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Gold Reserves and Confiscation

Once governments got you used to the concept of using just one currency in your everyday transactions and got you used to the trust that they were looking after your gold – they began loaning it out and selling it off, often without your knowledge or consent.

(Chart: source: Wikipedia By Tsange – CC BY-SA 4.0)

Looking at the chart, it’s easy to see the UK gold reserves have declined massively, especially in the 1960s – leading to the famous ‘Pound in your Pocket’ speech by Prime Minister Harold Wilson in 1967, trying to assuage voters that their pound was still worth a pound, as the value plunged against other currencies. A pound of what, Harold? In 1999, the UK decided to sell off over half the nations’ remaining gold reserves, some 400 tonnes. At the time, gold was at the end of a major 20-year bear market, and the price was at an all-time low, a price last seen in the 1970s. The Bank of England, the custodian of the countries’ gold reserves, insists that it was never consulted in the decision, and some leaks, in fact, suggest that many of their staff vigorously opposed the move. They claim that Her Majesty’s Treasury and them alone made the decision. At the time, the Chancellor of the Exchequer was a Mr. Gordon “Golden” Brown, who subsequently became Prime Minister.

Even worse, the huge gold sales and auctions were publicly announced well in advance, thus giving gold dealers the chance to prepare for the glut of gold that was about to be released onto the market, and force the price down still further as a result. The normal strategy is to keep intended government gold sales quiet, then simply conduct the sales on the open market, obtaining the best prices possible, then announce the results afterward.

Why might a government decide to sell off one of the main assets of its people at the lowest price possible? There were rumours and accusations that the gold was sold to prevent top Hedge Funds who had got it wrong gambling on the price of gold from going bust and destroying the worldwide economy, among others.

Regardless of the truth of the rumours, 1999-2002 has subsequently been proved to have been exactly the right time to start buying gold, not selling it; in fact, the value of the gold sold by the UK has risen by over ten billion dollars since that time. This period in gold price history is now referred to as ‘The Brown Bottom.’

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1971 Gold Window Closes

While the owning of gold was illegal for US citizens from 1933, the USA sat atop international trade after World War 2, allowing gold convertibility at the same price of 35 dollars an ounce for other nations. This was called the ‘Bretton Woods’ agreement, referring to the location where it was signed. However, partly due to the cost of paying for the Vietnam War, the number of dollars in circulation began rising in the 1950s and 1960s. Nations like France and West Germany seized their chance to exchange their devaluing dollars for the real thing, gold at $35 an ounce. In 1971, the window for exchanging gold was officially closed.

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The Federal Reserve

As the current empire, the USA began 1900 with a strong, growing country, an economic powerhouse destined to lead the world, and best of all, their currency was all denominated in gold and silver.

The USA removed its link in gradual phases, but several major milestones stand out in history. The first of these was the creation of the Federal Reserve, in 1913, just before World War One, handing control of the US national currency to private banking interests. To emphasise the importance of this, remember Amschel Rothschild’s quote :-

“Give me control of a nation’s money, and I care not who makes the laws.”

― Amschel Rothschild

James Corbett’s superb “Century of Enslavement – History of the Federal Reserve” video and podcast documentary is highly recommended for the full history of how that happened.

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USA Reduces Reserve Lending Requirement to ZERO

In 2020 during the Corona crisis, the USA simply reduced the reserve lending requirement to zero, giving banks the power to issue new money with interest added, without any savings in the bank to back it up. The media response in reporting this incredible, never-seen-before, financial act?

Zilch.

Well, virtually zilch. that was the only mainstream clip I found mentioning it.

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Merv

There were many great rich cities along the Silk Road that are now just ruined, with little left of their tales of immense wealth. Merv in Iran, for example, had perhaps 500,000 people there at its peak, was a major centre of learning, and is now just a raised shell in a desert. The point is, people and wealth move, civilisation and empire grows, lives, and dies. It is never fixed, and it definitely never stays the same forever.

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Then there’s Japan

Whatever may be said about Donald Trump, he is absolutely right to lament the one-sided trade deal with Japan.

For some reason, a load of your elected representatives (if you’re in the USA, but whatever country you are in, they are probably undertaking similar schemes and hoping you don’t notice), decided back in the late 1940s to gift Japan unfettered access to American markets, while simultaneously granting Japan the right to impose massive protective tariffs on the same types of goods travelling in the opposite direction. No wonder Japan was able to rise from defeated island nation to a huge superpower, where the imperial palace grounds in Tokyo were worth more than the whole of New York by the 1980s.

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The British Pound Sterling

To give you an example of how that paper you have
in your wallet, or digital bits on your banking homepage
screen have become distended from the real money it once
represented, just think of this – A British Pound Sterling was
once worth exactly what the words say – A pound in weight of
Sterling silver. As of the end of August 2020, the same pound
of sterling silver is valued at £282, or $376. That is 0.0035%
of its original value.

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How it Began

In 2006-07, originally as a hobby project, I wrote my first book, imaginatively entitled “How to Invest in Gold and Silver.” It was meant just to be a self-published work, distributed to a few friends and relatives, no further than that. However, in late 2007 and early 2008, strange things began to occur in world financial markets again, culminating with the BBC showing footage of people queueing outside Northern Rock, a UK-based bank, patiently waiting their turn to withdraw their savings from the bank in cash. These scenes looked exactly like something being replayed from history, familiar, common even. They were well-documented from a 1907 financial crisis in the USA when the imaginatively-named Knickerbocker Trust got into trouble, and history books tell us decisive action by the financier James Pierpont (J.P.) Morgan saved the day and more commonly-known, the 1930s in the aftermath of the 1929 Wall Street Crash. Only, whereas the BBC was subtly mocking them as fools and playing lots of footage of experts saying they were silly to worry, history showed something written in the book.

“Contrary to Popular opinion, banks do go bust.”

― Alan Dunwiddie, 2007

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Bank Holidays

Fractional Reserve Banking is responsible for something we all nowadays take as a positive thing because it means we get a day off work. Bank Holidays. The origin of bank holidays is historically based on banks taking a holiday from paying out to customers. They could tally the books during this holiday and ensure that they weren’t technically insolvent from having lent out too much money against deposits. The idea is that, if the bank was insolvent, they could call in a few favours during the day off and be in a position to continue the business, as usual, the next day of opening. If it sounds like something ancient, think again. The whole USA even had an eight-day bank holiday in 1933, after an emergency law was passed to stop more banks from going bust.

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Mary Poppins Bank Run

The 1964 Disney film “Mary Poppins”, starring Julie Andrews and Dick van Dyke, also demonstrates how a run on a fractional reserve bank works. In one scene, the bank manager sings about funding imperial projects like ‘railways in Africa’ and ‘dams in Egypt.’ The bank then snatches tuppence from a young boy who then shouts, “Give me my money back!” This prompts other bank customers to be concerned about why the bank manager won’t give his money back, and they begin demanding theirs, too, leading to the bank closing the withdrawal counters.

With the withdrawal counters closed, the bank accidentally spills a huge pile of gold coins on the floor, a subtle suggestion, perhaps, to help you realise they do have your money really. As long as all depositors don’t want their money back simultaneously, banks are fine. Trust is key.

The timing of this film is in itself interesting, if one digs a bit deeper. 1964 was a time when the public was beginning to have doubts about American superiority and dominance and with just reason. In 1963, the USA has 93 million silver dollars as security against silver certificates, but by 1964, it had dropped to 22 million. Also, the death of a president in 1963, one who had opposed the selling off of the nation’s silver reserves at $1.29 an ounce (it would be $50 an ounce 16 years later), was another factor in monetary change. In 1965, Lyndon Johnson signed the coinage act, reducing silver content in coins to 40% for half dollars and making the smaller coins, nickels and dimes, an inferior cupro-nickel alloy. Coin collectors and hoarders may be blamed, but we can guess the truth.

In reality, this story is little different to how the Roman Empire and countless others effected their thefts from the populace. Whereas once the bread and circus charade probably involved Gladiators wearing banners proclaiming the newly-debased copper solidus was “as good as gold”, we now have direct imagery hitting the brain. Disney certainly has a chequered history with possible abuse of it’s power that is worthy of special investigation. Then do you remember how 3 is the Magic Number? It seems it is for Disney too.