Posted Aug 5, 2012 by Martin Armstrong
A lot of people are fixed on what is money and presume somehow that a return to precious metals will solve the problem. Precious metals are for personal use. They have never prevented any society from systemic economic collapse. Do not confuse hoarding gold to preserve wealth with a gold standard. We had one with Bretton Woods. Governments printed and never adjusted the conversion ratio because then they have to admit what they have done. The problem is not WHAT is money, the problem is regardless what money might be, politicians always spend more than what they have. The only practical solution is to eliminate the ability to borrow. Debt had destroyed every empire, state, and city since the dawn of time. Hammurabi’s Legal Code created legal limits on interest so borrowing was a problem from the dawn of civilization.
The only solution to be realistic must address the outstanding debt while eliminating the capacity to borrow. Changing to a gold standard means the outstanding debt would be due then in gold. The bankers will love that. If we default, there goes all pension funds and we will be looking at massive civil unrest.
We have to be practical. If we are just going to follow dogma, you better dig a hole and don’t come out until the mushroom cloud subsides. This is real shit we are talking about! This is not idealized theory. Each and every act will have an equal and opposite reaction.
I have stated many times that unemployment hit 25% during the Great Depression because of the Dust Bowl and 40% of the civil work force was employed in agriculture. We are at a similar risk today, but the 40% is in government producing nothing toward the national wealth and are public servants because we pay them to produce nothing.
It is the implosion of state and local government, their inability to print into oblivion, that is the check against HYPERINFLATION as they raise taxes and try desperately to hold on to their chiefdoms.
Gold is for personal survival. Switching to gold does not address the debt, 40% employment in government, the pensions, and our long-term survival. Look at Greece as government workers riot against austerity. A gold standard now would create civil war. So gold may help you survive personally as the economy switches to underground, but it will not address the decades of abuse suffered under Marxism. Government is incapable of ever managing the economy. That is why communism collapsed. It is now Socialism’s turn (just being a little be pregnant with Marxism).