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28-Sep (Sprott) — For investors who are both just beginning their
foray into gold investment, and for those who have been long time proponents
of gold, Sprott Senior Advisor John Embry breaks down the recent history of
the U.S., highlighting the pressures that have brought fiat currency to the
brink, U.S. debt liabilities to staggering heights, and gold back to the
institutional investor’s crosshairs. It’s a must-hear, dispassionate and
highly instructional speech for anyone seeking to fully understand the state
of the global economy and its implications for gold and silver, and why gold
remains a cornerstone of a well-constructed portfolio today.
To quote Voltaire: “Paper money eventually returns to its intrinsic value.
Zero.”
The U.S. has provided the world’s reserve currency since Breton Woods.
Though we did not lose the implicit gold backing until 1971, the pressure of
the 1960s set the stage. As President LBJ tried to fund both his Great
Society program and the Cold War era arms race and the Vietnam War, cash was
flying out of U.S. coffers. In the process, an ever-greater amount of U.S.
cash – gold-backed cash – was ending up in foreign hands. At the time, only
central banks could redeem U.S. currency for gold, and they came forward with
arms outstretched. By 1970, the U.S. gold reserves were depleting at an
alarming rate, causing Nixon to close off the vaults and unpeg the dollar.
Few could imagine the financial engineering that was to follow.
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