Interview 978 – Geneva Business Insider with David L. Smith
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This month on the Geneva Business Insider, James and David discuss the results of the Swiss gold referendum, the Netherlands gold repatriation, the empty Ukrainian gold vaults, Russia’s gold buying spree, and the plunging price of oil.
SHOW NOTES:
Swiss Gold Referendum Fails: 78% Vote Against “Protecting The Country’s Wealth”
122 Tonnes of Gold Secretly Repatriated to Netherlands
Grandmaster Putin’s Golden Trap
Ukraine Admits Its Gold Is Gone: “There Is Almost No Gold Left In The Central Bank Vault”
Bank of America sees $50 oil as Opec dies
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Getting information out “to the masses”.
Sure you really wanted to say that James/
Best explanation of the reason for the Swiss disaster I’ve heard. That one came as a shock to me, thought the Swiss were more awake than most.
Always good to hear David speak.
Although not mentioned or discussed was one particularly negative aspect to the gold referendum having to do with mandating % of non-negotiable reserve gold. Perhaps the deal-breaker for many.
Given a prospective Swiss juxtaposition with necessary Euro laden trading partners caught in the Fed-web model of QE dependency, the Swiss could easily have found themselves very much at odds in very impractical circumstances with principal trading partners.
What the world very much needs is simply free gold and silver markets unmolested by mandate of international treaty to preclude its official manipulation. As long as the petrodollar dominates and the Fed lives its simply a pipe dream. But, its days may now have a more finite number. Pressure’s on from crypto-side tech now.
PMs’ just need to exist as an unmolested option medium for sovereign entities of all stripes to save and trade as wealth as needed.
The rigidity of the Swiss idea was unnecessary for having the desired effect on preservation of the relative trade worth of currency. It’s suspect as disingenuous killer ploy, imo.
We simply need more sound options that compete freely/globally.
I enjoyed the interview, but I have to say I don’t agree with David’s stance on deflation at all.
Let me try to explain why:
In a deflatory economy, money rises in value, which as he said is a good thing for people who have money. Let us forget for a minute that this means that people with the most money (the ultrarich) logically will make the most out of this scheme (2 % of a billion is a bit more than 2 % of 20 thousand) it also has dire results for your future economy.
Any new up and coming business, be it some dirty linked corp or an alternative young idealist with an innovating idea, needs investment money. If this investment money can’t be provided by himself (or lets say his family and close friends) he will have to either loan it or find an investor. This has a risk. In a deflatory economy, this is a problem because people can just keep their money riskfree in the bank, making it much more difficult to get any investment and thus reducing new ideas to receive adequate funding to get off the ground.
Now, you could talk about new ideas using less means because of innovative alternative ways of developing and such… but the basic mechanism still holds. Deflation is good for people with money in the short term, but bad overall for the whole economic system since investment and thus production starts to fall.
By the way: I did learn this from different sources, but one deserves mentioning since he is such a star normally in the Alt Media, namely Carroll Quigley, infamous writer of his must-read Tragedy and Hope.
Now, I’m guessing that since the book is about +1000 pages and has intricate economic history, it’s not always a fun one to get through, especially since the CliffsNotes versions out on the net are ever so handy and more than revealing enough (several quotes come to mind)
However, I would urge everyone to read up on his economic stuff as well, since it is very interesting, very relevant and, so long as I don’t find a convincing rebuttal or argument to why deflation is such a good thing, a good explanation of how this economic principle works.
A quote from the book:
“Inflation, especially a slow steady rise in prices, encourages producers, because it means that they can commit themselves to costs
of production on one price level and then, later, offer the finished product for sale at a somewhat higher price level. This situation encourages production because it gives confidence of an almost certain profit margin. On the other hand, production is discouraged in a period of falling prices, unless the producer is in the very unusual
situation where his costs are falling more rapidly than the prices of his product.”
and
“Rising prices benefit debtors and injure creditors, while falling prices do the opposite. A debtor called upon to pay a debt at a time when prices are higher than when he contracted the debt must yield up less goods and services than he obtained at the earlier date, on a lower price level when he borrowed the money. A creditor, such as a bank, which has lent money — equivalent to a certain quantity of goods and services — on
one price level, gets back the same amount of money — but a smaller quantity of goods and services — when repayment comes at a higher price level, because the money repaid is then less valuable. This is why bankers, as creditors in money terms, have been obsessed with maintaining the value of money, although the reason they have traditionally given for this obsession — that “sound money” maintains “business confidence” — has been propagandist rather than accurate.”
Edit: by the way, I understand this has a slight disconnect with some of the alt media economics (as it had with me) but this only should prove this needs more fleshing out, just in case we might risk changing into parrots, only repeating what we’ve been told.
Regarding the Ukraine, I’d like to ask members if they’ve come across a 2014 pdf document (ca. April 2014; sorry I don’t have a title) outlining what I regard as a balanced account (i.e., not NATO propaganda) of Ukraine’s history including relations with Europe and Russia, and current events (e.g., Nuland’s influence, the coup, and the Crimea’s absorption into Russia’s fold). I no longer have this gem of a document and I’ve been unable to relocate it on the web after considerable effort. The document is of significant length, well referenced, and prepared by dozens of authors, primarily from Europe. A link to the doc would be greatly appreciated!! Regards.