A Depression For The 21st Century

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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.

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Goldman Sachs Gold; Buffett Sacks Goldman;

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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?

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Federal Reserve vs. Judy Shelton And Gold

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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…”

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$10000 Gold – Or A Triple Top?

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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.  

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Asset Price Crash Dead Ahead

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An All-Asset Price Crash (AAPC) might be the next “Wow! Can you believe it?”

In the meantime, whether it be stocks, bonds, gold, or oil, investors are licking their chops and counting their profits before they are booked. And, they have reason to gloat. Let’s see what all the noise is about.

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The End of Inflation?

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A current headline says “fears of currency debasement drive gold price higher”. Seems reasonable; and it is. It is also reasonable, however, that a potential end of inflation is near.

Historically, governments have been “debasing” their currencies for centuries. The debasement leads to a loss of purchasing power in the currency in use.

Since gold is original money and has proven itself to be a true store of value, then it should not be unexpected that gold’s higher price over time reflects that currency debasement.

The debasement leads to a loss of purchasing power in the currency in use.

All currencies are substitutes for ‘real money’, i.e., gold; and all governments inflate and destroy their own currencies. 

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MMT And Gold

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ABOUT MMT AND GOLD 

According to MMT (Modern Monetary Theory), there are “four essential requirements that qualify a national currency as sovereign”.

Those four requirements include:

  • the National government chooses a money of account in which the currency is denominated;
  • the National government imposes obligations (taxes, fees, fines, tribute, tithes) denominated in the chosen money of account;
  • the National government issues a currency denominated in the money of account, and accepts that currency in payment of the imposed obligations; and
  • if the National government issues other obligations against itself, these are also denominated in the chosen money of account, and payable in the national government’s own currency.

We listed the above requirements and talked about ‘sovereign currencies’ in the article MMT – Variation On A Theme.

But, there is a fifth (important) requirement regarding MMT and a  National government which issues a sovereign currency. That requirement is stated quite clearly by L. Randall Wray, who is one of the leading spokespersons in behalf of MMT:

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MMT – Nothing New Here

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MMT – NOTHING NEW 

Overall, and after reading more extensively about it, including arguments both pro and con, I still do not see what is new or ‘modern’ about MMT. Whether it is, or is not, doesn’t matter. What matters is that it is getting a seemingly inordinate amount of attention and is a subject worthy of comment.

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Gold And Rip Van Winkle

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GOLD AND RIP VAN WINKLE

The “Rip Van Winkle Caper” was Episode No. 60 in the original Twilight Zone television series. It first aired in April 1961.

The show centered on the actions of four thieves who put themselves into suspended animation for 100 years, with the intention of waking to the prospect of enjoying, without concern, the spoils of their recent criminal actions.

The “spoils” happened to be one million dollars in gold bullion (bars) which they had recently misappropriated, i.e., stolen.

The entire plan was orchestrated by one of the men, who hired the others to perform specific tasks which depended on the execution of their respective and infamous talents. Now, they were in a cave located somewhere in the desert in the southwestern United States.

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Gold Market Manipulation And The Federal Reserve

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GOLD MARKET MANIPULATION 

Some gold bulls have bought in heavily to the argument that gold price suppression has been an ongoing activity for years, even decades. Supposedly, trading in the gold market is manipulated in ways that depress the market price for gold.

Assertions are made that the manipulation takes place in a shroud of secrecy; and the unexpected lower prices for gold, or prices that don’t meet wildly bullish expectations, are cited as evidence of conspiratorial activity.

The claim is made that the price of gold would be much higher if this manipulative trading activity were exposed, acknowledged, and prohibited. But…

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