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Politicians and Bankers Have Broken the USD - Will We Return To The Gold Standard? - Grant Williams

Published on Fri, Nov 2nd 2018 News & Politics Rectangular HD

Is the return to a gold standard ridiculous or inevitable?

Grant Williams' brilliant talk entitled "Cry Wolf" from 2018 predicts that a social, political, and financial crisis would be the catalyst - and that might be playing out in 2020.

0:22 Alan Greenspan Quote
1:10 Grant Williams Intro
4:08 Nixon Ended The Gold Standard and the Changes Were Profound
6:16 Dead Fiat Currencies
6:48 The Gold Standard
12:30 The Grey Wolf
15:00 History of the Gold Standard
18:22 The US Trade Deficit & Trump's Trade Wars
20:25 A Brief History of Gold Reserves
22:20 The Proliferation of Banker and Financiers (The Deer)
24:35 The Degradation of the Financial Landscape

Grant Williams, Senior Advisor at Vulpes Investment Mgmt, breaks down the history of the gold standard and the impact it will have on the future of world currency. This is a must-watch if you are reviewing your current investment portfolio.

Notes from Grant's talk:

"The change in the price of gold is equal to the change in the price of commodities, or the general price level, which tells you that there is something about gold... the ability of having a stable price has great value."

- Alan Greenspan

Man has employed a monetary system based on a gold or silver foundation for most of the last 5 centuries. This generated lengthy periods of prosperity and stability.

This gold standard ended because of our unquenchable thirst for leverage (debt) - either to achieve outsized gains with credit or to keep impossible promises made during an election.

These promises increase liabilities until they become unsustainable.

Gold gives us the ability to look far into the past to see how prices have performed over the centuries.

Commodity prices have fallen relative to gold at a little under 1% per annum for the last 2 centuries until Nixon ended Bretton Woods in 1971.

Gold preserves wealth and preserves purchasing power.

The last 50 years have been a huge experiment in fiat currency - which has resulted in politicians trashing the financial system.

This fiat currency experiment will come to an end, it's just a matter of time.

Over 3000 fiat currencies have failed in the past.

Greenspan said that "a large volume of government bonds can be sold to the public only at higher interest rates, thus government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare state to use the banking system as a means to an unlimited expansion of credit."
- Dr Alan Greenspan, Gold and Economic Freedom, 1966

Deficit spending is simply a means for the confiscation of wealth.

The economic system, as it stands, works very well for bankers and politicians - until it doesn't.

Grant cautions that 'crying wolf' is a real problem for anyone warning about the continued intervention of central banks.

The return to the gold standard would be devastating to the financial and political establishment. The reintroduction is commonly believed to be unnecessary and impossible.

Grant introduces the history of the grey wolf - which disappeared from the western United States by the 1970s - to build context for parallels he will draw later in the presentation.

The classical gold standard began in 1871 - every country's domestic money supply was tied directly to its' store of gold. Currencies were fixed against a certain weight of gold and the international gold exchange was completely unrestricted. This effectively created a fixed exchange rate under which the majority of the world flourished. Any country running a trade deficit would experience outflow in their gold stock which then reduced their ability to issue gold-linked notes and contracted their money supply- making their goods cheaper and imported goods more expensive. This dynamic ensure the problem of global imbalances was self-correcting.

The US has maintained it's position as the world's reserve currency longer than most because it's the first prolonged period (aside from wars) of purely fiat currency.

Central banks started to reduce their USD reserves following Trump's trade war.

The US holds over 8,000 tonnes of gold - the only material asset backing America's global debt.

Since its peak in 1970 the US manufacturing sector has shed some 8 Million jobs.

The financial sector's share of GDP has soared to almost 9% - exactly as it did in the 1920 before the crash.



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