As American Millennial Investors Obsess Over Cryptocurrencies, A Gold Currency Rebellion Is Sweeping Across the Nation Like Wildfire (And Millennials Ignore It at Their Own Peril)
One of the themes that you will find in my articles is analyzing the feud between “Goldbugs” and “Cryptoheads,” with each believing that their currency represents the future of commerce, especially as global markets and fiat currencies continue to deteriorate and implode. Of course, cryptocurrencies have in large part been propelled by Millennial investors, many of whom are absolutely convinced that gold represents a “barbarous relic” that has outlived its usefulness.
I guess someone forgot to give that woefully inaccurate memo to states such as Texas, Arizona, Idaho, Utah, Wyoming, Tennessee, Kansas, Louisiana, Minnesota, Iowa, North Carolina, South Carolina, and Georgia, because all of these states are part of a growing national rebellion that is demanding gold and silver be utilized as parallel currencies to the American Dollar, especially as the Federal Reserve’s Quantitative Easing and Currency Debasement guarantees hyperinflation and the complete devaluing and destruction of the American Greenback.
It’s quite ironic that Goldbugs understand something that Cryptoheads have thus far failed to grasp. The great irony of Cryptoheads is that while cryptos were created in order to create a decentralized currency and global economy that completely circumvented fiat currencies, Cryptoheads still demand that the financial value of cryptos still be measured by the exact same fiat currencies that they were designed to escape.
What’s the problem here?
The problem is that owning a crypto such as Bitcoin that’s worth $10,000 doesn’t really mean much when a gallon of gasoline costs $5,000 and a loaf of bread costs $7,000 because of hyperinflation. By not having anchored their crypto on a real store of wealth, far from getting rich or protecting their life savings, the Cryptohead will helplessly watch as his wealth and investments are simply inflated away to nothing.
Goldbugs also seem to be much better students of history than Cryptoheads, especially in understanding that all fiat currencies inevitably get debased and devalued to zero, and that while gold has been used as an international currency for 2,700 years, the American fiat dollar was only created when President Nixon abolished the gold standard in 1971 (which makes it 47 years old). Which one of these currencies represents an historical “fluke” that is destined for the dustbin of history?.
If there are three historical dates in American history that Millennial investors should learn about in order to understand how we got to this point, they are as follows.
The first is December 23rd, 1913, when President Woodrow Wilson signed the Federal Reserve Act. Since the signing of that act, the American Dollar has lost 98% of its value, and while many Millenials love to talk about the fact that American wages for the working and middle class have stagnated over the past four decades, what many fail to acknowledge is that the debasement of the American Dollar has also reduced their purchasing power, as well as their ability to save, invest, and create a nest egg for retirement.
While the article I’m about to post is a little dated, I love using it as a case study just to show my readers how the “inmates have taken over the asylum” when it comes to managing our economy, because the ignorance and stupidity on display stuck in my head and stayed with me since the first time I read it. If Millenials would like to know how disconnected from reality modern economists are becoming when defending modern currency policies, then read this article from Politifact.
As a warning, you might need to huff some paint thinner and slam your head against a brick wall a couple of times in order to wrap your brain around the “counter arguments” that modern economists are trying to make, especially when “debunking” the fact that Americans have been robbed blind and impoverished via inflation and currency debasement.
The author, Wes Hester, starts off by by pointing out that an ounce of gold was was worth $20.64 in 1913, yet when the article was written in 2010, it was going for $1,370, meaning there was a 6,530% increase in price, which constitutes a 98.5% debasement of the American Dollar (for the record, the spot price for gold as of 7/26/18 is $1,233.20).
The first economist he interviews, C. Barry Pfitzner, dismisses gold in its entirely, and instead compares it to any other speculative commodity (even go so far as comparing it to hog futures). He also believes that the price ratio between gold and the American Dollar has absolutely, positively, no bearing on American monetary policy whatsoever.
As we will discuss shortly, I’m guessing that Professor Pfitzner has never actually studied the value of silver coins minted before the 1965 Coinage Act, because the melt value of a 1964 Roosevelt Dime (the last year that dimes were made with 90% silver) is actually worth $1.11 as opposed to a modern dime’s standard ten cent face value (that $1.11 value is based on the 7/26/18 silver spot price, and considering that many believe that silver prices are being intentionally suppressed and manipulated in order to protect fiat currencies, they could actually be worth far more).
This honestly isn’t rocket science. Basic math would show an American citizen that an American ten cent piece has lost over 91% of its value since abandoning silver. Furthermore, it shows that Benjamin Franklin’s famous saying that “a penny saved is a penny earned” is absolutely meaningless unless a currency is backed by precious metals and constitutes a real store of value and labor. I’m reminded of a famous quote from Upton Sinclair when describing Professor Pfitzner’s obtuseness when it comes to monetary policy - It is difficult to get a man to understand something when his salary depends upon his not understanding it.
Hester then interviews Professor Dean Croushore, who is the Chair of the Economics Department at the University of Richmond’s Robins School of Business…who also comes across as an economist that’s never actually researched any of the ideas he’s teaching his students (which is absolutely terrifying considering that many of his students will no doubt believe they should help formulate both state and national economic policies).
After dismissing the belief that gold isn’t a real currency or measure of wealth, Croushore declares that the only way to measure currency is by using a consumer price index in order to assess what a dollar could purchase when the Federal Reserve was created, as opposed to what it could purchase under our current fiat system.
Hest dutifully obliges him by using the Bureau of Labor Statistics’ Consumer Price Index that compares what a dollar could purchase in 1913 as opposed to what it could purchase in 2010.
The results? A dollar from 1913 would have been worth $22.09 in 2010, which represents a 95% decline in purchasing power. Far from a rebuttal, Croushore unwittingly affirms that the Gold Standard is actually a legitimate and highly accurate measure of inflation and currency debasement.
I guess we lowly Plebeians can’t wrap our brains around the “science” that modern economists use for determining monetary policy. Or more likely, we’re dealing with the modern equivalent of Medieval witch doctors, but instead of using tea leaves, runes, and sheep intestines to scam and hoodwink the public, they utilize pseudoscience and half-baked theories in order to blind and baffle the people into adopting absolutely ruinous economic policies that have impoverished and swindled them of their life savings.
Finally, Hester confronts the final fig leaf that modern economists utilize when confronted with the fact that the monetary policies that their profession almost unanimously support have brought nothing but ruin and destitution to the country — Americans are being paid more dollars now than they were in 1913, which means they can purchase more goods and services. Whereas the average salary was only $400 in 1913, it was $33,000 in 2010.
Except Americans aren’t being paid more dollars, and they haven’t been paid more dollars since the early 1980s when wages for the working and middle class started stagnating. This forty year stagnation of wages should also be coupled with skyrocketing costs in sectors such as health insurance, housing, and higher education. So Millenials need to understand that not only have wages stagnated, but because of the loss of the gold standard, both the purchasing and savings power of your salaries have also been decimated, while the cost of living continues to skyrocket.
Yet the machine can only operate for so long before the gears start grinding against one another, and Millenials should come to understand what Goldbugs already know. All fiat currencies inevitably get debased to zero, and this leads us to the second date in American history that Millenials should take note of.
In 1965, President Johnson signed the Coinage Act, which officially abolished the Coinage Act of 1792 (signed by President Washington). Instead of being composed of 90% silver, dimes and quarters would now be made with copper and nickel, with Kennedy half dollars being made with 40% silver until officially being abolished in 1970 in favor of also being made with copper and nickel.
The result? A 1964 Washington Silver Quarter (the last year such quarters were made) would be worth $2.79 today (utilizing the silver spot price on 7/26/18) as opposed to a modern quarter’s .25 cent face value. Much like with Roosevelt Dimes, that represents a 91% debasement in value. Can we begin to understand why so many states are rebelling against Federal Monetary Policies?
Going back to Benjamin Franklin’s “folksy” philosophy that encouraged our citizenry to save (and which is the bedrock of any healthy, productive economy) those currency gains were supposed to go into your pocket. You were supposed to be rewarded for your prudence and frugality, and the financial reward you received from those savings should have been invested into a house, a business, a stock portfolio, a retirement, an inheritance, etc.
Instead, what is the true lifeblood of our fiat economy?
Debt. Mountains of it. Oceans of it. Our economy is sinking into the quicksand of Systemic Debt Saturation, where so much debt has been accumulated in both the private and public sectors that perpetuating the system is quite comparable to squeezing blood from a stone. Stagnating wages, a skyrocketing cost of living, 200 trillion in public debt when you incorporate unfunded liabilities (read Laurence Kotlikoff’s The Coming Generational Storm), along with the massive debasement of the people’s ability to save, invest, and purchase goods have collectively enslaved our society, and you’ll note that most economists (who know that I am right) won’t touch this issue with a ten foot pole because their salaries command them to turn a blind eye to it.
So it goes.
Yet we digress, back to American history. In 1971, President Nixon delivered the death blow by officially abandoning the Gold Standard; a process started by President Roosevelt nearly 40 years earlier in 1933 in order to inflate the money supply and clean up the economic mess that Wall Street had created (and which had played an instrumental role in creating the Great Depression).
Sound familiar? I would strongly encourage my readers to read this article from Matt Taibbi, a brilliant writer for Rolling Stone that points out (surprise surprise) that Goldman Sachs actually played a pivotal role in creating the 1929 stock market crash, just like the played a pivotal role in the 2008 crash.
I would be even more impressed with my Millennial readers if they did their own research, connected the dots, and came to understand how fiat money has played a fundamental role in both the growing governmental police state and military industrial complex, as well as the reckless, speculative gambling that Wall Street engaged in (and which they are still engaging in) which lead to the 2008 meltdown. Hint — sound money is the only way to starve both beasts, as they both could be rightfully compared to heroin addicts who can only continue to voraciously grow if there is a steady supply of “smack” at their disposal.
History doesn’t repeat itself, but it does have a rhythm. The growing rebellion being encouraged by both Goldbugs and Cryptoheads is yet another sad chapter in the history of currency debasement, which always ends in economic disaster for the society and citizenry that embrace it (the Roman Empire being a perfect example).
Yet the future belongs to those who realize that the global economy is about to undergo both a revolution and a renaissance, and the first step in recognizing this future is by dismissing the manufactured “feud” between Goldbugs and Cryptoheads as a foolish one, and one that’s often financed by disingenuous actors who understand what cryptos will inevitably do.
And what will cryptos inevitably do? In addition to the massive technological advancements they’re going to unleash upon the global economy, they are also going to resurrect an international gold standard grounded upon real price point discovery. As fiat currencies continue to falter and collapse, the smartest among the crypto coins will simply circumvent the fiat system entirely and instead anchor themselves on the two most trusted currencies that have wielded influence over the global economy for 2,700 years — gold and silver.
This is undeniably one of the principle reasons why central banks are so scared of cryptos. They seamlessly integrate the trust, reliability, and store of value that precious metals offer with the speed, liquidity, and technological advancements that cryptos offer.
We at Karatcoin represent the “tip of the spear” in regards to this renaissance and revolution, and we offer our clients an outstanding portfolio of products and services that synthesize the strengths that both gold and cryptos offer to the modern investor, especially those investors that are seeking protection from the growing economic storm clouds gathering on the horizon. For more information, come visit us at https://karatcoin.co/
https://www.usmoneyreserve.com/blog/states-standing-up-for-gold-silver/
https://money.cnn.com/2012/02/03/pf/states_currencies/index.htm
https://www.newsweek.com/economic-output-if-states-were-countries-california-would-be-france-467614
https://www.moneymetals.com/precious-metals-charts/gold-price
http://www.coinflation.com/coins/1946-1964-Silver-Roosevelt-Dime-Value.html
https://seekingalpha.com/article/4054626-part-1-silvers-price-manipulation
http://www.coinflation.com/coins/silver_calc.php
https://www.rollingstone.com/politics/politics-news/the-great-american-bubble-machine-195229/
