So we all know the sun is yellow, right? Especially at sunrise or sunset when a lot of reds and yellows make it through the air and blue gets scattered.
We also “know” that there are no green stars, right?
So how come the spectrum of the sun at the Space Station peaks in green?
Is the Sun in fact GREEN and not YELLOW?
Spectrum from Space Station:
Solar Spectrum recorded on Space Station
Looks to me like the peak is about 450 to 550 nm with a bit on each side. So what is that?
The solar reference spectrum in April 2008 as recorded by the Solar instrument on the International Space Station.
[…]
This is where the Solspec instrument comes in. Part of the Solar package on the International Space Station, it was launched with the European Columbus space laboratory in 2008 and tracked the Sun until it was shut down this year. It measured the energy of each wavelength in absolute terms and its variability – a feat that requires a higher order of precision than relative measurements. As an analogy, it is easy to feel a change in temperature, but nobody on Earth can sense the exact temperature without a thermometer.
This end game was obvious to a lot of us. It is widely known that cheap energy is essential for a vibrant and wealthy society. Now we have something of an existence proof of it. Germany, UK, even Poland. Either high inflation or recession as the economic choice. Political instability rising with folks marching in the streets. Companies (and the jobs and economic prosperity they bring) fleeing the country.
All this from a reduction of the supply of Oil and Natural Gas with higher prices for what is available. Now ask yourself what happens if they go to zero. Hint: Economic and social collapse.
Note that Germany is using the Euro € while Britain uses the Pound Sterling £ so their Central Bank policies can diverge giving the different choices of outcomes on the Inflation or Recession Hobson’s Choice of Misery in any case.
With that, here’s some evidence:
Comparing German recession with the UK Inflation choices without cheap Russian energy. Note too at about 22 minutes the recognition that a financial system depends on trust, that the EU & USA destroyed trust, and now the Parallel Economy is flourishing globally. Just as blocking information on EwTube led to the rise of Rumble, BitChute, Odysee, etc. Truth, honesty, trust, rule of law, freedom. With them you win, without them you are just another gangster who must be avoided and locked away.
BERLIN, May 25 (Reuters) – The German economy was in recession in early 2023 after household spending in Europe’s economic engine finally succumbed to the pressure of high inflation.
Gross domestic product fell by 0.3% in the first quarter of the year when adjusted for price and calendar effects, a second estimate from the statistics office showed on Thursday. This follows a decline of 0.5% in the fourth quarter of 2022.
[…]
“Under the weight of immense inflation, the German consumer has fallen to his knees, dragging the entire economy down with him,” said Andreas Scheuerle, an analyst at DekaBank.
Household consumption was down 1.2% quarter on quarter after price, seasonal and calendar adjustments. Government spending also decreased significantly, by 4.9%, on the quarter.
Germany’s consumer price inflation declined to 6.1% year-on-year in May 2023, compared to 7.2% in the previous month and below market expectations of 6.5%, according to a preliminary estimate. It was the lowest rate since March 2022, partially due to slower increases in both energy and food prices. Energy costs rose by 2.6% in May, easing from the 6.8% increase recorded in April. Similarly, the price of food advanced by 14.9%, which is lower than the 17.2% increase seen in the previous month. Additionally, services inflation slightly decreased to 4.5% from 4.7% in April. The EU-standard harmonized index of consumer prices, a measure used for cross-country comparisons, rose by 6.3% in May, marking the lowest level since February 2022. Despite the recent slowdown in inflationary pressures within Germany, the consumer price inflation rates remained significantly above the European Central Bank’s target of 2%. source: Federal Statistical Office
Note that the chart of inflation in the link shows it over 8% each month from September 2022 to February of 2023. Fairly strong and consistently so for a long time.
German Industry Collapse: Companies Leaving In Droves…”Can No Longer Bear Cost Explosion”!
Some industries rely on affordable energy to remain competitive on global markets. But in Germany, this lifeline of energy has become a luxury that many can no longer afford – even renowned companies who in the past had weathered two world wars and a pandemic.
After years of catastrophic energy policy mismanagement and green energies dogmatism, the bill is coming due. A growing number of German companies are saying ‘auf Wiedersehen‘ or simply shuttering their operations. Others are preparing drastic measures.
German news site Business Leaders here has since begun a running list of companies that are packing up, or shutting down or moving their production and high paying jobs to friendlier business environments.
Business Leaders here reports:
Germany is losing important sectors of the economy and industry. Those who still survived the Corona measures are now facing massive increases in energy prices. Many businesses, the self-employed and companies can no longer bear the cost explosions. In addition, there is the danger of blackouts due to a power shortage. The consequences are insolvencies or the migration of companies abroad. This does not only affect the manufacturing industry. An overview of which companies want to leave Germany – or stop production here – you will find the current list further down in the article.
What follows is Business Leaders’ list of companies that are shutting down operations, declaring insolvency in Germany, or planning drastic contingency measures (e.g. layoffs, production stoppages) due at least in large part to insanely high energy prices:
Dr. Schneider Unternehmensgruppe
Hellma Materials GmbH, W
Borealis AG
Yara International
Paul Hartmann AG
Heinz-Glas & Plastics Group (founded in 1622!)
Ford
BMW AG
Vitesco Technologies Group AG
Kostal Automobil Elektrik GmbH & Co. KG
Privatbrauerei Bischoff GmbH + Co. KG
Aryzta AG
Villeroy & Boch AG
Neue Porzellanfabrik Triptis GmbH
Dachziegelwerke Nelskamp GmbH
Holcim AG
SKW Stickstoffwerke Piesteritz
Linde GmbH / Linde plc
Hakle GmbH
Ludwig Görtz GmbH
DMV Deutsche Metallveredelung GmbH
ROT Rickert Oberflächentechnik
Baumann Federn AG
Budel-Hütte
Aurubis AG –
Stahl-Holding Saar
Thyssen-Krupp Steel Europe
Salzgitter
Lech-Stahlwerke
Waelzholz
Trimet
Swiss Steel
Glencore
ArcelorMittal –
Bremkamp Elastic GmbH
Cristal d’Arques
Nyrstar Budel
Aldel
Ascometal (Swiss Steel Group)
This list was last updated on September 14, according to Business Leaders, which reports it will keep updating. Analysts fear this is only the beginning and that things are going to get far bloody worse.
Half say their existence is threatened
So there’s that… Oh, and German / EU stock markets are having a bad time of it too… so I’d not invest there.
Anyone want to see what happens if you go to ZERO natural gas and oil? Hmmm?
So hey, EU, how are those “sanctions” working out for you, eh?
Poland
From the streets of Poland, a random blogger notes instability and unrest in the wind. Her audio is not the best as it is windy; but basically she says folks are talking up a protest in the streets over economic failure and unrest is likely.
Three banks halted customer cards / purchases over a “data breach” and there’s other chaos in the banking system. Inflation is causing problems, food costs are causing problems as are industrial cut backs.
I was surprised at the amount of Cyrillic on street signs as Polish is written in a Western script. On an oval sign in the “Chinese” tea shop I was able to read “Russian Tea Company” in what I presume is Russian, plus a Russian bank with the sign in Russian. I suppose I ought to have expected that as Russian was widely spoken in Poland until the fall of the USSR. It seems that most Slavic countries are comfortable with both Cyrillic and Western scripts and are multilingual with their own language, and English, Russian or both.
Similar problems in France with what seems like perpetual French riots in the streets of Paris and Macron at very low approval rates. The UK is just as bad. Spain has been having protests and so have other countries.
IMHO if the EU Sanctions keep working as much “going forward” and Russia continues to be as damaged by the Sanctions as they have been, the EU will collapse by next fall… /sarc;
So it isn’t quite Friday, yet… Oh, wait, at 3 something AM I guess it is Friday already… I’ve had a few beers and moved on from Political EOTWAWKI important international complete crap to music videos… and I find that Meatloaf did more than Rocky Horror Picture Show” as a supporting character…
BTW, Rocky Horror etc. is a show I dearly love. Despite my statements about not wanting things like “pride” being used for “buggery” and maybe 27 genders is crazy… I’m actually quite liberal on what one adult chooses to do with another adult (or sheep, or robot, or… but maybe I’ve overshared…:-) just keep the children innocent please. FWIW, I’ve got a few children by Lesbian Couples who chose me as their donor, so I’ve “walked the walk” on this too. I’m not anywhere near a “right wing prude”, just Leave The Children ALONE to be KIDS, damn it. Maybe I’ve had enough beer for the night and maybe oversharing isn’t quite covering it… We’ll find out tomorrow.
So imagine my surprise to find that Meatloaf has another video I really like. What? A guy can’t find out he really likes music videos from someone who’s died a long time ago? While I’ll admit it is a bit of a bummer, especially for him, I just really like this one:
Aside from being a bit of a parody of life, and aside from the humor in it; I’m pretty sure I heard it decades ago on AM Radio in the middle of the night, yet never listened to the lyrics all that closely. Also, growing up in the era of 6 foot wide rear seats in cars and Tube Radios in cars and… all that.. I can relate to the phrase “Dashboard Light”…
But whatever. Now I’m old … and married… VERY married… but that has nothing to do with the song. Honest…
Happy Friday Folks, and let the music flow…
Disclaimer: Beer was a fundamental contributor to this posting and all liability for anything is the responsibility of someone else, not me. Nothing is professional advice (do we have any honorable and trustworthy professions anymore? /rhetorical) and Not Responsible for any children, even my own… or any marital issues derived from being married… or not…
I had set out to make a posting titled “There is NO Debt Limit! Just a periodic Budget Food Fight” (since they ALWAYS just raise the “limit”, but only after bickering over who gets to spend it on what…). IMHO, the reason our Constitution specifies that ONLY Gold & Silver can be money is simply to prevent politicians from ruining the Fiat Currency by endless printing and spending. Neatly bypassed by the Democrat F.D.R. due to “emergency”… Setting the pattern for generations to come.
FWIW: I’ve moved about 1/3 of my disposable assets (i.e. cash) into gold or silver based assets. I’m looking to buy some physical gold in the next month or two ( I already have a modest amount of physical silver, about enough for a month “on the road” in an Aw Shit scenario). But that’s just me… and the Saudis, and the Chinese, and the Japanese, and the Germans, and the Swiss, and…
Is there a problem at The Fed with the stored Gold? Are The States moving to assert their constitutional right to “make money” of Gold and Silver?
This is an intriguing video in that it makes several assertions about the $US, Gold, and the US Federal Reserve Bank treating Germany rather shabbily (and suspiciously…)
Looking over their list of videos, they have a bit of a fixation with trashing the $US and promoting Gold (i.e. strong Gold Bugs or perhaps an “influencing operation” by some Asian Nation with an interest in dissing the $US). So “some verification required”.
OTOH, hyperventilating sites can be very useful for bringing some particulars of an issue to the front of mind. IFF, for example, you want to know what are good tires, you find the site that has hyperventilating tire fanatics scrutinizing the finest details of tire construction and performance. You may decide that their 4th ranked tire is Just Fine for what you need (and 1/10 the cost of their preferred Uber Tire) but usually with more detail in your decision. I’ve also learned some obscure details that matter from such sites.
So here’s the video that kicked off this look at The Fed’s Gold and how they treated Germany when they asked “Might we take a look at our Gold Reserves, please?”… rather than just a bit of scrute pointed at the Debt “Limit”… along with some speculation about what Asian Central Banks might be up to and a muse or two on the future of the $US.
So, first off, we know that Congress is haggling over how much money to print and who gets to spend it; with some sort of “compromise” being promoted (meaning that both parties get to spend on the Taxpayer Bank Account Theft Card via inflation). So that checks.
It also looks like many States are, in fact, making Gold and Silver legal tender. This is from 2019, so 5 more years of them since then:
SEVERAL STATES ARE BEGINNING TO ACCEPT GOLD AND SILVER AS CASH (Click for a List Of State-by-State Regulations and Local Coin Shops)
An encouraging victory for sound money has just taken place in West Virginia where they have now announced plans to remove taxation on precious metals as of July 1, 2019.
Louisiana, Utah, and Texas have passed legislation recognizing gold and silver as legal tender, a move that allows citizens to make transactions using precious metals in place of cash.
Joining seven other states that have either passed or introduced legislation in favor of the metals, Louisiana, Utah, and Texas are now taking further steps toward establishing regulatory depositories to hold gold and silver.
[…]
Below is a list of US states that accept Gold and Silver as legal tender:
WEST VIRGINIA
By a unanimous vote on March 8, the West Virginia Legislature approved Senate Bill 502, originally introduced by Sen. Craig Blaire (R-Martinsburg), which called for the exemption of taxation on sales of investment metal bullion and investment coins. On March 27, West Virginia Gov. Jim Justice signed the bill into law. The law went into effect on July 1, 2019.
WYOMING
In 2013, the Wyoming Legal Tender Act was defeated in a 5-4 vote. It was defeated again in 2015. The bill sought legal tender status for US-minted gold and silver coins.
UTAH
Utah became the first state declaring US-minted gold and silver coins as legal tender. The Utah Legal Tender Act was passed on March 10, 2011, setting the stage for other states to pursue similar legislation.
ARIZONA
Two bills declaring legal tender status for gold and silver coins were vetoed despite having passed the state legislature by a large margin. Governor Jan Brewer vetoed S.B.1439 in 2013, and Governor Doug Ducey vetoed a similar bill in 2015.
KANSAS
In 2013, the House Committee on Taxation passed a bill declaring both the legal tender and tax-exempt status of US-minted coins.
OKLAHOMA
On June 4, 2014, Governor Mary Fallin signed into law Senate Bill 862, recognizing gold and silver US-minted coins as legal tender and exempt from state taxation.
TEXAS
In March of 2017, Sen. Bob Hall introduced SB2097, a bill aimed at establishing a legal tender status for gold and silver including protections from seizure by state authorities.
INDIANA
In 2013, Senate Bill 99 was introduced to declare US-minted gold and silver coins as legal tender and tax-exempt.
MISSOURI
Senate Bill 98, an act that calls for an income tax deduction for capital gains from the exchange of gold and silver, is currently up for consideration. Similar acts failed—once in 2013, and twice in 2014.
LOUISIANA
H.B. 682 was passed with overwhelming support, making Louisiana the second state to eliminate sales tax for gold and silver currency and bullion. Introduced by Rep. Paul Hollis, H.B. 682 was signed into law by Governor Bobby Jindal.
TENNESSEE
We are waiting to see the outcome of Tennessee’s SB0350. This bill calls for the sales tax exemption of gold and silver coins.
SOUTH CAROLINA
The South Carolina House of Representatives passed a bill on April 11, 2013, declaring gold and silver legal tender.
This may sound like a radical idea, but as mentioned earlier, dollars were backed by silver and gold till not very long ago, and states are focusing on simply reinstating this recognition.
In a widespread movement, local grassroots organizations and state lawmakers have introduced bills to initiate this process in at least 23 states, with legislators of at least 10 states introducing their version of the bill in 2023 alone, including Montana, Missouri, Kansas, Oregon, Kentucky and Wisconsin.
So that checks too (but with the caveat that it is a “move to” not a Done Deal for 23), and noting that the video claims “26 States & Arkansas” HAVE made it legal tender – facts not in evidence that I could find in a quick search.
At the 5:40 ish point there’s a claim that Germany asked for a “review” of its remaining gold reserves at The Fed and was told that was rejected by The Fed on the grounds of “Unclear Intent” and “Threats to Financial Security”? Um, if it is the German Countrie’s gold, where’s the threat? And the intent is to find out how much is really there. (Any future decision on what to do with that information is not yet an intent.) BUT, in the last few years Germany has been dragging some of their gold home:
(Kitco News) – Germany’s central bank completed its plan to repatriate the country’s gold reserves from New York and Paris, three years ahead of schedule.
Initially expected to take until 2020, the plan involved returning 374 tons of gold from Paris, and 300 tons from New York.
This is a bit misleading, but clarified below, in that it sounds like the intent was to repatriate ALL the gold, but it wasn’t. Only about 1/2 of Germany’s gold is in Germany, with about 1/3 still in New York and 12% in London as of 2017. So it is possible that a request about the status of the rest could be an “issue”.
But for Vince Lanci, editor for marketslant.com and the founder of Echobay Partners, the timelines do not add up.
“You are dealing with something heavy that has to be moved so it does take time, but you don’t need seven years to move that much gold,” explained Lanci.
Germany started the repatriation program back in 2013; they initially wanted the gold back in five years time, but the U.S. Federal Reserve renegotiated for a seven-year timeline – which raised a red flag for Lanci.
“The Bundesbank gold was segregated. That also contributes a shorter delivery time than five years,” Lanci said.
“After the financial crisis, you started seeing many European countries wanting their gold back. This whole thing started because they were more concerned about control over ownership.”
In recent years, conspiracy theories circulated about Germany’s foreign gold reserves. Some observers questioned whether they had been lost or used by the other central banks. The German Federal Court of Auditors eventually asked for an inspection of foreign gold reserves in 2012.
Lanci opined that it gave the appearance the New York Fed did not actually have the gold. “Why would it take 7 years, unless there was a possible issue in getting it together, to return 300 tons? It could be done certainly in several weeks or even months – but 7 years?” Lanci questioned. “In my trading days, I’ve taken delivery of gold and silver and I’m aware of the physical logistical limitations. The time requested to deliver the 300 tonnes seems excessive – whether it be 5 or 7 years.”
Germany had previously repatriated 940 tons of its gold from the Bank of England without delays.
Lanci hypothesized that if the Fed did not have Germany’s gold, it would have to buy it to repay Germany, and a large purchase would push up the price, which the bank did not want.
On Wednesday, the Bundesbank, one of the biggest holders of gold in the world, said that it completed the move of 674 tonnes from the vaults of the Federal Reserve Bank of New York and the Banque de France.
Frankfurt now holds just over half of Germany’s total 3,378 tons of gold reserves, with 36.6 percent left in New York and 12.8 percent in London. The gold was initially stored outside of Germany during the Cold War.
But I could not find any reference to a current spat over “financial stability” in about 10 minutes of searches.
So that’s a “plausible based on history” but without evidence I could find.
How about De-Dollarization? Well, we already know that is going gang busters. Saudi Arabia has said it will trade oil in other currencies (especially with China). The western “Sanctions” on Russia have shoved all of the Russian sales / purchases into non-$US currencies (and with that, scared a lot of other countries into trading with domestic currencies and not in the $US). So we know it is going on in the $Billions scale already. What might it DO though?
This article starts with some history, like the Bretton Woods agreement of 1944 that moved the $US to top Reserve Currency status (stuff I had to learn in Economic History class to get my Econ degree… but others might not now about it). Prior to that point, the £ Sterling was the reserve currency of choice (and before that, other currencies and gold). That was when The Gold Standard was common among many currencies. Post W.W.II, several stopped converting their currency for gold. F.D.R. confiscated the gold of US Citizens in W.W.II, but left a nominal gold convertibility until that was finally destroyed by Nixon in 1971 (since The French were actually converting $US into Gold).
I remember that time well. The Viet Nam war was driving inflation through the roof, France saw this and decided to cash out for gold. Silver coins were being melted down and the silver sold as it was worth more than the face value of the coins. My first college roomie was touring Europe and got to ride the trains with a Eurail pass for 3 days until markets reopened and folks knew what value to exchange his $US for local currencies (and they could buy food and get a hotel room again instead of sleeping on the train…). FWIW, I’ve yet to figure out even ONE thing Nixon did that was good. He was called “The last Progressive Republican” and I can agree with that (thank God…) The Progressive movement is nothing but bad news and economic failure.
That was the moment when the $US headed for the toilet at increasing speed. That was also the time I memorized a few prices that I use for my own estimates of actual inflation. Gasoline was 25 ¢ / gallon. A US Postage Stamp rose from 3 ¢ to 5 ¢. A US Car (new) was about $1400. Our home cost $7000. A Rib Steak Dinner in our restaurant was $2.85 with full sides. A Quarter bought a kid a movie (often double feature) along with a drink and snack.
Now? Stamps are “only” up by 10 x while gas is also about 10 x to 15 x depending on location. Cars are well over $14,000 with Pickups going for $40,000+ so about 40 x while a house is running about 15 x in the same location and about 100 x in better locations. You can get a decent Rib Steak for $28 and a movie out is closer to $25 or 100x. (All inflation indexes have these variations in rate of price drift). Oh, and gold is trading for about $2000 instead of $35/oz so a 57 x, but really, the $35 was artificial then, so likely closer to a 25 x. All of this makes the $US NOW worth about 10 ¢ then at a minimum, and closer to 1 ¢ for some specific things. Overall, I’d say the current $US is worth about a nickle. It costs about $1 to buy what was a “Nickle Candy bar” then. Clearly not a good long term store of value.
Mix that with the US Government refusing to give folks their money back if they don’t like you today: you get a strong recipe for folks not wanting to trust the USA, US Banks, or the $US, so getting out of $US and into just about anything else they think they can trust. This will increase the supply of $US in exchange markets while increasing demand for other currencies and for valuable commodities, like gold and silver.
The Past Year Reignites the De-dollarization Movement
After a period of stability on the monetary front, 2022 and 2023 have brought renewed calls for a meaningful alternative to the dollar. This started in 2022, when the United States imposed all-encompassing sanctions against Russia following that country’s invasion of neighboring Ukraine. Seemingly, various other world leaders took umbrage at the idea that the U.S. could freeze their funds due to any sort of diplomatic or military dispute.
Geopolitics isn’t the only hot-button issue, however. Inflation is also weakening the standing of the dollar on the international stage. Since the 1980s, the United States has maintained a low and steady inflation rate, giving savers around the world the confidence to hold their assets in dollars. Over the past year, however, inflation has soared to previously unimaginable levels, calling into question the security and stability of the dollar for long-term savings and investments
So that checks.
Investment Possibilities for a De-dollarized World
To reiterate, it’s rather unlikely that the dollar would simply stop being the world’s reserve currency overnight. That said, there is a distinct possibility that the dollar’s overwhelming role in international trade and commerce could gradually diminish in coming years. Particularly depending on how things such as the banking crisis and inflation play out, there could be a significant move to reduce global dependency on the dollar. How should investors prepare for that possibility?
A first-principles solution for many investing problems, including weakness in the U.S. dollar, is diversification. Arguably, diversification is one of the few free lunches available in finance. By spreading capital across many different asset classes, sectors and countries, investors naturally get protection against a variety of potential crises.
Which is exactly what I’m doing. Not all in any one thing, but spread around. About 1/3 as real estate, owned clear. (IF you had bought real estate on a 30 year fixed rate loan at near 0% that would have been ideal; but that time is past and few people had the money to do that, then.) About 1/3 in $US denominated assets. About 1/3 in Precious Metals, other currencies, and non-$US based assets. (Really closer to 1/4 at the moment but moving the rest Real Soon Now ;-)
Those ratios to be “tuned up” over time as things develop. Now that I’ve heard about some States making Gold & Silver legal tender, it might be interesting if they started minting State Coins as money ;-) Similarly, if there is Some Thing I want, I’m just buying it NOW and not waiting. Load up on ammo, for example. A nice mix of a ‘manufacture’ that won’t be getting cheaper to make and a “metals basket” of common metals: Copper, Lead, Brass. Very full prepper food pantry. All the furniture we will need for decades (or perhaps ever…). Car inventory for the rest of my driving career. Nice boat ;-) Basically, I’m not seeing any large capital purchase I will need to make for the rest of my life (with the possible exception of an RV or a Whole House Generator); and as those decisions sort out, the “buy” will be sooner rather than later (IF it is done at all).
After that, it will just be “consumption goods” as needed and as affordable. We’d like to do a trip to Europe, so depending on how Le Petite W.W.III in Ukraine sorts out, maybe sooner or maybe not. Similarly, depending on how $US vs € vs £ exchange rates work out, the destination can change.
It is unlikely that by the end of this year I’ll be holding any significant $US in the bank. It will be in “stuff” or in Real Money Assets. Some will be in TIPs, the Treasury Inflation Protected Securities. They are only partly adjusted as they use Official Inflation Numbers that we know are a little bit bogus, but better than US Treasuries with no inflation rider or in $US as currency.
The US News article goes on to suggest Emerging Markets and China ought to do well. I question that. China has a “managed float” and tries to keep it low enough that China can sell lot of product cheap. They ought to continue to manage exchange rates vs the $US in the same way. Emerging Markets are “having issues” right now, and they get worse as oil prices rise (priced in $US still, so as the $US inflates that hurts them more). See Argentina for an example of the risks involved and an exemplar of how the $US inflating isn’t the worst whore in the fiat whore house:
They do recognize real estate and basic commodity producers as reasonably safe.
Argentinian inflation soared 108.8% year-on-year in April 2023, remaining at the highest level since 1991 and after rising 104.3% in March. source: Instituto Nacional de Estadística y Censos (INDEC)
That’s the worst case scenario if The Fed and The Dimocrats & RINO’s don’t get their act together for sound money.
OTOH, Argentina has an income requirement to get a citizenship / passport that is stated in Argentine Pesos, so getting cheaper by the day. Last I looked you had to make a bit over $500 / month US, so will be under $200 fairly soon ;-) I might get one just for the novelty of it … and because I’ve always wanted to visit Patagonia.
At the end of the video, they claim China imported 178 Tons of gold in March. At about $2000 / ounce (Troy) and 12 ounces / Troy Pound with 2679 Troy lbs per Metric ton:
178 x 2679 x 12 x ~2000 = about $11.4 Billion in a month. Call it about $137 Billion a year. That’s chump change compared to total $US trade and currency, but a big demand suck on the gold supply (illustrating one of the problems of gold as currency – not enough of it).
I expect that as long as China is buying gold that fast, prices will stay reasonably high. I’d also note in passing that China and Japan do not need to “dump Treasuries” to have a big impact. As bonds, these mature over time. All they need to do is move to shorter maturities and then let them “run off” as they mature. With the USA demanding over $1 Trillion (or is it $2 Trillion now…) of loans from the rest of the world economy just to fund the deficit year over year, just not buying new Treasuries puts them in a big bind.
In Conclusion
I don’t see Gold as a panacea nor do I think the USA will fall into hyperinflation; but I can easily see an inflation cycle like we had in the mid to late ’70s. So “rig for rough weather” economically but not expecting a tsunami of $US destruction. The British Pound survived Bretton Woods, just a bit wounded.
I also don’t expect to see a lot of gold coins as currency. First, there just isn’t enough volume to cover the total trade in the world. Second, one of the reasons for “gold backed paper” was the volume of gold LOST per year due to coins rubbing on each other in use. (OTOH, I did once buy a car with a gold coin… and still have the car… so it can be done.) There are a lot of problems with metals as currency (not the least of which is the volumes written about “bi-metalism” or the problems of keeping silver and gold relative values aligned when costs to mine each are shifting relative to each other – a huge economic issue in the pre-1970s era / literature).
So it’s a decent hedge for use in particular times, but a bit problematic for day to day use. OTOH, having a “gold backed currency” can work (and has worked in my lifetime). It just requires a good honest broker to hold the gold and do any needed exchanges. I’m just not seeing where the US Government, The Fed (anymore…), China Central Bank, or anything in The EU fits that requirement… and the Russian Central Bank is beyond reach from the USA. So we’ll have to see how that changes over time.
So I’m mostly looking at “Stuff” and “stuff stocks” to invest my money, and at precious metals as a “store of value” for longer term cash parking (over 1 year). Then “paper gold” for months or so swings and $US for any days to weeks parking of cash (until some other FX (foreign exchange) currency is proven up). All subject to change with market conditions. What I’m NOT doing is expecting the $US to hold any value long term (as it has already turned a $1 USA Gold Backed into a penny or max a nickle just since I was a kid) and keeping “on my toes” to move fast if the Dimocrats stay in charge much longer and / or Biden decides W.W.III is really a good idea.
I think it will pretty much sort out in a year, max of 2. Perhaps having a bank account in a Latin American country where you can buy the new BRICS+ currency will become a viable strategy; as the Globalists complete their plan to destroy the USA…
Musings from the Chiefio 