Jim Grant, astute monetary economist and respected author of the Interest Rate Observer said in a Bloomberg interview overnight that the dollar would crash and a new Gold Standard would be the end result of the U.S. Federal Reserve’s irresponsibilities. Although the interviewer said that Grant’s remarks were inflammatory Grant said that it is important to examine our monetary affairs over the sweep of time.
A guest host said that no one in academia is calling for a Gold Standard and suggested it would result in a deflationary period for the U.S. Grant disagreed and said that the Gold Standard is the only answer as it was monetary system good practice for the 100 years ending in 1914, whereas everything else since has been a “try out”.
Grant says that he expects more quantitative easing from the U. S. Fed, and likens their single mindedness to a doctor prescribing to a patient that is clearly overmedicated.
Silver Maples As Low As $2.29 Over Spot at SDBullion.com!
From Goldcore:
Today’s AM fix was USD 1,608.50, EUR 1,228.80 and GBP 1,062.28 per ounce.
Yesterday’s AM fix was USD 1,597.25, EUR 1,219.65 and GBP 1,052.07 per ounce.
Silver is trading at $29.13/oz, €22.32/oz and £19.33/oz. Platinum is trading at $1,611.00/oz, palladium at $736.00/oz and rhodium at $1,200/oz.
Gold climbed $19.30 or 1.3% yesterday in New York and closed at $1,613.90/oz. Silver surged to as high as $29.456 and ended with a gain of 1.2%.
Cross Currency Table – (Bloomberg)
Gold’s 1.3% gain yesterday was its biggest one-day gain in three months, as Federal Reserve Chairman Ben Bernanke’s defense of U.S. debt monetisation confirmed bullion’s inflation hedging appeal.
‘Helicopter Bernanke’ confirmed the Fed’s ultra dovish monetary policies are to continue which supported gold as a hedge against central banks’ cash printing.
Gold is trading flat today near a one and a half week high hit yesterday as Federal Reserve Chairman Ben Bernanke defended the U.S. ultra loose monetary policy.
The selloff in gold ETFs in February underscores the weakness in gold sentiment among retail investors that has been prominent recently.
Our trading desk has never been so busy – on the sell side – as weak hands and lack of conviction buyers have engaged in panic selling.
However, the sell off’s genesis was again hedge fund and bank paper players on the COMEX many of whom still have large concentrated short positions.
Total Known ETF Holdings of Gold – (Bloomberg)
February is set to be the weakest month in terms of gold ETF outflows thus far, and the decline is set to exceed the 2.3 million ounces liquidated back in January 2011.
Total known gold holdings held by exchange traded funds worldwide include the SPDR, ETF Securities, ZKB, iShares, Swiss & Global, Central Fund, Credit Suisse, Source, New Gold, Sprott Gold, Deutsche Bank, Central Goldtrust, Claymore (now iShares), and Goldist.
It is important to note that despite the significant decline in gold holdings in January 2011, gold bottomed at $1,313/oz on January 27, 2011 and then embarked on its nearly 50% increase or $600 increase to record nominal highs above $1,900/oz.
World powers and Iran ended two-days of talks over the Islamic Republic’s disputed nuclear program with a pledge to hold further discussions at both technical and political levels, an Iranian official said.
The officials adjourned without an announcement on a proposal by the U.S. and its partners to ease some banking, petrochemical and gold sanctions if Iran curbs its atomic activities.
Gold in USD (February 2010 To Today) – Support At $1,540/oz to $1,550/oz Level – (Bloomberg)
Jim Grant, astute monetary economist and respected author of the Interest Rate Observer said in a Bloomberg interview overnight that the dollar would crash and a new Gold Standard would be the end result of the U.S. Federal Reserve’s irresponsibilities.
Although the interviewer said that Grant’s remarks were inflammatory Grant said that it is important to examine our monetary affairs over the sweep of time.
“Over 100 years ago the U.S. Fed was founded and in 1944 at Bretton Woods they decided there would be no more Gold Standard but rather a U.S. dollar that was backed by gold. If you fast forward to the present we now have a full blown PhD standard where the former heads of Economic Departments are running federal institutions. Central Banks across the world are waging an all out struggle against the price mechanism which is going against Adam Smith’s invisible hand.”
A guest host said that no one in academia is calling for a Gold Standard and suggested it would result in a deflationary period for the U.S.
Grant disagreed and said that the Gold Standard is the only answer as it was monetary system good practice for the 100 years ending in 1914, whereas everything else since has been a “try out”.
Grant says that he expects more quantitative easing from the U. S. Fed, and likens their single mindedness to a doctor prescribing to a patient that is clearly overmedicated.
He notes, credit in the world is an infinite sum of numerous simultaneous equations. He notes that if humans knew how to allocate credit than the USSR would have been a success. Socialists unions over manipulating credit don’t work.
Therefore, just as central banks are continually try to print their way out of our current global debt crisis their manipulation is not working.
NEWS
Gold holds near 1-1/2-week high as Bernanke backs stimulus – Reuters
Gold gains most in 3 months as Bernanke defends policy – Reuters
Gold Miners Come Clean on Costs After Lost 6 Years – Bloomberg
U.S. to ease some banking, petrochemical and gold sanctions if Iran curbs its atomic activities – Bloomberg
World’s largest gold ETF cleared for HK pensioners – Asian Investor
Gold posts best day of 2013 – CNN
COMMENTARY
Video: Why Gold Is a Buy – CNBC
Video: Fed To Prompt Currency Crash and Return to Gold Standard – Bloomberg
Gold Looks Good and Why I Welcome The Collapsing Pound – Money Week
Structural Bull Market For Wheat – Dr. Thomas Chaize
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Interesting to watch Jim Grant school the Bloomberg Bobble-head shills on economics. Class starts 5:45 into the clip.
http://www.bloomberg.com/video/james-grant-on-economy-price-of-accommodation-iiofQ1j6R~e4vbLl~vyPaQ.html
Didn’t she look dumbfounded? Like she couldn’t grasp the alien technology of a Gold Standard.
Maybe so and believing, according to Grant, Sprott, Turk, Willie, Furgeson, et al. The fact is that all of us here will be far older when anything positive happens to Gold and Silver.
Sorry to say.
Ranger from Texas
Thanks a lot Ranger! What about us that are old bastards ALREADY! LMAO
Whoever goes on the gold standard must assign a value, in gold, to their currency and swap gold for it as requested. If other countries have pure fiat, what’s to prevent them from purchasing the gold-swap currency with their fiat and carrying off the gold?
They print and print, until they gots the gold. Seems like the gold standard has to be everywhere, or nowhere.
What am I missing here?
Yeah @the-doc how about it?
Conax your point is valid and is that not why TPTB are pushing a one world government?
In a nut shell…If the U.S. went to a gold standard, then you would End the Fed and have the Treasury issue new blue U.S. Notes. Green FRN’s would be converted at a rate of 10 green for every one blue devaluing the currency overnight by a factor of ten. There after FNR’s would not be accepted as currency. Gold would be revalued at $10,000/oz in blue U.S. Notes. Foreign countries would need to purchase the new blue money with their own currency to buy our gold. Free market would set the exchange rate.
Conax, at some point folks will wake up and realize that fiat has no value.
Having said that, remember the adage, “Markets can remain irrational longer than you can remain solvent.”
@C6
I don’t think they will ever opt for a gold standard. It would put the brakes on the Empire, they would have to pay the equivalent in gold for all the current programs and war materials they get by E-Z printing today. I would look for a currency based on a basket of commodities that can be grown. They can’t grow gold, it must be discovered and mined, refined and guarded. Some little fleabag country could strike it rich and take over the world. Can’t have that, can we? Cheap illegal labor makes growing ‘money’ a lot easier, and gold can remain a barbarous relic for another hundred years.
What if the Chinese went to a gold backed yuan? It looks like that’s where they are headed. How would the U.S. respond? Would OPEC then sell their oil for dollars only or would they switch to selling oil for the new gold backed yuan? What if Russia joined in with a new gold backed rubble? How do you think FRN’s would do in that environment?
@Silverrrr
If it makes you feel any better I am 72.
@Ranger, don’t brag. I am 20,000 years old.
@UD
They’d do very poorly. That’s why it would be problematic to go back to this system. People could start draining the Chinese treasury via fiat, if they will accept it in trade. I think that is the reason Nixon took us off the gold standard in ’71. The gold was flying out of here due to the declining value of the over-printed dollar which we had used to buy all those imports. It was either raise rates, stop printing, live within your means, or go off the gold standard.
My other problem with a gold standard is that they will call it ‘gold standard’, but they will continue to inflate on the down-low anyway.
All this is a little over my pay grade, so I’ll shut up.
With a new gold standard the U.S. would have a different dollar, meaning there are no new gold backed dollars out there to drain the gold. U.S. would repudiate existing fiat FRN debt and expropriate all the foreign gold located in the basement of the Federal Reserve Bank in NYC. Treasury would directly issue the new U.S. gold backed note at a value of $10,000/oz. World would swallow hard and accept it. Key is to control the oil(energy) which is exactly why we are militarily all over the Middle East. No other country has 12 carrier battle groups to exert its influence anywhere on the globe. That’s what it would take to make this work.
Hell I’m to old to worry about the Gold Standard but the USA can pay with a new Gold Standard note for Imports only but then again how would the exchange worthless Fiat for a Gold Standard note? Unless they use real Gold and Silver as money when they trade for a gold Backed Note.
I don’t think we wil all get that much older before a collapse.. 2-3 years