10:13 GMT +326 March 2017
    Gold bars and a Swiss Franc coin are seen in this illustration picture taken at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna November 7, 2014

    Return of Gold Standard: Why Soros is Buying the Precious Metal

    © REUTERS/ Leonhard Foeger
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    Demand for gold has jumped almost 21 percent in the first quarter of 2016, causing some to question whether paper money is doomed and if the gold standard is due for a comeback.

    In their latest Liberty Report, former US Republican congressman Dr. Ron Paul and American political analyst Daniel McAdams focused their attention on the fact that the idea of reviving the gold standard has recently caught its second wind.

    Although the US financial establishment has repeatedly attacked gold, claiming that it "is not money," the price of the precious metal has made leaps and bounds over the past sixteen years, soaring from $300 per ounce in the early 2000s to more than $1,400 an ounce.

    The former congressman stressed that "it is just utterly silly to say [gold] is just a commodity, and not special, no difference, and therefore it would only hurt people because how would it preserve the financial market."

    "If gold is money and history is correct — it's been around for six thousand years — gold wins out," Dr. Paul, who has been a torch-bearer for gold since the early 1970's, remarked.

    There is yet another reason to return to the gold standard, according to the former Republican congressman.

    "[Gold] truly is a special type of commodity and special money… I think that reason why they [US financial establishment] attack gold is gold is the restraining force [it has] on government. If you have an honest gold standard, you will restrain government — government spending, government debt, government special interests, the welfare state, the warfare state — because they can't print the money… Anyone who understands anything about monetary policy understands you just cannot create money out of thin air endlessly and think it will maintain value," Paul underscored.

    The experts emphasized that "the Federal Reserve and its fiat currency policy is literally the lifeblood of the warfare state." A century ago, US paper currency could be freely exchanged for gold at a guaranteed rate set by the government; this concept was known as the gold standard. From 1933 until 1971, the dollar was theoretically backed by gold, but only foreign governments could exchange US dollars for gold and private citizens couldn't buy bullion for speculative purposes. However, since 1971, the price of gold has been allowed to float and the US government doesn't back the 'fiat' money it prints with precious metal.

    If the Fed's endless money printing is suspended and limited by some sort of commodity-backed currency, the "warfare state," the omnipotent military industrial complex and influential Wall Street bankers will lose a big deal of their power, Paul claims.

    Paul and McAdams pointed out that even "gold haters" have realized that something is going on and have tried to marginalize the gold standard concept. They referred to the article "Make America Gold Again: Calls for Everyone's Favorite Standard Are Back" by Michelle Jamrisko of Bloomberg, which was published on May 17.

    "'The fringe has become the mainstream,' said Jesse Hurwitz, a US economist at Barclays Capital in New York. He sees the gold standard as a bad idea but 'something we'll increasingly talk about,'" the article reads.

    Jamrisko also quoted George Selgin, director of the Center for Monetary and Financial Alternatives at the Cato Institute in Washington, who believes that the gold standard is just a proverbial "Humpty Dumpty" that is hard to put back together.

    And still, "for those in the US who see much risk and little benefit in the current course, gold is still a rallying point. And their audience may be growing," Jamrisko remarked.

    Maybe the best argument in favor of gold is that American legendary investor and billionaire George Soros has recently sold 37% of his stock and bought a lot more gold and gold stocks.

    "George Soros, who once called gold 'the ultimate bubble,' has resumed buying the precious metal after a three-year hiatus. On Monday, the billionaire investor disclosed that in the first quarter he bought 1.05 million shares in SPDR Gold Trust, the world's biggest gold exchanged-traded fund, valued at about $123.5 million," Fortune and Reuters reported Tuesday.

    What does it mean?

    According to financial analyst and Forbes contributor Adam Sarhan, Soros, like many other experienced investors, worries "about US stocks and a global economic slowdown."

    "Gold and gold stocks are one of the direct beneficiaries of the so-called 'risk-off' environment. In fact, Gold is one of the strongest performing markets in 2016 and gold stocks continue to be one of the strongest performing sectors on Wall Street," Sahran writes in his op-ed.

    Indeed, demand for the precious metal has jumped almost 21 percent in the first quarter of 2016. Like it or not, gold is doing pretty well.

    "When big legendary investors act, history shows us, it is wise to listen," Sahran adds.

    At the same time, Ron Paul believes that paper money, when not backed by a valuable commodity, is doomed.

    "Our currency became totally fiat paper money in 1971… And it's not doing well, people are panicking over it. It is rather long for paper money but I can guarantee [that] if history means anything at all, if common sense means anything at all, if economic law means anything at all the paper money will self-destruct… Eventually, you have to have a confidence restored," Dr. Paul emphasized.  


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    de-dollarization, gold standard, gold, dollar, Federal Reserve System, Ron Paul, George Soros, Europe, United States
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    • Mystic-One
      Once a country is buried in usurious debt there is no way out but Totalitarianism and Oligarchical control as long as the same system is adhered to.

      World wide usury must be banned and the choke hold of those that collect the interest must be forever broken if mankind is ever to hope for true freedom and sovereignty.
    • Marc Nonnenkamp
      No fiat currency as ever had a long life. Fiat currencies are backed only by central banks and the so-called taxing authorities of their governments.
    • avatar
      If Soros buy Gold then the time is comming for the prepared new Dollar (Purple Dollar) who is prepared since years and this Dollar will be connected to the new(old) gold standard. Halleluja for the rich people!
    • avatar
      terryjohnodgersin reply toMystic-One(Show commentHide comment)
      Mystic-One, there are many ways to skin a cat. Much of what passes for debt these days is inflation driven usury that the World Bank and all their Banking and corporate buddies use to keep the worker economically enslaved through central Banks.

      Part of the way out is to understand how Banking works, and once a government allows itself to get clued into how Banks can make such hefty profits out of thin air then national debts will disappear overnight.

      Another way out of the spiral is to rebuild a country's manufacturing base, as Trump is hinting at - that will hurt the money lenders more than anything that is non-lethal and will give economic independence back to the country that does it.
    • avatar
      Anyone who falls for life-long mason Ron Paul's nonsense is not thinking. If he were honest he would have been chased out of office decades ago and NEVER allowed to run for president.
      When people are hungry they want food, not gold.
      When people's clothes are falling apart they want clothes, not gold.
      When people need shelter they want shelter, not gold.
      When people need heat or other fuel they want fuel, not gold.
      Even if there was enough gold to use it for money it could never work for many reasons.
      1. People would hoard it, not buy with it, so there would be an even greater scarcity of exchange medium than the scarcity of gold itself.
      2. Gold is as easily circulated as debt at usury as is anything else used as money.
      3. Look at the wide range of the cost of gold in this article - anyone who thinks that gold is a "stable value" is literally nuts. It IS just another commodity, no matter what the false worship of it.
    • avatar
      I was wrong. My comment is here.
    • avatar
      Randall Lee Hilburnin reply totblizz(Show commentHide comment)
      tblizz, The problem with gold is that its value can be manipulated just like any other commodity. That is no doubt what Soros is in the process. of doing. It is not as bad as a debt based money like the USD now is, but it is no ultimate solution. The money has to be based on something that has real intrinsic value, such as infrastructure and industrial production.
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