COMMENT: Hello Marty,
Nice put up on oil and gold. I by no means owned gold till about 20 years in the past. I learn concerning the gold bull of the 70’s and tales of gold mining shares outperforming within the Nice Melancholy decade. However I by no means purchased into the hype till I began listening to those promoters later. It was lille strolling right into a darkish parlor full of incense and free ladies. Seductive. Till 2008. Then all of it got here crashing down. Going via the multi-year crash later from the 2011 excessive, one can see these persons are there to advertise even when the inventory market raced to new highs as gold miners crashed to new lows.
The purpose you made is so true. It’s important to reexamine the information and your inside biases. Then and solely then does one understand gold is simply one other asset. The financial system evolves and it’s supported by the individuals who make it develop. Not by the federal government. Gold is sweet and glossy and plenty of cash are lovely, nevertheless it is not going to do what its promoters declare it’s going to do if sufficient individuals see higher decisions to guard and broaden their wealth. Maybe that’s why individuals’s ;largest asset usually is their very own house. Its utility is apparent. And its distinctive attribute, location, units it aside from gold. Others see this. However gold promoters don’t. Possibly that’s why diamonds have by no means actually taken off instead funding. As a result of whereas they’re enticing, they aren’t terribly helpful. And as for being a retailer of worth…properly, there are different extra liquid belongings that match that invoice…say for instance. Shares!
MS
REPLY: Mony has been many issues, however what you say about utility is appropriate. Cash has been cattle, and sheepskins, however most likely probably the most actually worldwide commodity to ever achieve that standing was Bronze. It was the Minoans who created the Bronze Age and you will note in some museums on show a Minoran Bronze Ingot which was utilized in commerce and it took the form of earlier types of cash – the sheepskin. Bronze has a utility worth from instruments to weapons. Nevertheless it possessed one more key component – movability in comparison with cattle. This can be a Roman Aes Signatum displaying a bull which was its alternative for cattle in commerce.
Here’s a Roman Aes Signatum of about 5 kilos of bronze with two chickens on it. This too was a logo of worth with the reverse a trident.
The requirement of MONEY is that everybody accepts it. The greenback is not any extra backed by gold, oil, and even propaganda. It’s backed by the truth that the US has a non-Marxist consumer-based economic system to which everybody needed to promote their wares to reestablish their economies. China and Japan rose as a result of they have been capable of promote to the American shopper. The identical was for the German automobile business. I do know, I used to be known as in by each the Japanese and German automobile industries. There have been no change controls on the greenback. Rising markets issued debt in {dollars} so they might promote it to American traders.
The most important world producers of oil have been, earlier than Biden, the US, Saudi Arabia, and Russia. These three international locations have been producing roughly 40 million barrels of oil per day in 2020 earlier than Biden took energy and intentionally got down to destroy American power manufacturing. That was 43% of complete world manufacturing again in 2020. As of the tip of 2021, $2.1 trillion was the overall worth of the fossil gasoline business. Usually, fossil fuels characterize about 2.5% of the world’s GDP. When oil costs shot up excessively costing about 4.5% of worldwide GDP, that’s when it tends to shift revenue and can typically result in financial decline as occurred through the Nineteen Seventies that we name “stagflation” which Larry Summers has tried to rename “secular stagnation” simply to confuse issues.
The quantity by themselves clearly establishes the claims of the dollar being the Petrodollar is pure sophistry. You may additionally name it the Weat-Greenback since world wheat can be priced in {dollars}.
