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Even Ben Bernanke Admits that Gold Is the Ultimate Safe Haven
As I noted yesterday, Alan Greenspan says that gold is the ultimate safe haven:
Gold still holds reign over the financial system as the ultimate source of payment.
Indeed, as I've previously reported, gold is in high demand during periods uncertainty and distrust of government. And see this.
As Ambrose Evans-Pritchard points out today:
Mr Bernanke himself was grilled by Congress this week on the role of gold. Why do people by gold? "As protection against of what we call tail risks: really, really bad outcomes," he replied.
Indeed.
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Excuse my use of the vernacular, but I prefer to be "in this world but not of it".
Article 1, Section 10:
"No State shall...make any Thing but gold and silver Coin a Tender in Payment of Debts;"
Can you at least pay some deference to the monetary situation in the colonies that inspired that?
At the time, anyone could print their own notes and we needed some means to guarantee that no single group could implement (and then throughly debase) their own currency to the detriment of the others. Gold and silver satisfy the conditions of being relatively rare and difficult to counterfeit...that is the only interesting thing about them beyond human's fascination with shiny objects.
In truth, any physical substance which satisfies those conditions would suffice as a backing for currency. Anything to the right of copper in the graph in this link would work:
http://en.wikipedia.org/wiki/Abundance_of_the_chemical_elements
[duplicate post deleted]
Which, IMO, is a mistake. The market should decide. If people trade marshmallows, what do I care?
The state cares only because it wants to confiscate wealth for its own purposes, and must have a standard media. Moreover, states always tax secretly through inflation or coin clipping.
In this day and age, multiple currencies backed by a variety of wealth standards could compete among themselves, and be subject to the laws of market exchange no different than their components. This would prevent bankfraudster types from attempting to manipulate the monetary unit for their own benefit by F'ing with the price of a single commodity by allowing the composition of the currency to adjust.
note: we'd have to fix the laws to prosecute undisclosed frauds and have a system for rooting them out. E.g. institutions issuing a currency fractionally when the promise disclosed is fully backed, then they go to jail. Similarly, silver paper markets backed by 1/8 real silver, naked shorts, etc. should be disclosed to market participants. Let real value exchanges form, let those who want to pretend in the fractional realm bear the rotten fruit of their own efforts on their own corrupt exchanges.
Those who want a currency backed by debt? That is their choice. Or a currency fractionally loaned into the system? Be my guest, but I'll not accept it as tender.
This would sort itself out pretty quickly, so long as the market is allowed to function. e.g. the Yugo is extinct -- which is good, but Chrysler survives to the expense of us all despite the fact that the market rejected its pisspoor cost/value proposition.
I have three words for you...
Stiff The Fed.
http://silverminers.com/commentary/wallace/index.php?&content_id=1290
If the Yugo is extinct which I am not sure of, then it is extinct because OJM decided to bomb the Yugo factories. They didn't bomb the Trabant factories, or the Lada factories or the Triumph factories. Why did they feel the need bomb Yugo, who was selling cars in the US on a free-market (so-to-speak) basis? Hyundais were lousy cars in the 90s too, now they are snappy and look great better priced than Japanese cars. Why do you call Yugo extinction a good thing? Was Pan Ams extinction a good thing? Would Boeing's extinction be a good thing?
Critique of an Austrian Critique
https://libertyrevival.wordpress.com/2010/06/22/honest-and-sound-critici...
Once debated Zarlanga over lunch. In the end, he relies on the false hope that the perfect governing body can be trusted with currency. That alone is fallacy.
Got ground down in your blog. You could stand to use a more inviting writing style, especially if you're trying to reason with folks who rejected 80% of what you've rejected, but not Mises. Insulting them repeatedly before getting to your point doesn't help that goal, unless there's another objective, like simply getting people to skip over Mises, etc. But that, frankly, isn't very intellectually honest...
Gold is transitory
Bernank said Gold is a "tradition"... Obumma this week said eating up your peas is a tradition with him.. Geithner thinks robbing pensions to pay for his budget deficit is "complying with the Law"
I swear America is run by Cyborg robots who are programmed to come out with the most inane crap i've ever heard!
Well, pus-gums Bernank was half-way correct.
Gold is a tradition, and since a tradition is constructed by belief and ritual...
It's a belief in that it is the ultimate apex faith money with storage of wealth, transaction medium, and unit of account.
It is a ritual in that in that its symbolism of labor sets forth a set of actions and is passed down through history, and throughout all societies.
I'm cool with that! I think I'll go get more today.
Gold (and silver) being currency for thousands of years are not tradition. It is the market at work.
We seem to rely on the market to create great efficiencies and improvements in so many areas, and tend to acknowledge intervention in the market functions creates inefficiencies, redundancy, expense and waste.
For some reason, we exempt a few areas that we regulate / intervene into, and wonder why things continue to degrade / get worse / less consumer beneficial, year after year. Thinking of government schooling monopolies, health-care interventions, etc. We started messing with that all so long ago, we assume the problems are inherent to the market process rather than the result of prior interventions. Each intervention creates a hose of additional distortions, inefficiencies, lower quality / higher costs, etc., and yet our history is to blame the markets and instead prescribe increased doses of the problem causing pathogen as a medicine: more intervention, meddling, etc. And we wonder why schooling sucks more and more. We wonder why heath-care system. grows more economically unfeasible.
And then there is the economy, interest rates and money. Ever more increasingly intervened in and meddled with, and the problems just grow worse.
Solution?
But I have meandered. Gold and silver have been currency continually because the market has chosen it. The people, when presented with paper alternatives, eventually ditch the paper and give the finger to the fiat backing it, going back to gold and silver, sometimes other metals more common (belts of shells, etc.), but never to sacks of sand or dirt.
I wonder how the market would react to a sack of dirt backed by the Full Faith and Credit of the U.S. Government?
Yes, it is tradition.
You have faith that the next guy will find gold appealing enough to exchange it for whatever you want to buy from him. That your faith is well-founded in this respect does not obviate the fact that it is a tradition shared by you and the vendor. That some have more faith in gold than paper promises does not make it less of a tradition.
Just like your belief in the "efficiency" of markets...they are not magical and only behave as you say in the most abstract idealized models. In practice, they provide for massive amounts of inefficiency (at least in terms of wasted resources and labor), monopolized markets, and periodic financial crises (from the bank panics of old to the liquidity freezes of today).
And that is the very crux of the tradition; it was chosen as the means of exchange.
The market? But what market? this comment is utterly stupid. Can propagandists come with better stuff?
We need to revolt. America needs to wake up. This smoke and mirrors game is bullshit.
Yee blew it in 71 - you had the privilege of just a hybrid Gold currency and would not recognize what Gold was telling you.
All that had to be done back then was put a large excise duty on foregin oil - this would have slowly developed your economy into a less oil dependent entity.
Instead Carter decided to project force into the Gulf & liberalise the trucking industry creating the Walmart monster.
The last 40 years has been a epic waste of time.
Rubber duck come in rubber duck.............
www.youtube.com/watch?v=P5XGvNpWXqA
Depends on what perspective you take. For the Bankers & Executive/Judicial branch, it was very productive.
Bankers / judges etc - like the rest of us need functional machinery , good food etc.
Now that so much expertise has been lost farming oil BTUs rather then building sustainable infrastructure they could be in a bit of trouble also.
Remember even lower middle class people of today live far better lives then medieval kings of old.
Although Ali Mcgraw may have been worth the waste.........
after Wednesdays 'performance' by Ben i'm not sure what to think of him because i don't he' s sure what he knows or thinks anymore either!
This is a Central Banker that has no notion of what money is, no idea why CB's hold Gold, in fact i think if you gave him his own employment contract he wouldn't recognise his own job!!!
This elite educated and pampered crone is completely lost in space.. he does precisely what he's told like a good little zombie by his masters on WS and in DC but after that he is totally clueless, rudderless and pointless... Ben 'The Lights are On but Nobodies Home' Bernanke
He doesnt work for DC. He works for the elite that own DC and the banks. Watch as he slowly becomes more "honest" about everything - and more clear - as the politicians grab the handle on the printing press in desperation. This is all about shifting blame now. Bernanke knows exactly what he is doing. And the play is progressing right on script. Dont underestimate this creep.
I agree. As in Plato's Allegory of the Cave, people are confusing shadows for shapes. His words create implications about ideas that he never states due to the incomprehensible gibberish that he utters. He only fails when he looks less convincing at it than Greenspin, but since now is failure time (our Wile E. Coyote off of the cliff moment), even that is moot.
Which isn't to say he knows what the grand plan is. He is a tool, an actor on a stage who only knows that to succeed is to play his part well.
I think you can watch his face and see when his words are deviating from his true beliefs. IMO, you got something resembling his beliefs on Wed. Thursday was him walking it back at the request of his handlers.
sombody IS home... and that home is one very uncomfortable place. I'm guessing his dreams are looking like increasingly violent war movies. With Ben losing his grip, things are getting toxic. 1:3 he could be replaced before Nov. 2012. Start watching for the signs someone else is being groomed.
Who will be abe to spin the ESF "bulls**t as well as Greenspunk did...
Smells like treason to this American...
"Money (paper) is the everyday symbol of what people had given up."
Paraphrasing author, William Greider
Secrets of the Temple
The only money that buys "hope and change" for thousands of years is gold and silver.
A poser like Ben Shalom cares nothing for hope and change - he is robbing the taxpayer blind 3-generations deep, while HIS BANKS gut the rule of law to insulate the people from the epic fraud committed against them.
Mission Accomplished!
Ahem... The rule of law as it's written enabled him to rob us all blind.
It's called Fiat Money, Central Banking and fractional reserve... All perfectly legal, but in the end, a swindle to benefit some at the expense of others, and horribly destructive to the foundations of an economy.
It was the usurpation of the rule of law (the constitution) by petty bureaucrats and kleptocrats that made this possible. Fiat money issued by the Federal Reserve is obviously unconstitutional.
Dude you are on fire today. I'm really enjoying "The Butters Show." Keep it coming please. Spot on.
"...just like US Treasury paper.".....do ya' mean I can use it as toilet paper
Maybe your gold will provide you a safe haven when they come knocking to collect your fair share of the DEBT.
Or maybe not.
When THEY come knocking on my door to collect the "my share" of the debt, THEY will get what THEY deserve. Quick and final justice.
All it will take is 20 - 50 shot-dead cops/Feds trying to physically confiscate gold and guns, and that will all STOP.
LE will get the message.
if it ever comes to that, it will be an ugly scene.
My PM accumulation is only trumped by my 5.56 and .308 accumulation and no is walking away with either. gotta draw a line and the sand and that is my line.
So, the authorities have audited the local coin shop, and have perused your bank records. They have decided that you have a sizeable store of gold and silver coins. They are now at your door, with a SWAT team behind them, to collect your PM's which are desperately needed, gold to re-establish our monetary system, and the silver for the war effort. Laws have recently been passed.
What will you do?
Lots of assumptions here. I'll bet Blankfien/Soros/etc own way more gold than you in your suburban house, or apt, or whatever. We are minor targets. I'd go after Ron Paul first. Then Sprott.
We all know what would happen. Roll over and offer some ass.
Of course, you don't actually have much in your house. You have a bait-safe, so you can just let them have that. When they say they "know" you have more, you can tell them to go ahead and look for it. Obviously, you remembered to bury Coke cans all over your yard, so the SWAT guys can dig around like chumps all day/week/year with metal detectors if they want.You could even lead them on a bit and say you buried it, but don't remember exactly what section of the yard. Put a little dildo in each can, to let them know they are dicks.
Just remember to hide it where you can find it. They would have to legalize the confiscation first, and that would already be a huge warning signal to get your shit in order. There aren't enough SWAT teams to bang on every house at the same time - there will be prep time. By then, society will already have degraded to the point where worrying about food would be more of a problem. Food, gas, water... The SWAT team may or may not be busy working on this other shit.
I really doubt the proffered scenario will play out like this. Anyway, the appropriate response is to PREpare, not... postpare.
Thanks for the advice!
Keep taking the meds.
Buried dildos? My day is now complete.
Oh there's a compelling argument for not owning physical. Instead let's hold paper promises that can be defaulted on and paid back in devalued fiat crap. What's the defense for that?
Sorry, I'll take my chances with "traditional" money.
Exactly! I at least have a chance to defend any PMs I might own but I have no defense against the printing press other than hard assets. All paper is devalued with each spin of the press (or each digital dollar created).
If you own physical, and keep it stored in a safe location only known and accessable by yourself. There is no way anyone or government could know of it's existence and/or force collection of gold. This is why physical gold is soooo much more safe than paper gold.
I love the internal contradiction of confiscating paper gold.
Just what are they absconding with?
Well, depending on the paper, one can assume there is a varying fraction of gold backing it in some form. You just don't want to be at the end of the line.
In some ways, this is no different than the modified gold back system run by the bank-fraudsters even under the pseudo-gold standard of the 1800s... They still loaned out more pieces of paper than they had gold to back up, a fraud by any means in any other industry. (e.g., a granary can't issue more receipts for tons of grain than it actually has in storage...) The booms and bubbles (aka, the "Panics" that fraudulent system created are often blamed on the free market, when in reality it is the fraud of loaning demand deposits at duration. Eventually people catch on and want their gold.
The growing run on the dollar is merely a cousin to this.
Leopold, I concur.
Did I tell you that my neighbor worked all her life and expended her labor to purchase a bag full of air.
A very mean criminal came in and stole that bag.
...if only she had had an airgun
Touche!
Its nots money though. Its just like US Treasury paper...
Fecal matter isn't money either. It's just like US Treaury paper
Money sucks. Assets rule.
Yeah, I noticed that bit where he said treasuries weren't money.
So if gold and treasuries aren't money, then what the hell is money Mr. Bernanke?