The Price of Gold

“Owning physical gold is like having a put option on your government and the financial system. And when you don’t have confidence in these things, the paper price of a gold contract that trades in a government-regulated commodities exchange is… irrelevant.” An important reminder from the SovereignMan.

The price of gold has taken a hit in the last few weeks dipping down to the $1,500’s. If you own gold and silver as ‘a put option on the financial system’ this temporary dip is of little concern, what you own is real money. And this week Patrick Barron explained why it is the dollar and not gold that is overvalued.

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GoldMoney: Why price inflation will take off

Alasdair Macleod explains how “preference for money” impacts price levels and what role a shift in preferences will play in a ‘virtually certain’ new banking crisis.

“We are all aware, through application of logic if nothing else, that if you increase the quantity of money, prices will increase as that extra money is spent. What is less appreciated is that prices can change dramatically due to shifts in preference for money over goods.”

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Business Week: Dollar-Less Iranians Discover Virtual Currency

As Hyperinflation continues in Iran, it seems that some Iranians have discovered a simple way out of the mess imposed on them by international politics, Bitcoin.

Bloomberg’s Business Week spoke to a few Iranians who have found a solution in Bitcoin. “Iranians are resorting to virtual currency to move money into and out of the country in a way that Western authorities find hard to detect.

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