And there are lots of them, as I gather from Jim Willie at GoldenJackass.com, who is warning us to keep an eye on the Chinese, and that we should expect them to move “toward creation of the Chinese yuan as a global reserve currency,” which is certainly interesting from a geo-political perspective, but which becomes Very, Very Interesting (VVI) when he cautions us to also “watch their simultaneous moves away from the USDollar and toward gold for reserves management,” a phrase that is rated “VVI” by the Mogambo Intergalactic News Service because it means that gold will positively soar in price, meaning (in turn) that my pathetic little store of gold will be my ticket out of this dump, speeding me posthaste to wonderful, new, bright city lights and adventures where nobody knows me and nobody can credibly threaten “I’m going to tell your wife/boss/galactic overlord what you did/said/downloaded onto your computer!”

Until then, we have the same responsibilities, and so this next part I carefully wrote down in my notes because it sounds like it will appear, perhaps as an essay question, on the mid-term exam. Mr. Willie said, “The merger of the two important strategic initiatives is a gold-backed yuan currency.”

This “gold-backed” Chinese currency is more than mere grubby speculation by a couple of guys who know that gold will soar as a result of the supreme stupidity and corruption of the world’s governments, and who are getting tired of waiting for gold to soar so we can get started with developing a sensory overload of wicked, licentious, hedonistic over-consumption, sort of like Sodom and Gomorrah if they had had enough money! Hahaha!

Captivated and distracted by such dreams of glorious, gluttonous excess, I was startled by Mr. Willie saying that a gold-backed Chinese currency is “precisely what was stated openly by Zheng Lianghao, managing director of the World Gold Council’s Far East division. That news came out this week.”

Even more telling, I think, is when he reported, “The Germans have demanded all of their gold held in custodial accounts inside the United States to be returned to German soil.”

He admits, “The story is not public, but details have come to me from a private source close to the action.” But if I know Germans, and I don’t, they are not going to sit around waiting for America to steal their gold, if indeed there is any left after the criminally-incompetent Federal Reserve and Treasury encumbered thousands of tonnes of gold by leasing it out, which was immediately sold into the market by those borrowing the gold, massively depressing the price of gold (which was the whole purpose of the exercise) so that bubbling inflation in prices from the floods of money and credit coming from the Federal Reserve to finance massive, long-term deficit-spending by the federal government was effectively disguised by making gold ridiculously cheap, which made guys like me, whose familiarity with the Austrian school of economics allows us to see through this despicable scam, and we begin to accost strangers on the street in a heroic attempt to save them, and we say to them, “Buy gold now, you moron, because it will never be this cheap again! And if you don’t buy gold even after being told, point-blank and right to your face, to buy gold as your only rational response to massive government incompetence and corruption that will destroy the dollar, then you are as stupid as you look! Hahaha! You’re a moron! Hahaha!”

Interestingly, he adds, “The Germans have also given counsel for Dubai to demand all of their gold held in custodial accounts inside London to be returned to Dubai, where a new gold trading center will spring up. In my view, THIS IS THE BIGGEST NEWS FOR GOLD THIS ENTIRE YEAR.”

Careful readers looking for “news behind the news for news you can use” will no doubt notice his use of all-capital letters with which to indicate particular emphasis, perhaps along this very line, which must be important as hell, for whatever reason, because the year is not quite half over and we already have the best news? Wow!

Then I learned that I did not even suspect that “the hidden arch-enemy for the US-UK on all matters pertaining to gold bullion is Germany.” He admits that this “is not a well-known concept,” letting me save a little face, although Germany is “also advising the Chinese on currency and gold matters. Can one detect some coordination?”

To this I say, “Yes, and it’s about time, too, that smart people came together to do something good, like putting their currencies on a strict adherence to gold and thus getting rid of price inflation once and for all instead of a lot of stupid people coming together, like in Congress, to deficit-spend zillions of dollars to do things that sound good to a bunch of nurturing wet-nurses, which is what we have become, but are guaranteed to fail with disastrously inflationary results!”

It is only after I have had a few drinks, and am now despondent and self-pitying after having been rejected by all the good looking girls in the room, mostly responding with variations either on the theme of “Ewww! Go away, creepy old man!” or “Okay, but it’s gonna cost ya triple because you are such a creepy old man!” that I admit that I don’t know why I am complaining about such irresponsible, stupidity in government because I am doing exactly what history says to do in order to capitalize on it: Buy gold, silver and oil to personally capitalize on loathsome governmental incompetence, blatant corruption, and now the legitimization, not to mention the incredible institutionalization, of outright stupidity.

But I have to laugh at the linguistic problems, since I know a little German, no Arabic and only enough Chinese so that I can order dinner (“Gimme a Number 7 combo and a couple of egg rolls, chop chop!”), so it will be comically confusing since I will not know what in the hell they are talking about.

And although I am the perfect guy to advise these guys on gold, I realize it will be hard for me to communicate with them since I don’t speak their languages and they don’t speak English except with funny-sounding foreign accents, so I cleverly decide to speak to them all with the universal American Indian language that everyone understands (as I gather from watching old movies on TV), and I say, “Gold! You get-um! Heap big wampum!”

And, if you are wondering, advising foreign governments to adopt a gold standard for their money is just ONE of the many, many happy reasons why I say to them and to you, to buy gold, a chore made easy because, “Whee! This investing stuff is easy!”

Source: Yuan to Jump on the Golden Bandwagon?

Right? Well, fact is, the action has actually been greatly muted if we allow for the shocking volatility in gold’s No.1 competitor for “safe haven” funds, the almighty US Dollar.

You see, like so much else, the market action just described only sets Gold in terms of the greenback (against which it has still tripled since July 1999).

Versus pretty much every other world currency, in contrast, gold in fact enjoyed a banner month this October – delivering gut-wrenching volatility plus new record highs – starting right here in London, home to the world’s $60 billion-a-day trade in wholesale Gold Bullion Bars (a.k.a. the “spot market”).

Mid-month, gold also leapt to new record highs for Australian, Canadian, Danish, Estonian, Hong Kong, Hungarian, Icelandic, New Zealand, Norwegian, South African, South Korean, Swedish, Turkish and Russian investors.

Oh, and the 350 million souls in the Eurozone. Plus the 1.1 billion people of India.

Prices of gold have of course slipped back – and sharply – against all major currencies since reaching €685 an ounce for European investors and savers on Oct. 10th. (That marked a near-tripling from the low of Jan. 2000.) In the spot market, gold’s now trading almost 13% lower as the month-end draws near.

And notable by its absence from the rogues’ gallery of fast-sinking currency zones listed above is the Chinese Yuan, as well. More spectacularly, the world-destroying Japanese Yen has squashed the prices of gold since turning sharply higher against everything – real estate, global equities, emerging-market debt, even the Tokyo Nikkei – in mid-July.

But if we really are witnessing a global currency crisis led by the destructive reversal of the Yen Carry Trade (and it certainly looks like it from inside a wallet of Sterling or Ne Zealand Dollars, let alone Forints or Krona), then just what kind of fight is gold putting up as the apparent “ultimate” safe-guard against currency shocks?

Regular visitors to this site may recall a chart we offered in August this year, a chart showing the Prices of gold in terms of the world’s top 10 currencies by economic output. It’s not perfect; the GDP weightings for 2008 will need revising, perhaps, when this year’s full-year data becomes available early next year.

But as a measure of truly globalized gold price, it both softens the US Dollar’s long slide of 2002-2008 on the currency markets, as well as tempering this month’s intemperate highs in gold bullion vs. the Aussie, Loonie, HK Dollar, Forint, Kiwi, Krone, Rand, Won, Lira, Ruble, Euro, Pound Sterling, Rupee and various Kronas.

You can’t help but spot the volatility – otherwise known as “My gold just crapped out!”

The way “quant jocks” figure the violence in asset prices, in fact, the daily volatility in this global gold price has more than doubled since August to a three-decade record.

You might also note, however, that gold really has risen sharply against all major world currencies so far this decade, not just the US Dollar. And no one should imagine it will be an easy ride – whether up or down – from here.

There’s too much at stake when you try to measure that $60 billion daily turnover in physical gold against the $3.2 trillion daily turnover in official government currencies.

Adrian Ash
for The Daily Reckoning Australia

Source: Prices of Gold in the Top 10 World Currencies

The greedy geniuses in the New York and Washington D.C. axis of weasels finally did the deed. They killed the goose that laid the fiat egg. They weren’t content to merely bring in trillions of dollars in profits.

They had to leverage their schemes and shower them across the globe in the form of fraudulent real estate bond packages and derivatives. Check out the definition of hubris. The camel’s back then took on one too many straws.

The dollar continues to probe new depths. A short-term bounce is always possible but the fundamentals are atrocious. Nobody in control is suggesting anything remotely possible as to fixing it.

The clowns in charge of the buck continue to bray that the US has a “strong dollar policy”. I’d hate to see what it would look like if they wanted it lower. Here’s a recent dollar chart:

The dollar replaced the British Pound as the world’s “reserve currency” in 1944. Commodities have since been priced in dollars globally. That means foreign countries had to first purchase dollars in order to buy key commodities such as oil. Other central banks kept their reserves in dollars. No one could get enough dollars. These entities financed our debts and extravagances.

Those days are now gone. Fool me 524 trillion times… shame on me. Dollars are being shunned across the world. Dollar links to commodity pricing are being broken. Nobody wants to save in a depreciating entity. The era of guns and dollars is kaput. Only the guns are left. You should be concerned.

The Euro will assume a large part of the duties left in the wake of the dollar chaos. It is now of an age to do so. The Japanese Yen and Chinese Yuan will also come to the fore. The Swiss would love to have their Franc, once again, be a major global player. At this point, these are all totally fiat entities and more of the same.

Un-backed currencies are always on borrowed time. They appeal to the something for nothing crowd. This same crowd inevitably brings them down.

The entities in charge of global economics and finance want nothing to do with honest money. They will fight gold or silver backed money tooth and nail. Commodity backed money restricts their power. A constitutionally mandated, precious metal backed currency sets individuals free. Fiat money enslaves.

Where do you think the US is headed next when the final nail gets pounded into the dollar coffin? Honest money or more of the same?

My jaded and conspiracy oriented mind sees continued abuses coming our way. As long as the elitist creeps in the Council on Foreign Relations and other secretive societies remain in power behind the scenes nothing substantive will change. It’s just like the changing of the guard at Windsor Castle. A bunch of bodies shuffle around, but nothing behind the walls changes.

Elitist globalists are intent upon bringing forth a “New World Order”. They seek a one-world government and they intend to run it. You will be their serf.

The US has been and continues to be dismantled. It is no accident. US sovereignty and the US Constitution stand in direct opposition to authoritarian enslavement. They have largely been rendered null and void. Unending Executive Orders, the Patriot Act and unconstitutional treaties have rendered the Constitution little more than a historic document.

We have been purposefully bankrupted.

Our manufacturing base and our standard of living have been shipped overseas. We are being assimilated into the global community.

Our borders have intentionally been left unprotected. Same as above.

What does all this have to do with the dollar and coming currency regimes? Friends, we’re heading for more of the same problems, but on a larger scale. Bigger is always better, right? How will we ever be able to compete with the Euroland colossus? It now represents 31% of global output and is considerably larger than the US. What’s next?

You got it. We’ll form our own North American Union! Then later we can merge with the rest of the world. One big happy feudal kingdom. Check out what our esteemed leaders have been up to (http://www.humanevents.com/article.php?id=15017):

“Following the March 2005 meeting in Waco, Tex., the Council on Foreign Relations (CFR) published in May 2005 a task force report titled “Building a North American Community.” We have already documented that this CFR task force report calls for a plan to create by 2010 a redefinition of boundaries such that the primary immigration control will be around the three countries of the North American Union, not between the three countries. We have argued that a likely reason President Bush has not secured our border with Mexico is that the administration is pushing for the establishment of the North American Union.”

We don’t need no steenkin’ dollar. We can have the Amero, eh? It’s not like Waco needs more infamy. Here’s more:

“Pastor’s 2001 book “Toward a North American Community” called for the creation of a North American Union that would perfect the defects Pastor believes limit the progress of the European Union. Much of Pastor’s thinking appears aimed at limiting the power and sovereignty of the United States as we enter this new super-regional entity. Pastor has also called for the creation of a new currency which he has coined the “Amero,” a currency that is proposed to replace the U.S. dollar, the Canadian dollar, and the Mexican peso.”

The creatures (http://www.amazon.com/Creature-Jekyll-Island-Edward-Griffin/dp/0912986409) now in charge of the island will bring forth more fraud unless “we, the people” wake up. Honest money will come only over their tarred and feathered bodies.

I see a new DC/NY clothing line on the horizon. Get your own “honest money” while you still can.

Invest Resourcefully,

Rusty

P.S. To let me know what you thought of today’s article, send an e-mail to: feedback@investorsdailyedge.com.