Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek Radio: Bill Murphy and Andy Schectman, and Chris Waltzek
By: radio.GoldSeek.com

State of Inflationary Confusion
By: John Mauldin

BROAD US STOCKMARKET update - IN POSITION FOR DOWNWAVE NUMBER 2...
By: Clive Maund

Gold’s Basing Pattern Continues
By: Gary Savage

Stock Market Volatility Attributed to 'Shenanigans'
By: Michael Ballanger

Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Roughly 1% on the Week
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 2 23 2018
By: Ira Epstein

Unintended Consequences, Part 1: Bigger Deficits = Higher Interest Rates =…Many Bad Things
By: John Rubino

A Roman lesson on inflation
By: Alasdair Macleod

COT Gold, Silver and US Dollar Index Report - February 23, 2018
By: GoldSeek.com

 
Search

GoldSeek Web

 
Floating Exchange Rates = The world we have today


 -- Published: Monday, 17 August 2015 | Print  | Disqus 

Why is this so difficult for people to see? There can be no confusion about the issue that is sending the world headlong into financial chaos. It is the positively stupid idea of letting unbacked currencies “trade” against one another.

Firstly, politicians are corrupt in every country. They say that death and taxes are the only two certainties? Wrong! Corrupt politicians are a certainty as well. As a result, these politicians get elected via unreasonable promises from a monetary perspective. When you add the fact that sovereigns issue debt as money and not cash you MUST back that debt with something and that something used to be gold.

Instead, post Nixon, the geniuses in charge thought it a splendid idea to let unbacked currencies float. That way the “free market” would decide who had the cleanest shirt. Did anyone ever stop to think that governments have always defaulted on their debts and at some point defaults in economies that truly mattered would start to default again?

Every developed nation is swimming in unsustainable debt without a gold standard to default against. So, we are left with Japan trying to crush its currency, Europe as a whole trying to crush its currency and now China must crush its currency (free market…sure). But, what about the biggest debtor of all the US? Somehow, the US whose total debt level and unfunded liabilities dwarf that of the worlds is watching its currency soar? That makes everyone holding US Treasuries externally richer and the US government a whole lot poorer.

But hey, gold’s a pet rock and has no place in the world of money right? Well, anyone espousing the theory that the gold standard did not work is about to see what a world of sovereign defaults looks like without it.

In the end, sovereign governments have no business issuing debt as money. They should issue cash! If the money center banks insist the politicians issue debt then debt has to be backed by something, should the debt need retiring. It is that simple.

This is an unholy mess we find ourselves in and anyone that thinks there is enough capital to convert privately the outstanding debt into equity at the sovereign level is clueless. So, put your crash helmets on and watch the carnage unfold but if you are looking for someone to blame forget it. The fatal blow that Nixon dealt to the globe was hatched by those that have long since passed being relevant in the monetary world.

 

It’s a Mystery


| Digg This Article
 -- Published: Monday, 17 August 2015 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.