Topic: Precious metals are not useful in a collapse scenario! - page 9. (Read 13421 times)

COMMENT: Marty, the gold bugs are at it again desperately trying to say you are wrong as always and just misrepresent whatever they can. They acknowledge you called for new highs in the Dow, but claim even that was not until 2013 when I read about your forecast back in 2011 in Barrons. They seem to be so desperate to try to prove you wrong yet they have never been right. They do not understand anything about markets. You are correct. They are as bad as politicians preaching the same nonsense and then misrepresent your record to tell lies. They do not mention you said gold would rally up to 1362 and back down. Unbelievable how dishonest and unethical these people are especially ——–.


Thank you for being straight up

KW

REPLY: The gold promoters have a single agenda and are not students of the market. They are just wrong on their theories, and you are right, they are like politicians. Every election is vote for me for change. It seems like vote for me because I have been less wrong than my opponent. They cast everything into right or wrong and shun trying to learn anything the markets are telling us. They cannot learn because they have a predetermined fixed image of how the world should be. They only focus on gold and cannot see what else exists in the world or how everything is connected. They function the same as central bankers who try to talk markets up by giving false impressions of reality. It’s a shame how many people they ruin because they are fixed on one scenario (And yes, the forecast for new a high was made at the bottom of the ECM back in 2011 when Barrons reported that forecast). The lift-off for the Dow to move to new highs with our first target 18500 could NEVER have been correct if gold did not also peak in 2011 and turn down. They have fought that decline all the way.

Look. We need fools on the other side of reality in order to trade against them. They are the fuel that makes markets move. It’s a shame how many people lost money lining the pockets of bankers because of these people. Nothing happened on October 1 when the world was coming to an end because the IMF included the Chinese yuan in the SDR. They thought that Shanghai would start trading “real” gold, not paper, and that New York would have collapsed by now. Their scenarios are childish and absurd to say the least. They have no respect for people. They are like Hillary: it’s all about them.

This is a battle of us against them. They are on the side of the establishment, preaching the same story that made the bankers rich and selling into every high they chased up the flagpole

Maybe somebody should tell him we are end 2016 and not end 2015. He seems a bit lost  

The Rothschilds apparently like gold a lot.  It is not at all clear how much they own, but is reputed to be substantial...  Where else are you going to invest your $billion$ after you have plenty of castles and vineyards?

https://en.wikipedia.org/wiki/Rothschild_family

It would not surprise me at all if the Rs own many tonnes of gold.

Do the Rothschilds know something you don't?  

That family is the classic example of owning lots of quietly held gold, passed down through the generations (other wealthy Europeans have been doing the same for centuries).

Idiots always think they are correct

Facts:

• Edward Snowden making his final move of no return to release NSA exposé on the exact turn date (April 22, 2013) for Armstrong's model of the peak of the USA empire.
• Putin officially entered the war in Syria on Oct. 1, 2015, precisely Armstrong's major ECM (Economic Confidence Model) turn date 2015.75.
• Per my prior post above, Assange+USA intelligence+FBI initiated a counter-coup against the Establishment politicians on Oct. 28, 2016, precisely to the day of the current turn date of Armstrong's ECM. Also the Bundy's were acquitted which was the first time a jury went against the Establishment in 200 years.
• Dollar is up since the peak (various currencies peaked between 2011 and 2016):
  +90% against gold
  +60% Australian dollar
  +41% British pound
  +53% Canadian dollar
  +60% Chilean peso
  +13% Chinese yuan (non-floating currency rate)
  +38% Euro
  +35% Indian rupee
  +60% Japanese yen valley-to-peak (note the dollar has slumped against yen so far in 2016)
  +43% Swiss franc
• FX exchange volume $5.3 trillion daily, versus $3 billion monthly for precious metals
• USA DJIA up +75% in same period. Armstrong's model has been predicted a double to triple since 2011.
• Armstrong's War Cycle model pinpointing Ukraine, Middle East, and rapefugees crisises decades before they occurred.
• etc

You'd have to be a fucking blind moron to not see what is going on.

The facts for 2016:

Gold +22.5% YTD
Long Bond US Treasury TLT +9.1% YTD
SP500 +2.7% YTD

Armstrong & shills predictions for 2016:
OMG gold going to sub $1000 or even to sub $850.
Bonds US Treasury exploding to the downside (the infamous 2015.75 big bang).
SP500 skyrocketing due to capital flows.

The BS is over. No verbal (or should I say written) diarrhea is going to change anything. The emperor is naked.

I have no time to argue with stubborn mules.

People will use fiat money when they have it and when the other side accepts it. Hint: they will gradually stop accepting it in hyperinflation surroundings, sorry but legal tender law can't help in hyperinflation -

Hyperinflation aside, just 3% of fiat money exists in paper notes. When you don't have paper banknotes (electricity has been down for a week in your area, they promise to fix it next week), what will you do? You will trade PMs, even at a discounted metal value.

It doesn't need to be a universal unit-of-exchange, it only needs to be a unit of exchange that your local owner of food stock accepts.

I have a good feeling many of them will accept PMs as they always did and do in war times, in other calamities.

You assume that the dark or digital age will happen everywhere in the world at the same time.

The truth is there will be spreads between status of dark chaos or of digital enlightenment in different parts of the world lasting years, decades probably. This presents opportunities for exchange and liquidity, arbitrage. You only need good enough, not the best, liquidity to make a trade when you're hungry. Fiat paper money of course works best until it doesn't.

Gold should bounce and rally to test the 1340 level by year-end. We need a weekly closing above the 1336 level to show some sustainability. Resistance begins at 1308 and we need a daily closing above 1319 to be impressive.

QUESTION: Mr. Armstrong; So many people keep calling for a stock market crash. At the same time, it has hung on to the 18000 level in the Dow for dear life. Do you see such a devastating crash as even possible?



ANSWER: No possible way. Retail participation is at near record lows. It has just started to lift begrudgingly. Even the Gallup poll on Americans shows the same thing. Retail participation is at best 55% down from 65% in 2007. Liquidity, however, is still off by 50%. This does introduce the likelihood of Flash Crashes and Flash Rallies. Such events are by no means because of a pending major crash. Just where do you put money if bonds are dead and banks a questionable? Of course some will yell gold. But gold is for the individual. Pension funds and institutional investors with billions and trillions cannot invest in gold bullion with no yield. Gold stocks, yes, but bullion no.



November is a Directional Change and then our next big target is January. We will be doing a Gold Video Update tomorrow.

I expected that you would end up saying something along these lines. But this has evidently nothing to do with the trust that people reveal towards precious metals. You seem to have massively forgotten what you started with. Namely, that the trust that people have toward a gold specie doesn't depend on what this specie is made from, but only on the stamp of it.

Money has always been what people trust and have confidence in. This doesn't mean the metal itself, but as Armstrong has explained many times it was the stamp on the metal. Even when the invaders took over the Roman Empire, they used the stamps on the coins from the former Empire because it was more trusted.

But you still can't escape the simple question why authorities continued to use precious metals for minting coins until very recent...

And why people started evading such coins when the authorities began debasing them

You can't transfer digital value when electricity and internet are down. You need substitutes. And I don't mean permanently disrupted, just a week is enough to remember the "barbaric" past. Sure, food will be a priority but those who have access to large stockpiles of food will accept barbaric metals and other such items of value. They would accept digital but electricity and internet will be turned on next week only and so they accept what they have confidence about, many people have confidence about metals. Not to mention that two-three billion people in the world don't have bank accounts (including developed countries) and aren't really accustomed to and haven't gone full digital, and I don't mean tribal people of some remote islands. Everyone knows metals, they will always have some value.

In fact, they wouldn't even need to mint the coins from precious metals at all in the first place...

I don't really see why you continue challenging that point

This is just another way of saying that people no longer believe in the stamp. Or, alternately stated, they believe in the stamp only as long as the nominal value of the coin corresponds to the real metal content of it...

Which, in its turn, basically means that the stamp is pretty much irrelevant in this aspect

The problem is that physical silver coin is not ever going to be used as currency ever again, no matter what happens. Period.

1. We are in a digital age and no one is going backwards, no matter what happens. Period.

2. When global collapses ensues such that you think you might be able to use metal coinage, what actually happens is as follows.

The authorities had been collecting taxes in gold coins, so the population had to use the royal mint to get these coins. The authorities had also been heavily after counterfeiters, despite their own constant debasement of coinage

No problem really. But you have to:

  1. Explain what exactly I misunderstood in Gresham's Law
  2. Give a correct explanation of it

You see, just claiming that someone doesn't understand or misunderstands something won't work. Gresham's Law is not about melting coins and it has nothing to do with the melt value. Basically, it says that people don't believe the nominal value of a specie set by authorities, which directly challenges your point...

Namely, that value of a coin is the stamp on the metal

On the other hand, if it all came down to trust in authorities, there would be no case for Gresham's Law where you had essentially the same stamp but, nevertheless, different levels of trust...

Which wouldn't be ever possible unless you in fact trusted the metal more than the stamp on it as you claim

SOMEONE sounds jealous there are no basements in the Philippines to be locked and loaded in.

I disagree that that trust in the case of hard currencies has anything to do with authorities and the stamp on the metal they make. In fact, in medieval times you could just grab a piece of gold and take it to the royal mint where you got your royal coins stamped for a small fee. This tells us that the stamp had rather a utilitarian function than an existential one. On the other hand, if it all came down to trust in authorities, there would be no case for Gresham's Law where you had essentially the same stamp but, nevertheless, different levels of trust...

Which wouldn't be ever possible unless you in fact trusted the metal more than the stamp on it as you claim

Why did we build the largest coin collection in the world? Because coins are the documented history of the fiscal mismanagement of centuries of mankind. There is nothing that does not fluctuate even what is used for money.

The Mongols conquered China and maintained their monetary system. They honored the paper money in circulation and used that as the monetary base rather than coins.

The barbarians issued coins at first maintaining the pretense of the Roman Empire pretending that they now held the throne.

...the next target marks the end of the Roman Empire that formally falls in 476AD with the last real emperor. However, then the barbarians assume the throne for a brief period of time. They issued coins that appeared to be Roman in appearance. Effectively, at the end, the barbarians wanted to be Romans where as the Vandals just stripped even the copper from the roofs of temples in Rome.

The idea that money must be tangible also has no basis in fact. Money has been many things to many people. The entire basis of money is you will accept something as money as long as you have CONFIDENCE that in turn someone else will accept it from you.

This idea that somehow gold coin is not fiat has been so misleading. Here is a Roman tax collector gold bar because the government minted gold coins cheating in quality but refused to accept them in return for taxes. Thus, taxes were imposed based upon weight – not coins! Therefore, the gold coins of the day were not trusted and even government had no CONFIDENCE in them, which is why they were NOT legal tender (acceptable for taxes).

...

Early attempts at wage and prices controls always failed from Babylonian times right up to the Wage & Price Controls of Diocletian (284-305AD) who attempted to restore silver coinage AFTER the Great Monetary collapse. It did not matter that coinage was restored. CONFIDENCE still collapsed and the coinage was rapidly hoarded and vanished from circulation. So yes, even when the money is of full value, it still will not circulate if people do not BELIEVE government. Indeed, there was still another war and finally Constantine (309-337AD) emerged as Emperor after defeating all rivals. He enjoyed some success but had to abandon Rome and created a new Capital Constantinople and revised the monetary system again.

...

Government then began to stamp the image or badge of the city to impress people.However, the first city to “coin” money was also the first to discover “fiat” meaning the value is simply dictated by government

...

The whole reason people began to use banks was because the “money” could not be verified. Just because the coins were silver or gold did not mean anything. They could be debased, shaved, or forged. You deposited money in a bank and the bank CERTIFIED you were paying in “good” money. People did not want coins, they wanted the bank paper receipts. Like the moneychanger, the bank was certifying the transaction was taking place with proper value in “money”. Thus, paper money began in middle ages as receipts certifying deposits.

...

Ancient Egypt always had “fiat” money receipts for grain in public warehouses trading as money. They did not have any coinage until Alexander the Great conquered them in 334BC. Virginia also had the same system of tobacco receipts that circulated as money in colonial times.

China and Japan were the same. They never had circulating gold or silver coinage. This nonsense that money has to be tangible is NOT supported by the facts. Money has always been based solely upon what someone else is will to accept. Go to a WaWa or Starbucks and try to buy with a gold coin. They will not accept it. Hell, some places will not even take a $100 bill anymore and want plastic. If they do not BELIEVE gold is acceptable for payment or you hand them $1 in 1964 silver quarters to by a $5 coffee, you are out of luck. They will see it as $1 not worth $5. This is the real economy. MONEY is only valuable based upon what the OTHER person believes – not you!

It is NOT the fiat. It is simply CONFIDENCE. Bank and warehouse paper receipts have circulated as money for thousands of years. Even dollars under Bretton Woods gold standard were simply receipts redeemable in gold in international transactions. It was NOT gold that actually circulated. When people as a whole distrust government, then barter replaces official “money” and that can be a lot of things and the worse it gets the more likely it boils down to food. We have run every possible correlation and have the database to do so.

When Genghis Khan invaded China, which was using paper money, he too accepted it and did not devalue the paper money that was in circulation. He too accepted the paper money from the previous emperors.

By the time this economic implosion is over, you will PRAY for HYPERINFLATION. What we face is far worse. It is loss of everything with the risk of tanks rolling down your streets hunting money!

It has always been a confidence game. Those in power are constantly trying to boost the confidence of the people in order to stabilize their control over society. Above is a Roman coin from the tetrarchy period of Diocletian & Maximinus. The term meant “leadership of four” whereas there had been a chaotic period that spanned across 20 emperors whereby they came to power only to be overthrown by another. There was no political stability. The Emperor Diocletian sought to create political stability and established the tetrarchy where there were two emperors and two “Caesars” who were like vice presidents in waiting. The power of governing the empire was split and marked the end of the crisis of the third century.

You do not see hyperinflation in Britain or China despite the fact that both declined from major economic peaks. Money never becomes worthless in a major core society for if the core were to collapse then everything else must fall as well. Genghis Khan accepted the paper currency of China upon his conquest and did not render it worthless. It continued to circulate and he accepted it in payment himself. That is showing the Moguls wanted the dignity of conquering civilization and merely replaced the emperor.

Human nature does not change with time. It remains consistent and this is why history repeats. With the fall of Rome, the invading barbarians wanted to be Roman. Their rulers initially issued coins merely pretending to be the emperor. One of the great kings was Theodebert I (534-548AD) whose tomb is erected and still standing as if he too had been a Roman Emperor. Thus the invaders wanted to be the head of the civilization both in China and Europe showing confidence did not vanish, just a change in ownership and no hyperinflation.

The term ‘barbarous coinage’ of the 3rd century refers to imitative coins that are typically crude in style. Their origin stems from the use of Roman coins outside the empire and as a result there was a high demand that was not often met. Consequently, then shortage of official coinage was compensated by the strike of imitative coinage that was underweight, but there was no real intrinsic metal value. Like US dollars circulate in Russia and China, it is the confidence in the foreign government that provides the inherent value to the monetary instrument rather than the metal content.

Indian Ancient Imitations of Roman Coins

The peripheral economy with respect to the center core economy has routinely imitated the coinage of the dominant economy which is the financial capital of the world. In the case of India, these imitations of Roman coinage in gold are known as far back as the Roman Emperor Tiberius (14-37AD). These are imitations rather than counterfeits for the metal content is the same or at times even better. Pictured here is an Indian contemporary Indian imitation of a gold aureus of Tiberius (AV Aureus 19mm, 6.69 grams) copied from a coin struck at Lugdunum (Lyon) mint issue in modern day France which obviously made it to India.