It's amazing to me just how many problems we face can be traced back to the lack of a gold standard. We would have kept our factories and continued progressing with higher and higher efficiencies when the alternative would have been running out of gold with which to buy things.
Completely idiotic companies with no real reason to exist would never have been born. Companies that make things worth having wouldn't have the wherewithal to spend most or any of their budget on woke ESG BS. And on and on.
Exploiting?That's the best thing that ever happened to China.It's a reason that Chinese people have grown their standard of living so much.Imagine if the poor of Africa could be exploited.Then they would have a chance of growing their standard of living,of gaining more knowledge,etc.
I don't know.I know it helped Americans buy products cheaper than if made in the U.S.,which increased our standard of living.It helped starving Chinese farmers get off the farm and become wealthier.So,probably a win win deal.
Foxconn had to install netting around the top of their factories because so many young workers were jumping off committing suicide....but hey.....they were making money and not on the farm anymore !!!
Thank you for the short lesson Bill! History does repeat as the world witnessed the growth of America in the 19th century, we now witness the growth communist China. Europe paved the way for America’s growth by buying our products cheaper then they could make back home, and helped build us into the industrial power we became. The question is why would America pave way for a communist nation to become stronger then their own capitalistic system? Greed has no loyalty it seems, and the cost to we the people will be great. I really appreciate you three well educated and traveled men, and the wonderful staff you employ. Keep up the helpful daily education some of us receive, and continue to guide us through this impending storm…
The Fed cannot do anything other than full employment. Their hands are tied. Congress will not let them ease & tighten money. They try a little & stop. What’s needed is drastic action which D.C. will NEVER undertake. Makes no difference who is elected. Elections are fake. We will end up like Venezuela, only worse. Just please leave 2nd Amendment in place. We are gonna need it!
Seems like today,there is no consideration of the future.It's like,politicians just spend money or add taxes,without any concept of future consequences.Unless the world is going to end soon,we should be considering the longer term consequences of today's actions.Maybe,if politicians had done any thinking,they wouldn't have shut down the economy because of a virus or handed out $billions of Dollars they had to create from nothing.
I've asked Bill this question, before, but he's never responded. Maybe someone out there can explain it to me . . .
Under the Bretton-Woods system, the American dollar was redeemable for gold at the guaranteed rate of $35 per ounce. Bill has bemoaned the fact that Nixon de-coupled the dollar from gold in 1971. But it seems to me that he had no choice.
If every country in the world could redeem dollars for gold at $35 per ounce -- EVEN IF THE PRICE OF GOLD ON THE OPEN MARKET WAS HIGHER THAN $35 AN OUNCE -- wouldn't America's gold reserves have been depleted? Why would any other country buy gold on the open market if they could get it from America at the discounted price of only $35 an ounce? They'd just exchange their dollars for our gold and America would have no gold. By de-coupling the dollar from gold, Nixon saved America's stockpile of gold . . . Or am I missing something?
Under a true gold standard, with a dollar pegged to a certain weight of gold, talking about the "price of gold" makes no sense. With an honest peg, the government guarantees there won't be any more dollars printed than can be redeemed for the amount of gold in storage.
Bill has used the analogy of a parking garage passing out more tickets than there are parked cars to be redeemed. Pretty obviously, "dishonest" isn't a strong enough word to describe this situation.
With LBJ's Great Society programs and RMN's war in Vietnam, government outlays started exceeding what politicians knew taxpayers would willingly pay. So, on the sly, they started issuing more dollars than could be backed by the amount of gold held by the government.
Now we have the situation you describe in your last paragraph. But what you describe as Nixon saving America's gold could be more accurately described as "we screwed you once by printing more dollars than we could redeem and spending them in bad faith for the goods you provided in good faith; now we're screwing you again by not allowing you to get any gold at all".
Under an honest dollar to gold peg, other countries would obviously consider holding dollars the same as holding gold. There would be no advantage in redeeming the dollars for gold. In fact, with the cost of shipping considered, they would actually lose wealth. Those dollars would continue to be used in trade and be more efficient than shipping gold back and forth.
The other option would have been for Nixon to re-price the dollar lower in terms of gold to reflect its true value based on the amount of currency in circulation versus the quantity of gold supposedly held by the Fed. At that point, it would no longer make sense for the French and Germans to redeem their dollars. The currency devaluation/ inflation took place in 70's anyway. Re-pricing the dollar would have been a way to "rip off the band-aid"
At that time in August 1971 , you could buy gold in the open market between 35 and 42 usd an ounce , if I am not mistaken the French and the Germans ( de Gaule and Willie Brand) saw it coming too many usd in circulation and not enough gold against it , again if I am not mistaken the reserves were at 12.000 tones at their pick , this two counties did exchange some of their usd dol holding into gold , and then Nixon ( or consulting ) said it stop on the 15th of august 1971 , USA was depleted of 4.000 tones of gold , today they suppose to have 8133 tones of gold . Not audited for National Security... or else ...
I don't know why Bill gripes so much about the dollar no longer being backed by gold. If America had exchanged all of its gold for dollars, we wouldn't have had any gold to back up those dollars, anyway. We'd be in the same position that we are with the Fed's worthless, inflated, "printed," dollars. Like it or not, Nixon did the right thing.
Yes Nixon did the right thing , but the Feds since then printed so many usd dollars that this 8133 tones are a mere drop in the ocean of the dollars printed since 1971 ... just to say that if this gold is really there ( not audited for so long ) you would need a price of 115.000 usd dollars an ounce to back 100 % of the debt ( public debt being 30 trillions )
Funny thing about your quantifier " . . . if this gold is really there . . . "
Years ago I worked at one of America's busiest airports and saw a strange scenario play out on several occasions that was like a scene out of an action movie, but it was real life.
After the passengers had boarded, the baggage was loaded, and the jetway was retracted, all the baggage handlers retreated and left the plane sitting, isolated, on the apron with the baggage conveyor still raised up into the plane's cargo compartment. A black pick-up truck with government license plates and a hard bed cover, accompanied by a convoy of police vehicles then backed up to the baggage conveyor. A black SUV -- also with government license plates -- and blacked-out windows was the last to arrive and sat out by itself where it could observe everything. About a dozen police officers got out of their cars and surrounded the pick-up truck and the baggage conveyor. No one ever got out of the SUV.
Then three baggage handlers came out. One rode up the conveyor into the plane's belly while the other two began unloading white boxes about the size of a manilla envelope and three or four inches, thick. I could tell by the way they were handling the boxes, they were heavy.
They sent the boxes up the conveyor and the baggage handler in the plane's belly, stowed them. When the truck was empty, the plane was sealed up, the conveyor removed and the baggage handlers left. Then the cops drove away, along with the pick-up truck. The SUV with the blacked-out windows remained.
The plane started its engines, was pushed back from the gate, and moved off down the taxi-way. Only after the plane had reached the taxi-way, leading to the runway, did the black SUV leave the scene.
After I saw this play out several times over the course of a few weeks, I asked another employee who had worked at the airport longer than me, if he'd seen it and asked him if he knew what was in the boxes. He said, "Those are gold bars." I asked him how he knew and he said that, once, one of the boxes fell off the conveyor and broke open and gold bars spilled out. He said, "You should have seen those cops! They were all over that box and the baggage handler! They counted the bars several times, put them back in the box, and taped it up."
Sooo . . . Where was that gold going? Considering the heavy government presence, it seems likely that it was coming from America's gold reserves. But, the destination? That's the $64,000 question. I would be VERY interested to know the results of a full audit of America's gold reserves . . . IF one was ever conducted.
Well you ask a question and don’t supply enough of your own answers. For a start, what airport did this happen at? And you were supposedly there, where was that aircraft flying? What was the flight number? Who was the carrier? What year are we talking? This is not classified information. It’s information that would be helpful if you provided it in your story. For example, there’s nothing much to it if it was a flight from say JFK to SDF (Kentucky) as it was probably a regular shuttle to Fort Knox. If it was going overseas, well that’s more intriguing but if it was say London or Switzerland, probably less so. Gold does get moved by air freight often, and the security you describe is not unusual whether government or private company conducting the transfer. It could have been gold dore bars of mixed metal heading to a refinery. Were you near any large gold mines?
There are a lot more details I could have given, but I didn't do so, intentionally. Even though this took place in full sight of the flying public, only those of us who worked at the airport, and saw it repeatedly, would have our suspicions aroused because of how often this was taking place. More details would reveal the probability that this gold was coming from America's stockpile. The frequency with which it was happening indicates that large quantities of gold were being moved.
One thing that I found very troubling -- which went right over the heads of the vast majority of people -- is this . . .
Remember when Trump first took office? I believe it was his Treasury Secretary (don't remember his name) that he sent to Fort Knox to see if there was any gold, there. When the guy came out, he was smiling and said that, yes, the gold was there. But -- and it's a big BUT -- he said that they opened only ONE of the many vaults within Fort Knox and that he saw a wall of gold bars. They weighed one of the bars and it fell within the range of the weight that the gold bars in Fort Knox are supposed to be. But, that was it. He didn't insist that they open ALL of the vaults. For all we know, the others could have been empty and they kept gold in one, for just such a possibility as what Trump did. I mean . . . If the U.S. Secretary of the Treasury demands to inspect the gold at Fort Knox, wouldn't you think they'd show him ALL of the gold in Fort Knox . . . unless they did.
You're right. Maybe the "Hollywood-style" scenario that I saw take place on several occasions was perfectly innocent, and there was a logical explanation for it. Or, not. But, I have my doubts and I have good reason for them.
I know I mention few times about the veracity of the gold reserve of USA , the truth is , I don’t have clue , I do know nothing if this gold is there or not . Hopefully there is plenty of it . Gold or not the world is in a big mess .
I have been thinking about the Fed's "preferred" 2% inflation rate. Using the Rule of 72, from 1945-1971 (26 years) there should still have been 10 years until the dollar's value was halved- but it was obviously on its way. The arbitrage was greatly in favour of taking the gold as soon as possible.
There is a privilege in issuing the global reserve currency which has been used and abused.
Please, tell the truth: And what about the 80% - 90% of the population that didn’t own stocks and bonds?
updated May 12, 2022, with Gallup's latest data pertaining to Americans' stock ownership.
WASHINGTON, D.C. -- Gallup finds 58% of Americans reporting that they own stock, based on its April Economy and Personal Finance survey. This is slightly higher than the 56% measured in 2021 and 55% measured in 2020 but is not a statistically meaningful increase.
I have been a Bonner fan for over 20 yrs. Recently, I subscribed for your full research package but found it too complicated to take advantage of and asked for a refund. Thank you very much for your prompt action on my request. I am a Canadian citizen and Live in Vancouver BC. I believe the Cdn. economy is in worse shape than the US. I don't know what to do.
I am living in an assisted living residence call Legacy Senior Living that after laundry and a few extras costs almost $9 thousand dollars CDN. a month. My husband died last October and I have lost his Canadian gov't pensions (2) along with his Swiss Annuity (the purchase was an excellent financial move for us) that I purchased it on advice I received at your annual financial conventions that you used to hold in Vancouver. I attended almost everyone of them.I am 86 yrs. old and barely make ends meet every mont. In addition I have some savings but with inflation, I don't like to touch them. I have 3 successful sons who don't need money (I reuse to take any from them) no one ever can have too much and I am determined to leave them something. Should I move to a cheaper country or what? I would really appreciate your advice on affordable life styles. Joan Harper
Dear Joan, Sorry to hear about your financial and personal problems. Since you have a good relationship with your sons, let them contribute to your cost of living. I'm sure they would really appreciate contributing, after all you have done for them. Moving to a different Country would be very hard on you unless it is with a relative or really good friend. I wouldn't recommend it.
If you have had a good relationship with your sons, and they're all doing well then ask them for a bit of help. Not sure that scrimping so you can "leave them something" is quite how the world works these days - best take care of yourself, I say, Joan
Thank you. My biggest concerns for her were her age and her health. I think it would be hard or might be hard for her to adjust to a different environment.
It's amazing to me just how many problems we face can be traced back to the lack of a gold standard. We would have kept our factories and continued progressing with higher and higher efficiencies when the alternative would have been running out of gold with which to buy things.
Completely idiotic companies with no real reason to exist would never have been born. Companies that make things worth having wouldn't have the wherewithal to spend most or any of their budget on woke ESG BS. And on and on.
And corporate greed exploiting cheap labor, giving away our technology, so short sighted.
Exploiting?That's the best thing that ever happened to China.It's a reason that Chinese people have grown their standard of living so much.Imagine if the poor of Africa could be exploited.Then they would have a chance of growing their standard of living,of gaining more knowledge,etc.
What's done is done, do you think it was a fair exchange?
I don't know.I know it helped Americans buy products cheaper than if made in the U.S.,which increased our standard of living.It helped starving Chinese farmers get off the farm and become wealthier.So,probably a win win deal.
As peasants the Chinese never starved if left alone.
Foxconn had to install netting around the top of their factories because so many young workers were jumping off committing suicide....but hey.....they were making money and not on the farm anymore !!!
Thank you for the short lesson Bill! History does repeat as the world witnessed the growth of America in the 19th century, we now witness the growth communist China. Europe paved the way for America’s growth by buying our products cheaper then they could make back home, and helped build us into the industrial power we became. The question is why would America pave way for a communist nation to become stronger then their own capitalistic system? Greed has no loyalty it seems, and the cost to we the people will be great. I really appreciate you three well educated and traveled men, and the wonderful staff you employ. Keep up the helpful daily education some of us receive, and continue to guide us through this impending storm…
The Fed cannot do anything other than full employment. Their hands are tied. Congress will not let them ease & tighten money. They try a little & stop. What’s needed is drastic action which D.C. will NEVER undertake. Makes no difference who is elected. Elections are fake. We will end up like Venezuela, only worse. Just please leave 2nd Amendment in place. We are gonna need it!
Seems like today,there is no consideration of the future.It's like,politicians just spend money or add taxes,without any concept of future consequences.Unless the world is going to end soon,we should be considering the longer term consequences of today's actions.Maybe,if politicians had done any thinking,they wouldn't have shut down the economy because of a virus or handed out $billions of Dollars they had to create from nothing.
I’d have got 2 beers and gone hungry.
"A Life of It’s Own"?
I've asked Bill this question, before, but he's never responded. Maybe someone out there can explain it to me . . .
Under the Bretton-Woods system, the American dollar was redeemable for gold at the guaranteed rate of $35 per ounce. Bill has bemoaned the fact that Nixon de-coupled the dollar from gold in 1971. But it seems to me that he had no choice.
If every country in the world could redeem dollars for gold at $35 per ounce -- EVEN IF THE PRICE OF GOLD ON THE OPEN MARKET WAS HIGHER THAN $35 AN OUNCE -- wouldn't America's gold reserves have been depleted? Why would any other country buy gold on the open market if they could get it from America at the discounted price of only $35 an ounce? They'd just exchange their dollars for our gold and America would have no gold. By de-coupling the dollar from gold, Nixon saved America's stockpile of gold . . . Or am I missing something?
Under a true gold standard, with a dollar pegged to a certain weight of gold, talking about the "price of gold" makes no sense. With an honest peg, the government guarantees there won't be any more dollars printed than can be redeemed for the amount of gold in storage.
Bill has used the analogy of a parking garage passing out more tickets than there are parked cars to be redeemed. Pretty obviously, "dishonest" isn't a strong enough word to describe this situation.
With LBJ's Great Society programs and RMN's war in Vietnam, government outlays started exceeding what politicians knew taxpayers would willingly pay. So, on the sly, they started issuing more dollars than could be backed by the amount of gold held by the government.
Now we have the situation you describe in your last paragraph. But what you describe as Nixon saving America's gold could be more accurately described as "we screwed you once by printing more dollars than we could redeem and spending them in bad faith for the goods you provided in good faith; now we're screwing you again by not allowing you to get any gold at all".
I should have added:
Under an honest dollar to gold peg, other countries would obviously consider holding dollars the same as holding gold. There would be no advantage in redeeming the dollars for gold. In fact, with the cost of shipping considered, they would actually lose wealth. Those dollars would continue to be used in trade and be more efficient than shipping gold back and forth.
The other option would have been for Nixon to re-price the dollar lower in terms of gold to reflect its true value based on the amount of currency in circulation versus the quantity of gold supposedly held by the Fed. At that point, it would no longer make sense for the French and Germans to redeem their dollars. The currency devaluation/ inflation took place in 70's anyway. Re-pricing the dollar would have been a way to "rip off the band-aid"
At that time in August 1971 , you could buy gold in the open market between 35 and 42 usd an ounce , if I am not mistaken the French and the Germans ( de Gaule and Willie Brand) saw it coming too many usd in circulation and not enough gold against it , again if I am not mistaken the reserves were at 12.000 tones at their pick , this two counties did exchange some of their usd dol holding into gold , and then Nixon ( or consulting ) said it stop on the 15th of august 1971 , USA was depleted of 4.000 tones of gold , today they suppose to have 8133 tones of gold . Not audited for National Security... or else ...
Thanks, Juan. That's what I thought.
I don't know why Bill gripes so much about the dollar no longer being backed by gold. If America had exchanged all of its gold for dollars, we wouldn't have had any gold to back up those dollars, anyway. We'd be in the same position that we are with the Fed's worthless, inflated, "printed," dollars. Like it or not, Nixon did the right thing.
Yes Nixon did the right thing , but the Feds since then printed so many usd dollars that this 8133 tones are a mere drop in the ocean of the dollars printed since 1971 ... just to say that if this gold is really there ( not audited for so long ) you would need a price of 115.000 usd dollars an ounce to back 100 % of the debt ( public debt being 30 trillions )
Funny thing about your quantifier " . . . if this gold is really there . . . "
Years ago I worked at one of America's busiest airports and saw a strange scenario play out on several occasions that was like a scene out of an action movie, but it was real life.
After the passengers had boarded, the baggage was loaded, and the jetway was retracted, all the baggage handlers retreated and left the plane sitting, isolated, on the apron with the baggage conveyor still raised up into the plane's cargo compartment. A black pick-up truck with government license plates and a hard bed cover, accompanied by a convoy of police vehicles then backed up to the baggage conveyor. A black SUV -- also with government license plates -- and blacked-out windows was the last to arrive and sat out by itself where it could observe everything. About a dozen police officers got out of their cars and surrounded the pick-up truck and the baggage conveyor. No one ever got out of the SUV.
Then three baggage handlers came out. One rode up the conveyor into the plane's belly while the other two began unloading white boxes about the size of a manilla envelope and three or four inches, thick. I could tell by the way they were handling the boxes, they were heavy.
They sent the boxes up the conveyor and the baggage handler in the plane's belly, stowed them. When the truck was empty, the plane was sealed up, the conveyor removed and the baggage handlers left. Then the cops drove away, along with the pick-up truck. The SUV with the blacked-out windows remained.
The plane started its engines, was pushed back from the gate, and moved off down the taxi-way. Only after the plane had reached the taxi-way, leading to the runway, did the black SUV leave the scene.
After I saw this play out several times over the course of a few weeks, I asked another employee who had worked at the airport longer than me, if he'd seen it and asked him if he knew what was in the boxes. He said, "Those are gold bars." I asked him how he knew and he said that, once, one of the boxes fell off the conveyor and broke open and gold bars spilled out. He said, "You should have seen those cops! They were all over that box and the baggage handler! They counted the bars several times, put them back in the box, and taped it up."
Sooo . . . Where was that gold going? Considering the heavy government presence, it seems likely that it was coming from America's gold reserves. But, the destination? That's the $64,000 question. I would be VERY interested to know the results of a full audit of America's gold reserves . . . IF one was ever conducted.
Well you ask a question and don’t supply enough of your own answers. For a start, what airport did this happen at? And you were supposedly there, where was that aircraft flying? What was the flight number? Who was the carrier? What year are we talking? This is not classified information. It’s information that would be helpful if you provided it in your story. For example, there’s nothing much to it if it was a flight from say JFK to SDF (Kentucky) as it was probably a regular shuttle to Fort Knox. If it was going overseas, well that’s more intriguing but if it was say London or Switzerland, probably less so. Gold does get moved by air freight often, and the security you describe is not unusual whether government or private company conducting the transfer. It could have been gold dore bars of mixed metal heading to a refinery. Were you near any large gold mines?
There are a lot more details I could have given, but I didn't do so, intentionally. Even though this took place in full sight of the flying public, only those of us who worked at the airport, and saw it repeatedly, would have our suspicions aroused because of how often this was taking place. More details would reveal the probability that this gold was coming from America's stockpile. The frequency with which it was happening indicates that large quantities of gold were being moved.
One thing that I found very troubling -- which went right over the heads of the vast majority of people -- is this . . .
Remember when Trump first took office? I believe it was his Treasury Secretary (don't remember his name) that he sent to Fort Knox to see if there was any gold, there. When the guy came out, he was smiling and said that, yes, the gold was there. But -- and it's a big BUT -- he said that they opened only ONE of the many vaults within Fort Knox and that he saw a wall of gold bars. They weighed one of the bars and it fell within the range of the weight that the gold bars in Fort Knox are supposed to be. But, that was it. He didn't insist that they open ALL of the vaults. For all we know, the others could have been empty and they kept gold in one, for just such a possibility as what Trump did. I mean . . . If the U.S. Secretary of the Treasury demands to inspect the gold at Fort Knox, wouldn't you think they'd show him ALL of the gold in Fort Knox . . . unless they did.
You're right. Maybe the "Hollywood-style" scenario that I saw take place on several occasions was perfectly innocent, and there was a logical explanation for it. Or, not. But, I have my doubts and I have good reason for them.
Dear Dale ,
I know I mention few times about the veracity of the gold reserve of USA , the truth is , I don’t have clue , I do know nothing if this gold is there or not . Hopefully there is plenty of it . Gold or not the world is in a big mess .
Have a great day Dale .
Sincerely Juan
I share your curiosity about the consequences of a dollar with no gold backing.
And I've often wondered if Nixon's dollar wouldn't need a gold backstop anyway if there was no national debt.
The US is the largest debtor in human history.
We owe more money to other governments primarily than what all the other nations on this planet combined owe each other.
Also mysterious to me is the Fed's deliberate inflation schedule of 2%/year. Why 2%? And why per year? Inquiring minds want to know
I have been thinking about the Fed's "preferred" 2% inflation rate. Using the Rule of 72, from 1945-1971 (26 years) there should still have been 10 years until the dollar's value was halved- but it was obviously on its way. The arbitrage was greatly in favour of taking the gold as soon as possible.
There is a privilege in issuing the global reserve currency which has been used and abused.
Please, tell the truth: And what about the 80% - 90% of the population that didn’t own stocks and bonds?
updated May 12, 2022, with Gallup's latest data pertaining to Americans' stock ownership.
WASHINGTON, D.C. -- Gallup finds 58% of Americans reporting that they own stock, based on its April Economy and Personal Finance survey. This is slightly higher than the 56% measured in 2021 and 55% measured in 2020 but is not a statistically meaningful increase.
Sam A.
I have been a Bonner fan for over 20 yrs. Recently, I subscribed for your full research package but found it too complicated to take advantage of and asked for a refund. Thank you very much for your prompt action on my request. I am a Canadian citizen and Live in Vancouver BC. I believe the Cdn. economy is in worse shape than the US. I don't know what to do.
I am living in an assisted living residence call Legacy Senior Living that after laundry and a few extras costs almost $9 thousand dollars CDN. a month. My husband died last October and I have lost his Canadian gov't pensions (2) along with his Swiss Annuity (the purchase was an excellent financial move for us) that I purchased it on advice I received at your annual financial conventions that you used to hold in Vancouver. I attended almost everyone of them.I am 86 yrs. old and barely make ends meet every mont. In addition I have some savings but with inflation, I don't like to touch them. I have 3 successful sons who don't need money (I reuse to take any from them) no one ever can have too much and I am determined to leave them something. Should I move to a cheaper country or what? I would really appreciate your advice on affordable life styles. Joan Harper
Dear Joan, Sorry to hear about your financial and personal problems. Since you have a good relationship with your sons, let them contribute to your cost of living. I'm sure they would really appreciate contributing, after all you have done for them. Moving to a different Country would be very hard on you unless it is with a relative or really good friend. I wouldn't recommend it.
Good luck!
If you have had a good relationship with your sons, and they're all doing well then ask them for a bit of help. Not sure that scrimping so you can "leave them something" is quite how the world works these days - best take care of yourself, I say, Joan
escapeartist . com is a website with a lot of valuable information on other countries to live in and the process it takes to move there.
Thank you. My biggest concerns for her were her age and her health. I think it would be hard or might be hard for her to adjust to a different environment.
Totally agree. Her children should help.