The Gold Standard

Cigarlover said:

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So if we take the December 2024 number and divide it by 35 billion we get a factor of 615. Obviously things haven't gone up by 615x. So is inflation driven by money supply or not?
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It is, but it isn't a linear relationship. The advent of the petrodollar circa 1971-1973 introduced a market dynamic whereby we export a lot of inflation to other nations.

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@Cigarlover I'd like to get Zed's take on your questions.
Do you mind if I copy & paste to the other forum? OR could you drop this in the lunatic fringe thread over there?

JayDubya said:

^^^^^^^^^^^^^^^^^^^^
@Cigarlover I'd like to get Zed's take on your questions.
Do you mind if I copy & paste to the other forum? OR could you drop this in the lunatic fringe thread over there?

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Most definitely. Go for it.

pmbug said:

It is, but it isn't a linear relationship. The advent of the petrodollar circa 1971-1973 introduced a market dynamic whereby we export a lot of inflation to other nations.

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I thought that might be part of it but wasn't sure if M-2 also included money we sent out of the country. I always understood it to be within the US borders and available to the US.
It definitely makes sense that we are exporting our inflation. Thats why when others sell our treasuries that inflations come home and gold goes up. Thats a direct reaction anyway.

On the other hand, lately, as in the last year or so, the fed has been reducing it's balance sheet and restricting money supply. So why is gold going up? Are we printing more than the fed is restricting or reducing it's balance sheet?

To me, things seem to make sense at times. Other times I just don't understand it. Seems very confusing.

I don't know what to think, never really considered it. But I'm thinking it might simply be a flaw in the logic being used. A semantic of the thought process.

I think we're going to to go "oh yeah, I should have thought of that" when we get the answer.

Something along the lines of the old "missing dollar" brainteaser:

Three people check into a hotel and pay $30 for a room, each contributing $10. Later, the hotel manager realizes the room was actually $25, so he gives $5 to the bellhop to return to the guests. The bellhop, however, decides to keep $2 for himself and gives $1 back to each guest.

Now, each guest has effectively paid $9 (since they originally paid $10 but got $1 back), totaling $27. The bellhop kept $2, bringing the total to $29—but they originally paid $30! So where did the missing dollar go?

Cigarlover said:

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On the other hand, lately, as in the last year or so, the fed has been reducing it's balance sheet and restricting money supply. So why is gold going up? Are we printing more than the fed is restricting or reducing it's balance sheet?
...

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Fed's balance sheet went from $4T in 2019 to $9T at the peak (+$5T) and QT has reclaimed $2T (it is back down to $7T).

Gold did not reflect the QE since 2020. Paper games and markets chasing other assets (real estate, stocks).

Gold's current run has been largely fueled by foreign buying (China, India). USA is just recently waking up on gold. There is still a lot of room for capital rotation from stocks and real estate to gold. $.02 FWIW.

JayDubya said:

So where did the missing dollar go?

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VISA™

maneco64

Nothing to see, can listen in one tab, play around the forum in a different tab.

This Is What Happened to Weimar Germans Who Trusted Government and the Currency.​

^^

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With a single stroke of a Sharpie, the current administration could achieve several of its most desired and difficult objectives:

• Limit the amount that the money supply can grow—reining in government spending
• Curb inflation, the great enemy of the incumbent
• Completely neuter the Federal Reserve
• A return to the gold standard has support at the highest levels

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Let's see...

• DOGE is trying to rein in government spending, but government spending has actually increased.
• Inflation curbed? That's not conclusive yet. Tariff uncertainty is still rippling cascading waves of consequences though global supply chains.
• The Fed is still doing whatever they want and Trump still posts impotent tweets on social media criticizing JPow.
• Maybe. We only see innuendo. Where's some solid evidence of anything concrete on the issue?

DYODD here.

"This Will Be THE END..." | John Rubino​

May 13, 2025 #economy #MarketCrash
John Rubino, Former Wall Street Analyst, Author & Substacker talks on the current economic landscape and its implications for investors. Rubino discusses the end of a credit supercycle, highlighting the risks of hyperinflation, deflation, and stagflation due to global fiat currency systems.

12:18

pmbug said:

... Tariff uncertainty is still rippling cascading waves of consequences though global supply chains. ...

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pmbug said:

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That must prove tariffs are BAD. And that price-rises, by dishonest marketers, are the fault of the government, trying to address systemic trade imbalances with mercantile dictatorships and oligarchs' asset-stripping.

Who KNEW that "every company on Earth" had this POWER.

Now. Why didn't they USE this power, BEFORE. Why didn't they just send their prices TO DA MOON!...like of course they want to do. Like everyone wants to do. Because there's nothing so exhilarating as Money-Fer-Nuffin.

How about...BECAUSE THEY CAN'T...? Because markets won't CARRY these prices?

Just as Stellantis tried to jack prices of their shoddy cars, while making them shoddier. They had temporary, limited success in the contrived healf-emergency; so they thought they'd cracked the nut. New engines designed by phone by Pakistani engineers; made in Mexico; and shipped with a $100k sticker price.

Sales have basically stopped dead.


No, what this is, is another attempt to resign the public to the Davos-designed Status Quo. You will have nothing, and you will be happy. Just as they are on Indian reservations - cared for by that good government agency, the BIA.

Just as they are in Youngstown, Ohio, or in parts of New Mexico. Wanna know why fentanyl is an epidemic? Because the kids are told, endlessly, they'll own nothing, they'll have UBI, and they'll shut up and like it.

When we get to Klown Schlob's Utopia...Klown's disciples are gonna be surprised at what it's like. Not Klown; he's on his way to his Just Rewards...but Justine Castro, and all the other Davos acolytes.

$20 + $5 commemoratives. The $5 are very nice 90% on same planchet as old coins, but if the US Mint sold current date Indians and Liberties they could not make enough due to demand.

I got the $20 @ spot + $6 and the commemoratives at spot.