Fiat financialization certainly followed gold’s 1971 demonetization and with it, ever increasing banking leverage. This assisted in growing the disparity of wealth on display today globally.
Ongoing is also a decreasing standard of living for western middle classes along with the crowding out of business competition through oligopolistic mergers, many of which have led to less varied services, quality products, and pricing options.
Oligarchic beneficiaries, love insider benefiting financial systems. Monopoly men hate competition. The financial system we’ve had now for many decades, remains based on ever expanding record debt levels.
This is often what’s assisted in making many individuals, embarrassingly wealthy. But merely mutter the words ‘gold remonitization’ and many in the billionaire class (and their hired talking point artists) will shriek. What you will often hear back are unexamined, emotional, baseless arguments in retort. Case in point, a goldbug’s son who strayed…
There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning. – Warren Buffett, 2006
In terms of the next new monetary system, what is past may indeed be prologue.
One of the world’s most eloquent gold commentators, makes another excellent presentation on potential new monetary system changes to come.
Below we will backlink a way for you to see this thought provoking 40 minute presentation, but first we need to give you a bit of a background on the matter.
An ongoing contention remains that the financial system is unsustainably overleveraged right now. As we by now, have likely passed $250 trillion USD debt levels worldwide.
The viability of the current financial and monetary system is increasingly coming under question. We are likely one more financial crisis from seeing real changes.
Enter much gold standard ignorance.
The fun really gets underway at $800 & $1000 USD
— James Henry Anderson (@jameshenryand) January 26, 2018
Gold Standards are Enacted to End Financial Crisis
When people or even recent presidential candidates talk about gold standards, they often do so inferring that they are by choice. While in fact, history shows that not to be so.
Historic strict gold specie standards were often enacted to subdue financial crisis, and further protect against the hard lessons monetary maleficence can ultimately produce when left unchecked.
Recent Gold Monetary System Involvement Timeline
Pssst, did you know Bank and Financial Crisis are more common without Gold discipline?
Judging by their actions and recurrent news headlines today, the current rules based global order is not working for many rising powers (e.g. China, India, Russia, and other nations).
The new monetary system ‘rules of the game’ are more than likely going to be remade and reset perhaps sooner than most mainstream financial commentators, participants, and onlookers think.
Of course there have been many financial market commentators who have spoken aloud about IMF SDRs (Special Drawing Rights) as a proposed next monetary system solution.
Hardly ever mentioned is that the original SDR was defined as a fraction or slightly less than 1 gram of gold.
When that quickly failed, the SDR composite currency index went full major fiat currency tracking. Thus debasing heavily versus any precious metal bullion value as per usual, over time.
The overall IMF SDR idea basically fell by the popular way side until its 2008-2009 comeback into the monetary and financial system conversation.
Since that date, even some of its original architects have been claiming a coming debt crisis is what will indeed catapult the SDR into its future ‘destined role‘.
We even ourselves made videos on the matter in early 2015, which you can watch below.
Note at the 5:32 mark, former World Bank head Robert Zoellick, prescribes gold’s involvement in the next monetary system too.
The Bank for International Settlements and every central banker still knows full well that gold bullion remains the anchor of all currency proxies (this is why governments own about 1 in 5 oz of physical gold above ground).
All currency proxies which have followed gold, have either already failed, or are in route to destined future failures up and coming.
The video we embedded above was made just before the Chinese yuan renminbi currency was officially accepted into the IMF SDR ‘magic circle’ around the same point in time that China under declared her official People’s Bank of China gold reserves at a non-boat rocking 1,658 tonnes (summer of 2015).
Anyone monitoring physical gold bullion flows since the 1980 financialization of our western economies would likely estimate that China has over 10,000 or up to 20,000 tonnes of gold reserves. Of course, most of which have yet to be declared ‘officially’.
Remember that in China, the central government has various hidden pots of gold bullion. Basic import export figures over the last few decades makes more Chinese sovereign gold bullion reserves a damn certainly.
Many fold her current official gold reserve claim, she has more gold bullion ranging from her major bank holdings, her sovereign wealth funds, her world leading domestic gold mining industry mining some 500 tonnes a year, her ongoing gold mining military efforts, and her undeclared post 1983 gold bullion buying spree to date.
Slowly we move from a dominate US dollar reserve currency world. Perhaps some day, much more quickly, into a monetary world in which various parties have more of a say (Europe, Japan, China, Russia, India, etc.).
As many eastern nations and even EU members, now openly talk about building their financial sovereignty and firewalls ( i.e. further financial autonomy without unilateral SWIFT sanctions from the USA having as drastic of effects in the decades to come).
Perhaps in most of our lifetimes we will see a more multipolar monetary world.
But again, most likely only after another major financial crisis which gives birth to it. From here to there, we are expecting major structural changes will come along with a major revaluing of all asset classes en route.
Prudent bullion allocation continues to make common sense today.
Especially with potential future financial crisis and deleveraging events where many unpayable debts are finally realized and written down, and or are heavily debased upon.
Yet aside from the building financial folly surrounding us, there is also a historic and price stability case for why reintroducing gold discipline back into the monetary system’s future, makes prudent sense too.
The co-founder of Real Vision, Grant Williams, just made a presentation on this topic of gold remonetization potentiality and the after affects of worsening financial discipline since Nixon killed the US dollar’s final gold ties in 1971.
Gold New Monetary System Potential
Discussed in Grant Williams‘ presentation, the following ideas are touched upon.
– The ability of having a stable price, has great value (for the mass of humanity).
– The most perfect currency based on price stability. One made not by humans, but by some of the most violent and rare events we know of.
– War, human greed, and unsustainable political promises lead to trouble.
– Commodities priced in fiat vs Gold over centuries.
– Why those living now are mostly clueless about gold standards.
– Alan Greenspan today and before his Federal Reserve tenure and actions double crossed his writings.
– The Cry Wolf phenomenon that Grant Williams, ourselves, and likely you might also resonate with at the moment.
– A bit on John Exter’s inverse gold pyramid. An illustration which shows how financial spill over and deleveraging crisis may flow from most to least counterparty risk laden assets.
– The tight grown and growing correlation between increased fiat financialization & disparities in wealth.
– How people incorrectly presume Gold Standards come about ( as if by mere chance or random choice ).
– The disincentive for today’s enriching and self-benefiting ‘establishment’ from bringing back some financial and gold discipline (w/o another financial crisis requiring its reestablishment by market forces or emergency decree).
– An analogy between the reintroduction of the Great Wolf to Yellowstone National Park and what the reintroduction of a gold based financial discipline could mean for increased financial competition (e.g. a future with a more broadly balanced economic well being for more people, one with more stable prices, and improved savings / property rights).
PRESENTATION: ‘Cry Wolf‘ by Grant Williams
^^^ Take the time to watch this ^^^
Grant makes a sound case for gold’s involvement in the next monetary and global financial rules based system to come.
There’s good reason our forefathers depended upon bullion as a safe store of value for millennia.
We should again consider deploying its disciplined use to wisely revamp, in the next financial crisis to come.
About the Author
James Anderson has a BA in finance from Loyola University New Orleans. Having both worked and invested in the physical investment grade bullion markets beginning prior to the 2008 global financial crisis.