If you think this weekend’s G-20 meetings in Washington are only about designing short-term fixes to the financial system and regulatory reforms for banks, hedge funds, brokers, mortgage companies and investment banks … think again.
Behind the scenes, a far more fundamental fix is being discussed — the possible revaluation of gold and the birth of an entirely new monetary system.
Emphasis added by me.
Wait. Don't get excited yet.
More:
It would be a strategy designed to ease the burden of ALL debts — by simultaneously devaluing ALL currencies … and re-inflating ALL asset prices.
That’s what central banks and governments around the world are going to start talking about this weekend — a new financial order that includes new monetary units that helps to wipe clean the world’s debt ledgers.
It won’t be an easy deal to broker, since the U.S. is the world’s largest debtor. But remember: Debts are now going bad all over the world. So everyone would benefit.
Emphasis in the original.
Sounds exciting now, doesn't it? Sounds just like what I've proposed (and which I still believe is inevitable).
But wait. Don't get excited yet.
More:
The Big Question: What gold price would be legislated to reflate the U.S. and global economy?
I can’t tell you what gold price the G-20 would ultimately agree to. But here’s what they will be looking at …
* To monetize 100% of the outstanding public and private sector debt in the U.S., the official government price of gold would have to be raised to about $53,000 per ounce.
* To monetize 50%, the price of gold would have to be raised to around $26,500 an ounce.
* To monetize 20% would require a gold price a hair over $10,600 an ounce.
* To monetize just 10%, gold would have to be priced just over $5,300 an ounce.
Those figures are just based on the U.S. debt structure and do not factor in global debts gone bad. But since the U.S. is the world’s largest debtor and the epicenter of the crisis, the G-20 will likely base their final decision mostly on the U.S. debt structure.
Emphasis in the original.
By this point, you should start smelling a rat. I did.
But wait. This point confirms what I said here:
Second, I do NOT advocate a fully convertible gold standard. Never have. There isn’t enough gold in the world to make currencies convertible into gold. It would end up backfiring, restricting the supply of money and credit.
Emphasis added by me.
Yep. The bottom line with gold is: Fuck that. There's not enough. There never will be enough. Using that as a standard of value is simply anti-human. It's worse than tying our fortunes to oil (especially with arguments for the Peak Oil hypothesis all around).
And the next bit, which I will not quote, is the rat: A recommendation to buy gold.
How can he recommended gold when he's already argued it would restrict overall growth?
The other rat is the possible G20 discussion of debt handling. It would be a parlor trick that would essentially give National and Corporate debt a huge break -- while screwing all the rest of us.
Debt has to be wiped out for all three levels: National, Corporate, and Consumer. I've detailed that here. Nothing short of that will work.
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