SPECIALREPORTPREPAREDBYGLOBALGOLDSWITZERLAND

RealversusFalseMoney
Author:ClaudioGrass,ManagingDirectorGlobalGoldSwitzerland. Keywords: Monetary History, Gold Standard, Fiat Money, Free Money, Austrian Economics, Debt Crisis,Inflation,CurrencyDevaluation,CentralBanks,PhysicalGold,PaperGold. Content:Thispaperdiscussestheveryconceptofmoney:whatisit,wheredoesitcomefrom,how does it lose value. Besides, the paper answers the question which economic risks are inherent in todaysmonetarysystem. Tableofcontents: Introduction Theoriginoftodaysbankingsystem Milestonesinmonetaryhistory Theimpactonourlives Howtoprotectoneself page1 page3 page5 page10 page11

Introduction
Thosewhodonotrememberthepastarecondemnedtorepeatit.GeorgeSantayana Fiat currencies in connection with our banking system have numerous disadvantages. The system is prone to bank runs, leadsto an unstable economy andconstant inflation; to name just a few. The aim of this article is to explain how our current monetary system works. To begin,wewillexplainhowmoneyandthebankingsystemcameintoexistence.Wewillthen dive into important milestones of monetary history. At the end of this article, we will illustrate how individual savers can protect themselves from these shortfalls by relying on realinsteadoffakemoney. Now let us start by looking at the question of how money came into existence and what stagesitwentthroughinitsdevelopment.Historically,anythingapersonneededhecreated himself.Peoplewereselfsufficient.Economicinteractionwasmoreorlessunnecessary. Between 9000 and 1000 B.C., cattle were used as such a medium of exchange. It was easily transportable;andprovidednotonlymeatwhenslaughtered,butalsoadailyreturninthe formofmilk.Thisformofmoneywaspracticalbutstillhadthedisadvantagethatitwasnt easily divisible. Furthermore, when the nomad lifestyle was slowly given up, and people started to settle down in cities etc., holding this form of money became increasingly complicated. Over time, people realized that some people are better performing specific duties than others: So they decided to divide labor. Everyone was assigned a specific task (One what he wasbestat).Thisincreasedeconomicoutput,andingeneralterms,everyonebecamebetter

off. This transition of how work was performed in an economy made trade between individualsanecessity;thereforebarterbecamecommonplace. Barter worked generally well: The shoemaker, for example, could concentrate on making shoes and rely on trade with the baker or butcher to put food on his familys table. Barter, however, also had disadvantages. To elaborate lets continue with the example of our shoemaker. After trading with the butcher the previous day, the shoemaker goes to the butcher again. He wants to trade a new pair of shoes for some more meat. The butcher, however, doesnt require shoes on a daily basis; today instead, he requires a new knife to cut his meat. The consequences of such a scenario result with the shoemaker having to first trade in his shoe for a knife, then go to the butcher to trade it for some meat. As you can image, barter requires a long chain of transactions before one gets what one really wants. Another problem with barter is the missing divisibility of some goods. Lets assume that the exchangerateofahousetoashoeis1:1,000;theshoemakercannotbuy1/1,000ofhouse andthepersonsellingahousedoesnotreallyhaveusefor1,000pairsofshoes. These disadvantages of barter led the market participants to search for a medium of exchangethatwouldbeacceptedbyallparticipants,andwasthereforehighlyliquid.

The image above shows the timeline of dominant international currencies, although paper currencies have existed before it is a relatively new occurrence that it has become the dominant form of money throughout theworld.

These disadvantages brought on a new era of money; namely the coins minted out of preciousmetals.TheancientLydianswerethefirstimplementingamisshapennuggetcalled Electron, a naturally occurring goldsilver alloy, as their medium of exchange approximately 700 years BCE. Followed by theancient Greeks who were the first to start off with gold coins (The Drachma). When one analyses different civilizations in history, like the Greeks, Romans and the history of city states in Italy (Florence, Venice, Genua etc.)it is evident that the blossoming of these Civilizations took place when they adopted Gold or Silverbasedcurrency. One such example is the Solidus which was used from China to Britain during the Byzantine Empire. It was used basically as a world currency for over 800 years. Another interesting aspect is that when empires collapsed so did their currency. This was not due to the fact that gold was suddenly less appreciated by the population of other countries, but was due to government intervention. When governments ran into (financial) trouble

they started mixing in worthless metals into gold coins. They could then issue and spend moremoneythantheyactuallyhad.Liketoday,thesemeasuresleadtotheimpoverishment of the middle class and fueled corruption and wars. It is important to understand that already back then this process lead to a massive wealth redistribution from the bottom to thetop,fromnormalpeoplewithoutprivilegestotheeliteswiththeprivilegetocontrolthe currencysupply. What we learn from history is that money doesnt come into existence by force or legislation.Itisinessenceamarketprocess;whereparticipantsdecidefreelywhichmedium they want to use. It has to be easily recognizable and transportable. It has to be rare so it cant be easily reproduced and so it can act as a store of value. Gold and silver fulfill these criteria, have an intrinsic value and are free of any counterparty risks. Therefore, it is clear why historically they were the most wide spread medium of exchange (money) used over a timeperiodofover3000years.Aristotlecametothefollowingconclusion:Ineffect,thereis nothing inherently wrong with fiat money, provided we get perfect authority and godlike intelligenceforkings. We will now discuss the origins of our current banking system. You might be asking yourself if we forgot to talk about todays money. Not at all! The money which we hold in our hands today (or hold in our accounts) is just so strongly connected to the banking systemthatunderstandingthebankingsystemfirstisessential.

Theoriginoftodaysbankingsystem
In ancient Greece, temples acted as banks because they were regarded as safe; because of religious reasons and due to the fact that they usually had their own militia for protection.Sinceitwasnotadvisableeventhen;towalkaroundwithtoomanyGoldorSilver coins, people have always sought a place where they could safely store large amounts of coins.Laterinhistory,thegoldsmithsstartednotonlytomintpreciousmetalcoins,butalso toactasdepositorieswheregoldcouldbedeposited. People deposited their gold with the goldsmith, who in return demanded a storage fee for safekeeping. The goldsmith was obliged to hand over this gold on demand. The depositors were still the owners and the gold couldnt be lent out. The depositor received a receipt for the deposited gold. Over time, this receipt became a means of payment because it was a titleofownershipongoldandwasseentobeasgoodasgold.Thisdevelopmentwasthus thebirthofthemodernbankingsystemandthedematerializationofmoney. Greed, however, took over, and the goldsmiths wanted to make more money. Actually, the first documented case of fraud by a banker dates back to the year 393 BC. Isocrates describesinaspeechhowthebanker(Passio)usedbribes,deceivedandfalsifieddocuments to misappropriate the gold which was entrusted to his bank. It became a widely used practiceofthesegoldsmiths(andotherdepositories)tolendoutthegoldwhichwashanded to them for safekeeping; earning interest on lending out gold in the form of receipts; which wasnt legally theirs. As the receipts were perceived to be as good as gold, by increasing the amountofreceipts,theyactuallycreatedmoneyoutofthinairandwereearningintereston it. This Ponzi scheme worked well as long as the people had confidence in the bank and didntalldemandtoretrievetheirgoldatthesametime.

Throughout history, the above mentioned scam was considered fraud. Not anymore! Today, in fact, under the guise of fractional reserve banking, it is even protected by the state. Whenyoumakeadeposit,thebankisonly obligedtoholdasmallfractionofthedepositas a reserve; the rest is lent out. When the money lent is deposited at another bank, the other bankinturncandothesame.Sothetotalmoneyincirculationcanincreasebyamultipleof whatthecentralbankcreated.Inbankingterms,thisiscalledthemoneymultiplier.Theonly reasonthatbankrunsareevenpossibleisbecauseasthenameimplies;thebankonlyholds a fraction of the deposits as reserves. This multiplying of money or credit expansion leads to inflation and artificial booms; that end in recessions. In the end, the conduct of the goldsmiths and todays bankers is basically the same: Both are in essence a fraud. Although one holds the name fractional reserve banking and has the governments blessing! Letsconsiderthatabankisrequiredtohold5%asaminimumreserveforthedepositsheld. Lets assume a deposit of 100,000 USD is made. The bank would keep 5,000 USD and would lend out 95,000 USD. A person decides to get a loan for 95,000 USD to buy a car, when the car dealer deposits these 95,000 USD into his bank account, the bank is again only required to hold a 5% reserve (4,750 USD) and can lend out 90,250 USD. This can be done until the banks have created 2,000,000 USD based on a deposit of only 100,000 USD. They can increasethemoneysupplybyupto20times! Hellenism was a turning point in the history of the financial system. The first state bank was created. The Ptolemy dynasty was the first to realize how profitable this more or less fraudulent activity of the private banks was. Instead of fighting against these scams, they decidedtojoininandcreatedastatebank.TheEgyptianswentastepfurtherandcreateda central bank in Alexandria. It had branches throughout the country and marginalized the importance of private banks. This bank was responsible for the custody of taxes, but it also tookdepositsfromindividuals.Astobeexpectedfromastatebank,thefundswereinvested forthebenefitofthestate. In Rome, where the state possessed the place of business where banking was conducted; bankers needed to obtain a license before they conduct any banking business. By forming a guild (in order to defend their common interests) they were able to obtain privileges from the emperors. In the end, the economic and social collapse of the Roman Empire was causedbytheinflationarypoliciesofthestate;whichreducedthepurchasingpowerofthe currency. On the other hand, price caps were set for basic goods. This led to the demise of many businesses and brought trade in the Empire to a halt. This development brought bankingtoanabruptend.Ittooknearly800yearsuntilthebankingsystemwasrediscovered during the Middle Ages in the Italian cities. Similar situations as in Rome reoccurred and the main profiteers were not the depositors, but the bankers and the power elite who gave themthelicenses. This alliance between banks and governments continues till this day. To put it bluntly; the governments give the banks the right to print money. In exchange, they expect the banks to buy their bonds (debt) so they can continue to spend money they simply dont have. In

the 20th century alone, we have seen 50 hyperinflations and currency collapses. In contrast, GoldandSilverhavealwaysremainedtoworkasacurrency. For a more detailed overview on the development of the banking system, I recommend the book Geld, Bankkredit und Konjunkturzyklen by Professor Jess Huerta de Soto, which I usedasasourceforthissection.

Milestonesinrecentmonetaryhistory
After introducing you to the early foundation of how our monetary and banking system developed. I would now like to elaborate on more recent history. Starting in 1816, and to explain which steps, including wars, were undertaken to slowly drive gold and silver away outofourmonetarysystem. Beforedivingintothedetails,thechartbelowisagoodsummaryofwhatistofollow.These steps have led to inflation, which has and continues to impoverish the middle class worldwide. As you can see the consumer prices between 1661 and the First World War fell and therefore the purchasing power of the people increased. They were able to buy more goods with the same amount of gold or silver. Only during wars the prices increased, especially during the FrenchBritish War and the Napoleonic Wars because the British government financed the war already back then by an increase of paper money at the expense of wealth of its people. It is also clearly visible that we have a serious problem withinflationsinceWWIandespeciallysince1940!

Source:F.Lips/J.Trachsler,Geld,GoldunddieWahrheit.

PhaseI:18161914/TheClassicalGoldStandard Ferdinand Lips described the 19th Century as a period of prosperity, economic growth and without inflation. At the time, most of the important currencies remained stable over long periods. It was the era of the classical gold standard! This standard was simple; currencies were backed by Gold and could be exchanged into Gold at a fixed exchange rate. It was practicallyimpossibletomanipulatemoney:Governmentscandoalotofthings,butprinting gold (to back money) is simply not one of them. This lack of manipulation provided a stable currency for the citizens. During this period, the living standard of the masses rose considerably,whichinturnledtoaverylowunemploymentlevels. On the 23rdof December 1913, President Wilson signedthe FederalReserve Act. This set the foundationforthecentralbankingsystemweknowtoday. PhaseII:19141918/WWI In 1914, at the beginning of World War I, the Gold Standard was dropped in several countries. Under the Gold Standard, governments would simply not have enough money (gold) to finance costly wars. So they dropped the Gold Standard and began a deficit spending spree. In his famous book Gold Wars Ferdinand Lips wrote: "If the gold standard hadnotbeenabandoned,thewarwouldnothavelastedlongerthanafewmonths.Without the Gold Standard, however, the war went on for more than four years, ruined leading economiesandclaimedmillionsoflives." The initial plan was to return to the Gold Standard after the end of the war because of the factthatthegovernmentprintedsomuchmoneyhowever;theywouldhavehadtodevalue theircurrencyintermsofGold.FearingthatpeoplewouldlosefaithintheBritishpound,the Brits were against the reintroduction. In the end most countries didnt go back to the Gold Standard. PhaseIII:19221931/TheGoldExchangeStandard

AttheGenoaConferencein1922,theGoldExchangeStandardwasintroduced;underwhich, theDollarandtheBritishpoundwereconsideredtobeasgoodasgold(andcouldtherefore be held as reserve currencies). As already mentioned, it is important to note that these currencieshadlostpurchasingpowerandthereforecouldntbeasgoodasgold. The immediate effect of this new system was that reserveswere now counted twice; first in the country of issuance, than in the creditors country that held it as a reserve. Let me give you an example to explain how this could happen: Lets assume that an American company boughtaGermancompanyfor10millionUSD.UnderTheGoldStandard,the10millionUSD would have led to a decrease in the money supply in the states because the equivalent amount of gold would have been shifted to the account of the German Bundesbank. In return, the money supply of the German DMark would have expanded to the equivalent of 10millionUSD. Under The Gold Exchange Standard, however, the money supply of Germany expanded by theequivalentof10millionUSDinDeutschmark;andatthesametimethemoneysupplyof the United States stayed the same because the dollar was deemed to be as good as gold

undertheGoldExchangeStandard.WhatdidtheGermansdo?Insteadofexchangingthe10 million USD into gold, they just kept the amount in Dollars and bought treasurybills and bonds;onwhichtheyreceivedaninterestpayment.Therefore,theUSdidnthavetoreduce the broad money supply because they kept theGold reserves. (The USD was on equal terms as Gold and therefore they gained the unmoral privilege; together with the Brits, to pay out othernationsinfiatmoney). Furthermore, the reserve countries (USA and Great Britain) were able to run balance of payments deficits without being punished as long as the other nations had confidence in their currencies. The new system set a gigantic money and credit machine into motion and created theinflationaryboom of the 1920s. The new mechanism proved to be an engine of inflation whose product excess purchasing power flowed abundantly into real estate and the stock markets. This was the cause for the inevitable corrective Depression starting with thecrashof1929. In 1925,the French and the Brits wanted to stop this craziness. Winston Churchill and Minister of Finance Pointcar decided to return to the system of Gold Parity, as used previoustothewar.Duetothis,GreatBritainfacedthebiggestdrainofgold.Thisleadtoan enormous reduction in the money supply and the UK drifted into a severe deflation. The immediate outcome was the longest strike in the history of Great Britain which paralyzed the economy in large scale. Still number one in terms of global power, the Brits called the Americansforhelp. Their initial plan was to stop the massive gold drain by lowering the interest rates in the US to the same low levels as in Great Britain: Because of the strikes and the ongoing severe depression they couldnt increase the interest rates (which would have led to more capital inflowsintoBritain).Therefore,theFEDreducedtheinterestratestothelowlevelsintheUK and injected excessively paper money into the US Banking System. The gold drain out of London finally stopped. However, as a consequence, the excessive liquidity and credit injectionfloodedintothestockexchangeandintorealestate:Thisleadtotheartificialboom of the 1920s. The central banks were once more unable to absorb the excess liquidity; the imbalancehadalreadybecometoobig.Thisistherealcausebehindthegreatdepression. PhaseIV:19311945/Fluctuatingcurrencies&WWII Keynesianeconomicshadbecometheworldsdominanteconomictheory.Thestockmarket crashed between 1929 and 1932 and the Dow Jones Industrial Averagelost about 90% of its value. Even tangible assets, such as real estate, were hit similarly hard. Residential and commercialbuildingslostupto80%oftheirvalue.Mostcommoditiessufferedasimilarfate. During 1929 and 1933,the consumer price index dropped by 24%. In 1933, President Roosevelt abandoned the Gold Standard and US citizens had to hand over all their Gold to the government in exchange for paper money. It was forbidden to hold Gold in the US. Shortly after theenactment of these prohibitions, the president; underauthority granted by the Congress, devalued the Dollar vs Gold by 75% from 20.67 USD to 35.00 USD. The main difference to today is that back then Gold was still considered as the backbone of the currencysystem.TheUShadtobackDollarswith25%ofphysicalgold,thereforetheyhadto steal it from their citizens because otherwise they could not have printed the necessary money to increase their debts and to bailout their bankrupt banking system. They also

achieved a lower USD (increase in international competitiveness) and reduced the existing debt through inflation. The government betrayed their own people by stealing from them and implementing a form of financial repression because they pushed every citizen into usingpapermoney. Before1933,theFederalReservenotescontainedthepromisethattheycouldbeconverted into gold. Later, the caption was changed to read that a bill could be exchanged forlawful moneyoftheUnitedStates. EconomistandGoldexpertJohnExterdescribedtheperiodasfollows:Thecontractionwas so powerful that it took Roosevelt three terms and a war to get out of it. In 1933, unemployment stood at 25%. By 1937, it had fallen to 15%. However, in 193738, the stock market took another dive; the economy went into another contraction and unemployment climbedbackto21%.WorldWarIIofcoursecuredunemployment.Withoutthewar,thereis no telling how long it would have lasted. With the outbreak of World War II, Gold became a strategic commodity. Worldwide trading of the metal by individuals and corporations was banned. At the same time, the Gold stock of the US Treasury continued to grow. This was due to bullion transfers for foreign purchases of military hardware. In September 1949, the US Treasury at the high point of Americas gold power owned USD 24.6 billion worth of bullion(at35USDperounce). PhaseV:19451968/BrettonWoodsSystem InJulyof1944,representativesof44nationsgatheredatBrettonWoodstodiscussthepost war international monetary system. It was decided that the US Dollar and Gold would become the sole reserve currencies. The outcome was nothing more than America dictating the US Dollars official supremacy. The USD should become the only currency convertible into gold by foreign central banks. So all the world currencies were expressed in terms of and closely tied to the US Dollar. In turn, the dollar was still fixed to Gold. Only the United States could change the price of Gold meaning all other nations were forced to either increase the value or devalue in terms of Dollars. Under Bretton Woods, the US had a commitmenttomaintainthevalueoftheDollarbybuyingandsellingunlimitedquantitiesof Gold,at35USDperounce.Italsohadthecommitmenttodeliveronrequest,Goldtoforeign central banks: Often that commitment was not met. Diplomatic pressure was applied to prevent Gold withdrawals from the US. James Dines recalls an incident when President JohnsondiscouragedGermany,forexample,fromconvertingitsUSDintoGoldbyreminding it that US troops stood between it and Russia. (You will find a proof for political pressure under the following link Fed Arthur Burns on Gold June 1975: http://www.gata.org/files/FedArthurBurnsOnGold6031975.pdf) From that moment, it was possible for the US to pay their debt in USD; which they created outofthinair.FrenchPresidentCharlesdeGaullecalledthistheExorbitantprivilege. By the end of 1949 at the high point of Americas gold power the US treasury owned physical gold in the amount of 24.6 Billion USD at the price of 35 USD per oz. This reflected approximately 700 million ounces of gold or 70% of the total gold reserves of all central banksinthesocalledfreeworld.10yearslater,in1959theGoldreserveshadalreadybeen depleted because the amount of paper Dollars deposited with other foreign central banks exceeded the total value of the physical Gold kept within the states. If foreign central banks

had demanded to exchange their paper Dollars into real money (physical Gold) the safes of FortKnoxwouldhaveonlybeenenoughtocoverafractionofthedebt. PhaseVI:19681971/TheDownfalloftheBrettonWoodsSystem During the 60s, people continuously lost trust in the USD. Governments around the world started to exchange their USD into physical Gold. The French government exchanged nearly 3 billion USD of Gold from the US Treasury. Shipping the bulk of its Gold custody holdings at the New York FED to Paris; generally challenging the functioning of the Bretton Woods system. The London GoldPool which had been established to oppress the price of gold failed. On March 17th, 1968, it was then decided amongst seven members of the London goldpool(GreatBritain,WestGermany,Switzerland,theNetherlands,Belgium,Italyandthe United States) to close it down and to establish a twotiered Gold price: One for the central banks at 35 USD and one for the freemarket. Central banks were forbidden to have anythingtodowiththefreemarket;theycouldneitherbuynorsellinit. By March 1968, the US Gold stock had plummeted to around 10.5 billion USD priced at 35 USD per ounce (vs. 24.6 USD billion in 1949). Within the same month, the US congress removed the 25% Gold reserve requirement for Federal Reserve Notes. The end of this monetarytragedywasreachedwhentheBankofEnglandandtheSwissNationalbankasked for Gold in exchange for their Dollars in 1971. Richard Salsman (American Economist and lecturer) wrote in his book Gold and Liberty that By 1971, more than half of the Gold supplythatwasforciblytakenfromUScitizensinthe1930iesendedupinthevaultsofforeign central banks. This was the biggest bank heist in world history. It happened in slow motion andmaynothavebeentheintentofeveryofficialwhoparticipatedinit. On August 15th 1971,President Nixon responded by temporarilyclosing the gold window; by refusing to allow the treasury to redeem any foreignheld Dollars in Gold. Closing the Gold Window was according to Salsman, a polite expression for defaulting on Gold payments and repudiating an international monetary agreement. Salsman also said,when Goldwasdemonetizedin1971,manycriticsofGoldpredictedthatitspricewouldfallbelow 35USDperounce.TheyassumedthatthepaperdollargavevaluetoGold,nottheotherway around.Thepasthasshownthatnothingcouldbemorewrongthatthisstatement! In contrary, the announcement of Nixon was nothing less than a declaration of bankruptcy. Instead of going bankrupt the USD became the worlds reserve currency the Emperor without clothes expanded his powers based on papermoney which is not worth thepaperitisprintedon! PhaseVII:Ourpapermoney Since August 15th 1971, the Dollar became nothing more than a fiat currency and the FED has been free to continue its monetary expansion at will. The result is as we have seen, a massive explosion of debt. The problem with this mountain of debt is that it simply cannot berepaid.DebtisasJohnExtermentionedonce,Afunnything:italwaysmustberepaid,if notbythedebtor,thenbythelender,orworsestill,thetaxpayers!

Theimpactonourlives
Letsstartwithalittlestory.Imagineyouareon anislandwith9 otherpeopleandeveryone has 100 $ (so the total is 1000 $ and everyone owns 10% of the money). Amongst these 10 people, there is a banker (who is responsible for taking care of the money supply) and his friend. One day, the banker decides to print an additional 1000 $. He keeps 500 $ for himself and hand another 500 $ to his friend. Now the total supply of money is 2.000 $, but you still only have 100 $ (you only own 5% of the total money supply). This money in your hand will now only be able to buy half of what it could before. Although no one has actually physically stolen anything from you; half of your wealth was stolen by the banker and dividedbetweenhimselfandhisfriend. Admittedly, this is a bit of a simplification and the bankers and his friends in todays world take more care; to at least keep up the appearance that this isnt happening, but it is the same.ThechartbelowshowshowstronglycurrencieshavedevaluedvisvisGoldsincethe Gold window was closed by Nixon. Even the Swiss franc, which is seen as a stable and durablecurrencyhaslostaround90%ofitsvalueinthepast40years.

Source:IncrementumLiechtenstein/R.Stfferle.

As I have already mentioned, governments play a big role in our monetary and banking system.Theyarethefriendsofthebanker,similartotheexamplewiththeisland.Why?The answer is debt! Most western countries have piled up a gigantic debt burden. To illustrate this, the chart below shows the debt burden in percent of GDP for selected countries. It becomesclearwhenyouhavealookatthechartbelow.Evencountries,whicharecurrently notinthespotlight,havedebtlevels,whichalreadytodayseemsimplyunsustainable.Ifone takes the so called unfunded liabilities into consideration which are promises already made (like pensions etc.) which arent funded yet, the situation seems dramatic (red bar). Due to these extremely high debt levels, governments all over the world have an incentive to help banksbecauseoftworeasons:Thefirstreasonisthatbanksaremajorbuyersofgovernment debt (with your deposits). The second reason is that the money which is produced by the

banks increases the money supply and reduces the buying power of money; or put in anotherway,reducestherealdebt,whichgovernmentshavetorepay.

Howcanyouprotectyourselffromthesedevelopmentsintheworld?
Although we are not fans of Alan Greenspans policy when he became the chairman of the FED; many years prior to this, he wrote an excellent essay called Gold and Economic Freedom,wherewecanreadthefollowing: This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty inunderstandingthestatists'antagonismtowardtheGoldstandard. We agree with Greenspans view and believe that the only way to protect ones property rights is by holding unleveraged and unencumber direct ownership of physical precious metals;asfarawayaspossiblefromthebankingsystem! The core mission of Global Gold is the safekeeping of precious metals. We store and protectyourassetsonyourbehalf,wherebytheownershiprightsstaywithyouatalltimes andisnottransferable,unlessyou personallyinstruct usotherwise. Wearenotallowedto pledge, hedge or loan out your metals, nor are they part of our balance sheet. We guarantee the complete availability onetoone in the format you purchased the metals until you ask for physical delivery or decide to sell your metals. The metals are fully yours andatyourowndisposalatanytime. WritteninRapperswil,June2013

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Abouttheauthor
ClaudioGrassjoinedtheGlobalGoldteamin2011asManagingDirector. PriortojoiningGlobalGoldhegainedvastexperienceininternationalsalesandmarketing workingformultinationalcorporationsespeciallywithintheairline,NGOandITbusiness.He bringsalongexperienceininternationalbusinessconsulting,businessdevelopmentandkey accountmanagementwithfocusonsales,sourcingandstrategy.Heisastrongadvocateof freemarketprinciplesandthereforehefeelsattractedtotheprinciplesofthelibertarian philosophies. ClaudioGrassholdsacommercialdegreefromtheZurichBusinessSchoolandstudied businesseconomicsattheEuropeanEconomicsAcademyinSt.Gallen,Switzerland.

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