Using Gold “In Extremis.” Are We There Yet? by Julian D. W. Phillips
Which country is starting to buy food with oil and gold?
“Grain deals are being paid for in gold bullion and barter deals are being offered,” one European grains trader said. Some of the major trading houses are involved. Another virtue of using gold is that barter or gold payments are the quickest option to get imports.
…it’s this that Alan Greenspan described as “in extremis”. He said, “Gold is money, in extremis”.
…investors have to ask themselves…
- will monetary crises hurt the exchangeability of any other currency or its international value?
- Will political changes to the balance of power weaken the international exchangeability of a currency or its international value?
- Will such extreme times hit the developed world?”
We’ve seen the profits of Societe Generale drop 89% on its investment side and note that the exposure of that bank to the sovereign debt crisis is horrific and could possibly bring the bank down, unless there is a major change of direction in the weaker nation’s of Europe’s economic direction. This doesn’t appear to be on the horizon. The implication that we derive from this is that we’re as close to a banking crisis as we are to a Greek default. If such a crisis does suppurate, then it will spread far and wide, and many banks as well as financially weak nations will find their international credit standing facing extreme times. This affects the very structure of the E.U. monetary and banking system.
Not only will banks then distrust each other but so will Chinese investors. No one will support a lost cause. It is that perception that brings about extreme times. It is that perception that demands that gold be used as money.
via Using Gold “In Extremis.” Are We There Yet? by Julian D. W. Phillips.
Is life starting to imitate art here?
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