This Is Unlike Anything We’ve Seen In History-Gold

On the heels of continued volatility in the gold and silver markets, the Godfather of newsletter writers, Richard Russell, writes that we are living through some of the greatest and momentous changes in world history. Russell also discusses the US dollar, inflation, the Fed, and what is happening in the gold market.

Richard Russell: “As in life, nothing in the markets seems to change in a hurry. But when an item finally changes, it tends to make up for lost time … What do they call it when you don’t trust anything? Oh yeah, they call it “Life in the markets under Ben Bernanke.” Will Ben continue to buy one trillion worth of bonds and assorted vehicles through the end of the year?

… Now the whole daffy world is following Bernanke’s lead. Japan has had it with two decades of deflation, and Japan‘s new central bank head vows to double Japan‘s monetary base within two years — or, at least buy bonds until deflation in the Land of the Rising Sun turns to inflation of at least 2%. In the meantime, Japanese stocks are surging under Japan‘s new super brand of QE.

I have to wonder how long US stocks can continue to climb on the basis of quantitative easing? I don’t know, and I don’t think anybody else knows either. The strategy now seems to be — you buy blue chip US stocks or the DIAs and stay with them until the market turns sloppy — or until it actually turns down. Forget values, forget sentiment, forget risk, forget the charts, forget caution — stay with blue chip dividend-paying stocks for as long as they continue to climb, and when they halt their climb, give ‘em back to Wall Street and await further developments.

But what about the “depression” that Nobel Prize winner Paul Krugman insists we’re now in? The hell with the depression, the stock market is going up, and maybe when it turns down we’ll have his depression. Until then, “What, me worry?” No chance, I’ve got my gold. And if the end of the world arrives, I’m betting gold will be my savior (that is, if Uncle Sam doesn’t take it away from me at gun-point).

Most professionals and fund managers are worried about a hurricane of inflation showing up somewhere in the not-too-distant future. After all, inflation is always a monetary phenomenon, and God knows we’ve had our turn at money creation. In fact, there’s never been anything like the current worldwide explosion of currency creation.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/5/1_Richard_Russell__This_Is_Unlike_Anything_Weve_Seen_In_History.html

Arizona Becomes 2nd State To Make Gold & Silver Legal Tender

Just under a month ago we raised the prospect of a number of states following Utah (which authorized bullion for currency in 2011) down the path of gold and silver as legal tender. “The legislation is about signaling discontent with monetary policy and about what Ben Bernanke is doing,” was how this shift was previously described and as Yahoo reports, the Arizona Senate on Tuesday approved a measure to make gold and silver legal currency in the state, in a response to what backers said was a lack of confidence in the international monetary system. The bill will make gold and silver coins legal tender as of mid-2014 and more than a dozen other states continue to mull the transition. Those against the bill argue somewhat ironically, “anybody who thinks gold or silver is a really safe place to put your money had better think again,” anchored on the last two weeks, but as one supporter of the bill added, a “sound and honest money system such as gold and silver” is needed to bring stability.

Via Yahoo,

The Arizona Senate on Tuesday approved a measure to make gold and silver legal currency in the state, in a response to what backers said was a lack of confidence in the international monetary system.

The bill calls for Arizona to make gold and silver coins and bullion legal tender beginning in mid-2014, joining existing U.S. currency issued by the federal government.

If signed into law, Arizona would become the second state in the nation to establish these precious metals as legal tender. Utah approved such legislation in 2011.

More than a dozen states have considered similar legislation in recent years, according to the National Conference of State Legislatures.

He also pointed to the recent decline in the value of gold – which sank to $1,321.35 per ounce on April 16, its lowest price in more than two years – noting that “anybody who thinks gold or silver is a really safe place to put your money had better think again.”

The push to establish gold and silver as currency has become increasingly popular in the United States in recent years

… the legislation was needed to counter what he sees as insolvency in the global monetary system.

“The dollar system and all of the other derivative currencies, including the euro, are a recipe for worldwide bankruptcy,” Weiner told lawmakers at an earlier hearing, adding that a “sound and honest money system such as gold and silver” was needed to bring stability.

 

More U.S. states looking to legalize gold and silver as currency while ditching dollars

As the U.S. government continues to crank out dollars like they were Monopoly money, more and more states – fearing an eventual collapse of the currency, most likely – are looking at ways to legalize and utilize gold and silver as currency.

Shunning trust in the Fed chairman Ben Bernanke, the Treasury and the economic policies of the Obama administration, more than a dozen states are considering adoption of the alternative currencies.

Utah lawmakers and Gov. Gary Herbert enacted legislation in 2011 that authorizes bullion for use as currency; now, similar bills are under consideration in Kansas, South Carolina and other states, according to Bloomberg News.

The measures are being supported by limited government advocates in these states yet for now passage of such laws are largely symbolic. You can’t, for instance, go grocery shopping in Utah and pay for your items with gold.

Concern about impending ‘collapse of the dollar’

These measures are important because they are reflective of growing concerns over the longevity and viability of the U.S. dollar – concerns that have been heightened by the Fed’s rather unconventional moves (like massive printing of trillions of excess dollars) in recent years, in some weird attempt to “stabilize” the economy, says Loren Gatch, a politics professor at theUniversity of Central Oklahoma.

“The legislation is about signaling discontent with monetary policy and about what Ben Bernanke is doing,” Gatch, who studies alternative currencies at the Edmond, Oklahoma-based school, told Bloomberg. “There is a fear that the government, or Bernanke in particular and the Federal Reserve, is pursuing a policy that will lead to the collapse of the dollar. That’s what is behind it.”

There is good reason for such concern.

For one, Bernanke and the other money masters have been manipulating currency and the markets for years, all in a way that benefits the Wall Street and banking elites. The Fed chairman has been keeping interest rates near zero since the beginning of the Great Recession in December 2007 primarily because elevated rates would devastate the federal government, which is paying hundreds of billions in interest payments on borrowed money as it is.

And this irresponsible fiscal manipulation is ongoing. Per Bloomberg News:

The Fed said in March it would continue buying $85 billion in securities each month in a program known as quantitative easing that has ballooned its assets beyond $3 trillion and is aimed at keeping long-term borrowing costs low to support economic growth.

Moreover, economic figures are being fabricated. According to an inflation measure “favored by the Fed,” Bloomberg notes, consumer prices rose just 1.3 percent in February over the previous year. Yet anyone who is trying to earn a living knows that two of the most purchased items – food and gas – are chiefly responsible for the dramatic cost of living rises in recent years. And yet, they aren’t even factored into the government’s inflation figures because they are considered too “volatile.”

Gold, silver making comebacks

Investors bet that inflationary pressures would increase because of the government’s phony “economic stimulus” measures that did nothing but pile on more debt. Still, that speculation led to a 78 percent rise in gold prices since December 2008. The historic precious metal hit a high of $1,923.70 an ounce in 2011; since then, prices have retreated and have remained flat. Now they are around $1,535 an ounce, which is still high.

But when inflation does kick in – and it will – the value of gold and the other historically valuable currency, silver – will increase as well. States considering using these precious metals as currency once more seek to use them as a fall-back when the dollar finally does collapse.

Texas gold is not just in the oil fields

One state, in fact, is so concerned about the dollar’s economic future it is considering legislation to regain physical possession over its gold.

Texas Gov. Rick Perry and a number of lawmakers want to establish the Texas Bullion Depository to store some 6,643 gold bars valued at about $1 billion that are currently being held in a New York bank warehouse. The gold, which is owned by the University of Texas Investment Management Co., or UTIMCO, took delivery of the bars in 2011 over concerns that rising demand would eventually outpace supply.

The facility would also accept deposits from the general public, and serve as a basis for a payments system in the state in case a “systemic dislocation in a national and international financial system” were to occur, the legislation says.

Jim Rickards, the senior managing director at the Tangent Capital Partners LLC in New York, and author of Currency Wars: The Making of the Next Global Crisis, said if Texas were to enact its legislation, it would mean sovereign backing of deposits, like when the dollar was based on the gold standard, and make the purchase and storage of gold easier.

“We are seeing a distinct movement back to a world where gold is considered money,” Rickards told Bloomberg News.

Source: http://www.naturalnews.com/039984_gold_currency_states.html