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Zero Hedge put out a piece yesterday that compared China’s “money growth” (newly created) versus that of Japan and the U.S. for the month of November.   Surprisingly, China created $200 billion of new debt versus $159 billion for Japan and the U.S. combined.  I must say that I was greatly surprised by these numbers but it got me to thinking…

Collectively this is nearly $400 billion, do you realize how much money this is?  “A lot” would be a good answer but it’s always best to relate or compare one thing to another for perspective.  Do you realize what $400 billion represents?  Um…how about more or less 10,000 tons of gold?  You know, in round numbers the total amount of gold “supposedly” held in Ft. Knox and our other depositories?  Or…maybe a little bit more gold than China has accumulated during their buying spree over the last few years?

Think about this, between Japan, China and the U.S more “money” (debt) was created in just ONE MONTH than the amount of gold held by any one country…in ONE MONTH!  Another way to look at this number is that it is roughly equal to the amount of gold mined all over the world…over a FOUR YEAR timeframe!  You can look at this from many different angles; I wonder “why” this amount of money needed to be created?  Without going into a long spiel of economics, suffice it to say…”because they have to.”  They “have to” because if this money is not created then the Ponzi collapses upon itself and “normal” will have a whole new meaning altogether…I might add a not too pleasant meaning either.

So back to the $359 billion in one month.  In layman’s terms, let me make the analogy of your credit card versus your bank account.  This is similar to borrowing the entire balance of your bank account via credit card in just one month and this assumes you are not lying about your account balance.  Do you see how lopsided this has become?  How “free” fiat money, debt or whatever you want to call it has become?  How “dear” gold really is?

I know it’s hard to see how “dear” gold is right now because in dollars it is priced more or less at just $1,250 per ounce.  But wait, what if newly created “money” (debt) grows by the same amount as November…for the next 12 months?  This is easy to say but hard to believe, it makes all of the above descriptions and analogies TWELVE TIMES WORSE!

Yes I am a cheerleader for gold so you can read this and say, “There he goes again”…or you can reread this and verify that the math (I rounded numbers so please don’t nit-pick me) and logic are correct.  You can reread this piece and put in perspective how incorrectly these currency markets are in relation to gold (and silver).  I have written so many times regarding the coming “re set,” can you now see with the above example exactly “why” a re set is not only necessary but mandatory?  Can you see the directions of Mother Nature’s push for real goods versus the world’s freely and literally unlimited created paper monies?

Before I finish, I do want to address those who will say that China is either going to collapse, never will, will dominate the globe or whatever.  From where I sit, China has only “played the game” that was in progress.  They have moved toward capitalism and fractional reserve banking…but…they figured out “how to win the game.”  When, not if the current fractional reserve game collapses, you can bet that Chinese banks will go down in flames with all the rest.  But guess what?  China “has the gold” and will sit at the head of the table when new currencies are discussed (they surely already have been) and new pecking orders are set.  When this event unfolds, China WILL… (Not the U.S., not Europe, not the COMEX or LBMA, and not even 5 cigar smoking knuckleheads sitting in an ivory tower in London)… SET THE PRICE OF GOLD.

One last question, were we to get to the point where no gold is available (offered) for sale then what would its price be in dollars, Yen, Euros, Yuan or whatever?  This is similar to asking what a gallon of clean drinking water would be worth in the middle of the desert.  Of course you could ask the same question of a pound of rice, a bag of potatoes or even a dozen eggs in an economic meltdown.  Most will say “you can’t eat gold” so it will be worthless in an economic meltdown.  I agree you would never use gold to “eat” because you could never get “change” back.  You cannot eat silver either but those thin little 90% Silver dimes will be pretty tasty after exchanging them for food.