Friday, November 14, 2014

Weekend Chillout - When the War is Over

With both Alan Greenspan and seemingly ISIS coming out on the same side of the Gold vs Fiat war this week it seems this 43 year old war is starting to heat up.

IS becomes the only State with Real Money - Gold, Silver and Copper

From zerohedge.com

Article link

It appears the rumors are true. Islamic State is set to become the only 'state' to back its currency with gold (silver and copper) as it unveils the new coins that will be used in an attempt to solidify its makeshift caliphate. ISIS says the new currency will take the group  out of "the oppressors' money system."





As Zaid Benjamin notes, ISIS releases details of its new currancy with golden 1 & 5 dinar, silver 1, 5, 10 dirham and copper 10 & 20 fils 

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It seems Alan Greenspan may have been on to something after all...
"Remember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it."
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Of course this will mean more physical demand - along with Russia and China - and so more price suppression by the West.

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I suspect that someone in ISIS has been paying attention to the advice of the Swiss trained (in Economics) Sheikh Imran Hosein.

Did The BoJ Quietly Peg The Yen To Gold?

From Zerohedge.com

Article link

For 14 years, as Japan's economic demise grew more and more evident, its currency devalued relative to gold (the only non-fiat numeraire). When Abenomics began, the trend began to stabilize... but for the last year or so - as The Fed tapered - JPY and Gold have practically flatlined around 132,000 JPY per ounce. This 'odd' stability stands in strangely stark contrast to the volatility and trends in the USD, JPY, and Gold over this period. Even amid the collapse in JPY in recent weeks, it has remained firmly inside a 3% envelope of the 'peg'.

A long trend of JPY fiat devaluation as Japan's lost decades are priced in...


Then odd stability...


Of course, this is conjecture, but doesn't it seem a little odd that with all the hot money flows and violent swings in the last year around the world, that this relationship has been for all intent and purpose - flat and managed.

Charts: Bloomberg