Gold - did you know?

Abandoned Gold Standard Guarantees Inflation

In recent times, prices have surged higher and "revived" inflation has become the topic among establishment writers. Unfortunately, these writers point to the usual suspects, i.e. higher energy costs, potential higher interest rates, etc. In fact, the causeof inflation is the United States’ abandonment of the Gold standard.

The United States’ abandonment of Gold as the foundation of its monetary system came in two steps:

1. In 1933, President Franklin Roosevelt ended American's right to surrender paper dollars for Gold and even to own Gold bullion. As a side note: According to a United Nations charter under the Human Rights group of Charters (of which the USA is a member), the only Gold that could be legally argued for retention was Gold that had a symbol on it relating to a religious image.

2. Step two came in 1971 when President Richard Nixon "CLOSED THEGOLD WINDOW" and denied foreign governments the right to turn in paper dollars for gold.


Roosevelt’s administration’s move was a major step in shifting the world from the Gold standard to the Gold exchange standard. Under the Gold standard, governments fixed the prices of their currencies in terms of a specified amount of Gold and stood readyto convert their currencies into Gold at the fixed prices.


Under the Gold exchange standard, governments could hold U.S. dollars and British sterling as reserves, because those currencies were "exchangeable for Gold." The move to the Gold exchange standard became official with the adoption of the 1944 BrettonWoods Agreement. When President Nixon's administration closed the Gold window, those nations counting paper dollars as reserves found themselves holding paper instead of Gold. - A point to think on here.

In 1974 President Gerald Ford signed legislation that permitted Americans again to own gold bullion, but that legislation did not put the United States back on the Gold standard. Under the Gold standard, a government is limited, legally and practically, as to how much paper money it can print. During the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s Gold reserves.

Under the Gold standard, governments that print too much paper money risk runs on their Gold reserves. Runs occur as holders of the paper seek to convert to Gold before the vaults are empty. A run on the dollar is what happened in the late 1960s, which culminated in President Richard Nixon's administration CLOSINGTHE GOLD WINDOW in 1971.


"CLOSING THE GOLD WINDOW" is a euphemism for the U.S. defaulting on its promise to other countries to redeem dollars for Gold (measurable to real labor - see previous issues). As an alternative, the Nixon administration could have devalued the dollar and continued to redeem. In effect, he chose one hundredpercent devaluation, a de facto default on the promise to redeem or pay!

In the 34 years before Nixon's administration closed the Gold window, the money supply in the U.S. grew less than twofold. After Nixon’s administration’s action in 1971, the money supply has expanded many fold without abating. Basically there has been an open checkbook to create money (wealth - see previous issues) without the Gold (labor) to back it or issue it against. The Federal Reserve's massive inflation triggered a series of steps since, because that created paper money (Fiat currency - see previous issues) must go somewhere. It simply doesn't disappear.

1. In the 1990s it resulted in the greatest advance in stock market history. As a backdrop reference, consider this: From 1882 up until 1982 it had taken the Dow Jones Index 100 years to reach 1,000 points. Since then up until today the Dow Index is over 10,000 points. In less than 30 years, inflation turns up in theinvestment arena!

2. When that market couldn't take the inflation anymore, it tipped over like an overflowing cup into housing prices pushing it to record unsustainable levels.

3. Because the inflation is still not abating, it must go somewhere else. That area is now tipping over into Commodities, or as I like to say it, "into things that people need, not whatpeople want." For example, crude Oil would cost as low as $8 per barrel during the late 1990s.

And the King of Commodities is Gold, the ultimate store of wealth.Despite establishment assertions that the dollar is "sound," people should prepare for further declines in the value of paper currencies and plan their futures accordingly. They should only use paper currency merely as a conduit of transfer into tangibles.

History shows that no government after going on a fiat monetarysystem ever reverses course. There is no reason to believe this time will be any different, nor do I see any political will to change the current course.


As the wise King Solomon once put it in his own personal autobiography, "There is no remembrance of former things, nor will there be any remembrance of things that are to come by those who will come after."

This is the thinking of the crowd; it is definitely not the waythe Generationally Wealthy think. Solomon also wrote in anotherone of his books, "A good man leaves an inheritance to his children’s children, but the wealth of the sinner is stored up for the righteous." I find it interesting how Solomon mentions "children's children." The meaning here of "children's children" is speaking about grandchildren!


The Generationally Wealthy have a trait to measure the success of passing down their Monetary Financial Knowledge. They teach this trait to their children, something the middle class and poor do not do. That trait simply goes as follows: The confirmation of howsuccessful they are in passing down the knowledge is not confirmed by their children, but will be confirmed by their grandchildren's ability to continue actually increasing it further. Even if some unforeseen event takes place and all the wealth is lost, they will have the principle trait instilled into them so that they will know how to gain it back all over again.

The same principle can be applied to a teacher. A teacher can measure the success of a student by how that student passes the information onto the next student and their success in the given field of what was taught.

Another example can be given of a company where the founder grows the business then prepares or preps his next manager to continue on with the business after he has retired. The founder still will not realize how successful he was at prepping his next manager until that successor then preps and passes the business onto the following manager. When the founder is able to look at the company under this individual's management, only then will he truly know if he was successful or not.


The same principle can be applied to all the IBOs who are reading this. Your confirmation will not come from who you introduced to the business and have trained. It will come from how well the person you introduced is able to continue on with the business by training others for success. Please think on this carefully in the days ahead, for your income in this business will depend directly and possibly indirectly on your understanding of this trait.


The trait, or the principle, as stated above is not related solely to families. It spans many different areas such as cultures, organizations, nations, religions, corporations, governments, clubs, institutions and/or churches to name a few.

"Financial education has to go beyond the mindset of a WANT; people need to realize that financial education has to be seen in the mind as a NEED. It's a necessity to life."

Until next time,

Simon Heapes

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