Category Archive: Gold Standard

Main Author Keith Weiner
Keith Weiner is president of the Gold Standard Institute USA in Phoenix, Arizona, and CEO of the precious metals fund manager Monetary Metals. He created DiamondWare, a technology company that he sold to Nortel Networks in 2008. He has his PhD from the New Austrian School of Economics. He lives with his wife near Phoenix, Arizona. In March 2015 he moved his Gold Standard column from Forbes to SNBCHF.com.

Janet Yellen Fights the Tide of Falling Interest

The Fed is going to have to take back this interest rate hike (Dec 16). The process that sets the interest rate is complex. I have written many words on its terminal decline. However, there are two simple reasons why the trend remains downward.

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Falling Interest Causes Falling Profits

Most people assume that prices move as a result of changes in the money supply. Instead, let’s look at the effect of falling interest. To start, consider a hamburger restaurant. Suppose that the average profit in the burger business is ten percent of invested capital. If MacDowell’s is thinking about expanding, it has to consider the interest rate. Why?

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A Free Market in Interest Rates

Unless you’re living under a rock, you know that we have an administered interest rate. This means that the bureaucrats at the Federal Reserve decide what’s good for the little people. Then they impose it on us. In trying to return to freedom, many people wonder why couldn’t we let the market set the interest rate. After all, we don’t have a Corn Control Agency or a Lumber Board (pun intended). So why do we have a Federal Open Market Committee?...

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Will a GDP Futures Market Be Liquid?

At the Cato Monetary Conference, Scott Sumner said he had a “modest” proposal, that there should be a highly liquid futures market in Nominal Gross Domestic Product (NGDP). Sumner is known for his view that the Fed should target NGDP as the basis for monetary policy. So a GDP futures market that predicts it would be convenient. Let’s look at his idea more closely.

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How Do People Destroy Capital?

The flip side of falling interest rates is the rising price of bonds. Bonds are in an endless, ferocious bull market. Why do I call it ferocious? Perhaps voracious is a better word, as it is gobbling up capital like the Cookie Monster jamming tollhouses into his maw. There are several mechanisms by which this occurs.

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What’s Different about Monetary Policy?

Keith Weiner argues that the money that many money managers make does not come from producing anything of value. It’s other people’s life savings that they are driving and eating.

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Keith Weiner in Zurich



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Offener Brief an Alexis Tsipras

Keith Weiner zeigt, dass Griechenland bankrott gehen wird, egal ob es im Euro bleibt oder auf Dollar oder eine neue Drachme umstellt. Er schlägt eine Umstellung auf gold-denominierte Obligationen vor. Nur die Sicherheit von Gold wird Kapital wieder in das Land locken.

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The Dog That Did not Bark

In the famous Sherlock Holmes Story, the detective identified the perpetrator from the fact that a dog didn’t bark. The dog didn’t bark because it dog knew the perp. This story makes a good analogy to what happened on Thursday, Sep 17. Perhaps I should say what did not happen. The Fed did not raise the interest rate.

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The Fed and the Cotton Candy Market

For Keith Weiner the Federal Reserve operates like a Cotton Candy Machine for the housing market. It creates a massive bubble, financed with debt. It spins the price of a house, with the help of credit and debt, into something many times its original size.

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Jackson Hole: Cherry Flavored Cyanide, or Strawberry

The American Principles Project and the Atlas Network Sound Money Project, provided a much needed alternative in the Jackson Hole Summit.

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Move Over Entrepreneurs, Make Way for Speculation!

The development of lending was a revolutionary breakthrough. Lending allowed the retiree to do business with the entrepreneur. The retiree has wealth, but no income. The entrepreneur is the opposite, with income but not wealth. The retiree lets the entrepreneur use his wealth, in exchange for an income. The entrepreneur is happy to pay interest, in order to grow his business and increase profits. At times throughout the centuries, governments...

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Who the Heck Consumes Capital?!

I have been writing about consumption of capital, using the example of a farmer who sells off his farm to buy groceries. It’s a striking story, because people don’t normally act like this. Of course, there are self-destructive people in every society, but, not many. Most people know not to spend themselves into poverty. To make people hurt themselves, we need to add the essential element: a perverse incentive. Consider a parlor game called...

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The Economy is in Liquidation Mode

If you’re an American over a certain age, you remember roller skating rinks (I have no idea if it caught on in other countries). This industry boomed in the 1970’s disco era. However, by the mid 1980’s, the fad was fading. Imagine running a rink company at the end of the craze. You know it is not going to survive for long. How do you operate your business? You milk it.

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Yield Purchasing Power: $100M Today Matches $100K in 1979

Yield Purchasing Power reveals that with today's zero interest we are living in times of hyperinflation. Larry worked for his savings his whole life. Through the lens of conventional purchasing power defintions, we don’t focus on the liquidation of Larry’s wealth. We ignore—or take it for granted—that he’s trading his life savings for bread. We only ask how many loaves he got. If you had a farm, would you consider trading it away, to feed your...

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Keith Weiner: Open Letter to Alexis Tsipras

The troika wants you to accept another bailout deal, to service Greek debts a while longer. Since bailouts mean borrowing more, you cannot avoid default in the end. Going deeper into debt is no good for anyone. However, Greece has no future so long as it clings to the euro.

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Keith Weiner: Inflation Caused the Greek Tragedy

By inflation, I don’t refer to rising consumer prices in Athens. My Greek friends tell me that prices have been steady there in recent years. The focus on prices is the greatest sleight of hand ever perpetrated. It diverts your attention away from the real action. Inflation is the counterfeiting of credit. It is borrowing, when you can’t pay and you know it. Inflation is taking money under false pretenses, and issuing fraudulent bonds. This...

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THERE’S Your Hyperinflation!

Hyperinflation is commonly defined as rapidly rising prices which get out of control. Let’s restate this in terms of purchasing power. In hyperinflation, the purchasing power of the currency collapses. Many critics of the central banks have predicted that this end is coming soon. They have been frustrated as prices are clearly not skyrocketing. For example, the price of crude oil was cut almost in half (so far). There’s little to see if one...

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What Good is the Texas Gold Depository?

You’re getting onto a highway. You want to go to your destination but there are roadblocks. The barriers are stacked up in layers. Even if one is removed, you still can’t get anywhere. So is it worth it to start eliminating obstacles, even though it won’t clear the road yet? On June 12, 2015 Texas said yes. The road we’re talking about is the path forward to the gold standard.

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Interest – Inflation = #REF

Economists say real interest = nominal interest - inflation. They paint a false and misleading picture.

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