Let’s have a quick chat about gold, Ben Bernanke’s ‘barbarous relic’ that is otherwise known as real money. I want to present a brief synthesis that covers a few critical angles from the macro to the micro. What is going on with the global monetary system? What indications do we have that a shift is underway? What can ordinary people like you and me do about it?
Our first stop: China.
China is hosting the 2016 G20 summit where world leaders from the largest economies get together to discuss global economic policy, cut deals with each another, and coordinate efforts across the board. Make no mistake; that this high-profile meeting is taking place in China this year is extremely significant and no coincidence. If you’d like to read more about the event click through to the rundown from the South China Morning Post.
More important than any public speech or announced agreement will be the backroom agreements made during the two-day summit from 9/4 to 9/5 while here in the US the populace will be enjoying a long weekend and getting ready for school to start again. I would love to be a fly on the wall at those meetings. I suspect I would hear a lot about the Eurasian Trade Zone, the Asian Infrastructure Investment Bank, the Asian Development Bank, and the New Silk Road. There will likely be bilateral and multilateral trade deals and partnerships created.
We are witnessing a changing of the guard. A swing of the historical pendulum back to the East. Apart from everything else, I believe that behind the scenes it is currency that is front and center. Whoever has the reins to the global monetary system has geopolitical power that influences the entire world. The current system must change because it cannot be sustained forever. It is eroding before our eyes. Something new will eventually take its place. When that final inflection point comes and everyone is made aware of the failure of the old and the institution of the new, it will be too late to take action to protect your purchasing power.
Real money is the future. The fiat experiment is dead, and I hope and pray that global debt slavery goes with it. Gold and silver are real money. They have been since the beginning of human civilization. They are Biblical money. They are Constitutional money.
Knowing this, how do we know that we are running out of time before the inflection point?
How do you say dead canary in German?
That’s right: Deutsche Bank! Recently it has been reported that this $75 Trillion derivative warehouse can’t deliver physical gold in response to paper claims of ownership. This is a massive red flag, particularly after Deutsche Bank admitted to rigging the paper prices of precious metals earlier in the spring and to being part of a broader network of banks that participated in the fraud.
Even though the broader public yawned at the earlier news, the fuse has now been lit. Now as failures to deliver begin to mount the savvy folks will begin to demand physical as the paper promises fall short. Since we’ve seen paper claims to physical assets reach astonishing ratios above 500-1 earlier this year at the COMEX, if any big money actually stands for delivery and doesn’t receive their physical metal the unwind will be difficult to comprehend in its speed and severity even for those who follow such developments closely.
Guess who could stand for delivery any time they want?
I know at least one country with their finger on this gold button: China again. The Chinese are patient, but rest assured that they have the ability to force a global monetary reset simply by standing for delivery and showing their cards. A word of advice to any monetary policymaker who is reading this via NSA archives: don’t go all in against China. They’ve outlasted enough empires to deserve some credit for savvy geopolitics.
China will push that button when they believe it is in their best interests. Until that time there is still an opportunity to get on the right side of things by getting into precious metals. Holding the physical metal is the best option because it eliminates counterparty risk, but what if gold or silver is not affordable? What if you can’t really store it? What if you’re concerned about it being accepted as money when you want to spend it?
Let’s take a look at a solution:
This is Goldmoney. Here you can open up a personal account for free and fund it using bank transfers or credit card payments. Funding your account gives you a balance of gold that is owned by you through title and stored in vaults in various locations around the world – I prefer the vaults in Hong Kong, Singapore, and Zurich. Once you fund your account you can transfer the ownership of gold in any increment in any currency. You can also transfer balances to a prepaid card that allows you to spend your gold wherever MasterCard is accepted. I wouldn’t spend it just yet, but this is a great way to begin diversifying your assets into precious metals held outside the United States at a low cost without needing to meet massive minimum requirements.
If you have any savings at all and want to protect your purchasing power, then Goldmoney is an option well worth your consideration. I’ve recently become a member in order to continue my diversification across various hard asset strategies. If you can afford to take delivery of physical, then I would prioritize that option. However, if you don’t have a bunch of cash laying around to buy an ounce of gold or a chunk of silver and you want to make sure you can easily transact using your precious metals, then I recommend giving this a shot.
This is not necessarily a catch-all solution for every scenario, but it deserves to be investigated as part of a comprehensive portfolio. As a reminder and a disclaimer I am not a financial advisor and I am not affiliated with Goldmoney in any way other than being a new customer. Do your own research and make your own decisions.
All investments involve risk, but right now doing nothing is the biggest risk you could take.
Take advantage of the gift of time to act while you still have it.
Buckle up, amateurs.