Gold, that “barbaric relic” from yesteryear just won’t go away even though the central banks around the world would like just that. I believe it was Keynes who first coined the phrase “barbarous relic” which has stuck for more than half a century. But why does it have to be so barbaric?
Gold as you know has had a very long history, some 5,000 years or more. Wars have been fought over it, kings and queens have won or lost over it, coup de ‘tat’s have occurred because if it, entire governments have been swept because of gold …or the lack of. Gold has been hidden, buried, swept away and stolen over the years. Maybe JM Keynes called it the “barbarous relic” because of the ugly lengths man has gone to throughout history to attain it? Yes I know, I was only kidding, he was demeaning gold and tried to tar it as useless versus our “new-fangled” fiat money of the time…
I think a little bit of history is in order. Let’s start with the “non recent” history of Europe. We saw the leadership change many times over the last 500+ years. The Dutch, Portuguese, Spanish, French and British all took a turn “at the top.” Each of these countries led the world in trade and economics for various spells. The British started (in the mid 1600’s) what is currently our fractional reserve banking system that we have today, it was however a little less “fractional” when it began. Each one of these countries at one time or another had larger hoards of gold than anyone else …”money” and power simply flowed to the strongest economy. It can be said that this was also a “chicken or the egg” scenario where a strong economy attracted gold and high gold balances augured well for a strong economy. Gold attained by plunder was another ticket to the top. On the other side of the globe, the Japanese and Chinese were the powers with the most gold and silver attained by both trade and plunder.
So why the history lesson? Let’s fast forward to more recent times such as WWII onward. Did you know that Germany by middle to the end of the war could not pay for any trade goods except by using gold because their paper was suspect, gold was their only acceptable currency? Did you know the Soviet Union was selling gold bars with the “Czar’s stamp” on it in 1989? As a side note, when I heard of this I knew the end was near. The USSR was selling 89% pure gold bars into a 99.99% market, it was accepted and of course discounted but this wasn’t the point. If they had any “good delivery” gold they would have sold that instead because selling the “dregs” was like laying their cards on the table. They were demonstrably selling from the bottom of the barrel. I mention this because back in 2011 and ’12 we were hearing stories of 90% gold hitting the market which had the “fingerprint” of coin melt from the 1930’s. Was this the bottom of OUR barrel?
Let me add a few very recent events. We found out yesterday that Ukraine no longer has any gold left. Where did this gold go to? It is speculated the gold was “flown out” (to the U.S.?). There are also questions as to what happened to Libya’s gold after we bombed them back to the stone ages and dethroned Qadaffi. Same questions regarding Iraq and their gold. Do you see a pattern here? In the case of Sadam Hussein and Qadaffi, they both made rumblings of going to gold or silver backed currencies and presto …they are gone and so is their gold? Now, ISIS is talking about going to a gold backed dinar, who do we dethrone and where is their gold? There is one more “recent” event regarding gold. Germany asked to repatriate her gold in 2013 and doesn’t seem to be getting much of it. Only 5 tons last year of a scheduled 37. As a funny side note, if Ukraine lost 40+ tons of gold …and Mr. Putin bought 55 tons over the last quarter …might some (all?) of this gold have simply come to rest a little bit further to the northeast. What is even funnier in my mind is that Mr. Putin may have bought exactly what once was Ukrainian gold and paid for it in dollars, did he not give the West something they can create freely for stolen goods of value. So in essence, Mr. Putin may have sent the U.S. some of their dollars back for what may have been Soviet gold in the first place? Sorry, I had to put that in here because it strikes me as so ironic!
To finish, let me try to tie some of this together. Even though gold is supposedly “barbaric,” the U.S. guards it diligently (so to speak) in Ft. Knox, West Point and NYC. We “say” we have it and to this point no one other than the Germans have asked for any of their custodian held gold. No audits have been done in 60 years, not even Congressmen have been allowed to see it since the 1970’s. In many cases since WWII, gold has turned up missing after “we fixed things” and despotic rulers were ousted. If gold is so barbaric, how come it keeps turning up as “lost”? If it is really so barbaric then why do the Chinese (Asians in general) want it so badly? Why so much secrecy? Is there something to hide? The answer of course is “yes” there is something to hide. Even IF we do have the barbaric gold we say we do, we are still broke and bankrupt. If we don’t then we are more broke, more bankrupt and …do not have the capital (even marked up many fold) to begin repairing, recovering and picking up the pieces.
I’ll add these thoughts which I believe are worth pondering on. “Gold is only barbaric if you don’t have any”… which means barbaric acts are taken to either hide this fact or to attain some. For something that is so barbaric and “meaningless,” governments around the world sure go to great lengths to guard what gold they do have and to keep secret anything and everything they are doing in this particular money market!
John Meynard Keynes quote was actually,
“In truth, the gold standard is already a barberous relic”
He was talking about the use of gold backing a paper money system, which was actually a failure because governments were creating paper without adding gold reserves. Keynes actually liked gold and thought it should be used as both a national and personal asset reserve. Its better for gold owners if gold is free to rise in price.
“Its better for gold owners if gold is free to rise in price”… ya’ think?
Hi Bill,
Another day I had very strong argument on Russian disccussion board over those recently acquired 55 tons by Putin. They say it was internal purchase, from Polyus conglomerate. Russia doesn’t buy from external market at all. I dont trust WGC either.
any comment?
we knew they do not export any production, I am skeptical that they do not import “any” gold purchases. Is there any supporting evidence that they do not purchase from the outside? Not trying to be flippant here, I would really like to know or have hard knowledge on this if you can uncover it. Thanks keremetski.
Hi Bill,
Sberbank, russian lagest sate-owned bank is selling their metal reserve to RCB in amount of 15 bln rubles, thus liquidating their 38% of metal reserves.
It was in russian fin news.
Sberbank is main stakeholder in Polyus gold mining company. Polyus sell their product to external market to source dollars.
Thats how RCB officially not selling gold from the reserves and get sourced in dollars. Note how RCB didnt intervene in recent ruble plunge. Why? Well, they
are dollar hedged through those Polyus channels.
Putin is just another NWO puppet. I trust noone. I only trust mathematical law ( aka Mother Nature), which will rule eventually.
thank you keremetski.
“Gold is only barbaric if you don’t have any”…great insight Bill!!
thanks Rodger.
Bill,
Happy holidays to you and your family.
It appears to me that there are 2 sources that call gold “barbaric”: (1) Bankers and (2) Those that have no gold.
Fiat will soon go down in the history books as toilet paper and the biggest ponzi scheme the world has ever seen.
a blessed Thanksgiving to and yours Farrell.
Hi Bill, forwarded your previous article to my father, told him to forward it to his brothers. Thank you for that previous article and thank you for this one also. And thank you for ALL your articles. Side note & off topic: Really, really curious for Monday 24th, as there will be a strike in Antwerp. Let’s see how things unfold. Previously, Brussels was burning.. OK.. Weird times! Thanks.
why are they (who?) striking?
Hi Bill, the working class is on strike because our new government made the decision to raise the retirement age (I think to 67). And also because they put on hold the Wage Indexation Mechanism. I think some gov officials are terrified to pay off debts, but it just seems that it doesn’t work that way.. Also, as you may know, the housing bubble never deflated here and many are stuck with a huge mortgage for their house. A good majority has based their financial decision upon the assumption that they would earn more money, year after year. Average (decent) house for sale in Flanders as from €350.000. Not considering taxes (10%). So, this is the environment in which discomfort is being produced. Here, we all grew up, assuming housing was the best (leveraged) investment option ever. I think it is now the Achilles heel of our economy. No such thing as Foreclosure exists here, but I should do more research about the legal aspect of defaulting on mortgages here, because at this point, cannot provide correct info about that. I think “they come for” your relatives if you cannot pay. But again, I should research it better. Thanks.
thanks Geert.
Now, ISIS is talking about going to a gold backed dinar, who do we dethrone and where is their gold?
Answer: Syria? They just need a little to sell on the open market to keep the PONZI going a little longer?
I don’t think Putin and China will not stand for it.
When the US and Brits invade a country the first thing they seem to steal is the country’s Gold!
‘Nuff said.
yes
The effort of repatriation of gold will continue to move forward as more and more people realize that a major reset is coming.
There was a great article yesterday on the http://www.kingworldnews.com website discussing the inside story on the effort to repatriate German Gold. Very interesting bits of info there.
I can only hope that the economic war between the East and the West does not become a hostile physical war.
I fully believe that there are two forces wanting a physical war from the western perspective.
The fist is the greed of the Industrial Military Complex and the Second is the desire of some to deflect blame from themselves for this financial mess to the aggression of the East.
Society always looks for a Scapegoat.
It would seem that history has shown us that the cost of correcting mistakes is always escalated by concealing the truth.
and now we get a story that Netherlands repatriated 122.5 tons?
case in point.
http://www.theguardian.com/world/2014/nov/20/russia-warns-us-ukraine-forces-russian-rebels
God help us before it is too late.
Amen!
Regarding Dutch news. Interesting timing to announce this, right before the Swiss referendum.
What Cartel wants us to beleive? Another puzzle to solve over week end.
I need to see those delivered bars.
yes exactly, were these the original bars deposited many years ago?
Bill just read your article on the COMEX on Gold-Eagle. I also am a retail 25 year broker and in the process of trying to decide which direction to go. I would love to visit sometime. Thanks for the superb article Bill
please e-mail me at [email protected] . We can talk tomorrow if you wish.