Gold Bullion and Ancient Dollars

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Published : May 15th, 2018
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Category : Gold and Silver

This article was written by Gary Christenson for Miles Franklin.

Consumer price inflation is real. It sneaks into every facet of life. Bags of coffee shrink from 16 ounces to 12 ounces and then to 10 ounces. “Shrinkflation” is policy. That Snickers candy bar is smaller but costs the same or more.

But don’t blame the candy industry, coffee distributors or automobile manufacturers. Fiat currencies create the problems.

Why do we need to fix our currency?  Because commercial banks (via fractional reserve banking) and the Federal Reserve print dollars by the trillions, devalue all existing dollars, and increase prices on almost everything. Do you remember McDonald’s prices in 1961?

The problem is the currency unit. It shrinks in value!

How well would the military perform if the government changed the units of measurement every year?  Example: The diameter of the rocket fuel tank is 47 inches. The next year the diameter measures 49 inches, but the rocket didn’t change! Chaos, craziness, and a dysfunctional military would result.

Reducing the value of currency units is like changing the measuring units for length. The chaos becomes unmanageable.

Most unbacked paper currencies have failed. Others, such as the pound and dollar, are worth a tiny fraction of their initial value. However we delude ourselves and believe flawed currencies will survive and prosper.

When insanity and delusions persist, there are reasons. One might think the powers-that-be prefer a flawed system that enriches them at the expense of the savers, pension plans, taxpayers and future workers…

Whatever the reason, the process continues. Devalue the dollar, increase prices, pretend and extend, and work the scam.

Rather than curse the darkness, light a candle within your financial world! Buy silver and gold.

The following is a quick history lesson on prices, devaluing dollars, and preserving purchasing power with gold.

In 1913 gold sold for $20.67, potatoes cost 1.6 cents per pound, a pack of cigarettes cost ten cents, and an average house sold for about $3,000.

Prices are higher today!  I used $0.60 per pound for potatoes, $6.00 for cigarettes, and $392,000 for an average house (source:  St. Louis Federal Reserve.)  Consider the following.

Other Examples of “Excessive Printing” – Argentina and Venezuela:

During the past 70 years Argentina devalued their peso by lopping off 13 zeros. That is ten trillion-to-one devaluation against the dollar which also devalued. One year ago Argentina sold 100 year bonds to yield hungry “investors” who should have studied history. Read this. Interest rates have risen to about 40% per year and the peso is devaluing.

Inflation is out-of-control and hurting everyone in Venezuela. Those who placed their savings in gold bullion are better protected. A recent article tells about a cardiologist who received severance pay after working five years. It purchased a cup of coffee!

CONCLUSIONS:

  • Prices rise as currencies devalue, sometimes rapidly.
  • Huge devaluations have occurred in many other countries but not recently in the U.S.
  • Printing the global reserve currency creates advantages. One advantage is that the U.S. can import real goods and pay for them with “printed” debt—Treasury notes. Exchanging real goods for “IOUs” can work for a long time, but not forever.
  • Imagine the impact upon the U.S. economy if it could not exchange paper debt for real goods. Other countries strive to eliminate these exchanges. Treasury Notes are accepted for imports, but for how many more years?
  • Prices in the U.S. will rise when there is less demand for the dollar in global trade. (Think crude oil!)
  • Politics and military posturing may delay the loss of reserve currency status, but not indefinitely.

TAKE ACTION:

1. Financial changes are inevitable. Most of those changes devalue dollars. (Name one politician who wants a return to stable prices, a strong dollar, and a balanced budget…)

2. Silver and gold preserve purchasing power. See the above graphics regarding trucks and houses priced in gold ounces.

3. Buy silver and gold to protect your assets, retirement and purchasing power.

4. Call Miles Franklin to exchange digital debt based currency units for real money – silver and gold.

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Andrew Hoffman was a buy-side and sell-side analyst in the United States (including six years as an II-ranked oilfield service analyst at Salomon Smith Barney), but since 2002 his focus has been entirely in the metals markets, principally gold and silver. He recently worked as a consultant to junior mining companies, head of Corporate Development, and VP of Investor Relations for different mining ventures, and is now the Director of Marketing for Miles Franklin, a U.S.-based bullion dealer.
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