As I write this article, at about 11:30AM NY time, on 27 October 2015, the probability of another banker raid in the paper gold and silver derivatives markets increases and remains elevated. Yet, every time bankers raid paper prices, if indeed this happens again sometime over the next few trading days, their raids on the fiat currency prices of gold and silver always trigger a lot of frustration on behalf of physical gold and physical silver owners due to an improper equating of fiat currency price with real value and improper equating of “perceived” value with “real” value. To debunk these widely held inaccurate beliefs, how can one truly accept a valuation of sound money (physical gold and physical silver) in an unsound, counterfeit fiat currency? In fact, it astounds me when I witness intelligent people repeatedly make the mistake of pricing a sound money in terms of unsound money and then equating this fake price to physical gold’s (or silver’s) value.
A huge reason we all tend to make these types of sophomoric mistakes is due to the fact that the bankers erased all real knowledge about sound money from textbooks and the collective conscience of society long before any of us living on this planet today had even been born. Therefore, we were raised to believe that valuing gold and silver in terms of fake fiat currencies is acceptable, whereas if you transported a 5-year old child that lived during a period of a real gold standard persisted to the present day, that child would laugh at our foolishness regarding the manner in which we value physical gold and silver. During periods of true gold standards (and not anti-gold standards like the Bretton Woods system, that was still truly a US dollar standard), the only accepted way of valuing gold and silver was by its weight, in grams or in troy ounces. The reasons why the Bretton Woods system was much more of an anti-gold standard as opposed to a true gold standard is beyond the scope of this article, but something we explain in fully and in great detail in our upcoming SmartWealth Academy. Any paper note that simultaneously circulated with gold and silver coins during true gold and silver standards only represented that standard monetary unit of gold and silver weight. And when governments and bankers reneged on their promise to redeem these paper notes into a pre-specified precious metal monetary weight, the paper notes depreciated against the precious metal.
Today, bankers have brainwashed us all to believe that the precious metal, when it is falling in fiat currency prices, is dropping in value (our “perceived” value), when in reality, the value of the precious metal always remains constant because its “real” value can only be measured by its weight. In fact, when bankers raid paper gold and silver futures markets and artificially drop its associated gold and silver price, if we were able to distinguish the differences between “perceived” value and “real” value, and the difference between price versus value, we would all be ecstatic instead of depressed. Why? Because we would understand that in manufacturing such events, bankers have increased the value of our paper notes in terms of real gold and real silver. Remember, I just told you that historically, under periods of real silver standards, when the bankers committed fraud, the paper notes depreciated greatly, up to as much as 40%, in terms of the real silver it could then buy (I explain this historical event in much more detail in my vlog below). Today, banker fraud causes our paper notes to appreciate, not depreciate, in terms of the value of gold and value of silver they can buy.
This reversal of fortune, from the same committed bank fraud, should blow your mind. To understand these concepts further, please watch our two part series, SmartKnowledgeU_Vlog_002: What is the Fair Value of Gold? Ounces Over Dollars, below. If you watch the two-part series below, then when bankers soon likely raid gold and silver futures markets and force the fiat currency prices down, you will remain much more calm as you realize this has no affect whatsoever on the real value of physical gold and physical silver.
To watch the above vlogs, please click on the photos and then click the text
“Watch this video on YouTube.”
About the Author: JS Kim is the Managing Director of SmartKnowledgeU, a fiercely independent consulting, research, and education firm that focuses on providing wealth preservation strategies to clients in 30+ different countries around the world. Stay tuned for othe release of our upcoming SmartWealth Academy, an online education academy designed to provide an alternative to business school at a fraction of the price of top business programs, yet with the provision of knowledge completely lacking from MBA and business school programs necessary to survive our ongoing currency wars.