The Monetary Monster-Crisis (49)

Debasing the Bars

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Fig. 1: Good or Bad Delivery public domain.

A Good Delivery bar, the standard for trade in the major international gold markets.

It is a wild world in which taxi-drivers and housewives are starting to discuss how to invest their savings. Hey, Mary - How do you invest your savings? Well, I've sold all investment stuff, bonds and stock, emptied my bank accounts and bought gold coins. That's what makes sense... That's what is being heard from passers-by, in the subway or from neighbors in the pub. I'm not so sure. Lately I have been studying the report "Bank of England to the Fed: 'No Indication Should, of Course, Be Given to the Bundesbank", also found in Gold Anti-Trust Action Committee Exposing the long-term ... To summarize: the Bank of England discovers discrepancies with US Assay Office gold bars, notifies the NY Fed that its gold bars have major "bad delivery" issues, but, and this is the punchline, on this occasion, we'll keep it quiet, because the Bundesbank got these bars. That's too bad for some central banks, states and countries, but good for gold investors (as long as they do not own some of those debased bars). In fact the report says: the US ran out of good delivery gold in March 1968 and only had coin bars remaining. And that's the point where I became alert. Did it start way back in 1968? That early? That's bad.

Tungsten-ed bars are bad delivery as well I suppose. That's fine with me. I do not own any bars, tungstened or not. At least not as an individual person. A modern state however owns gold bars to secure their currency and these bars are public property, paid by our ancestors' taxes. A thousand micro dilutions over the decades. Yes, that's exactly how the Roman emperors inflated their coins. Chipping away some metal, remelting in some copper - to compensate the weight. It must be done in the dark. That's for sure. I remember how the Romans managed to wreck their empire. It was just as easy as printing money. No, I guess it must have been easier...

Kipper and Wipper

The Kipper und Wipper-documentation ('Tipper and See-saw') clearly explains how to create real physical money by turning copper into gold. Of course debasing currency (in order to raise revenue for the war) has always been practiced, where effective taxation did not exist. Wikipedia says: It is particularly used in connection with commodity money such as gold or silver coins. Someone forgot to include the bars. They always considered them to be good delivery. That's why they cannot be delivered anymore. They must have to be kept locked up in Fort Knox... Fiat or paper money is debased when the volume of money printed is greater than demand, but that's only one variant. Wikipedia adds: The value of the denarius in Roman currency gradually decreased over time as the Roman government altered both the size and the silver content of the coin. Originally, the silver used was nearly pure, weighing about 4.5 grams. From time to time, this was reduced. During the Julio-Claudian dynasty, the Denarius contained approximately 4 grams of silver, and then was reduced to 3.8 grams under Nero. The Denarius continued to shrink in size and purity, until by the second half of the third century, it was only about 2% silver, and was replaced by the Argenteus. One reason a government will debase its currency is financial gain for the sovereign at the expense of citizens. By reducing the silver or gold content of a coin, a government can make more coins out of a given amount of specie.1 That's true for the money we carry in our pockets. But debasement may also be applied at the central bank's money, which is not owned by anyone. Debasing the bars at the central bank's vault is stealing other people's money. They didn't start the stealing (no, I'm sorry: the debasing) a few years ago at the crisis. The debasing must have begun decades ago, maybe even before 1968. A moral debasing news has been reported for 100oz. bars, which have been filled with tungsten. The technology seems to be most professional: Fake gold bars turn up in Manhattan 2. Is it really a profit for criminals? Who else might be interested in low interest for gold sales?

1 Debasement 2 Posted: Sep 19, 2012

Running amok
Yes, I did read Get Ready for Cheap Money 'Run Amok': Rogers promising more inflation, more money printing, more debt, more spending ... The superlative of much is more The superlative of more is most The superlative of most is too much The superlative of too much is to crash The superlative of a crash is a recession The superlative of a recession is a depression The superlative of a depression is to run amok The sky is the limit said the astronauts, but the bankers transposed the idea to the financial debts. Amok printing has been seen in Germany and some of the old folks remember what happened if too much money is being printed. What's the superlative of running amok? It's the fiscal abyss.

The fiscal Abyss

Fiscal cliff? That's not a cliff! It's an abyss. I'm afraid the Jim Rogers Blog is right. They will ruin economy. They will ruin it with cliffs, run amok into abysses, 'Tip and See-saw', 'salt and tungsten' the bars, anything you can imagine and any trick that can be thought. I guess there is a 1000-pack of engineers grumbling around and checking ways to debase our money. Nothing will be left out in a desperate situation and the situation has been desperate ever since 1968. That's our fiscal abyss. If there would have been a cliff there would have been a rock to maneuver the ship into a solid and stable position. I wish there would have been that fiscal cliff to run into that solid rock. All I see is a black hole where the fiat money is pouring in.

Never mind it's only money...