Guest Post by Jesse
Gresham’s law is an economic principle that states ‘when a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation.’
Notice the ‘sea change’ that occurred with Shanghai gold flows starting in 2013.
There were about 49 tonnes, or 1,575,000 troy ounces, of gold delivered from Shanghai in the latest week.
No matter what the pundits say about ‘gold bugs’ and all that sort of nonsensical disparagement, the central banks of the world have been net buyers of gold since about 2007, and the major countries of The Silk Road are buying gold bullion by the tonne each and every week.
Are they all unenlightened idiots? Goldbugs?
Are the central bankers of the world fools and dupes?
Or are we being misled by the global Banks? Hard to believe, right?
Gold bullion is moving from West to East.
Gold has grown seriously weaker over the last several years while the Dollar has grown seriously stronger.
I’m not surprised by this. What’s telling is that the Shanghai index is on the upswing and the west is going down, so by population distribution, the west is telling the other 75% of the world that gold is not recognized, only the fiat petro dollar. It won’t end very well for the western 25%.
We somehow feel that our paper gold, and fiat Wall Street casino will save us, when “the fat lady sings”.
The golden rule – – “He who has all the gold – rules”
Does Gresham’s Law work in other areas of society also? Me thinks so…
Bad politicians drive out good ones is a good example.