Gold Under Fire as Money Not Traceable like Bank Issued Toilet Paper

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.

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Hyperinflation Déjà Vu—Can What Happened in Zimbabwe Happen In U.S.?

Even though the Presidential election is over and all of the accompanying hyperbole has ceased, the future of the U.S. economy is still on the minds of many. A poll taken by Fox News prior to the election reported that the #1 concern among voters was not jobs but rather price inflation. In the face of that citizen concern, the Federal Reserve is pursuing the worst possible course of action—QEfinity (the most recent iteration of Quantitative Easing—the expansion of the currency supply by buying up U.S. government debt from banks). If you don’t believe us that it is indeed the worst possible course of action, witness Zimbabwe.

Dr. Gideon Gono was first appointed Governor of the Reserve Bank of Zimbabwe (RBZ) in 2003 and was reappointed to his post with a new five-year term beginning in 2008. Many found Gono’s reappointment astonishing, given that Gono reigned over what is arguably the worst episode of hyperinflation the world has ever seen.

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Torturing the Iranian People - Groceries Skyrocket

Grand Bazaar, Tehran

Photo Credit: Yomadic.com

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Rothschild - Richer than the Richest on Euro, Gold

A Rothschild brother, this time Jacob of RIT Capital Partners is in the news again, going short the euro currency with a $200 million position. It is unknown how the position is levered or structured; however, coming from this source, it is a big blow to confidence in the euro currency.

A fiat currency is created by a government decree. The Latin word fiat means “let it be done.” And with the stroke of a pen, or the crank of a printing press, “money” is created. Fiat currency has no inherent value—the paper that a $100 dollar bill is printed on is surely not worth $100. It might have been worth a few cents before the government ruined its utility as scrap paper by printing green words and numbers all over it! Compare this with gold, which is a precious, rare metal that is, in many cases, the only substance on earth that can be used for certain human purposes, including science, medicine, and of course—adornment.

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The Dollar is Silver - Banknotes are a Bank's Liability

After our piece detailing the cycles of knowledge in the “nature of coin, credit and circulation,” as then-President Adams stated it, we thought it would be interesting to look at dollars themselves.

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Federal Reserve History Mythologizes Creation of All-Powerful Cartel

Written By: The WealthCycles Staff

Simply put, bonds are debt. Bonds basically say: "I owe you (IOU) X-amount of currency, plus X-amount of interest." —Michael Maloney, Guide to Investing In Gold & Silver. But, there is more to it than that. Bonds set the cost of borrowing, determine international currency flows, and play a huge role in determining the value of each nation’s currency. That means bonds have a direct effect on the dollars, euros, pesos or yuan in your wallet or bank account.

Hyperinflation is when extreme inflation spirals out of control and confidence in a fiat currency falls. Usually, hyperinflation is characterized by a negative feedback loop, in which people, fearing the falling value of their currency, buy hard goods in order to preserve their purchasing power. This drives the prices of goods up, which creates price inflation, and drives the purchasing power of currencies down—creating a feedback loop.    

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testiomials By 1910 much of the control of the U.S. financial system was concentrated in the hands of a powerful few. It was these powerful few who departed in the dead of night for a secret destination where plans were hatched for a centralized bank to hold the reins of power over the entire global financial system.”

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Zero-Yield Game Takes It To The Limit

Written By: The WealthCycles Staff

Inflation is simply an increase in the supply of currency and credit. The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling is defined by the term "price inflation." Central Banks attempt to stop deflation, a natural phenomenon which occurs in order to correct the prior inflation.

Simply put, bonds are debt. Bonds basically say: "I owe you (IOU) X-amount of currency, plus X-amount of interest." —Michael Maloney, Guide to Investing In Gold & Silver. But, there is more to it than that. Bonds set the cost of borrowing, determine international currency flows, and play a huge role in determining the value of each nation’s currency. That means bonds have a direct effect on the dollars, euros, pesos or yuan in your wallet or bank account.

Deflation is a contraction of the currency supply, which causes prices to fall and the value of currency to rise. When prices fall, a boom becomes a bust, and suddenly a recession becomes a depression.  Fed Chairman Ben Bernanke, a scholar of the Great Depression, knows the dangers that deflation poses to a debt-based economy.

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testiomials As conservatives continue hollering about inflationary central bank policies, those same policies are flirting with deflation.”

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The Economic Brain

Written By: The WealthCycles Staff

A fiat currency is created by a government decree. The Latin word fiat means “let it be done.” And with the stroke of a pen, or the crank of a printing press, “money” is created. Fiat currency has no inherent value—the paper that a $100 dollar bill is printed on is surely not worth $100. It might have been worth a few cents before the government ruined its utility as scrap paper by printing green words and numbers all over it! Compare this with gold, which is a precious, rare metal that is, in many cases, the only substance on earth that can be used for certain human purposes, including science, medicine, and of course—adornment.

The Efficient Market Hypothesis is a theory that says  says that the market is efficient for two reasons. (1) We believe it is inefficient. (2) Everyone is constantly trying to beat the market and make money.

The theory gasically because people believe the market is inefficient (i.e. you can beat the returns of the market) the market becomes efficient. Say you are attempting to beat the market. Your very act of trying to attempting to make money (Mauricio Explain the theory, I cant do it)

It is important to note, this theory doesn’t exclude the possibility that you can beat the market. What it is suggesting is that you only do so by taking on, what the market views as, higher risk. This is because the

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testiomials Analysts are rarely all on the same page that a particular stock or sector is a bad bargain, despite the fact the market later proves it was.”

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The Tidal Wave Approaches… As No One Pays Attention

As we have been writing for the last 3 years, debt deleveraging equals deflation. While people have been screaming for imminent hyperinflation, we have stood by the idea that we would have to stop in deflationary territory before central banks around the world would react, flooding the globe with fiat currency. Check this little piece out from our local LA Times:

Deflation is a contraction of the currency supply, which causes prices to fall and the value of currency to rise. When prices fall, a boom becomes a bust, and suddenly a recession becomes a depression.  Fed Chairman Ben Bernanke, a scholar of the Great Depression, knows the dangers that deflation poses to a debt-based economy.

Hyperinflation is when extreme inflation spirals out of control and confidence in a fiat currency falls. Usually, hyperinflation is characterized by a negative feedback loop, in which people, fearing the falling value of their currency, buy hard goods in order to preserve their purchasing power. This drives the prices of goods up, which creates price inflation, and drives the purchasing power of currencies down—creating a feedback loop.    

A fiat currency is created by a government decree. The Latin word fiat means “let it be done.” And with the stroke of a pen, or the crank of a printing press, “money” is created. Fiat currency has no inherent value—the paper that a $100 dollar bill is printed on is surely not worth $100. It might have been worth a few cents before the government ruined its utility as scrap paper by printing green words and numbers all over it! Compare this with gold, which is a precious, rare metal that is, in many cases, the only substance on earth that can be used for certain human purposes, including science, medicine, and of course—adornment.

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Global Currency System on Shaky Ground

Hang on to your hats! Not only is Southern California, WealthCycles.com’s home turf, undergoing extreme winds today, but there are increasing signs that the world monetary system is in for some buffeting as well.

 In Zimbabwe, central banker Gideon Gono has spurned the U.S. dollar, which the nation adopted as its national currency in 2009 after Gono and his government cohorts hyperinflated the Zimbabwean currency into oblivion three years ago, as reported by ZeroHedge:

Now, the country's cult central banker Gideon Gono has made it clear he wishes to avoid another episode of transplant currency hyperinflation courtesy of his counterpart in the Marriner Eccles building and "has warned that Zimbabwe’s nascent economic recovery is at the mercy of the United States dollar, which is facing new pressures from the Euro-zone debt crisis."

(See the WealthCycles.com article, The Hyperinflationary Bogeyman, for more on the Zimbabwean hyperinflation.)

Hyperinflation is when extreme inflation spirals out of control and confidence in a fiat currency falls. Usually, hyperinflation is characterized by a negative feedback loop, in which people, fearing the falling value of their currency, buy hard goods in order to preserve their purchasing power. This drives the prices of goods up, which creates price inflation, and drives the purchasing power of currencies down—creating a feedback loop.    

Inflation is simply an increase in the supply of currency and credit. The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling is defined by the term "price inflation." Central Banks attempt to stop deflation, a natural phenomenon which occurs in order to correct the prior inflation.

Read More >

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