THE GOLD TO GDP RATIO OF “THE MAJOR PLAYERS”
This important little tweet was spotted by V.T., one of our long-time and regular article spotters and sharers, and a big thank you for doing so, because the numbers here confirm something that has long been a suspicion of mine. But first, the tweet:
Here are the real gold powers ranked by their ratio of gold to GDP. The ranking shows how much real money each has to support its economy:
Russia - 8.3%
Switzerland - 7.6%
Italy - 7.4%
France - 5.3%
Germany - 4.9%
U.S. - 1.9%
India - 1.4%
Japan - 1.3%
China - 0.80%
UK - 0.60% pic.twitter.com/3e6qliPUBK— Jim Rickards (@JamesGRickards) February 14, 2024
Now normally I would not bother with a tweet on "x", but as this one comes from Jim Rickards and therefore from a stable source, it's worth taking a look at, because I think the implication is clear.
You'll note that what I've been saying for a very long time (almost as long as this website has been in existence, and as long as I've written books about finances and money) is true: there is far too little gold and for that matter, silver and other types of bullion to support any wholesale return to "the gold standard," because as a percentage of national gross domestic product, gold reserves only approach the benchmark of ten percent.
That ten percent benchmark is probably significant, because that is usually considered the target benchmark of reserves required to make a fractional reserve system work. If, say, a bank has on its books $1,000,000 of assets in deposits, the rule of thumb is that it should have about $100,000 in actual cash in its vaults in case depositors demand to convert their deposit into cash and withdraw it. And of course, runs on banks are when its solvency becomes suspect, people lose trust in the institution, and a considerable percentage demand their deposits be converted into cash. When this demand exceeds the reserve supply, the bank shuts its doors, stops the hemorrhage.
Now imagine the same situation with regard to bullion rather than cash. In the system that actually prevailed during "gold standard days," convertibility and reserve requirements meant that there was never enough bullion to cover all the certificates in circulation based upon the bars in the vaults. So how did the system actually work? The answer to that may form a clue as to what is taking place now, and to see the answer, a quick look at the American War Between the States is in order. Both the Union and the Confederacy financed their burgeoning war efforts largely by fiat monies (though, strictly speaking, the Confederate version was a bit "strange"). Both sides restricted the use and circulation of specie - gold and silver coin - because this was needed to pay foreign creditors. Thus, both sides would not accept their own fiat currencies in payments of taxes on imports or exports, but only in the conduct of other normal everyday transactions.
In short, the system was a two tiered system, and so long as specie money was restricted as a means of financial clearing to being largely between "major players" like governments, the system worked. Convertibilty was restricted to the banks. As specie flowed into the respective governments in payment of export or import dues, those governments in turn leveraged their specie and bullion for foreign credit and trade. "Yes, we'll take Confederate dollars, so long as they're in gold or silver." (And, I'll wager, the exact same holds true today.)
Thus the amount and spate of gold buying we've seen recently suggests that this may be the goal or intended "stopping" point in any global financial reset.
But there's a problem, and as far as I can tell, it's a problem that faced not only the Confederacy, but it's modern financializing counterparts: with so much speculation and inflation of paper in the financial system, not just of paper notes of monetized debt, but other financial instruments like derivatives and so on, the whole thing has become massively inflated. One can either go out and find more gold and silver to be able to prop up the massive expansion of such instruments, or one can attempt to financialize other commodities. We've seen Mr. Globalooney attempting to do the latter in recent years, with the financialization of the very basics of life: water, food, the air, the climate, and so on. This should be a warning and measure of just how insane the whole system has become. And how very near it is to collapse. And it's an experiment that the Confederacy actually tried: massive inflation "backed" by the commoditization of its only internationally tradable resource: cotton.
Notably, in 1864 as its economy finally began to collapse, and in spite of its legal proscriptions on the circulation of gold and silver, the latter became the most sought after form of money in the very Confederacy that had attempted to restrict its use in order to increase its own supply of it. The opposite happened.
The lesson: unless convertibility extends to all, and not just the banks, then it is not a real bullion-backed system.
And there's another lesson that history also teaches: one can only add so many zeroes to a system of fiat money before the necessity of a revaluation occurs, and that revaluation usually has meant the sudden shock of lopping off lots of those zeroes. And the only way to do that is to bust the financial speculation in paper financial instruments.
Just ask Hjalmar Schacht, the head of Germany's Reichsbank, because that's how he did it in 1923. Oh, and by the way, it's worth remembering that he was "on" to the whole convertibility scam, because in 1928 during a visit to the New York Federal Reserve, he asked his friend and the Governor of the New York Fed, Mr. Strong, to see the Reichsbank's gold reserves. A nervous Mr. Strong had eventually to inform Herr Schacht that the German gold could not be located (!), whereupon Herr Schact smiled - no doubt mischievously - and said "that's alright... I know you're good for it..."
In other words, "I'll be back..."
One has to wonder if Germany's much more recent repatriation of its gold from the Fed, from London, and from Paris, has something to do with it, if, indeed, it was the ghost of Hjalmar Schacht, returning for his gold.
Bottom line: insist on convertibility for individuals, and insist that those bullion depository certificates of deposit can not only circulate as money, but that anyone can demand their convertibility into specie at any bank, savings and loan, or credit bureau. Otherwise, it's just another banksters' game. And get ready, because it's looking increasingly like they're getting ready to lop off a lot of zeroes.
And another tip, you have another tool besides interest rate tinkering that you seldom talk about publicly: reserve requirements. This should, and must, become an immediate part of the discussion connected to state bullion depositories along with convertibility and use of circulating certificates of deposit. Otherwise, guys, you're just play-acting.
See you on the flip side...
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We are no longer a fractional reserve system, we are now a NO reserve system. Also in case anyone didnt get the memo, the banking regulations changed in 2014, any money you deposit in the bank is now considered an “unsecured investment.” Caution Will Robinson, Caution. 🤖 🫡
Events that will be worth watching closely in the coming months and years is that Russia, like China and other BRICS allies may not be fully reporting their accumulated gold reserves to the IMF. That should become a key consideration since no country is obligated to any other country to report any true facts to their enemies during a war. For starters there is the real consideration that in hindsight the cleansing of the Azov Battalion troops in the Ukraine was the beginning of WW3.
The trouble with using gold as a reserve to support and underpin a Central Banks national currency, is that gold is priced in US Dollars and measured in US ounces $oz across the world. That means gold as a mined commodity is always rigged to the US dollar.
So everything hinges on the USA. Recently, the price of gold has hit record highs of over $2000 an ounce. The price of gold is inversely linked to the economic health and performance of the USA. The high inflation in the US is the cause of the recent record high price of gold.
Currently, given persistent inflation, financial markets trust ‘solid’ gold to hold and maintain its value, much more than ‘paper’ US Dollars.
Troy ozs🫡👆🏻
Somewhere in my ‘stack of stuff’ is an article written by Goldcore about the Ruskies buying tons and tons of gold just prior to the Ruskie’s invasion of the Ukraine. Then it began to make more sense to me when the Western nations imposed monetary sanctions in order to bring all nations under their ‘monetary thumb’. So, why would the Russians began hoarding so much of the world’s gold reserves when they were also one of the largest producers of gold? Then considering the BRICS alliance of nations, which includes South Africa, and other nations that also produce a lot of gold what in the world do those dastardly Ruskies know that most of the other nations with their ‘dumbed down’ populations have no clue as to what is being planned for them?
It is my understanding there is gold and silver near the area of the Russian occupation, not to mention the minerals and very rich soil…. hmm. Who will get them? Black Rock or the Russians. No winners there.
Tzar Geronimo & Russian redskins stake a claim.
https://dl.dropboxusercontent.com/s/jxcc5zjhzvakwls/geronimo.jpg
YEP
From 1792 to 1934, the US Congress defined the US dollar in law as 23.22 grains of fine gold. This worked out to a troy ounce (480 grains) of gold was worth $20.67. The $20 gold coin was 464.4 grains of gold (20×23.22) and the remaining 15.6 grains of the coin was composed of an alloy of silver and copper. During this period 1792-1934, the wealth of the US increased exponentially when compared to the stable money supply.
Could the US return to a gold back dollar today? Back of the envelope calculating says yes.
The money supply in the US is the total amount of money (gold, currency, savings deposits and checking accounts, etc.) held by the public and is estimated at $1 trillion dollars. Dollars held overseas are labeled EuroDollars and are not part of the US money supply. A US dollar held in a Canadian bank is a EuroDollar by definition.
Sir Isaac Newton was a comptroller at the Bank of England and as such determined gold bullion of a value 40% or greater of the outstanding money supply would be needed to be held by the Bank to support the currency.
To support the US money supply of $1T the Federal Reserve would need to hold at least $400B in gold. On 28 Feb 2021, the US DoT reported holding 261.5M oz of gold (https://www.fiscal.treasury.gov/reports-statements/gold-report/21-02.html). This would result in a gold price of $1530 ($400B/261.5M) per ounce and would support the 40% bullion needed for a $1T US money supply. This would define the dollar as 0.314 grains of gold. If the dollar was defined as 0.2322 grains of gold, the price of gold would be $2067 per troy ounce, a $2000 gold coin could be struck and issued, and the gold bullion held would be valued by law as $540.5B or 54% of the $1T money supply.
So yes the US can implement a gold back/priced monetary system. It’s just a matter of defining the dollar in a weight of gold based on the amount of USG gold held, the outstanding US money supply, and satisfies the 40% or greater bullion requirement. However, to do so would set off such a financial storm that it would make the Great Depression look like a firecracker when compared to a hydrogen bomb.
But it must be done because the Russians are running the agenda for BRICS this year, and they will most likely introduce the gold-priced trading system which they were prevented from introducing last year in South Africa.
Only, by secession, can new instruments of trade be created. Only, by secession, can individual American states join the gold club of the BRICS trade.
Only, by secession, can a new Protestant Reformation arise, against the Roman Catholic Church. Only, by secession, can the Vatican be destroyed.
The dollar is not redeemable, because it is an instrument of the federal union, which is an imploding empire, and an empty sack cannot stand upright.
The Bering Strait land bridge is a continental handshake of peace.
https://dl.dropboxusercontent.com/s/s7tnc0ze5af0u3k/uncle-traveling-matt.jpg
Mr. Rickards uses a GDP to gold ratio for measuring economic power. GDP is the monetary measure of an economy’s total output in a specified time.
Currently, USG reports GDP as 3.3%. The USG also reports current inflation is 3.1%. So is the US economy growing at 3.3% as indicated by GDP or, when inflation is also considered, is the US economy flat and stagnate?
If at the end of year 1, total sales for 10 items is $100, and if at the end of year 2, total sales were $108, then GDP and the economy would be reported by USG as growing at 8%. However, during year 2, because of inflation, the cost per item was raised from $10 to $12, and only 9 units were sold for the total sales of $108. So, is the economy expanding at 8% as GDP indicates, or is the economy contracting because production output declined by 10%?
GDP is a slippery metric, which is why the USG utilizes it, and Mr. Rickards shouldn’t.
The ancient proto-Scythians solved the inflationary problem, by systematically rebooting their economy, by seven years intervals, when farmland was left to lie fallow, every 7th year.
It is a recognition, that speculative derivatives are an inherent flaw, in all systems, which has countermeasure, in pre-planned cycles of reboot, as tactical reset.
BTW, normally it is called “Sunday”, when man has a tactical reset, in labouring cycle, and, holistically, society was seen as greater man, and he was brought to a regular halt, likewise.
The modern idea of perpetual progress, spiraling out of control, is unnatural and demonic, whereas taking regular pauses, at the milestones, is the natural walkabout, on the great road.
Mr. Rickards also implies “real money”, i.e. gold, is an indicator of a country’s economic strength. I’d disagree. The amount of gold in a country’s treasury does not determine a country’s economic strength. The classic example of this is 16th century Spain, whose treasury was full of the gold she’d imported from the New World, when compared to 16th century England with little gold but the stronger economy based on textiles, farming, mining and fishing. Spain was richer in real money but England had the stronger, wealthier economy. A modern example would be to compare oil-rich Saudi Arabia to the stronger, oil-poor Japanese economy in the 1970’s. In the end, an excessive amount of gold possessed by a country can become a “classic resource curse” and not an indicator of economic strength.
It seems that [speed], computing speed to measure volatility in the markets, is everything these days. It’s surprising that there’s any likeness of stability for the cautious investor to invest. It often comes down to what is beneficial and useful between merchants and traders. Spain’s plundered gold, for example, benefitted few while farming, industrial, and export trade involved many..
One thing about expanded commodities is that they seem subject to the activity of the players. That in turn seems dependent on their wealth (as they determine it for trade), the environment for the trading, and the returns from their efforts. Precious stuff (metals, jewels, and the like) vs that which provides for commerce to take place in the first place (that’s a lot of stuff – food, eats, drink, travel, and hired help that are not enslaved -there used to be much more of this not to long ago).
Then again, it depends on what twinkles in the eyes of the beholder. Especially, for those that insist on modern business, brinksmanship, and bucks to satisfy their strategic needs and long-term goals. Money, after all, is an agreement between business traders no matter its form and no matter where in those chains of transactions.
Seems the only thing Amerika produces these days are bad movies.
I agree that reserve requirements and convertibility are essential issues. It’s also true that when confidence in paper currency evaporates, the general public reverts to using something else of perceived value (often, physical gold and silver), regardless of government policy and proscriptions.
There are, however, a few things about official use of bullion that concern me. For one thing, nobody knows how much bullion actually exists on the planet.
Historically, if I understand correctly, there has never been enough bullion available to the general public to support a vibrant, growing economy for the masses. Hence the utility of fiat currency when used properly.
Proper use of fiat currency means that a government issues it, and maintains its supply, in proportion to actual economic activity (i.e., the actual volume of goods and services produced). Improper use of fiat currency means issuing too much of it, in order to do any number of nefarious things, like saving failed banks, issuing tons of credit for things that don’t lead to greater economic productivity, paying off friends of the régime, buying votes, facilitating large-scale speculation, and paying for wars a country can’t afford. The U.S., of course, has been doing all of the above for a very long time . . .
Another issue: Let’s say some bank or government bullion depository claims to have some percentage of its reserves in bullion. Is the public apt to believe them? I don’t know. I suppose that convertibility of paper certificates for individuals could inspire a degree of confidence in a bullion depository’s alleged reserves.
I think it comes down to trust, a reasonable level of integrity, and some semblance of the rule of law. Any monetary system, with or without bullion, is inevitably doomed when those things are absent. In the present era, governments in the West are sorely lacking those things.
I don’t have any brilliant ideas about how to fix any of this . . . I just wanted to share my thoughts.
There is a simple fix:
ᚠᚢᚦᚩᚱᚳᚷᚹᚻᚾᛁᛄᛇᛈᛉᛋᛏᛒᛖᛗᛚᛝᛞᛟᚪᚫᚣᛠᛡᛢᛣᚸᛤᛥ
All interactions are based on principles, and agreed upon realities, and, fiat is an agreed upon reality, that is trumped, by principles.
The international money power is mortally afraid of the idea of the cross, because is a fixed point, which induces a central hub axiom.
The reason, why I can say that, with absolute certainty, is because Black Elk’s “Six Grandfathers” is a permanent fixed point, in the flux.
It is always a matter of principle.
BTW, philosophically, the firm spot is standing inside the compass idea, as an ontology, which becomes a permanent “affliction”, when breaking the 7th seal, which reveals the Grail runes: ᛢᛣᚸᛤᛥ, in Genesis.
“Give me a firm spot, on which to stand, and I shall move the earth.” – Archimedes.
Gold, Silver, Platinum, and Labor are the real valuable commodities not paper money and coin must have value or it is worthless too
Yes, the Genesis idea is the fixed point of the labourer, centered around his creation, and from there, there are derivatives, as organised principles.
The labourers’ guild is at liberty, in Genesis, because creation is endorsed, as the first principle, underpinning everything else.
In one’s view, the whole kit-n-kaboodle of exaggerated finance isn’t worth the metal lugged around for show and tell. All are worthless when people who use it do not prosper with food, drink, and shelter. Real goods for real goods maintain the day of daily bread. A potential the masses may yet return to. It is far superior than metal chunks and the fancifully colored paper or documents of IOU’s that distort true and lasting wealth out of convenience.
Then again, it depends on what twinkles in the eyes of the beholder. Especially, for those that insist on business, brinksmanship, and bucks to satisfy their strategic needs after their corporeal departs the density of gold that once kept their place in the chase.
A lucky Leprechaun one might have, thanks to dear mother and her beginnings; keeping company with the treacherous and thieving type one has seen, yields only bare trees and empty soils of greenery, a route best not taken.
Each has a type of priceless currency but it’s not in metal and paper things.
The thought, that fallen Samaria would have risen again, in Crimea, is the most banned proposition, because, such an insurrection carries the idea, that man owns the fruits of his own labour.
Even though 27 centuries have passed, then Scythian Crimea still carries potency, because it provides a political lynchpin, that explains the political backdrop, behind, what is sold as religions today.
Russia is the carrier of an unbroken tradition, in that part of the world, and, an atavistic throwback holds the auspicious promise, that nothing is ever forgotten, which is, why forefathers do matter.
There is always a quest, in a question, when realising one’s own limitations, which spurs further study.
When I read in “Hidden Finance, Rogue Networks..” That one of the groups Dr. Farrell considered capable of the penetrated 9/11 op was the Japanese Yakuza, I thought that was a stretch. But reading this article, maybe I underestimated them a bit:
https://www.cnbc.com/2024/02/21/feds-charge-japanese-yakuza-leader-with-nuclear-materials-trafficking.html
Is there an off-world trade going on in gold/silver and other precious and rare Earth metals?
Thus, there is a Space Force protecting and enabling that trade?
How long has it been going on. Before there was a Space Force?
Before there were Nation States?
Since the Cosmic War?
Before the Cosmic War?
When the world’s central banks realize they no longer need U.S. dollars for trade, they will start cashing them in. That has to be a totally inflationary event for us in the good ole US of A. I have tried to get a handle on just how many U.S. bucks have been tucked away in central banks of the world. But if anyone knows, they are not talking. Any ideas out there?
1. Today, I exclusively identify as Scythian, because ancestral Odin was Scythian, before he entered Europe, as Saxon, and settled in Scandinavia. I’m ancient, not modern.
2. Historically, Crimea is the Scythian headquarters, and the new Samaria, from where the deported escapees retaliated, against the Assyrian empire.
3. Today, the Assyro-Zionists are ideologically bankrupt, because the fake Jerusalem is built on sand, and won’t stand, and therefore they need, to steal the Scythian identity.
4. Wall Street is stealing gold, by heisting the Russian Tzar’s gold, and plundering the Crimean museum exhibition of Scythian gold, in the Netherlands, which is identity theft.
5. The Assyrian loyalists, who have stolen the proto-Scythian identity, need to re-evaluate their speculation, because a lie, on repeat, wears thin, and makes a hole, in their pants on fire.
6. The Scythian alchemist is pure plasma, and everything he touches, turns into gold, which is why the Assyro-Zionist vampires seek to sip a straw, in his Scythian veins.
7. The Scythian position is scientific, and defined, by a sequence of symbols, that makes up a verifiable rebus, from where the Scythian identity is extrapolated, which is pure gold:
ᚠᚢᚦᚩᚱᚳᚷᚹᚻᚾᛁᛄᛇᛈᛉᛋᛏᛒᛖᛗᛚᛝᛞᛟᚪᚫᚣᛠᛡᛢᛣᚸᛤᛥ
Scythio-Samarian gold:
https://www.rt.com/russia/592436-crimea-ukraine-netherlands-echr/
Mad King George & Co:
https://dl.dropboxusercontent.com/scl/fi/xp6kyjuvcqtjdy1zbs1yf/looney-tunes8.jpg?rlkey=tjcb4ezgdi63qgipav8kvuzvm
BTW, Odin settled in Odense, Odin’s vé, which means Odin’s court, from where Scythian law, defines Europe, by precedent, and the Supreme Court of the Netherlands has no say in the matter.
Scythian Odin has plenty of molten gold reserves, to pour down the throat of the Supreme Court of the Netherlands, because Protestants and Catholics love eachother to death, in Europe.
The majority of Central Banks hold their reserve currency in US Dollars. The European Central Bank holds majority of its reserve currency in Euros. Of course China wants to increase use of the Renminbi as a reserve currency. Gold, silver, oil and other commodities are traded in US Dollars. I can’t see local currencies taking off, given survival of the fittest always applies in economics. You only have to consider the Euro, to see the rocky road it was on after its launch. Also look at the ups and downs of the Pound Sterling over the past 50 years.