"Everything you need to know about gold"
Kelsey Williams The Fed always does its job. So, just what is their job? And, how well do they perform?
For the answer to the first question, one statement will suffice: The Fed’s job is to create money; at all times and in all seasons.
The Federal Reserve Bank creates money for the US government to spend and for banks to loan. It is a partnership that dates back more than one hundred years.
Apparently investors don’t tire of hearing the same old thing; and their advisors willingly provide the same questionable advice: “The best way to play this new bull market in gold is to buy gold stocks” or something to that effect. Are gold stocks a better choice than golditself? Let’s find out…
MMT IS A SOCIAL AGENDA
The subtitle of Stephanie Kelton’s book, The Deficit Myth, is “Modern Monetary Theory and the Birth of the People’s Economy”. The material in her book supports and encourages that theme and what it implies.
It isn’t that Ms. Kelton and others have not explained carefully how MMT can presumably work, both financially and economically; they have. The financial details have been enumerated and dissected adequately. However, the justification for implementation of MMT appears to be based on expectations of grander social programs, and how to pay for them.
GOLD VS. SILVER
In the five months between March and August this year, the price of silver increased from a fourteen-year low of $11.77 per ounce to a seven-year high of $29.26. That is a whopping gain of one hundred sixty-three percent.
Meanwhile, gold’s price rose from its low of $1472 per ounce to a recent high of $2061. That represents a gain of forty percent, which is certainly a handsome number. Nevertheless, silver’s performance outshone gold by a ratio of four-to-one.
However, five months doesn’t tell the whole story. For those who were and are, hopeful that this is just the beginning of silver’s day in the sun, be warned. Looking at the bigger picture historically, silver can’t hold a candle to gold.
(Note: This article is an updated version of an original article published in 2017. On March 15, 2020, the Federal Reserve Board reduced reserve requirement ratios to zero percent effective March 26, 2020. The action eliminated reserve requirements for all depository institutions.)
FRACTIONAL-RESERVE BANKING
The expression “elephant in the room“…
“…an important or enormous topic, question, or controversial issue that is obvious or that everyone knows about but no one mentions or wants to discuss because it makes at least some of them uncomfortable or is personally, socially, or politically embarrassing, controversial, inflammatory, or dangerous. (source)
A wordy definition, yes; but it is applicable to our topic of Fractional-Reserve Banking. After reading the rest of this article, you should be able to see just how important and enormous Fractional-Reserve Banking is; as well as how dangerous.
Lets’s start with some history.
A 21ST CENTURY DEPRESSION
Some are calling it the “Greater Depression” but that still makes last century’s Depression of the 1930’s the point of reference. The Great Depression of the 1930s was bad, but what we are facing now is worse.
The Depression Of The 21st Century will likely end up being the new singular event of discussion and comparison for all financial and economic catastrophes. Questions of how much worse and how long it will last are difficult to answer. Predictions about the type and strength of potential recovery could be premature.
GOLDMAN SACHS, BUFFETT AND GOLD…
In late July, during an interview with CNBC, the chief investment officer of private wealth management at Goldman Sachs made the following statement:
“Our view is that gold is only appropriate if you have a very strong view that the U.S. dollar is going to be debased. We don’t have that view…” Sharmin Mossavar-Rahmani
Is Ms. Mossavar-Rahmani not aware that the U.S. dollar has already been debased by ninety-nine percent? And, that gold at $2000 per ounce (a one-hundred fold increase from $20 per ounce) already reflects that debasement?
FEDERAL RESERVE VS. JUDY SHELTON
Those in favor of Judy Shelton’s approval by Congress, pursuant to her nomination to the Federal Reserve Board Of Governors, should not be surprised by the torrent of criticism directed at her.
A letter published and signed by former Federal Reserve officials and staffers called on the Senate to reject her nomination, stating that “Ms. Shelton’s views are so extreme and ill-considered as to be an unnecessary distraction from the tasks at hand…”
Predictions for a $10,000 gold price are based on seemingly sound fundamentals and logic; but the fundamentals are incorrect and presented in unrealistic context. Here are some things to keep in mind when you see any predictions for the price of gold.
