The Uncertainty Of Money

Imagine a world in which governments do business with one another only in gold, as in physical gold. They can issue promissory notes to one another, but it has to be backed by verified stores of gold. Governments, however, do not use gold for paying employees or contracting work with private business. In the case of employees, government pays in script, the value of which is set by the government. The vendors, on the other hand, are paid with silver, as in real silver coin or silver notes.

The first part of this thought experiment is not a big leap, as governments still hoard gold and will on occasion pay one another in gold. In our imaginary world, gold would be the exclusive currency of government, so regular people would hold very little of it, other than for novelty. This is not much different from today, as gold is not legal tender in most of the world. It is treated, in the law, as a commodity, like diamonds, barrels of oil, bales of hay, and so on. Gold is a product, not money.

The rest of the thought experiment gets a little weird, as companies do business in the tender of their home country. If they did business with one another in silver, then one of two things would happen. Either the price of silver would be pegged at the value of the legal tender or it would be pegged at the price of gold. Since government would always be willing to buy gold in silver or tender, from anyone holding gold as a store of value, the most likely result is all three would be related in value.

The result of this arrangement would be a world where the credit worthiness of governments would be pegged to their gold reserves, but also the gold reserves of their native companies and populations. A government that could quickly buy up gold from its people would have more flexibility than a government so distrusted that its own people would resist selling its gold to the state. Something similar would apply to the credit ratings of businesses, with regards to the supply of silver.

A well run country with a high trust population and a responsible government would find that the flow of gold and silver would be high, as there would be no reason to hoard them. Similarly, the value of the paper script used for retail transactions would have a steady value, relative to the currency of business and government. This would not just be an internal trust. Outsiders would see it too. In contrast, corrupt states with corrupt people would have low trust and lots of hoarding of gold and silver.

Now, this thought experiment is useful in understanding what is happening with the screaming headlines about negative bond yields. The media hypes these events as if they are the sign of the end times. Most likely, they are triggered by the word “negative” and just assume it is bad news. In reality, what the market is saying is that the German bonds are so safe, the holder is willing to pay for the privilege of holding them. Lenders are literally paying the German state for the privilege of lending to it.

Now, it is tempting for a certain sort of person (libertarians) to say it is ridiculous to compare government debt to gold, as in this analogy. They are right. Government debt is actually more secure. The reason is this. Tomorrow, the government can ban the private ownership of gold. Executive Order 6102 is a United States presidential executive order signed on April 5, 1933, by President Franklin D. Roosevelt that effectively banned the private ownership of gold in the United States.

On the other hand, no government anywhere could ban the private ownership of government debt. In fact, no government could risk the hint of not paying its outstanding debts, as that would make all debt worthless. Since, in the case of Western countries, those government bonds are the basis of the financial system, public trust in the credit worthiness of government is vital. That’s why people are literally willing to trade gold at a loss for the privilege of holding German bonds right now.

Now, that does not mean negative rates are all puppies and sunshine. Going back to our analogy, a world where everyone trusts government, but is not willing to trust companies, would result in a disequilibrium in the relationship between gold, silver and the paper script used in retail. The “price” in terms of script for silver would collapse, while the price of gold would soar. After all, why hold silver when business is bad, when you can hold gold or even cash, which has a higher value?

In our age, government debt is the gold in the analogy, but corporate debt is the equivalent of the silver. Modern business works off debt, as it is the currency of the modern age. In prior ages, government debt and corporate debt was captive to the supply of gold and silver. Today, the relationship between sovereign debt, municipal debt, corporate debt and legal tender is enabled and managed by central banks, primarily the Federal Reserve and the European Central Bank.

This is why borrowing rates across the West remain at historic lows. The whole point of this arrangement was to prevent the ups and downs, the booms and busts that plagued industrial economies since the steam engine. The trouble is, the system also allows for the easy manipulation of the economy through the money supply. Inevitably, that worked one way and we are now in a place where no one is willing to pay the price of getting things back to something close to historic norms.

This system has also been based on certain assumptions about America that are starting to unravel. One is that America would continue to operate like a giant shopping mall, willing to buy on unfavorable terms. Both Europe and China based their economic models on this assumption. Trump has abandoned that and that’s why we see problems in China and now economic uncertainty in the heart of Europe. The uncertainty of world political arrangements is now showing up in the money.

It also suggests the markets are slowly coming to terms with the fact that the Trump economic model is the new normal. The election is fourteen months away, so if his loss in 2020 was the safe bet, the markets would be responding now. Instead, the global economy seems to be slowly coming around to the fact that either Trump wins in 2020 or his polices will be carried on no matter what happens. America as problem solver for the world’s money problems may be coming to an end.

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223 thoughts on “The Uncertainty Of Money

  1. The boom-bust cycles are more intense and prolonged than before. They are papered over by monetary policy—preventing the market clearing performed by deflation—but each successive time it widens the gap in purchasing power between the asset owning class and the working class.

  2. Sent you a few shekels. Love you and your pod.
    May you live a thousand years and shit on a thousand commies.
    I wonder if money is like Schleswig-Holstein. Only three people understand it, one is dead, one has forgotten and one isn’t sure.

  3. I felt alluded to by this article due to my proposal in a comment in an earlier one for precious/solid-metals-based economy. You are right in skewering the theory with the precedent of the FDR totalitarian powergrab against gold, and the relative stability of the debt-based economy compared to the boom-bust-industrial age… But see, there is the problem, the bourgeois-led industrial age made hoarding either by private or public hands, much easier. In an at least partially-agrarian world, with at least a partially-landed gentry and populace*, consumption in a precious-metals-based economy would be kept at much lower levels; while land and real estate would not be subject to the incredible leveraging it’s been loaded up on for decades. I’d argue this leverage is the last leg the global dollar will stand on, until Middle America’s valuable land and quaint communities are turned into expansions of the Leftcoasts that is… Then the leg will break, and the rope will stretch the pale neck of the American. Or, alternatively, the American falls off his (((termite)))-infested rocking chair, wakes up from the globalist-induced coma, and…

    Alas, it is true, going back to this near-medieval model and making it work would be harder than any of the silly old Ron Paul 08-12 utopian libertarian proposals. But if anything, as you say in the last two paragraphs, perhaps rectification is coming to some degree, if slower. But it is coming. Whether this rectification goes as far as going back to precious/solid-currency**, or any other more stable socioeconomic arrangements than whatever we have now***, perhaps won’t be seen by us. But at least the tide is turning.

    (*with their organic guilds, trusts, unions, churches, councils providing some autonomy and balance against the central state’s potential powergrabs, while working together with it if possible)

    (**I did include copper for poorer nations, maybe others for any local particularities; and maybe crypto would work still in some environments)

    (***we can only hint at these. For example, Archaeofuturisme paints a similar picture if under different political arrangements: most fertile married people consigned to the land again, perhaps with some internet and other bells and whistles, while only few chosen ones can afford the robotized wall-e globocities. Perhaps this would work in the late 21st-early 22nd centuries, after cities and suburbs get depopulated due to Western sterile lifestyles, and ethnic troubles provoking an agrarian-provincial-localist reaction. It did happen in the 5-6th centuries…)

  4. And now a word from the management.

    Job 1:21. “…Naked came I out of my mother’s womb, and naked shall I return thither: the LORD gave, and the LORD hath taken away; blessed be the name of the LORD…”

    • Revelation 13; 16 And the second beast required all people small and great, rich and poor, free and slave, to receive a mark on their right hand or on their forehead, 17 so that no one could buy or sell unless he had the mark— the name of the beast or the number of its name.

  5. Someone should have told Greece about that – and it isn’t working out well for Turkey. There was also Russia and the little tigers in 1998.

    Governments have defaulted on bonds since paper currency was invented. It is not a matter of choice, it is there is finite wealth to tax, and the debt can easily exceed that value. Technically going Weimar/Zimbabwe/Venezuela isn’t technical default but that doesn’t matter – you aren’t getting wealth back, just a few trillion Fiatunit notes.

    The missing piece is “What is the debt denominated in?”
    The problem with Puerto Rico, Venezuela, Argentina is they can only issue bonds – debt – in dollars, so they can’t print their way out of it.
    Modern Monetary Theory (MMT like AOC praises) is based on being able to issue infinite debt.

    The problem with the EU is it will break apart, it has already – there is a pretense Greece will be able to repay its Euro based debt.

    Another distinction is between liquidity – is there a market to trade bonds – v.s. solvency – can they be repaid at all?

    Consider that both California and Illinois are insolvent. Period. Mathematically inescapable. It is just that short of a scourge that kills almost everyone who is or will be on their retiree rolls but leaves assets around, what they owe exceeds what they can tax. The constitution says they can’t default on pensions, it doesn’t say so about Bonds.

    Things are worth what the public – the marginal buyer and seller – believes they are worth, be it, Milken junk bonds (he couldn’t afford the hint of default either, neither could Sunbeam, Radio Shack, Toys ‘R Us, or ShopKo). Or Bernie Madoff – it was clear years before that there was no “there” there. Or John Corzine using his hedge fund as a casino. Or why did AIG need to be bailed out – 2008 wasn’t that long ago but it seems forgotten already as we assume there is some new stability and normal and not the Donner Party eating the last of its seed corn before they start to eat each other.

    Gullibility and stupidity are human. In markets, there is always a hope (sometimes unspoken) that you will be able to sell something to an even more gullible or stupid buyer.

  6. Lurking in the shadows of our credit-saturated situation, is that a credit-laced economy always has the meter running, and growth must outrun the constant bill associated with paying off all that interest. A cash or asset based economy has difficulty growing, but stasis is just that, the level of prosperity or poverty, overall, stays roughly the same (Amish economics). Our credit based economy, which got jump-started in the 19-teens, first worked pretty well, as a war footing and industrialization growth outran the credit interest bill. In the twenties, credit went on overdrive, much of it into the stock market (in part because there were not enough other productive places to soak up all that new credit), and the crash, bank holiday, and depression all served to put people most of the way back to square one, but with a broader economy full of credit bills due.

    WW2, family formation, baby boom, more wars, internationalization of trade and jobs, and the computer/internet boom, all created economic growth to compensate some for the expansion of credit, and pay those interest bills. The rest of the compensation for the bill was paid in depreciation of the currency over time.

    Now that growth to cover the nut has stopped, some want to bring in POC to restart things through population expansion, Trump is trying to bring growth back by reimporting jobs back home, but the fact of the matter is that the real growth is slowing. The consumer is fully indebted, companies are hitting the bottom line by cutting costs, not expanding revenues, but the credit bill must be paid. The latest twist is zero interest rates, so credit does not come with an interest bill attached. So now savers are screwed, and there still is no growth to speak of. So what is the next step? There is always the matter of handouts (cue Bernie and Pocahontas), but the alternative roads are not obvious. It becomes a “hunker down and take care of those close to you first” sort of thing. I’m open to other ideas, but no one has articulated one yet. Trump’s proposition is a sort of backward looking-forward looking cultural nostalgia thing, but the actual economic policy prescriptions seem to be a combination of extending more credit at home (budget deficits and tax cuts), along with a beggar-thy-neighbor international policy, couched as getting back to square on international trade arrangements-which it is. Other than that, what have we got?

  7. “German bonds are so safe, the holder is willing to pay for the privilege of holding them”. Hardly. It’s called front running the CB’s. The wise guys know a new round of QE is coming and expect much more negative yields. They expect to make a killing, and will. Case in point, is the Austrian 100 year bund – its price move up has been asymptotic.

    • RT Rider said: ” Case in point, is the Austrian 100 year bund – its price move up has been asymptotic.” Would that curve be horizontal, vertical or oblique to the nominal interest rate? Or would it just be easier to say that the whole freaking thing is rigged?

    • Drake said: “They immediately bombed the place into chaos.”
      Gaddafi also tried to make a deal with the EU ( for lots of cash of course) to do what he could to bottel up the flow of African mass immigration. Big mistake.

  8. Fine analysis but the end should read : America as problem solver for the worlds money problems is almost certain to never end.

    First , there is no alternative . Second it would collapse the world economy . Dollar is and will remain a king

  9. Trump’s catastrophic spending policies will be carried on by the Democrats, that’s for sure. It’s basically the green new deal without the eco-friendly label. It comes from an assumption of baby boomers that they’ll be safely in the grave before this things goes off a cliff.

    As far as negative yields go, this wasn’t even covered in even the most advanced finance classes 20+ years ago. Bonds represent the time value of money. Who would hold money, 20 or 30 years at a loss? It would imply that opportunity cost, the heart of the free market, is non-existent in the current environment. This era will be studied intensely a hundred years from now, by all kinds of students. Not in a good way, in a “how could they do this?” Kaiser Wilhelm II way.

    “what the market is saying is that the German bonds are so safe, the holder is willing to pay for the privilege of holding them.” In a functioning capital market, that’s what this would say. In today’s Alice in Wonderland market, where central banks are the primary actors in asset valuation, there are four possibilities 1) the world is so dangerous, and opportunities so lacking, that people are willing to pay to get most of their money back in 20 years, instead of only a fraction. 2) the Euro will have a more stable value compared to competing currencies, including the dollar. 3) The ECB, like all other central banks will backstop the bonds and monetize them. 4) Many many institutions, from insurance companies, re-insurance companies, pension funds, banks, etc., are contractually obligated to own X% of government bonds through their charters. They have to buy then at financial gunpoint.

    The answer would be all of the above, but mostly 3 and 4.

    What’s going on today, with negative yields, is the mark of a liquidity crisis worldwide. As world-wide debt has exploded to over 225% of GDP (mind boggling) all that debt needs more and more servicing through fresh credit extensions from reserve banks acting in concert. Even when the US stopped its QE program, Japan and Europe ramped up to take the slack. Now Europe will begin again, with the US having to re-start it in the late fall. Japan is Japan and is desperately running out of domestic assets to buy for debt service and is now buying domestic index funds.

    When you think about a debt load this big, you have to think why do hurricanes top out at Cat 5? Why not a cat 7 or 8 hurricane? It’s because the periphery of the hurricane can’t spin fast enough to keep up with the eye. The central banks are at the eye of the hurricane, as it grows. the negative yields on bonds are the negative pressure inside the eye. As some point, the hurricane can’t get enough energy to sustain itself and falls apart.

    I’ll take my chances and hold gold. Even if I have to tape it to the inside of my pant leg as I walk across the border into Canada. Some future FDR issues an executive order? Bring it.

      • Do you not see the deficit just this month? When I saw that I said “take that Weimar Republic!” And to think this is nothing compared to next year.

        • yah, I can hardly walk around because of all the people pushing wheel barrows full of dollar bills. I’ll gladly give you a couple of loaves of bread and a jar of pickles, for all your worthless greenbacks.

    • The holder of negative interest bonds will pay twice. First is the nominal interest rate, and the second is the accelerating depreciation of the underlying currency over time. The path of least resistance for the central bank is massive currency issuance, even as segments of the private sector begin to default. All back to the government, one way or the other. Once the link between currency and something tangible (gold and silver, in our case) was severed, the path was preordained. It’s only how fast we travel it that matters. You now get this weird game of chicken, where people hope to die before they spend down. Be careful of what you wish for.

  10. If you believe Drudge then Trump is at 62% disapproval. Not sure if I do but could see it. White women being natural backers of aristocracy hate deplorables. Every European Republic before 1920 restricted women’s rights and every aristocracy increase d them.

    I could see Harris or Warren winning. Borders o pen, free stuff for immig rants who are instant citizen and seizing most White property. Not Bill Gates he’s honorary non White. Your stuff. My stuff.

    We are seeing unevenly non Wh ite leaders like Chakrabarti struggle with aging Whites like Pelosi. For now Pelosi wins but for now long?

    U.S. Can’t go Argentina. Repudiate debt. Hence need to seize to pay off vibrant both new and old.

    • Pocahontas will be the next President. And she’s build on the legacy of failure. Oh how we will love the neo-Victorian school marm finger wagging.

    • I was looking at polling for this time in prior presidencies. Trump is pretty much where Obama and Bush stood at this point in their tenures. Those are not great comparisons, as Obama had the endless cheering from the media and Bush had war hysteria to boost his numbers. Trump is getting it from his own party and the media. A lot will depend upon who the democrats nominate and what happens between now and next summer.

      • Trump is more of a circa 2007 George W., only looking for a second term. He’ll only have a prayer if he invades Iran at just the right time before the big casualties start. Of course I have to discount that I live with Rachael Maddows’ in a bubble (Coastal CA) where he’s absolutely hated by everyone. I would have to take a trip to Ohio. It’s too bad those useless Mennonites don’t vote in PA. Or Amish. Maybe both.

  11. The one certainty about money is cash is going away sooner than later. Sweden is nearly a cashless society and expects to be completely cashless by 2023. The EU is starting to eliminate the 200-Euro and 500-Euro notes to make large cash transactions more and more difficult. This trend will continue under the guise of controlling “criminal” money to ensure banks and governments eventually have total control of our money.

    • I’m regularly outraged by the quasi-law-enforcement role banks and other financial institutions are playing post-9/11. The entire financial system has been “deputized” as snitches and the “crimes and offenses” are incredibly subjective and ripe for abuse. I’m amazed at how Switzerland in particular has ruined its prior sterling reputation for confidentiality due to massive pressure from the greedy snooping Five Eyes. Meanwhile, privileged connected elites can operate with impunity under the anarcho-tyrannical white collar criminal standard that treats us like terrorists while Charles Kushner gets to run Trump’s campaign and write NYT editorials from his 5-star kosher “jail” cell.

    • Your financial situation will be both more highly visible to the state, and under the thumb of the state. Bearer bonds are gone, too, and stock certificates are just about done as well. Everything as pixels on a computer screen and 0s and 1s on a computer database. Note how real estate is getting completely catalogued on line by the likes of Zillow. All your purchases are logged, too. GPS on your phone and your car. The surveillance state is real.

    • hahah Sweden! Isn’t their national currency kiddie porn? If Sweden is your answer, I don’t want to know the question. Stopped reading when I saw that ‘word’; seriously.

    • Hence increasing trade in gold.

      I am curious about the future of crypto, though. Given the presence of Big Tech… I am not inclined to trust it.

      • John;
        The value of crypto completely depends on steady electrical power to the servers maintaining the blockchains. Hence a really bad idea if one forecasts a Tango Uniform (or SHTF) event in the future. IOW, if you can use it, you don’t really need it. And, when you’d really need it, it likely won’t be accessible.

        Plus, the Cloud really cannot permit private money that evades their control, long term. Expect reporting requirements for acceptors. Here is where big tech will come in, as you say.

        Crypto as a long term storehouse of value_? *Any* currency, gold included, depends on the willingness of folks holding real stuff you want/need to be willing to accept it in exchange. In effect, you are betting on being able to turn it into food, etc. in the future. Gold is a likely bet, but it’s a bet none-the-less.

        In the case of crypto, there’s a lot of infrastructure required for a vendor to be able to even accept and use it. Might work.

        If the exchange is this afternoon, then fiat paper will be fine, until one day it isn’t.

      • I’ve asked some crypto people why I should trust cryptos in the face of governments (or big tech) who buy computing by the acre. Whether it’s breaking the crypto outright, or a massive ability to mine, can’t such parties manipulate it? Don’t even consider the notion of simply banning its use.

        Never an answer.

        And big tech being the “sponsors” of crypto like Facebook? That has already said they’d apply “sensible” limits on who they’d “allow” to use its crypto? What moron would buy into that?

    • Sweden has passed laws mandating businesses accept cash for the benefit of immigrants. They have voiced concerns that foreigners would be left out of the economy otherwise.

      Cash will never be eliminated in a psuedo-democratic society as it would destroy the High-Low alliance and stealth wealth redistribution. What they will do (as happened in India in 2016) is eliminate large notes to hamper the movement of capital. The lower class don’t need large denominated notes/bills because they don’t have enough money nor transact in large quantities. I’m not sure why everyone seems blind to this. Cash could have easily been eliminated in the 1970s with the advent of Visa but it would have hurt blacks and latinos the most and prevented the parallel economy that they have been thriving off ever since.

    • Nope, it just creates a massive black market in meat space. Just like we have in the U.S. – they’re called swamp meets and craigs list.

      Not to mention that bartering will take off like mad if we go to digital money.

    • Cash may go away, but cashless transactions controlled/monitored by the State will not be the sole media for interaction among the peasants. Count on it. Indeed, a switch to such cashless banking will promote a black market unlike any thing seen in peacetime.

  12. I see what you did there, Z. The first five paragraphs were basically what existed before WW1 and its funding requirements, which necessitated more central banking and massive amounts of credit creation.

  13. gold is an illusory store of wealth. let the chinks and russians have it all. it cannot be used for coinage, it has little or no industrial value, you can’t eat it or build anything with it. the price bounces all over the place ($400/oz to $1,200/oz, soon to be back to $400). and now of course the chinks are flooding the world with gold painted tungsten. then there is this: “Nuclear experiments have successfully transmuted lead into gold, but the expense far exceeds any gain” [today]. and finally, there is an unlimited supply in the oceans.

    • Karl, no offense… but you are massively misinformed about that. Do some research. In the final days of WW2, when most of Germany was either captured or on fire and people were starving to death and dying of exposure and other diseases that go along with total societal collapse… people with gold made fortunes. People with silver survived.

      The market always wins. People HAVE to do business, That means currency or barter, and barter has the obvious limitations. Gold always maintains its value. Currencies do not – which is why you see the massive price swings on Gold.

      • Perhaps the best lessons are the ones drawn from history, 1923 Germany and the various Latin countries. Land survives, emigration can work, shares in substantial companies often survive in one piece, and precious metals maintained their value. Of all of those, the PM’s were the only ones that maintained a storehouse of value, in an environment where the rule of law and contract law were broken. So dial up your expectations for the future and plan accordingly. I am banking on a bit of everything and figuring one of them will come to pass.

        • Jim rickards says that in Europe they have old money dating back to the 1500s. These people supposedly have a simple formula for preserving their wealth through generations: 1/3 gold, 1/3 fine art, 1/3 land. Through any conflict one of these can usually be maintained or litigated back after the passing of a hostile regime. Woman in Gold is a good demonstration of that principle, I think.
          This is not meant to be investment advice nor am I a professional. Lol

      • I don’t disagree with your WWII example, but I never advocated holding paper. And never would. My point is that gold is not a good store of value, and is really a kind of sentimental play.

        • Gold is actually a store of value, designed for hoarding in a coffee can in the ground, sewn in the hems of your clothing (how my German grandmother did things), or stored at the bottom of that lake. But it does nothing else, and it may as well be jewelry. Paper assets work much better in a paper financial world, and can grow in value like crazy if you position yourself correctly, as long as you are not holding the bag if or when the paper you hold goes worthless.

          • C’mon Dutch, you know better! No one uses gold that way (too too heavy). It’s jewels in the clothing!

          • Actually, little tiny gold coins sewn here and there. The remnant of the family savings having gone through WW1and 1923. She was not a wealthy woman. Still have them today, probably only 2 or 3 ounces between them. The problem for her with gold as jewelry, is that, as she emigrated away from Germany, it all would have been seized at the borders or along the way, and it would have telegraphed a message that mugging her would have been a fruitful exercise.

    • also-
      Robotic mining will decrease the cost of digging up new gold. As the production costs decline, so will the market price.

    • Karl McHungus said: “… it has little or no industrial value…”
      What the hell planet do you live on?

    • The reason gold has been the primary store of value for most civilizations is that it can fashioned into jewelry and given to women who will then be more likely to have sex with you.

    • Gold has been a store of wealth since before cuneiform. The Chinks and Russians have been around for a lot longer than us. Gold has more industrial uses than just about any other metal, including your smart phone. Gold doesn’t bounce around in price, the currencies bounce around a fixed gold unit, tungsten is not as dense as gold and a scale can tell the difference, and nuclear experiments can only make gold atom by atom. And no, we will not be mining asteroids for it.

      That being said, gold is NOT an investment. It is a currency, the worlds oldest currency. It should not be treated as an investment, but as a long term store of value over time, like a savings account that doesn’t pay interest. The upside is that the bank doesn’t fail, and the currency has the longest track record of any in the world.

      • “Gold has more industrial uses than just about any other metal”

        more than steel?

        more than aluminum?

        more than copper?

        more than nickel?


        guess that’s why consumer electronics have gone up in price so much over the years; all that darn gold in there.

    • The precious metals have countless industrial and aritistic applications, including space exploration, medical technology, musical instruments, pollution mitigation, electronics etc. These are just what come to mind immediately.

      Do you have a link for your statement that “nuclear experiments” have transmuted lead into gold?

  14. “Executive Order 6102 is a United States presidential executive order signed on April 5, 1933, by President Franklin D. Roosevelt that effectively banned the private ownership of gold in the United States.”

    Not quite. FDR allowed citizens to own only small amounts of precious metals. He’d have been hung from a lamp post if he’d tried to enforce that one too – as the order faced massive non-compliance that bordered on civil disobedience – from the Cloud People right on down to the Dirts. Everyone that could was stacking metals and you’d have been nuts NOT to – given the times and circumstances.

    I’ve stacked some silver – but gold is too unwieldly for the average person to use. I cannot really see tying up $1500.00 in one single coin.

    Given the levels of technology today though, I wonder if stacking metals really makes sense. With every purchase leaving and electronic trail, gubbimint flunkies and lickspittles would have no problem tracking down and confiscating the wealth of its citizens. This is probably an excellent way to underline the importance of America’s 2nd Amendment. Fact is that it probably kept FDR from getting to zealous about enforcing his limitations on precious metal ownership.

    • Never underestimate the value of mysterious boating accidents. Things fall over the side all the time.

    • plus many people who think they own metal, just own paper certificates. not the same thing at all.

    • Gold is too unwieldy? The gold/silver ratio now is 88. So it takes 5.5 pounds of silver to equal 1 ounce of gold. For my bug-out bag, I’d prefer gold. I don’t want to hear all the whining from my wife and kids trying to carry all that silver as we trek across country in the post-apocalyptic hellscape.

      • He means unwieldy for barter purposes. If all you’re carrying is gold, what are you going to do about buying a loaf of bread.

        • Most mints make fractional ounce gold coins such as 1/10, 1/4, and 1/2. British sovereigns are 0.2354 Troy ounces. In Asia, gold bullion is also widely available in grams and multiplles thereof and in kilograms as well.

          The premium above spot price that a buyer pays for a smaller coin or ingot will of course be somewhat higher percentage-wise, but he should collect a slightly higher premium when he sells as well.

    • John, if you are a silver guy how do you travel with your reserve? Say, $10k or 600 oz’s. $20k? That seems the problem for me after a certain amount.

    • Funny thing about the Wiki page about 6102, the page is full of examples of prosecutions, but never mentioned the actual amount of gold turned in. I’ve read elsewhere that it was a very small proportion of that which was in private hands.

  15. Negative rates are the result of several factors, but certainly, a main contributor is central banks and their attempt to prop up weak economic growth. That investors are willing hold negative interest rate bonds is a testament to their concern about other investment options – though some bond investors such as banks and insurance companies have to hold those bonds like it or not.

    Falling rates have been a boon to investors over the past decade, helping stocks by pushing up valuations and bond via cap gains, but that just pulled forward investment returns from the future to the present. Bond and stock returns over the next decade likely will be abysmal. Real bond yields are zero while the U.S. stock market is valued to return ~2% to 4% annual real (and that’s assuming no regression to the mean of long-term P/E valuations).

    The real question is what happens when the next recession hits. Rates could – and likely will – fall more, at least in the U.S. However, simultaneously, the government will need to borrow huge amount of money due to the normal additional spending/reduced tax revenue of a recession combined with ramped up Social Security and Medicare spending. What if investors refuse to lend to governments at such low rates?

    The Fed would step in, print money and use it to buy govt bonds, thus injecting a lot of money into the system. Currency devaluation, anyone. But maybe investors will be so scared that they’ll buy 10-year govt bonds at -2.5%. Who knows.

    Regardless, plan for low investment returns over the next decade. Also, put into your portfolio a few inflation hedges – gold, commodities, real estate, TIPs. Don’t go nuts, just make them a part of the portfolio. Mostly, just plan on low real returns.

    • In Marx’s world of capital versus labor, we have managed to accumulate too much of both. Now neither one pays very well. Give a rapidly-growing credit creation environment, embedded in free market capitalism, its due, it creates a whole lot of everything. Now the question is where the Malthusian limits kick in.

    • There was a nice interview on CNBC with Mohammed El-Arian, the big Allianz economist, who said (more or less) “OK, the ECB has gone negative and that’s not a good thing, but if the Fed goes negative, then the wheels are about to come off the bus”. (Link to the interview below.)

      Of course the Fed will eventually go negative. They can’t stay positive with the ECB going negative and staying there. When the Fed goes negative, the poo will indeed hit the fan but the businesses most severely damaged will be the finance and insurance. (Everybody who bought annuities — buckle up.). (God, Steve Liesman is a douchebag.)

  16. My father, an economist, loved this quip:

    “An economist is a man who wears a watch chain with a Phi Beta Kappa key at one end and no watch at the other.” — Alben W. Barkley

    The meaning is unclear to me, though no more than monetary theory, but it always sounded like it was funny…

    One more economics quip:

    “All my economists say, ‘on the one hand…on the other’… GIVE me a one-handed economist!” — Harry Truman.

    • I think Mr. Barkley’s bon mot was intended as a sarcastic remark about how poor most academic economists are.

  17. I’m becoming schizophrenic on monetary policy.

    Daywalker Me is still an Austrian fundamentalist who sees currency manipulation and all the other kinds of Current Year arbitrage (labor, VAT’s, trade policy that overlaps with these, on and on) as complexity scams that allow sophisticated elite operators to privatize profit and socialize risk on scales that can seriously threaten the social stability of huge empires if not the whole world. Gold bugger all that, DOTR the Fed and Ron Paul uber alles.

    Shadow Me is open to things like Gettin’ that Bag, full-blown MMT, a G200 bankruptcy conference/debt jubilee and Scandi socialism. I started hearing his voice around 2015 when the massive debt and varied fiscal malfeasance of Obama still hadn’t Mad Max’d the economy despite Rush, Mike, Mark, Glenn and the ZH guys warning me it was just around the corner since 1992 or so. 2007 was the closest we came to needing our Tea Party Patriot Survival Stoves and that was obviously more the result of outright systemic criminality and corruption rather than wrong-headed public policy. Shadow Me’s getting more and more comfortable in my skin as Trump goes by, and he’s starting to speak out with Tourettes-like intensity.

    As much as my Good Austrian* tries to ixnay the ocialcism-say, Liet-Maynard-Keynes says that “the government already functionally controls the financial system through the Fed anyway, in the same way that public expression is now controlled by an unholy, unchallenged “public private partnership.” Sharing financial power in this way allows plutocrats inside and outside the government to shapeshift as needed between public and private functions, circumventing constitutional and legal limits by sham-privatizing some scams and providing sham enforcement, legal immunities and other government muscle by sham-socializing other scams.

    I’m trying to medicate with varying dose of Mises and Marx. In my more lucid moments, I think an ethnostate with a scaled-down localized economy that proles could actually understand should and could operate on a mostly-Austrian model relying on a mixed bag of commodities for a “gold standard.” When Shadow Me starts gyreing and gimbling about “burning this clown-infested shit-show down,” I put on my latest Yang Gang hat (man they’re cheap nowadays!), vape some krokodil and listen to Striker on 1.5 speed.

    * yes, (((nay sayers))), that’s possible – if it makes you feel any better, he has a full Nordic beard, not a tiny hypnotic mustache.

    • There is the matter of coming to terms with the world you actually live in, rather than the one you want to live in.

      • Dutch said: ” There is the matter of coming to terms with the world you actually live in, rather than the one you want to live in.”

        What!? Are you actually suggesting that we give up our fantasy island daydreams and start thinking in practical terms for workable solutions? How dare you!

      • Goes without saying. Ideally a highly financialized abstracted economy isn’t what we want, but I’m perfectly ready and able to operate on that level. We’re the kind of people who have the skills and smarts to operate in a hyperbolically-distorted society, but I’d like to steer the ship into calmer waters for the good of everyone on the other side of the White bell curve. The high performers will thrive in that setting as well and be happier besides.

        • Exile, well said. That is precisely my feeling as well. If you are on the left side of the Bell curve (and I don’t care your race) we can do a lot better wrt to your life in this country.

          Yes, we are not all equal wrt ability and proclivities. But I am not at the point of declaring half the country as irredeemable deplorables as some of our “leadership” has stated.

  18. Look at the membership in the Congress of the United States and the leadership of the EU. What do you see? Are these people representative of the type of person that you would follow into battle. Do they inspire confidence or the embody the ideals that you would risk your life for? Given that these people have their hand on the tiller of governments, where do you think they are taking us? Is it a good place? Observe, analyze, predict, and plan accordingly. Wishing on rainbows is not a survival strategy.

    • I don’t think Congress runs anything. Maybe a small group have access to real power, but most are just decoration.

      • thezman said: “I don’t think Congress runs anything. Maybe a small group have access to real power, but most are just decoration.”

        Seriously, half the time they can’t get the director of the FBI to answer an email.

      • They elect the leadership of the House of Representatives and the Senate, in whom the power of the federal purse resides. It’s turtles all the way down. A degraded citizenry elects bad Congressional and Senate representatives, who then choose corrupt and duplicitous leaders, who then use public tax money to bribe weak-minded voters to endlessly reelect them. Vicious Cycle 101.

      • They’re the bought-and-paid-for front men for the people that really hold power. That’s why neither “D’s” nor “R’s” pursue their base’s goals when they hold both Houses and the Presidency. Oddly enough the corporate donors and MIC always have every wish fulfilled. Voting is surely an exercise in futility.

        • Perhaps an exercise in futility—especially since they do the bidding of the elite power holders—however, you and I are not in the elite. Seems to me that on my level of the totem pole, the party in power can make my life an order of magnitude worse?

      • Imperial Rome had its rubberstamp Senate. Imperial America has its Congress of useless debaters. As always, the proper question in looking for the source of power is “How many divisions does the Pope of Rome have?”

    • Correct.

      Just as gubbimints have whored out our currency – they’ve whored out the value of the vote. There might be the odd honest man running for office that might survive the mauling he will get in the mass media – but who will vote for him except the odd heritage American with a triple digit IQ? With imported hordes of vibrants and exotic weirdos from over the rainbow, one can almost forgive the media for calling the last election for Hillary.

      There’s an old nickel kicking around somewhere that you can vote yourself in for stuff like this… but you have to shoot your way out. The soap box and ballot box has failed, fellas.

      Praise the lord and pass the ammunition…

  19. “His policies” like open borders and drunken-sailor spending? Good times.

    I actually live in a high trust society.

    I have high trust that half my fellow citizens (the Real Americans) want me dead or enslaved, 30 million invaders want me taxed at 90% and my culture to he dismantled, and my Government will do everything in its power – and many things explicitly not in its power to make those things happen.

    Which is why my favorite currency is Lake City Brass. In that regard, I’m solidly middle class.

    • Middle Class Brass ™

      “It just gets the job done.”

      I’ve already designed the logo, notifies the state corporation commission, and filed the PTO forms.

  20. So we have uncertainty at the heart of Europe, people willing to trade gold for bonds from the heart of Europe, while the country at the heart of Europe appears to be in or near a recession six weeks before Brexit?

    Is it possible that there is another explanation for the negative rates?

    • Here’s a heterodox analysis. Those German bonds are assets. Germany cannot create money out of thin air, but it can create assets out of thin air. Since in the modern world economy, an asset is the required ingredient for wealth creation, control of new asset creation is no different from controlling the mint. What negative rates mean is the economy is begging for new assets in the system.

      The German economy particularly, but the EU general in about to enter a great transition, starting with the UK leaving the EU. Financing that transition in order to avert a depression is going to requires lots of credit creation. That means lots more assets like German bonds. In other words, the market place is now adjusting to the coming new reality for the EU, which probably does not mean just Brexit. Italy is probably the next place we hear talk of leaving the EU.

      • CTH posits that Trump and Boris are planning a deal similar to the ones we have with Mexico and Canada, making the UK the hub for EU trade with the US.

        • What seems to be shaping up is the English speaking countries will have what amounts to a trading bloc, that coordinates with their foreign policy and intelligence operations. Mexico is the bolt-on for cheap labor for now.

          • Industrial jobs in MX won’t hurt. The initial block of MX migrants 90’s, early 2000’s were coming off the land because of the NAFTA agreement completed under Clinton, but started with Bush I.
            We now see a migrant rush from Central America, again coming off the land. Why, because our farm exports destroy their inefficient farms. A NAFTA redo sort to speak.

      • Zero interest rates accommodate a ton of money printing. Which is what is on deck in Europe to keep things afloat in a contracting economy. Rapid depreciation of the Euro is now baked in, which makes the Dollar the best house in a bad neighborhood, as the value of all fiat currencies continues to depreciate.

          • It makes already cheap European stocks an amazing deal for us. Yes, Europe will have slow growth and profits, but when you buy a basket of companies at a long-term PE of less than 10 (maybe even 6 to 8), you don’t any growth beyond inflation.

          • Are you obtuse or somehow of the belief the so-called FANG stocks represent the entire U.S. market? BAC is trading with a P/E of less than 10, to cite just one major example. I can’t be arsed to find more.

          • The stocks owned by DVP and QVAL have an average PE of 10, and both ETFs screen for quality so you’re not buying junk. Int’l stocks are even cheaper. EYLD has a PE of 8.87. Granted, it’s emerging markets but still. IVAL is 9.5. A stronger dollar will make those int’l stocks even cheaper. Good times ahead for US investors willing to look abroad.

            The system may not end in our lifetimes so best to make a little money. The problem will be keeping out of the govt’s hands.

        • The question is whether the U.S. will fight it with its own currency devaluation. The fed might need to buy a lot of govt bonds in the next recession.

          If not, the dollar will continue to crush the euro. In 2008, a dollar bought ~0.66 Euro. That’s now 0.9.

      • I guess people aren’t ready just yet to trade gold for bonds: the sale failed. I wonder if it was a trial balloon.

      • The bond is an asset to the holder and a liability to the issuer. Credit is created only if the central bank issues credit to purchase it, or if a bank purchases it as part of its asset base to lend to the private sector. If it’s purchased, let’s say by an individual, the capital that would possibly have gone into the real economy, let’s say a Siemens bond, goes into government debt, contracting the liquidity available for the private sector economy. This is why central banks must issue more credit at an exponential rate, and why Trump is screaming louder and louder about all of this. He’s manic about it right now. He’s smart enough to know how leverage works. He does know that. his whole life was built on it. The problem with a bank purchasing a negative yielding bond is that even a marginal increase in interest rates will vaporize that asset, and cause them to suddenly contract lending to cover that loss.

        If only governments could create wealth. Only the real economy can do that. This is a very artificial environment.

    • As I understand it, the ECB is buying corporate and government bonds which drives down yields.

      • That’s a big part of it. The ECB and Bank of Japan have pumping a ton of money into their systems via QE, pushing down interest rates to prime the economy. A side result is pushing money into other financial assets. The Fed stopped QE a few years back but still holds massive amount of bonds in its portfolio.

        The question is whether non-govt investors will continue to buy assets (bonds) worth less than cash in sufficient amounts to service government borrowing needs. Maybe, maybe not. If not, the central banks have to buy even more govt bonds, pumping even more money into the system.

        Regardless, negative interest rates are not a healthy sign.

    • Unless the tax-benefit of those bonds offset the loss, I can’t imagine why they would sell. They still going to be paid off in the devalued currency.

  21. Great explanation of a complex concept and its ramifications.

    Thanks to the author and commentators here, I came to realizations about our current system of corporate capitalism.

    Corporations depend on continual growth in profits every year. To do this, they keep offering more convenience and cheapness. This necessitates cheap labor and an ever-growing stream of consumers. This was accomplished by getting women into the workforce which increases the labor and consumer pools. Working women have fewer kids and to compensate, the importation of the third world was increased.

    Corporate capitalism will give you free 2 day shipping but at the cost of your soul. I just paid $15 more for 2 books from Barnes and Noble while getting them a week later than Amazon. However Barnes and Noble does not spy on me to the same extent or censor badthink the way Amazon does.

    Finally both corporate capitalism and state socialism have flaws. The former eats its own seed corn while the latter disincentivizes planting.

    • State socialism disincentivizes planting – AND eats it’s own seed corn.

      All to keep the worst most unhealthy plants living large in the most sunny spots in the field.

      • Are you suggesting that corporations are worthy of our support? The idealized corporation that you champion can only exist and be contained in a fascist ethnostate, given the realities of human nature.

        • Hmmm – I re-read my comment like 30 times to see where I advocated for some sort of “idealized corporation” that you claim – and I still can’t find it.

        • This whole “Facist Ethnostate” thing is sounding pretty darn good…where do I sign up?

      • That’s Rand’s “20th Century Motor Company” version of socialism. That model relies on every participant being devoid of any motivation or value beyond economic gamesmanship, a cartoonish version of homo economicus.

        Every mixed-economy welfare state since Bismarck has demonstrated that socialism doesn’t wreck nations in and of itself, and there haven’t been any states based on laissez-faire Social Darwinism because human beings don’t let children and old people starve or die for lack of medical care.

        It’s a matter of balance. Middle-class welfare and infinity dindus isn’t what I want, but in a racially and culturally homogenous White nation, we can strike a balance between pedal-to-the-metal economic efficiency and a nanny state.

        • Every single one of those “mixed economy welfare states” that you refer to – has infinity Dindus , and they’re all sucking off the teat.

          And importing even more.




          The only place I’ve seen welfare done right – was Nazi Germany. Who pretty much made it clear that if you were a burden on society – you were going to the oven.

          And they’re not here any more either – are they?

          • I’m a 5PT’er with Third Position sentiments on Right-Left politics. Let’s just say I have a certain affection for conservative social policy combined with populist fiscal policy. Scandis did well with welfare until immigration swamped their longships. The common folk there are increasingly ready to clear the decks. Capitalism and privatization is usually the stalking horse for open borders. Our Guys can get immigration and welfare policy right because we understand how they’re related.

          • >>>Scandis did well with welfare until immigration swamped their longships.<<<

            I’m pretty sympatico with your positions and appreciate your willingness to put a preeminence on the 14 Words. That being said, the Scandis were always going to run out of money for their generous welfare state. The given justification for the mass importation of the Durka Durkas was to allow them to continue affording it.

            That being said, “Muh Free Markets” is an obvious and massive failure.

          • Re: “were always going to run out of money for their generous welfare state”.

            Any healthy society cannot consume more than they produce in the longer term.

            You can play all sorts of financial games – and you can import “infinity dindus” to backstop the whole mess , but sooner or later you’re eating your seed corn and your society fails and vanishes into the dust. That’s why all of the socialism and all of the welfare state nonsense is just a lie. It’s bullshit designed to please the greed of the Free Shit Army.

            The natural state of the world is entropy and decay.

            The Free Shit Army operates is if these rules simply don’t exist.

            The same rules that apply to an individual – apply to a society. I’d like to see somebody prove differently.

            If I can’t grow enough food to keep myself alive – I die. If can’t produce enough monetary reward thru my labor to feed the tax monster – I lose my house. If I can’t find the time to keep a roof on my house, the rust at bay on my automobile, and to keep the critters away from my garden – all of those things fall to shit in relatively short order.

            Show me where the free lunch is?

            Man has figured out how to harness energy to produce things for himself that muscle, wind, and water power simply could not generate enough energy input to produce before. Somewhere along the line this set off the free shit mentality gene and allowed it to run rampant.

            If a person who spent their life emptying garbage cans for $12 an hour gets cancer – and it costs $1 mil to cure him – where does that come from? He never generated enough economic output to support the cost of his treatment. Multiply that enough times – and you’re completely broke as a “society”.

            The simplest way I’ve found to reveal the bullshit of anybody’s argument – is to extend it out to everybody and see if it still works. If I say “everybody in society needs to work to survive and we’ll kill the slackers” – you have a society that works, although cruelly.

            If I say ” we have magic dirt and anybody of any color or gender can be the same and perform as well as anybody else” what we end up with is a broken society sooner or later.

            If I say “we need socialist healthcare for society and the government is going to pay for it” – you pretty quickly release the worst of human nature and everybody is looking for a handout. And you produce a society that is bankrupt and falling apart.

            Boomer cuck normies like Normie just simply refuse to accept these harsh facts of life, they still insist on getting their free shit. Evidence be damned.

            It will be interesting to see who they blame and what they complain about when the electricity doesn’t work any more.

          • “If a person who spent their life emptying garbage cans for $12 an hour gets cancer – and it costs $1 mil to cure him – where does that come from? He never generated enough economic output to support the cost of his treatment. Multiply that enough times – and you’re completely broke as a “society”.”

            This is true but who wants to live in such a harsh society? The money to treat the poor garbage can emptier’s cancer can easily come from a small amount gathered from the collective. Why is that so bad? It’s very civilized to care for the weak and afflicted among us. It’s using our brains and organizational capabilities to make a less harsh world. And we can make enough money to easily cover those expenses if the monies weren’t blown on global military empires and subsidies for obscenely wealthy people/corporations.

            Having said that, there needs to be some kind of controls on medical services, treatments and devices, which prices are wildly distorted because the west enjoys employing this medical technology at a premium and spreading it worldwide to 2nd and 3rd world countries, who have no money and are subsidized by U.S. citizens’ taxes, thus helping to spur on the population explosion of violent, low-IQ Africans.

            If white people kept their money in their own countries, life would be so much more comfortable for the productive revenue-makers. The prosperity produced by white people is astounding. Look at what the tax revenue from the majority white tax payers built in the west, and then spread to igniting development in 2nd and 3rd world countries, who may not have developed at all if not for western interference and money. We need to re-capture our prosperity and direct it toward ourselves. If that makes me an isolationist, so be it, in fact, proud to be so!

          • Ursula, your sentiments promote you well, however, there are limits and we see the approaching end of them at this point. As with any expense, there can be a cost/benefit computed. I believe that’s what Calsdad was getting at.

            Continuing the trash collectors unfortunate cancer event analogy, the million $$$ collected at a fraction of a penny from everyone else is a fraction of a penny others do not have to promote/better their lives—or the lives of their families. Over time, small amounts of money taken away from the individual to promote the greater good of society adds up. Since needs/wants always outstrip resources, there has to be an end point.

            As to your plea for a “charity begins at home approach”, no argument here. But that still only delays the inevitable.

          • Ursula, re. your garbage collector, I’m tempted to simply say “insurance” and end it there. The is one of the reasons the concept was invented. But your reply deserves better.

            The main problem is once you’ve established that the garbage man has a right to the earnings of others, a line forms of those who will produce their stories of disadvantage to claim the same right. The brakes are off.

            In a monoculture, you have at least one natural brake on it. In a multi-culture you end up with a competition for who can claim more as politicians dangle this right in front of the various groups to buy their votes. Which is one part of our current predicament.

            I could not agree more with your last two sentences though.

          • “…can easily come from a small amount gathered from the collective. Why is that so bad? It’s very civilized to care for the weak and afflicted among us.”

            Yes, it is civilized. But the question remains: Is my contribution to the garbage man’s medical treatment voluntary, in which case it appropriately characterized as Christion charity, or is it extracted at gun point or threat thereof by you or those you elect, in which case it is theft and likely misappriation of resources.

            Generosity is noble and is to be encouraged. But the giver should set the terms – not the receiver and most certainly not a delegated third party with the power to coerce.

            Once upon a time, Whites used co-ops, mutual aid societies, private insurance, churches, personal charity, and just plain old careful long-term planning by extended famillies to take care of their own on their own and did so far efficiently than bureaucrats and politicians could. Furthermore at the level of local communities it is far easier and more just – than at the higher levels of the social structure – to identify who among us deserves help and to ascertain exactly what kind of help and how much of it he needs. Morevoer, for a variety of reasons, it is also easier at the private level to ascertain who does not deserve or otherwise should not be given help.

          • I think you’ve gotten that completely wrong.

            Lefties reflexively complain about “capitalism” – when in reality they don’t even know what it is and can’t explain it.

            So of course if you’ve marinated in a stew of leftism the go-to boogie man is going to be just screaming “Capitalism!!” at all that afflicts you.

            The reality is we didn’t start getting massive immigration into western countries – until the socialist welfare state came into full bloom. The average American (and European too probably) – thinks that they’re entitled to all manner of free shit – and the darkies can just take care of all the nasty jobs they don’t want to do any more.

            You know – the crappy jobs that teenagers, early 20 somethings – and the blacks used to do when I was a kid.

            Now the blacks are all on welfare ( show me where that’s a function of capitalism), the teenagers can’t work after school jobs because they’re too good for that , and the 20 – somethings aren’t going to work that’s fit for illegal immigrants , even if it means living in van down by the river.

            Again – not a problem with “capitalism” . It’s a problem with the free shit mentality that has so pervaded the minds of pretty much everybody that they think they don’t have to do dirty shitty work any more – because either somebody else will do it – or they’ll get a robot.

            Yet they still expect a check to show up in the mail every week.

            The rise of the Free Shit Army is not a capitalist project. It’s a leftie socialist project.

            When I see people claim otherwise – it’s how I know they’re infected lefties.

          • He’s not defending the ACTUAL crony capitalist system.

            He is rebutting the proposition that white people need an administrative state, affordable housing, affirmative action, central planning, community organizers, environmental impact statements, income taxes, industrial policy, occupational licenses, and a welfare state in order to thrive.

          • I’m betting that Normie can’t even define what capitalism is. The fact that he reflexively attacks it and attributes all the failures of the current system to it – tells me all I need to know about his left leaning mentality.

            The fact that he throws in other keywords like “unions” just seals it up nice with a bow.

            His constant whining about boomers and boilerplate leftie boomer complaints makes me think he is one – and this is another case of leftie projection (covered by Zman in previous posts)

          • Z’s also covered the inability of many on the Right to criticize capitalism (Right Wing Econ p-cast, others).

            Labeling anything short of AEI Kochtopus libertarianism “muh socialism” is part of the problem.

            As I said before, it’s a matter of balance.

            Atomized Social Darwinian laissez faire capitalism is not the Light that casts everything more “collective” into Darkness.

          • If anything, atomized individual laissez-faire ideas is what has led us directly into the hell of Woke Capital.

            Culture is upstream of Economics.

          • “Capitalism” is to white people in the uSA what “delousing showers” were to Jews in the dreisich reich.

          • Here’s the thing: if you allow a vacuum where human nature demands a power, our enemies will oh-so-happily fill the vacuum. It turns out that the abject failure of the BoomerCons has shown us what (some of) these are: if you do not have state control over who can purchase land, they will block-bust us and ghettoize us via white flight, then stack the elections to disenfranchise us. If you do not provide the people with a state religion, they will invent one – social justice. If you do not have professional licensing, invaders that aren’t afraid of in-group preference will crowd out the native people and then monopolize the entryways.

            Our Thing cannot allow these power vacuums to exist, especially in the name of “muh preeeenciphuls.” Whose principles would those be, kemosabe? “Your principles” lead inexorably to the defeat, immisseration, and death of my people, so go breathe water if you think we’re buying what you’re selling.

          • State control over who can purchase land gave us:

            (1) Shelley v. Kramer, 334 U.S. 1 (1948) (covenant restricting sale to negroes violated the 14th amendment);

            (2) The Federal Fair Housing Act of 1968 (unlawful to refuse to rent or sell upon the basis of color).

            Note, IN PRACTICE, i.e., the real world, giving the state control over who can purchase land has been a disaster for white people.

          • The people who live there get to say who lives next door. The question isn’t so much about what the state controls so much as who controls the state.

          • People would not want so much free shit if they didn’t live in a highly monetized world and make wages that are competitive with illegal immigrant wages; that is, very low pay. It’s the Chamber of Commerce and other business concerns that make it so. How to counter that? Don’t tell me it’s voting. The donor class vets the candidates. Those who do not think the right way (that is, pro-Chamber of Commerce, which has come to mean lowest pay possible for workers) do not get the donors’ big money. Those who don’t get funding generally don’t make it to office.

          • This is such a good documentary by a Baltic (Estonian) man on the age of the Communists, from one who grew up at that time. Hair-raising, disturbing. Those who have little money or means and are open to the notions of Socialism should watch this to get a sense of what happened from those who witnessed it in that part of the world. It’s not the highest production value, but very good for a small one-man show, excellent really.

        • The Boomercons will never sign up. Like Carlsdad their too brainwashed by their own failure to preserve our country…

          Free markets!!! Unbridled Capatlism!!! Death to Unions!!!!

          Then they wonder why the only job their white son can get is tending bar or mayne getting to sit in a middle management chair being lectured on PC culture by their big great free market corp.

          Funny thing is, in 20 years well all be getting Yang Bucks and itll be the white boomer grand kidsnto vote it in.

          • UBI, also misses the problem. It harkens back to the ancient Romans where the citizens were given a ration of wheat and admission to the circus. Today, substitute Internet for circus.

            UBI is a faint. It is designed to make everyone think that there is dignity in welfare, that it is a right to live off of one’s fellow man. If this sounds, Randian, so be it. UBI—as any welfare—is soul sucking and destructive to human dignity (in the long run, nothing here says people should die in the streets because of a short term events beyond their control).

            Problem is not capitalism, it’s crony capitalism which is fed by a government with too much power to pick winners and losers. That coupled with a technological society which rewards products of the mind rather than physical labor.

            Automation in the next couple decades will probably produce a 40-50% surplus in human capital in the USA. Attempts to raise wages through fiat—min wage bottoms—will simply speed the process up, but they should play a part.

            What is needed is to understand/accept the relationship between jobs and people’s innate ability to perform such work, and what that work can reasonably be expected to pay individuals to perform. In other words, acceptance of HBD science. Once we know/accept what jobs people can be expected to succeed at, we can preserve/create those jobs and perhaps even subsidize those in them.

            Like Ursula said, it will mean we think America first and perhaps isolate ourselves somewhat from this globalism folly our elites have foisted upon us.

      • And capitalism has gotten us nothing but a hollowing out of all industry all for the sake of rich conservative investors and wall street.

        All Trump has done is use his con to give all $15 a month extra at the expense of the largest yearly deficit in a non depression. Whike big B keeps forcing in more cheap labor. The GOP is owned by the vulture Romneycons and Bomercons like yourself will go to the grave thinking that voting GOP saved this country.

        Nope. You helped kill it.

        Cant die off quick enough…

    • What they really rely on is a rubber yardstick. If US corporations needed real growth and record profits year in year out, but were using a steel yardstick, they would have collapsed a long time ago. I just turned 50 and in my lifetime the dollar has lost like 86% of its value. An item that was a dollar in the year of my birth is 7 dollars today. And this is a rosy gov number. It’s probably higher.

      • NYC subway token in 1969 … 20cents
        NYC subway Metrocard in 2019 … $2.75
        11 times as much.
        The Dollar has lost over 90% of its value, in only 50 years.
        If you go back further, to the 1930s, the NYC subway was only 5cents.

        • I can remember there used to be a water-ice truck that sold water-ice and pretzels that would drive around the neighbohood. I would beg my mom for the .15 to buy a water-ice and a pretzel (about 1974). That same water-ice and pretzel, from the same company, only now you have to drive there to get it, is like $2.50

          • yah, i seem to remember a little inflation here and there since 1974 😛 Now do the same with: long distance calls, color tv prices, computing power, etc

          • Now adjust the number of hours you have to work to buy these appliances for how many of them you will have to buy to replace the one bought in the 70s.
            5 years ago I replaced a perfectly good 70s or 60s air conditioner/heater because of a deal with the electric company. My air conditioner is already broken. It already needs to be replaced! My 1950s telephone is still working fine.

          • Now do the price of Housing, Healthcare, and Education. Wages (real) have been relatively flat for decades.

          • Since 1964, the price of housing, health-care, and education have all dramatically increased.

            Why? Muh central planning, muh affirmative action, muh third party payment of muh health care, muh boss has got to pay muh health care, muh socialism, muh community interest, muh public interest, muh NIMBY, muh snob zoning, muh concern for the snail-darter, muh concern for the negro, and muh welfare.

          • The Welfare State and Mass Immigration un-tethered to skills or the ability to sustain oneself or one’s family. (AKA the Visa Lottery and Chain Migration. AKA Hart-Celler.)

          • Calculating inflation is very difficult. There is a reason why Keynes said not one man in a million could decipher the effects of inflation.
            The quality of those items has fallen through the floor and they are being built in other countries.
            The drop in build quality is hard to overstate. 99% of consumer electronics is so poorly built that they can’t even be serviced. Even the cabinets are cheap. While the drop in quality of consumer electronics is particularly acute, there has been a large drop in quality of pretty much ALL consumer goods. Everything from shirts to shoes to hand-tools to air-conditioners and refrigerators, have plummeted in quality.
            The other reason the price of consumer electronics has fallen was miniaturization of the electronic components.
            Computing power has absolutely nothing to do with inflation. It is a function of technological improvements, not productivity. However, the build quality of computers has fallen through the floor as well. Even before computers became household goods and were mostly office equipment, the quality was already falling. Today, computers are so poorly built that inserting a car into a slot causes the MB to bow and if you’re not careful, can damage them. The fit quality is poor. The power supplies have plummeted as well. Keyboards used to come with proper switches and would last many years and were easy to service. The build quality is just awful. A lot of these companies won’t even guarantee parts stock for more than a year. As recently as the mid 90s you could still get parts from IBM for the 5150!

        • In 1971 I made $1.75/hour, now I make a lot more than $22.75 an hour. You need to provide a scaling factor in these kinds of comments.

          • You also have to take into account quality improvements. My first TV in 1990 was a 25 inch Magnavox that weighed about 200 pounds, and retailed at $499. I just bought a 55 inch 4K for $429. Cars also last much longer. I won’t even get into tech products, because they did not even really exist, except for my first desktop with 5.25 floppy disks for storage.

      • Everybody thinks the Fed is something magical that benefits their lives. They completely forget that “inflation” pretty much screws them – unless they want to play the Wall Street roulette wheel game with their hard earned money.

        Looking at the value of the dollar over time is instructional. The Wikipedia page for the US dollar has the chart.

        Long story short: Value of the US dollar at inception = $1.00

        Value of US dollar around 1900 or so = $0.96
        (no Fed in existence)

        Federal Reserve comes into existence :1913

        Value of US dollar today = $0.03

        For all the bitching about the economy and the value of the dollar bouncing around with the Fed around to manage things – the value of the dollar never went below $0.59 from 1775 to 1900. And that low point was 1780 – when the Revolution was still in play. If you had saved a dollar in 1775 – it would still be worth 96 cents in 1900. Save a dollar in 1913 – and it would be worth 3 cents now. I fail to see how this has “benefited” me. Maybe I need a Jew to explain because my goy mind doesn’t understand.

        Once the Fed came into existence – the value plunged to $0.39 by 1920 , and except for a brief bounce up – went nowhere but down ever since then.

        When people try to lecture me about Muh Socialism and how we need to pay for all the old people – I tell them to stop screwing me out of my savings in the first place and maybe you wouldn’t have to screw over all the youngsters to pay for my retirement.

        • so Americans — in your view — are materially poorer now than in 1920?! Come on, you are better than that. Don’t be a V D ball washer!

          • True, but inflation and the Fed weren’t responsible for that increased living standard. Gains in productivity were. The question is whether the Fed and its monetary policies over the years have helped or hurt the ability of businesses and inventors to create productivity gains.

          • I never said they were materially poorer.

            I said their medium of exchange is corrupted and degraded.

            One doesn’t necessarily = the other.

          • >>>so Americans — in your view — are materially poorer now than in 1920?! <<<

            Americans in 1920 had something way better than a house full of cheap Chinese shit – they had an actual country.

        • Whether inflation hurts or helps people is debatable. Maybe a little inflation keeps money moving through the economy, helping businesses which then hire workers. Maybe inflation hurts people who save their money in cash rather than a high-yielding money market.

          You can look to the 19th century and say, hey, stable currencies and rapid economic growth. You can look at the 20th century and say, hey, inflation and rapid economic growth. There doesn’t appear to be a clear winner.

          Yeah, yeah, banks get the money first before the inflation of printing money brings down the value but if you look over the 19th and 20th centuries, you see a ton of real economic growth under both regimes.

          • When I look at the 18th century I see that Samuel Whittemore fought in the Revolution at age 78 (in 1775) – and lived to be 96 years old.

            Your point is?

          • Who is paying for all of the immigration into white countries – and where are they getting the money from?

            The entire premise for the existence of this blog seems to be that white countries are being overrun.

            Somebody is paying for that.

            Where do they get the money?

            Now tell me again how inflation is not hurting me…………

            Or talk to the retired white guy who just wanted to live in his paid off house until he dies. But cannot now that the value of the property has risen sky high in his (formerly) all white town. Risen sky high BTW – because of the influx of foreign money and foreigners into said town.

            White guy is now chased out of town by finances – because he can’t even afford to pay the property taxes on his value-inflated home any more.

            Again – tell me how inflation didn’t just screw this guy?

            Inflation is a scheme for somebody else to get rich by spending the money first. Hint: that person isn’t you.

            You have fully bought into the sell job.

            I’ll file this exchange under : “Reason #47 why white nationalism is a failbus looking for a cliff to crash into – they can’t even come to grips with where they’re getting screwed – and WHY”

          • Look, I’m on your side. It’s ridiculous that the Fed controls the price of the most important asset in the world: the cost of money.

            A stable currency that basically never moved would be better for all.

            But our country’s problem isn’t inflation, it’s immigration. Granted the guys behind inflation and the Fed are also the guys behind immigration.

    • “Working women have fewer kids and to compensate, the importation of the third world was increased…”

      Which dovetails nicely with White genocide,

  22. or as we have been told for millennia

    “Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants and debt is the money of slaves.”

    • my reading of antiquity shows silver was the most important metal for coinage, and gold was more or less just for jewelry and so forth. and then there is salt:

      During the era when the Phoenicians ruled the Mediterranean sea and surrounding territories (cerca 1550 – 300 B.C.), salt was indeed a highly precious commodity. After this, the Romans became the dominant force in the Mediterranean, though the value of salt did not immediately decline by any means. Whether it was pound-for-pound as valuable as gold, I think it is hard to say, but probably not out of the question at some point.

      Until relatively modern times, salt was prized mainly for its ability to preserve foodstuffs as well as season food. In the hot Mediterranean climate where fish and meat would decay rather quickly, this was particularly useful. The period of Phonetician domination during the early to mid first millennium B.C. (including its successor state Carthage) represented one of the world’s first monopolies. Essentially, other nations (including Ancient Greece and early Rome) did not have great access to salt, and hence the Phoenecian monopoly could dictate its own outrageous rates.

      • Gold is a store of wealth, silver, currency—silver being more plentiful for that purpose, but still scarce enough to have limited stores. Salt was artificially scarce in certain areas and at certain times, but not today, obviously. So too are diamonds, which are made artificially scarce through cartels.

        One hoards gold when one distrusts the fiat currency of the government. The value of government currency lies not in gold reserves, but in the economic visibility of the nation issuing such. War and other calamities require a national government to have gold reserves (or a substitute such with a reserve currency, the US dollar) as such events tend to destroy the economy and reduce the country’s fiat currency into worthless IOU’s to those external to the country. A case in point, Great Britain during early WWII. Their purchases of war supplies overseas were in gold. The USA basically drained them dry prior to entering to entering the war

      • Balderdash. I’ll wager you cannot cite a single ancient source for the proposition that salt was worth more than an equivalent weight of gold. The technology for salt production changed very little from the Phoenician era you reference until the late Medieval period, essentially evaporation of sea water in coastal salt pans. Compared to the rather more laborious production of gold, which requires finding and separating the ore from its geological substrate, then refining it to a known purity. One Florentine source from the 14th century noted that several tons of salt could be purchased for 35-40 ducats, essentially a handful of gold coins. The principle expense of salt as a commodity was the cost of transport from the coasts inland and the multi-jurisdictional taxation this afforded. While it was extremely valuable for food preservation, it was never worth more than gold ounce for ounce.

  23. For all of the disappointments that have occurred under Trump, there is one outstanding change that Trump has made that may stick – the realization that the United States is a country. It is not a global police force, it is not a discount store, it is not a social service agency, it is not a global flophouse – it is a country like any other, albeit unusually wealthy and powerful. Trump himself sometimes seems not to grasp all the implications of this, but the realization is spreading. One the Democrat side, Gabbard and Yang also seem to believe this.

    • I think you meant to say, “the realization that the United States WAS a country.” Those horses have already left the barn… or rather, while the barn door was left wide open, so many possums, rats and coyotes swarmed inside that the horses have all suffocated.

      The whole affair is a bit like a man dying of colon cancer who says to himself, Ya know, at least I’ve finally realized the importance of a high-fiber diet!

      Trump was the last chance, the Hail Mary attempt to avoid catastrophe. Had he been a serious-minded man, had he actually done what he said he’d do, beginning on Day One, had he gone full nuclear from the very start, (and most importantly, had he understood intellectually the critical importance of his own program, something which he appears not to actually understand), then we might have had a fighting chance to save the ship. But he didn’t and won’t and can’t, so now, set the controls for the heart of the next civil war.

      • >>>Trump was the last chance, the Hail Mary attempt to avoid catastrophe. Had he been a serious-minded man, had he actually done what he said he’d do, beginning on Day One, had he gone full nuclear from the very start,<<<

        Yup. And to all of you who make excuses for Trump, look at what Salvini has accomplished with less power in an arguably more POZed situation.

      • Had he gone full nuclear, he would have gone the way of JFK. It took decades to get into this mess, it’s going to take a long slog to get out of it. Sure, I would have loved to see him go full out on his campaign agenda, but reality is he has to deal with the deep state, total cultural elite opposition to his agenda, and who knows what else. Maybe he is just a conman, but even a serious and dedicated MAGAman would have only fared marginally better, assuming he survived long enough. I am a bit disappointed with how he jumped for red flag laws, for instance, but so far it has only been talk.

        • Yeah, Trump had a lot of crap to deal with. So much so that had he gone “full nuclear” on his agenda, failure was still likely. But he would have had a chance. By caving on essentially every aspect of his agenda, he ensured failure.

          The Hail Mary pass analogy is perfect. It probably won’t work. But walking off the field while the clock runs out definitely won’t work.

      • Well yes but civil war began with the campaign of shooting police by any definition of war. Trump hadn’t declared yet. He seems to be trying to accomplish his goals without war. Something that will be appreciated if war breaks out.

    • Now if we can just get Americans to realize they are a nation, not just a country. Give me a map and a UN army and I can draw you up a dysfunctional country anywhere on the globe. Now a nation, that’s different. Tradition, blood, soil, and generations buried in the ground… get Trump to talk about those and I’m listening.

  24. The problem is that America as world problem solver, both economically and militarily, is better than the alternative. If China and Europe collapse that means that America will be the only economically viable country in the world. The migration problem will become MUCH worse. America has a lot of room and a certain type of… citizen will not rest until Kansas looks like Hong Kong. More migrants will not change their behavior.

    • The problem is that America as a world problem solver = No more United States.

      Letting your nation be used as a vehicle for the high and mighty to entertain themselves with notions that they’re going to solve all of the world’s issues – is a sure ticket to national disaster and ruin.

      We were warned about letting that happen – and have either chosen to ignore the warnings or have gotten the country hijacked out from underneath us.

      Either way – being the world’s policeman is a one way ticket to disaster.

      How the hell do you think all of the POC ended up here in the first place? If you’re here because you think that a nation for white people is a good idea – but yet you still think that nation should be going around the world trying to solve all the problems the POC have – I would suggest making an appointment to get your schizophrenia diagnosed.

      • Marrying Mr. World Police & Mrs. World Nanny makes for a very dysfunctional family and waaay too many step-kids to compete with.

        • And also ends up with all of your white sons dead and planted in the ground. Not exactly a good recipe for continuation of a white society that isn’t run by the women.

          • George Soros dreams of America as the North American Sector of Davos World populated by single moms with mocha kids.

            “America the Julia’d….”

          • is that some kind of code? Do you have a colored hanky in your left hip pocket? Asking for a friend…

          • The problem Planet Davos has is that it’s policies are undermining the thing that makes Planet Davos possible. “Somehow” Russia does not invade Western Europe, “somehow” China does not sack Australia. The “somehow” is the USA. The US was supposed to be this nation of goodwhites who rode into town and restored law ‘n order when the POC gangs got out of control. We were the goodwhite taxpayers of the planet, spending on a vast military so the rest of the world, Europe especially, could indulge in drugs, gay sex, and gynocentric feel good social welfare policies while the neoliberals played with libertarian notions of unlimited free trade and free movement of both capital and labor.

            The problem is that they drastically underestimated the number of badwhites in the US who are increasingly rebelling against not only the Poz, but the World Police concept too. Meanwhile the US is flooded with people from the worst parts of the third world who also expect the goodwhites to stick around and fight their battles for them, all the while giving up their jobs and watching passively while migrants sell roast rat on their sidewalks.

          • I often think of all the fathers that lost a son in Iraq or Shitistan, and wonder what they must think and feel. Only a profoundly naive father would allow his son in the US military.

      • I’m not sure the high and mighty even have high and mighty goals anymore. I get more the feeling they view us as despicable fungible economic units who, as added benefit, produce sons and daughters that are enjoyable sex toys.

        When this falls and a reckoning comes to fruition, my heart shall sing.

        • “…they view us as despicable fungible economic units who, as added benefit, produce sons and daughters that are enjoyable sex toys.”

          Well, they surely view us as expendable. In fact they want most of the population reduced anyway.

    • I’d rather Kansas looked like Hong Kong than Somalia or Chiapas, either of which is more likely than Hong Kong.

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