Armstrong Economics Blog/Gold Re-Posted Sep 11, 2022 by Martin Armstrong
Well, the Goldbugs are out in force claiming that Putin is creating a Moscow World Standard for gold. These people will never learn that their dream of some fixed gold standard has always collapsed throughout history. They have never played in the big leagues and consequently, they do not even understand the rules of the game. It’s like standing on the street corner and seeing a guy drive by in a black limo and lament life is not fair for they should be like him without ever knowing what he is really all about.
Yes, gold coins existed since the 8th century BC. However, it was NEVER a gold standard for if that was even attempted, it would have collapsed as did Bretton Woods, the 19997 Asian Currency Crisis, the Swiss-Euro Peg, or the collapse of the British pound in the ERM Crisis that made Soros a fortune. NEVER throughout all the recorded financial history of the world was there EVER a “gold standard” as they keep telling people. Gold floating up and down with the economy the same as the dollar does today – it was always a floating exchange rate monetary system.
There were periods when the gold coinage of Byzantium was debased especially during the Great Monetary Crisis of 1092. The coins that were once gold, we debased to the point they became silver.
Even the ratio of silver to gold was never constant. There were times when new discoveries of silver poured from the mines leading to the decline in purchasing power of the silver. Likewise, there were times when gold became more common than silver. Even during the California Gold Rush of 1849, the purchasing power of gold declined sharply because there was too much of it coming around.
So why do their relentless theories of a return to a gold standard fail and only end up with people losing their shirts, pants, their home, and sometimes their wives? The answer is SIMPLE, yet they cannot escape their own beliefs that have turned gold into a religion. There can NEVER be any FIX EXCHANGE RATE regardless of whether it is gold, silver, bronze, paper dollars, or sea shells – yes they too were money along with cattle and slave girls.
For you see, there is such a thing as a BUSINESS CYCLE. They simply refuse to understand the basic monetary theory or the history of money, which had been many things for over 6,000 years. It does not matter what the money might be at any point in time, it will decline in value as assets rise which we call inflation, and as people need cash and assets decline, we call that a recession. That has ALWAYS taken place regardless of the century, what was money at the time, or the culture. This is WHY there can NEVER be a “gold standard” that will ever survive for that is COMMUNISM where you prevent a recession by eliminating freedom. For you see, Marx tried to stop this business cycle so he confiscated all private assets and even that failed to prevent the business cycle from winning.
Even Fed Chairman during the collapse of Bretton Woods explained its epitaph. The business cycle ALWAYS wins! That simply means gold will rise and fall in value BECAUSE of the business cycle. It is not some scheme to manipulate it. That is part of the natural cycle.
Gold has been around for a long time. In Egypt, they had the first paper money. There were warehouse receipts for the grain you would deposit. Gold was seen as the tears of the god Ra, the sun god. The only person who was worthy to touch it was the Pharaoh. The Celts used gold in ring form, not coins. But throughout the entire history of gold, it rose and fell and had no such FIXED value.
So, as the goldbugs are pushing the latest that Russia is now establishing a gold standard, they do not understand what is really going on. Russia has been turning from Europe and America toward Asia expanding its markets and its economic power even to include India and Iran. Putin has persuaded Middle Eastern oil and gas producers to turn to Asia. Some have accused me of advising Putin in his latest speech everything he said and what he is doing is coming from our models. I do not advise Putin personally. Of course, we have many readers in Russia as well. I was even called by RT about how our model predicted Ukraine would be the hot spot one year in advance.
Biden has destroyed the world economy. I believe that even Bill Browder may be just a front for the CIA pushing this agenda that is actually undermining the West – not Russia. The world economy has been divided in two and it will NEVER return to normal. Putin is very smart. Probably far smarter than any other world leader at this time. Both Russia and China see the world in cycles. In Europe and America, we see the world as linear and that is our downfall.
Lady Margaret Thacher spoke at our World Economic Conference in 1996. She understood about cycles. As she told me that Tony Blair would win well before there were any polls, she said it was “just time.” The downfall of the West is that we do not see the world in cycles. It is Just Time, for the rein of the United States to come to an end.
Even Bill Clinton told Yeltsin after meeting Putin, “He’s a very smart man.” Putin sees the rising power of Asia in what is their Industrial Revolution. Biden’s insane sanctions against Russia have strengthened the bond with China, opposite of what Nixon did. Thanks to Biden’s sanctions, Russia is forging an alternative world order to that of the World Economic Form and its directive to Western leaders. Putin’s move to create a Moscow gold exchange is simply because he cannot sell gold anymore in the West. Putin, hopefully, will not be that stupid and try to fix a value of gold that would only ensure the collapse of Asia and Russia. Gold must be free to rise and fall as it has done for thousands of years.