Thissons Gold Blog

A collection of information and insights concerning gold (and to a lesser extent, the other noble metals).

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Greeks cannot withdraw cash leftin safe deposit boxes at Greek banks as long as capitalrestrictions remain in place, a deputy finance minister toldGreek television on Sunday.Greece's government

Safety deposit boxes are anything but “safe”

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What does the Constitution say about money?  Tom Woods explains that the Dollar, as mentioned twice in the Constitution, was already an item that everyone was familiar with (as a silver Spanish milled coin with a certain purity and fineness).

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http://market-ticker.org/akcs-www?post=230045 

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The hidden economic messages about gold in The Shining!

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BIS concludes that deflation is not harmful:

https://www.bis.org/publ/qtrpdf/r_qt1503e.pdf 

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Antal Fekete: The manipulation theory was invented by those who are afraid to face the facts squarely. We should know better: no valorization scheme ever works for any significant length of time for any commodity. It is another matter that foreign policy makers in Washington may have stolen a ride on the back of spontaneously collapsing crude oil to punish Putin. Mish: I am in perfect agreement on this point. Commodity price declines are about the slowing global economy, not oil price manipulation.

http://globaleconomicanalysis.blogspot.com/#VudyZGW5Of8HwQt8.99

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Lawrence Summers - Gibson’s Paradox

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People think that gold is some kind of inflation hedge, but it’s really not. Gold fell from $800 in 1980 to $250 in 2000 with inflation every step of the way. What happened in that period? The answer is falling interest rates, all along the way. That’s an environment in which gold does pretty badly." http://globaleconomicanalysis.blogspot.com/search?updated-max=2015-01-30T16:27:00-08:00&max-results=3&start=3&by-date=false#KEjqkCqby4egqMKH.99

Mike Shedlock

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What gold does in a crisis (gold confiscation)

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Debunking the myth that we will run out of silver.

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"Since the international economic system is simultaneously determined it is impossible to determine whether balance of payments disequilibria are caused by the excess saving or the excess spending countries — one could not exist without the other. However, in a fixed exchange rate system the fact...

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Why you should bling out.

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Gold is ridiculously undervalued at its current price of around $1500/ounce. My belief is that once the dominos start to fall, starting with the PIIGS nations, the ultimate result will be a recognition that the US is no better, and there will be a currency crisis.  In the event of such a crisis, the only thing that will be trusted to settle international trades will be gold, and I believe that the governments of the world will clamor to obtain it by any means for use in trade.  After confiscation fails to bring enough gold into their coffers, they will ultimately be forced to trade value to coax it from private hands, and gold will be recognized (and PRICED!) for what it is:  the only non-debt money with no counterparty risk.

This article discusses the “shadow price” of gold, how it was valued by nations during the Bretton Woods era, the implications for its future value in a return to gold-settled international trade, etc.

If you want a succinct summary, this post on ZeroHedge provides highlights:

http://www.zerohedge.com/article/gold-special-report-erste-group-says-foundation-return-sound-money-has-been-laid-expects-gol 

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European Central Bank President Jean-Claude Trichet admits that “when it becomes serious you have to lie.”

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This follows up on my prior post about “the heart of the problem.”

It shows how exporting countries are the flipside of the coin to debtor nations. It also describes how settling international trade in specie (gold) would cure such imbalances, creating localized inflation* in creditor nations and localized *deflation in debtor nations. In our fiat world, with currency interventions, this mechanism is absent.

*Note that in this context we are talking about price changes rather than a shift in the ratio of money&credit to goods.

This also ties in nicely with a speech I saw by Marc Faber (I will try to locate it) explaining how inflation in one spot is tied to deflation in another. This put me at ease because I conclude that we don’t need to know whether the inflationists or deflationists will be correct to prepare for the next round of the crisis.

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This article explains the flawed policies that lead to global trade/debt imbalances.

Read this article carefully and you will see why a US Currency devaluation is inevitable (buy gold?).