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Ben Believes Gold Only Has Value Due To Tradition

Tyler Durden's picture


This happened earler:

From Brian Rogers of Fator Securities

ron paul just asked the bernank if he thought gold was money.  The bernank almost swallows his tongue, stares blankly for a few seconds and then says, “no.”

paul then asks why banks hold gold on their balance sheet?  why not diamonds?  the bernank says, “tradition, I suppose.”  so let me get this straight, banks hold billions of dollars of an asset that pays no interest or dividends on their balance sheet for reasons of "tradition".  nothing to do with anything else, just tradition.  uh, yea.  that must be it.

classic!  the bernank just revealed his fundamental adherence to fiat money and his massive misunderstanding of real money and economics.  BUY MORE GOLD AND SILVER immediately if not sooner!!!

We wonder what his answer would be as to why the dollar still has any value left: vampire blood?

This material was not prepared by Fator Securities LLC.. U.S. Persons seeking further information must contact Fator Securities LLC in New York at (646) 205-1160. This material shall not constitute an offer to sell or the solicitation of any offer to buy (may only be made at the time qualified participants are in receipt of the requisite documentation, e.g., confidential private offering memorandum describing the offering, related subscription agreement, etc.). Securities shall not be offered or sold in any jurisdiction in which such offer, solicitation or sale would be unlawful or until all applicable regulatory or legal requirements of such jurisdictions have been satisfied. This material is not intended for general public use or distribution and is intended for distribution only to appropriate investors. The opinions contained herein are based on personal judgments and estimates and are, therefore, subject to revision. Past performances are not indicative of future results.



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Wed, 07/13/2011 - 13:11 | 1452601 kennard
kennard's picture

Greenspan had the presence of mind, and courtesy, to give a complete and thoughtful answer. Bernanke just said "no", reflecting, to my mind, disdain and impatience. He got what he deserved.

Wed, 07/13/2011 - 13:37 | 1452702 bread n circuses
bread n circuses's picture


...when fiat monies arose and, indeed, created the type of problems — which I think you correctly identify — of the 1970s, although the implication that it was some scheme or conspiracy gives it a much more conscious focus than actually, as I recall, it was occurring. It was more inadvertence that created the basic problems.


So I think central banking, I believe, has learned the dangers of fiat money, and I think, as a consequence of that, we've behaved as though there are, indeed, real reserves underneath the system.


So...central bankers made honest mistakes and learned their lessons?  And now "behave" nobly as if thier money is really backed by reserves? Really?  Seems to me that they just learned how to steal even more and better yet, get away with it.

Wed, 07/13/2011 - 11:26 | 1451928 TheTmfreak
TheTmfreak's picture

Thank you for posting this. If you could update it with the actual transcript/video (when it comes available) would be great. This probably one of the best sound bites I've heard in awhile.

Wed, 07/13/2011 - 11:27 | 1451933 Hedgetard55
Hedgetard55's picture

Bernanke to Wall Street: "I got your back, boyz".


Bernanke to Main Street: "Fuck you, suckers".


Goldman to Ben: "We have your office waiting for you Ben, and your 7 figure salary.

Wed, 07/13/2011 - 11:35 | 1452011 LoneStarHog
LoneStarHog's picture

Main Street to Bernanke & Goldman:  Boiled Rope & Lead !!!!!

Wed, 07/13/2011 - 11:44 | 1452070 Iriestx
Iriestx's picture

When Ben's finished devaluing the dollar and leaves his office for the GS gig, it's going to ttake a 7 figure salary to buy a loaf of bread.


He's going to need a 2000 figure salary, at the minimum.

Wed, 07/13/2011 - 12:44 | 1452469 Sleepy Weasal
Sleepy Weasal's picture

Ben to goldman:  "keep your 7 figure salary, pay me in gold bitchez, I'm a traditionalist"

Wed, 07/13/2011 - 11:27 | 1451934 daz
daz's picture

I hope a youtube video of this moment will be out soon.. to replay and replay the moment.. lol


Wed, 07/13/2011 - 11:33 | 1451987 Dagny Taggart
Dagny Taggart's picture

It's out. At the 4:59 mark: "Do you think gold is money?"

Wed, 07/13/2011 - 11:40 | 1452042 Dick Darlington
Dick Darlington's picture

Thanks for the link! This one's a keeper. =)

Wed, 07/13/2011 - 11:27 | 1451936 williambanzai7
williambanzai7's picture

He is a hyena, dressed in a gorilla suit impersonating a well read donkey.

Wed, 07/13/2011 - 11:36 | 1452016 Cognitive Dissonance
Cognitive Dissonance's picture

Pictures please.

I insist.

Wed, 07/13/2011 - 12:07 | 1452237 carbonmutant
carbonmutant's picture

He's a career academic who tried to apply a theoretical solution for the Great Depression to a completely different problem based on the fantasy that if you give away enough money you can solve world hunger.

Wed, 07/13/2011 - 12:14 | 1452292 Cognitive Dissonance
Cognitive Dissonance's picture

LOL. You are too kind. Then again, you are always polite. :)

He's a well educated and delusional puppet who was selected precisely because it was known what he would do if he held the magic wand.

Calgon, take me away.

Wed, 07/13/2011 - 12:16 | 1452308 carbonmutant
carbonmutant's picture

Wed, 07/13/2011 - 11:30 | 1451963 Racer
Racer's picture

This is as wrong as the sub-prime is well contained comment!

Wed, 07/13/2011 - 11:30 | 1451966 ghostfaceinvestah
ghostfaceinvestah's picture

Why doesn't Ben sell it all then, and hand over the proceeds to the Treasury?

Wed, 07/13/2011 - 11:53 | 1452132 Hansel
Hansel's picture

The Fed doesn't own gold.  They own gold certificates worth $11 billion.  This is according to a Treasury guy at Ron Paul's last domestic monetary policy hearing.

Wed, 07/13/2011 - 12:04 | 1452215 I Am The Unknow...
I Am The Unknown Comic's picture

I can confirm the Fed does not own any gold and only gold certificates as per testimony before congress.  However, I think they stated in that testimony that the value of the certs was $42 Billion.  Please don't quote me on that but I think that's what they testified to. 

Wed, 07/13/2011 - 12:25 | 1452364 BigJim
BigJim's picture

Would that be priced at the 'official' rate of $42 an oz?

Wed, 07/13/2011 - 13:00 | 1452550 knukles
knukles's picture

Yes, it is carried at the "old official" rate whatever that was/is. 
Just think about it. 

Two, that's right, two dissociative disorders on display at once.  The old price and Ben's testimony all wrapped up in one Ponzi (Opppps 3 of 'em.) scheme.

Wed, 07/13/2011 - 13:05 | 1452551 knukles
knukles's picture

Whatta deal.
Jesus H Christ.

Ben oughta be required to talk every day!

Quit pissin' on him.

He's our best friend!

Anybody whose long PM's, non-US dollar dollars, swissy and commodities is havin' one hell of a great day!

Ben is our friend!

Wed, 07/13/2011 - 12:55 | 1452528 Hansel
Hansel's picture

No, it is $11 billion. See the Fed balance sheet,

The certificates were locked in at $42 an ounce when gold redemption was suspended.  They will never be worth more than the $42 an ounce equivalent.

Fri, 07/15/2011 - 02:12 | 1458544 I Am The Unknow...
I Am The Unknown Comic's picture

Verified on my end.  I stand corrected.  Thank you Hansel.  It is indeed gold certs valued at $42/oz and not a total of $42B. 

Anyway, I fully expect that there comes a point in time soon when The Fed will sell these certs to Primary Dealers at $X,XXX.00 per cert (if not XX,XXX.00 per cert) and this will be the new "Gold Bond medicated powder for the economic patient on life support."  It would allow The Fed to suck dollars (M2) out of the economy, thus combating hyperinflation. 

Just a hypothosis....having had exposure to these fucktarded PhD Economists and their way of thinking.   

Wed, 07/13/2011 - 14:01 | 1452786 DosZap
DosZap's picture


The Fed does not own any Gold?.

What's in the vault in the basement of the Federal Reserve Bank in NYC?.

Hint: It's not currency.

He likely spoke truth, but not the ENTIRE truth.

Wed, 07/13/2011 - 11:31 | 1451970 Temporalist
Temporalist's picture

Considering JP Morgan was the main force behind creating the Fed maybe BB should know what he said about gold:

"Gold is money and nothing else." - JP Morgan 1912 (before the Fed was created)

Wed, 07/13/2011 - 12:37 | 1452429 AnAnonymous
AnAnonymous's picture

Fiat is also on bank balance sheet so it is money because if not, why would the banks hold it on their balance sheets?

All the story of the US condensed in a few lines, absurd ideas, self destructing reasoning and a drive for power.

Wed, 07/13/2011 - 11:31 | 1451971 Anjum
Anjum's picture

So ... if Mr. Bernanke truly believes what he said about gold, he wouldnt mind selling off the U.S. holdings in gold ?? A useless asset that would reduce the mountain of U.S. debt somewhat. What say, Mr. Bernanke?

Wed, 07/13/2011 - 11:34 | 1451989 lettuce
lettuce's picture

that would require us to actually have gold

Wed, 07/13/2011 - 11:51 | 1452113 Anjum
Anjum's picture

Well, since its 'not money' even if its tungsten it will have some value, no ? :)

Wed, 07/13/2011 - 11:36 | 1452014 Bay of Pigs
Bay of Pigs's picture

Sad to say, the US gold horde is probably already gone. Part of it is for sure.

Gold swaps bitchez.

Wed, 07/13/2011 - 12:07 | 1452248 Cognitive Dissonance
Cognitive Dissonance's picture

Why is it that I have not seen any serious research on this subject even from the alternative media? Or have I simply missed it? I understand that no one can get in to audit the Gold. But does anyone know of any in-depth articles exploring this subject?


Wed, 07/13/2011 - 12:34 | 1452414 BigJim
BigJim's picture

I've seen quite a few mentions of this, but, as you say, nothing truly 'in-depth'.

But, then again, in addition to Fort Knox not being audited, nether has the Fed with respect to its gold swaps.

I wonder if even TPTB have a really good idea of who really owns what, when it comes to gold.

Jim Rickards advocates the US just literally steal everyone else's being stored at the NY Fed.

Wed, 07/13/2011 - 13:55 | 1452627 knukles
knukles's picture

I have searched high and low for many years and it appears that there is no possibility of in-depth research as there is naught..... but silence.
The most telling evidence is the lack of information.  The lack of proactive measures to examine the holdings.  The failure of the Administrative or Legislative branches to enact measures to mandate such.  The failure of Treasury to demand a periodic accounting of the people's assets.  The failure of the Fed to consider the like, for they carry certificates representing such on their balance sheet.  Heavens, as a private organization, I'd like to know for what and from whom I hold a vault receipt.  I'd like to have an audit.
So would the rest of the world, beings it represents a reserve against the global reserve fiat...

Unless I already know.....   something.

The silence itself is not only deafening, but all telling. 
There is something amiss.  I know not what, but I know it because Knukles knows it; by virtue of the silence, obfuscation, deception and disengagement.
And Knukles has full understanding, empathy, a professionals engagement with those human frailties and qualities, those character defects.
Like dealing with folks with dissociative disorders, denial, those constitutionally incapable of being honest with themselves. 
We know who they are.
You saw quivering lips today....
We already know there's quite something amiss.
The silence seems so large, one simply assumes the act to be as well.

For if one is at peace with ones self, no more evidence is needed.  The perceptions management and Hegelian dialect become not only ineffectual, but reassuring and reconfirming of the suspicions.

Wed, 07/13/2011 - 14:09 | 1452819 Sunshine n Lollipops
Sunshine n Lollipops's picture

knukles, you are one eloquent pinhead. :)

Wed, 07/13/2011 - 14:37 | 1452939 Bay of Pigs
Bay of Pigs's picture


You can search the archives at for some circumstantial evidence but I'm afraid we're in the dark on this. Watching the latest Congressional hearing a few weeks ago yielded nothing but more questions, more stonewalling and obsfucation from where I sit.

This is sad situation my friends. The ship is going down, and there aren't enough lifeboats.

Wed, 07/13/2011 - 14:56 | 1453021 Bay of Pigs
Bay of Pigs's picture

I do know GATA was able to get the FED's Kevin Warsh to admit to the gold swaps. 

Here's a story on the Ft Knox gold. Hard to prove anything, but it's worth looking at.


Wed, 07/13/2011 - 19:48 | 1454220 smore
smore's picture

You couldn't be referring to to the "Golden Horde", could you?


Nah, didn't think so...


Wed, 07/13/2011 - 11:33 | 1451980 jmac2013
jmac2013's picture

Tradition?  Why didn't he just call it a "barbaric relic"?  Guess that would have sounded too zerohedge sockpuppetish.

Wed, 07/13/2011 - 12:14 | 1452290 RockyRacoon
RockyRacoon's picture

Gold itself is/was not the barbarous relic.


John Maynard Keynes      In truth, the gold standard is already a barbarous relic. Monetary Reform (1924), p. 172.
Wed, 07/13/2011 - 12:41 | 1452451 Cognitive Dissonance
Cognitive Dissonance's picture

I've never understood why the barbers of the world have never taken offense to this cheap shot characterization.


Wed, 07/13/2011 - 13:03 | 1452565 Cognitive Dissonance
Cognitive Dissonance's picture

That is most certainly NOT a barbarous relic. :)

Then again, only her hairdresser really knows for sure.

Wed, 07/13/2011 - 12:42 | 1452458 BigJim
BigJim's picture

If you ask me, Keynesian economics is the only barbarous relic around here.

And the Fed, of course...

Wed, 07/13/2011 - 12:42 | 1452459 goldfish1
goldfish1's picture

Bernanke is saying tradition (a long-established action or pattern of behavior in a community or group of people, often one that has been handed down from generation to generation) is a barbaric (uncivilized, unsophisticated) relic (a tradition, practice, or rule that dates from some time in the past, especially one that is considered out of date or inappropriate at the present time) ?

Wed, 07/13/2011 - 11:33 | 1451983 problemfixr
problemfixr's picture

Tickets, tickets everyone.  The gold and silver train will soon be pulling out of the station...  Your conductor for this journey will be: The Bernank

Wed, 07/13/2011 - 11:52 | 1452124 Anjum
Anjum's picture

can't pay for the ticket as I only have gold .. and gold isnt money !! catch22 :)

Wed, 07/13/2011 - 12:27 | 1452381 viahj
viahj's picture

at this point in time, you still are required to convert your money into currency in order to buy athat ticket, not a catch22, it's a three step process but has not always been and will not forever be

Wed, 07/13/2011 - 11:34 | 1451998 Hedgetard55
Hedgetard55's picture

Dumbest statement EVAH by a FED Chairman.

Wed, 07/13/2011 - 11:34 | 1452002 bbq on whitehou...
bbq on whitehouse lawn's picture

Cue "Fiddler on the Roof."

Tradition... Ben is as crazy as a fiddler on the roof.

Wed, 07/13/2011 - 11:38 | 1452031 williambanzai7
williambanzai7's picture

It's actually Swindler on the Roof and the signature song is If I had a Ponzi...

Wed, 07/13/2011 - 11:53 | 1452130 Cognitive Dissonance
Cognitive Dissonance's picture

Were you always so plugged into popular culture or is this just a transitory temporary insanity? :>)

Wed, 07/13/2011 - 13:48 | 1452737 carbonmutant
carbonmutant's picture

Probably drugs or blowfish... lol

Wed, 07/13/2011 - 12:07 | 1452247 fiddler_on_the_roof
fiddler_on_the_roof's picture


"If I had a ponzi...."

Wed, 07/13/2011 - 12:43 | 1452462 BigJim
BigJim's picture


Wed, 07/13/2011 - 11:36 | 1452017 Laughinggrizzley
Laughinggrizzley's picture

Just remember, if things get out of hand, the "free markets" will raise margins requirements on silver, release the SPR, and let the banks front run the announcements. This pathological POS denies he is creating inflation.

Wed, 07/13/2011 - 11:37 | 1452018 spartan117
spartan117's picture

I for one have stopped blaming Bernanke and the Fed.  I mean, it's not like the American people have put a gun to his head and said, "print away"!  Instead, we let him print while we watch Jersey Shore and soon-to-be non-NFL football on Sundays.  Americans - we want a comfortable lifestyle, but expect someone else to pay for it.  If we really wanted a balanced budget, we'd be on the doorsteps of Capitol Hill demanding a strong dollar policy.  Instead, we'd prefer someone else to kick the can down the road.  Now, I might not be speaking for the masses here on Zerohedge, but 99% of the population out there could care less where fiat currencies are headed, so long as they can enjoy there V8 muscle cars and $50 steak dinners at Houston's.

Wed, 07/13/2011 - 11:37 | 1452019 Internet Tough Guy
Internet Tough Guy's picture

Silverbugs should consider that question; why do central banks hold GOLD?

Wed, 07/13/2011 - 11:41 | 1452046 the not so migh...
the not so mighty maximiza's picture

Gold takes less space?

Wed, 07/13/2011 - 11:43 | 1452063 Quintus
Quintus's picture

Traditionally, Central Bankers can only be killed with a silver bullet.  Presumably they don't hold silver in their reserves because they are afraid of it.

Wed, 07/13/2011 - 12:05 | 1452227 I Am The Unknow...
I Am The Unknown Comic's picture

+1 Bravo!

Wed, 07/13/2011 - 11:49 | 1452099 1100-TACTICAL-12
1100-TACTICAL-12's picture

Gold & SILVER are money... always have been always will be...

Wed, 07/13/2011 - 11:50 | 1452106 voshnishki
voshnishki's picture

Because there is not enough physical silver to go around.  E.g. Hunt Brothers, JP Morgan manipulation.  Also, it's an industrial metal which would create problems.


Wed, 07/13/2011 - 11:52 | 1452122 Internet Tough Guy
Internet Tough Guy's picture

There is always enough metal, it is just a question of price. Your second answer is closer to the truth.

Wed, 07/13/2011 - 12:21 | 1452342 RockyRacoon
RockyRacoon's picture

Silverbugs should consider that question; why do central banks hold GOLD?

The industrial utility of silver precludes its use as a bank asset.  The only way banks would handle silver would be in coin form as currency.

Wed, 07/13/2011 - 12:28 | 1452385 AnAnonymous
AnAnonymous's picture

Silverbugs should consider that question; why do central banks hold GOLD?


I've got the answer, sir.

That is because what is not held by banks on their balance sheet can also be money. So silver is money because the banks do not hold it and gold is money because the banks hold it.

US world order.

Wed, 07/13/2011 - 20:02 | 1454272 smore
smore's picture

How about this question: in how many languages is the word for silver the same as the word for money?  14?

Wed, 07/13/2011 - 11:38 | 1452026 francis_sawyer
francis_sawyer's picture

Maybe nobody really heard the question correctly...

Ron Paul: "Is there actually any gold in Ft. Knox"?

Bernanke: "No"


aah... now it all makes sense!


Wed, 07/13/2011 - 11:41 | 1452047 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

No, I heard that the government has confiscated 10 old pre-33 gold eagles from a U. S. citizen and placed them in Ft. Knox so we know there are least "9.675" ounces of gold in Ft. Knox!


Tuco Benedicto Pacifico Juan Maria Ramirez

Wed, 07/13/2011 - 11:50 | 1452112 francis_sawyer
francis_sawyer's picture

Hooray for US!


In any case... Get ready for the "Transitory & [EVER MORE sophisticated diets in 3rd world countries 2.0] testimony coming soon to a teleprompter near you...

Meanwhile... enjoy your peas...

Wed, 07/13/2011 - 12:06 | 1452235 Libertarian777
Libertarian777's picture

i'm sure they got 'misplaced' on the way to fort knox. you know... USPS isn't that reliable, no tracking number, and no insurance.

Wed, 07/13/2011 - 11:41 | 1452032 whaletail
whaletail's picture

The traditional punishment for treason is death.

Wed, 07/13/2011 - 11:39 | 1452033 Bansters-in-my-...
Bansters-in-my- feces's picture

What the fuck is with the FATOR advertising disclaimer.????


Wed, 07/13/2011 - 12:03 | 1452216 Ethics Gradient
Ethics Gradient's picture

Ctrl+A, Ctrl+C, Ctrl+V.


Wed, 07/13/2011 - 11:40 | 1452040 The Duke of New...
The Duke of New York A No.1's picture

Bernanke just downplaying his competition ... all mafia organizations hate competition.

Wed, 07/13/2011 - 11:44 | 1452073 Temporalist
Wed, 07/13/2011 - 11:41 | 1452049 blindman
blindman's picture

excuse me but i smell liqour. watch that buy immediately bullshit, imo.
pump and dump and pocket the spread in the pm market? or is this time different?
is the fed out of bullshit bullets? is the bis done with the old and ready for the new? are all the pieces in place for the end game?
i don't think so but, then again, i don't really know anything. cept "watch your ass"
good luck.
The most important thing you?ll read all day
Posted on July 13, 2011 by maxkeiser
bernanke speaks gold to the moon. watch your ass in the presence
of so much hot air and rocket fuel.
Dead Money ?
Posted on June 27, 2011 by steve from virginia
The Fate of Gold & Oil
"We are due for a correction ? It?s Just Time. The months ahead are September and November in particular for turning points. What we have to pay close attention to is the ?hype? that comes out. If the Investment Bankers are looking to force a liquidation to make a bang-up trade for the year since things have been quiet, the news will be spun to support their agenda. This is part of the game. When they wanted all the little guys in for 1980, they made the Hunts a household name. That was the setup. The little guy buys thinking he is running with the big dogs. The real big dogs stay well hidden in the bushes and will NEVER step into the limelight."

Wed, 07/13/2011 - 11:48 | 1452093 whaletail
whaletail's picture're saying be careful?  That Martin Armstrong piece gave me considerable pause. 

Wed, 07/13/2011 - 11:55 | 1452148 blindman
blindman's picture

i'm saying be careful and watch your know your liquidity
needs and respect them so you don't get caught in the trap of having
to sell something precious when they whipsaw this shit back into
a buying opportunity. this heist is slow motion and calculated and
will take place over time. they serve you the hype liquor and
then rob u blind. they are true believer professional fascists and
have learned how to fuck with the collective mind to steal the
collective promise and pocket and lock up the interest.
be careful and watch your ass and trust no man or woman. period

Wed, 07/13/2011 - 11:58 | 1452169 whaletail
whaletail's picture

Amen to that, brother [tips class] And that's exactly what Armstrong pointed out.

Wed, 07/13/2011 - 12:30 | 1452340 blindman
blindman's picture

the routine in politics, economics ..etc... is like the
the simple strategy barbara and carla once used for their
weekend amusement and "profit". the line is
" you dance with him, i'll
grab the money."
the mark is any drunk at the bar. the girls are attractive and
personable enough. the mark buys a few drinks, leaves the money
on the bar and one of them dances him out of his money while
the other girl leaves the place with the cash.
all night long.
for years. this is what i think of whenever i hear a public
speaker today in america or i guess anywhere for that matter?
linguistic dancing while carla grabs the money. an art form.
ben just said there is uncertainty as to whether the recovery will
continue. that's what i'm talking about.
12 July 2011

Wed, 07/13/2011 - 15:34 | 1453193 whaletail
whaletail's picture

The long con. 

Wed, 07/13/2011 - 11:41 | 1452051 THE DORK OF CORK
THE DORK OF CORK's picture

I am sorry - this may be bad taste but I just can't help it.


Wed, 07/13/2011 - 11:42 | 1452052 Temporalist
Temporalist's picture

I wish Congressman Paul was better with his snark.  When BB said are treasuries money Dr. Paul could have said "Of course not they are loans/debt with counterparty risk but gold is not debt and has no counterparty risk."


Wed, 07/13/2011 - 11:41 | 1452053 JSD
JSD's picture

Outstanding.  Ron should have asked Ben if he was aware that diamonds, intrinsically speaking, are not indeed rare.  Ron should have then followed up with "Have you ever heard of De Beers?" Just for shits and giggles.

Wed, 07/13/2011 - 11:43 | 1452058 ItFarmer
Wed, 07/13/2011 - 11:44 | 1452067 luigi
luigi's picture
"We wonder what his answer would be as to why the dollar still has any value left"


...uhm... maybe... Tradition?

Wed, 07/13/2011 - 11:57 | 1452166 Urban Redneck
Urban Redneck's picture

But Ben can't tell the truth...

Wed, 07/13/2011 - 12:09 | 1452268 Libertarian777
Libertarian777's picture

i think it comes down to two things.

Either Bernake is :

1. lying... which is bad, but understandable. or

2. this the fkn scary part... he actually believes his own bullshit.

At least with 1. the truth will come to light. With 2. he will continue on his path until there is nothing left. Much like how fundamentalist cults/sects/religions end up killing themselves and everyone with them.

Wed, 07/13/2011 - 11:45 | 1452072 Hedgetard55
Hedgetard55's picture

It is a strange, sick, ironic world. Ben continues to murder the old and fixed income dependent seniors, and steal from everyone who owns dollars or their equivalents to give them to his bankster brothers, while a 9 year old kid in NY gets cut up into pieces.

Wed, 07/13/2011 - 11:45 | 1452077 JSD
JSD's picture

Fk it. I'm selling everything and going long EUR.

Wed, 07/13/2011 - 12:01 | 1452198 equity_momo
equity_momo's picture

lol ;)

Wed, 07/13/2011 - 11:46 | 1452078 kito
kito's picture

ohhhh that kind of tradition, and all along ive been stocking up on thanksgiving turkeys and santa suits. shit what do i do now?

Wed, 07/13/2011 - 11:46 | 1452080 Everybodys All ...
Everybodys All American's picture

Used to be tradition to live within your means.

Wed, 07/13/2011 - 11:46 | 1452082 Xibalba
Xibalba's picture




If I was a rich man....da. da. da. da. dy. dy!

Wed, 07/13/2011 - 11:46 | 1452084 A. Tad Askew
A. Tad Askew's picture

R. Paul 1, The Bernank 0.  After the game, The Bernank was demoted to the minors....

Wed, 07/13/2011 - 11:48 | 1452095 dwdollar
dwdollar's picture

Is that comment really suppose to instill confidence in the USD?  Bernanke needs to work on his presentation.

Wed, 07/13/2011 - 11:50 | 1452097 sabra1
sabra1's picture

RobotTrader was going out last night, so he asked me to short gold and silver for him this morning before the markets opened! so i did! did anyone see or hear from him? anyone?

Wed, 07/13/2011 - 11:49 | 1452100 whaletail
whaletail's picture

"tradition, I suppose" = "move along...nothing to see here"

Wed, 07/13/2011 - 11:49 | 1452101 Caveman93
Caveman93's picture

PWNED! B00m Headshot! 

Wed, 07/13/2011 - 11:50 | 1452104 equity_momo
equity_momo's picture

Blythe out to sit on the gold price as Europe closes. Volume picked up to the downside as JPM(aka Fed/USG) waste more money on a futile task to keep appearances in order.   As soon as they move off the offer , weeeeeeeeee , beachball time.

Wed, 07/13/2011 - 11:50 | 1452107 shoemouse
shoemouse's picture

Bernanke has not seen this clip

Wed, 07/13/2011 - 11:50 | 1452110 Double down
Double down's picture

Ben is right; it is the truth.  Gold is money according to tradition, one that can be dismissed as little as one can deny one's past.       

Wed, 07/13/2011 - 11:52 | 1452121 bernorange
bernorange's picture

Please tell me someone YouTubed this.

Wed, 07/13/2011 - 11:55 | 1452142 bernorange
Wed, 07/13/2011 - 11:53 | 1452127 Catullus
Catullus's picture

That's funny. I hold on to dollars for the same reason. Haha.

Wed, 07/13/2011 - 11:53 | 1452135 jomama
jomama's picture

lol, gold isn't money?

Wed, 07/13/2011 - 20:31 | 1454320 smore
smore's picture



Wed, 07/13/2011 - 20:28 | 1454338 smore
smore's picture

Hey, I've been a practicing goldbug for over a decade, but let's not be simplistic here.  Gold isn't money to the exclusion of everything else.  It's not some Aristotelian essence of money.  Silver has as good a claim to be money as gold.  Silver and gold are different, but they can both be money.  How about platinum?  No? 

In a sense the Bernank has a point, and probably the "unwashed masses" would have no problem agreeing with him.

I think the best definition is that gold is "the currency of last resort", in the real world, although other worlds are conceivable, even one in which diamonds are.

Or even Spaghetti.


Wed, 07/13/2011 - 11:53 | 1452136 Franken_Stein
Franken_Stein's picture


Diamonds are just a modification of carbon, i.e. a certain geometrical arrangement of carbon atoms.


That's why you can burn diamonds.


C + O2 --> CO2; -393 kJ / mol


Wed, 07/13/2011 - 12:04 | 1452217 Libertarian777
Libertarian777's picture

and federal reserve notes are just a certain geometrical arrangement of US treasury debt.


That's why you can burn FRNs.

$2.8 trillion (Fed 'asset' base) + $2 trillion (new debt target increase) = -330 million people/living standards

Wed, 07/13/2011 - 12:27 | 1452384 wandstrasse
wandstrasse's picture

and federal reserve notes are just a certain geometrical arrangement of US treasury debt. That's why you can burn FRNs.

priceless statement on worthless fiat.

Wed, 07/13/2011 - 12:07 | 1452245 AbbeBrel
AbbeBrel's picture

If you look at the Handbook of Industrial Diamonds, the goal of Chemical Vapor Dep (CVD) diamond manufacturing cost is one dollar per carat.  One can easily imagine smart folks adding in impurities and defects in the crystal structure such that CVD diamonds are indistinguishable from natural ones.   At that point, CVD diamonds are the "tungsten" of the diamond world.

Thus diamonds aren't the greatest value repository, as you can make them.   Gold is still harder to manufacture!

Wed, 07/13/2011 - 11:54 | 1452140 voshnishki
voshnishki's picture

IMO I think PM's will actually take off when there is the announcement that there is no more physical silver available for delivery.  Well, if it is announced.  I think it will happen before the end of 2012.

Wed, 07/13/2011 - 12:08 | 1452259 whaletail
whaletail's picture

I think the sell side will keep that piece of info in the arsenal for a little while longer.  I think the sell side will start co-opting some of the silver bull analysis and arguments. They want to get their customers into a safe haven, yet one that will appreciate better that gold and treasuries (yes, I just wrote that). For the institutional buyers, like a pension, looking at shortfalls, they'll like the safety of silver (perceived), and the chance at greater appreciation to make-up for the shortfalls.  Then we'll get a May 1 event and silver will be back in the 30's [sad horns]. 

Wed, 07/13/2011 - 11:55 | 1452144 NotApplicable
NotApplicable's picture

What's funny is that technically his answer about tradition is correct. The followup question of course, should be "Why?"

Because gold fulfills all monetary metrics better than anything else on the planet, that's why. People freely chose it because it works. Just because fedgov broke it over the last century can never undo this fact.

Wed, 07/13/2011 - 11:55 | 1452150 Atomizer
Atomizer's picture

Federal Reserve backed by cubic zirconia diamonds.

Wed, 07/13/2011 - 11:56 | 1452157 Turd Ferguson
Turd Ferguson's picture

The only "barbarous relic" I see is the U.S. Federal Reserve.

Wed, 07/13/2011 - 12:13 | 1452286 Calculated_Risk
Calculated_Risk's picture

and IRS...

Wed, 07/13/2011 - 14:58 | 1453031 Bastiat
Bastiat's picture

Barbarous indeed.

Wed, 07/13/2011 - 11:57 | 1452159 indio007
indio007's picture

Everything is is money if the 2 parties on a deal want it to be. Tabacco has been money, Cows have been money. Promises to discharge debts are money.


Anything you want is money. It's only the agreement of the parties that is law.

Wed, 07/13/2011 - 12:00 | 1452182 caerus
caerus's picture

right!  I just used the cow example the other day.  Thing is, the cow dies or must be "consumed" or "used" in some way.  Gold doesn't die, its malleable, its fungible, its relatively scarce...

Wed, 07/13/2011 - 12:52 | 1452515 viahj
viahj's picture

right, a cow is a consumable and as such can be used in barter but it is not money

Wed, 07/13/2011 - 17:52 | 1453804 indio007
indio007's picture

Correct a cow is not money now , but it could be. The purpose of money is just temporary conversion.

Wed, 07/13/2011 - 11:58 | 1452162 wang
wang's picture

here is the clip where Bernank suggests entitlements are a pyramid (scheme)


"On entitlements you are also correct that ah they are not true insurance programs, I think many Americans believe that the money they put in Social Security or Medicare is somewhere in the bank someplace, that's not really quite right, what's happening mostly is younger generations are paying through their taxes for older generations benefits and that worked okay as the population was shaped much more like a pyramid"



the clip

Wed, 07/13/2011 - 13:01 | 1452557 NotApplicable
NotApplicable's picture

Wow, how can he be so stupid as to use the word pyramid?

I like how he blamed it on the shape of the population as opposed to the design of the program. So, I guess the stupid boomers just didn't have enough kids?

Wed, 07/13/2011 - 11:58 | 1452167 Michael Victory
Michael Victory's picture

good shit.

Wed, 07/13/2011 - 11:58 | 1452168 jack stephan
jack stephan's picture

Ron Paul reminds me of Cato from the HBO's Rome.

The america my family used to tell me about at dinner was 24k, now over time it's so doped up it's more like 9k.


Wed, 07/13/2011 - 12:02 | 1452206 caerus
caerus's picture

Plutarch's biography of Cato is one of my favorite reads ever!  Cato Contra Mundum!

Wed, 07/13/2011 - 20:53 | 1454434 smore
smore's picture

Fed delenda est!

Wed, 07/13/2011 - 12:00 | 1452181 Global Hunter
Global Hunter's picture

Santilli on not raising the debt ceiling "let Congress worry about the 42 cents on every dollar they spend with borrowed money".

Liesman "this isn't the time to be having that conversation"

Santilli "now is the time, its right here now...if not now when?  When?  when?"

cheers behind Santilli from the floor, Liesman looking very red faced.  

Anchorman quickly "well lets go back to live testimony". 


Wed, 07/13/2011 - 12:36 | 1452424 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Ha, ha!  Thanks for that!



Wed, 07/13/2011 - 14:05 | 1452725 hedgeless_horseman
hedgeless_horseman's picture

Nice work, Rick!  

Now finish your peas and leave this complicated treasury stuff to the "professional politicians" and Senior Economics Reporters.

Wed, 07/13/2011 - 12:00 | 1452183 10044
10044's picture

And traditionally paper money gets f'd with respect to gold.
He forgot to mention that piece

Wed, 07/13/2011 - 12:01 | 1452186 Meatier Shower
Meatier Shower's picture

Another tradition comes to mind Ben.

Tar and feathering.

Wed, 07/13/2011 - 12:01 | 1452197 Libertarian777
Libertarian777's picture

why would we feel sorry for him?

He came off his high tower to preach to us about the virtues of money printing. Then went and proceeded to debase the currency.

It is often said economics cannot be classed as science because it is not empirical. Well The Bernak continues with the most fked up experiment ever.


He's not 'forced' into anything. Nothing is stopping him from quitting. So no we don't feel sorry for him. If he can't stand the heat, get the fk out the kitchen and leave the cooking to the people who have to eat it. He cooks up shit (aka FRNs) and feeds it to the middle class.


Wish Ron Paul asked him, 'what is a dollar'? and 'what is a federal reserve note? and what is the difference between these two?

Wed, 07/13/2011 - 12:08 | 1452252 caerus
caerus's picture

Agreed...the prob is that if economics is an empirical science...we're the laboratory

Wed, 07/13/2011 - 12:01 | 1452199 MFL8240
MFL8240's picture

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility." 


US Constitution

Wed, 07/13/2011 - 17:59 | 1453838 indio007
indio007's picture

I will add to this. Namely the votes at the Constitutional Convention on whether to allow the US to emit bills of credit. 


The language permitting it was in the wording on the Constitution and specifically removed by vote.

Notes of Debates in the Federal Convention of 1787
by James Madison
Thursday, August 16


Mr. Govr. MORRIS moved to strike out "and emit bills on the credit of the U. States"-If the United States had credit such bills would be unnecessary: if they had not, unjust & useless.

Mr. BUTLER, 2ds. the motion.

Mr. MADISON, will it not be sufficient to prohibit the making them a tender? This will remove the temptation to emit them with unjust views. And promissory notes in that shape may in some emergencies be best.

Mr. Govr. MORRIS. striking out the words will leave room still for notes of a responsible minister which will do all the good without the mischief. The Monied interest will oppose the plan of Government, if paper emissions be not prohibited.

Mr. GHORUM was for striking out, without inserting any prohibition. if the words stand they may suggest and lead to the measure.

Col. MASON 20 had doubts on the subject. Congs. he thought would not have the power unless it were expressed. Though he had a mortal hatred to paper money, yet as he could not foresee all emergences, he was unwilling to tie the hands of the Legislature. He observed that the late war could not have been carried on, had such a prohibition existed.

Mr. GHORUM. The power as far as it will be necessary or safe, is involved in that of borrowing.

Mr. MERCER was a friend to paper money, though in the present state & temper of America, he should neither propose nor approve of such a measure. He was consequently opposed to a prohibition of it altogether. It will stamp suspicion on the Government to deny it a discretion on this point. It was impolitic also to excite the opposition of all those who were friends to paper money. The people of property would be sure to be on the side of the plan, and it was impolitic to purchase their further attachment with the loss of the opposite class of Citizens

Mr. ELSEWORTH thought this a favorable moment to shut and bar the door against paper money. The mischiefs of the various experiments which had been made, were now fresh in the public mind and had excited the disgust of all the respectable part of America. By witholding the power from the new Governt. more friends of influence would be gained to it than by almost any thing else. Paper money can in no case be necessary. Give the Government credit, and other resources will offer. The power may do harm, never good.

Mr. RANDOLPH, notwithstanding his antipathy to paper money, could not agree to strike out the words, as he could not foresee all the occasions which21might arise.

Mr. WILSON. It will have a most salutary influence on the credit of the U. States to remove the possibility of paper money. This expedient can never succeed whilst its mischiefs are remembered, and as long as it can be resorted to, it will be a bar to other resources.

Mr. BUTLER. remarked that paper was a legal tender in no Country in Europe. He was urgent for disarming the Government of such a power.

Mr. MASON was still averse to tying the hands of the Legislature altogether. If there was no example in Europe as just remarked, it might be observed on the other side, that there was none in which the Government was restrained on this head.

Mr. READ, thought the words, if not struck out, would be as alarming as the mark of the Beast in Revelations.

Mr. LANGDON had rather reject the whole plan than retain the three words "(and emit bills")

On the motion for striking out

N. H. ay. Mas. ay. Ct ay. N. J. no. Pa. ay. Del. ay. Md. no. Va. ay.23 N. C. ay. S. C. ay. Geo. ay. 22



Wed, 07/13/2011 - 12:01 | 1452201 SteveBob
SteveBob's picture

Bernanke's comment on gold as tradition should be grounds for immediate dismissal.  He should also use his PhD certificate for toilet paper as that is all it is worth. 

Shocking statement.


Wed, 07/13/2011 - 12:03 | 1452213 Kali
Kali's picture

A British Bank
Mr. Banks & Mary Poppins

Mr. Banks
A British bank is run with precision
A British home requires nothing less!
Tradition, discipline, and rules must
be the tools
Without them 
Disorder! Chaos!
Moral disintegration!
In short, you have a ghastly mess!

The children must be molded, shaped
and taught
That life's a looming battle to be faced
and fought
If they must go on outings
these outings ought to be
Fraught with purpose, yes
and practicality!
These silly words like superca..
And popping through pictures
Have little use, fulfill no asic need!
They've got to learn the honest truth
despite their youth

Wed, 07/13/2011 - 12:04 | 1452221 Dr. Gonzo
Dr. Gonzo's picture

That was fucking awkward. 2 plus 2 does equal 3 in his world. Federal Reserve Notes will always be money in his reality construct. Even when they stop buy anything anymore he'll still insist mankind uses them for every transaction. He'll be the old guy at the insane assylum drooling and pulling old FRNs out of his pockets and telling the other catatonic inmates he just needed QE 8 and it finaly would have worked.

Wed, 07/13/2011 - 12:05 | 1452224 Kali
Kali's picture

Fidelity Fiduciary Bank
Bert, Mr. Banks, Mr. Dawes Sr. & Bankers

Mr. Dawes Sr.
If you invest your tuppence
wisely in the bank
Safe and sound
Soon that tuppence, safely
invested in the bank
Will compound

And you'll achieve that sense
of conquest
As your affluence expands
In the hands of the directors
Who invest as propriety demands

Mr. Banks
You see, Michael, you'll be part of
Railways through Africa
Dams across the Nile
Fleets of ocean greyhounds
Majestic, self-amortizing canals
Plantations of ripening tea

All from tuppence, prudently
fruitfully, frugally invested
In the, to be specific
In the Dawes, Tomes
Mousely, Grubbs
Fidelity Fiduciary Bank!

Mr. Banks
Now, Michael, when you
deposit tuppence in a bank account
Soon you'll see
That it blooms into credit of a
generous amount

And you'll achieve that sense of stature
As your influence expands
To the high financial strata
That established credit now commands

Mr. Dawes Sr.
You can purchase first and
second trust deeds
Think of the foreclosures!
bonds, chattels, dividends, shares
Bankruptcies! Debtor sales!

All manner of private enterprise!
Shipyards! The mercantile!
Collieries! Tanneries!
Incorporations! Amalgamations! Banks!

Mr. Banks
You see, Michael

Tuppence, patiently, cautiously
trustingly invested
In the, to be specific
In the Dawes, Tomes
Mousely, Grubbs
Fidelity Fiduciary Bank!

Wed, 07/13/2011 - 13:47 | 1452738 hedgeless_horseman
hedgeless_horseman's picture

+ pengiuns, umbrellas, and Dick Van Dyke's striped pants.

Wed, 07/13/2011 - 12:05 | 1452226 thadoctrizin
thadoctrizin's picture

I'm not sure why everyone is so surprised by this response from Bernak. Gold does hace value because of over 5000 years of tradition. It definitely fits the definition money better than fiat but the definition of money has been confused with the definition of currency. I personally enjoy watching my stacks grow but I find it hard to see a world where we rely upon pm as currency. I hear a lot of talk about returning to hard backed currency but I have not hear or read of a plausible plan to return to such without routing society as it exists today. I mean how do we get from here to there?

Wed, 07/13/2011 - 12:43 | 1452464 Temporalist
Temporalist's picture

To me that is like asking "Why do people screw up?"  Or "Why did people buy option ARMs?"  Or "How do we save people that invested with Bernie Madoff?"

Most people that believe in PMs try to sound the alarm to everyone they know.  If the people choose to do something not in their best interest, smoking, eating junk food, driving drunk, voting for sociopaths, why do the people who knew better have to protect them?

China is buying PMs hand over fist.  They have stores mobbed with people to get gold and silver.  If the politicians and media in the U.S. were more honest they could have been telling people to invest in PMs for decades.  Instead the ponzi grew because it was easy money and stocks, bonds, derivatives, mortgages are all debt and counterparty paper.

People get screwed every day by the global financial did we get here to begin with? 

Wed, 07/13/2011 - 12:05 | 1452230 thadoctrizin
thadoctrizin's picture

I'm not sure why everyone is so surprised by this response from Bernak. Gold does hace value because of over 5000 years of tradition. It definitely fits the definition money better than fiat but the definition of money has been confused with the definition of currency. I personally enjoy watching my stacks grow but I find it hard to see a world where we rely upon pm as currency. I hear a lot of talk about returning to hard backed currency but I have not hear or read of a plausible plan to return to such without routing society as it exists today. I mean how do we get from here to there?

Wed, 07/13/2011 - 12:09 | 1452258 Nothing To See Here
Nothing To See Here's picture

Found on the Business Insider blog - I think I pea'ed in my pants:


Is gold money?
"No, of course not. It doesn't say money anywhere on gold. This paper I am giving you says money right on it." So Ben, why do you have so much gold? "Uh, well, uh....tradition. Yeah, it's just an ancient custom. Because gold is TRADITIONALLY money. Uh wait, did I just say that?!"
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