Spain Revealing the Totalitarian Future for All

 

Posted Jul 6, 2021 by Martin Armstrong

Spain is just putting it all out there. There is new legislation that effectively allows the total end of democracy and All freedom in Spain and this is just the beginning. Any person of legal age will be obliged to carry out the “personal benefits” required by the government, following the guidelines of the National Security Council, whenever the government declares a state of crisis for any reason whatsoever including health. Spain is declaring that all citizens are really slaves of the state without human rights. There is to be no exception and everyone MUST comply with the orders and instructions issued by the government. This new National Security Law stated:

In the event that a state of crisis is declared in Spain (‘situation of interest to National Security’ is the name given by law), the authorities may also proceed to the temporary requisition of all types of property, at the intervention or provisional occupation of those that are necessary or the suspension of all kinds of activities.

In the event that a state of crisis is declared in Spain (“situation of interest to National Security” is the name given by law), the authorities may also proceed to the temporary seizure of all types of property, at the intervention or provisional occupation of those that are necessary or the suspension of all kinds of activities. That is so vague it will allow the government to seize all your bank accounts and even your home – PERIOD! Those who suffer financial damages due to the seizure of their property or the interruption of their activity will have the right to be compensated. In its first drafts, the law excludes the payment of compensation to those who are obliged to make a personal benefit.  Therefore, any crisis they declare which can be health, environmental, economic, or financial nature, will be covered as well as an invasion from Mars.

However, this new duty to surrender all property does not stop with individuals. This ALSO applies to companies and legal entities to collaborate with the authorities to overcome whatever crisis they in their sole discretion determine. This introduces yet another new risk to owning any Spanish stocks. The politicians have cleverly found justification for eliminating human rights is contained in article 30 of the Constitution, according to which “Spaniards have the duty and right to defend Spain.”

On top of that, the government can also create mandatory military service which had been suspended in Spain back in 2001. They are referring to the 4th section, according to which, “by law, the duties of citizens may be regulated in cases of serious risk, catastrophe or public calamity .” This constitutional provision has remained until now inactive. The drafting of this legislation was deliberate toexclude it from any “organic law” which is the only one that can affect fundamental rights. The crisis is to be declared by the head of state – not the courts.

The obligation of the media

The new legislation also addresses the media. This draft includes the obligation of the media to collaborate with the competent authorities in the dissemination of information of a preventive or operational nature. In other words, it terminates the freedom of the press. The press will be compelled to put out only the government view.

This is what is coming down for all of Europe.

Spain Bans Combustion Engines by 2040 & All Old Cars by 2050

 

Posted May 14, 2021 by Martin Armstrong

The Spanish parliament has passed an energy transition law to achieve climate neutrality by 2050. “As of today, Spain has a climate law on the basis of which it can resolutely build a green, sustainable, just future with prosperity for all,” said Spain’s Prime Minister Pedro Sánchez on Thursday’s parliamentary vote on Twitter. A central point of the law is a ban on the sale of vehicles with climate-damaging internal combustion engines from 2040.

Worse still, all combustion engine cars will be banned from even driving after2050. By 2023 at the latest, all Spanish cities with more than 50,000 inhabitants must set up zones in which the traffic of particularly climate-damaging vehicles are restricted.

Spain’s greenhouse gas emissions are to be reduced by at least 23% by 2030 compared to 1990 levels. To this end, the share of renewable energies in the country’s total energy supply is to increase to 42% by 2030 and to at least 74% in electricity production. The climate law that has now been passed is intended to ensure that Spain does its part to make the European Union CO2-neutral by 2050. Madrid had already committed itself to the EU in January 2020 with the aim of a 23% greenhouse gas reduction by 2030.

Meanwhile, the entire EU has raised the requirement from a reduction in greenhouse gas emissions of 40% by 2030, to 55%. However, the agreement has yet to be put into effect. For environmentalists, Spain’s new climate law doesn’t go far enough as they are demanding. Greenpeace has criticized this new law as “insufficient” for the fulfillment of the Paris Climate Protection Agreement. The Spanish Environment Minister Teresa Ribera spoke on Twitter of an “indispensable law to build on”. At the same time, she admitted that Spain should have passed such a law “ten years ago”.

Interest Rates and the Great Global Crisis

Posted Jan 22, 2020 by Martin Armstrong

COMMENT: I attended your 2016 WEC and I thought you would be wrong that interest rates would rise and the whole big bang thing. Rates have risen only in the US, the pension crisis is clearly unfolding, and states have been going bust. Now there is the Repo Crisis and I did buy the report. I will return to the WEC this year. I realize that you are able to forecast long-term trends that nobody else can even see.  Here in Australia, my God, it seems like the government has become occupied by Nazis who were also hunting money.

Good on ya!

PD

REPLY: Yes, most people have no idea that Hitler had passed similar laws that made it illegal to have a bank account outside the country. That prompted Switzerland to adopt its secrecy laws. Western governments are doing exactly as Hitler did. Oh yes, he killed a lot of Jews and others. But make no mistake about it, that was not just hatred. It was profitable. Hitler confiscated all their assets and then harvested even the gold in their teeth.

Just scan history and you will see a pattern. Henry VII created the Church of England but confiscated all the assets of the Catholic Church. Constantine the Great adopted Christianity as the major religion and then confiscated the assets of the pagan temples. The only leader who confiscated assets of the Church without pretending he was adopting another religion was Napoleon. The Spanish Inquisition persecuted people, including the Jews and Arabs. but that was also profitable for they confiscated their assets.

The rule of law in England at the time of the American Revolution had 240 felonies. The penalty was death so there too the king confiscated all your assets and threw your family out on the street. Just follow the money. Now they call it criminal to hide money from the government. It is money laundering to put cash in a safe deposit box — read the fine print — it can be confiscated. The criminal law is far too often used for the financial gain of the state.

As everyone knows, I turned out to be an institutional adviser. Consequently, the model that I developed had to be able to forecast the trend of all time levels. It was critical to be able to provide a reliable forecast out for 10 years when truly planning strategy for multinational corporations. That is why we had over $2.5 trillion under contract when the US national debt was just $6 trillion. We were by far the largest international adviser in the world.

The disparity in the rates between the USA and those in Japan and Europe are all part of the crisis in both liquidity as well as international banking. The vast majority of derivatives out there are interest rate related. Europe has a major major major problem. An uptick in interest rates will be devastating in so many ways. It will not only cause major losses for the ECB portfolio of bonds with over $12 trillion in negative-yielding bonds, but then you have the derivatives market.

On top of that, to make derivatives safer, after 2007 that insisted that they all had to go through a  central counter-party clearing house (CCP)  agent. As you can see, the 2018 annual report showed that Deutsche Bank also acts as a CCP to which it guarantees another 21.6 trillion Euros of exposure.

This experiment with negative interest rates has created a nightmare from which we are desperately afraid to wake up because it could be very real.

Catalonia & the Inevitable Split of Spain

Posted Oct 24, 2019 by Martin Armstrong

QUESTION: Hi Marty,
I was expecting a blog about Catalonia after the trial. So, here I am. Things have escalated lately and we are seeing violence in the streets. People are getting angry with no solution nor proposal from Madrid on the table for years. Spain will never allow Catalonia to get independence, a referendum nor anything basically. They will do everything they can to avoid it. We did see that so many times already, working very closely with the law. It seems to me that independence has never been so close though. I am expecting PSOE together with PP to rule after 10N. They will make bad decisions again and I see that after that we might see the last part of the journey to finally get independence. I am not sure how this could/will be done. Spanish will jail everyone, beat everyone and call us nazis, violent, not using the law properly, supremacists etc. EU will not support it again. This time though I have the feeling we will make it. What does you/Socrates see here? How can independence be achieved in these circumstances? Spain has the law (theirs) and the power to stopped, but this has gone too far, we really need to do it. Our future and our children’s future are at high risk sticking within Spain.
Thanks for all your work.
M
ANSWER: It was the marriage of Ferdinand and Isabella in 1469 which united both crowns and set the stage for the creation of the Kingdom of Spain, at the dawn of the modern era. From a cyclical perspective, Spain will probably split by 2029. The separatist movement for Catalonia remains in play. It is only a question of time. The economic pressure will be to surge in 2021/2022 and that will most likely result in the final separation by 2029 with the potential to come a little early by 2025.

The Spanish government will complete collapse in 2021

Germany Arrests Former Head of Catalonia for Spain Confirm the Spanish Constitution Violates Human Rights

Posted Mar 27, 2018 by Martin Armstrong

One day soon, the world will suddenly discover that the European project is authoritarian because they believe the people as stupid and politicians know better. When that day dawns, the crisis in Europe will erupt in total shock and this will undermine the entire economy which has rapidly fallen to even behind China. At the core of this true European Crisis is the fact that individual human rights come behind the rights of politicians. Make no mistake about it, politicians in the West secretly admire China where some view the model for democracy in the West as crumbling before their eyes.

Germany has arrested the former Catalan Prime Minister Carles Puigdemont enforcing Spain’s dictatorship and anti-Democratic government to save the EU. Spain is by NO MEANS a democratic nation and evidence of that statement is the Spanish Constitution. It exempts all politicians and Judges holding them above the law and denies the right of the people to even disagree with the government. Puigdemont was arrested on the German-Danish border traveling from Finland to Belgium. The state police office in Kiel announced that Puigdemont had been arrested and the charge is advocating a democratic vote in Catalonia to separate from Spain. This is the most outrageous legal persecution that has taken place since the Communist Revolution in Russia who imprisoned or killed anyone who opposed them.

Puigdemont proclaimed Catalonia’s independence from Spain in October, that Madrid says violating the constitution. Their interpretation of their Constitution is permanent slavery no different from the positions of France and Britain that justified the French and American Revolutions. Then the Spanis judiciary began investigations into rebellion and charged Puigdemont and other leading separatists who were forced to then flee to Belgium into exile. Clearly, anyone one charges with a political crime MUST leave Europe for the governments will conspire to save the EU.

Puigdemont went to Finland to attend a conference and Spain submitted an application for the arrest of the deposed regional president. Finland then agreed to arrest Puigdemont so he fled to return to Belgium. Germany intercepted him and arrested him and he now faces 25 years in prison where he will certainly die. Spain’s Supreme Court opened criminal proceedings against Puigdemont and other regional politicians. Imprisoning people for their political ideas has been the hallmark of tyranny. It is a sad day to watch the ruthless behavior of the Spanish government and its Judiciary is a disgrace to the nation and the Spanish people.

The entire problem underlying this crisis exposes the Spanish Constitution that NEVER truly provided a democratic nation for it did not provide a workable transition from dictatorship to democracy. This Spanish Constitution is a contradictory document that denies any democratic resolution or process and maintains the Franco Dictatorship. In Spain, all members of parliament, including those in regional parliaments, enjoy immunity, judges cannot be dismissed. The Constitution defines political parties as “the main instrument of political participation” (Article 6), giving them a role that goes far beyond the process of public opinion-making, as understood in most democracies.

In Spain, the self-interest of government prevails over the rights of the individual. This is the plain reading of Article 155 (see below). The Franco regime organized the Society around its National Movement and the vertical, professional syndicates. Therefore, it was not even the people as a whole that was considered to be the nation but the party. Following the dictator’s death, Spain did open up to political and trade union pluralism, but there was no real redefining revision of Franco’s means of dictatorship. The citizens do not vote for deputies, but closed lists of a party whose candidates move into Parliament depending on the number of votes. MPs do not have offices in their constituencies.

There is no actual representative form of government when you look closely at the structure. There is no actual accountability for the political party itself and they are isolated from the public opinion and their own base. This is why political corruption runs ramped in Spain – there is no actual direct representation or accountability. The Spanish section of Transparency International called on the parties to abolish the closed lists and publish their campaign budgets no later than three months after the election back in 2014. Nothing has been done.

The entire Spanish Constitution contradicts the European Convention on Human Rights (ECHR) is an international treaty to protect human rights and fundamental freedoms in Europe. Article 10 of the ECHR provides the right to freedom of expression and information, subject to certain restrictions that are “in accordance with law” and “necessary in a democratic society”. This right includes the freedom to hold opinions and to receive and impart information and ideas. However, the Spanish Constitution outright contradicts Article 10 by its Article 155. Clearly, the Spanish Constitution was no more than a compromise between democracy and Francoism. Above all, the fathers of the Spanish Constitution wanted to prevent a civil war by retaining an authoritative clause that allowed dictatorial action. The new constitution was therefore settled between an authoritarian, national Catholic leader system and a democracy and has never actually placed individual liberties in a role of importance violating the very idea of human rights.

The Spanish government will undoubtedly fall. It will be 43 years and ripe for its complete collapse in 2021. The arrest of Puigdemont proves beyond a shadow of a doubt that the Spanish Constitution denies freedom of expression and human rights. Puigdemont did not engage in violence and thus is simply a political prisoner and Germany is endorsing the dictatorship of Spain.

No one in the EU leadership stand for public election either. No wonder they too support Spain.

---

The Spanish Constitution

PREAMBLE

The Spanish Nation, wishing to establish justice, liberty and security, and to promote the welfare of all who make part of it, in use of her sovereignty, proclaims its will to:

Guarantee democratic life within the Constitution and the laws according to a just economic and social order.

Consolidate a State ensuring the rule of law as an expression of the will of the people.

Protect all Spaniards and all the peoples of Spain in the exercise of human rights, their cultures and traditions, languages and institutions.

Promote the progress of culture and the economy to ensure a dignified quality of life for all

Establish an advanced democratic society, and

Collaborate in the strengthening of peaceful and efficient cooperation among all the peoples of the Earth.

Consequently, the Cortes approve and the Spanish people ratify the . . . Constitution.

ARTICLE 155

1. If a Self-governing Community [e.g., Catalonia] does not fulfil the obligations imposed upon it by the Constitution or other laws, or acts in a way that is seriously prejudicial to the general interest of Spain, the Government, after having lodged a complaint with the President of [that] Self-governing Community and failed to receive satisfactory response, may, following approval granted by the overall majority of the Senate, take all measures necessary to compel the Community to meet said obligations, or to protect the abovementioned general interest.
   –
2. With a view to implementing the measures provided for in the foregoing paragraph, the Government may issue instructions to all the authorities of the Self-governing Communities.

Catalonia - we should see the separation is by 2022.

Catalonia to Separate from Spain?

Posted May 26, 2017 by Martin Armstrong

QUESTION: Mr. Armstrong, when you were here in Barcelona, you said that Catalonia would vote to separate from Spain. Most thought you would be wrong. I myself confess I was not sure you would be right. Well you were right, or your amazing computer was correct, and the fever to separate only grows bolder. Do you still see this and the ultimate end of the EU?

ANSWER: Yes, but this is a process that is slow. The speed will being to pick up next year and it appears to be increasing in velocity between 2018 and 2022. El Pais ran a story: “Catalonia to immediately declare independence if no referendum held” with the leaked excerpts from what appears to be the Catalonian regional government’s road map to independence. The secret document included a plan where the region would unilaterally break away from Spain if Madrid tried to prevent its citizens from holding a referendum on independence in the fall. The proposed question is straight forward:

“Do you want Catalonia to be a state that is independent from Spain?”

I reported back in 2015 that Barcelona was preparing to issue its own electronic currency. Since then, the city is still moving forward with a plan to introduce its own currency, despite warnings from Spain’s central bank. The new so-called “social currency” would be used to buy local goods and services at a discount while having a one to one parity with the euro. This is plan B in order to set up for separation. Catalonia is the richest region in Spain and is supporting the rest of the country. So it is very much like Margaret Thatcher once warned, that Socialism works until you run out of other people’s money. That is exactly what is taking place in Spain. They have been bleeding Catalonia dry.

The real question is what will Spain do? Spain is the Eurozone’s fourth largest economy. It is distinctly on the verge of breaking up. Spain and the EU seem intent upon not letting that happen. If there is any attempt by force from Madrid under the pretense of a police action, then the gloves will come off.

Madrid will take drastic actions, including that will most likely first attempt to invoke article 155 of the constitution, which will effectively put an end to all forms of Catalan self governance. Will the people tolerate that? This will not merely strengthen the resolve of Catalan separatists, it could very well lead to a civil war erupting between 2018 into 2020, but the latest we should see the separation is by 2022.

The previous Spanish Civil War took place between 1936 and 1939 lasting about 3 years. It broke out when the Spanish army in Morocco led by General Francisco Franco, rose up against the democratically elected Republican government, presided over by Manuel Azaña. Typically, there will be a divergence and split within the military. That is how these things erupt. We may see this in the USA also around 2022, which may be a contagion at that time. The potential for the collapse of the EU looms on the horizon for 2022.

Separatist Movement in Spain

Posted on May 28, 2015 by Martin Armstrong

The formation of Spain dates back to the marriage of the Catholic Monarchs Queen Isabella I of Castile and King Ferdinand II of Aragon (Catalan). They were both from the House of Trastámara and were second cousins, being both descended from John I of Castile. They married on October 19th, 1469 (1469.8), in the city of Valladolid. It was this marriage that united both kingdoms under the same crown and thus creating the modern state of Spain.

Today, there has been a rise in separatist movement in Spain to redivide the nation that was once formed by this marriage for political power. The Catalan Independence Movement or the Catalan Separatist Movement is a political movement, derived from Catalan nationalism, which supports the independence of Catalonia or the Catalan countries from Spain and France. This region was a coastal territory of the Crown of Aragon, However, the Crown of Aragon lost distinctive rules, institutions and laws at the end of the War of Spanish Succession in 1714, when Philip V (1683 – 1746) of Spain issued the Nueva Planta decrees, a centralized Spanish rule by sheer political force. Catalan lost its identity from a legal perspective at that moment.

There is little doubt that the roots of independence in Catalonia runs deep for there is not merely a different culture, but also a different language which separates the people from the rest of Spain.  The first serious struggle for Catalan independence began to materialize after 19 intervals of the 8.6 year cycles dating back to 1640, there was the first unsuccessful Catalan Republic following the Reaper’s War. During the subsequent War of the Spanish Succession (1701–1714) the Catalans had hoped to salvage their institutions of home rule, despite the centralizing Bourbon pretender to the throne, rather than achieving outright independence.

In 1898, Spain lost its’ last major overseas colonies (Cuba, Guam, Puerto Rico, and the Philippines) in the Spanish–American War. This event actually began a rapid collapse of the economy and confidence evaporated. This was generally perceived as a disaster in Spain, undermining the credibility of both the government and its associated ideologies and almost leading to a military coup d’état led by Camilo Polavieja. It was the Spanish-American War that began the economic decline in Spain and from this event there began a rising tide of civil unrest.

The Spanish government attempted to reestablish its importance and sought to conquer Morocco (Melilla War) which failed. There was tremendous civil unrest caused great discontent at home which ended in a revolt in Barcelona, known as the Semana Tragica (July 25th – 2 August 2nd, 1909). This Catalonia revolt of the lower classes of Barcelona, backed by the anarchists, communists, and republicans, rose up against what they considered the unjust methods for recruiting soldiers. The government declared a state of war and sent the army to crush the revolt and the people in Barcelona, causing over a hundred deaths and the execution of Francisco Ferrer. The people tried to organize a national strike against the government, but this failed because the unions could only mobilize urban workers.

Eventually, the Spanish army was defeated by the natives of Morocco on July 22nd, 1921. The military discontent began to rise following this defeat. There was also a rising fear of a proletarian revolution, and a rising nationalist movement creating great civil unrest. Then on September 13th, 1923, Miguel Primo de Rivera (ruled 1923-1930), Captain General of Catalonia, orchestrated a coup d’état, after issuing a manifesto blaming the problems of Spain on the parliamentary system. He deeply believed that it was the politicians who had ruined Spain and that governing without them he could restore the nation.

Alfonso XIII backed the General and named him Prime Minister. Primo de Rivera and then proceeded to suspend the Constitution and assume absolute powers as a dictator abolishing all other political parties. During this time, he greatly increased government spending on business and public services, which caused his government to go bankrupt. He lost the support of the military and faced serious health problems. Opposition to his regime was so great that Alfonso XIII stopped supporting him and forced him to resign in January 1930

In 1928 exiled Catalans in Cuba from the coup d’état of 1923, drafted a Provisional Constitution of the Catalan Republic. It would come to a head with the 1931 Sovereign Debt Crisis. It was at this time when we begin to see the formation of the first political parties to define themselves as pro-independence for Catalonia. Then it was during the First World War when Catalan Volunteers bore the pro-independence flag when they fought on the Allies’ side. The same ensign headed a text addressed to president Wilson late in 1918, calling upon him to review the Treaty of Utrecht. They wanted the United States to support the repeal of the treaty that allowed Spain to abolish Catalonia’s home rule inside a centralized unitary State.

The beginnings of separatism can be traced back to 1931 and the Sovereign Debt Crisis that moved a coalition of Catalan nationalist parties to form and was the most voted force in Catalonia in the Spanish municipal elections that triggered the proclamation of the Second Spanish Republic. With the fall of the monarchy in 1931, by 1932 Catalonia was granted a statute of autonomy and home rule institutions, which lasted until the Spanish Civil War which began in July 1936 and officially ended with Franco’s victory in April 1939 and his subsequent dictatorship.

The Spanish Civil War, was a civil war fought from 1936 to 1939 between the Republicans, who were loyal to the democratic Spanish Republic, and the Nationalists, a rebel group led by General Francisco Franco (1892 – 1975). The Nationalists won, and Franco ruled Spain for the next 36 years, from 1939 until his death in 1975.

The Franco dictatorship was based its public ideology on Spanish Nationalism and Catholicism, abolished home rule and discouraged regional cultures. Following Franco’s death in 1975 and the Spanish transition to democracy, Catalan autonomy was restored in 1977.

Catalan Nationalists have governed the region most of the time since then, and those calling for full independence have had their parliamentary group since 1980. Nevertheless, there has been a significant shift since the 2011.45 turn in the Economic Confidence Model. Open demonstrations began on September 11, 2012 and September 11, 2013 there were massive demonstrations with more than 1 million participants calling for independence for Catalonia.

Catalonia is committed to a referendum on independence, and 55% of it is composed of openly separatist parties. The Estelada flag, in its blue and red versions, has become its main symbol.

 Spain itself has followed the Economic Confidence Model rather nicely. The whole independence movement was set off by the Sovereign Debt Crisis of 1931. The discontent rose sharply and this ultimately led to the Spanish Civil War starting in 1936.

The the beginning of the economic problem in late 1929 followed by the Sovereign Debt Crisis in 1931, the movement toward civil unrest and the independent movement of Catalonia followed the 8.6 year frequency as well. This 51.6 year wave reached its peak in 1977 and that is when we find following Franco’s death in 1975, that there was not just a Spanish transition toward democracy, but it was precisely on time for Catalan autonomy was then restored in 1977.

We can see that the subsequent 8.6 year waves are:

 1985.8, 1994.4, 2003, 2011.6, 2020.2, 2028.8 and 2037.4

It was from the 2011 turning point that there was a rising tide of independence movement with Catalonia to separate from Spain. One can easily see the cultural difference between Barcelona and Madrid. Barcelona is perhaps the cleanest city in Europe with wide streets and a vibrant culture that is distinctly different. It appears that we should expect the rising separatist movement to continue with the turn in the ECM 2015.75 for this will be 4.3 years from 2011.6 moving into a high for 2020.

History of Gold

Will Gold Still Go to $5000?

Posted on September 2, 2014 by Martin Armstrong

Reply

Yes – to answer a lot of questions. We still see the future rally in gold reaching the $5,000 level. Keep in mind this requires an asset rally. Those who tout the German Hyperinflation omit the fact that ALL tangible assets rose not only gold and the replacement currency people accepted was backed by real estate not gold. So the rally in gold will be part of an asset rally – not gold by itself, which has never taken place even once in history.
The current special report on the metals provides the targets and the timing for the high in gold and silver with the projections in price and time for the low prior to the rally. As for those who insist gold in money, let me make this point very clear. Money is ONLY a medium of exchange it has NEVER been a store of value for money has NEVER retained a specific buying power from one day to the next EVER! I understand people hate me for saying this for they just have to cling to their myths and theories to justify their losses. Some people cannot admit they are wrong and those are typically the people who cannot trade and why most people who try to trade lose money.



This argument that gold is money has been around since the late 19th century. It was the battle between the Silver Democrats and the Conservatives. The governments starting with Germany dropped silver as money. The USA followed and the silver promoters called it the Crime of 1873. This was a return to a gold standard only. It was then argued that a gold standard created deflation so they wanted to create inflation like Europe right now to pump-up the economy. This was instigated by the silver miners (promoters) who needed government to buy their production. This led to the flood of silver dollars that drove gold out of circulation. This became Gresham’s Law – bad money drives out good. This was the result of the silver miners promoting that silver should be raised in value relative to gold. The US foolishly then tried to force the rest of the world to adopt their silver/gold ratio. But instead, the silver poured into the USA and the Europeans took home gold since the Americans were overvaluing silver.



The US was on the verge of bankruptcy in 1896 flooded with silver as the gold migrated to Europe. This Crisis led to the Presidential Election and William Jennings Bryan’s famous speech – thou shalt not crucify mankind on a cross of gold. The Wizard of Oz was written as a political satire portraying the gold standard as oppressive and deflationary. The tin man was industry, the scarecrow was agriculture, and the cowardly lion was Bryan. They were off to see the Wizard who was Congress to complain about the unemployment following the yellow-bricj road symbolizing the gold standard.


So these arguments are very old and the debate between austerity (gold standard) and inflation has never ended, albeit the gold promoters keep up the same stories regardless of the facts. They have turned from silver to paper money assuming that it is now paper money rather than a flood of silver dollars that is the great evil. Silver became rehabilitated after it was freed in the 1960s with the collapse of the silver standard.  After that, the tax on silver imposed in 1934 was abandoned.
This idea of returning to a gold standard is still argued more than 100 years later with nothing new to add to the debate. A return to the gold standard would create deflation and high unemployment for it would introduced austerity. If a gold standard were truly implemented it would shrink the money supply and economic growth would decline as we see in Europe with these same ideas of austerity. Europe is now being forced into massive deflation because of the austerity policies they did not understand.


The problem with gold that turns off the MAJORITY of investors has been these wild stories. They sit well with the die-hard goldbugs, but they fail to convert the masses and thus will not increase the buying power of the advocates. Unfortunately, I can find no such historical support for that idea that gold is either a store of value different from anything else that fluctuates in value or exclusively money when the majority of society disagrees and that is all that counts. The business cycle cannot be defeated – even Paul Volcker admitted that much.


Governments are moving to electronic money and will never return to a gold standard. That is reality. Gold standards have been attempted countess times but have always failed because there is a business cycle that cannot be manipulated.


I have warned that if society implodes too far, we end up with the Mad Max outcome. What is that? It is where the only medium of exchange becomes food – not even gold. It is returning the cycle to its beginning. Money began as food (cattle), moved to sheep skins for clothing, then to bronze that was cast in large ingots the shape of the medium of exchange it was replacing – sheep skins. The four pointed edges were the legs. Neither silver nor gold served as money. They were both luxury items and that has NEVER provided a medium of exchange until the basics are in place. So if we are headed into a Mad Max event, sorry, stockpile food.



Gold ONLY became a medium of exchange when it became common. For thousands of years Gold was restricted for the use of kings. It did not circulate as money. We find kings buried with gold from Philip II of Macedon to the Pharaohs of Egypt. Agamemnon’s gold death mask has survived. Gold was not some inherent form of money from day one. Its value increased only as a function of DEMAND – people liked it. That was all.

 

As gold became more common, it then migrated down to the aristocrats in the form of jewelry. Only with the discovery of gold in Turkey in vast quantities did it finally emerge as a medium of exchange based solely upon agreement by the people who saw it as desirable. That means DEMAND. It was something only kings could afford. The same thing took place with PURPLE dye that was restricted to only Roman Emperors. That is what the term refers to saying someone assumed the PURPLE. In the Catholic Church, the vestments during lent are still PURPLE symbolizing that Christ is King.

During the Middle Ages as trade was resurfacing, the bankers were called “Peppermen” because the spice pepper was MORE valuable than gold by weight. This reflects the entire issue. The medium of exchange depends ENTIRELY upon demand. It it what people find desirable at that moment. An example of this is looking at the fine art of Rubens. The women he painted were always robust – not the model type of today. Why? A skinny woman was a poor woman. If she was rich she had weight to her. In Russia, having decade teeth was a show of wealth for you could afford sugar.

 

This insistence that only gold is money has no foundation in history. They are distorting history to fit a predetermined agenda they do not even understand. This idea that is money is tangible then there will be no inflation is without any support in history whatsoever. Spain was the richest country in Europe after bringing back all the gold that created massive inflation throughout Europe. Like Bretton Woods, it did not prevent the collapse of Spain, which thanks to becoming a serial defaulter successfully converted itself from the richest nation to the third world pauper status. Spain became a serial defaulter on its government debt starting in 1557 followed by 1570, 1575, 1596, 1607, and 1647 ending in a 3rd world status. By the end, nobody would lend them anything. They destroyed the Italian banks and then wiped out all the German bankers. Only a fool buys government debt.

Gold did not save Spain nor did the gold standard postwar world with Bretton Woods! Why? BECAUSE IT DOES NOT MATTER WHAT THE MONEY IS – THE PROBLEM IS FISCAL MISMANAGEMENT OF GOVERNMENT.  Returning to a gold standard will NOT make politicians honest. Sorry – we need real reform for that one and that does NOT center upon what we use as money.

This should be about making money – not supporting a predetermined idea because that is what someone would like to see happen. No matter what evidence is presented, there are those who will refuse to believe anything other than what they want to believe. That is life. They have to learn the hard way.