Tarnished Crown: Silver Stolen by Paper Promises
If you don't own any Gold or Silver you're totally screwed.
Venetian Bankers vault the Gold and issue paper substitutes called War Bonds
The evolution of currency from precious metals to paper promises marks a pivotal shift in economic history, often driven by the exigencies of war and the ambitions of rulers. Venice, a maritime powerhouse, pioneered this transition by introducing paper substitutes for gold and silver. Venetian merchants and bankers, who vaulted precious metals, issued paper war bonds to finance military endeavors, notably the sack of Constantinople in 1204.
This practice spread across Europe, with Spain issuing "Juros" and France creating "Rentes" - both essentially war bonds used to fund military campaigns.
These paper promises allowed rulers to wage costly wars without immediately depleting their treasuries, but often at the expense of their citizens' wealth.
The establishment of the Bank of England in 1694 further institutionalized this system. Forty businessmen loaned money to the crown to finance war against France, and in return, they were granted the exclusive right to issue currency.
This arrangement effectively created a monopoly on money creation, concentrating financial power in the hands of a few.
As paper currency became more prevalent, it gradually replaced gold and silver as the primary medium of exchange. However, this transition was not without consequences. The ease with which paper money could be created often led to inflation, eroding the purchasing power of citizens' savings.
The pattern continued into the modern era with the establishment of the Federal Reserve in the United States in 1913. The Federal Reserve Note, ostensibly a paper representation of gold and silver, became a debt instrument, further divorcing currency from tangible assets.
This historical progression reveals a recurring theme: the use of paper promises to finance wars and expand empires, often at the cost of economic stability and citizens' wealth. The tarnished crown of empire, once gleaming with silver and gold, became increasingly propped up by paper promises, leaving a legacy of debt and economic uncertainty that persists to this day.
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The global financial landscape is at a critical juncture, with the US dollar's dominance facing unprecedented challenges. As nations like Russia, China, India, Saudi Arabia, and Thailand, along with BRICS applicants, develop alternatives such as mBridge and gold-backed currencies, we're witnessing a seismic shift in international finance.
Record gold purchases by central banks reflect a growing trend of nations seeking to diversify away from US dollar reserves. This surge in demand is partly driven by the ability to purchase more oil using gold than previously possible with US dollars. Simultaneously, there's a notable trend of countries selling US Treasury securities to acquire gold, signaling a significant reallocation of national wealth.
For ordinary citizens, these developments carry profound implications. If major financial institutions and governments are pivoting towards precious metals, it suggests a prudent strategy for individuals to consider similar moves.
As the purchasing power of fiat currencies potentially erodes, physical gold and silver offer a time-tested hedge against economic uncertainty.
Investing in precious metals can provide a safeguard against currency devaluation and geopolitical instability. With the current trajectory of global economic policies, diversifying one's portfolio with gold and silver may offer not just financial security, but also peace of mind in an increasingly unpredictable world.
As we stand at this crossroads in history, the wisdom of the ages echoes louder than ever: gold and silver remain steadfast stores of value. In times of transition and uncertainty, these precious metals shine as beacons of financial stability and prudence
Always enjoy the history lessons!
Buying gold at 17-1800 (or earlier) was easy. At 2200 it caused some trepidation. At 2600 its difficult to pull the trigger.
The saving grace is that although I’m a few Oz short of my goal (and would welcome a decent pullback) I have continued to buy silver, allocating the same amount of fiat every month for many years, even though the # of Oz o rained is about 1/3 of what it was when I started.
I’m betting that in the next few years those more expensive Oz will be worth their weight in gold.
So to speak.