Gold (and Silver) Pays Interest? Paper Does Not?

We live in a fantasy world. However, it’s not just an ordinary fantasy world, it is a crazy fantasy world. Regular readers know it as “the Wonderland Matrix”, a realm where nothing ever has to make sense. Yet another illustration of this insane realm comes via looking at our money (or, at least what the bankers call “money”).

For many, many years, if you asked any banker what monetary instrument should be used in order to store our liquid wealth, you would always get the same answer: use the bankers’ paper currencies rather than humanity’s oldest and most-trusted monetary instrument(s), gold (and silver). And each time a banker expressed this preference, he/she would supply the same reason: “gold generates no income.”

Gold generates no income, meaning it pays no yield (i.e. interest). What was implied, but never stated, was that the bankers’ paper currencies always produced a yield, and thus paid interest. Of course, conveniently, the bankers always omitted one detail when they made their cute comparison: “inflation.”

Why, historically, have the bankers been forced to pay a yield to depositors, as compensation for storing their paper currencies on account? Because unlike gold (and silver), the bankers’ paper currencies are relentlessly devoured by inflation. Let’s make a comparison which bankers never make.

Two thousand years ago; in ancient Rome, with a one-ounce gold coin a man could purchase the finest, tailor-made toga, along with the other accessories of that era, a belt and sandals. In the Middle Ages; with a one-ounce gold coin a gentleman could purchase a finely-tailored suit, along with the accessories of that era.

Today, despite the price of gold being severely and perennially suppressed, a gentleman can still purchase a suit and accessories with a one-ounce gold coin – but today you would be forced to purchase ‘off the rack.’ Still, that’s a pretty good track record for wealth preservation over a span of two thousand years.

Then we have the bankers’ paper currencies. Ask any banker, and they will tell you without hesitation that the world’s premier paper currency is still the U.S. dollar. In the one hundred years since the Federal Reserve was place in charge of “protecting” the dollar, it has lost roughly 99% of its value (i.e. purchasing power).

What would cost you $100 today could be purchased with $1, on the day that the Federal Reserve was created. That’s called “inflation”, and if you ask any banker, they will tell you that we need this inflation. Indeed, the bankers (including those at the Fed) continually whine that “we don’t have enough inflation” – meaning they would like to see our paper wealth being devoured much more quickly.

Gold “pays no interest” because it doesn’t need to pay a yield. It is already a perfect tool of wealth preservation. Conversely, the bankers’ paper currencies must pay a yield, as partial compensation for the relentless erosion of wealth, from the inflation caused by the money-printing of these very, same bankers.

However, as the saying goes, that was then and this is now. In 2016; the bankers’ paper currencies no longer pay any interest. Indeed, in the Wonderland Matrix, we now have “negative interest rates”: bankers stealing money from accounts at a fixed rate, in addition to the rate of (banker-created) inflation which is already devouring that wealth.

But this isn’t enough for the bankers. They have also declared “a War on Cash”. What the bankers want to do is to force us to deposit all of our wealth into their banks, denominated in their own, ever-depreciating paper currencies, and then confiscate (steal) all of that wealth via their twin tools-of-theft: inflation and ‘negative interest rates’.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.

-          Alan Greenspan (1966)