Often
the assertion is made that there is ‘not enough’ gold to return
to a gold based monetary system. The counter-argument is that there is
too much paper. The picture above illustrates the point perfectly.
The
dollar based monetary system is the largest bubble in the history of the
world. Gold
has been, is and will always be the center of the financial universe.
In 1971, most people were too gullible and accepted the thinking that the sun
(gold) revolves around the earth (FRN$).
Today
by luck I ran into a friend who was the Chairman and founder of a respectable
bank in Nevada. He is extremely well connected. We spent some
time talking shop. He remarked that ‘oil is going to $50 and gold
to $500’ and in about two years that gold will probably begin
performing well. I would not be surprised if both assertions are proven
correct over time because of the nature of the great deflationary
credit contraction as gold abuts T-Bills. Nevertheless, my bullion
is not for sale.
Why is
that? Because the current monetary system is an illusion. The
gold market is tiny
compared to the Tower of Babel that has been constructed on top of it. The pricing mechanism is
completely broken.
My
friend, who often teases me for being a ‘gold bug,’ does not
understand some basic monetary science and theory. He views gold as a
portfolio asset; I view everything else as a portfolio asset. We hold opposite views about what is
the center of the financial universe. I launched a calculated
rebuttal about credit default swaps vaporizing firms. He revealed his ignorance
by responding, ‘Yes, is there going to be any end?’ I
responded, ‘There are $1,400T
of derivatives and central banks use some of them to manipulate the gold price.
The great thing about gold is it is either in my hand or not and $850B of it
cannot just be created out of thin air.’
I then
briefly explained the future of currency, GoldMoney, and how it
eliminates counter-party, settlement, credit, payment and Herstatt risk from
the medium of exchange and store of value. The change of the monetary
system is only beginning. Change always encounters pugnacious
opposition from the status quo Establishment. However, like the
Catholic Church was powerless against the ideas of Copernicus and Galileo so
likewise is the Establishment powerless against the ideas of digital
commodity money.
Most
importantly digital gold will ultimately explode onto the international
monetary scene whether bankers or governments like it or not! However,
there are still some ideas that need to be implemented. When the
systems are implemented and the time is right then digital gold will go viral and the
illusion will dissipate.
My
strategy is to acquire gold on a consistent regular basis with a constant
percentage of proceeds from cash-flowing assets. When you own an
unencumbered ounce of gold your wealth is sovereign. Hoard it. Humanity’s gold lust has
been dormant for nearly a century and when it awakens it will be extremely
vehement and go viral. Those who own gold know of what I
speak. The yellow metal seems to call out to the inner conscience and
resonate with our DNA. The result will be that the pitiful garrets of
the central banks will be overrun as The Great Credit
Contraction continues.
Click here
for a full-size easy to read version
^p
Trace Mayer
RuntoGold.com
Trace Mayer,
J.D., holds a degree in Accounting from Brigham Young University, a law
degree from California Western School of Law and studies the Austrian school
of economics. He works as an entrepreneur, investor, journalist and monetary
scientist. He is a strong advocate of the freedom of speech, a member of the
Society of Professional Journalists and the San Diego County Bar Association.
He has appeared on ABC, NBC, BNN, many radio shows and presented at many
investment conferences throughout the world.
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