Gold, seemingly everywhere and nowhere at the same time, has popped up on the mainstream radar, after spending the year beating stock markets as the less volatile asset and completing yet another year in a recognized bull market. That’s a lot more than stock markets can say, as they merely tread water in real terms.
Bloomberg highlighted gold on New Year’s Eve as the medium of exchange that could serve as payment for assassinating the U.S. Ambassador in Yemen, according to recorded audio.
The audio may or may not be credible. Should the recording turn out not to be credible, it would have served conveniently to support the idea that gold is used as money in illegal or morally destitute transactions. This argument usually is usually brought to bear in the push for a digital currency that would make it possible to hold anyone using it retroactively accountable. We have written about the chip, and the fact that a Cashless Society Is Totalitarian Dream. We also ask, is the End of Cash Compatible with Freedom of Choice?
The Associated Press reported that the audio, posted on “militant websites” of unknown ownership and posted anonymously, had the asking price at 3 kg, or 96 troy ounces of gold, worth $160,000 today. If the reward offer is real, it definitely illustrates the ire invoked by bombing the public from far above using remote-controlled drones.
The threat comes after the U.S. administration ramped up their war against Yemen in 2012, after using unmanned drones to kill those stated to be terrorists, including children.
“Did we just kill a kid?” – U.S. Drone Operator
Of course, some departments in the U.S. federal government consider civilian protesters to be terrorists as well, and so the “terrorist” line is arbitrarily drawn. The decision of who to kill and who not to has become more difficult as due process (your right to a day in court), a right enshrined in law since the Magna Carta in 1215, has been lost. The Federal Reserve Branch (Fed) of Richmond even sent “passive” all-seeing-eyes to Occupy rallies, as the linked article describes.
Protesters complained of price fixing and policies that favor those with financial assets rather than the poor, those saving, and those living on fixed incomes.
Of course, saving in gold and transacting in precious metals denies the currency cartel operators the ability to pilfer the value of your savings by means of constant inflation of the currency supply. That institutionalized inflation, which continually decreases the value of existing currency, is an the inherent feature of fiat currencies that has made the “War on Poverty” nothing more than an ongoing joke.
Mainstream media, the financial establishment and government authorities will continue to attach gold, as “one has no difficulty in understanding the statist’ antagonism.” But at some point, as their purchasing power falls, people will get “over” the increasing uselessness of paper notes. In Zimbabwe, they use the valueless currency to paper billboards and have had chronic septic issues resulting from the flushing of banknotes used as toilet paper.
In Hyperinflation Déjà Vu—Can What Happened in Zimbabwe Happen In U.S.? we note that Dr. Gideon Gono, the governor of the Reserve Bank of Zimbabwe responsible for Zimbabwe’s runaway inflation (and Ben Bernanke’s personal idol), has now turned to supporting… gold.
Now, in the other currently ongoing big inflation (other than Syrian and Iran, which are the result of economic warfare) in Argentina, “toiletgate” has again pushed into the press. The Financial Times reported on December 28 that a wad of cash was found in the private bathroom of the Argentine economic minister four years ago, and she has been sentenced for “aggravated concealment of a public document.”
Argentina’s banking system shut down entirely as recently as 2001 after big inflation destroyed the peso’s purchasing power. Soon the Argentinean peso will buy nothing yet again.
We have Argentinean customers who, while they are not yet defecating on the country’s newest currency, are defecting, seeking to exchange their paper pesos for gold and silver. Capital controls instituted by the Argentine government have limited wire transfers, credit card companies have limited transactions, and locally currency exchange often takes place just over the border.
This is a population that could explain how and why to plan for the same eventuality the U.S. dollar faces. But we can do better. As we are reminded, straight from the horse’s mouth via the same Richmond Fed from above:
As we lift off, destination $6 trillion as a monetary base (pre-crisis… $0.85 trillion), Bernanke stated at the December 12 press conference, “[If there is no cliff deal] we would perhaps increase [QE] a bit.”
The bigger they are, the harder they fall.