Monday, January 21, 2013

The value of Money not the Value of Gold

Gold is value, fiat currencies are measures of value. Up until now, governments have been attempting to halt gold's revaluing to currencies in order to keep the fiat Keynesian game going for as long as possible. Before the great reset.

Gold will eventually become the de facto value measure for international trade settlements as it (somewhat) was during the Bretton Woods era until 1973.

The idea isn't that you and I use gold to buy groceries or cars, it is that countries use it to settle their accounts.

This would be after they agree on a new value for gold, in their own currencies (or new currencies like the Amero). Gold is money and is the asset that best stores the value of wealth. Currencies would be reset to the amount of gold that each country holds.

This is what mainstream journalists are now alluding to (see The Telegraph) and here in the Sydney Morning Herald). Note the Herald article mention though. A little bit concerning that the US would want to hold gold it doesn't legally own in order to prop up its dollar reserve status. It appears the US will not give up easily on this. Germany gets back 300 tons over 7 years. The likely reason they are doing this is to give the US, and others, time to revalue the dollar in readiness for the the great reset to gold.

It could be that the gold isn't there, as some commentators suggest, but that won't be a problem in this scenario, unless the public find out en masse and decide to do something about it.

So what happens for Joe Sixpack on the street when the dollar is floated against gold for international trade settlements. Gerald Celente said it like this:

"Sooner or later, the world is going to abandon the U.S. dollar as the currency in which international accounts are settled. Consequently, import prices will rise; and as the U.S. is now an import-dependent country, from that day on, Americans will walk into Wal Mart and think they're in Neiman Marcus."

If this scenario plays out, the US dollar base would currently take around $20,000 per ounce, or more, to peg it to the amount of physical gold held. This means prices of imports will increase by around 11 times in the US. Probably not the outcome most would tolerate. So my guess this is done over a period of around seven or eight years. Sound familiar?

Interesting times ahead.

Gold in New Zealand dollars: $2015.43 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $38.15 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
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