Gold and Bitcoin have been on the rise in recent days. A craze clearly linked to the appointment to the board of governors of the FED of Judy Shelton, an economist in favor of a resurrection of the Gold Standard …
The History of the Gold Standard in the United States
This appointment is an opportunity to come back to the history of the Gold Standard in the USA. Believe it or not, there was a time when American banks all printed their own tickets. Each had to exchange their notes for gold on demand. In other words, bankers were constrained by the Gold Standard and exposed themselves to a bank run if they printed too much paper…
In order to free themselves from this straitjacket, the usurers voted for the famous National Bank Act of 1864 which marked the introduction of a same type of banknotes for all banks. This universal dollar was used to abolish bank runs since it was now possible to exchange banknotes for gold at any bank. So it doesn’t matter if his own bank goes bankrupt …
Despite this Machiavellian risk sharing, the dollar is still convertible into gold. This safeguard urged the banks to be cautious, but they were still able to have fun thanks to the industrial Revolution. The productivity gains extraordinary offered by the steam machine were the source of the biggest economic boom in history and a tremendous monetary expansion.
These productivity gains allowed the fractional reserve system (paper money backed by small gold reserves) to flourish. The reason being that destructive inflation and normally inherent in the overflowing paper money creation was largely neutralized by the increase in productivity enabled by technological progress and the combustion of fossil fuels.
But everything changed to 1933. Since that date, US banks are no longer obligated to exchange gold banknotes … What had to happen happened. Banks have started shamelessly spinning the money press, obviously generating a inflation monster:
Visit our dedicated article to discover the troubled origins of the American Central Bank.
A woman in the Federal Reserve
Back to Judy Shelton. The latter has just been confirmed by the US Senate Banking Committee.
The Governing Council is the decision-making body of the FED and consists of 12 people. 7 are named directly by the President of the United States with the consent of the Senate. This is the case with Judy Shelton. [Les présidents US choisissent un nouveau gouverneur tous les 2 ans.]
5 others come from the 12 regional FEDs (the branches of the FED) whose governors are elected by private banks. In other words, 5 out of 12 governors are emissaries of private banks and it only takes one corrupt president to tip the scales in their favor …
Bankers have always had the advantage of long time to advance their pawns against democratic forces and control the printing press… The appointment of Judy Shelton, greeted by a new highest gold history and an 8-year high for silver, suggests a monetary paradigm shift may be in the pipes.
Judy Shelton is probably a Bitcoin fan
Judy Shelton is Donald Trump’s economic advisor. She is known to want to return to Gold Standard as well as his criticisms of the independence of the FED and the 2% inflation target.
” I think the Gold Standard is another way of saying monetary discipline. Money must be a unit of account, an intermediary of exchanges and a reliable store of value. It should not depend on who the president of the FED is. “
Judy Shelton’s words echo Bitcoiners for whom the technology of Blockchain is above all a way to prohibit the debasement of currency by a single entity. Aka the banker caste.
” The fundamental problem with the current currency is that you have to trust the central bank not to degrade the currency. The history of fiat currencies has shown that this trust is still violated. “
Satoshi Nakamoto, inventor of Bitcoin
What is Judy Shelton thinking?
His critics accuse him of being a weather vane. The reason for not having pleaded in favor of lowering interest rates during the 2008 crisis before returning his jacket since the election of Donald Trump. Indeed, the latter directly opposed Jerome Powell (President of the Fed appointed by Trump) when the latter wanted to raise interest rates.
An easy criticism, out of context, which needs to be tweaked since Judy Shelton was mostly at the time rise against a system that benefits wealthy shareholders as well as multinationals who borrow for free to buy back their shares. #buybacks
More interestingly and much more recently, it should be noted that Judy Shelton spoke in favor of the zeroing the interest rate that the Fed pays private banks to park their money in its accounts. This rate is very important. It is called in Europe the interest rate on deposits. That of the ECB is for example -0.50%.
By lowering this rate in territory negative, Central Banks can force banks to lend at very low or even negative rates to governments. Visit this article for more information on this key mechanism of our monetary system.
To put it another way, Judy Shelton wants to cut borrowing rates drastically and indirectly US debt. A gloomy prospect for shareholders of banks who will collect much less interest. Who will complain ? …
CBDC (Central Bank Digital Currency)
When questioned by the Senate Banking Committee, Judy Shelton did not come out against the idea of a digital dollar. That is to say a CBDC (obviously having nothing to do with the Bitcoin cryptocurrency whose Blockchain is decentralized).
We must therefore arm ourselves with doubts when we know that central bankers do not hesitate to arouse a amalgamation between their CBDC shitcoins and Bitcoin in order to make cash disappear. Doubts partly dispelled by the person concerned who declared in early 2020:
” I would say we need a digital dollar a little less inside the country than outside, in order to preserve dollar hegemony. ” […] “The dollar is the most important instrument of soft power that we have on the world. “
The remarks were made in response to Senator Cotton’s interest in a digital dollar which, in his imagination, would thwart China’s monetary ambitions along its new silk roads. This is what we wrote about ThecoinTribune in April about the “Cryptoyuan”:
” The idea is that the populations on these trade routes can download the CBDC wallet and bypass existing financial structures. (As such, the Huawei case is most likely linked to the CBDC). You must go through a bank member of the network SWIFT if you want to do business with the rest of the world. There is no other way. However, SWIFT is headed by a board of directors made up of 25 seats which support 80% western buttocks. Its president is the boss of CityBank, the largest bank in the world … “
The mirage of the Digital Dollar
In the video above, Judy says “ love the idea of a money guaranteed by gold and that such a currency could even take the form of some kind of cryptocurrency “
This statement is very apt because in reality no digital dollar or other national shitcoin will be used for anything against a yuan convertible into gold. This has been the case since 2018, when China launched its own Oil benchmark denominated in yuan and convertible into gold (2018).
Creating a “digital dollar” does not threaten the yuan. The only way to stop the yuan from spreading would be to disconnect China from the internet or cut off its access to the Android operating system …
A more “athletic“To thwart the plans of the Middle Empire would be restore the convertibility of the dollar into gold which was abandoned in 1971 by the president Nixon. This is in truth the only solution to curb the rise of the yuan.
That being said, the Gold Standard is a bitter potion because it will involve a drastic reduction in the standard of living of Americans via the end of the chronic deficit of the trade balance on pain of losing all their gold.
This is precisely what Judy Shelton is going to advocate for on the Fed Board of Governors to prevent the yuan will eventually dethrone the dollar. The return of the Gold Standard will soon break the exorbitant privilege dollar and Shelton is just the messenger. This paradigm shift shows that China and Russia are winning their bet after years of frantic gold buying.
Down with inflation
Let’s end with another very interesting statement about the Fed’s 2% inflation target:
“Stable prices? Stable usually means no movement. […] What is stable? If a home’s value goes up 2% for 10 or 20 years, that means the price changes 20 to 40% while you own your home. Is it relevant? “
Shelton is in favor of a 0% inflation target and the new generations will appreciate it, they who are now forced to go into debt 25 years or even more to buy a roof and 4 walls… Bankers have been smoking us for too long by making us believe “Price stability” means an increase of 2% per year…
It is high time to stop the banks to orchestrate the rise in property prices to feed the headlong flight from the debt ponzi scheme. To achieve this, it would suffice to establish a fixed rule over time as to the amounts that can be borrowed, making them fully proportional to income. And for that to work, you need 0% interest rates …
All of this bodes very well for Bitcoin as it is augmented gold and it is no coincidence that cryptocurrency has appreciated in tandem with gold since Shelton’s appointment. Go Judy.
Child of Satoshi, the alchemist who turned a cryptographic algorithm into gold.
I’m talking about monetary geopolitics, not shitcoins.