Tag Archives: gold

2011-04-20 Geoff Golder on the New Crypto-Currency BitCoin

Local software developer Geoff Golder comes on the program to explain and discuss the implications of the newly developing online currency called BitCoin.

[blip.tv http://blip.tv/play/AYK0w2MA%5D

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Further Currency Developments…

Gold hit $1067.00 today, and the dollar has continued to weaken against other currencies, including the Yen and Euro.  In addition to the factors previously mentioned below, I just came across another article that adds a piece to the reserve currency puzzle.  According to an article from the Telegraph, last month the Chinese offered their first issuance of government debt that foreigners are allowed to acquire.

This is a rather important development, because any currency that aspires to fill the role of the World Reserve needs to be “backed” by internationally negotiable government debt.  If a country wants to sell its oil, right now (unless it is Iran, which is taking Euros) it accepts Dollars.  It then uses those Dollars to buy other goods and service that it requires on the world market.  However, what happens if that country has a trade surplus; that is, sells more goods than it buys?  It can put that surplus into commodities and private companies (as middle eastern “sovereign wealth funds” have done), but such strategies are risky and not very liquid should the country need a big wad of buying power in a pinch.  As they are backed by the power of the State to tax its citizens, Dollar denominated government bonds are the easiest place to park a surplus, and are as close to cash as a government can get in terms of liquidity.

Thus, this move by the Chinese government allows a country the option of selling its surplus for Yuan rather than Dollars, as it allows for a liquid, low risk place to park those Yuan.  This will begin to allow China to print more money than its own economy requires (just like the USA does now), meaning high value money enters the world economy in China and then loses value as it filters to the rest of the world.  American prosperity since the 1970s has been built on the rents collected from this system of inflation-exportation, and the Chinese are edging in on our hustle.  I wonder: at what point will the Federal Government be forced to openly acknowledge the economic warfare that they’re waging behind the backs of the American people?  An honest discussion of this inevitably leads to the problems inherent to a monopolized money supply*; this is why Dr. Paul’s Free Competition in Currency Act needs to be passed (but was assiduously ignored).

On the other hand, the Second Vermont Republic has just issued one ounce silver coins; I’m thinking a bit of silver might not be a bad call as a hedge given what the price of the yellow stuff is doing…

[UPDATE] – Looks like the American mainstream media (outside the financial press) is finally picking up on this story![/UPDATE]

* What follows is an excerpt from Kevin Carson’s “The Iron Fist Behind the Invisible Hand” discussing the money monopoly: Continue reading

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More damning dollar news…and perhaps a war brewing?

As the result of a series of meetings between high-level central bank officials (from which the US was excluded), the Independent is reporting that:

Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

The transitionary currency, according to Chinese banking sources, may be gold, (which would explain the recent spike in the price of the yellow metal).

The article also notes that:

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

Which makes the recent US preparations for war with Iran make a bit more sense . . . looks like we’re going to be in for a rocky ride.

*UPDATE*

For some background on what is at stake in the reserve currency fight, check out this post.

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It’s the Monday morning after the Bailout…

…and I’m extremely curious to see what the markets will do this week.  An hour and 45 minutes into the trading session, the DOW is already down almost 500 points and gold is up 42 dollars (or 5%).  Is this an oversell that people will profit off of by picking up bargain shares, or is this the beginning of a correction that even Uncle Sam’s pocketbook can’t stave off any longer?  It’ll be interesting to watch.

Also, there are a few good articles on CounterPunch this morning about the Bailout and the credit crisis, and specifically how the bailout will not only fail, but that its failure will further erode confidence in American economic stability, exacerbating the problem.  Good times.

In any case, I’m off to pretend these problems don’t exist for a few hours of good company and heavily accented German social theory (I’m seeing Jurgen Habermas lecture at Yale *sqeeeeal*).  Until then, good luck preserving your capital (what little I have after my student loan payments is sitting in the relative safety of gold mining stocks and foreign government bonds thanks to Prudent Bear ^__^ ), and enjoy the day!

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9/28/2008 ASftR – Thomas Naylor Interview

The whole interview:

Naylor on Bush and the price of gold:

Naylor on Vermont secession and the ways it could be used to shield Vermonters from the National Debt:

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