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http://www.goldseek.com/news/GoldSeeker/bars.pngA Return to the Gold Standard, or Gold Behind Currencies – Part 3/5
By: Julian D. W. Phillips

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This is the third part of a five part series on how gold will return to the monetary system globally but not in the form of the defunct Gold Standard.

Return of Gold to an Active Role in the New, Global Monetary System
The questions gold investors have to ask themselves is, "if the days of the dollar are numbered, how will gold be used in the monetary system that follows? Will there be a global monetary system that all nations subscribe to or will the monetary world fragment?” For one thing, we will continue to live in a global world with nations trading amongst each other. To gold investors, such an eventuality –let alone its potential reality—would cause a return to the use of gold as a foundation for any monetary system, but not as a means of exchange, ever again. That journey has already started. Whether in a cooperative or uncooperative world, gold will have to provide international liquidity and facilitate trade between nations in place of the dollar. This will include the U.S. too. The world is headed irrevocably to a multi-currency system with the dollar as one of the world's leading currencies, but not the sole one. Gold, as always, will have to inspire the trust it once did. It will have to fill the gap left by the world of currencies that occurred when the developed world removed itself from gold and at the same time removed currencies from supplying adequate measures of value.

It is appropriate to look at whether we will see the likes of the Gold Standard again.

A Word on the Gold Standard

Mr Ben Bernanke has given a series of lectures on the Gold Standard and its performance. What he said about it was quite correct. What he said was a critique of the Gold Standard with a view to dismissing it. It's a pity he did not address the question of gold's future as a contingency plan, which we are sure has been discussed thoroughly by the Fed and with the input from the other developed world central bankers. After all, when Alan Greenspan said the "Gold is money, in extremis” he was right then and in the future. Few people would deny we have moved into extreme times for most nations. A fact that we have seen a glimpse of (central banks and the Bank of International Settlements are quiet on these points) has been that in the last two year gold has been used amongst banks and nations to facilitate loans and to lower their interest costs.


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So much has been written about the failings of the Gold Standard, but what has been omitted when a comparison to today is made, is that the gold system was designed for its time and it succeeded very well in that context, with that stability and those values. Then those values changed, the situation governing money changed and this frozen, fixed system did prove inadequate for the days that followed. What is missed from the criticism of that system is that it was a system that used gold as the foundation for the system of money of that day.

It wasn't gold that was at fault, it was the system that used the gold.

Measure of Value
Today, gold has done what it did then. It has proved to be a measure of value, a counter to the swings in the value of currencies. In the days of the gold standard, the notes issued against gold were based on the value of gold which was fixed. In essence, the devaluation of gold in 1935 was an instrument to expand the amount or supply of money. Prior to that and a basic cause of the depression was an insufficient money supply. The devaluation of the dollar assisted in the U.S. recovery at the time. The subsequent gathering of gold into U.S. vaults gave financial credibility to the U.S. monetary system.


Why and how was he correct? He discussed the system called the Gold Standard with its fixed exchange rates and fixed price of gold. This can no longer happen for the reasons he gave. Today, we have neither. Going back to a fixed price of gold or, more importantly, to fixed exchange rates would be insane. The current misfortunes of the Eurozone are amply demonstrating this as rich countries and poor countries use the 'fixed' exchange rate of the euro between themselves. We will see this decade old experiment founder for the same reasons eventually after a long and painful process that could last another decade.

(In the fourth part of the series we look at how gold will fit into the new monetary system and why they will have enough gold to make it work)

www.GoldForecaster.com / www.SilverForecaster.com

Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina, have based this document on information obtained from sources it believes to be reliable but which it has not independently verified; Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina make no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina only and are subject to change without notice. Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina assume no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this Report.

A FEW MINEFIELDS THAT CAN BLOW UP THE GLOBAL STOCK MARKETS IN 2012

(THANKS TO GARY DORSCH FOR THIS GREAT INFORMATION)

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1. Uncertainty over Election politics and Taxes in US

If re-elected, President Obama might allow the Bush tax cuts to expire, and therefore allow the long-term capital-gains tax rate to increase to 20%, plus a 3.8% investment surtax to finance Obama-Care. That 23.8% rate amounts to a nearly 60% increase from the 15% rate in effect since 2003. And that's without his new "Buffett rule," which would take the rate to 30% for many taxpayers.Taxes on short-term capital gains would increase by 3% across the board,and dividends will once again be taxed as regular income, plus a 3.8% tax on investment income as part of the health-care overhaul passed in 2009. For the highest earners, tax rates on most dividends, currently 15% is set to jump to a whopping 43.4% next year.

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2. Spain.

The Madrid stock market and Spanish banking stocks continue to tumble. The benchmark IBEX-35 index is down -10% so far this year, and is -30% lower from a year ago.Spain's biggest bank, Banco Santander STD.N) has fallen -18% over the past four weeks, and has dropped more than -45% over the past year. Credit Default Swaps, used to measure the cost to insure the debt of Banco Santander's subordinated debt, for a period of five years, jumped +220-bps higher in the past two weeks to around 630-bps today, meaning it takes €630,000 to insure €10-million of STD's debt against the risk of default.

3. CHINA

The Deepening Recession in Europe is Spilling over into the Asian sphere, and slowing down the world's economic locomotive - China. Chinese exports ranged between $475-billion to $518-billion in the last three quarters of 2011. However,in the first quarter of 2012, China's exports fell to $430-billion. Factory activity in China shrank for a fifth straight month in March, hit by declining order books, disappointing exports, and new hiring hitting a two-year low, according to the HSBC purchasing managers index. Most worrisome, the new orders sub-index fell to a four-month low of 46.1, from 48.5 in February.

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4. AUSTRALIA

China's demand for iron ore, coal and natural gas, drove Australia's terms of trade, or export prices relative to import prices, to a record high last year. But Australia unexpectedly posted back-to-back trade deficits in January and February, the first consecutive shortfalls in two years, as coal and metal prices slumped, sending the Aussie dollar lower and intensifying pressure on the Reserve Bank of Australia (RBA) to resume cutting interest rates, because overseas shipments account for about a quarter of gross domestic product. Exports fell in February to A$24.4-billion, the lowest level in a year. The value of coal exports, the nation's second-biggest commodity export after iron ore, plunged -21% to A$3.4-billion, the least since March 2011. Overseas sales of goods and services to India, Japan and Korea, which buy about 25% of Australian exports, all declined.

5. LATIN AMERICA

Brazil's economy stalled out in the past two quarters, showing near zero growth in Q'3 of 2011 and Q'4 of 2012. Factory output in February was -3.9% lower than a year ago. Yet slower growth was necessary in order to quell the inflation rate, which was quite high, north of +7% in August 2011. For all of 2011, Brazil's economy grew +2.7%, after expanding at a record +7.5% in 2010.

In the mean time -

Have a great week trading -

All the best -

Frank Petricca

Kno's Comments: This came in my email and I have no link. Frank is a great information resource for me.

Good Evening - Trade Well

We Are All Informed and Knowledge Is Power

NO SHEEP ALLOWED ON THIS THREAD !!!

Good Morning Everyone

Hello Sweetie

Good Morning

1.3100 or 1.3050 ?

Where are we going ?

I am going to Waterloo Ontario by car in 1 hour and 9 minutes...

Trade Good and NO SEX during Trading Hours

You must cram a lot of fun in on the weekend Kno!

URL: http://www.dollarvigilante.com/blog/2012/4/16/salvaging-your-savings.html

April 17, 2012

"It is unbelievable. Goldman Sachs? No one has any criminal convictions. The whole new regulatory reform is a joke. The whole government is a Ponzi scheme." - Bernie Madoff

http://www.dollarvigilante.com/storage/SDIRA.jpgWhat is your average person to do? The governments who purport to own them and take half of their production every year also borrow on "their behalf" and have put not only them, but their children and grandchildren into levels of debt that can only be described as slavery. Meanwhile, the entire economy is so distorted by government regulations, taxes, tariffs, laws and legislation that calling it a "free market" is like calling Shaquille O'Neal a petite, pretty white girl. And, to top it off, the monetary system forced upon us by legal tender laws is a system based, at its core, on counterfeiting and price (interest rate) fixing.

Then, your average person, has been indoctrinated in government child prison camps and forced to rote memorize progaganda and useless information for 12 years (AKA Educated) has to figure out how to financially survive living in this fasco-communist paradise where the game is rigged against them.
In the pre-modern era the way for most people to survive and prosper was through saving. Saving is purely the result of producing more than you consume and retaining the rest for consumption in the future. But now the game is rigged... and is just a well orchestrated ponzi scheme. After half their income is stolen from them every year and another large portion is "invisibly taxed" through inflation, the small pittance that is left is just a piece of paper with some famous criminal's picture drawn on it.

And, in order to protect even that from being whisked away, governments have created "tax sheltered" retirement accounts to give them the brief sensation of having financial freedom. It is perceived financial freedom for slaves.

http://www.dollarvigilante.com/stora...=1334712051666

But, as the end-game for the socialist democratic nation state nears, tax theft revenues will continue to fall as state expenditures continue to rise and governments will look at that untaxed pool or retirement savings as their after-dinner desert and look to nationalize it. This has already happened in the western world. In Ireland, as example, they have already instituted a tax on the gross assets of pensions... not on their profits, but an annual tax on their holdings! In Portugal the state mafia has raided over 5.6 billion Euros of pension funds in a bid to meet its fiscal target. And in Hungary, 4.5 billion Euros worth of government securities were taken over from assets in private pension funds towards reducing the country's public debt.

It is only a matter of time until USSA and other western retirement and pension funds are confiscated or forced into "investing" in Treasuries - a sure thing to lose 5-10% of its value every year in inflation adjusted dollars.

While you have no way to withdraw what is owed to you in advance from things like Socialist Security without incurring heavy penalties, there are still some options. In the US, you can easily convert your IRA into a self-directed IRA. Once it has been converted you can not only invest in assets such as gold bullion but you can do so outside of the country to protect your assets from seizure.


Your government registered financial advisor will not tell you about this. In fact, they'll be against it as it removes your IRA funds from their company. That is why it is more important than ever to do your own research and protect yourself now before you go down with the ship.

The financial situation of the US Government is in a shambles, with over $75 trillion in debt and liabilities ($250,000 for each person in the US). As they continue down the road to insolvency we expect they will do what almost all governments do. They'll try to stay alive by taking the assets of the citizenry. This has happened countless times in history.

Best,

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Jeff Berwick

I can party with the best of them. My comment was for FX Mindset who is always thinking of SEX instead of focusing on his FX trading. That was why I made the comment.

I have been learning about SEX since the age of 14. At Age 60 I learned how to practise Sexual Transmutation. I learned that from the great book "Think And Grow Rich"

Sex is about desire. Turn your desire in building VS fornicating and SEX becomes the most powerful force in the world.

Without that you end up like DKS of the IMF...

He thought with his small brain. Come visit me one day in Montreal. We can go to Chez Paree. Just Google It !!!

No Worries
Chart Attached

am Agreed!Sex is not good for our Mind
But its good for our health

Lolz..am kidding,too serious is bad for health

I like that

http://www.dailyfx.com/forex/fundame...sk_Trends.html


18 April 2012 03:06 GMT http://www.dailyfx.com/design/fxcm/img/common/blank.gif



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1. Dollar Little Moved Despite Aggressive Rebound in Risk Trends
2. Euro Stubborn in the Face of Poor Bond Auction Growth Concerns
3. Canadian Dollar Surges after BoC Says Hawkish Move a….Possibility
4. Australian Dollar Traders Cap Their Rate Expectations for Cuts, Turn to Risk
5. British Pound Rallies In Spite of CPI, Jobs and BoE Minutes Due
6. New Zealand Dollar: Does Inflation Data Carry as Much Sway Here as with the Aussie?
7. Gold Once Again Delivers on Volatility, Fails for Trend

Dollar Little Moved Despite Aggressive Rebound in Risk Trends
The fundamental flow was heavy and the S&P 500 was particularly strong this past session; yet through that fundamental drive, the benchmark US dollar found itself virtually unmoved through the close. In fact, the Dow Jones FXCM Dollar Index closed Tuesday’s active trading session with a 0.04 percent change at 9940. Alone, the benchmark’s lack of momentum would not be particularly surprising; but against the backdrop of otherwise active markets, the restraint is somewhat surprising. This could speak to two underlying truths: either the dollar is lagging capital markets, or the rally in risk trends lacks the kind of conviction we would need to generate follow through. Following Occam’s Razor (the principle whereby the simpler explanation or the one with the fewest assumptions is usually the correct one), we would expect the disconnect was the dollar’s responsibility. However, there is still no clear trend for our primary sentiment gauges and recent data does little to encourage bulls.


In the most easily made connection to broader risk trends this past session, macro traders could pick up on the IMF’s updated growth forecasts. From January, the group notched its 2012 global GDP outlook up from 3.3 to 3.5 percent. That pace draws a notable contrast to the more moderate 2.1 percent outlook for the US. Any optimism that may have accompanied these projections were offset by the market’s preexisting expectations of moderate growth for the year and the IMF’s own concern that downside risks were “extremely present.” The preoccupation with a global crisis borne from the Euro Zone found another mixed picture. Headlines from Spain were far from encouraging (more on that below), but the gauges of regional stress seemed unfazed – much less global measures.


Ultimately, it is the view on general risk trends where the greenback will defer its intentions. While the S&P 500 managed its biggest single day rally in a month (1.6 percent), the move didn’t shake the index free from weeks of general congestion. If the dollar is to take to a prevailing and durable trend (bullish or bearish), FX interests will likely need to be guided by the influence of a general sentiment shift.


Euro Stubborn in the Face of Poor Bond Auction Growth Concerns
Through Tuesday’s session, the euro dropped against all of its major counterparts with the exception of the Japanese yen. Weakness on the shared currency’s part is reasonable against the discouraging round of fundamentals the euro faced through the session. Continuing with the IMF’s optimism, the Euro Zone’s 2012 recession was upgraded from a 0.5 percent expected contraction to 0.3 percent. That said, Spain’s growth forecast was lowered further to a 1.8 percent projected contraction alongside expectations of a 6.0 percent debt-GDP ratio (missing the 5.3 percent target). Following along with the Spain theme, the 12 and 18 month bond auctions met higher demand but at the price of significantly higher yields (investors demanding greater return to take a risk on a loan to the country). Furthermore, Prime Minister Rajoy said the region is going through another round of credit crunch. Through all of this though, Spanish 10-year yields actually fell. Now on to Thursday’s 10yr auction.

I am leaving for Ontario now so I will be offline for 12 hours.

Trade well and keep your shaver close by. I like clean shaven things although I have a mustache. Take care My Friend !!!

1900 Posts and it has been fun. I have enjoyed my stay here. Thanks PipTrapper. One Day In Montreal. You are a CLASS ACT and I am very proud to be part of your family on this thread you started on September 25, 2011.

G-D Bless

be safe in the Journey Sir,sometimes we need have some fun and some kidding in this life

E/U Buy TP primary 1.3160, Next 1.3190

EUR/USD: Hemmed in by big flows

Any rallies are running into the BIS, thought to be selling on behalf of the SNB (who buy EUR/CHF then sell EUR/USD in order to keep FX reserve ratios steady)
Dips are seeing demand from Middle East Sovereigns and a US bank thought to be buying on behalf of IMF (for loan payments to Portugal and Greece)

Yesterday was impressive run by equities but by Euro

Around
DOW +1.4%
GER30 +2.6%
FRA40 +2.7%
ESP35 +2.3%
ITA40 +3.7%
But still they are opening pretty fall...
And Euro +0.06% , so no one wants to buy this sucker...
So if equities fall today or tomorrow there may be a free fall for EU.....

now we know that SNB not buying Euro for boost EurSwiss

That's yesterday's news:


Today is a new day...

Still relevant