The Gold Standard The Gold Standard Institute

Issue #38 15 February 2014 1

The Gold Standard
The journal of The Gold Standard Institute

Editor Philip Barton
Regular contributors Rudy Fritsch
Keith Weiner
Sebastian Younan
Occasional contributors Thomas Bachheimer
Ronald Stoeferle
Publius
John Butler
Charles Vollum

The Gold Standard Institute

The purpose of the Institute is to promote an
unadulterated Gold Standard

www.goldstandardinstitute.net

President Philip Barton
President Europe Thomas Bachheimer
President USA Keith Weiner
President Australia Sebastian Younan
Editor-in-Chief Rudy Fritsch


Membership Levels

Annual Member US$100 per year
Lifetime Member US$3,500
Gold Member US$15,000
Gold Knight US$350,000
Annual Corporate Member US$2,000
Contents
Editorial ........................................................................... 1
News ................................................................................. 2
Gold Standard - The way to liberty ............................. 2
Indian Government Games in Gold ........................... 3
Do Bank Notes Cease Representing Merchandise? .. 5
Gold... Monetary Utopia?.............................................. 6
The National Debt Cannot Be Paid Off .................... 7

Editorial
Signs of increased stress in the paper money arena
are deeply troubling. The currencies of Russia,
Turkey, Venezuela, India, Argentina (of course) and
many others are under pressure. Their situation is
not unimportant to the rest of the world; all paper
monies are connected to one degree or another.
The longer that the application of the soothing balm
of gold is delayed, the harder and more painful the
transition will be. The usual exacerbation of external
problems to distract from rising internal
dissatisfaction has begun.
Bellicose and jingoistic rhetoric coming out of China,
Japan, South Korea and the Philippines on who
owns what island, and thus who has claims to the oil
and fishing rights, may or may not amount to
anything, but it preoccupies thought as intended.
None of them have anything to really gain by
military adventures, but posturing can sometimes get
out of hand. That would be disaster heaped upon
disaster. Japans worsening economic, monetary and
demographic problems, compounded by its on-going
nuclear nightmare, cast doubt on its willingness to
act prudently. Chinas militaristic rumblings and
Japanese PM Abes visit to a controversial war shrine
were both guaranteed to up the stakes.
Thailand is in a supressed state of civil war. Gunfire
has been reported as mass protests again erupt
against the corruption of the Shinawatra clan. If
guns are used to protest against such run-of-the-mill
matters as political corruption, what will happen
when the real problem manifests?
Asia is looking very fragile, and Australia, which has
worked hard to integrate itself into the
neighbourhood cultures, is looking with
apprehension beyond its northern borders.
And then there is MENA, the Eurozone and the US.
Those breathlessly hoping for gold to go to the
moon are sadly misinformed about the nature of
what is happening. There will be no winners, just
some, maybe, who lose less than others.
Philip Barton
The Gold Standard The Gold Standard Institute
Issue #38 15 February 2014 2


News
Wirtschaftsblatt.at: Thomas Bachheimer Wir sind
der Tahrir-Platz der Geldpolitik

Zero Hedge: Bitcoin, Gold and the Quantity of
Money

You Tube: Revolutionary development for the future
of gold

You Tube: Gold being dissolved in Aqua Regia yes
it can be recovered

Gold Eagle: China increases its official gold reserves

The Peninsula Qatar: Qatar increases gold reserves

Mineweb: Gold preferred in India because of its
stable nature

Daily Mail: First gold coin struck in the US (1787)
going to auction

Forbes: Laws against Predatory Lenders Keith
Weiner

Reuters: Deutsche bank to withdraw from gold,
silver fix

Peak Prosperity: The Aurum another possibility
for gold circulation.
Deccan Herald: Indian central planners pull the rug
out from jewellery exports by over 50% for the last
six months of 2013

Value Walk: How gold differs from all other
commodities Fabrice Drouin Ristori

CNBC: HSBC in trouble?
Gold Standard - The way to liberty
History has countless manifestations of monetary
policies. Even the royal houses of the Middle Ages
used their power to change the nature of money to
their advantage - and mostly to dilute. They could
not resist the temptation to finance too costly
ventures and projects through indirect ways. Gold
and silver coins were added to less valuable metals,
the citizens were therefore consequently - not
directly violent, but still subjected to violence put
underneath a creeping expropriation.
What the royal houses arranged caused back then, is
now sealed in another form behind the walls of
central banks. The phantom of inflation strolls
around more quietly than ever before. It is no longer
necessary to start the proverbial printing presses.
The German Reichsbank faced a shortage of paper,
partially due to its inflationary monetary policy,
which would erode not only the money of the
Weimar Republic, but also the young democracy.
Today's central bankers do not have to worry
anymore about this issue. Money has long been
digitized, it has become a mere booking line. Thus,
the hardest, but in any case quietest of all taxes, was
made even more abstract. At its core, however, there
is little difference between the behavior of the
medieval potentates in financial distress and those of
our central banks today. Power and non-transparent
decision-making processes provide the opportunity
to undermine the value of money and thus the
stability of society at any era. The economies of the
former Deutsche Mark block are faced with the
effects of expansionary monetary policy to a great
The Gold Standard The Gold Standard Institute
Issue #38 15 February 2014 3


extent. The maxim of price stability was abandoned
in favor of political visions. The European Central
Bank shook off the legacy of the Deutsche
Bundesbank, should the ECB actually ever have
carried on this legacy to begin with.
State budgets can be understood as figures that are
reflecting policies. Ever since the collapse of
Lehman Brothers, the monetary value of the
monetary union itself became a political issue. The
gravitation of market forces has been eliminated in
favor of a new interventionism on the part of the
European System of Central Banks, and annulled
presumably at least with the quiet acceptance of
European governments. Liberalism is on the decline
and is gradually being replaced by an institutionalism
that is in its nature socialistically stained.
Collectivistic centralism won one victory after
another against liberal federalism. Both parallel
developments lead to a substantial shift that provides
food for thought.
During the financial crisis, the ECB accumulated a
multiple of its intended power. Democratically
legitimized parliaments receded to the same extent
into the background. The sovereignty over the
budget, the key right of a state, was passed on to the
European Stability Mechanism. An organization that
is equally influential as it is anonymous.
The liberal thinker Friedrich August von Hayek
warned in his book "The Road to Serfdom" strongly
against overpowering bureaucracy and the
accumulation of power. The sum of conglomerated
power is greater than the power of its individual
parts. The criminal acts of the collective
dictatorships of fascism, nazism and communism
were apparent in their overall fatality, in the context
of the development of his work. Consequently,
history would have to be understood as a plea for a
maximized liberal and decentralized political system,
to permanently bury a terrifying vision of a
totalitarian state and a totalitarian society. Of course,
the executive board of the ECB shall not be
compared with any supporting figures of dictatorial
systems
But the hubris that must be hidden behind a
conviction that wants to confront the failure of the
state and its organs by expanding its powers and
possibilities for economic control, can barely be
imagined. In his late work The Fatal Conceit - The
Errors of Socialism Hayek quoted a famous
statement by Carl Mengers , who describes the
essence of our democracy today crisis accurately:
"Why do Institutions that serve common welfare and are most
significant for the development of the same, arise without a
justification within the collective will?
A de-politicization of money and thus the return to
all its facets as a store of value and means of
exchange, would be beneficial for a broad minded-
liberal society rather than a centrally - doctrinaire
social order. The gold standard of a currency
captures the otherwise nearly limitless power of
politics and thereby gives people freedom.
Wolfgang Schwetz
Wolfgang is the author of
Freiheit und Gold Reale
Werte fr sterreich (Freedom
and Gold Real Value of
Austria). It is being released this
month.
Wolfgang is studying national
economics at the University of
Vienna. Despite his clear mind
being washed by pure Keynsian
academic BS, he is a follower of Austrian School economics and has become
a real admirer of gold and the gold standard. Since 2008 Wolfgang has
been a Parliamentarian secretary at the Austrian Freedom Party.
Indian Government Games in Gold
In a 24 hour period, around the 28
th
January 2014, a
flurry of news reports from India caught ones eye.
The first of these news reports, was the claim by
globally known Indian Finance Minister, CP
Chidambaram (who seems to have now dropped the
C from his name), that Gold smuggling into India
amounted to as high as 3,000kg per month, in certain
months. This figure equates to 3 metric tons per
month.
An initial thought on this revelation, is that Mr.
Chidambaram has pulled this figure from his plump
derriere. Obviously, smugglers do not fill out
government importation forms at the border, to help
the government keep an account of how much gold
is being smuggled into the country.
The Gold Standard The Gold Standard Institute
Issue #38 15 February 2014 4


A second thought was that perhaps Mr.
Chidambarams good fellas in the Indian gold
industry tipped him off, with the figure of 3,000kg
per month, since that is the figure that they allow
the legitimate gold & gem dealers of India to have
from them? Since, this low tonnage would allow
CPs good fellas to continue wrenching the
extortion like premiums for physical gold sold in
India from the gold & gem dealers of India.
Either way, ones wild guess, is that this figure is
severely underestimated by CP, purely due to
political expediency. CP cant be seen to be
absolutely irrelevant, with regards to reducing gold
smuggling tonnage into India, both by the rest of the
Indian citizenry, and by his banker masters in the
West.
It is a fact, that CPs government hiked gold import
duties by 150%, from 4% to 10%, in very short time
during the course of 2013, in their illusory fight to
tame the Indian Current Account Deficit (CAD). It
is illusory because the largest component making up
the Indian CAD is not gold, but energy, namely
crude oil, and various petroleum products. If one
were serious about taming a runaway CAD, one
would strike at that, which is the largest component
of it.
It is also a fact, that when it comes to physical gold,
Indian demand is traditionally a major absorber of
global supply from the mines, and from scrap.
Estimates have it that between India & China, those
two countries take around 4 out of 5 troy ounces
offered in the physical market globally.
It is no coincidence, that the April & late June 2013
precious metals price smashes, were also met with
the throttling of Indian citizen demand, by CPs
150% increase in Indias gold import duty.
This act alone, removed much of the Indian citizen
demand, which is crucial to the gold markets ability
to absorb global physical supply. Say what you will
about smuggling numbers into India being larger
than 3 tons per month, it would be nave to pretend
that a 150% increase in import duties would not
have had an effect in denting the Indian citizens
ability to absorb or overwhelm supply.
With Indian citizens offline with regards to global
gold demand, the risk to the gold price manipulators,
from smashing the price in April & late June 2013,
was minimised.
The second news report, was a fawning praise of the
Indian governments & the RBIs (Reserve Bank of
India) raising of their short term rate by 0.25%, as
this action would show the RBIs persistence to bring in
price stability. This brown nosing praise comes in
the wake of the Indian Rupee losing about 20% of
its purchasing power against the US dollar in the past
year Price stability indeed! In late August 2013, the
Rupee had lost 30% against the US dollar in the first
8 months of that year. Surely, the latest 0.25%
increase in Indias short term rate would compensate
for a 20%-30% loss in the currency over the past
year? One could not make this stuff up.
The third news report was the carrot, to the 150%
gold import duty hike stick. It was the promise by
CP that with the CAD now tamed at 2.5% of
GDP, thanks to his government & the RBIs
persistence to bring in price stability, that by March
2014, CP will look into reducing gold import duties.
Not will reduce gold import duties, but merely the
promise that he will look into itnot now, but in
March.
Why in March and not now? The Indian elections
are in April. The political party of CP, and his
cohorts, including the RBI are worried about the
outcome of that election, particularly about how well
their main rival, Narendra Modi, will do.
Modi is pro-gold, pro-industry, and governs the state
of Gujarat, with an unemployment rate of about 1-
1.5%. He will reduce Indias gold import duty back
to previous norms if he surviveserrif hes
elected.
From these 3 news reports, it is interesting to see the
games that the incumbent Indian government &
central bank plays in the gold market, all for the
ultimate aim of retaining power for themselves, and
appeasing their Western bullion banking brethren, at
the expense of the Indian gold buying citizenry, as
well as the global gold buying citizenry or what little
of it remains in the West.
The Gold Standard The Gold Standard Institute
Issue #38 15 February 2014 5


Caravan of Thought
Do Bank Notes Cease Representing
Merchandise?
Under the gold standard, banks often use bank notes
to buy real bills of exchange.
1
That is, banks convert
real bills of exchange (commercial credit money) into
bank notes (bank credit money). Thus, these bank
notes represent the merchandise that the bill
represents.
Many opponents of the real bills doctrine admit that
when a bill is converted into bank notes, these bank
notes represent the merchandise represented by the
bill. However, they also claim that as these bank
notes pass to other hands, this representation is lost.
They represent merchandise to the person receiving
them via selling the bill to the bank. However, when
the person to whom the bank gives the bank notes
spends them, these bank notes cease representing
merchandise. They are now merely currency
representing nothing neither merchandise nor
specie. This is true even though these bank notes are
convertible in gold or merchandise.
(If these opponents of the real bills doctrine are
consistent, the same argument is true when a person
sells gold to a bank for bank notes, i.e., converts
specie to bank notes. These bank notes represent
gold to the person receiving the bank notes from the
bank. However, when he spends the bank notes,
these bank notes cease representing gold and began
representing nothing although they can be used to
buy gold from the issuing bank [redeemed] or
merchandise in the markets.)
To the contrary, these bank notes continue to
represent merchandise no matter how often they are
spent or how many hands through which they pass.
That duty is never discharged until they are returned
to the issuing bank. Then they are retired. All bank
notes not lost eventually return to the issuing bank.

1
Most of the time banks buy real bills of exchange by crediting
the sellers checking account with the amount of the purchase.
This checkbook money is functionally the same as bank notes.
They are both forms of bank credit money. Both represent
merchandise. The only real difference is that bank notes often
pass through more hands before returning to the issuing bank
for cancellation.
Bank notes issued for a particular bill may continue
to circulate for months after that bill has been paid
and extinguished. However, that does not make
these bank notes inflationary. An equivalent amount
of purchasing media (gold, other bank notes, or
checkbook money) has been removed from
circulation to pay the bill.
Opponents of the real bills doctrine who use this
argument never describe the process by which bank
notes cease representing merchandise. They do not
because they cannot. They cannot because bank
notes never cease representing merchandise. To do
so, they have to transmute bank notes from
something into nothing.
Much of the confusing about bank notes comes
from observing the actions of government notes and
nonconvertible bank notes issued by a central bank
for its government. These notes are not tied to
merchandise and do not represent merchandise.
They represent nothing except the governments
credit, i.e., the governments ability to force its
subjects to surrender their property to it, commonly
called the governments ability to tax. Because no
relationship exists between government notes and
new goods entering the markets, government notes
are inflationary. (Under the real bills doctrine, bank
notes are directly tied to new goods entering the
markets and can only increase as the quantity of new
goods increase.) Being inconvertible, government
notes lack quality and trade at a discount to gold
coin.
Additional confusion comes from observing bank
notes issued by banks that have suspended
convertibility. All the checks offered by convertibility
are lost. Banks can over issue bank notes deliberately
(e.g., buying treasury bills and bills of
accommodation) or accidently (e.g., buying bills that
are not paid). Like government notes, these banks
lose quality and become inflationary, i.e., trade at a
discount to gold coin.
If the gold standard and convertibility into gold
remains, bank notes issued to buy real bills of
exchange represent merchandise and maintain the
same quality as gold coin. They never cease
representing merchandise and are not inflationary
regardless of their quantity.
The Gold Standard The Gold Standard Institute
Issue #38 15 February 2014 6


Thomas Allen
Gold... Monetary Utopia?
I have written many articles about Gold, about the
Unadulterated Gold Standard, about the
components of a Gold based economy. Perhaps its
time for a bit of a reality check. Is the very idea of
Gold money, the very idea of honest money in an
honest society Utopian? Especially in this day and
age, an age of the big lie, of tyrannical governments,
of crony capitalism, of loss of human vitality...
After all, families run and have always run without
money, except as needed to deal with the outside
world. Same with the extended family; work is done,
responsibilities shared, but money never changes
hands. Why does this kind of very human interaction
have to be limited to families, or at best to small
tribes; why cant the whole world run this way? Why
not a world without money, with only the best
interest of all as the driver? Why a profit driven,
money based economy?
Many attempts have been made in just such efforts;
efforts to replace the money based economy with an
economy based on altruism, on human
understanding, on shared responsibilities... the
classical Marxist cry from all according to their
ability, to all according to their need. Indeed,
communal living has been tried on many scales,
many times, from small hippie communes to the
great socialist experiments of Soviet Russia, of
Communist China. The very same socialist
experiment is now being tried in the formerly
capitalist USA.
All these attempts have failed dismally; more than
dismally, have failed tragically and with lethal
consequences for hundreds of millions of innocent
human beings; in Stalins five year plans, Maos
Cultural Revolution... and perhaps soon in the USAs
ObamaCare as well. Why do these social
experiments fail... and why does Humanity keep
trying them, in spite of repeated tragic failures?
Why these Utopian experiments fail is easy to see, if
we but choose to look and see the truth; the idea that
what works in a family or small tribe can be scaled
up without limit is Utopian. It is a false belief, and a
lethal belief. Sociologists have researched this very
topic; money-free societies can exist, do exist, direct
democracy can exist, does exist, in communities of
up to about 250 people. Once this number is
exceeded, the family based, altruism based system
starts to break down.
No rocket science or brain surgery is needed to see
why; in a small group, everyone knows everyone else;
knows who to trust, knows who is a good leader,
knows who is a dead-beat... and the family
connection brings forgiveness to relationships. As
the group grows, it becomes harder to know whom
to trust, whom to vote for... and much less
forgiveness is given to strangers than to Aunt
Mindy or Uncle Joe.
The effort to scale up small scale communities to
thousands, indeed millions, is doomed to fail. The
hard reality is that a different system must be used to
enable society at large to survive; if we dont know
who is making a promise, if we dont know whether
the promise maker can be trusted or not, the system
itself must generate trust. Without trust, society
breaks down and civilizations collapse.
Fiat currency is always and everywhere a promise; we
dont know, indeed cannot know if the promise
maker is to be trusted. After all, Ben Bernanke is not
our intimately known Uncle Joe... and Janet Yellen
is not our Aunt Mindy. We cannot trust them, as
we do not know them... we only know stories that
are spread about them... stories that are mainly
spin... i.e. mainly lies.
We do not have an intimate knowledge of their
personality, their mindset, their belief systems; we
dont have a long term history of direct interaction
with them. If we do trust them, we are being nave;
and naivety generally leads to trouble... just as
Utopian social experiments lead to trouble.
No system based on trust can work, unless there are
solid grounds for giving trust; either intimate
knowledge of the players based on living in close
proximity, as in an extended family, or a strong case
of common interest. The interests of Central
Bankers bear very little commonality with the
interests of the average wage earner; and I suggest
The Gold Standard The Gold Standard Institute
Issue #38 15 February 2014 7


very few people on this planet have lived as part of
Bernankes or Yellens family... extended or
otherwise.
So we come to it; the Fiat system cannot be trusted,
as the purveyors of the system cannot be trusted.
The very idea of trusting a Fiat system is Utopian,
and therefore lethal. Only a system that is inherently
trustworthy, and is not dependent on the promises
of either Bernanke or Yellen or of any other power
seeker can possibly work. Only a system that is not
under the control of and cannot be controlled by any
special interest can be trusted.
Of course, there is such a trustworthy system, a
system not controlled by any special interest; its
called the Unadulterated Gold Standard. Gold is not
a promise, but a present good, a bird in the hand vs.
a promise of two birds in the bush. Gold is the
touchstone, the acid test of any promise ever made.
Gold is the ultimate extinguisher of debt; that is
Gold fulfills any economic promise made.
A bond is a promise; and if redeemed in Gold, a
promise that proves itself to be true. A Real Bill is a
promise; and if redeemed in Gold, a promise that
proves itself to be true. A bank note is a promise;
and if redeemed in Gold, a promise that proves itself
to be true. A promise that is redeemed in another
promise is proven to be what? Proven to be nothing
but a lie.
Fiat currency is a lie, Fiat bank notes are lies, Fiat
denominated bonds are lies... an economy based on
Fiat is an economy based on lies. That is where we
are today, living under a system based on lies... and
the results are starting to show. Just as the lies of the
Utopian socialist experiments in the USSR and
China showed up... in the form of war, famine,
death... so the results of living under a Fiat system of
lies are starting to show up.
Is war far away? Is famine far away? I suggest both
are already upon us. Thousands are dying in wars at
this very moment... hundreds of thousands have died
in the last few years... and the death of millions is in
sight. The push of a button by a power mad
psychopath would ignite the conflagration.
One third of the world population is already hungry;
and not just in the so called underdeveloped
nations. In the UK thousands of retirees are facing a
choice; freeze or starve. These poor innocents
cannot afford both food and fuel. In the meantime,
the power mad psychopath running the US
government is busy shutting down power plants,
pushing energy costs to the sky. How many
American retirees already face the same choice;
freeze or starve?
Why Humanity keeps trying Utopian experiments is
a conundrum; the special interests, the power
seekers, the parasites spread reams of propaganda
promoting their Fiat system; the very heart of the
big lie... but why do people swallow the lie? Is it as
simple as Santayanas famous those who fail to learn
the lessons of history are doomed to repeat them...
or is it more than that? Why do we fail to see the
truth? Do we fear to see the truth?
The truth will set you free. Do right and fear not.
Rudy J. Fritsch
Editor in Chief
The National Debt Cannot Be Paid
Off
Last year, the Arizona legislature passed SB1439.
This was a bill to recognize gold and silver as money
in the state of Arizona. It was vetoed by Governor
Brewer. Recently, SB1096 was introduced to try
again this year and address some of the criticism
from the governor and others.
Arizona again has an opportunity to take a leadership
position. There is a worldwide trend towards using
gold as money. The driver is obvious: excessive debt.
Government spending is out of control and, while
most say they want spending cuts, people oppose
cuts that impact them. Among those who get
government money, theres practically an unspoken,
unbreakable pact to keep the money coming. But
when I say that the national debt cannot be paid off,
its not a political forecast; its a statement on the
flawed nature of the dollar.
The Gold Standard The Gold Standard Institute
Issue #38 15 February 2014 8


Astute observers call the dollar a fiat currency. Fiat
means force. Its true that were forced to use the
dollar (e.g. by taxes on gold) but the dollar is also
irredeemable. Theres no way to cash it in. The dollar is
credit that is never repaid. Todays dollar is a
dishonored promise.
This was not always true. Before 1933, the dollar
represented an obligation to pay 1/20 ounce of gold.
People could deposit gold and get paper notes in
receipt. Those notes circulated, and any bearer could
redeem them for gold. Back then, $20 was not the
gold price. It was the legal rate at which gold was
deposited and redeemed.
In 1971, President Nixon changed the monetary
system with the stroke of his pen, making the Fed no
longer obligated to redeem dollars for gold. The
consequences of using debt as if it were money were
soon clear. Rising debt became a more serious
problem than rising prices.
To understand debt, credit and the importance of
redemption, consider Joe borrowing sugar from
neighbor Sue. To pay Sue back, Joe goes to the store,
buys sugar and hands it to Sue. Not only is Sue
repaid; the debt goes out of existenceit is
extinguished. Borrowing money used to be like
borrowing sugar. The repayment of debt in gold-
backed dollars settled the loan and wiped the debt
clean.
Not anymore, since Nixon detached the dollar from
gold. By making people pay with paper-only dollars,
each debt is transferred, not cleared.
Suppose Sue owed Joe $1,000, then hands Joe ten
$100 bills. Sue gets out of the debt loop. But now
the Fed owes Joe the $1,000. What does Joe do? He
deposits his cash in a bank. Now the bank owes Joe
money, while the Fed owes the bank. What does the
bank do? It buys a Treasury bond. Now the Treasury
owes the bank. And so on.
By Nixons design, the system omits a crucial feature.
The extinguisher of debt, gold, is not allowed to do
its job. Debt can only be transferred from one party
to another. Its like a lump being pushed around
under a rug. With no means of final payment, that
lump is never put in the trash. Debt is never
extinguished.
In fact, the debt must increase, because the interest
is constantly accruing. Interest is added to the debt,
as it cant be paid off either. Total debt must grow by
at least the interest. Debt actually increases faster
than that, because the government craves what now
passes for growth.
The rate of debt increase is proportional to the debt
itself. It is not a fixed dollar amount, such as $100
billion a year. It is instead a percent of total debt.
Mathematics has a term for this type of growth: an
exponential function.
Exponential growth is not sustainable, according to
credible scientists. Mainstream economists ignore
this fact in the hope that that somehow growth can
outpace debt, one year a time.
But exponentially rising debt is not sustainable
because the capacity to service the debt is finite.
Without a means of extinguishing debt, servicing is
merely borrowing new money to pay off old debts.
This is the equivalent of taking out a home equity
loan to get money to pay the mortgage.
The U.S. debt is putting us in danger of economic
catastrophe. Like Greece, which found no more
buyers for their bonds, the U.S. relies on selling new
bonds to pay interest and principal when due. The
difference is that the whole world bids on U.S.
Treasury bonds, for now. But eventually, market
participants will realize that the American debt
cannot be paid off.
Dr. Keith Weiner
Dr. Keith Weiner is the president of the Gold Standard Institute USA,
and CEO of Monetary Metals where he write on the basis and related
topics. Keith is a leading authority in the areas of gold, money, and credit
and has made important contributions to the development of trading
techniques founded upon the analysis of bid-ask spreads. Keith is a sought
after speaker and regularly writes on economics. He is an Objectivist, and
has his PhD from the New Austrian School of Economics. He lives with
his wife near Phoenix, Arizona.