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.com Radio: John Williams and Louis Navellier, and your host Chris Waltzek
By: radio.GoldSeek.com

Gold Market Update
By: Clive Maund

Technical Scoop - Weekend Update Nov 19
By: David Chapman

Zero Hedge invites Financial Times to heed GATA's urging on gold suppression
By: Chris Powell

The Great Retirement Con
By: Adam Taggart

Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom
By: Gary Tanashian

Global Silver Investment Demand Maybe Down, But Still Double Pre-2008 Market Crash Level
By: Steve St. Angelo

Secular Bull Stock Market?
By: Gary Savage

Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Over 1% and 2% on the Week
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 11 17 2017
By: Ira Epstein

 
Search

GoldSeek Web

 
Chart of the Century!


 -- Published: Sunday, 7 August 2016 | Print  | Disqus 

By Bill Holter 

  In a recent article, Peter Degraaf posted a series of charts including   the one below.  I must confess I had never seen this particular chart before but extremely glad it was posted.  I knew the monetary base had grown wildly but did not realize the extent until seeing it in graph form.  While Peter spent just one paragraph on this, let's look at it in depth to get a better understanding of why it is so important and what it really means.

http://goldseek.com/news/2016/8-3pd/image001.jpg 

Macrotrends.com

   Let's start by deconstructing this down to what it really means.  First, I must confess I do not know whether this chart is comparing the "priced" amount of U.S. gold to the monetary base or rather the price of gold to the monetary base (because the axis is not labeled).  Either way, this chart tells us something VERY important!  The price of gold relative to the monetary base has never been lower than it is right now other than the at the end of last year. 

  Looking at the chart, you can clearly see the "markup" of gold in 1933 from $20.67 to $35.  You can also see the run from $35 to $850 during the 1970's and peaking in 1980.  You can also see the turn in 2000-2001 when gold traded down to $256 per ounce.  These were very important generational turns but we can glean something even more important from this chart.  In relation to the monetary base, you can now purchase gold below $20.67, below $35 and below $256 when adjusted for the monetary base outstanding!  The monetary base has grown and grown for 100 years, it has exploded in the last 8 years. 

  Making this simple to understand, as the monetary base grows (money is printed), it is like slicing a pie.  With each "cut" (addition of dollars), each slice gets smaller and smaller.  As with anything, the smaller something becomes, the less valuable it will be.  In banking or finance, this concept is called "inflation" when a currency becomes more plentiful in relation to goods ...prices rise because it takes more of the more plentiful currency to purchase the same amount of goods as compared to previously.

  Shifting gears, there is another side to this equation and one the powers that be are desperately trying to keep hidden from you.  They have been suppressing the price of gold to hide the fact they have sliced and diced the "dollar pie" until now the slices are miniscule (the dollar has very little value left).  They have done this at the same time "risk" has exploded.  When I say "risk", I am talking about systemic risk.  Never before has the world taken on as much leverage in relation to GDP nor versus collateral.  Banks, brokers, insurance companies and even sovereign governments are now more leveraged and financially in higher risk situations than ever before in history!

  I would be remiss in writing this if I did so without talking about "U.S. gold".  There is so much anecdotal evidence the U.S. has been divesting gold (even custodial held gold) for years, in no way can anyone credibly believe the 8,300 tons claimed is still there.  If this is the case which I absolutely believe it is, then the above chart would be revised to even lower levels.  I guess the best way to illustrate would be to go back to our pie analogy, how big would the many more slices be if the total pie was the size of a thimble?

  Going one step further, "gold" has been rehypothecated many times over.  We have seen instances on COMEX where there were more than 500 ounces represented by paper contracts for every one real ounce they claimed to have.  We have no way to know what the real global number of hypothecated gold is to actual gold ...but we will find out sooner or later and the mass of paper owners will be left holding just that ...paper.  The cover up has gone on for years and was done to support confidence in the dollar, U.S. Treasuries and the fiat currency system in general. 

  The currency/debt system we live in will mathematically implode as sure as the Sun will rise tomorrow.  This is simple logic, the system as a whole cannot grow enough to pay back nor service the debt already in use, "debt saturation" if you will.  Richard Russell called it "inflate or die" which means either "inflate" the currency or outright default, there is no in between in the end.  Someone, somewhere "loses", there is no way around this, the odds greatly favor the holders of currencies as being the losers rather than outright default. 

  To finish, it is my hope you are putting 1+1 together while reading this.  There has never been a more dangerous time financially than today in all of history.  This, at the same time gold has never been cheaper in relation to the amount of dollars outstanding.  This 1+1 is a no brainer, never before a greater need for the safety of gold and never has the insurance policy been this cheap!  Of course we could talk about silver which is extremely cheap versus gold but that would be overkill for another writing.  This will end with a massive call on gold by EVERYTHING credit ...which is everything, everywhere financial!  The "call" for real gold will come on like a light switch flipped overnight.  You either have it, or you don't ...and never will!

  This was a public article, if you would like to read all of our work please follow this link to subscribe https://www.jsmineset.com/membership-account/membership-levels/.

Standing watch,

Bill Holter

Holter-Sinclair collaboration

Comments welcome  bholter@hotmail.com


| Digg This Article
 -- Published: Sunday, 7 August 2016 | 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.