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Archive for August, 2011
A Golden Foot in the Door
In my last article, I asked ‘Is a New Gold Swiss Franc in the Cards?’ If yes, the consequences are awesome. Of course, there is a tremendous amount of pressure being exerted by ‘The Powers That Be’ to prevent the Gold Swiss Franc from happening; these ‘powers’ being greedy bankers yearning after ever more profits through issuing ever more credit, and corrupt politicians yearning just as strongly after cash. Cash to pay the exorbitant costs of the welfare/warfare state… cash to buy votes for their own reelection. Under irredeemable paper greedy bankers continue to lend ever more ‘money’ to the corrupt politicos… and the poor citizens of the world get stuck paying interest on these loans… for ever! A new Gold Franc would put a sudden end to the deadly game of endlessly growing debt by putting the skids to the corrupt and precarious paper money system the world is currently suffering under.
Switzerland is unique in being perhaps the only truly democratic country in the world; if Swiss citizens decide to, they can originate a petition for a referendum on any issue… including the issue of the new Gold Franc. If such a referendum passes, then the politicos and bankers are subject to a democratic end run. Such an end run would be sweet revenge for the disgraceful way the very same politicos caved to pressure from Washington, and re-wrote the Swiss constitution to remove the Gold backing of the (paper) Swiss Franc… without honest consultation with or input from Swiss citizens.
Once the Gold Franc is in circulation, amazing consequences start to fall into place. By ‘opening the Swiss Mint to Gold’, which is what the circulation of a Swiss Gold coin implies, and by charging a nominal 5% seignorage for striking coins from raw Gold bullion, the Swiss government will be assured of an income in Gold. This income will support the issue of Gold Bonds! The world needs Gold Bonds in a most desperate manner, even if this need is not generally recognized. Gold bonds are denominated in Gold units, mature into Gold, and pay interest in Gold.
Holders of Gold bonds know exactly what the value of their bonds will be upon maturity; the very same amount of physical Gold that they paid to buy the bonds. This is very far from the fortunes of paper bond holders… who will get back pennies on the Dollar cost of their paper denominated bonds… if they are ‘lucky’ and the Sovereign paper bond issuer does not default outright.
Bond issuers like the Swiss government will also come to love Gold bonds. Gold bonds carry the very lowest interest rates possible, because of the certainty that Gold will hold its value… and the certainty that paper will not. The current long term ‘lease rate’ for Gold is under 0.5% per annum. Lease rate means interest rate… the name ‘lease rate’ is simply an attempt to hide the fact that yes Virginia, Gold DOES indeed earn interest!
By comparison, even with Helicopter Ben and Tricky Trichet doing their best to hold rates down, USD and Euro long bond rates are around 3 ½ %. Of course, once Switzerland breaks the Gold Bond ice, other countries will follow; imagine if Greece were to refinance its sovereign debt at 0.5%… instead of 8% or more… with no German… er European… bail out needed? After all, Greek Gold -unlike Greek debt- is just as good as Swiss Gold.
Gold is the very best money ever used by Humanity. I quote Austrian economist Hans Sennholz;
“Sound money and free banking are not impossible, they are merely illegal. That is why money must be deregulated. The Gold standard will return as soon as people realize that honesty is the best policy.
As hope of ill gain is the beginning of the fiat standard, so is honesty the mother of the Gold standard. The Gold standard is as old as civilization. Throughout the ages, the Gold standard has emerged again and again because man needed a dependable medium of exchange.”
With Gold coins and Gold bonds in circulation, the world economy is well on its way to recovery, and the world financial system is well on its way to economic Nirvana. The Unadulterated Gold Standard as the foundation of the new financial order is but one step away.
Financial Stewards Pay What Is Due
Abraham lived among the Hittites. When Sarah died, he needed to buy a burial site for her. The Hittites offered Abraham the choice of any land he wanted. He chose a cave on Ephron’s land.
Genesis 23:9b is Abraham’s request of the Hittites. He wanted the Hittites to assist him in getting Ephron to agree to his purchasing part of his land for the burial site.
In later verses, we see that Ephron had no problem with Abraham using the land for a burial site. In fact, he was willing to give Abraham the land for free. However, Abraham wanted to pay full price for the land.
We all seek handouts and freebies
While we may now blame it on the economy, we all seem to be on the lookout for handouts and freebies. Anything we are able to get for free, or for less than the asking price, is somehow more enjoyable.
The truth that we tend to ignore is that it costs someone somewhere. If we think that a large corporation is eating that cost, we must remember that they will still end up trickling that cost back down to us as purchasers of their other goods and services. So is it really free or discounted?
We can also look at our approach to filing our income taxes. Are we dishonest when it comes to the things we claim on our returns? Do we try to deduct more than we are truly able? Do we claim dependents that we don’t actually care for?
Look at the other side
What about when we are on the other side of the situation? What if someone expected us to give away our goods or services for free or for less than we feel they are worth? Would we be as willing to do that?
This is not to say that we should never volunteer time or make donations to those less fortunate. We are simply talking about people trying to talk us into reducing our prices or giving things away.
We work to provide for ourselves and our families. If we discounted everything or gave it away, we would never be able to make enough to support our families.
When we are in business, we should offer our goods and services at reasonable rates so that people are less interested in seeking discounts and freebies. It will make people more wiling to do business with us.
At the same time, as a consumer, being willing to pay an honest price ensures that everyone is able to provide for their households.
With respect to our tax returns, Jesus told us in Matthew 22:21, “Give to Caesar what is Caesar’s, and to God what is God’s.” As a part of several communities, we have a responsibility to help support them. Our taxes are used to develop services that we may use. They also help support those who are less fortunate than us.
We may not always agree with the choices that the political groups make for us, but that has nothing to do with us handling our responsibilities.
Rather than thinking of self, let’s all aim for making decisions that are in the best interest of the larger community.
