density chaos to break out on dollar devaluation event. getting food and fresh water enough to folks scrounging for their next morsel in these high density locals will be a tall order, if you snooze, you will definitely lose, its going to be the event of our lifetimes. Thanks for the update

stalking wolf
May 26, 2012 - 2:43pm

Thanks turd

Nice Article about Dent! I guess he was trying to keep everyone out of the beginning of the PM Bull, When he made that insane prediction.

May 26, 2012 - 3:24pm

Thanks Turd

and thanks JB!

Great podcast. John has the ability to make a relatively complicated subject seem quite simple. Hope you can have a refresher with him in a few months to see how the Golden Revolution is coming along.

May 26, 2012 - 4:36pm

Repost, I put a lot on effort

Repost, I put a lot on effort into this... Hope to be forgiven.

Is latest direction and speed of USD appreciation enough to force FED to let out QE official next? With some pretext found for it in deflation, economic weakness, Europe's contagion ... If Europe continues as it does , the flight to safety into USD within next month and some time after Greek elections, may bring USD up which will risk all what FED has been doing so far to cheapen USD?

USDx from April 2011 when QE2 came close to its end, till today has gone up 72,5 to 82, 4 , which is by 13,6%.

The value of USDx FED seems very uncomfortable with seems to be around about 86-87, but , if the past 2 jumps in USDx serves as an example, once USDx starts to move up, it goes the last step from 82-87 in ONE MONTH.

So we are already there, and FED should know it, and has to act.

However, its not given they are going to succeed to bring USDx down, but definitely will succeed in bringing PMs up. In the end of 2008, with QE1 and actions before official announcement, it took from October 2008 till May 2009 to get USDx from 88 to 79, or 6 months. It took 5 months to do the same from May 2010-Septemeber 2010. To do the same now, as we may hit 88 in June 14th, they will have if announced in June formal QE3 to work (USDx back to 79) only by end of October 2012 if lucky-start of November 2012 ( which I think they will be not and more actions will be needed). That is kind of close to elections, may be too close to risk doing it too late?

So , in that sense, to be effective as a tool to shore up "Obama reelection propaganda economics" it should happen tomorrow as Europe keeps not giving the USA Eurobonds.

This is the chart of USDx with FED uncomfortable line of 88 added and prediction when it will be hit:

I have added this to other charts here:

I think we should guess this from strange rhetoric used to speak about unemployment, as an example. If someone from the FED says that the US is fully employed, then what would e.g May job report do to that view point that could support QE3? Just one idea, there might be many ways to sound whatever is needed.

Open question remains can silver stand up against such sharp appreciation in USDx in June without dropping below 26? Have to think hard about that one. After that, its one way traffic-the last hurdle , so to say.

Dead Canary
May 26, 2012 - 4:41pm

Humble Host

You describe yourself as "Your humble host". HUMBLE.... HUMBLE.... My dear Cra... err, Turd. How can a man with such insight possibly remain humble. You are in my humble opinion the METAL GOD.

"Turd Rules!"

May 26, 2012 - 4:44pm

Gold Standard

Here's why I think a Gold Standard is coming...I don't know when, and I don't know how, but like I've heard from numerous people that all have agreed on this, the market will force it. I know this is true because there's a movement going on. It's a movement that is behind the scenes. It's a movement that isn't talked about in the MSM and it is what this site is dedicated for, the end of the great Keynesian experiment. The message is pretty simple. The storm is coming, so you better protect yourself.

There is more talk about what is going on. Amongst people, amongst the blogs, amongst even the crappy MSM on rare occasions from Jim Grant, or Rick Santelli, or random traders they put on tv. This gives me hope and promise of a better future. 10 years ago, 20 years ago, the same ideas were being discussed and nothing has happened because there wasn't enough people that knew, but more and more people are starting to hear it, and continue to pass it on and believe it. The storm is coming. More and more are starting to teach others. And like R man J says above, any intelligent person who hears the story buys into gold.

That is why there will be a gold standard at some point in the future. The passing of information, and the realization that gold really is the only true money. People understand that there is something wrong with the system. Even if they don't understand why. Eventually they will. Some random person like a Turdite will tell them, or read a comment on an article somewhere, or pass a book or do whatever. The truth is on our side. The truth is being told by more and more people. The truth will be taught to our children and younger generations which will spread it even further. Eventually that is what will overwhelm the current system, if not before.

One specific group that I think can, and possibly will be the trigger to this, is all of the current college students say 2005-2015. You know, the ones that are out there who have been handed tens (if not hundreds) of thousands of dollars of student loan debt that they can barely pay for (lack of good jobs), and they can't get rid of (no bankruptcy)? It may wind up the uselessness of their debt triggers them to ask the question why? And they may be smart enough, and tech savvy enough to search the internet to find the truth. Then be pissed off enough to do something about it.

Some may join the ranks of the JP Morgan's and the Goldman Sachs of the world to continue the system and reap the rewards straight out of school while screwing everybody else. But those will not be enough to offset all the rest of the grads without jobs. Or even those that get into that world and leave once they see what's really going on. People like Turd, or Krieger, or anyone else that is now trying to get the message out after leaving the financial world. That is the hope, that is the promise and that is the proof.

Like Krieger said, he will never give up. Turd will never give up. I and many others on this site, other sites and across the entire world, will never give up. We all are the market, and we will demand it either with our wallets (preferred) or with violence. Some day. Maybe soon.

May 26, 2012 - 8:38pm

Anybody know anything about this?

Kyodo News announced Saturday that Yen-Yuan direct trading will begin in June.

Japan and China are expected to start direct trading of their currencies as early as in June as part of efforts to boost bilateral trade and investment, financial sources in China said Saturday.

With the new step, exchange rates between the yen and the yuan will be determined by their transactions, departing from the current ”cross rate” system that involves the U.S. dollar in setting yen-yuan rates.

It will be the first time that China has allowed a major currency except the dollar to directly trade with the yuan, also known as the renminbi, the sources said.

​This ought to stir the pot a little.

May 26, 2012 - 9:08pm

The CME's Daily Delivery Report

The CME's Daily Delivery Report showed that 6 gold and 8 silver contracts were posted for delivery on Wednesday.

There were no reported changes in either GLD or SLV.

The U.S. Mint reported selling 75,000 silver eagles.

Over at the Comex-approved depositories on Thursday, they reported receiving 615,835 troy ounces of silver...and shipped 157,793 ounce of the stuff out the door. The link to that action is here.

Ed Steer Gold & Silver Daily

May 26, 2012 - 9:15pm
May 26, 2012 - 9:17pm

Marc Faber: 100% Chance of Global Recession

Faber’s bearish market calls have been followed closely since 1987 when he warned his clients to cash out before Black Monday.

And in a live interview on CNBC’s Fast Money Halftime Report, Faber again warned that economies of the world may be on the brink of a serious slowdown.

Faber indicated that while investors remain focused on Greece and Europe – other issues, bigger issues are looming. And they’re more threatening.

“As an observer of markets – whenever everyone focuses on one thing – like Greece and Europe – maybe they miss issues that are far more important – such as a meaningful slowdown in India and China.”

The latest reports from Beijing would support Faber's assertion. The HSBC Flash Purchasing Managers Index, slipped to 48.7 in May from 49.3 in April. That marks the seventh straight month that the index has been below 50, a level which indicates economic activity is contracting.

Posted on CNBC website

The link is here.

May 26, 2012 - 9:20pm

Giant Lender in Spain Asks for Billions to Fend Off Collapse

Spain’s banking crisis worsened Friday as the board of Bankia, the country’s biggest mortgage lender, warned that it would need an additional 19 billion euros ($23.88 billion), far beyond what the government estimated when it seized the bank and its portfolio of delinquent real estate loans earlier this month.

The government is trying to head off a collapse of the bank, which could threaten the Spanish banking industry and reverberate through the financial centers of Europe and beyond. The fear is that it will not have the money to save its banks, and their $1.25 trillion in deposits, and will need a rescue by the rest of Europe — even as political and financial leaders struggle to resolve Greece’s debt debacle.

Bankia’s announcement came as Standard & Poor’s, the credit ratings agency, downgraded Bankia and two other banks, Banco Popular and Bankinter, to junk status and lowered the ratings of two other Spanish banks also staggered by mounting bad loans. A junk rating could make it even harder for Bankia to borrow its way out of trouble.

Bankia’s announcement came as Standard & Poor’s, the credit ratings agency, downgraded Bankia and two other banks, Banco Popular and Bankinter, to junk status and lowered the ratings of two other Spanish banks also staggered by mounting bad loans. A junk rating could make it even harder for Bankia to borrow its way out of trouble.

The rising fear now is that the recent steady outflow of deposits from Spain’s banks, which are suffering from the bursting of Spain’s real estate bubble, to institutions outside the country could eventually turn into the sort of bank run that almost brought the financial world to its knees after the collapse of Lehman Brothers in 2008.

Posted on The New York Times website

the link is here.

May 26, 2012 - 9:23pm

Ted Butler gives up on the CFTC and wants all commissioners out


The Commodity Futures Trading Commission (CFTC) has been negligent in failing to terminate the obvious manipulation ongoing in silver. Furthermore, the agency may be complicit in this manipulation. Worse, it has lied to the public and elected officials. This all goes back to the time when Bear Stearns was taken over by JPMorgan in March of 2008. It is well known that Bear Stearns went under as a result of a sudden loss of liquidity amidst a run by creditors and customers. What is not well known is that those problems were greatly exacerbated by a $2 billion margin call on silver and gold short positions from the end of December 2007 to March 2008. I believe the silver and gold margin calls were at the heart of Bear Stearns’ failure.

We know now (from CFTC correspondence to lawmakers in 2008) that JPMorgan took over Bear Stearns’ giant silver and gold short positions on the COMEX. Up until that time, we did not know that Bear Stearns was the concentrated silver and gold short. Using Commitment of Traders Report (COT) data, Bear Stearns had a COMEX silver short position of no less than 35,000 net contracts and a COMEX gold short position of no less than 60,000 net contracts from the end of December 2007 to their takeover by JPMorgan two and a half months later. From December 31, 2007 to mid-March 2008, the price of silver rose by $6 (from $15 to $21) and the price of gold rose from $850 to over $1000. Based upon the number of contracts held short by Bear Stearns and the price movement at that time, that resulted in margin calls of $2 billion. I would contend that was the real reason for Bear Stearns’ demise.

​Posted on

The link is here.

May 26, 2012 - 9:24pm
May 26, 2012 - 10:20pm

Michael Rivero deserves a hat tip

Michael Rivero, who has been operating one of my favorite web sites for years, "What Really Happened"

knocked it out of the park today with this commentary he put on a link regarding putting taxpayers behind Wall Street derivatives trading:

IF THIS DOES NOT TRIGGER A REVOLUTION, THEN YOU ARE ALL PUSSIES! As An Encore to Bailing Out the Big Banks, Government to Backstop Derivatives Clearinghouses … In the U.S. and Abroad

As the Wall Street Journal reported yesterday:

Little noticed is that on Tuesday Team Obama took its first formal steps toward putting taxpayers behind Wall Street derivatives trading — not behind banks that might make mistakes in derivatives markets, but behind the trading itself. Yes, the same crew that rails against the dangers of derivatives is quietly positioning these financial instruments directly above the taxpayer safety net.

What this basically means is that the US Government let Wall Street go wild with high-stakes gambling called Derivatives, and even after the disaster of AIG (which was dumped into the taxpayers) derivatives were still allowed to run rampant across the globe. In other words, since Wall Street and the government ducked the consequences of their earlier greed, they got greedier. Derivatives exposure in Europe alone is almost $100 trillion. So what Wall Street and Washington DC just did is drop the derivatives exposure onto the taxpayer. So when the system implodes, which is now inevitable, they will come knocking on the door for your money, your gold, your jewelry, the gold in your teeth, your silver, your copper, your car, and most importantly the lives of your children pledged as slaves to the resulting debt for the next 20 generations. As ancient Rome succumbed to the machinations of the money-junkies, wives, daughters, even sons were forced to work in state-owned houses of prostitution. Already in Europe women are being told they must work as whores if they cannot find other work with which to pay the money-junkies. Think it will not happen here? Still believe Saddam had nuclear weapons?

Now, consider that since 2008 the American people have told the US Government not to use taxpayer money to backstop Wall Street's recklessness. Had DC allowed Wall Street to take their lumps from the mortgage-backed securities fraud and fail, to be replaced by more responsible financial leaders, we would already be headed out of this mess the way Iceland is. But the US Government ignored the will of the people, went ahead with TARP and an endless stream of additional bailouts, Wall Street got greedier and now Europe hovers over the edge of a precipice, firmly tied to the Wall Street banks by derivatives, and now Washington DC wants to move those chains from their good buddies the bankers onto your ankles, and wave good bye as you sink our of sight into the abyss.

In other words, the government is going to force you to pay for the failure that resulted from their doing something you told them not to do in the first place.

And if you go along with this, then you deserve everything that is about to happen.

Now is the time to get angry, because you have nothing left to lose!

“And how we burned in the camps later, thinking: What would things have been like if every Security operative, when he went out at night to make an arrest, had been uncertain whether he would return alive and had to say good-bye to his family? Or if, during periods of mass arrests, as for example in Leningrad, when they arrested a quarter of the entire city, people had not simply sat there in their lairs, paling with terror at every bang of the downstairs door and at every step on the staircase, but had understood they had nothing left to lose and had boldly set up in the downstairs hall an ambush of half a dozen people with axes, hammers, pokers, or whatever else was at hand?... The Organs would very quickly have suffered a shortage of officers and transport and, notwithstanding all of Stalin's thirst, the cursed machine would have ground to a halt! If...if...We didn't love freedom enough. And even more – we had no awareness of the real situation.... We purely and simply deserved everything that happened afterward.”-― Aleksandr I. Solzhenitsyn, The Gulag Archipelago

R man J
May 26, 2012 - 10:45pm

Meanwhile behind the scenes

Physical holders are getting closer to victory yet with no visible signs in the paper market. My favorite quote from Jim Willie (apologies but this is just one of many rich insights gained): "The increase in off-market substantial gold transactions, being solicited at the very top, is absolutely stunning to see. The Boyz need liquidity and they need it fast. The only asset they can turn into cash is their gold bullion stashed away in various locations. The current events are from a new dimension not seen in past years."...The Western depositories are currently being raided at discounts and not premiums, since the time window that has been created allows to do that. However, that window is closing swiftly and once closed, the price for metal will go through the roof."

I was looking for PM volatility and all I got was 9 months of stagnant suppression followed shortly (sooner than I thought, because the dollar's rejection hastens greatly) by a sudden unexpected, unsuspected, mind-blowing blast-off in both gold and silver! We have not traveled this way before. The pleasure of the 140% gains 9/2010 to 4/2011 were just a paper prophecy of the future...just child's play. Physical is the us the will find a way to assure that physical metals are possessed because it will be necessary to do so...there will be nowhere to hide.

May 26, 2012 - 11:10pm

Re: Michael Rivero and OTC - CDS Backup

TOO LATE! By 27 months.

On Wednesday February 10, 2010 the Depository Trust and Clearing Corporation (DTCC) announced it's application to the Federal Reserve had been approved, to form a subsidiary of the Federal Reserve system, responsible for over-the-counter credit derivatives.

Be sure to read the few comments on the article. Eye opening.

The TBTF's have been planning this for years. They know whats coming in the derivatives market. Its going to be one VERY hot potato that they will just pass on to the tax payer. This new entity that the article deals with, will be part of the mechanism used to accomplish this hot potato pass.

Da 'Boyz' on Wall street, sure flew this one in under the radar, aided and abetted by their political cronies in Washington.

May 27, 2012 - 1:45am

Tulving update & job alert

As ouchtouch mentioned, Mr. Tulving is unusually low on some SKUs:

This is BU gold Eagles:

And, in case it's of interest, there is a new post looking for a qualified applicant for a Software - Business Analyst (Torrance, CA). If you are looking for a job, or are a frustrated employer looking for a seasoned, straight-thinking new hire - take a look at Turdland Jobs Forum for open positions, interview & job search tips -- and feel free to add anything you feel appropriate to the topic.

May 27, 2012 - 7:15am

Thaks Turd, great interview,

Thaks Turd, great interview, especially:

"Inability of countries to cooperate leads to gold standard" or gold as some reference point in trade.

This is particularly true after the 2008 crisis when after the September 2008 countries were herding their actions to an unprecedented level of cooperation in the immediate aftermath of the crisis trying to return to status quo, started to deco operate as the distance from shock event grew and players started to pursue their individual strategies more and more. This is how complex systems "unfreeze" from rigid state of total coherence to normal mixed state of islands of coherence (frozen more or less) separated by channels of chaotic liquid state which "thaws" and splits the coherent "frozen" islands into more and more separated pieces with less and less coherence displayed over the whole global system.

This will lead to a threshold level of the inability to cooperate, which is a necessary condition for gold to reemerge as reference for settling trades. That is a process that has already started and is going to develop by its own systemic forces regardless of policy actions. Policy actions that will try to stop this process will fight the phase transition is a complex system which requires enormous amount of pressure at the right points and is destructive to both liquid and frozen parts of the system.

This can create conflicts on a world wide level- not so soon, but , if history is a guide, as Mr. Butler says,step by step it will take the path of destruction of productive assets FIRST, acceptance of the systemic trend SECOND, afterwards, in a quantitatively smaller /qualitatively even more disordered system.

May 27, 2012 - 7:36am

In physics, by applying

In physics, by applying pressure, You can freeze the liquid parts again, at higher temperature, returning to previous frozen cooperative status quo by suppression of de coordinating forces of thermal nature in parts of it. You can also reduce the destructive impact of increasing temperature ( de-cooperation) by reducing the volume of the system and thus freezing it again (by taking some parts away from it or even more effectively by evaporating some particularly uncooperative piece of it).


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Key Economic Events Week of 3/18

3/19 10:00 ET Factory Orders (Jan)
3/20 2:00 ET FOMC Fedlines
3/20 2:30 ET CGP presser
3/21 8:30 ET Philly Fed
3/22 9:45 ET Markit PMIs
3/22 10:00 ET Existing Home Sales
3/22 10:00 ET Wholesale Inventories (Jan)

Key Economic Events Week of 3/11

3/11 8:30 ET Retail Sales (Jan)
3/11 10:00 ET Business Inventories (Dec)
3/12 8:30 ET CPI (Feb)
3/13 8:30 ET Durable Goods (Jan)
3/13 8:30 ET PPI (Feb)
3/14 8:30 ET Import Prices (Feb)
3/14 10:00 ET New Home Sales (Jan)
3/15 8:30 ET Empire State Manu Index
3/15 9:15 ET Cap. Util. & Ind. Prod.

Key Economic Events Week of 3/4

3/5 9:45 ET Markit and ISM services PMIs
3/5 10:00 ET New home sales (Dec)
3/6 8:30 ET Trade Balance (Dec)
3/7 8:30 ET Productivity and Unit Labor Costs
3/8 8:30 ET BLSBS
3/8 8:30 ET Housing starts (Jan)

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