The Phaserl


Did Gold Survive the Depression?

from Armstrong Economics:

Some people totally confuse gold and money. During the Great Depression, we were on a gold standard. During a decline, ALL assets will decline against whatever is money, just as money declines during a boom. You need to separate MONEY from gold or you will never understand how the economy functions and you will buy gold when you should be selling. If you do not get this one right, forget it. You are not ready to invest.

If bronze or cattle were money, they would have risen against gold. It is MONEY vs. ASSETS — not gold. Today, gold is a commodity and it is tracking the commodity group as it is tracking silver. Gold moved opposite of silver between 1929 and 1932 only because it was then MONEY. So if you think a crash means that gold will rise, you are in for a very rude awakening.


You are doomed if you cling to the idea that gold will rise simply because stocks decline. Gold was DEVALUED in 1934 since gold was MONEY. What it could purchase for $20.67 then cost $35. The government confiscated gold and moved to a TWO-TIER monetary system with gold used exclusively for international settlements, not domestic.


Gold rose in purchasing power between 1929 and 1932 simply because it was MONEY at that time. The gold promoters do not understand that gold is no longer money, and therefore it will not rise in purchasing power in the event of a crash. The promoters do not talk about the event where government confiscated gold. They focus on the fact that gold rose in value from $20.67 to $35 without explaining that everything rose between 1934 and 1937, and then fell with the crash of 1937 when MONEY rose in value. Devalue whatever is MONEY and all assets rise, be it real estate, stocks, or commodities. This is what took place even during the German hyperinflation. It is ASSETS against MONEY, regardless of what it might be at that moment in time.

Gold 1970-1990 -M

Today, gold will decline with commodities against MONEY, and then it will rise when people lose confidence in government after realizing that there is a Sovereign Debt Crisis. You better get this one right. Inflation soared during the OPEC crisis, but we ended up with cost-push inflation rather than demand; gold declined from 1974 into 1976 by about 50% and MONEY rose in purchasing power. All the classic nonsense from fiat to the end of the dollar was banter as gold fell 50%. If we look at how gold has performed when it is not MONEY, we can start to sort out the bullshit from reality.

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25 comments to Did Gold Survive the Depression?

  • Ed_B

    “So if you think a crash means that gold will rise, you are in for a very rude awakening”.

    IMO, China will cause the price of gold to rise, not a crash. A crash WILL be quite rude… to all of us. It will be a lot ruder to those who have not prepped or stacked, however. If the fiat paper Ponzi scheme dies at long last, you can bet money (which is to say silver and gold) that PMs will be THE preferred money, whether they are officially recognized as such by governments & pundits or not.

  • What a foolish perspecitve. Gold rose the most when it was NOT money. From 1971-1980 and from 200-2011. Marty is on a crusade to bash gold. Why bother printing his propaganda

  • Robert Olin

    Ok – I admit to liking a good conspiracy theory, but I heard thru the grapevine that Armstrong sang a different tune about gold before we went to jail. If so why?

  • Benjamin

    It Seems like a good place to start would be to understand the difference between money and currency.

    • brybo

      If the institutions state gold is not money but the people say gold is money (and treat it as such) then all these words and arguments mean nothing and an answer to such a question cannot be found within these pages but only on the streets.

  • rich

    Ten Things Every Economist Should Know about the Gold Standard

    “Gold Is Money And Nothing Else” – JP Morgan’s Full December 1912 Testimony To Congress

    Gold has worked down from Alexander’s time… When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory. – Bernard M. Baruch


    “Martin Arthur Armstrong is the former chairman of
    Princeton Economics International Ltd. He was indicted
    on September 29, 1999 in the United States District Court
    for the Southern District of New York for conspiracy to
    defraud the United States.”

    Weigh all things and do your own due diligence.

  • Don

    Previous article he states this cycle is the 300 year government crisis with a couple other cycles converging, now he says gold won’t rocket until people question gov/banks….
    Almost sure MA called for gold to begin it’s ascent to $5,000 around Q3 of 2015.

    This curious contradictions might happen if someone had their loved ones lives threatened.

    • Robert Olin

      Bingo! That’s what I’m thinking. I listen to everything he says and he’s given me a lot to think about like the Treasury usurping the Fed not long after it was created, but like they say in the X-Files – Trust No One. The Powers That Be have a lot of power.

  • James in NY

    Am I watching CNBC?

    Talk about double speak.

    This guy is a typical self important ass whom believes his own dogma.

    The reason gold and silver have been beaten down again and again throughout history has been because of scummy people hi-jacking the religion of money for their own selfish greed. Wanting sound money does not make someone a Marxist.

  • Petedivine

    Good luck Mr. Martin. I don’t agree with your Gold or Silver thesis. When the ponzi breaks down, you better have something other then the full faith and credit of a failed government in your wallet. And since the U.S. Has gone bust before, and has 200 trillion in debt and unfounded liabilities, and of course the rest of the world is actively selling treasuries. Let’s just say prison is a tough place and sometimes we must make the choice of bending before we are broken.

  • Moondeer

    Armstrong sold his soul to the devil while in prison. I would not believe mush of what he says!

    • Moondeer can you provide evidence of this, i feel it would make a great story.

      • Robert Olin

        Rob Kirby, in an interview stated the reason for Armstrong going to jail was that he shot his mouth off to a reporter about a banker friend who had a recording of a discussion proving high level gold fixing. The banker ended up dead 2 weeks later and Armstrong is indited. Now – I can’t remember where I heard this – maybe The Daily Coin,
        but it confirmed something I had suspected. Of course, now with Paul Craig Roberts and many other credible persons pointing out the obvious naked shorting of GLD, it’s no longer a secret. The only person who denies it is Armstrong. But I have no idea what is true and what is BS. Due Diligence always.

  • Bob A

    A lot of MA haters! Did you buy too much gold and silver too? Geesh.

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