Tag: gold

Switzerland’s Long Fight for Fiscal Policy Independence

By Daniel Szewc | Switzerland

Switzerland has long been known for being a fiscally responsible (most often caused by internal competition between the Cantons) banker nation. Yet since the EU has grown in influence, so has their unitarian nature. With this comes an extreme blood-thirst for monotony, as well as a lack of competition.

In March 2011, the European Central Bank in Frankfurt, Germany, pressured the Swiss national bank to cap the swiftly strengthening Franc to the Euro. This was the natural conclusion of Switzerland, which already had ditched the gold standard on the first of May, 2000. How ironic is it, that it happened on the communist holiday of 05/01? This capping, whilst certainly hurting the Franc’s fame as a sure way to keep one’s assets intact in cases of war, lasted for 3 years, until 2014.

In a frantic move by Swiss elites, who sensed that EU leaders were too busy with Middle-Eastern immigrants, tried to also force down the partial re-institution of the gold standard via expanding the national bank’s fractional reserve (modern banking system) banking from an 8% coverage of the Franc’s value in gold to 20%. This would lead to investors being more likely to use the Franc and would help their economy greatly. Yet, as Karl Marx said, “Democracy is the road to socialism”. The referendum failed, with only about 20% of the population voting to support the fiscal counter-revolution.

However, citizens do realize when something was better in the past – there is still hope! Switzerland is going to have another referendum in June, this time proposing the complete abolishing of the Fractional Reserve Banking, and the abolishing of debt currency. The referendum, organised by the Vollgeld Initiative, will have a bigger effect on you than you can imagine.

Right now, a bank may lend you money that it does not have. It “creates” it using computer code, automatically stripping away part of the money’s value, and increasing inflation. All the bank needs to hold is a fraction of the money it lends. This was the reason why many irresponsible banks collapsed in 2008. Most international banks have their main headquarters in the ever-neutral Switzerland. If this referendum gets over half the votes, all of these banks will adopt these rules, making a global difference. Expect the value of money to deflate considerably less.

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Gold or Bust: How Russia and China Can Make Gold Great Again

By James Sweet | USA

BRICS, an association between Brazil, Russia, India, China, and South Africa, is considering starting a gold trade between members of the association, which can threaten American dominance in the world economy. If BRICS began an internal gold trade, it is entirely possible, and plausible, that the nations involved with the trade could back their currencies with a gold standard, effectively taking the US Dollar out of dominance. Is this the beginning of the end of American dominance?

Russia and China, arguably the most powerful nations in BRICS, have been importing and producing gold in great amounts. In 2016, China was ranked as the second largest importer of gold, according to the Observatory of Economic Complexity. In 2017, China was ranked as the largest producer of gold, Russia falling closely behind as the third largest producer, according to World Atlas. The United States does not fall within the top five importers of gold and is ranked as the fourth largest producer of gold. Falling behind Russia and China in terms of producing gold as well as falling behind China in terms of importing, it is evident that the United States is heading down a dark, scary road, with only an ineffective flashlight to guide the way.

What is this ineffective flashlight? It is COMEX, the division of the New York Mercantile Exchange that is responsible for trading gold. Claudio Grass, “a Mises Ambassador and an independent precious metals advisor based out of Switzerland” as stated on the Mises Institute’s website, has talked about how COMEX is not efficient at trading gold. According to Grass, “OTC and COMEX are working toward their own destruction.” He has also stated that “the paper scams in London and New York will either blow up when the paper price of gold drops to zero or when just a fraction of investors insists upon receiving physical gold in return.” Currently, the international price of gold is determined purely by the two major markets that use paper gold: COMEX, and London’s OTC. With BRICS accounting for 40% of the population and around 22% of the world’s gross product, it is likely that the value of gold would surge following the establishment of a gold trade that uses physical gold.

Peter Schiff, an economist credited with predicting the recession of 2008, has said, “at some point, the price [of gold] is going to explode because there is real physical buying, and all that paper selling can’t camouflage that.” If Schiff’s prediction is correct, the United States is going to face a major crisis in the gold trade. This leaves a very important question: When will BRICS start implementing their gold trade?

Sergey Shvetsov, the First Deputy Chairman of the Bank of Russia, attended Russia’s annual “Russian Bullion Market.” According to BullionStar.com, Shvetsov has
“reaffirmed that the Bank of Russia has now signed a Memorandum of Understanding with China on developing a joint trading system for gold and that the first implementation steps in this project will begin in 2018.” While it may take a few years for the BRICS gold trade to begin, those in the United States, as well as other western nations with fiat currencies and paper-based gold trades, should prepare for a possible collapse of the western gold trade, as well as fiat currencies. With the large stockpile of gold in BRICS nations, we could see the end of western dominance in the world economy and the rise of the east.

President Franklin D. Roosevelt ended the gold standard in an attempt to pull the United States out of the Great Depression, not knowing he would be setting the nation up for another economic crisis. If the US Dollar does not become backed by a gold standard, the currency will face a real threat of becoming inferior to the currencies of the BRICS nations. The COMEX and London gold trades will fail, and the general populace of the United States will turn to other currencies that are more valuable, like Bitcoin or the Chinese Renminbi. The United States government cannot “ensure freedom” in China, nor can they do it in Russia. President Trump wants to “Make America Great Again”, but to do so, he needs to beat Russia and China in their goal to “Make Gold Great Again”.