calling china collapsers: , page-26

Which is very interesting CT (using Marks to buy gold), do you have any stats on how much gold Germany produced in house? The US were doing exactly the same thing, except all their gold was locally produced. Gold reserves in the US went from 50Moz 1900 to 150Moz 1920 to 699Moz in 1949. That's 21,470 tonnes!!

It is no secret whatsoever that the crown the US wears today is due purely to the massive reserves it had when they were most needed. Something that Germany may have been trying to replicate. If any other single country had achieved a similar base reserve, it would be far more economically balanced (then and now).

The difference is simply that the US, and AUS (hence Britain, plus others) went through stages of bonanza gold rushes, so a fixed price of gold had no external deficit attached to those countries. If this now changes to any other element, it will incur the same penalty of economic advantage/disadvantage to those countries without that element.

From the US Treasury in early 1900's -
“The mines are thus confirming the gold standard steadily and invincibly. They are creating an inflation of currency which keeps pace with the enterprise and industry of the country”. This was not a one eyed view of the necessary balances of commerce, production and inflation. Contained within the same section of the annual report is very careful consideration to the imbalances caused by not maintaining the flow of gold needed to balance the requirements of the Treasury. “Yet for the immediate present, and doubtless for a few years at least, the inflow of gold will be in such large measure as to lift the volume of currency to the highest level of all needs of business.”

Rhodesia (Zimbabwe) went the other way, and used $Zim to buy $USD reserves (paper, not gold) = same outcome = a worthless currency. Rinse and repeat Weimar except using paper. Debt is the serial killer - not gold. The reality is some nations become literally worthless due to indebtedness and serial deafult is inevitable without surplus trade.

As for inflation, it is purely the monetary base issued per capita that causes it, then how that is utilised either internally or externally in the lending standards of a leveraged credit market (i.e. banks). A flood of external selling causes the same debasement when coupled with illiquid markets (sanctions, embargos etc).

The fastest elevator any currency can take is to give the financial kingpins a reason not to trade it. Something the Britsh pound, and Aussie AUD are in danger of should the tides turn on them. But, proliferation ala US style might mean they are held by sufficiently many not become illiquid.

The situation in 1970 was completely different. But it was the price rise that gave us the 1980 to 2000 bull market.

Fiat response to gold floating in 1971, as can be seen better in the gold price in local currency -

- note British pound and AUD loose money policies.

The spread in performance above against gold hightlights the differences in monetary debasement against a nonUSD FX parity. But the same story is told when using $USD.

Now, this was a floating price of gold that had universal benefits to every currency as a "rising" reserve. Imagine what happened back in 1930 when POG was fixed, and you were not a gold producer (e.g. the GBP in the above). The best currencies by far were CHF, JPY and German Mark.

CHF now has far in excess of required gold reserves per cap and per GDP. Germany recovered from WW2 to a very strong economic position. Japan likewise recovered to a strong post WW2 position but has since 1990 been on a 1 way decline.

The only thing saving Japan is now it's currency - with the difference to a Weimar or a Zimbabwe is purely maintained liquidity due to a much more embedded proliferation.

When JPY and GBP liquidity runs out, the lights go out.

As for any currency holding a reserve that falls in value (and not rises such as gold so far does) i.e $USD paper reserves, their currency falls with the falling value of paper. That should be self evident.

The US have known this secret for more than 100 years now.