2021 Gold Report

2021 Gold Report

Table of Contents

GOLD: The Ultimate Inflation Hedge
Dean Heskin, Swiss America President and CEO

Preserve Your Future Buying Power in the America We Now Have
Lee Bellinger, Off Grid Confidential

Dollar May Crash to Zero Under Unsustainable Debt
Dr. Jerome Corsi, Corsi Nation

Stock Market Investors Need to See This Chart
Tom Dyson, Rogue Economics

Get Ready For "Magic Money Tree" Politics
Craig R. Smith, Swiss America Chairman Emeritus

Inequality and the Gold Standard
David Howden, Mises Institute

Good Reasons to Go for Gold in 2021!
David Bradshaw, My Idea Factory

GOLD: The Ultimate Inflation Hedge

From the President's Desk...
Dean Heskin

"The Chinese use two brush strokes to write the word 'crisis.' One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger - but recognize the opportunity." -John F. Kennedy

If 2020 has taught us anything, it is to prepare for the unexpected. As we go to press with our 39th Anniversary Issue of Real Money Perspectives, America is facing some very tough challenges. The Federal Reserve Chairman Jerome Powell recently admitted to Congress, "the outlook for the economy is extraordinarily uncertain."

Typically the solution by central bankers and the federal government is to throw billions (and now trillions) of dollars at attempts to solve every potential crisis. Sometimes this works in the short-term; but kicking the debt can down the road results in creating an even bigger crisis later on.

While it is only natural to hope 2021 will bring America a brighter future, achieving this goal may be very challenging considering the unforeseen economic fallout from the Covid-19 pandemic as well as the widespread distrust of our politicians and the media.

I believe the smartest strategy for individual investors this coming year is to hope for the best... while being prepared for the worst. This means learning to embrace paradoxes. As JFK implied, danger and opportunity are two sides of the same coin. The key is to remain positive while keeping an eye out for opportunities which can protect you from unforeseen dangers.

Right now greed is driving the financial markets to historic highs, but the pendulum could swing back to fear overnight. Wall Street along with a majority of mainstream financial pundits are betting a gridlocked Congress will restrict tax increases and help push stock prices to new highs; but no one really knows.

The one asset class you can count on through thick and thin is your tangible asset holdings. Throughout all of the political and economic gyrations, gold and silver have consistently grown in value over the past two years - and the last two decades! As you will discover in this issue, smart money is betting this tangible trend will continue and expand over the next 4-10 years - no matter what 2021 brings.

Precious metals are also one of the safest ways to insure your retirement nest egg is safe, secure and sheltered from the growing dangers threatening your life savings. It's a very simple process to move an existing IRA or 401(k) into a Precious Metals IRA.

I'm thankful you've found your way into the growing Swiss America family. Fasten your seat belt for an insightful briefing on why physical gold is the ultimate portfolio hedge in today's uncertain world.

Sincerely,

Dean Heskin

Preserve Your Future Buying Power in the America We Now Have

Lee Bellinger, www.offgridconfidential.com

REVEALED: The one fool-proof, absolutely secure way to test your assets' future buying power.

INSIDERS' FAV BET! This hidden asset value building tactic is embedded deep in the Federal Reserve's bloated balance sheet.

"Only a mouth breathing moron would create $3 TRILLION in currency outta thin air and not expect dire consequences"¦because of fractional reserve banking, when that new $3 trillion hits the banks, it becomes $30 trillion." -Doberman Dan, self-described non-financial expert with street smarts that matter.

OKAY, gold recently touched the $2,000 an ounce mark. Just so you know"¦gold bugs have predicted $2,000+++ gold for decades -- and now, finally, that threshold has been breached.

It took a lot to get us to $2,000 gold. Over just eleven weeks in the United States, the U.S. True Money Supply increased by 20% to a record $17.232 trillion. That's an incremental leap in the money supply of $2.875 trillion.

On an annualized basis, that 11-week increase equates to a 137% growth in money supply in a single year, which is just shy of 22-times the median growth rate since 1986! As of this report, new dollars are pouring in from the Fed.

My instinct is to avoid sweeping statements, even if sometimes they are true. Here's the unstoppable, unyielding trend that $2,000 per ounce gold is a mere symptom of:

The feds are experts at engineering a steady and carefully calibrated dollar decline - one that is sizeable enough to put a dent in the real value of existing debts - but not precipitous enough to scare the public out of dollar-based financial assets (bank accounts, bonds, etc). You buy gold mainly because at some point, though, the dollar's decline is likely to spiral out of control.

To date, tried and true monetary parlor tricks are impressive in their success at protecting the dollar; for a very long time the Fed's money magicians have stalled any massive shift away from the dollar and toward non-dollar denominated assets such as precious metals.

And that is precisely why you may count on federal money magicians to double down on their work - especially now - to aggressively manage the dollar's downward spending power while beating back a massive monetary debt crisis. The stakes for millions of financially strapped seniors are almost unthinkable. Without these massive spending fixes, social security and Medicare would be kaput.

And so, a state of frantic urgency pervades Treasury and Federal Reserve experts"¦driving their considerable best efforts to confuse and break gold's upward trend. To these faceless, powerful insiders, gold is an existential threat to unrestrained public spending.

They know that if too many investors bid up the price of gold too much, the government's longstanding money creation bubble might just abruptly "pop."

The Federal Reserve's "Yo-Yo Diet" to Starve Your Future Buying Power

Unfortunately, few investment advisors with "credentials" teach and recommend these time-tested defenses against dollar debasement your family needs and deserves.

So, expect this: Extreme gold suppression tactics to fend off America's financial reckoning. Just please do your level best to not be distracted by dramatic price-depleting selloffs and counter gains for gold in the coming months.

The coming gold price gyrations are but noise"¦just do your best to pay attention to what happens behind the drama and mayhem. It's not going to be easy but you'll be fine if you focus on the fundamentals in this story and recent editions. In my last newsletter, I suggested many small steps to consider in defense of your investments' future spending potential. Including changes to how you manage your household's finances, no matter how small they may be.

Hedge Your Bets Against Social Chaos and Financial Mayhem

This is a moment for patience and study - all to hedge your financial resources more smartly against social chaos and what are now obvious dollar destruction tactics. Read on to see how sophisticated investors keep accurate track of their future purchasing power.

The Shocking Inflation Rip-Off You Can Now Sidestep With Ease

First, though, take a look at these startling facts I have previously reported and have updated below:

In 1999, average personal Income was $42,000 and today, 22 years later, average income has inched up to just $58,379.45 -- a shockingly modest gain of 38.9% over 22 years. Buying a new car has gone up 82.9%. Buying a new home costs you 73% more and the Dow Jones Industrial Index is about 155.0% higher in nominal value than it was 22 years ago.

All seemingly normal, right? Well, look at what "no-dividend paying" gold has done in those same two decades: The yellow metal cost $285 per ounce in 1999 -- and today it is nearly 637% higher!

So, let's just average how much stuff has gone up in the 22 years since 1999. Average the increase in personal income, add in cost of buying a new car, what it costs to buy new home and the rising value of the Dow.

Put all four of these categories together and that comes to an average gain of about 97% across all four categories since 1999 (average income, new car, new house and Dow value Increases, up 97%, averaged together).

Break Their Rules and Defy the Game on Your Terms, Starting Now

Gold is up about 637% from 1999 - it whupped rising nominal costs (97%) by better than a factor of 6x. And again, gold did this just sitting in your basement - without market analysis, trades or professional advice.

Today, a firehose of fake money is being pumped into dollar denominated assets - yet most certified financial planners still don't embrace hedging against inflation with hard assets.

Hard money investment is just not in their wheelhouse - because among other things there is no paycheck for them in physical precious metals.

But more basic than that, Keynesian-trained investment advisors are no more suited to guide inflation-hedged investments than is an unfortunate goldfish flopping about an overturned desk aquarium.

It's actually rather amazing how badly mainstream investment news has misled investors about gold since 1999.

Why "Modern Heresy" is Your Best Financial Friend Right Now

Despite the hard evidence presented above, even partial diversification out of dollar-denominated investments remains heretical among state certified brokers and most professional financial planners. Being impervious to proof seems to be a consistent theme of credentialed financial analysts - because it reflects the anti-gold groupthink of the mainstream financial media - at least when it comes to publicly admitting that carefully managed dollar devaluation underscores the timeless stability of gold's value.

The result is that most people get sucked into dollar-denominated assets touted by big financial media advertisers. So, they invest their money without protecting themselves from carefully controlled and gradual dollar destruction practices that sustain huge deficit spending.

Some investors have a bigger vision. They use gold's stability as a sort of gauge, to figure out what's really going on in the financial world.

This Is the ONE Statistic That Crushes or Expands Personal Wealth

Let's revisit a very useful statistic that turns some investors into visionaries by comparison to mainstream financial wisdom"¦to guide you in future decisions about gold investing vs. stocks included in the Dow Jones Stock Index.

Last time I reported on the Dow-Gold price ratio, it took about 19 ounces of gold to buy a share of the Dow Index. (This was determined by the Dow being at 28,066.47 and then divided by the market price of gold, then at $1,455.)

As we go to press, it now takes only 15.86 ounces of gold to buy a share of the DOW. (This was determined by the Dow being at 29,500 and then divided by the market price of gold, now at about $1,888 per ounce.)

All this means that in just a couple of years, gold's purchasing power against the Dow is notably higher. That's a huge net increase in purchasing power against the Dow for gold of nearly 20%.

You Have to Make This Happen for You Now, Before It's Too Late

As the co-founder of Agora Financial Publishing has said, focus on the goal - to acquire stocks when they are cheap and sell them when they are expensive.

What the current Dow-to-Gold ratio of 15.86 suggests is that you hang onto gold. When the Dow-to-Gold ratio drops, to say a ratio of 5 or less, then it is time to consider selling your gold and using the proceeds to buy stocks.

Measure twice and cut once! I suggest that you make it a personal practice to follow how many shares of the Dow Jones Stock Index you can acquire with your gold.

You can do similarly enlightening ratio exercises - such as examining how many barrels of oil you can purchase with an ounce of gold. The list is endless.

It's Not Like Your Broker Gets Paid to Tell You All This

How much it costs to buy something with an ounce of your gold sheds light on the government's dollar devaluation policies - forming this habit of monitoring inflation by comparing gold prices to dollar- denominated assets helps you become far more literate about what is really going on in the U. S. economy.

Don't count on highly credentialed financial planners to approve. Despite gold's steady gains against the Dow, market commentators have long derided gold and/or attempted to call tops in the gold market"¦and in so doing have done their readers a terrible disservice.

Take December 2008, when investment analyst and consultant Alan Brochstein wrote an article titled "Own Gold? Time to Fold." In it he confidently wrote, "If you still are concerned about inflation, learn about Treasury Inflation Protection Securities (TIPS). Gold remains a sucker's bet..."

Since then, gold has jumped from $884.30 to $1,900+ today -- vastly outperforming TIPS. It's worth noting that in financially disastrous 2008, gold managed to eke out a 5% gain for the year.

Then we have the iconic May 27, 2010 article, "Why I Don't Trust Gold". In It Wall Street Journal commentator Brett Arends likened gold to a "Ponzi scheme." (Of course, physical gold is the antidote to Ponzi schemes.)

Fortune magazine's 2009 "Investor's Guide" featured a stack of gold coins on its cover. Curiously, not a single story in the 160-page Special Issue had anything to say about the precious metal! Readers were drawn in by the allure of gold and given stories on the fool's gold of bonds, stocks, and other financial assets.

Idiocy is also an Acquired Trait

The August 2011 issue of Money magazine featured a stack of Silver Eagles on the cover. The use of silver coins as a prop is effective at drawing attention to the magazine, but it was entirely misleading.

The actual stories highlighted on the cover of Money related to stocks, mutual funds, savings accounts, and "Why Housing Will Rebound" - not to silver.

Tellingly, inside the magazine there wasn't a single story on silver coins or silver mining or anything to do with silver! It's unfortunate that mainstream financial publications tease the public with images of precious metals but then steer them toward conventional financial assets (those sold by their advertisers, as it happens). The general public continues to be kept behind the curve.

Savers who listened to Forbes and Money yielded next to nothing as compared to gold. That's because dollar-denominated assets lose value even if there are nominal taxable gains.

Since the Fed was created in 1913, the dollar has lost more than 95% of its value. In other words, a dollar today is worth less than what a nickel was in 1913.

Bake Success Into Every Investment You Make With This Simple Number

The Dow-gold ratio is an awesome way to measure the decline of dollar-denominated assets. I also want to suggest another barometer to measure and protect your future buying potential in defiance of financial misinformation that passes for mainstream news; look at precious metals from a strictly supply and demand point of view.

While federal money magicians excel at confusing gold and silver markets, even they can't repeal the laws of supply and demand. In all this scary stuff lies your opportunity, fellow prospective victim of the system.

This Artificially Induced Global Depression Makes Scarcity Your Friend

Across the globe, gold mine production faces serious headwinds.

For example, as it regards supply, in 2018, U.S. gold mines produced 211 metric tons. A year earlier, they mined 237 metric tons. This represents a year-over-year decline of close to 11%, according to the U.S. Geological Survey. The story on the global scene is more dire.

The World Gold Council reports that global gold production growth is down more than 79% over the past nine years.

Indonesia's annual output plunged 24%. South Africa had the most shocking drop"¦ production fell 18% compared to 2017.

You Can't Eat Everything That Looks Appetizing

Gold output in Peru fell 9% compared to 2017 as the local opposition to mining that has occurred during recent years took its toll.

Remember too, the coronavirus pandemic continues to stampede the human race into a self-destructive yet mindless panic. Quarantines and lockdowns with no end in sight makes it far less likely that global mining operations are going to fire up again anytime soon.

So, the trend in place is a continuing steady and steepening decline in the replenishment of global inventories of precious metals; especially silver, platinum, palladium and GOLD.

Just Because Others Are Practicing Being Stupid Doesn't Mean You Have to Play Along

The hardest-hit regions are rickety mining operations in Africa, Mexico, and Latin America. And- according to S&P Global Market Intelligence- while all commodities are potentially at risk; production of gold, copper, and platinum are particularly affected.

Gold only makes up about 0.003 parts per million of the earth's crust. And, it's no longer found in concentrated amounts like the chunks of riches that were found in the Klondike and California back in the 1800s.

In fact, gold is so scarce today that mining it is much like standing in the middle of a swift river, closing your eyes, reaching into it, and blindly grabbing a trout the very first time you try it.

So, the future of mining rests with a small, hardy breed of smarter miners"¦ who use extreme measures to obtain the scant amount of recoverable gold that remains in the earth.

HURRY -- These New Facts About Global Mining are Make or Break

They look for specks of gold amid hundreds of millions of tons of excavated earth.

Generally speaking, a mine should yield at least one gram of gold per ton. In fact, a report from Visual Capitalist found that the average grade of gold deposits in the world is around about 1.01 grams per ton of rock and soil that's dug.

Think about that for a moment. One gram (0.035 oz) is equal to the mass of a small paper clip. This small amount of gold is usually not even in one place - it's dispersed through a ton of rock and dirt.

It's why the pick and shovel of yore have been replaced by huge 200-ton trucks capable of carrying vast amounts of dirt to a processing facility.

What the Most Qualified Man in the World Says About $4,000 Gold

Frank Holmes, a world-renowned gold authority and CEO of U.S. Global Investors, has said if history is any guide, we could be heading toward $4,000 gold. He told Kitco News that the price of gold has historically correlated with the expansion of the Federal Reserve's balance sheet.

During the Great Recession's brutal economics, gold rewarded investors with an exhilarating five-month ride from $1,400 to $2,000. This time the ride could be wildly more profitable.

Balance Sheet B.S. is Your Opportunity to Reap from Global Panic

That balance sheet has now ballooned more than $3 trillion because of the Fed's coronavirus economic stimulus plan. That drove the current balance sheet to more than $7 trillion. Holmes said he thinks that will grow to $10 trillion before all is said and done.

Given the historical trends, that's extremely bullish for gold.

"In the next three years, if we look back, if [history] repeats itself, from 2008 to 2011, that three year run saw gold go from a $750 - $800 range up to $1,900," he said.

Holmes added:

"If we forecast that because we have the same expansion of the balance sheet of the Fed then it would project, if cycles are exactly the same, gold could go to $4,000."

Gold outputs in key producing countries such as Australia and Peru are set to slump to generational lows in the mid-term.

Simple, Easy Steps Are the Most Important Ones You Can Make

That tightening supply could also help keep gold prices stable and upward over the long haul, market manipulations aside. So, am I telling you to go out and buy as much gold as you can get? No. I do however suggest that if you like and agree with the gold story, you do the following:

Buy in the inevitable price dips going forward.

Make yourself comfortable with the Dow-Gold ratio so that you can evaluate your other investments with ease.

This article is by Lee Bellinger, founder and publisher of the monthly financial advisory Off-Grid Confidential, 1015 Charlotte Avenue, #301, Rock Hill, SC 29732. OffGridConfidential.com Lee.bellinger@americanlanternpress.com

By Jerome R. Corsi, Ph.D. www.corsination.com

The U.S. dollar has joined other major currencies in a race to zero value as central banks are failing, unable to preserve purchasing power in fiat currency that has lost 100% of its value since the U.S. went completely off the gold standard under President Nixon in 1971.

A chart published by Egon von Greyerz, founder of Matterhorn Asset Management AG, shows that the U.S. dollar, along with other major currencies around the globe, has lost over 90 percent of its value since 1971. The sad truth in this same time frame, U. S. national debt has on the average doubled every 8 years since Reagan assumed the presidency in 1981.

Even more alarming, the Congressional Budget Organization (CBO) published a study in September 2020, that reported the national debt will rise to nearly twice the U. S. total economic output in 2050, an increase from less than 80 percent since last year.

Economists have traditionally pressed the flashing red alert when a country's national debt exceeds 100 percent of the Gross Domestic Product (GDP), a red-line target the U.S. is rapidly hitting, on the way our national debt being nearly 200 percent of GDP and exceeding only 30 years from now. "By the end of 2020, federal debt held by the public is projected to equal 98 percent of GDP," the CBO report warned. "The projected budget deficits would boost federal debt to 104 percent of GDP in 2021, to 107 percent of GDP (the highest amount in the nation's history) in 2023, and to 195 percent of GDP by 2050."

The COVID-19 pandemic has led to a bout of deficit spending that is unprecedented in American history. The CARE Act, passed by Congress as a COVID-19 relief measure, provided $1.8 trillion in direct aid to individuals and businesses, the largest in U.S. history. Altogether, the Trump administration and Congress have enacted three separate COVID-19 relief packages at a total cost of over $2 trillion.

As a result of this runaway deficit spending, the price of gold has surged to at or above the $2,000/ounce technical resistance level, with silver challenging a multi-year high mark trading at the $30/ounce technical resistance level. Precious metal analysts are predicting that uncertainty could bring gold and silver price appreciations until 2024 and 2025. In the near term, technical resistance charts suggest gold's next target is the $2,000-$2,500 resistance level, followed by $3,200, and then $5,000.

As a result of this runaway deficit spending, the price of gold has surged to price at or above the $2,000/ounce technical resistance level, with silver challenging a multi-year high mark trading at the $30/ounce technical resistance level. Precious metal analysts are predicting that uncertainty and cycle events could continue gold and silver price appreciations until 2024 and 2025. In the near term, technical resistance charts suggest gold's next target are the $2,000-$2,5000 resistance level, followed by $3,200, and then $5,000.

Nor is there any end in sight to U.S. deficit spending. On October 1, 2020, the Democrats controlling the House passed a second $2.2 trillion COVID-19 relief bill, resulting in another round of talks with the GOP majority in the Senate over a compromise bill. Treasury Secretary Steven Mnuchin and House Speaker Pelosi, D-Calif., are both under political pressure to deliver a $400 per week pandemic jobless benefit and to extend loans to businesses seeking to retain employees in continuing government-imposed economic shutdowns to contain the epidemic.

Economist John Williams has said the decision by the Federal Open Market Committee of the Federal Reserve to abandon the 2 percent inflation target the Fed has maintained for years signals no end to deficit spending. In his special hyperinflation alert issued June 3, 2020, Williams wrote: "For decades, the ultimate fate of the current U.S. dollar, the economy and financial system have been at risk of hyperinflationary collapse. The Coronavirus pandemic crisis could be the trigger."

Williams noted Consumer Price Index (CPI) inflation in the United States from 1970- the last year of the gold-backed U.S. Dollar- to date has been 561 percent. In the same time frame, the increase in the U.S. price of gold (1970 to date) has been 4,314 percent. "Gold and silver prices remain the canary in the coal mine of hyperinflation," William warned.

For decades, Williams has been looking at an eventual hyperinflation crisis and long-term U.S. government insolvency. In 2004, when the "Financial Report of the U.S. Government" showed the fiscal and long-term financial operations had deteriorated to the point of unsustainability, Williams began predicting the insolvency risks of the U.S. Treasury - an unsustainable budget deficit and sovereign debt levels - would lead to U.S. hyperinflation likely in 2021-22.

For decades Williams has predicted U.S. economic trends correctly. Perhaps we should all listen even more closely today when Williams warns us that "physical holdings of precious metals such as gold and silver are traditional stores of wealth, which tend to preserve the purchasing power of one's income, wealth, and assets." In his most recent 2020 newsletter, Williams is insisting, "this is a good time to hold gold and silver."

Tom Dyson, Rogue Economics

"The Dow-to-Gold ratio shows us the relationship between the stock market and gold. The first thing the ratio tells us - looking back 120 years - is there is a clear cycle in this relationship.

At times, stocks get cheap compared to gold. You can buy the Dow with only a few ounces of gold. This was the case in 1896, 1932, and 1980. Other times, gold gets very cheap relative to stocks. It takes many ounces of gold to buy the Dow. 1929, 1966, and 1999 are examples of this.

The ratio seems to cycle between these extremes every decade or two. The second thing to notice is that extremes in the Dow-to-Gold ratio tend to mark important tops/bottoms in the stock market.

At important bull market tops - like 1999 - it takes many ounces of gold to buy the Dow. At important bear market bottoms - like 1980 - it takes only a few ounces of gold to buy the Dow. This makes sense.

The Dow-to-Gold ratio is a good indicator of the primary trend in the stock market. Based on my reading of this chart, the stock market entered a bear market in 1999. And it will remain in a bear market until the Dow can be bought with only a few ounces of gold.

My guess is that will occur at some point in the next 10 years. Today, one share of the Dow will buy only 14.5 ounces of gold. That's down from 42 ounces back in August 1999. Since 1999, the Dow has lost 65% of its value in terms of real money - gold.

Talk about a silent and insidious bear market....The Dow-to-Gold ratio will return to low single digits (below 5) anyway"¦ And the government policy of 'do whatever it takes to avoid recessions and bear markets' will have been completely discredited."

By Craig R. Smith
Swiss America Chairman Emeritus

"Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice."
-Thomas Jefferson, Aug. 1, 1786

Introduction

With a world in disarray, a raging global pandemic, U.S.-China relations in free fall and a nation deeply divided; the American economic recovery has an uphill battle.

Modern Monetary Theory has been offered as the best solution by its proponents, predictably on the Far Left.

Modern Monetary Theory (MMT) is an idea which suggests that the link between public debt and inflation is now broken so therefore deficits don't matter. Spend all you like, the thinking goes, because the Treasury can just print unlimited amounts of money.

If MMT is adopted by our leadership, it will shape all policy decisions requiring funding. There is a huge risk that MMT, like so many other economic theories, will spawn the next fiscal crisis requiring even more urgent measures to dig the U. S. out of its debt trap.

"Magic Money Tree" is what more traditional economists of both the right and left cynically call "Modern Monetary Theory" (MMT), the eccentric economic idea that might soon replace both Keynesianism and capitalism in government policy.

Illogical as it seems, many politicians love MMT because it claims that government can spend vast trillions of dollars, and usually without raising taxes.

The government owns the Mint's printing presses and can magically conjure its own paper fiat currency; at least until a storm of hyperinflation threatens. No such storm arose during the last 10 years as government created roughly an extra $1 Trillion per year, contrary to traditional economic expectations.

Modern Monetary Theory therefore promises to free politicians from old-fashioned economic discipline and restraint. MMT would let them spend almost without limit, without budgets, without making tough choices.

MMT lets politicians be Santa Claus, giving voters everything for free - universal basic income of $1,000 or more per month for everybody forever, free college education and cancellation of $1.6 Trillion in student loan debt, "Medicare For All," and a thousand other spending programs at a combined cost of several hundred trillion dollars.

MMT is neo-socialism, not through government ownership of the "means of production" but through government ownership and control of supposedly-endless green energy called money, the Aladdin's Lamp that fulfills all wishes. It shifts society's wealth from the private sector to the government. But is this utopian dream too good to be true?

MMT's Roots

Modern Monetary Theory, truth be told, is neither modern nor monetary nor much of a theory. MMT's early roots go back to ancient Greece and the philosopher Plato, who said that "money" was merely a symbol.

Money, said Plato, should be worthless outside its country, and not be made of gold or silver. His student Aristotle, by contrast, thought money should be something like gold with its own stable, intrinsic value.

But rulers have been tempted - from the Roman Emperor Augustus and China's Song dynasty to French financial advisor John Law and the Weimar Republic in post-World War I Germany - to enrich their governments and themselves by reducing the precious metal in coins; or by printing more fiat paper notes, each with less value.

For most of the last 2,000 years, most money was Aristotelian, hard and inherently valuable. But modern money is becoming Platonic - soft, changeable, and unreliable because it is backed only by politician promises, not by anything of sure value.

Our fiat dollars are mere paper, but politicians now regard even this as giving us too much freedom. Credit is replacing currency in our emerging "cashless" society, making every credit card, computer and cell phone transaction trackable, taxable - and blockable if government dislikes what we are trying to buy, such as firearms.

Like China's conformity-requiring "social credit" system, American banks have begun denying credit to those deemed Politically Incorrect. Governments and their asset forfeiture policies have also made it risky to carry or use cash, as we document in our latest edition of The Secret War.

Our savings are now nothing more than hackable fragile electronic blips, like ghosts, in bank computers, as we document in our book Don't Bank On It! The Unsafe World of 21st Century Banking.

And if Modern Monetary Theory becomes ascendant, then our government will grow geometrically by conjuring vast quantities of money out of thin air, as was predicted more than 70 years ago.

Government Needs No Taxes?

In 1945, Beardsley Ruml, Chairman of the Federal Reserve Bank of New York, reportedly delivered a speech before the American Bar Association in which he foreshadowed MMT by saying: "The necessity for a government to tax in order to maintain both its independence and its solvency is...not true for a national government."

Ruml's eye-opening speech, published in the January 1946 quarterly journal American Affairs, was titled: "Taxes for Revenue Are Obsolete."

The implication of Ruml's speech is that government owns the Mint and can fund itself merely by printing as much money as its politicians desire.

Such newly-printed dollars acquire their value, in effect, by diluting and hence devaluing the old dollars that people have earned and saved through their productive efforts. Debasing your real dollars empowers government's unearned dollars.

To prevent a blaze of high inflation or hyperinflation from burning up the entire value of every dollar in circulation, new and old, taxes are used to selectively claw back money from targeted individuals, groups and industries.

Taxes will still be imposed, said Ruml, but will "express public policy in the distribution of wealth and of income, as in the case of the progressive income and estate taxes....[and] in penalizing various industries and economic groups...[and] to isolate and assess directly the costs of certain national benefits, such as highways and social security."

Taxes will not be used for revenue, but as a coercive means of social engineering. Such engineering projects - to be created by using sky-high personal and corporate income taxes, requirements that corporations massively bankroll radical activists or lose their charter to do business, imposition of a wealth tax, a prohibition on being a billionaire, and many other financial punishments that amount to making all of us equal by cutting off the heads of taller Americans.

Like Ruml, Modern Monetary Theory holds that a country can pay for anything merely by printing enough currency. If this causes inflation, the government can reduce spending, or raise taxes on select groups of citizens (e.g., "the rich") to "destroy" the excess money.

Government Monopoly Money

Under MMT, such decisions are made by politicians, not central bankers who are supposedly insulated from partisan politics. MMT is thus implemented primarily through fiscal, not monetary, policies. It should be called Modern Fiscal Theory.

Modern Monetary Theory scholars include University of Texas-Austin economist James K. Galbraith (son of renowned Canadian-born Harvard economist John Kenneth Galbraith, who was Franklin Delano Roosevelt's price-controls czar during the Great Depression); University of Missouri-Kansas City economists Warren Mosler and L. Randall Wray, the author of Modern Money Theory and Understanding Modern Money; and Stephanie Kelton of Stony Brook University, who in 2016 was an economic advisor to Democratic Socialist presidential candidate Senator Bernie Sanders (I-Vermont). Their combined analyses reveal a shocking new picture of how fiat modern money economies work.

The cornerstone idea of Modern Monetary Theory is that money is a "creature of the state." All modern fiat money, including the U.S. Dollar, is created by the central government to serve its purposes. According to Professor Kelton, people need "to see the dollar as a simple public monopoly."

The money supply remains the government's de facto property; just as all the land of a country continues to belong to the government, which will confiscate it if users fail to pay "rent" in the form of property taxes.

The Federal Government likewise routinely exerts its control over the U.S. supply of "elastic" money, expanding it by spreading stimulus dollars or shrinking its supply via taxation that reduces the amount of money in private hands.

The U.S. Government has no need to tax anybody to get money, according to MMT. Government can simply produce as much as it wishes, whenever it wishes, either in paper at a cost of two pennies per note, or by having the Federal Reserve add a few zeroes to its computerized accounting.

Money As A Social Debt?

Modern Money, according to MMT, is at its core a social debt relationship between the government and its subjects. This is the real world basis of Modern Money's value and the control over people that government exercises through it.

Yet here, too, the value of government fiat money in non-government transactions exists, says MMT, primarily because government transactions require dollars to pay government obligations. This is what gives private users reason to believe that others, who like themselves must pay taxes and other government costs, will accept dollars at a particular exchange value.

How can government increase the value of its paper dollars? It can raise taxes, making each dollar more scarce and more needed. Higher taxes increase the number of dollars that tax-paying citizens must obtain each year.

The government can then offset the risk of inflation by balancing this (and increasing social productivity) by raising taxes in one way or another. This increases market demand for its money, and it absorbs inflation-causing excess liquidity back into the government whence all money came.

Paper fiat money has long jokingly been called "Monopoly Money," after the cheap paper bills used in the board game Monopoly.

The reality, as Modern Monetary Theory reveals, is that today's fiat dollars are literally monopoly money whose value comes from government requiring their use to pay government obligations while maintaining a legal tender government monopoly on the making of U.S. Dollars.

Our dollars really are government monopoly money, and this grim joke is on us.

It is shocking to see how many of those trusted with running our government are willing and eager to deal in what is really counterfeit money - money made from nothing - and to require us to trade our real work, goods, and services for their worthless currency.

Politicians have often had this something-for-nothing morality, which is why their paper fiat money has throughout history tended to last only a century or so at most. As the French writer Voltaire said: "Paper money eventually returns to its intrinsic value - Zero."

The Magic Money Tree will be burned down by hyperinflation, and the utopian politicians will flee their fake Eden, but this inferno will cause government to steeply increase your taxes even as inflation's flames destroy whatever you have saved in MMT dollars.

Real "Money" is True Wealth

The good news is that if you act prudently now, you can fireproof your savings against "Magic Money Tree" policies - and the inflation they will surely bring about - by converting part of your money into the intrinsically valuable "money" which Aristotle and America's Framers wisely specified.

This universal form of money is called physical gold and silver, which could soar in value on the rising thermal of the world's paper fiat monies burning. Why put your faith in politician "magic money" when you could move your money to wealth that has never burned and has always been reliable?

by David Howden, Mises Institute

The income inequality debate is not as straight forward as it is commonly framed. It is not just a question of one group getting a larger piece of the pie, but of increasing the size of the pie so that everyone can benefit....

Relying on data from Berkeley economist Emmanuel Saez, Cassidy shares the following graph showing changes in real income growth over the past century (1913-2013). First let's look at the top 1 percent. There seem to be about three distinct periods their incomes have gone through. The first from 1913 to roughly 1973 is more or less flat. Real incomes for the top 1 percent were no higher in 1973 than they were around 1930. After 1973 however there is a sharp and mostly uninterrupted spike upwards which seems to stop around the year 2000. After 2000 their real incomes have ebbed and flowed, primarily in response to capital gains and losses on their stock portfolios.

Compare this with the bottom 99%. There seem to be about four distinct periods of real income growth. From 1913 until the end of the Great Depression, real income remained more or less constant. The 1940s, 50s and 60s saw a rapid increase in real income growth, far more rapid than what the 1 percent experienced. This came to a sudden end around 1973 and a stagnation until the early 1990s. Then from 1993 onward we see the same final stage as the 1 percent. Increasing real incomes....

The one year that probably pops out for people who think income inequality is a bad thing is 1973. So what happened in 1973?...What was the biggest event to occur in 1973?...The most important thing to happen in 1973 actually happened in 1971, August 15th to be exact. On that date Richard Nixon closed the gold window. The US dollar was convertible by foreign governments into gold under the then-existing Bretton Woods system at the great price of $35 per ounce...No longer was the US dollar tied to gold and the US no longer had to worry about spending beyond its means...The US dollar still functioned on a fixed exchange rate standard relative to gold until 1973....1973 was also the year that set off the most inflationary episode in America's history....

All this takes us back to the original question: why did income inequality increase so much after 1973? We can look to two factors both related to the loss of the gold exchange standard in 1971 and the arrival of flexible exchange rates two years later....The reason why there is growing income inequality since 1973 is a direct result of this monetary mayhem. All this new money needs an entry point into the economy....The 99 percent that have become relatively poorer over the past 40 years are those who get access to this new money last.

Good Reasons to Go for Gold in 2021!

David Bradshaw, My Idea Factory

Now that you've read our 2021 Real Money Perspectives, with perspectives from many authorities on the subjects of the economy and markets, let's address the all-important next question: Should YOU add physical gold and/or silver to your portfolio and/or retirement plan in 2021?

If you follow Swiss America CEO Dean Heskin's recommendation, you will likely already see the opportunity that 2021 presents. With precious metal prices already having gone through a price correction in 2020, the road is now clear to reach fresh heights in 2021.

The key to successful investing is to maintain a long-term perspective. Gold prices flexed their muscles in 2020, rising above $2,000/oz. and silver prices crested $30/oz., but that's just a foretaste of what we could see in 2021.

And just in case you may be thinking you're a little late to join the precious metals bull market, according to Kitco.com; "In 'real' terms, gold has to rise over $700 to beat the all-time, inflation-adjusted high of $2,722.18 in 1980...To reach a 'real' all-time-high, silver has to top $160.59." No wonder many experts are calling for the next leg of the precious metals bull market to extend another 5-10 years.

In addition to the peace of mind that owning tangible assets offers during these times of "extraordinary uncertainty," below is a list of good, solid reasons why physical gold and silver should become an important part of your portfolio and retirement planning.

Some Benefits of Physical Gold and Silver include:
1. Real Money Worldwide
2. Offer Long-Term Appreciation
3. Have No Counter-party Risk
4. Private and Confidential
5. Liquid and Portable
6. Easy to Store (home or vault)
7. Protection from Bad Political Decisions
8. Hedges on Your Other Investments
9. Portfolio Protection in a Crisis
10. Protection from a Falling Dollar
11. Favored Over High Stock Valuations
12. Protection from Rising Inflation
13. Hedges against Social Chaos
14. The Best Performing Assets since 2000
15. Protection from Recessions/Depressions
16. Representative of Rising Demand, Falling Supply
17. Forecasted to Rise in Price by Experts
18. Protection from Modern Monetary Theory (see p. 9)
19. Counterbalance From Pandemic Economic Threats
20. Trustworthy, Unlike the Federal Reserve

The only question now is what mix of precious metals will best accomplish your personal and retirement goals? For the answer to that question and any other questions you may have, I suggest calling your Swiss America representative at 800-289-2646 to discuss your individual situation.

As we say in our daily Swiss America podcast: "Don't wait to buy gold and silver, buy gold and silver now... and wait!

SWISS AMERICA CREDENTIALS

Swiss America Trading Corporation was founded by Craig Smith in 1982 and has since served well over 60,000 clients. Swiss America is an A+ rated, accredited member of the Better Business Bureau.

U. S. Coin Industry Affiliations:
* American Numismatic Association (ANA) - Life Members
* Industry Council for Tangible Assets (ICTA) - Member
* Numismatic Guaranty Corp (NGC) - Dealer
* Canadian Numismatic Association (CNA)
* National Silver Dollar Roundtable (NSDR)
* Certified Acceptance Corporation (CAC)
* Numismatic Consumer Alliance (NCA) - Sponsor
* Coinplex Authorized Dealer

About Dean Heskin
Dean Heskin is President and CEO of Swiss America Trading Corporation. Mr. Heskin started with the firm in 1992 as an account executive and was named CEO in 2012. For nearly thirty years Mr. Heskin's opinions and perspectives have been sought after and shared with many. You may have read, seen or heard him on the numerous media interviews he's conducted with; FOX News, The Wilkow Majority, The Wayne Allen Root Show, CBS MarketWatch, Off the Grid or Real Money Perspectives. Dean is happily married, has five children and currently resides in Scottsdale, Arizona.

About Craig R. Smith

Craig Smith is Chairman Emeritus of Swiss America Trading Corporation. Mr. Smith founded the company in 1982 out of a bedroom in his home with $50.00. It has since grown into one of the largest and most respected firms in the industry known for its dedication to consumer education and safety.

DISCLAIMER: 1. Swiss America Trading Corporation, its principals and representatives, in no way guarantee a profit or guarantee against a loss on any coin purchased. 2. Significant price swings in a short period of time are possible. 3. The degree of liquidity for certified coins will vary according to the general market conditions and the particular coin involved. 4. Swiss America and its representatives are not certified to provide tax, legal, insurance or investment advice. You are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an accountant, attorney or tax professional regarding your specific legal or tax situation.