Excellent article from Hugo Salinas Price about the debased dollar, gold and the suicidal bankers who will destroy the world.

The Dollar Cannot Be Devalued and Suicidal Bankers

Hugo Salinas Price

“If the U.S. inflates and devalues the dollar, gold will go much higher in price”  Jim Rickards. (See here).

The last dollar devaluation took place under President Roosevelt in 1934, when from being worth 1/20.67th of an ounce of gold in 1933, the dollar was devalued to 1/35th of an ounce of gold.

The last opportunity for devaluing the dollar took place in August 1971, when the dollar was still pegged at 1/35th of an ounce of gold. Nixon took the advice of Milton Friedman and made the worst mistake in history; Nixon did not devalue the dollar as he should have done, but simply took the US off the gold standard, such as it was, and thence forth the US refused to redeem dollars held by Central Banks around the world at any price.

Since August 15, 1971, the dollar can no longer be devalued.

Since the dollar is the reserve currency of all Central Banks in the world, all other currencies – the euro included – are only derivatives of the dollar. The proof of this statement is that the value of each and every currency in the world is calculated in dollars,

The world’s currencies are devalued or revalued against the dollar in the world’s currency markets every day of the year.

There is a “Dollar Index” which shows a value of the dollar against a basket of other currencies. However, the currencies selected for the basket are arbitrarily selected and some relatively important currencies are not included in the basket. Besides this, the movement of the dollar in the “Dollar Index” cannot signify either devaluation or revaluation of the dollar, because the currencies in the Index are themselves undergoing either depreciation or appreciation in dollar terms, due to their own national circumstances.

The US cannot declare an official devaluation of the dollar because there is nothing against which it may devalue, or rather, it does not wish to recognize the existence of gold as money, against which it might devalue.

In order for the US to devalue the dollar effectively, it would first be absolutely necessary for the US government to establish gold as the referent for its value. The US government would have to declare that the value of the dollar is equivalent to a given amount of gold, and solemnly promise that that value will be upheld and made good by offering to buy any amount of gold tendered to it, and pay for it in dollars at a price slightly below the officially established price of gold in dollars, as well as offering to sell any amount of gold paid for in dollars, at a price slightly above the officially established price of gold in dollars.

Once an official value of the dollar in gold were established, it would then once again be possible for the US government to renege on its promise and devalue the dollar by establishing a new and lower value of the dollar in gold. In other words, the dollar must first of all be freely convertible into gold at an official rate, before any devaluation can take place.

As things now stand, it is impossible to devalue the dollar.

A rising price of gold does not devalue the dollar, because there is no official link between gold and the dollar. The world’s monetary and financial systems have no link to gold. Gold can be any price without causing any effect upon those systems. We have seen gold at $1900 dollars per ounce, and things were running just as they were when gold was $300 dollars per ounce.

However, the rising price of gold is a huge embarrassment to the US government not because it devalues the dollar (it does not do this) but because it provokes a loss of confidence in the dollar. When the dollar is seen as falling in value against gold, its fall causes investors to exchange dollars and other currencies for gold as a means of protecting wealth. The rising price of gold is a blot on the prestige of the US dollar and the prestige of the US itself.

The price of gold in dollars is therefore under strict government control. This fact, once derided as ridiculous, is increasingly accepted as truth by those interested in monetary matters around the world. The means for controlling the price of gold lies in the massive sales of “paper gold” which take place to suppress its price, as so many investigators have amply documented.

US monetary policy considers that the dollar is here to stay forever, and that gold is no longer – and never again will be – the world’s ultimate money.

The governments of several nations around the world do not share the same conviction with regard to the permanence of the dollar. China invented irredeemable paper money – which is what the whole world uses today – some one thousand years ago, and several dynasties of Chinese emperors learned to their cost that paper money always degenerates into simple trash.

The Chinese government knows that the dollar will not be around forever. China is purchasing enormous amounts of gold to add to their huge pile of US Bonds in the reserves of the Bank of China; the government of China is more enlightened than the government of the US, because it is encouraging the Chinese to purchase gold and silver.

The US government tells the world that it possesses some 8,000 tonnes of gold; the fact that it cannot deliver physical gold held for Germany’s account belies the assurances regarding the physical gold stock of the US.

The situation for the US – and for the world – is dangerous: the US is like a ship with no lifeboats, because it is presumed to be unsinkable.

The US and its allies are allowing the Chinese and Asia in general, to take possession of huge amounts of gold every year, while the US, the UK and Europe are drained of gold by shipments to the East.

The US evidently believes that the dollar is here to stay and that gold is just a passing fancy. This is classic hubris or arrogance.

When serious problems for the dollar surface – as they surely will – and the US has little or no gold to fall back on, the US with its back to the wall may become a very dangerous entity in the world. Would it be possible for those running the US to loose their heads and decide for a suicidal nuclear war in response to a desperate economic situation? Does the destruction of the whole world matter to men about to take their own lives? Do suicidal bankers worry about the fate of the world?


  1. Jim Rickards: Study Will Show That Gold Is Being Manipulated on the Comex (Again)

    “If I were running the manipulation I would be embarrassed at this point, it is so blatant…The regulators have been asleep at the switch.”

    Jim Rickards

    No one listens because the US regulators don’t want to see it, Wall Street traders make money off it, the mainstream media ignores it, and the shills deride anyone who brings it up. So I do not expect anything to come out of this latest version of a study that I have seen several times before, unless it is somehow associated with more undeniable smoking gun evidence uncovered through the London Fix investigation, and a ‘limited hangout’ operation. But I can doubt that as well, because it requires too much self-awareness for the masters of the universe.

    The real smoking gun will more likely be tied to be an unanticipated default somewhere in the system. And then people will ask, ‘how did we not see this coming?’ And the hunt for a scapegoat or patsy will be underway. God will not forgive us if we once again allow some of the old and shameful persecutions of the weak and innocent and the other to carry that burden of guilt yet again.

    The public will be trimmed and skinned in yet another bailout, or should I say ‘bail-in,’ to replace what had been rehypothecated. Possession will be nine-tenths of the law. And the big crooks will throw the shills, stooges, and the little crooks to the mob, without a second thought.

    It is different this time, because we are different. It can’t happen here. The most delusional words ever spoken.


  2. I wonder what Americans are going to do to prepare for a “Federal Reserve” failure, ie, Fed insolvency, or government debt default. Buy gold?

    Japanese Prepare For “Abenomics Failure”, Scramble To Buy Physical Gold

    Submitted by Tyler Durden on 03/28/2014 – 10:42

    “Tanaka Kikinzoku Jewelry, a precious metals specialist, reported that sales of gold ingots across seven of its shops are up more than 500% this month. At the company’s flagship store in Ginza on Thursday, people queued for up to three hours to buy 500g bars worth about Y2.3m ($22,500). March has been the busiest month in Tanaka’s 120-year history.”… “Investors are being drawn to the metal not just because of higher taxes, said Itsuo Toshima, an adviser to pension funds.“Slowly and steadily, people are preparing for the worst, which is the failure of Abenomics.” “To protect the value of wealth, gold comes into play as an inflation hedge, and if the economy goes back to deflationary circumstances then, again, money seeking safe havens would flow into gold.”

  3. The USofA is like a ship without a Captain. I’m not talkin’ about the POS half-breed that occupies our WH. He’s a sorry excuse for a human let alone a fucking leader! I’m talkin’ about a Statesman, a person that would have actually read and understand our Constitution. A person that understands what sovereignty means and would do everything in his power to protect the sovereignty of the USofA. A person that will put the American citizens ahead of any party politics. This is what we need, but I’m not holding’ my breath!

  4. “Eleven million people living in the shadows I believed are already American citizens, these people are just waiting, waiting for a chance to be able to contribute fully, and by that standard, 11 million undocumented aliens are already Americans in my view.”

    Joe Biden, today………what a low life sad excuse of a elected official, and a waste of human flesh.

  5. ” … these people are just waiting, waiting for a chance to be able to CONTRIBUTE FULLY …”

    Hey, Mexicans …. that means TAXES. Come on down! You deserve to be taxed to death just like the rest of us slaves.

    Yeah, leave your country …. and be a subjugated American FOREVER … even if you swim back across the river.

    Dumbasses don’t know how good they have it … all those bennies without cost.

  6. I had read that Spain became a victim of its own success and her role then became like a mouth through which the riches of gold and silver from the Americas entered Europe and went into the hands of the bankers.

    Like a dog with a rat attached to its tail, the US cannot flee from currencies that are pegged to the dollar, no matter how fast it runs. The next step is to print furiously and disseminate those dollars directly into the economy. As long as people accept the newly abundant bills, things will stay afloat. When people lose confidence in the dollar then we shall see prices skyrocket. Germany finally pegged its currency to tangible goods (land) and managed to stop the hyperinflation when its currency became toilet paper.

    I would like to keep puffing on this joint and speculate how trading cash for illegal drugs keeps inflation in check, I just have to figure out how that works. It worked in China a long time ago.

  7. Stucky says:

    “Dumbasses don’t know how good they have it … all those bennies without cost.”

    I’ve argued that they do know. Since we lived across the border Juarez, we had a suspicion of Mexicans for a long time. I’ll cover that topic another day. Right now, I will only add to your comment that being illegal is a good cover from taxes, jury duty, auto insurance, Obamacare,…

  8. “The USofA is like a ship without a Captain”

    Give a bunch of lawyers, criminals, the biggest checkbook in the world, and they can spend whatever they want. But, they have to get re-elected, to keep feeding at the trough, so they hand out piles of other people’s money to people too lazy to work for a living. They take bribes, hand-outs from the rich, and give them back 100x the bribe in tax breaks, government contracts, stimulus spending and other graft. There is no accountability, it’s a god damn free-for-all, and no representation for taxpayers, who the FSA laugh at and call suckers for working. We already had a revolution for taxation without representation, and we need another, really bad.

  9. Are Employee Background Checks Racist? EEOC Thinks So

    Last week the Federal Trade Commission joined with the Equal Employment Opportunity Commission to tell employers that background checks could have a “disparate impact” on black people and expose private firms to lawsuits.

    Threatening aggressive enforcement, the agencies released new compliance guidelines: “Background Checks: What Employers Need to Know:” They advise employers to “take special care when basing employment decisions on background problems that may be more common among people of a certain race.”

    A high ranking EEOC enforcement official warns employers, “asking a prospective employee if they are a murder, rapist, bank robber, child abuser, drug smuggler, or have been convicted of any known felony risks a hefty fine, loss of business license, or imprisonment for up to 12 years upon conviction.” The unnamed official went on to add, “We mean business here at the EEOC. Discriminatory hiring practices today will get you nothing but a felony record. And that, my friend, will destroy any chance you have of getting a high paying government job once you’re released.”

    *President Obama was still out of cell phone range somewhere on the 18th green and unable to comment.

  10. “Gold can be any price without causing any effect upon those systems.”

    i’ll have to re-read this piece but the above statement stuck out. i am not sure whether that is a true statement, though it is true that gold, which is hardly used in industry, can be revalued to an absurdly high price: $20k, $50K, $100k, even in today’s money. i suppose only jewelers would complain (and the dumbfucks who haven’t bought physical gold yet). the reason gold isn’t priced correctly is because physical gold is awash in a sea of paper gold, and it’s the latter, by virtue of its size, that determines the price. once the paper market breaks, which is inevitable, then we may see something approaching a fair market value for the yellow metal.

    thanks for posting admin. this is one of the most interesting essays on gold i have read in a while. much better than the doug casey routine: “i’m looking into argentinian bowling alleys, the nepalese foothills and etruscan artwork…we suggest going long the dong, short the baht…buy these mining shares for a 400 bagger!!”

  11. el vato loco says, “When people lose confidence in the dollar then we shall see prices skyrocket.”

    ok, but what will make people lose confidence in the dollar? prices that skyrocket?

  12. Aw dang, Arch attached a rat to my ass and now I will go in circles trying to figure out if rising prices precede hyperinflation. I think I said it was the furious printing and dissemination of currency into the economy. Then it becomes a sellers market where excess dollars chase fewer goods.

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  14. “the rising price of gold … (it does not do this) [devalue the dollar]”



  15. Anonymous says:

    “the rising price of gold … (it does not do this) [devalue the dollar]” AhahHahahAHahaHAhahHAhahahAHahHAh!”

    Anon did not understand the concept of the missing link between the dollar and gold. The dollar is fiat money, it is no longer convertible into a set weight of gold as in the past. They are divorced. Like a divorced couple, what happens to one is of no concern to the other. Is that better, Anon?


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