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Posts Tagged ‘U.S. dollar’

Gold Key, weighing one kilogram is used to acc...

Appearing on the Christmas Day 2011 broadcast of The Alex Jones Show, Porter Stansberry of Stansberry Research said in response to MF Global leveraging themselves 38 to 1 and going bankrupt (starting at 52:03):

This is how the system worked for 40 years. Ever since we left gold in ’71, this was the path to wealth. You borrow unlimited amounts of money and if you get in trouble, you will get bailed out, and you just borrow more money — that’s the secret. That is how Corzine made Goldman Sachs the biggest bank in the world — by leveraging everything, and getting bailed out anytime there was trouble.

The main factor in that case was likely outright theft, and regarding U.S. government policy, Congress’ repeal of Glass-Steagall under the Clinton administration in 1999 and the repeal of the ban on most derivatives under the Reagan administration were the real factors involved.

Stansberry is referring to Nixon ending the international gold exchange standard, which allowed foreign central banks to convert their USDs to gold at $35 an ounce, and there wasn’t anywhere close to 100% backing of the dollars held by other countries, so they were already lending out more dollars than was backed by gold.

Furthermore, Goldman Sachs is not the largest U.S. bank. Market capitalization, for Goldman Sachs, according to Yahoo Finance, was $46.17 billion as of December 23, while J.P. Morgan Chase was valued at $127.49 billion. The net income available to common shareholders of J.P. Morgan was $18.55 billion, while it was only $3.76 billion for Goldman Sachs.

For more on Porter Stansberry, see my article, Porter Stansberry’s prediction that the U.S. dollar will cease to be the world’s reserve currency in 2011 likely not to come true.

For more on the bankster gold standard, see my article, The gold double standard.

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A gold-standard 1928 one-dollar bill.

Last week, I heard a prominent alternative financial analyst say the U.S. dollar should be replaced with a new currency backed 15 to 20% by gold, or it wouldn’t fly.

However, prior to the 1933 gold confiscation, the U.S. dollar was backed 35 to 40% by gold, and that didn’t prevent the Great Depression, nor the 5000+ bank failures or one-third contraction of the money supply from 1929 to 1932.

Previously, I wrote the articles, Support for a gold-backed currency crosses the political divide and The gold standard loses its perceived lustre, with major media exposure.

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