Gold and Paper 1951 – 2016


———   Argentina:  1951   ———




=        117         E-5 Pesos1952

Argentinian 5 Peso notes


But after government meddling and central bank printing … 65 years later:

———   Argentina:  2016   ———



=        20,000,000,000,000,000E-5 Pesos1952

Argentinian 5 Peso notes

(After adjusting for the 10 trillion to one devaluations in the past 50 years.)

———   United States:  1951   ———



=        7

U.S. 5 Dollar notesE-5 Dollar1950


But after government meddling and central bank printing … 65 years later

———   United States:  2016   ———


=        250

U.S. 5 Dollar notesE-5Dollar2015


From Raymond Chandler in “The Long Goodbye:”

“There is no trap so deadly as the trap you set for yourself.”  (Think deficit spending, central banking, QE, and “printing money.”)


Images that come to mind are:

E-printing press

















Future Possibilities for dollars/euros/pounds/yen:

  • More debt, “money printing,” central bank desperation, currency devaluations, QE, and more of the same failed policies –  will produce higher gold prices.
  • Inflationary blow-off and gold prices go astronomical in devalued currencies, as they have in many other countries in the past century.
  • Deflationary depression, tens or hundreds of $Trillions of debt defaults that make the 1930s look like a “walk in the park” by comparison to the “Greater Depression.” Gold prices are … unpredictable.
  • The dollar is gradually replaced by some other currency – a Special Drawing Right (IMF), a gold backed “something,” a digital currency, something new, or:



From:  Pierre Lassonde:

“… very sure the five-year bear market for gold is over”  …  “gold could surge to $8,000 an ounce or even higher…” 

Gary Christenson

The Deviant Investor

My books:

Amazon Author Page


6 thoughts on “Gold and Paper 1951 – 2016

  1. I thought gold would be much higher by now but if it was I would have much less. I keep adding to silver & gold & thank all those responsible for allowing me more time to gather nuts.

    • 10-4. We have had 3 years to accumulate a valuable asset while the central banks of the world print the paper and digital stuff. Eventually a reckoning will occur and the paper and digital stuff will be marked lower.
      The Deviant Investor

  2. It depends on the point of view taken, whether the paper system has failed. If the goal is to preserve the purchasing power of savings, then the paper system most definitely failed. However, if the goal is to finance growth without savings, enable consumption without meaningful production, extract resources and products from other countries without delivering any real value in return and secure full employment for the broad masses regardless whether they produce anything of value or not, then the paper system was a great success. The loss of purchasing power over long periods of time is a small price to pay for the many benefits the paper system offers. Without paper, we would not have been able to paper over the crisis of 2008. In a gold based system, most likely we would have entered a real depression in 2008. The paper system enabled the huge growth of the world population by enabling resource extraction without having to pay for the true cost of resources. Does anybody really care about the pollution of the environment ?
    Or the depletion of resources, the depletion of large fish in the oceans, the depletion of top soil etc ?

    People who criticize the paper system tacitly assume that under a commodity based monetary system, full employment would be equally easy to accomplish as under the paper system. That is I believe an illusion.

    Everybody likes free lunches. The paper system is just the idea that a good monetary system should enable free lunches for everybody. After all, in the long run, we are all dead anyway. And we can not take the gold with us when we die.
    So does it really matter ? In the end, life is not about accumulating money, It is about living a meaningful life without having to suffer from the fact that we live in a world of scarcity.

    • I think your point is that the paper system allows economies and individuals to delay consequences from mismanagement and failed policy. I don’t consider this a success. I think your second point is that paper allowed the world economies to survive the trauma of 2008, and gold would (probably) not have. But that misses the point. The stock bubble of 2000 and real estate bubble and mortgage bubble of 2006-2008 would not have occurred in a sensible economic system based on some fractional tie to actual gold. Paper systems enable and encourage the insanity of bubbles in stocks and mortgages. I think acknowledging consequences and costs is good, and creating a paper system to avoid consequences is not good.
      The Deviant Investor

  3. One thing is certainly true. No matter how evident the failure of Central Bank and Political policy becomes, and no matter how much pain is associated with it; the essential belief in it’s excellence will never be shaken!

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