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Silver and Gold Truth Versus Fiat Lies

The Jefferson Airplane sang about truth and lies nearly 50 years ago.

“When the truth is found to be lies

And all the joy within you dies…”

Restating their insight to make it relevant to our global delusions about real money – gold and silver – and the much less real money we call dollars, euros, pounds, yen and so forth:

When the truths we want to believe are clearly lies,

Then CONFIDENCE in our currency dies…

What do loss of confidence, loss of faith in financial systems, and pervasive lies have to do with gold and silver?  The answer begins with: Gold is far more truthful money – central banks can’t print it or create it from “thin air.”  Dollars, euros, yen and others are fiat currency units based on confidence and debt (not assets) and are supported by government mandates that these pieces of colored paper and computerized digits shall be accepted as money.

But confidence in debt based currencies promoted by insolvent governments is clearly waning.  The Russians and Chinese understand – they are converting dollars, yuan, and rubles into gold.  Europe, Japan and the U.S. are “printing” more euros, yen, and dollars hoping that “extend and pretend” will give the politicians more years in office, another war or two, and more profits for the military contractors and bankers.  When propaganda and “statistics” fail, there are always diversions like bombs and invasions.  (What happened to the gold from Iraq, Libya, and the Ukraine?  If gold has little value, why did it disappear so quickly?)

What happens when another financial calamity occurs?  Something major can and will occur in the next few years.  Possibilities:  derivative crisis in Europe (Greek bonds anyone?); tactical nukes in Ukraine; cyberattack on US,  Japanese or European banking systems; fall of the Petrodollar; credit collapse in China; US T-bond crash; an audit of the gold in Fort Knox (just kidding); or many other possibilities.

Assume a major financial crisis occurs within five years:

  • Confidence in the purchasing power of some currencies will rapidly die.
  • Some currencies, stock markets, and bond markets will implode.
  • Confidence in political and financial leaders will decline.
  • Gold and silver will retain their value while currencies sink into the sunset of devaluation and QE to infinity.
  • Nominal prices for gold and silver will go far higher – based on the loss of confidence in paper currencies and the loss of purchasing power of those currencies. (Repression will not hold their prices down much longer.)
  • Gold and silver will retain their value because many people know, trust, and have confidence in gold and silver.
  • Confidence in dollars, euros, and yen can disappear in weeks or months. Think Argentina, Venezuela, Germany, Hungary, Bosnia, USSR, and many other countries in the past 100 years.  (How much will Confederate money purchase today?)
  • When our supposed truths are found to be lies, confidence in our currency dies. 

The truths we have been told that are lies:

  1. Those dollars, yen and euros are money. Well no, the stuff passes for money as long as the next person BELIEVES IT WILL CONTINUE to pass for money.  (What happens when people fear the next person will no longer accept those paper dollars in exchange for needed goods?  It has happened many times before and will most certainly happen again in the next few years, perhaps in a country where you live.) 
  2. Gold and the gold standard are a “barbarous relic,” useless, and unnecessary in the modern financial world. This lie is ruthlessly promoted, along with other nonsense from financial authorities who have a vested interest in selling their products (created dollars, euros, yen etc.) in exchange for real assets, such as steel mills, automobiles, land, and yes, gold and silver.  (Does it amaze you that a central bank can print a billion euros and then use that newly created “money” to buy gold?)
  3. Deficits don’t matter. This is particularly relevant as the U.S. debt is more than $18 Trillion and rapidly rising due to massive deficit spending every year.  Worse, global debt is approximately $200 Trillion.  Ask Greece, Zimbabwe and the Ukraine if they believe that deficits don’t matter.  I submit that “deficits don’t matter” is the intellectual equivalent of “we can borrow our way out of debt” or “we can spend our way into prosperity.”
  4. Central banks are necessary. I can’t prove they aren’t necessary, but it seems unlikely that parasitic institutions that extract money from their respective economies and do little but inflate their currencies are necessary or valuable to the general economy.  The Federal Reserve has not prevented depressions or recessions, has not increased employment, nor maintained the value of the dollar.  However, it has increased the wealth of the financial and political elite at the expense of most others.
  5. There are many more lies that are promoted as truth. Ignorance is unfortunate but believing the lies is far more dangerous.  In no particular order here are a few more lies (only my opinions) that many of us currently believe or have previously believed.
  • Real estate prices will always go up.
  • The dollar is good as gold. (I last heard this in the late 1950s.)
  • Buy and hold stocks forever.
  • This war will make the world safe for democracy.
  • “I believe in a balanced budget.”
  • You can keep your doctor and current health plan.
  • No more foreign wars….
  • There isn’t enough gold in the world such that we can go back onto a gold standard.
  • This is a temporary government program.
  • The deficits are declining. (Why is there a deficit in the first place and how will the US repay $18 Trillion?)
  • “No boots on the ground.”
  • It was necessary to bail out the banks for the good of the country (actually the bankers, elite, politicians, payoffs etc.)
  • We can spend our way into prosperity.
  • Printing money makes us all wealthier.
  • A lone gunman…
  • We owe the national debt to ourselves.
  • And finally…. If we vote out Useless Incumbent # 97 and vote in Slimy Candidate # 104, all will be well.

Don’t believe the lies or trust that unbacked debt based paper currencies will survive (they never do).  Learn from the lessons of history – gold and silver have been money for thousands of years.  The western world currently has amnesia about the true nature of money.  Asia has not forgotten the value of gold and silver. 

Convert increasingly risky dollars, euros, yen, bonds, and other delusions into gold and silver while you can.  The window of opportunity will not remain open much longer.

Gary Christenson

The Deviant Investor




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