Jim Sinclair: Gold Confiscation Not A Possibility

At SD we have long emphasized to concerned gold and silver investors that government confiscation is not a legitimate risk as the metals reach full valuation at the end of the secular bull run. 
The legendary Jim Sinclair sent an email alert to subscribers this morning regarding perceived gold confiscation risks among his readers.

Sinclair stated that  There was much to be gained by gold confiscation in the 1930s because we were on a gold standard.. Gold in the 1930s was the only instruments of QE. It is not now nor will it be again in the future.  There is no reason except some sort of fear of revenge to consider confiscation of gold, gold shares or the gold ETFs now. Those that worry so much about this do not really understand what gold was under a gold standard.

Sinclair’s full MUST READ alert below:
From Jim Sinclair:


Hi Jim,


I know you receive tons of emails, so I will get right down to the core of my question. In a note on kingworldnews.com today Richard Russell wrote:


“At any rate, I’m personally torn between putting all my assets into bullion gold coins or leaving half in gold and half of my assets in US dollars. In their demand to making Fed notes the only legal tender money, I believe the Fed (and the government) would stoop to any trick or law or machination to ensure that Americans must accept Fed notes as the only legal tender money. The government (Congress?) could pass a law outlawing any transactions in gold or silver or any precious metal.  The government could halt the trading of gold or gold ETFs.  Or there might be a dozen tricks that the government could use that would outlaw the use of gold as legal tender. Then, there are always taxes as a barrier to even owning or trading gold. So I dunno, hold all your assets in gold bullion coins?  Frankly, I’m afraid to.  The bankers demand that I use their rotten fiat notes as money, and believe me, the bankers (the Fed) run the country.”


What is your take on this possibility Jim? Do you think we would see warning signs before TPTB does anything on that? If you have already treated this issue in a previous post, please excuse me and feel free to forget about this email. Thanks for all you do so generously for all of us sheeple.


CIGA Michel


Dear Michel,


My respect for Richard Russell could not be higher. I will speak to this generically while recognizing “Richard the Good” stands along with “Dean Harry Schultz” as the only true two icons of gold. All others are but pretenders to the golden throne for some personal profit motive. Anyone seeking to dim another’s candle that theirs might shine brighter are as sociopathic as the banksters in our crowd for what they can get.


There was much to be gained by gold confiscation in the 1930s because we were on a gold standard. Without taking you into complicated explanations, please accept the true fact that gold in the 1930s was the only instruments of QE. It is not now nor will it be again in the future. There may be more to gain by a significant price of gold in the new reserve currency. There is no reason except some sort of fear of revenge to consider confiscation of gold, gold shares or the gold ETFs now. Those that worry so much about this do not really understand what gold was under a gold standard.


Why was energy not confiscated at $145 crude? Why not confiscate Apple at $750? Confiscation is NOT going to occur, nor will the gold bullion or gold share profits be confiscated via punitive taxation. It serves no monetary purpose and just might injure the efforts for a new reserve currency that is sure to come.




  1. They can’t confiscate if they can’t find it. Remember the old saying? “Loose Lips Sinks Ships”. In any event I don’t see it happening anyway unless it’s in the Banksters Bank. IMO

    • I have to agree that I kinda have loose lips. I don’t precisely tell others on where my gold, silver, nickel and copper are located but I tell others that I own physical precious metals. I only tell that to a very few friends and they won’t care that much about my precious metals since they are too busy with their gadgets.

  2. I don’t worry too much about a gold grab from the feds.  Even though they know I have an SDIRA its location is not know since I have a SDB carve out to put them off the scent.  My concern is the LEO finding the stack due to some ‘grid down’ local emergency.  It crossed my mind how many people who were hit by Hurricane Sandy and found themselves trying to figure out how to flee the storm,  whether to leave their phyzz at home or take it with them.  Decisions, decisions. Take the kids? Take the phyzz, the dog, wife or favorite video games?
    Seriously though, the police, FEMA or rescue personnel could easily seize valuables in the name of public safety or just steal them, like the TSA.   Alternatively, if a person is known to be a ‘person of interest’ for no other reason that they political views voiced in a public forum, they increase the chances of a visit from LEO.  If they violate one of the thousands of laws that are passed in the dark of night, like holding a meeting of family and friends for a game of UNO and bible reading, one crank of a neighbor can run a good day.  The typical probe of a home during an ‘investigation’ is done in the name of public safety  Who knows. maybe that dog,  that hamper of diapers waiting to be washed or the gun and ammunition in a closet can cause the LEO to take further action. 
    There are many examples of a family home being ransacked by LEO on a hunting expedition with little or no due cause or warranted actions.  You have hell to pay to retrieve in your valuables. LEO often goes on hunting expeditions, seizing assets, cars, homes, valuables in order to sell them and fluff up the bank account of the local gendarmes.  This is stated policy today with budgets stretched to the breaking points
    When law enforcement turns rogue to keep their doors open the citizenry must be wary.
    On another note a good friend decided to return to Russia after immigrating to the US 25 years ago.  She stacked about 25 gold coins and planned to take them home with her.  STOP!  Taking coins of this sort in luggage is crazy.  There would be a virtual 100% chance of them being seized by the TSA.  This removal of physically valuable monetary assets would result in them being seized by the customs officials.   Don’t travel with your phyzz.

    • @AGXIIK

      I’ve LONG contended that THAT was the TRUE ‘reason’ for instituting TSA. This current phase of ‘duty’ is just ‘play time’ before they start their core focus of emptying people’s pockets of everything that isn’t plastic.

    • What do we call a LEO who steals private property?  Ans:  a thief.  And he should be dealt with as we would any other thief.

      Another thing… in 1933, gold was… MONEY.  Today, it is not… at least officially.

      Need to change that tax law about gold profits and 28%.  Maybe that’s reasonable for numismatic coins that really are “collectibles” but bullion coins, rounds, and bars are not.  They are MONEY and money should never be taxed when merely changing it from one form to another.

    • In order to seize it they have to find it. Keep it hidden in odd hard to find spots and not all in one spot. Have a dummy stash of fake bars for them to take.
      I wouldn’t want to be on the gold and silver recovery teams, lifespans would be short.

    • MARY!  You are an absolute genius!  Now I know what we can use those fake gold plated tungsten bars for.  Just buy several, put in a small but sort of hidden safe, and if anyone comes looking for my silver stash, which will be split up and buried in several locations, I will tell them that I converted it all to gold.  When they ask for it, I will open the safe and there they will be.  Once they have stolen those Chinese-made bars, I will be home free.  Likely, they will never return.  If they do, I will say, “WHAT DO YOU MEAN THOSE GOLD BARS WERE FAKE?!  DAMMIT, I PAID GOOD SILVER FOR THEM!!!”.  LOL

    • Your comment explains exactly why I should also own some physical golds instead of only physical silver. With gold, I can store a lot of my wealth in a small spot so it means that I’ll be able to flee away easily with them when I have to quit my house.

  3. Yes, gold confiscation IS an impossibility! If you’ve buried it in various locations … in containers designed to frustrate detection devices and ‘magnetic strata disturbance’ instruments. As I like to say … there’s never been a safer depository concocted than ‘The Bank of Mother Earth’.

    Paper rots, Coin Does Not. 

    • What do you recommend, PF? For “magnetic detection frustration”

    • But what kind of Containers? 

    • The good part about the BME (Bank of Mother Earth) is that you can store your precious metals there for free and you have a lot of spaces. Storing precious metals inside PVC pipes and then burying the pipes in the ground is the best method in my opinion because your gold and silver won’t get scratched or tarnished after a long time.

  4. I do not care if I have my stash was sitting on the dining room table and the jackboots arrive.  
    It is mine fellas, I am not giving it away.  They would be treated as any other armed threat.  

  5. You are right on that Pat.  The very firm rule, as a US citizen, that you can’t exit the US borders with more than $10,000 in US currency has been expanded on an experimental test basis.  That prohibition can now be extended to cash-like mechanisms.  Those items  targeted  can include debit cards and the like.  My take on this is the typical camel’s nose.
     If a debit card filled with E-cash can be seen as your attempt to leave the country without complying with the Customs cash declaration form the TSA and Customs will rain down on your head with the wrath of god.  Once trapped, even innocently and that is the secret to their success, you would be dragging into the Dante pit, accused of anything that these people think they can make stick.  Like the incidental ‘finding and taking’ of personal property by LEO, this new system could easily be extended to credit cards with large limits, Bitcoins, HSA cards or anything that remotely resembles cash and cash-like items.
    It would not take much imagination, something that the TSA has little of, find a way to accrue the various credit and debit cards in your wallet and instantaneous declare you a ‘financial terrorist’   There are people today who are on a no fly list for far smaller crimes against the state.  I’m not sure exactly how to get around this but it is a threat that has teeth since the USSA does not want the two legged tax crops from leaving the platation before they are fully harvested.
      I don’t quite understand Bitcoins but even those supposedly super encrypted systems can be hacked.  If you carry your Bitcoin wealth on your thumb drive, I wonder how much force would be required to make you confess to its contents. I hear Gitmo has some empty cages.

    • Well at least you can exit the USA as a US citizen with tons of physical gold and silver coins, bars and rounds. If not, then you can maybe exit the country with 10,000$ in face value American silver Eagle coins. That means, their melt value will be worth 337000$ with their spot price at 33.70$ per ounce.

  6. There’s a huge difference between gold holders today and in the 1930′s.  Remember it was legal currency back then and a large portion of the population had gold coins. 
    I forgot the statistic but its less than 1% of the population which hold any type of gold investment in the U.S. and that’s including stocks and ETF’s.  Probably only 0.1% hold any phyzzzzz.  And probably only 0.01% hold any phyzzzz worth paying the gas and leg work to confiscate.  Versus in the 1930′s probably 10% or 20% held some type of gold coin or bullion.  
    These numbers are guesses but you get the point.  Its just not worth the governments time in the U.S. because such few people have any gold phyzzzz.  The only exception would be a handful of super rich which are probably well connected and would know weeks in advance what was coming down the pipe.

    • Indeed they would, PB.  They did last time!  Many of them sent their gold to banks outside the US to avoid the confiscation.  No reporting of off-shore assets back in those days.

    • You’re right and I didn’t thought of that. It would cost the government too much to retrieve the physical golds from people and the golds’ values won’t be enough to cover up the expenses.

  7. The TSA will get your plastic too. They have a new scanning tool coming which checks the balance on prepaid credit cards, using the existing RF system built into cards

  8. I’ve heard a completely different take on this subject.

    It is well documented now, that there is an ongoing, substantial and frightening outflow of metals from the West to the East. Concomitantly, gold bars appear to have been diluted in purity and/or gold that was supposedly stored somewhere has presumably vanished. Additionally, thanks to the suppression of PM prices, savvy folks are increasingly buying metals (like Silver Eagles, etc.). Next (as we continue to careen toward disaster), hedge funds, the average Joe, etc. will start to buy in droves. And all along, the government is printing money like it is going out of style (which, of course, it is), despite the deleterious effect this will have.

    Care to guess why none of this seems to be disturbing the powers-that-be?

    Well, it seems there was an executive order signed this year that gives POTUS the right to declare a national emergency that would empower him (i.e. various federal agencies) to confiscate and commandeer any resources or precious metals necessary for the “strategic” protection of the nation. Now, why would this executive order have been signed?

    Apparently, what we are witnessing now is the tolerated outflow of metals at cheap prices in order to buy time so that the dollar can be propped up, so that various emergency laws can be put into place, etc. before the inevitable crash. Then, when the whole system breaks down and a new currency needs to be established (which will be backed by gold and maybe silver too), people will be able to kiss their PMs goodbye (as will those countries storing gold in the US). Citizens who don’t give it up will be vilified as unpatriotic, rouge speculators who deserve to be incarcerated for breaking a law that merely aims to protect the nation. Additionally, any shortage of silver needed for other “strategic” purposes (i.e. for building solar panels, industrial products, electronics, etc.), would also most certainly trigger confiscation.

    The “contrarian” position explained here also takes note of the fact that various civil liberties have seriously taken it on the chin in the last 10 years. The question this gives rise to is whether or not anybody in their right mind thinks PMs (or one’s “rights” regarding them) will fare any better? Why would they be immune to capricious and arbitrary decrees, or laws that aim to stabilize or protect a faltering system?

    In summary, the position explained here asserts that the best one can do is guess when confiscation will happen (not whether or not it will happen), and then to sell before the SHTF. It states that wishful thinking (i.e. “our PMs are safe”), as well as a severe case of normalcy bias, will only result in a painful awakening. What is required now is to understand the increasingly desperate and insane world we live in and to be astutely practical given this reality.

    P.S. It doesn’t matter how many people own PMs (1%, 2% or 20% of the population), but whether or not the total tonnage floating around out there would make a difference if confiscated. With regard to Silver Eagles alone (bullion, proof and uncirculated), it seems 9,400 tons have been minted since 1986, and 446 tons of Gold Eagles have been minted since 1986 (which ranks 14th on the chart of gold tonnage owned by countries). These are not insubstantial sums. Remember, these sums are only Eagles floating around out there. There are far more tons of bars and other bullion out there … the grand total of everything would certainly make confiscation worthwhile.

    • Nice post Waitandwatch.

    • @waitandwatch

      If it’s any consolation …   http://oathkeepers.org/oath/2009/03/03/declaration-of-orders-we-will-not-obey/

      A vast number of LEOs and Military folks are on the side of The People and their Natural Rights. 

    • @Powerball
      You’ve erased your comments on my post, but I already had a response written, so I’ll post it anyway.

      Your counter-argument to what I wrote was that: (1) Silver won’t be confiscated because it would cost 100x or 1000x the price of silver to do so, and; (2) it might make more sense if it were confiscated in 10-20 years in the future, but not now, because the government can just go into the open market if it needs silver. Here are my responses.

      From what I gather, silver is already in short supply in today’s market, and the prognosis for the near future appears to only get drastically worse. Peak silver isn’t 10-20 years away as you suggest. It’s around the corner. Already less and less is being mined, in part because the costs are prohibitive (given the suppressed price of silver and gold), but more importantly because the easy digs are already exhausted. Less and less is extracted with every ton that must be mined at progressively deeper depths. The fact that silver is already in short supply is not evident when an individual tries to buy phyz at the local coin shop, but it becomes crystal clear when Sprott tries to fill an offering. Then there is also the fact that most mines outside of the U.S. will probably be nationalized within the next few years. So, it doesn’t look like the silver supply situation is as rosy as you seem to think.

      Furthermore, contrary to what you claim, the government wouldn’t have any problem spending 100x or 1,000x the value of silver in order to confiscate it. Why? Because it will just spend fiat money to do so, and fiat is cheap: just print more of it and you have enough to finance any project. And why would the government want to do this? Because of (1) the absolute importance of silver in various, critical industrial uses (without which our world wouldn’t exist as we know it) and (2) the way this impacts national defense and GDP. Simply stated, you can’t put a value on this finite and critical resource, so the government will do whatever necessary (and print as much fiat money as necessary) to institute whatever mechanisms necessary to confiscate silver.

      In summary, confiscating silver will be much easier than getting it in the open market. Why? Because by the time the SHTF, there will not be enough of it to purchase (in quantity) on the open market, nobody will want to part with their silver, and nobody will want to trade phyz for fiat. Moreover, I reckon most folks will do their patriotic duty, bite the bullet and hand over their silver, if for no other reason than the fact that the government will make it known (just in case somebody out there hasn’t read the news yet) that they have already seen every email of your transactions with Kitco, CME, etc. So, your holdings are already known to the government.

      I don’t know … it seems the contrarian argument is pretty solid. 

    • That is why I do not buy from the commercials, ebay, another auction site, private sales…

    • @MaryB

      The best is if your state like mine has a law that exempts taxes. If I do a $1500. and up transaction at a PM dealer in cash there is no taxes or record of the transaction. What silver  

    • Put another way, after FedZilla has totally raped us financially, does anyone really think that they will overlook any PMs that might be laying around?  Not hardly!


    • That fits perfectly with My analysis of the topic, W&W. 
      Hence I am looking to liquidate 120 ASE immediately, if not sooner.  

    • The first thing the government would do is to stop the gold and silver coin’s productions from the US Mint so that no more people would be able to redeem their fiat papers for physical precious metals. Then, the government will try to track down the purchases from the US Mint to find out the buyers.

  9. Of course Gold will be confiscated. Jim has not offered a satisfactory argument against it. What he has overlooked is that we could return to a Gold standard in time or a system that is a hybrid including Gold and at that time our Central Banks will need to be fully stocked. Consider that the amount of known reserves are in doubt and that this may be one impetus behind a domestic cease trading order and demands for reserves to be bolstered to offset the level of domestic public indebtedness. Gold is an instrument of politics and with the advent of Basel III changing the status of Gold to Tier one status we can be assured that while CB demand rises that volatility will be driven down. That is another way of saying that the price will be managed from a banking perspective and this can only be achieved when the majority of gold is back in the hands of government while incentives to public trade are reduced or eliminated. Cooperation between countries is a forgone conclusion in this regard as the whole lot of us are facing serious pressures where past debt and credit are concerned. I include China on that list. Why else do you all think Germany amongst other countries has asked its CB to repatriate its holdings back home? Hmmm? Why? Jim Sinclair is wrong. Gold will be confiscated by regulatory changes and tradng bans when the moment is right notwithstanding whatever percieved value exists on the date of such changes.

    • @farmer

      Not only are there tens of millions of Oath Keepers who’ll stand down in the face of ‘confiscation’ orders, but a nascent group organizing to re-populate original jurisdiction State governance to exercise proper Lawful supremecy over the federal body.

      You see, in order to avoid prohibition against making ‘any Thing but gold or silver Coin a tender in Payment of Debts’, the state legislatures shifted operations under exclusive federal ‘district’ jurisdiction. While all the visible pomp and ceremony of elections and such was preserved for appearances, governance under original State constitutional authority was abandoned. They couldn’t declare their State constitutions moot, because even mere color of Law by Letter comes from it. Though the genuine offices are vacant, they can be re-vitalized so the Spirit of those constitutions will be re-ignited.

    • Gold confiscation will only make gold worth more as it will go under ground and be traded on the black market. There are to many of us with lots of PMs that will never give it up no matter what. Good luck trying to confiscate any of mine!

    • The US dollar can’t be pegged to gold anymore because it has too much dollar supplies. If the Federal Reserve does peg the US dollar to gold, gold’s price will become 7000$ per ounce or even more which will destroy severely a lot of people’s savings. Even a gold confiscation won’t be enough.

  10. Gotta laugh a little AGX. Illegals enter and exit on a daily basis with much more than $10,000.00. LOL. Not necessarily cash but a money like substance.

  11. Got you there 2 OZ  A good laugh is the best med.   I get up about 5.30 AM, flip on the computer, dial in the resident crank Imus, brew a bucket o’ coffee and settle in for the latest outrages of the day on our favorite alt media. 
    With a flip of a coin; -heads—- fatuous gas bag;   tails—- vacuous ninny, I post away.   If the outrages are too over the top I turn on LFMAO’s Party Rock and then PSY Gangnam Style. After that, it’s impossible to avoid a smile and laugh.
    PS PAT I like to hide my phyzz behind a non magnetic atmopheric disturbance aka a shower of lead. Shovels give me hives. Digging anything but the Beatles is even worse.

  12. It seems like every time a new subject comes up everyone has a doomsday scenario that includes TSA goons and terms like “they” and “them.” Think about it folks: the TSA group never marches in cadence. They never stay in barracks. They are generally out of shape and are not trained to shoot straight. Ignorance and unpreparedness will never make a formidable force. A mercenary force such as used in many govenmental overthrows only fight as long as the pay buys baubles. Worthless cash? See ya! Maybe some government is offering gold for duty. Certainly not our stingy elite.
    The only scenarios I see are possibly a good CME from the Sun knocking out all the satellites and powerplants, communication and you see where I am going with this and the other is problems with shutting down the banks for a change over to Treasury notes (backed by what?) which means stay out of town Tonto. Leaving the country is something you must have already done. Staying where you are at is the wisest choice. Meet your neighbors. Make friends with farmers. Just keep your tank full but stay out of the city and off the freeways.

  13. Sinclair’s point is that FDR “confiscated” gold for the purpose of QE.  When he revalued gold upward that increased the base money supply.  Result was equivilent to today’s stimulus package.  We were on a gold system back then.  Today we are not.  Bernanke does not need the gold to increase the money supply.  He only needs a computer, probably has a special iPhone app for it.

    • Let us not confuse NEED with WANT.  Whether or not government actually needs anything we have that is even somewhat valuable, just how much should we trust them not to simply grab it on the off-chance that they might need it?  Something tells me that their modus operandi will be closer to “when in doubt, haul it out!”.  :-(

    • Sinclair is overlooking the fact that the purpose of Gold is to give essential meaning to a currency. Central Banks have taken a keen interest in the metal in the past few years for its virtues as a settlement mechanism and its use in assuring the legitimacy of their respective sovereign currencies.

      This is precisely what makes it a target for confiscation.

      With no gold-backing whatsoever the exercise of printing money for trade is near to pointless with so much risk currently in play and this is particularly so for nations without alternative reserves of wealth to support the money it offers abroad. Lets keep in mind that most Western countries have continued to carry gold on their books despite the fact the gold standard was eliminated.

      Now why would they have bothered to do that?

      This is not the case for every Western nation of course. Canada for example has virtually no Gold holdings whatsover however this problem is overcome as that country is well endowed with both oil and agricultural production for export. These indirectly serve the purpose of Central Banks needs for holding collateral against any potential default risk to other nations.

      Lets also recall that the purpose of Gold in the past was to facilitate trade between nations. In the absence of any other mechanism or product to exchange gold has served the purpose of payment to satisfy creditors. The alternative of course is the direct exchange of food, industrial commodities, energy or specialized services.

      In more modern times however fiat currencies have substituted for gold as the fluid to make the system work but as we are seeing cracks appear in exchange mechanisms a new interest in Gold has arisen. A country that can meet the capital needs of the market where trade is concerned by supplying alternative resources that are in demand does not need Gold as backing nor its collateral for external purchases and imports. In this case fiat suffices and it is accepted on face based on a nations resource strengths.

      Gold (or Gold backing) merely makes the exchanges simpler and more transparent.

      Fiat in this case is more than adequate where a nation is not questioned regarding its solvency. The US itself is well endowed in the worlds most essential and demanded resources which include energy, food and minerals. All these it has available for export. In the case of Corn and Soy it may be the global leader. Its currency is thus not in doubt despite heavy indebtedness in the same way we question European solvency. 

      The point though is that balancing trade between nations is of much greater significance than how a country exchanges goods and services within its borders. The currency issue is one of international relationships and as gold is borderless it is where Central Banks will turn to insure those trade relationships carry on without regard to risk while proving it can collateralize its currency for trade.

      As a medium of settlement there are few simpler alternatives than Gold but it is not the only choice as I have already noted above. 

      So when we also consider that other Central Banks around the world are now bolstering gold stocks against a backdrop of widespread currency devaluations then it should be clear to even the children in the room that moves are afoot to stabilize trading realationships and reduce currency risk while  also insuring transaction liquidity is sufficient in a worst case scenario.

      A worst case situation would be the collapse of the European Union and the possible dissolution of the Euro with the concommitant risk of multiple sovereign defaults and bond failures. This is not just a possibility in the minds of some economists but an inevitability although I seriously doubt the Euro is truly at risk. 

      So how do you protect yourself against such a scenario at a time when social discord may overrule current political dictates? Let us not forget the ballot box and how it may bring less cooperative elements to the forefront as a disenfranchised electorate chooses those with more radical solutions to our collective problems.

      The world is clearly becoming more discordant as job losses mount and living standards decline during this period of deleveraging (particularly in Europe) and this presents stability risks on both a Sovereign and global level. Witness the rise of Neo-Nazi parties in Greece, separatist movements in Spain and anti-Euro groups in the Northern countries as just a few examples of more divergent political movements in Europe that present hazards to the current group of policy makers and leaders.
      Any prudent Central Bank would naturally look to Gold under these circumstances as a backstop against potentially serious fiat losses (in a default scenario) and as a means of providing insurance in preserving the viability of its banking system while protecting the real gains their country may have acheived through past trade activities. Indeed, we are seeing exactly this scenario unfold much to the delight of many in the Gold investing community who perceive CB buying as a primary impetus behind future price rises in the yellow metal.

      Let me assure you though that what lies at the heart of this exercise is not greater price volatility but rather price stability in metals versus currencies. Investors should bear in mind that we will likely never see the more more extreme valuations that some people have proposed as discipline is gradually brought back to our money production processes. We are now discovering again what value is where a currency is concerned and as regards resource strength I have few doubts about the sanctity of the Dollar as a global reserve currency.

      How deeply it may yet fall is another question but there is now a widespread acknowledgement that we may be reaching the end of the thin branch that permits nearly unlimited printing to resolve the shortfall in genuine economic activity. The resolution to the dilemma will likely come about as inflation pressure mounts and velocity bounces off its historical lows. It is then that some of the excess liquidity must be withdrawn. No doubt Gold prices in US Dollar terms will benefit in the meantime but a price point of 5 or 10 thousand dollars per ounce is just preposterous and probably spells the end of the currency in our lifetime were it to occur.

      As Basel III seeks to make Gold tier one we cannot help but note this suggests moves are afoot to reduce unpredictability and volatility in Golds price movements which is actually contrary to the thinking in the Gold community that seeks speculative gains. 

      And so it is this money, (that which is earned abroad that I discussed above) that has come through exports and the honest efforts of its citizens which needs protecting as opposed to the internally generated transactions and cash accounts. Internal transactions in a country are much less relevent than external trade where the issue of Gold-backing is concerned.

      Do we not measure our success versus other counties in terms of our relative trade in goods and services? If the cash reserves we hold in our balance of trade accounts in another nations currencies are being devalued sharply are we not at risk of loss?

      Lets keep in mind we need to pay our bills to others as well. Will they continue to accept our word that we are good for the invoice or should we not be showing evidence of solvency via a backing mechanism whether it be oil, corn or metals? Gold as a first order is proof to others that we can collateralize and meet our obligations when necessary.

      From this perspective it becomes easier to understand why China, Russia, Brazil, Mexico and many others are in the process of bolstering gold holdings. This is no casual event. Billions upon billions are being spent by the various nations on an object with no intrinsic use. Now why would they be doing that? Furthermore, why would they be doing so in such numbers and volumes? Part of the answer of course is that gold makes up for deficiencies in other areas of their respective economies although that is really a topic for another day.

      It should be clear though that Gold has been the object of serious interest to some CB’s for a number of years now and that this interest is growing as global currency uncertainties evolve. At some point though there will not be adequate sources of supply for all CB’s with a desire to accumulate and this is where the rubber hits the road.

      Confiscation is all but assured on this basis although where it happens first is unclear. It is worth considering that the price of Gold will subsequently become mutually managed by the collective will of our banking community for the good of preserving and stabilizing trade exchange and value between nations.

      The unfortunate use of the word “confiscation” is a misnomer in my opinion and it has been over used by those who fear government with an eye to accumulating reserves. Simple trading bans and offers to purchase from private holders are sufficient to achieve the goal of acquisition without causing alarm. This is not a forced move but an offer to exchange where no other reasonable offers exist. I also believe we are evolving towards a hybrid system of currency valuation and that all the major players including China will play a role in the development of this new regime. Gold has a keystone position in the new heirarchy and so it will not be overlooked.

      Take note though that these activities we are witnessing where Central Bank acquisitions are concerned are quite outside the needs of the individual who pursues Gold for personal or speculative purposes and therefore the collective needs of the global community of nations will take precedence over the private desire of individuals. Put more simply, Gold is heading back to the vaults of nations and its use in private transactions will therefore be diminished. 

       If necessary, by decree. 
      Note: This comment has been reposted at Rickackerman.com for the benefit of a wider discussion.

    • @ Farmer

      Excellent discussion of various, pertinent factors that are part of the equation. What I would add–and where my analysis would part with yours and put emphasis on a different, more disorderly and radical outcome–are the issues of sovereign debt, and more specifically unfunded liabilities (the numbers of which are too big to grasp), as well as the unseemly can of worms known as shadow banking and default credit swaps (the numbers of which are also too staggering to grasp) that will be triggered when the collapse comes. When these are figured into the equation and a likely scenario constructed, the future for governments–and what they will feel obliged to do in order to manage things–begins to look worrisome; unless, a debt jubilee were to be declared, but I don’t think those with a stake in the outcome of where we are heading have such a solution in mind.

    • More great points from you too, Waitandwatch and many that I am in agreement with including a Jubilee. I will admit that not so long ago I argued strenuously against just that idea but as time has passed my position has softened considerably. The laws in both Canada and the US in fact allow for bankrupcty or default and in some situations we are seeing that debtors can walk away punishment-free. This is to some extent serving the purpose and intents behind the old fashioned Jubilee. Those continuing to live miserably in heavy debt are doing so by choice when options abound to escape the noose. I don’t recommend bankruptcy of course, I am only suggesting that when the system has tipped too far in favour of lenders and their past easy practices (like now) that avenues of escape exist for those who wish to move on with their lives. Bankrupcty and the disavowel of debt obligations is the option of choice for those who are otherwise trapped in debt servitude. So keep posting my friend, I have been enjoying your comments very much.

    • That’s the main reason why the government removed the gold standard off of the US dollar to turn it into a fiat currency so that the Federal Reserve can do unlimited bailouts, print unlimited dollars out of thin air with QE infinity and more unfair stuff.

  14. @farmer … “Let me assure you though that what lies at the heart of this exercise is not greater price volatility but rather price stability in metals and so investors should bear in mind that we will never see the more more extreme valuations that some people have proposed.”

    What brings constancy of worth to money is constancy of its supply. Government Plantation Scrip, by sheer possibility of infinite supply, is thus worthless, ipso facto. Rational equilibration between PMs and these ostentatious stamps incontrovertably … define … PMs as having infinite worth as ‘measured’ in them.

    Now, the most sinister element of your above argument is that it wholly negates all notion of … Private Property and Individual Determinism. What has caused all this world’s ills, with far worse to unfold, is the very government-centric, elitist orientation you’ve outlined. It has … FAILED … and you’ll be the better to ADMIT IT,

  15. @waitandwatch … “the future for governments … begins to look worrisome; unless, a debt jubilee were to be declared”

    Oh, sure … ‘debt jubilee’, leaving the very worst indebted … governments, bankers and monopoly industrialists … off the hook. Crumbs fall to the hoi-poloi, but that’s a ‘loss’ that can be recouped in short order … as long as the ‘sacred cow’ of the banknote scheme doesn’t go under the axe!

    Here’s a REAL alternative … convert all banknote units to their metallic equivalent based on their purchase power depreciation since inception. Of course, the relatively miniscule ‘worth’ could only be handily expressed in ‘base’ coin of copper …,re-establishing a genuine economic BASE again with … NO ONE any ‘richer’ or ‘poorer’, yet back on a level field. Most importantly the complex compounding on the damnable self-inflating float of ‘rented banknotes’ ends its mushrooming drain on the capacity of economies for free capital formation.


    • Pat…the Jubilee was not an event in past history intended to release governments from obligations. Rather it was a dictate designed to free those who had become “hopelessly indebted’ to their creditors. This included slaves and others who had borrowed themselves into insolvency over time. Take a look at Wiki for more insight and then dig deeper. 

    • Excellent discussion.  Very few understand that the lack of a debt jubilee every 49 years is the main reason that boom/bust cycles are seen even in gold/silver standards.

      We have written on the topic previously here: http://silverdoctors.blogspot.com/2011/04/is-compounding-debt-mankinds-kryptonite.html

      And Hinde Capital’s Ben Davies has as well in an excellent piece titled Debt: There is No Jubilee : http://www.hindecapital.com/docs/hil_reports/Debt_No%20Jubilee7.pdf


    • Seems that watch&wait put it in the context of relieving government debt. Pat was shooting that down, 
      but not directly. However, I think that, government being a  representative of all of us (or supposed to be)
      is indebted to the bank$ter$ and makes us all enslaved to their ponzi scheme of paper trash cash. I like
      PF’s solution for this end of it. Gold, Silver, Copper. However, monetizing copper may hamper industrial
      advancement and the electrifying of the world around us. But, releasing a (badly named)
      FREE ENERGY Generator overunity design, the power grid could come down and supply most of those needs that remain.

      No, I am not crazy, these devices do exist and make power in a usable form.  

    • @ undeRGRound

      I used the term in the widest context with regard to solutions the government has (whether or not we agree with them) in order to deal with the economic implosion, societal chaos, pandemonium, and revolutionary unrest (all of which will tragically include starvation and murder) that will result from a crash.

    • @waitandwatch
      Good Point. I think I see what you are saying.  

    • If we convert all fiat paper currencies into their metallic value, then there won’t be enough to meet the demands because there are way too much fiat currencies’ supply.

  16. I THINK JIM SINCLAIR may have an agenda here, may be a shill for TPTB, just maybe. Be Careful of what you do based on his words. 
    He might be 100% honest, but deluded? Then again, he might be right!
    I hope he is being straight up with us, and correct in his assessment, but I would not count on there being NO CONFISCATION.  

    • Besides, preparing for the Biggest Bully will make it easier to ward off all the smaller bullies
      that are SURE to come knocking! If Big Bro cannot get at your stack, then the gangs won’t.  

    • Thanx To brother PatFields, I have figured out a concealment scheme for the stack and other valuables. :D

  17. Michels’ concern with respect to the government outlawing Au and Ag @ some point in the future. Consider this. The government is already outlawing cash!  http://reason.com/blog/2011/10/19/lousiana-outlaws-using-cash-at

    • WOW, that Sucks, Glare…
      I see more states going to that if it works!
      It will hasten development of a Black Market. Eliminate under the table sales @ fleamarkets & such… 

    • @undeRGRound: You’re right. I have over the past year been considering why a “state” would pass such a law! The simple answer (which is usually the right one, but I don’t think it is in this case) is tax revenue. Most businesses in flea markets are legitimate and do collect taxes. But not the Yard Sales! This law effectively shuts down the private transfer of goods and services from one individual to another outside the system! It would also have a very chilling effect on how people interact with each other as well. Fostering a climate of paranoia. In time creating the STASI EFFECT of citizens turning on one another for favors from the state or the ‘big get even” for some real or perceived transgression of word, deed or gesture. In addition it paves the way for the TOTAL banning of cash. Giving all monetary control (capital control) to a faceless & nameless entity (TPTB). Piss off the entity and one can be destroyed with the touch of a keypad. Transgress the entity and one could be on the run, hiding without benefit or help.

    • Yes. I get cutting edge investment advice, thru emails and phone notifications, and they wish to make your (and mine) and everyone’s cell phones basically portable ATMs, with high security, 128 bit encryption, and all that. So if I meet you and buy something, we hold the phones close together and transfer digits. Handy, but totally taxable. If that happens, I forsee a day of a huge black market. Silver, Copper, some Gold… and Barter. 

    • That’s not fair! I don’t want to keep my dollars inside the bank because “if you don’t hold it, you don’t own it” even if it is cash. Even Canada is taking steps to turn its currency into digital with the program called “MintChip”. I’m going to buy and use a lot of physical gold and silver for purchases when that happens.

  18. @farmer … “the Jubilee was not an event in past history intended to release governments from obligations. Rather it was a dictate designed to free those who had become “hopelessly indebted’ to their creditors.”

    You mean, like … governments, bankers and monopoly industrialists!  The ‘slaves and others’ get the aforementioned ‘crumbs’ inadvertantly dropped in the process. 

    “Reason obeys itself, while ignorance submits to whatever is dictated.” –Thomas Paine

    So, why do I need Wiki?


    • You need Wiki because it offers the simplest explanation of a topic that you seem to be trying to manipulate out of context. No offence intended here but if your post is sincere you need to study history with more effort so that I do not need to waste my time working through the explanations of terms we should all understand.

  19. Henry Ford was encouraged to join the “re-distribution” fervor in the past. He refused. When asked why he stated “Sure it seems like a good idea. It would help the poor immensly. And it would not hurt me to participate. But in five years I would have it all back!”

  20. @The Doc

    I sure hate to have to disagree with you, but any sort of ‘debt jubilee’ is flat out robbery of creditors. Wrong is wrong. That any resort to it has EVER neen ‘justified’, I rather blame on fixing of numerical ‘value’ on money distinct from its weight and fineness. Freezing a ratio of exchangability on ANY good, defying its variable supply-demand characteristics, sends ripples of distortion through the entire web of goods-at-market. To attempt that with THE MOST traded good … money … destroys the capacity of markets to accomplish optimal price discovery.

    If you get down to ‘brass tacks’, the idiotic suppression of gold and silver, BOTH as to their natural rationality AND in terms of banknotes is all about this wholly numerical ‘fixing’.  It brought down China; it brought down Rome; it brought down Great Britain and it is in the last phase of bringing down the entire world’s economic integrity!

    That too, has its fount in stubborn defiance of the fact that REAL money slowly appreciates in demand driven valuation because metals are recovered at a rate slightly under population growth, incessantly putting downward pressure on prices of other goods. To satisfy the more crucial constituency of merchants who desired ‘protection’ from this effect, governments invented this game of numeration and debasement, clipping, et cetera; culminating in this automatically inflating banknote scheme to accomplish ‘price stability’.

    It’s all about futile circumvention of Natural Laws of Economics, making it all BAD!

    • @PatFields you would be correct that a debt jubilee would be robbery of creditors should it just be instituted randomly.  However, when it is a regular occurrence every 50 years, and the creditor knows exactly how long until the next jubilee occurs, this allows him to freely make the decision of how to price his capital/land, assets he is loaning appropriately, according to the number of years remaining until the next jubilee.  It automatically prevents an unsustainable exponential build up of debt, as well as ensures creditors are more cautious in their lending.  This is our creator’s economic system, not mine.  Throughout all of history, to my knowledge it has only been instituted by one civilization, Israel, and at that only for a relatively short time.
      We fully understand this will likely never be instituted again, but the fact remains that it is the only sustainable economic model.

    • Nice one, Doc! I was going to mention the Biblical reference if it was not mentioned, sooner or later. 
      I agree further, that the random use of a jubilee would/could be wrong. Bankruptcy laws are an attempt
      to extend this concept to folks that need it, and get modified when they are abused. An overall Jubilee
      would be preferable to arbitrary bankruptcies and various debt abatement programs, in my opinion.
      A properly set up system, from the ground up, would fix the problems that thoughtful people like
      Pat Fields see all around them as well. I like his take on the deflationary aspect of a PM Standard.
      It would work!   

    • I don’t know of any creditors who are not also borrowers. Jubilee from financial institutions that have engaged in fractional lending. A jubilee from them costs them nothing since the money was created from nothing but the borrowers signature. The Sumerians had debt jubilee upon the passing of their kings. The Romans had a jubilee every 50 years. Jubilee means freedom. We could all use some freedom! Freedom from being forced into a lifetime of servitude to governments and their programs, with no choice on whether or not we want to be a part of it. Social Security comes to mind. Freedom from illegal and immoral taxation. Such as wage and property taxes. This is when something you earned or bought is not really yours. Freedom of movement, drivers licence and vehicle registration & forced insurance are all forms of captivity and control. You bought the auto, payed the taxes and then are double and triple taxed every year even every month. But even that is not enough for the slave holders. They hire inforcers that no longer are to protect and serve but rather to hunt the public on the roads and extract more payment! A jubilee seems in order and not just financially!

    • Great point Doc with regards to both creditors and debtors knowing the time of a Jubilee. It is both a check and a balance; a reminder to creditors to restrain their ambitions that lead to debt enslavement and a source of motivation for borrowers to direct capital to productive uses. We can assume that as the date of the Jubilee approached that credit would become restrictive (creditors would not lend knowing they would not be repaid) and so it would be incumbent on borrowers to make the most strategic use of what little capital was on offer. 

    • Gold and silver are like special metals. They have a stable value so it will get noticed very quickly if a country manipulates their values. That’s why a lot of religions mention gold and silver as the true money. Gold and silver will bring down the USA first and since all countries are related to the USA, they will also go down.

  21. @farmer … “you need to study history with more effort so that I do not need to waste my time working through the explanations of terms we should all understand.”

    Exactly what terms? Terms like … creditor? Or maybe … saver? Or, how about the genuine defining elements of the term … money … in adition to ‘Trade Facilitation Instrument’. The evil that ‘debt jubilee’ ostensibly ameliorates is … LOAN AT INTEREST … which has an alternative form of operation called the … REAL BILL DOCTRINE.

    In the modern revival of industrialization, Real Bills supplied credit conveyance without Interest’s constantly growing depletion of circulating media. The ‘market’ for Real Bills slowly matured into a sophisticated Clearing Structure that was commandeered by organized banking, then suppressed into total obsolescence through supplanting it with the old banker’s related ploys of ’influence peddling’ and of ‘eminence renting’ through exclusive Loan at Interest.

    To paraphrase Cheech & Chong’s famous little phrase … ’Debt Jubilee? We don’t need no stinkin Debt Jubilee.’  What we need is an end of this stupid notion of ‘virtual money’ and a re-institution of the Real Bill Doctrine to convey the vast bulk of credit in pre-market production steps and reasonable minimalization of Loan at Interest to maintain as much circulating media as can be accomplished.

  22. This discussion is the first time Debt Jubilee has cross my radar to the point where I can post about it.  My response will probably take a turn to an  uniformed manner since it’s been discussed at length for millenmium and this is the first time I’ve studied it. 
      It seems to me that if a government is given sufficient time it become disconnected from the people it purports to govern. Instead of representing the people, it begins representing a collective that has nothing to do with the common man and in most (I mean all) cases ends up working at odds with the needs and wants of the common man.  We seem to be in the  latter stages of that disconnection.
    The collective represents the financial  and banking powers that hold  sway over  and controls the direction and intentions of the un-constituted governmental PTB.  By providing the people with FIAT currency in nearly unlimited amounts, coupled with its debt and interest firmly attached, those that indulge in the hog trough of debt will, with few exceptions, be trapped in its thrall. The housing collapse comment I made a few days ago spoke to the realities of the largest bubble in human history.  This on is still unwinding and won’t reboot for many years.  That bubble has cost us about $30 trillion in world wide property value thus far. 

     Speaking as a former banker, I appreciated those same  borrowers who came back to the well for more debt, trying to build their businesses fast enough to stay a step or two ahead of our collection department goon squad (That was me). I’ve actually been in the business long enough to see the second generation come to my door. The entrapment of that debt is very similar to the casino who offers the WHALE those expensive comps to keep him coming back.  In our banking case, the whale might get a toaster or free lunch with the president of the bank. TANSTAAFL.  Bankers also have the edge with interest that compounds like Doc noted in the April 2011 post about debt kryptonite.  In the last 20 years the total global debt accumulation is on the order of $75 trillion in hard loans and another $250 trillion in mandates and entitlements.
    The Leviathan government, once it trapped its citizenry in the debt paradigm that Pat Fields and others expound on most clearly,  will do anything to prevent the debtors from escaping this environment.  Note that Student Loans are not dischargeable by bankruptcy.  If mom and dad cosign for their kids they are also similar prevented from discharging this debt. Grandparents can also be trapped in this debt Tar Baby as well.    This is a small but perfect example of how the state wraps its citizenry in debt to infinity. It is also an example of how the state wraps itself in debt to infinity, undischargeable in any common manner.
    In the last 20 years since the 1989 to 1993 banking and debt collapse, a minor one IMO,  the interest rates have been quite low.  This seductive position of cheap debt with its attendant fellow traveler of inflating assets seduced  people across the world to take on debt and more debt. They tried to front run inflation and the debt interest by acquiring those assets that appeared to inflate more rapidly than the cost of the debt used to acquire these assets. In reality this money was late to the game. The real money was made before these assets were tossed like scraps to the people. The problem with this thinking is that assets inflate continuously to the sky. These assets also invariably revent to a bubble format, falling in value as fast as they inflated.  But the debt lives on forever, deflating the asset backing it to infinitely small value while itself grows exponentially.
      The Debt Jubilee referred to seems to be a means to reset the debt clock for another generation, not necessarily giving anyone a break from the debt paradigm. To me sounds like a false hope. As Henry Ford observed, all this will come back to me eventually.
      Trust me on this.  You can’t beat compounding interest, something  that Einstein said was the  most powerful force in the universe.  If you reflect on  that comment and how greedy Dumb A**es like bankers managed to harness that Weapon of Mass Destruction. that’s  like giving a kid a gallon of gas, matches and a free hand to burn down the house.  I’m not sure the names of the people who turned over this WMD to people of such low character but either they knew something we don’t and expected to reap its rewards or they didn’t realize what they set lose by opening up the banking equivalent of Pandora’s Box or some evil Gini that ends up granting itself 3 wishes that we have to pay for.  In either case we are experiencing the wrath of those choices.  And they were made without a single substantive consultation with the people or the idiots in government who also wanted their dip at the debt well.
    The 49 year cycle of the Debt Jubilee does seem to coincide with two things that have similar numbers attached.  The lifespan of FIAT currency seems to have a 40 year cycle  The average human generation is about 25 years so by the time of the Debt Jubilee, two generations would have come and gone.  Few will remember the last crash and no one wants to listen to Grandpa talking about how it was way back then. Kids are way too smart for that and so the cycle repeats itself, much to the benefit of the bankers lurking in the shadows, waiting to trap a new generation of borrowers.  Since Nixon dropped the gold standard, our paper currency has become increasingly worthless. This paper currency cycle is really long in the tooth.  The debt jubilee is also well underway no matter whether  one thinks it’s a good idea or not. 
    My opinion is well known on the subject of debt and its discharge.  Debt should not  represent  a suicide pact with the banker. Debt repudiation is a well established fact of law.  This is not to say that a person who can afford to pay a debt should simply walk away from that debt.   But the entire world is drowning in debt, dragging down billions of humans in its thrall, either by debt loads, debasement of currency or massively destructive inflation.   This is not just a US problem any more.  Fiscal policies and FIAT printing are  now part and parcel of the financial  troubles we see in the East and the West since not a single currency is backed by any hard asset.  Bad endings abound.
    If there is a really large disconnect, it’s the governments embarrasing debt loads that will never be paid. Well, let me be clear on that statement.  I do not plan to pay it even if my portion is $130,000.   In the government’s desperate attempt to keep the the game going by buying the population’s badly placed loyalty with cheap money, free food and stuff, it bankrupts itself by falling into the same trap as the Average Joe.   If there is a common thread between people and governments; they are both seduced by cheap debt. 
    30 year  3%  Government loans underwritten to itself are no more sustainable that a person who borrows the same amount to pay for a home financed over 30 years.  If the home owner ever pays for the home in its entirety, the amount funded is usually 3 times the original value of the home.  Unfortunately, government does not even end up with an asset as ‘valuable’ as a home.   It simply beggars its citizenry and then implodes.  And the Debt Jubilee takes place of its own accord, a consequence of foolish borrowing. 
    Whew, I guess it was heads this AM. 
    Pat Fields, your thoughts on this?

    • @AGXIIK

      We’re subliminally tricked by numbers. Billions? Trillions? Quadrillions? Of … exactly … what?  

      If we train our minds to think of banknotes as … units of purchase power … we can quickly grasp that in the real world, there isn’t actually any more money per capita than there was in 1900. In that view we can plainly recognize that an American banknote is in TRUTH a 10 gram copper slug that embodies exactly the same rational purchase power today as in 1900. So, do trillions of … ‘cents’ … sound daunting? No, in fact trillions of cents are appropriate for the increased frequency and volume of individual transactions that have evolved to the present by technological improvements to distribution, material handling and shipping. So, if there’s a relatively flat qantity of real money (DEMONSTRABLY the case from 1776 to 1912 … look at a chart), why muck things up with banknotes at all? They would seem to be an un-necessary complication (which they ARE).

      With that ‘scare-crow’ of ‘trillions’ felled, we look at where all these ‘cents’ disappear to. I hammer on this ‘bell’ incessantly. Banknotes are loaned onto existence at interest. Early on, bankers loaned their banknotes and the borrowers largely re-paid with money … which the bankers KEPT in their vaults … and replaced in circulation with MORE banknotes. Eventually, they swept so much gold from circulation that it caused financial convulsions and … gold basically fled into hiding. By the mid-1960s, the same process drained silver and it too ‘went to ground’. That left NOWHERE to source interest service funding, but … more currency borrowing-creation. It was at that juncture, where banknotes were automatically compelled to inflate by complex compounding interest on THEIR float by an exponential process of co-generation (again, look at a chart, THAT’s when the M3 ‘money’ supply began what’s today become parabolic … and b-b-b-baby, you just ain’t seen nothing yet).

      Now, today we’ve reached the point of ‘Debt Saturation’ and everyone is trying to pay BOTH principal AND interest with a currency float that isn’t being replenished by new borrowing sufficient to offset the complex compounding interest burden. In the ‘streets’ there is currency deflation manifesting itself as falling expenditure and to make up for the Elite’s crashing REAL revenues and THEIR interest servicing connundrum …NOW … the banks are OVER inflating the currency globally to ’cross a bridge’ that mathematically has no other side! It just keeps extending into infinity! All the whilr … the purchase power … of their currency contracts yet another ‘cent’ in mills per month.

    • The US national debt is growing and growing and people’s debts are also growing. Although, people can cut off their debts by not buying craps made in China that will become obsolete in a few years. It’s sad that a people bought electronics by taking on debts.

  23. @The Doc …” the fact remains that it is the only sustainable economic model.”

    Again, I say … in the environment of fiat ‘fixing’ of money’s trade value.

    In the absence of that element, money saved yields a natural gain simply through the phenomenon of the ’Population Demand Factor’. Delving even deeper into the ‘fixing’, it steals that gain from the huge number of savers and hands it over to the select little cadre of merchants … without compensatory value in return! No ‘debt jubilee’ offsets THAT theft.


    • Pat, I generally admire your points and would never lecture an individual of your caliber, but it seems that you miss the point of a Jubilee. If properly executed, the ones at the top lose the most. It would truly be a Big Reset. The losses sustained by savers is already here, no one can gain interest in a simple passbook savings account now, that ship has sailed. So it is time for a reset, 
      so we can return to a fair system. I am vastly over-simplifying here, and I’m sure you can shoot some holes in various parts.
      I generally agree with your arrangement, but a Reset is needed prior to that implementation.

      Just my 2 oz LOL 

    • Pat Fields   Bear in mind that I am a recovering banker which,  by its own right, means that I’m not that smart. I say this not as a confession, just an observation.
       So keep banging the bell.  I’m starting to get it. 
      Most of my posts are grounded in personal experience even though I enjoy the study of history.Personal dots connected with other dots allows me to understand the more esoteric notions of currency, debt, interest and precious metals.
       But history, like numbers, presents its own set of difficulties. There is so much of it.  So I’ll work from my own wallet to help me understand.
       Back when I was about 20 in 1972 if I had $25 in my pocket I was pretty rich.  If I had $100 I was delirious with wealth.  Gas 25 cent a gallon, beer $1.50 a six pack, rent $60 a month, utilities $8 a month, a baseball game $1.50 and the beer was smuggled into the stadium in plain sight.  I made $4 an hour as  a Teamster with time and a half for anything over 8 hours.  Double time over 12 hours in a day. 12 hour days were regular.  So a saw buck was a good portion of my weekly walk around money and represented barely 5 hours of heavy lifting, scarcely breaking a sweat, before taxes.  My tax burden was 25% so I netted $3 an hour.  A 12 hour day was a good paycheck, with about $35 in my pocket by the time I went home for the day.
      I never bought silver in the cheap days, much to my regret, so your essay makes me more cognisant about the purchasing power of the dollar relative the to stacks of dead presidents  now needed to accomplish the same acts of purchasing the basica.   And I had no loans outstanding, a thing was was to soon change.
      By 1975 with my first real job after college my pay level dropped by 30-40% due to the office nature of the work. No OT in the office.  From that point until about 1990, I was never ahead of the inflation monster eating  my purchasing power.  Even with nominal debt on a cheap car, the overhead rose and rose with the annual 10% inflation of  Nixon and Carter eras.  The Reagan era was not peach of a deal either as rates went to double digits. 
      My modest borrowings got me in some trouble until I cut the ties to the banksters while all the time I was working for one. I shoulda known better.
      It was not until I started make $100,000 plus regularly that the cash flow approached the greatly enjoyed spendable excess of cash that appeared in my wallet in 1970.  Despite the growing wad of paper in my wallet it did not buy anything better in 1990 than my first good paying job of 1970. 
      Your words hit the head of this conumdrum and got me to understand that the wad of cash in the wallet, not only growing exponentially but also in the  size of bills ($1s vs $10s and $10  vs $100s) still represented less than  the real value of the  silver coinage I used to spend like it was money.  90% silver money.  Where was the wayback machine when I wanted it. I  would have mopped floors for silver then.  As a matter of fact, I did.  But I did not save those 90%ers.
      Now I regularly ask my service providers if they want cash or silver.  One silver round goes for $35 when I buy services for those knowledgeable enough to see how this silver round has something more to its substance than a reward for 1 hour of work at $35 an hour.  Even those who see it for what it is worth still prefer to take pocket lettuce.  I keep a hundred of those rounds near to hand for this purpose.  Regretfully, the stack  has a negligible dent in it.   My intention is  to spread the word about this  Perpetual Ponzi Scheme Maxtrix Paradigm while dosing my service providers with an innoculation  of silver to counteract the venom of this matrix. 

    • AGXIIK, back then you could’ve have bought about two ounces of silver for four dollars! Now, it takes about 3.5 hours of work to get an ounce of silver if you get paid 9.90$ per hour. Well, that sucks that you didn’t took that opportunity.

  24. I think the way this will all play out is that Bernanke and his central banker ilk will be able to kick the can years farther down the road then we all think.  In the US cheaper fuel (N. Dakota, etc.) will allow the economy to muddle along.  Federal gov’t will solidify it’s total control by increasing the dependency class through pushing more and more people onto food stamps(SNAP, EBT, etc).  Federal gov’t will use this voting block to institute more loss of individual liberty i.e. Homeland Security, FEMA, UN Agenda 21.  Individual states will lose effective sovereignty and become morphed into ten FEMA regions headed by an appointed technocrat.  

    Terrorism and the Middle East will be used as reasons for heightened domestic surveillance.  Drones will be common place in our skies.  The control grid will tighten.  

    Retirement accounts(401K’s, etc.) will be redirected into government guaranteed Treasury instruments.  Same with the remaining pensions.

    The Dow and gold will be 1:1.  At what number?  All depends how much money they print.  But, better for them to have the DOW at 13,000 and gold at 13,000, then to have the DOW and gold at 6000.

    Eventually all the debt creation will become unmanagable.   A decision will be made at the Treasury(They’re the real power, not the Fed.) to reset the system.  There will be a debt jubilee of sorts, but only for gov’t debt i.e. the Federal gov’t will default on all Treasury obligations.  As a bone to the people student loan debt will be forgiven by the benevolent government.  

    The Treasury will seize all the foreign gold held by the Fed.  The Fed will be disbanded to placate the angry populace.  The Treasury will directly issue new ‘blue’ U.S. Notes backed by gold.  Old green Federal Reserve Notes will be converted to the new money at a rate of one blue for every ten green.   The public will thank the President for their food rations and reelect her.  

    Don’t worry about the Fed.  They still own the mortgages on half the real estate in the country.  They’ll do just fine.

    However, the rest of the world is pretty ticked off.  Alliances shift, someone gets stupid and we have a nuclear WW3.  A third of mankind is wiped out.  U.S. takes out most of the Muslim world and the leadership class in China.

    World clamors for peace and a treaty is signed and it all gets very prophetic from that point. 

  25. @undeRGRound …”I like his take on the deflationary aspect of a PM Standard. It would work!”

    It’s nothing new really. It’s what separated the ‘Barbarians’ from Rome and what the Chinese reverted back to when their ‘flying money’ irreversibly self-immolated. When you fully think through the weight-based monetary scheme that stays in supply-demand sync with those of all other goods-at-market, you can appreciate why it makes any such notion as a ‘debt jubilee’ completely superfluous. Placing of a fiat number on coin is what I call the ‘Original Economic Sin of Government’.

  26. @waitandwatch … “I used the term in the widest context with regard to solutions the government has … in order to deal with the economic implosion, societal chaos, pandemonium, and revolutionary unrest (all of which will include starvation and murder) that will result from a crash.”

    If any of that is allowed to advance to fruition … THEN … we’ll have a ‘hanging offense’ to adjudicate, because I looked into the new domestic copper supplies in warehouses and discovered that if all American banknote units were transformed into their TRUE residual purchase power metallic expression of 10 gram pieces, there is a surplus of metal! This doesn’t account for a possibly equal amount of scrap under foot. This is exactly what China did in 1450, with the immense difference of doing it entirely on Tael-weight. As a result, we don’t know China in the same way as Rome. China’s a surviving neighbor, but Rome’s long dead.

    All Treasury bonds could be liquidated and loan interest on banknotes would immediately cease! This, PRE-EMPTING the market’s determination of what the proper copper-silver ratio needs to be before silver can emerge back into broad circulation. That environment would circumvent the artificially induced monetary panic in society and allow capital accumulation to re-ignite productive manufacturing projects, slashing ‘unemployment’ to its bone so the government’s bloated pet pit-bull bureaucracy could go on its far too long overdue … diet.

    • @PatFields 

      Of course, pre-empting is preferable to playing catch-up, which would turn ugly.

      That having been said, I am afraid that the arc of decline that has characterized our political institutions (and society) will not reverse or level off sufficiently to allow for any grand, bold, innovative and/or proactive moves that could avert the bottoming out that would appear to be “baked into the cake.” We only seem capable of acting while looking in the rear mirror, i.e. after the fact.

      Let me explain. You seem to be a student of history, so perhaps you have read treatises like “The Fourth Turn,” which sets out to prove that there are definite, irrefutable cycles according to which economies, currencies, societies, cultures, etc. self-destruct and reset. The reasoning goes that just as summer is surely followed by fall and then winter, our institutions have peaked and are now on the downward sloping part of the curve, heading for a reset. Look at any society in the past, and you will witness the same cycle, especially if it was a mighty one that grew and grew and grew.

      Said differently, yours is a solution mindful of Occam’s razor. It appears rational, parsimonious, economical, and succinct; and as such, it would appear competitive among hypotheses aimed at solving our problem. But, even if what you say it correct, the timing of your solution (and the fervency of your advocacy on its behalf) is tragically off because the problem we are actually facing is part of a larger, even more parsimonious reality that is now operative in our lives; namely, entropy, or the law of entropy. It is now the dominant reality of our lives.

      Think of it this way, our institutions are reaching the endpoint of expanding and morphing into a contradictory, tangled, and unmanageable mess, so we will undoubtedly witness a collapse before things can reset and regain their health. Some would try–at all costs–to maintain the homeostasis, but I don’t see how speeding up the music and rearranging the chairs on the Titanic will work.

    • @PatFields:
      ASSUMING $20/oz Gold Standard Price, versus today’s Spot: (or $2500 adjusted for inflation, 1980 highs)

      $.008 adjusted for Inflation  =  current copper price/gram of $.0077
      $.011 @ current spot price  =  1.5x current price/gram 

      These are the values I get for the USD, I’ll convert to Copper Values:

      $.0077 per gram  (~$351/pound, divided by 453.59 grams to the pound)  

      Just like those bastards to devalue Copper by a factor of 10 and peg the dollar to it. A single 95% copper cent is currently
      worth   $.023 and they are saying that the dollar is worth 10 grams copper… gimme a Break! I know there are other factors
      in the value of the USD but NO WAY is it worth 7.7 CENTS in REAL VALUE!!! C’mon Man!  

  27. @RocketsRedGlare

    You ought to look into ‘Union States Project’  ( http://www.unionstatesproject.org/ ) and get involved. They’re right up your alley!

  28. undeRGRound   I’ve worried about containers for phyzz and ammo for years.  With plastic and metal ammo cans available on the internet for about $15 each, a good price considering the life span of each, I prefer the metal ones.  I’ve bought the baker’s dozen of the metal ones and living at 7,000 feet, when I open these cans, the air rushes out, telling me they are air tight. They may even be water tight.  Metal rusts, to be sure, and buried for a period of years, the metal will rust. But these thick skinned cans would retain much of the strength and shape, effectively containing your phyzz if it was still in the ballistic plastic tubes used for shipment.   Additionally, these very strong cans would be a good shield against fire. I expect that even the heat of a house fire would not melt the steel. The precious metals might melt but end up sloshing around in the bottom of the ammo can until it cooled into a misshapen blob of .999 silver mixed with a bit of unmelted plastic.   The long lived plastic ammo cans are an alternative.  They are not fireproof, a personal requirement of mine, by they are rust proof, able to resist decades under ground or even underwater.  I’ll stick with metal over plastic containers as they have the qualities of air and water tight nature coupled with a decades long durability.  Last but not least, you could go with Monotubes.  They are not fireproof but they are completely water and air tight and would stay buried long beyond our short life spans.
    Monotubes are expensive so you could go the route of my father in law. He started stacking in the 1970s when gold and silver was cheap. He bought solid PVC piping used in the hot dry Arizona summers. With a thick shell and glued on end caps, his phyzz stacks endured unscathed for decades. The only slight flaw was some water instruction into the platinum ingots. They were numbered and in plastic sheathes. These were slightly muddied. Plastic covers were badly damaged. The metals dealer in Phoenix couldn’t care less. He bought them from the estate at spot, mud and all.

    • Thx AG! I’ll check into that. I saw tall ammo cans too.

    • Or, you can build a secret fireproof vault that is located under the ground. Its entrance is blocked and hidden with something like a big boulder or something else that is easy to move. When the SHTF, you refuge inside that vault with foods, water, weapons and other supplies.

  29. @undeRGRound … “gimme a Break! I know there are other factors in the value of the USD but NO WAY is it worth 7.7 CENTS in REAL VALUE!!! C’mon Man!”

    SEE? This is what I mean about breaking free of embossed numbers to emphasize purchase power instead! To arrive at two and a third cents per pre-1982 penny is to use the banknote measure. A penny is a hundredth of a genuine dollar. The banknote has depreciated 97% in purchase power, so the real residual value is three pennies, or 10 grams copper.  The Mint has actually BEEN doing this all along. If you follow the sizes and alloys of the ‘dollar’ coin they mirror depreciation (like the postal rates were for the longest time). Today, a ‘Presidential Dollar’ has a 0.06 melt value in banknote terms, or roughly … three pennies! 

    • another cent. Yes, I looked at that too. The SBA’s are worth a bit more, like 1 cent.
      Thanks for pointing this out, PF! I’d love to see a copper backed Dollar.  

    • @undeRGRound … “I’d love to see a copper backed Dollar.”

      Banish the word ‘dollar’ from your mind! You’ll notice I almost NEVER use it myself. They’re … banknotes! The nomenclature and its ‘evil twin’ numeralization are mental distractions from … purchase power … value in metallic rational inter-relatedness. A ‘dollar’ is a COIN containing 371.25 grains fine silver. There is NO ‘BACKING” involved whatsoever. The silver ‘backs’ itself! The point is not to have a copper ‘dollar’, but a replacement of the damnable banknotes in an appropriate metallic form that simply turns out to be copper in a 10 gram piece. The historically proven BEST monetary scheme is visualized as a building where the founation is a copper BASE (THAT’S why it’s called ‘base metal’), supporting a skeletal frameworks of silver, all sheathed in gold. That structure needs no ‘backing’ … it had stood millennia all on its own!

    • Works For Me!

  30. @waitandwatch …”I am afraid that the arc of decline that has characterized our political institutions (and society) will not reverse or level off sufficiently to allow for any grand, bold, innovative and/or proactive moves that could avert the bottoming out.”

    Your fear is grounded in premise dependant on the de facto government. Implied lack of confidence in The People by exclusion is part and parcel with that viewpoint. Government is actually superfluous, as it’s wholly dispensible or maleable suiting necessity. Nevertheless, there are a handful of determined groups among The People (all that’s requisite in a Lawful Republic) in stations high and low, acting to restore the original, properly intended construction of governance; with its checks, balances and … order of supremacy … re-instituted. While the banknote scheme is irretrievably doomed by its fundamental structuring, preservation of the originally intended Social Order, is quickly approaching. At that juncture, despite the financial confusion, the American Ideal can again be sought. This is a phase … NOT a conclusion.

    • @PatFields

      Hey, no disrespect intended, but …

      (1) As has already been alluded to by others, your appreciation of history could use some expanding and filling.

      (2) The first half of your reply is rather convoluted (not very “parsimonious”), but I get your drift.

      (3) The second half of what you wrote evidences a sense of betrayal, as well as self-righteous anger, omnipotence and unfounded confidence that is not just unaware of the historical inflection and tipping point I spoke of, but also the strength of the forces arrayed against you and those you speak of so supportively. You will be swamped by a tide of events the size, nature and strength of which you apparently don’t comprehend. Everything that happens prior to this tsunami expending its energy is merely rearranging chairs on the deck of the Titanic, i.e. first–not second–order change. But, I already mentioned all of this.

      Anyway, you will have to exercise your “free will” and then find out for yourself about over-riding historical imperatives and fate.

      P.S. I’m moving on to other parts of the blog.

    • @waitandwatch I have to admit that I too am having trouble deciphering the commentary of Pat Fields whose misuse of words and their starnge placement out of context in sentences seems confused and rambling at times. But others here seem to like his commentary so I do read it even if I recoil at the illogic in the grammatical construction. Perhaps he can simplify his thoughts with shorter sentences and just get to the damn point instead of offering so much circular logic that seemingly leads absolutely nowhere.

      Sorry Pat…but you don’t make sense most of the time. (to me anyway).  

    • @waitandwatch

      What a disappointment! I had hoped (in vain apparently) that your little ‘mutual admiration society’ would summon up an exhilarating defense of exclusive credit conveyance by Loan at Interest, or the banknote scheme, or SOMETHING of actual substance. What do I get? Sheer, naked, baseless denigration! Why come onto the field of contention with nothing in your kit-bag but costumes? Next time, at LEAST bring a staff!

  31. @farmer

    Everyone here seems to understand what Jubilee is and how it works, so it’s redundant to restate. Very few. however, have expressed any insight as to why the mechanism was brought into existence at all. We can either uninquisitively master things as they are, or seek to reverse engineer things to ascertain whether a different state of pre-conditions might be far preferable to achieve.

    In ancient times Loan of fixed value money at Interest was the sole known means of conveying the credit function through markets. But the alternative of Real Bills began evolving sometime during the late Middle Ages and reached fair maturity by the time Adam Smith’s ‘Wealth of Nations’ popularized it. With a limited exception in England, given the Mercantilist bent of European governments at that time the only country in which it was enthusiastically adopted was America. The degree of financial advantage that resulted for society and Liberty of producers from bank dependency was so extensive, it was targeted for obliteration. While that goal was accomplished, as it’s said … ideas NEVER die.

    Bottom line is … who needs (or even WANTS) Jubilee when the overwhealming bulk of debt is … self-liquidating … and has no depletion of circulation owing to interest?  

    • “Bottom line is … who needs (or even WANTS) Jubilee when the overwhealming bulk of debt is … self-liquidating … and has no depletion of circulation owing to interest? ”

      What the hell does that mean, Pat? “No depletion of circulation owing to interest” makes no sense whatsoever to me. Can you try again please. 

    • @farmer

      It makes no sense because you apparently have no knowledge of Real Bills. A Real Bill is a Bill of Goods endorsed by the purchaser, on which the supplier extends credit for a maximum of 90 days (a season). It carries a prevailing rate of discount from face value the quicker its charge is liquidated. These are principally used to pass raw commodities through intermediate steps in a productive process to bring marketable goods to consumers. As the goods are sold, their payment passes back through the chain of Real Bills, liquidating each in turn.

      Notice that no interest is involved, the cost of money (more precisely, the beneficial use of the underlying good) for the term is rather a factor of the face values of the Bills. That cost can either be ameliorated according to the discount rate or eliminated if the purchaser extinguishes the debt immediately. In all cases, the Bills self-liquidate when the end products are finally bought by consumers.

      In the Loan alternative, where Interest is rent on money, the compounding service funds deplete circulating media each month, which is why ‘usury’ was condemned in ancient times. Interest’s monthly depletion of media reduces the community’s optimum money velocity to keep small trade brisk.

      If that’s too complicated, try Wiki. 

  32. @ undeRGRound … “No, I am not crazy, these devices do exist and make power in a usable form.”

    Do you … know … this to be true from personal experience? I’ve watched dozens of videos on the subject where the devices seem to produce the claimed results but I’m yet to be convinced enough to get out my tools and calipers. So, what’s your first-hand experience? 

    • PM’s sent.

      I have seen enough to warrant further investigation. I have described my theory to several engineering types and they have told me
      that my understanding of the pertinent phenomena is correct, and my theory of operation seems sound. It seems to explain in proper
      terms what others are doing, in part. Explaining the underlying theory, basically. It goes back nearly to Franklin and the Kite.  :D 

  33. If that’s the case, then why was a family’s gold confiscated recently due to a law that was passed down 100 years ago? The link below explains the family’s gold in more details. This incident proves that gold confiscation is still possible today.

  34. That’s right, Sumkid, the sins of the fathers visited on the family with 10 Double Eagle Sovereigns.  The long arm of the government has no barriers to time when stealing money is at stake.  As for me, back in the day I wasn’t as smart as you. All I invested in was beeer futures and stacked aluminum (cans)

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