If the Masses Lose Confidence in the Currency…

Mac Slavo
February 24th, 2013


At a recent  meeting of the American Economic Association a vote was held about whether or not the United States should back its currency with gold. Not surprisingly, 100% of mainstream economists educated by our most prestigious universities were against such a measure.

From the top down, there is a cult-like belief that our paper monetary system is absolute and infallible.

Yet, as we have seen throughout history, and especially in the last decade, currencies backed by nothing are always debased, eventually being worth even less than the paper they’re printed on.

If you’re one of those contrarians who happens to believe, like investment guru Jay Taylor, that market manipulation is rampant and the only reason why our ‘best and brightest’ continue to promote the legitimacy of paper currencies is to maintain a perception of stability in a crumbling monetary system, then the following interview from the Sound Money Campaign is a must watch.

Taylor discusses his thoughts on the importance of hard assets, the meaning of real value, investment strategies, and international diversification to avoid a government whose aim is to punish those who will survive and thrive when things turn sour.

Moreover, Taylor delves into the real reason for why the Federal Reserve and leading mainstream economists continue to push policies that led to the financial meltdown of 2008 and why those policies will eventually lead to something much, much worse :

I think more than that is the talk that comes out of the Fed and the establishment… I think that, in part, is to keep people believing in the integrity of a system that doesn’t have much else going for it other than  talk.

Because the debasing of currency is relentless.

The Federal Reserve is expanding its balance sheets, it’s creating money out of nothing, it’s devaluing the savings of individuals through the debasement of the currency and through zero interest policies.

They’re just trying to keep people off balance so they don’t bet in one direction in favor of inflation hedges.

They want to keep people believing [inflation] is not going to be a problem. they need to do that in order to keep people believing in the dollar, which they create out of nothing.

So, it’s a giant con game.

In the end, Pinocchio’s nose will be exposed and [free] markets win out.

(Watch the interview at Youtube)

Those of us who considers ourselves ‘gold bugs’ have lost confidence in the currency a long time ago. We keep using it because we have to, because that’s what we have to  use to buy and sell things on a day to day basis.

If the masses lose confidence in the currency – and this is why I think the Fed is fighting so hard with these mind games that they play to keep people off base and keep them believing in the legitimacy of the paper monetary system – if people lose confidence in the monetary system in mass I think gold and silver will hold up as a currency.

When that happens, look out, because it will be an unprecedented event and one that promises to shake the confidence of every financial, economic and political institution in the world.

What we’re talking about here is the collapse of the world’s reserve currency – the full faith and credit of the United States of America.

Imagine not being able to complete seemingly normal transaction like buying food, gas or paying a mortgage because the dollar is no longer a viable mechanism of exchange. Likewise, consider the international implications when the US government itself can no longer borrow money from foreign banks or confidence has deteriorated to such an extent that the dollar is no longer accepted as payment for the billions of dollars in goods we import daily. It’s a situation that would make it nearly impossible for us, as a nation, to acquire essential commodities to keep our country running.

Given that scenario, one begins to understand why Western banks and governments are doing everything they can to maintain a perception of economic health and stability. The alternative really is a widespread, unmitigated disaster.

It’s a sobering thought and one that will likely come to pass in our lifetimes.

Should such a currency event occur, how will you engage in trade? As we have seen in Greece, there is a strong likelihood that black markets will pop up almost overnight, so having assets of value will certainly be an important part of any post-collapse survival strategies.

Here’s the other thing that people really need to look at.

We’re always focused on gold and silver as determined by that fraudulent measure called the U.S. dollar. What I think people should rather do is look at what will gold buy and what will silver buy in terms of a basket of commodities.

Both metals did remarkably well for quite a while, and still are doing quite well since the Lehman Brothers [collapse]. Both of them gained a tremendous amount of purchasing power vis-a-vis other commodities.

All I know, is gold is real money and the stuff they’re creating out of nothing is a fraud.

Hard assets and sound money will be the only thing of value should our system come unhinged. Those with cash savings or retirement accounts will be wiped out, just as before, unless they are diversified in such a way to avoid the initial hit and the government wealth grab that will follow. In 2008 the-powers-that-be utilized a wide variety of so-called “monetary tools” to stabilize markets and economies. Should those markets and economies crash once again, their last ditch effort to keep a system on the brink from collapsing will be exposed as nothing but the fraud and conjecture many have warned about.

Be ready for that when it happens, because it’s going to be a very rough ride for everyone.


Share and Enjoy

  • Facebook
  • Twitter
  • Delicious
  • LinkedIn
  • StumbleUpon
  • Add to favorites
  • Email
  • RSS
  • http://profile.yahoo.com/ZF2DCXZD3Q3OFEINPVABRUJ5LM mark

    I have actually lived in a country where precisely this sort of rampant debasement has occurred: Venezuela. Their money, the Bolivar Fuerte, is not exchangeable for anything beyond their own borders. Zip. Nada. The government maintains stringent capital controls which offer favorable exchange rates for the privileged few, while everyone else has to buy their euros or dollars on the black market at five times the cost. It is also impossible to buy investment grade precious metals, in spite of domestic gold mining. I could quote exchange rates, but the numbers are meaningless– it’s purchasing power which matters. They have lost most of theirs, as have we. Since the Federal Reserve was established in 1913, the dollar has lost 97% of its purchasing power. Current policies will ensure they take the other 3%. Forget precious metals for the moment, and focus on things you use every day: toiletries, storable food, decent shoes, etc. It’s the mundane things we take for granted which become precious post crash. The best advice is to get in shape, because there’s likely to be more walking in your future.

  • hvaiallverden

    In the end, Calories is the king, nothing above or beside.

    In a marked where the confidence is crumbling and reality starts to kick in, everybody is running in circles and markeds are hyped in everyway possible, and this is more akind to panic.
    By your self a base, in highwalue metals, even Titan but the price in the long run vill probably fluctuate, even caotic but in the long runn is more vitale so build up an base.
    Paper is just that, paper.
    It may look impresive, the gain maybe even more impresive, and if its tooo good to be true, it probably is, just that, to good to be true, physical is best, stocks nexts best, but they will also fluctuate, in the Monetary insanity, where druling idiots runn the shipp.
    Where intitutsa sound more like echo chambes than anything else.
    The show must go on.

    The blind is leading the blind. And of course, when they all are blind the world is beutifull, and the abyss is nohere to behold, huh, what a vounderfull world.

    There are infact regions in Africa that goes well, not at levels of the west, but they are steadily climbing, and South Ameria in general, diversify into the long haul, you may even loose half, but thats a posetive utgome, the negative is Historical, more wars.
    All in all, its the actions regading the monetary policys controlled by the FeD, that matters, itsw their f….up we are witnesing and living in, and this moronic belife in their own ilutions are staggering to behold, this monetary policy, everincreasing growth, the only systemic entety with that perseption that is know, other than the Monetary policy indused by the FeD, is Cancer.
    And we all know what Cancer is, a death spiral.
    A slow decay to it eventualy grinds in to a holth.
    Then what.

    Sitting on the fence solves nothing and prolongs everything to a distant future, the scale of the f–up desides when, and right now, not If.
    Do not lisen to the idiot savanges in charge, their mantra is hammered into their mind, and as good and boidient slaves, they repeat what their maserts are telling them to say, puch them a litle and you see, they are Blank.
    Its stunning to behold.

    Both spain and Greece sould go back to their old espective curencys, case sulved within weeks.
    And so sould the rest, we dont need a World currency, thats utter bullshitt, the level will adjust anyway, by natural causes, and not induced by manipulation and criminal Intress, weponds created to inflict Inlfation/Deflation, the devils twins.

    I am not afrid of my self or my family, not at all, despite the hardshipp we may encounter.Calories is about farming, making food where you can, 5 hens and 1 cock, is more than sufficient to give you what you need, and you can expand it to a dobbel sice and have meat to.
    They usaly do not require mutch space(but can you give them good space and deasent comoditys, well they will live longer and be happier, and happy animals er the goal), and if you treat them well, and with respect, you will have the best food avaiable at any given time, feed them well and the food they provide taste as it sould do, exelent, and smoke some, dry it, even better and can be preserved over longer time cept cold and dry.
    Even in desert areas, ceep food, in the ground, best way of preserving for longer times, learn this and you are safe.

    All this is basic and all this cost almoust nothing.
    The best investment you can do, and its close to everlasting, not bad at all, hehe.

    In the mean time, we wait.