In this excellent Keiser Report, Max Keiser talks to Bill Still about his latest film: Jekyll Island.  Still also discusses the problems with the gold standard, the controversy of whether any gold remains in Fort Knox, and the bullion banks’ fractional gold banking system, aka paper gold futures.

  1. Going back to a gold-only standard is only taking one step back into the monetary system of the world.  And those in control now already control the vast majority of the gold in the world.  This is the more reason to have silver be the balance to gold as money.  Throughout the history of the world, silver has been money to a greater degree than even gold.  Silver in the hands of the people as money is the balance that is needed to the gold held by ‘kings and emperors’.

  2. The most insightful statement I heard in the show was the part about how interest rates are the cost of money. If the interest rate is 0 then our “money” is worthless! So very very true. The good news is that there are so many people in the world ready and willing to accept that paper for real assets. In this age of electronic speed of light banking we can exchange those FRNs faster than a HFT computer!

  3. Yes, the interest rate is the cost of borrowing money, not the value of the money itself.  The real argument here should be why is the Fed allowed to set the cost of money and not the free market?  The free market would establish a free and fair cost of money via competition while the Fed only uses this power to distort and manipulate the market.  
    Ultra cheap money is the primary reason why there are so many misallocations of capital now.  Since money is so cheap to borrow, why not try some off the wall things to gain BIG profits.  After all, if it blows up in our faces, we can always shift the cost to the tax-payers.  If it pays off, we keep most of the money… preferably off shore so that we can dodge US taxes while we are at it.  
    Additionally, the urge that people normally have to save some money for a rainy day is completely absent now.  There is nothing to gain from saving now because inflation will eat the buying power of our money while what little we do get is taxed!  Real interest rates are negative now, thanks to the artificially low interest rates, taxes, and inflation.  We are better off keeping our savings as useful things, such as food, silver, ammo, etc. and not as paper or digital currency in some bank somewhere, just waiting to be stolen.  GRRR!

  4. If we have to go back to the gold standard, we have to readjust the amount of gold with the dollar supply which will drive gold’s price at 6000$ to 7000$ per ounce which means that high inflation will appear. Also, I won’t be surprised if one day, we discover that there are no gold in Fort Knox because there wasn’t any audit for a long time and because it’s not used for a lot of purpose ever since we left the gold standard.

  5. There is gold in Ft Knox… plated over tungsten. Return to a gold/silver standard is the only way to get this runaway banking system under control. Ignoring something in the constitution doesn’t make it moot, it makes it illegal. States should be the ones controlling the economy, not some huge central bank. There would have to be an agreement on a standard coin design but that wouldn’t be that hard.
    Kill the derivatives market, make all trades null and void, bring the stock market and commodities markets back to being based on actual physical products.

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