Summary
➡ This text talks about how the value of credit and money can change. When there’s not enough credit, the cost of borrowing money goes up. This can lead to businesses failing if they can’t afford to borrow money. The text also talks about how banks can lend out more money than they actually have, using gold as a guarantee. This can lead to a cycle of boom and bust, where businesses fail because they can’t pay back their loans. The text also discusses how the value of money can be manipulated, like when Ancient Rome reduced the amount of silver in their coins. Finally, the text talks about how the amount of money in circulation can affect trade and the economy. If there’s not enough money available, prices can fall and trade can slow down.
➡ This text talks about the importance of not stealing in any form, including dishonest financial practices like inflating currency or not paying back debt. It suggests that a society can only prosper when it stops these forms of theft. The author also criticizes the current financial system, suggesting that we need to think outside of it and stop relying on debt. He believes that a slow, deliberate, and wise economic growth is the best way forward.
Transcript
But I do know that a rocket from somewhere came and hid about 100 meters away from my house. So here is that video. Okay, so here’s what happened. We have apartments over here, apartments over here. We have what was a fence. But there’s no fence. There’s a hole. If we turn it around, we see that over here. If I zoom in, there is a piece of fence on that roof.
And it hit over there and broke that roof one block away. And now there’s people pairing this house well, there you go. All right, move on. Nothing to see here. Please disperse. Nothing to see here. Please. And speaking of huge craters, this video is brought to you by dirty man safe, which I believe is one of the safest ways to store your gold and silver, whatever else you want to bury down underneath the ground and not be part of the system.
Obviously, the dirty man safe is not good if you’re being bombed by Hezbollah or Iran, because if they hit your backyard, wherever you have your gold and silver buried, it will probably be destroyed or strewn all over your neighbor’s yard, which is not the best way to keep your gold and silver. But assuming you’re not being bombed, then I believe the dirty man safe is a great way to store your valuables.
You can click on the link in the description below and that will lead you to a landing page which will give you ten free coin holders that hold ten coins each, where you can store your gold and silver inside plastic sheaths inside the dirty man safe. And please use the coupon code. Endgame ten at checkout for 10% off your dirty man safe. And remember, the easiest way for the government to steal your gold and silver during the end game is through ETF’s or through centralized holdings of gold and silver.
It will be very difficult for them to go house to house and dig up into people’s property to search for a few coins on retail levels that I don’t think is plausible, they will take the ETF’s. They’re not going to go into your backyard and dig up your property. And so while I do not recommend storing all of your gold and silver with dirty man safe, I do believe that some portion of your stacks of should go underground somewhere where you know where they are and nobody else does.
And what does this have to do with finance? Well, something happened at around 04:35 a. m. When Iran started sending its missiles over to Israel, supposedly. And that was this. Yes, it is true that markets are closed, including futures markets, at Sunday morning at 04:30 a. m. Israel time. But the blockchain markets, where people trade tokens of either nothing or something, they’re still open. They’re open all the time, which I believe contributes to the collective insanity of humanity.
Cause they never have any break, not even for a minute, from trading nice and gentle. We don’t want any unnecessary stress. But anyway, what happened here is this. In the blue, we have a blockchain token that is actually supposedly backed by gold bullion stored by brinks. I don’t want to get into whether it actually is or isn’t, but let’s assume that it is. And the blue line around when Iran started to send its missiles over to Israel.
And there was a thought that maybe world war three was starting. So you had this going on, right. The blue line is gold, basically trading higher to the equivalent of $3,000 per ounce. That’s where this peak is when the missiles started to fall, I believe. And at the same time, you had bitcoin plunging by about 10%. Now, this doesn’t prove anything. It could very well be that when things really start to get hairy, you’re talking about shit hits the fan.
You’re talking about in game stuff that really everyone will just pile into bitcoin, which is a safe, a series of locked safes that when you open them up, you get nothing. And they might pile into bitcoin, because I don’t know why. As opposed to piling into something tangible and real, uh, like gold. That could happen. I don’t know. Maybe. Are you sponsored by Pepsi or something? What? Maybe.
But anyway, we have a real life example of what happens when there is a panic of a possible endgame. Gold goes up, bitcoin goes down, each at the expense of the other. And that’s how it will work. Almost certainly. Could I be wrong? Yeah, maybe bitcoin is the savior of humanity. I just don’t think that’s true. But anyway, a subscriber asked me to respond to a column by Charles Hughesmith, who is usually pretty good on his commentary, on his economics commentary.
I’m familiar with his blog. It was featured on zero Hedge. But he wrote this article. It does show that even people on our side, at least philosophically, on some issues, they just don’t get the basics. They try to complicate things. They try to sound social engineering ish. Generally speaking, academic language is a good place to hide a bunch of bullshit, which we see in the fake academia of especially science and pharmaceuticals these days.
You say things in very sophisticated language and you can pretty much whatever you want because he sounds smart and people just say, oh, whatever, he sounds smart. So he must be right. Or at least he must be thinking deeply about things, when you could be thinking absolutely not deeply at all, or incredibly shallowly, as long as you use complicated sounding concepts that don’t really mean anything. I’m not saying that’s what Charles Hughesmith did here, but he got pretty close to it.
So let’s go through it. The first two sentences set the framework of this article, and the entire thing is problematic. He says we need to start thinking outside the current system, which has no solutions. Our convictions about money are quasi religious heretics are burned at the stake. I’m not sure which stake I’ll be tied to, because all the conventional choices, fiat currencies, sound money, gold or bitcoin in parentheses, and that’s problem itself or debt free currency, aka MMT, are all fatally flawed.
Okay, so this sets the tone of the entire article as trying to come from a top down perspective and create some kind of committee that will decide what system we have to go to. Uh, we need a group of people that will decide what the problems are and what the solutions are. Except that’s not how money came into existence. Money came into existence organically through trade. People traded one thing for another thing, and then people held onto the most liquid thing because the most liquid gets you closer to what you need in the end.
And hence, money arose from organic trade from the bottom up. So there is no committee based top down solution. A group of people trying to solve a problem. The solution is you just allow people to trade in whatever they want to trade in, and then the best money wins. If it’s bitcoin, it’ll be bitcoin. It won’t be bitcoin, but you should allow people to trade in bitcoin if they want.
Allow people to trade in gold, allow people to trade in debt currency, allow people to trade in today’s fiat currency, allow people to trade in whatever they want, and the best money wins. That’s the solution. Just liberty, freedom. No committees, no top down solutions. But you’ll see, as this article progresses, that the entire thing is trying to have its cake and eat it too, in the sense that the problem with the monetary system is that people steal.
And what he wants is a system that allows theft and allows us to escape the consequences of theft. There is no escape from the consequences of theft. All debts must be paid, and you’ll see this throughout the article. In an economy in which gold is the only money or silver, credit is limited to a percentage of gold held in reserves as much as the reserves must be held to fund customer redemptions withdrawals.
This limits the availability of credit. So you’re setting up a problem that doesn’t really exist, that people want more credit, and therefore there’s only a limited amount of credit, and so not everyone can get credit, and there’s a shortage. Well, that’s not true, because prices adjust to supply and demand. If there is not enough of something, the price goes up for it, and then it is apportioned to the people who are willing to pay that market price until supply and demand meet at the market price and the market clears.
If you have not enough tomatoes, the price of tomatoes goes up until the supply of tomatoes and the demand for tomatoes equals out and the market clears. It’s the same thing with credit. There’s no such thing as not enough credit. If there’s not enough credit, the price of credit grows up, which means interest rates go up, which means credit is supplied to those who are willing to pay for it and risk the most for it, because they know they need it.
And the demand for their product or whatever they’re using the credit for will be met, whereas more speculative industries or more speculative ventures will not be funded because they cannot afford the high price of credit when interest rates go up, when the credit is of short supply, very simple, supply and demand markets clear. That’s all you need to say. Here’s another paragraph. In a fractional Reserve bank system such as ours, 1oz of gold held in reserve is sufficient collateral for a loan.
Ten times the value of the reserve. 2300 in gold enables the issuance of $23,000 new money. That is a loan of $23,000, as every loan is new money created by the act of issuance. He’s saying fractional reserve here. Oh, here’s a solution. You can just loan out credit based on a fraction of gold that you have, but if you loan out all that credit, there’s a lot of it that will not be paid back because there’s not enough money to pay it back.
And a lot of those industries, or whatever those ventures are going to fail, and you’re going to create busts. That’s how you start with the boom and bust cycle. You create credit that is not backed by anything, and it makes the impression that the supply of gold or the supply of capital is higher than it is. And most of those industries end up failing. What we’re doing now, why they haven’t failed yet, is because we created the most massive credit bubble, where almost all of the industries that are in operation right now are supported by credit for money that doesn’t exist, and therefore they will all go bust.
Doesn’t mean the capital, the physical capital that they have will go out of existence, but it does mean that the ventures will fail, and they will have to be sold very, very cheaply to those who have real money, which is gold. Which goes back to the thesis of why we stack gold and silver in the first place, because all the capital that has been created on false credit will fall in value relative to real money, and they will all be bought up by holders of real money, gold and silver stackers, et cetera.
Here’s the next paragraph where he makes a huge mistake here. Ancient Rome offers an example of a system which only gold, silver were money. When the empire’s silver mines in Spain were depleted, the supply of new money dried up. And scarcity forced authorities to shave the actual silver content of coinage. Well, there’s a huge problem with that, right? Scarcity of money forced authorities to shave the actual silver content of coinage.
No, it didn’t force anyone to do anything. Shaving the actual silver content of coinage is stealing. Stealing from the public who uses that money, right? That’s inflation. It’s coin clipping. It’s the same thing. Nothing forces the state to steal from the money. It doesn’t force them to engage in a policy of inflation where you create more money units with less actual money material in them. What happens when you have a shortage of money is prices go down by themselves to clear the damn market.
Again, price of gold goes up. Therefore, the prices of things denominated in gold and silver go down, the market clears. There’s no reason to steal. And here is another big mistake. In other words, trade imbalances drain importers of their gold and silver. Yes, that’s the point. Meaning, for example, if I’m a person and I have money in my bank account, in dollar terms, and I spend that money down, and I spend a lot of money on a car, luxuries, persian rugs, I don’t know, things are just coming into my head.
And then I have a low balance in my bank account. I can’t really import stuff into my house anymore because I’m out of money. So what I have to do is I might have to export stuff and sell things to get more money or I have to stop importing, I have to stop spending. That is a natural balancing act. It keeps my budget balanced just like it keeps a state’s budget balance.
When gold flows out of a treasury, they have to stop spending. But here he says President Nixon didn’t end the era the convertible of the US dollar on a whim due to rising us trade deficits. America’s gold would have been drained to zero in a few years. Yes, that’s the a point that would have shown that America was spending too much money and they would have to spend less in order to restock their gold supplies, their money supplies their bank account, basically.
But what Nixon decided to do was say he’s not going to pay his debts anymore. That is not what he wasn’t forced to do that just like Rome wasn’t forced to clip coins. He’s coming from the perspective that, oh, when a state runs out of money, they’re forced to go into inflation. Well they could just cut spending, can’t they? Well no they can’t according to him, because I don’t know why he doesn’t even give that as a possibility.
And here he again neglects the concept of a market clearing. What is often overlooked in discussions of money is the necessity for reserve currencies to be exported to the global economy at scale. So there’s enough units, enough units, quote unquote floating around to fund commerce and credit. There’s no such thing as enough units of money. It doesn’t matter how many units of money there are. And there’s no special status for a reserve currency that they need enough units floating around.
Prices adjust to the amount of units of money that are floating around in whatever economic system it is. This is why prices float. And they change all the time depending on the number of units of money and the number of units of other stuff and the relationship between them. You don’t need to embark on a policy of theft in order to equate the amount of units of money to a necessary level.
There is no necessary level. And inflating the units just so you can pretend that you’re reaching as necessary level is, is taking from other people unjustly. It is theft if there is insufficient currency available in the global system. The currency cannot function as a reserve currency due to its scarcity. As the global economy increased in size, the sums of us dollars acquired also increased. No they didn’t. Prices go down.
If the supply of currency doesn’t increase in size, prices fall, requiring permanent trade deficits as the means to export the currency into the global financial. What the hell is he talking about? What, what is he saying here? He’s saying that there’s this ideal number of currency units that you need, need external to your home country in order to support the function of a reserve currency. So, well, what is that number? How do you know what that number is? It’s like some kind of voodoo magic that the Fed is going to calculate on the real rate of interest, the bar star or whatever they call it, I don’t know.
And they have these formulas for how they calculate it, but there’s no meaning to what an ideal ratio of a currency is. It doesn’t matter what the hell the number is, it just matters what the interest rate is depending on the amount of currency available, which should be based on the amount of money available and the amount of stuff available, and interest rates float based on the supply and demand.
What else do you need to say? Here we, here we have another paragraph that’s just really bad. Many feel that the getting rid of the USD’s reserve status would be a plus. What does that even mean, getting rid of the reserve? The USD’s reserve status? Is that even like a thing that a committee decides? Well, when other countries decide to stop courting dollars because they’re worthless, the USC’s reserve status will end.
It’s not like something made, like a decision made in a committee or something. Anyway, it continues. But those mercantilist nations exporting to the US would disagree, as once trade dries up, their gravy train ends. How is it their gravy train? The mercantilist nations exporting to the US. So wait, hold on. You have these nations exporting stuff to the US, like real stuff that you can use, computers, chinese crap, whatever it is, they’re exporting stuff to the US that the US can use, citizens of the US can use and make their lives easier, easier, better and more rich, and instead they get dollars in exchange, like stuff that they can like stack up in their basements of their central bank, all these papers and, and that’s their gravy train.
Like, what are they talk, what is he talking about? How is stacking a bunch of papers in a basement a gravy train? The gravy train is the US itself which gets all the stuff in exchange for printing units of nothing. Well, not really units of nothing, it’s just more and more diluted units of gold. But you know, that’s another question. But anyway, this sense is even worse. Also unset is the reality that many nations must import food and energy, and their trade deficits are thus unavoidable.
That’s the equivalent of saying, well, once you’re a bum, you have to always spend more money than you make because you can never balance your budget. If you’re a loser, deadbeat bum, you got to keep trade deficits and losing money because, well, you got to eat or you’re going to die. Well, maybe you should stop being a loser, deadbeat bum, how about that? And actually produce something so that you deserve the food and energy that you import or buy from somebody else or some other country.
What’s the difference between talking about two individuals in two countries? It’s the same thing. Interestingly, he says here, convertibility to gold didn’t restrain the ravages of inflation. Look at the chart of the USD’s purchasing power since 1900 and note the value dropped from twenty five dollars to five dollars during the period that the USD was convertible to gold. Well, that’s why they had to stop the convertibility to gold, because we’re still inflating the paper over the gold supply, which was why the gold convertibility eventually broke.
But you can’t dispute the fact that if you just held the gold instead of the dollar, your purchasing power would go up and up and up and up over time. And now I’ll just go into his final paragraph here. We need to start thinking outside the current system, which has no solutions. Debt free money leads to billion dollar bills. Sound money, gold or bitcoin, doesn’t matter. Ends up in the hands of the wealthy and borrowing money into existence leads to stagnation as soaring interest sucks the economy dry.
Look, dude, here’s the solution. And it’s not a solution that can be sustained except by a moral society and morals inevitably decay. God can come down from Sinai and give you a Torah and give you a law, and you can break it. He’s not going to stop you. Right? You can’t be in a utopia where everyone acts perfectly. But we know what we have to do. There is one solution to this problem.
It is stop stealing. There are many ways to steal. You can just take somebody’s stuff you can borrow and then not pay back, or you can print their currency units and lie about how much money you actually have. All of it is theft. The best way for society to continue and to prosper is to not steal. That’s the only thing you have to do. You can’t have your cake and eat it too.
You can’t not deal with the consequences of stealing after you have done so. Because once you steal, there is less stuff in the economy and more money units. Because whatever you stole, you consumed, whether you’re printing money or not printing money. And so those consequences have to be borne. But once they are, you have to go back to a society where a stealing theft is illegal, whether it be by open theft, or by going into debt and not paying it back, or by inflating clipping coins, whatever it is, whatever method you want to use.
Once your society stops stealing, you can live a much more balanced life, individually, collectively, societally, on all levels. How do you know when you got too much credit in an economy? When you start getting industries that are stupid and immoral and ridiculous, like for example onlyfans. com or what my friend Phil likes to say as his example of hotdaughter. com dot, you think your daughter’s hot? You try to auction off or sell pictures of her online.
I mean, I could see this actually happening or other stupid industries. Ridiculous. There are thousands of them. In an economy where there is credit is market based, just like everything should be, then you have only the most appropriate industries getting credit. You will still have defaults, you will still have failures. I’m not saying there won’t be any failure in a monetary system that is honest, you will, but it will be minimized because it will be very risky to take loans at rates of interest in real money.
And the result is that the economies grow very slowly and deliberately and after much thought and wisely. This is Rafi, the endgame investor. Please subscribe to the endgame investor at Substack link in the description below. You can subscribe there for free and get some of my free content. You can become a paid subscriber and where I’ll help you guide you through the endgame as we approach. I think there’s just a few months left and I’ll do my best to help you through the emotional ups and downs of what is going to be pretty interesting ride towards the end game and you can always be my patron on Patreon where you get my religious thinking about the gold and silver markets.
And in my last video I explained why I think from a spiritual perspective we have to go back to silver because inflation is a sin against money and the way to correct sins is to go back to the material that you sinned against or sinned with, and fixed that sin, fixed that mistake. And that’s how repentance is achieved. More in that on Patreon. .
See more of Rafi Farber on their Public Channel and the MPN Rafi Farber channel.
Author
