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Gold and Economic Freedom: Did Greenspan Know What He Was Doing?
With Gold reaching new heights in dollar terms, I think this is an appropriate time to post an article on the subject circa 1967 by none other than the famed former Chairman of the Federal Reserve Alan Greenspan. In this article Greenspan, a former Goldbug, waxes eloquent on the role of Gold in our society, although it is debatable whether he can be classified as a "former" Goldbug. I, for one, think he's still a Goldbug. This is what he said in a recent speech at an investment conference in New York -
"What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment".
and
Rising prices of precious metals and other commodities are "an indication of a very early stage of an endeavor to move away from paper currencies".
Questions have been raised by some commenters on ZH recently whether Greenspan did what he did on purpose. Reading the article below and considering the fact that he is a devotee of Ayn Rand (who by the way was at his side when he was sworn in as chairman of the Council of Economic Advisers in 1974), it's pretty hard to argue that Greenspan did not know what he was doing. Of course, some might say what a horrible way to bring about change but the fact remains that Greenspan did not do anything that would not have happened otherwise - he just accelerated the process by giving the corrupt bankers (who control everything, including the Fed) enough rope to hang themselves. Also, in my humble opinion, human beings do not change until pushed to desperation. The beauty of this is that the people are not only becoming more aware about our financial system and heretofore obscure subjects such as monetary policy but are themselves demanding change - things like abolition of the fed, return to sound money, etc. Do you think any of this would have happened if everyone was fat and happy using the corrupt Fed-controlled fiat money system? I think not. This is a more sustainable way of changing things - i.e. from the grassroots level - as opposed to somebody at the top dictating what needs to be done, which almost always ends in failure. Indeed, the best protection against criminal organizations such as the Federal Reserve taking over our society is vigilant and informed citizens. Read this and figure out for yourselves whether this is someone who hates Gold or does not understand it. Greenspan might indeed be John Galt - the man who stopped the motor of the world.
GOLD AND ECONOMIC FREEDOM
An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense-perhaps more clearly and subtly than many consistent defenders of laissez-faire -- that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.
In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society.
Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.
The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization. If men had no means to store value, i.e., to save, neither long-range planning nor exchange would be possible.
What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible. More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term "luxury good" implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron.
In the early stages of a developing money economy, several media of exchange might be used, since a wide variety of commodities would fulfill the foregoing conditions. However, one of the commodities will gradually displace all others, by being more widely acceptable. Preferences on what to hold as a store of value, will shift to the most widely acceptable commodity, which, in turn, will make it still more acceptable. The shift is progressive until that commodity becomes the sole medium of exchange. The use of a single medium is highly advantageous for the same reasons that a money economy is superior to a barter economy: it makes exchanges possible on an incalculably wider scale.
Whether the single medium is gold, silver, seashells, cattle, or tobacco is optional, depending on the context and development of a given economy. In fact, all have been employed, at various times, as media of exchange. Even in the present century, two major commodities, gold and silver, have been used as international media of exchange, with gold becoming the predominant one. Gold, having both artistic and functional uses and being relatively scarce, has significant advantages over all other media of exchange. Since the beginning of World War I, it has been virtually the sole international standard of exchange. If all goods and services were to be paid for in gold, large payments would be difficult to execute and this would tend to limit the extent of a society's divisions of labor and specialization. Thus a logical extension of the creation of a medium of exchange is the development of a banking system and credit instruments (bank notes and deposits) which act as a substitute for, but are convertible into, gold.
A free banking system based on gold is able to extend credit and thus to create bank notes (currency) and deposits, according to the production requirements of the economy. Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security of his deposits). But the amount of loans which he can afford to make is not arbitrary: he has to gauge it in relation to his reserves and to the status of his investments.
When banks loan money to finance productive and profitable endeavors, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion. Thus, under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth.
When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold the economies of the different countries act as one -- so long as there are no restraints on trade or on the movement of capital. Credit, interest rates, and prices tend to follow similar patterns in all countries. For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest paying banks in other countries. This will immediately cause a shortage of bank reserves in the "easy money" country, inducing tighter credit standards and a return to competitively higher interest rates again.
A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post-World War I type of disaster. The readjustment periods were short and the economies quickly reestablished a sound basis to resume expansion.
But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline-argued economic interventionists -- why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely -- it was claimed -- there need never be any slumps in business. And so the Federal Reserve System was organized in 1913. It consisted of twelve regional Federal Reserve banks nominally owned by private bankers, but in fact government sponsored, controlled, and supported. Credit extended by these banks is in practice (though not legally) backed by the taxing power of the federal government. Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks ("paper reserves") could serve as legal tender to pay depositors.
When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates.
The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market -- triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's.
With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain's abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed "a mixed gold standard"; yet it is gold that took the blame.) But the opposition to the gold standard in any form -- from a growing number of welfare-state advocates -- was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.
Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which -- through a complex series of steps -- the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
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 in understanding the statists' antagonism toward the gold standard.
--Alan Greenspan
1967
Source: http://www.usagold.com/gildedopinion/greenspan.html
Update: It just came to my mind that Greenspan joined the famed John Paulson's hedge fund in the January of this year and admittedly - "they're the only hedge fund he will advise on the direction of the economy". Soon after, John Paulson and Co. made a significant bet on Gold to the tune of $1.3 billion (and even more thereafter, including owning over 8% of the entire GLD ETF). Coincidence? I think not! Greenspan knows the games Central Banks, especially the Fed, have played all these years with Gold since going off the Gold standard and I think he has a pretty good idea where the price of Gold going. In any case, I would definitely wanna be long something John Paulson is!
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we think GG understands more about AliG than AliG does
funny that atlas shrugged & manchurian candidate came out within 2 years of each other
Sounds like Milton Friedman
OUTFRIGGINSTANDING stuff GG.
"MARK IT ZERO, DUDE"
"Let us use all our force to replace the circulation of gold by that of paper: our banks will absorb the gold, and we shall decide then what value the paper money will have, this will make us the masters of every man's existence.
"We have amongst ourselves many fine orators capable of feigning enthusiasm and of convincing the masses! We will send them amongst the nations to announce the changes that will make the happiness and prosperity of mankind.
"By gold and by flattery, we will win the proletariat, who will take on their shoulders the job of exterminating Christian capitalism. We will promise to the workers salaries that they have never even dared dream of, but we will also heighten the price of all necessities, so much so, that our profits will be even greater.
"In this manner we will prepare the revolutions that the Christians will conduct themselves and out of which we shall collect the fruits. By our jokes and by our attacks we will render their priests ridiculous and eventually odious, their religion as ridiculous, as odious as their priests. We shall become masters of their souls, because our pious attachment to our religion will prove to them the superiority of our souls.
"We have already established men of ours in all the key positions. Let us make every effort to furnish the goys with lawyers and doctors. Lawyers get to know about every interest. Doctors, once they cross the threshold of a house, become the confessors and directors of their patient's conscience. But above all, let us get the control of the education, of the schools. By them we will spread the ideas that are useful for us, and we will mould the children's brains as we wish. If one of us falls into the claws of justice by misfortune, let us all go to his aid, finding as many witnesses as may be needed to save him from his judges until the moment comes when it will be us who will be judges."
(Rzeichorn, published by Sir John Radcliff in 1876)
http://www.biblebelievers.org.au/proof.htm
Great piece, I have often wondered myself if AG was the ultimate mole.
Despite claims to the contrary, there is ample evidence that he never gave up his belief in the gold standard (though I am too lazy to find the evidence, there is plenty out there).
You are correct about it being easier to kill it from the bottom than the top - look at what Andrew Jackson had to go through, they almost had him killed.
For the same reason, I am happy when I read stories about the extension of the homebuyer tax credit, a second stimulus, cash-for-clunkers-and-everything-else, TALF, TARP, MBS purchases, etc. It hastens the demise of our fiat currency.
Can't come soon enough.
Good article, Gordon. The nuts and bolts of it for me are in these sentences here.
He just accelerated the process by giving the corrupt bankers (who control everything, including the Fed) enough rope to hang themselves. Also, in my humble opinion, human beings do not change until pushed to desperation.
Great article
I've thought about it this way also.
However, after watching his last performance in front of the House Committee on Oversight and Government Reform when he blamed it all on his misplaced trust of the "free market", I thought;
"You sir, are no Howard Roark."
GG, great piece - Gold the once and future money is a good read.
Ron Paul showed Sir Alan his treatise on gold that he had written I think in college and Alan of the record agreed with him
What a scumbag with ZERO PRINCIPLES - believing in a gold standard yet kowtowing to the status quo of the fiat money printers of the central bank.
He is has no soul, no principles, no beliefs as he sacrificed everything he believed in for power and status.
Ayn was right Alan's biggest fatal flaw was his need to please and that he was a social climber. She knew his nature down to the core.
Cheers,
Pigpen
Big ego + Feds powers + political pressure - backbone = market manipulation disaster. The big ego wouldn't let him do nothing, which is what should be done in many circumstances. Just do nothing. The market will correct itself.
I'm with you Pigpen.....and my cheap chardonnay of course.
Maybe he just liked the rubber chicken dinners
Boy the younger greenspan is sure different from the
older greenspan. Sure they are the same guy? He's
a pod person now.
i have read about greedscam's aurophilia years ago
and thought consequently that he might be a decent
person who might bring reform....he proved otherwise
with his bubblemania....
on the other hand, he was acting rationally within
a corrupt perverse system....he gave us exactly
what a politburo is designed to deliver - mayhem,
robbery, and destruction...it is the logic of the
system...
greedscam's head belongs in a guillotine along
with bernquacke's....but only aftere being used
as a golf tee....
Gordo must be licking his lips at this point. Quite the insight. Is anybody (AG) really that smart? I'm not, so I wouldn't know.
Fiat will fail on its own and it would appear that obvious conclusion was apparent to Greenspan. He wasn't trying to kill the system, he was trying to exploit it for as long as he could.
"Deficit spending is simply a scheme for the confiscation of wealth."
This is the essence of "strong dollar policy" (controlling commodities trading in US dollars) created and championed by Greenspan, Rubin, Summers, and others - impose the inflation tax on the rest of the world, i.e. steal their wealth - we give them something we can simply print more of (or a promise for future printing) in exchange for real stuff.
Of course they understand gold, that's why they manipulated it.
Maybe the best comment that I have ever read on any post! Trading worthless paper for real assets. Crazy like a fox...
if the dollar blows up, what is the likelyhood the gov does some BS to screw the taxpayer over on their ability to pay their mortgages off with what becomes funny money or the new currency?
Particularly if you have gold and silver that maintain their value to the new currency?
Good question. I'm not taking any chances. Pay down debt with FRNs, roll over Tbills, fondle the gold eagles, do good deeds. I don't think there are any plans for home mortgage "jubilee" on the event horizon.
So to achieve parity between money in circulation, etc and gold, what does gold need to go to so we can say wea re back on a gold standard?
if japan joins in then its 7,500 or 8,000.
Add China in and it goes to $9,500/ounce. That's simply the total gold ounces that each country says they have vaulted and then looking at the total paper in circulation. Then you divide the paper value by the # ounces to determine the value gold would need to be in order to equal the dollars/yen/yuan in circulation.
Now add in some printing going on and that will continue for a few years and you begin to see why some people (including me) really really like the stuff right now.
$6,500/ounce
We don't need any kind of "parity" - Gold itself must be in circulation as money, although today we can definitely have electronic means to exchange it such as Goldmoney. That way we - the society as a whole itself - and not some central authority (which is central planning, really) controls the supply of money.
Edit: If you mean what the price of Gold needs to be to balance it against whatever amount of paper money has been created to-date since we went off the gold standard, the estimates vary from anything to $10,000 to hundreds of thousands of dollars an ounce.
So basically such a move would only benefit those that hoarded gold out of faith?
Not out of faith, out of understanding. You hold federal reserve notes a.k.a. dollars out of faith.
Sorry but what differenciates one as faith an the other as understanding?
The fact that all paper money is a short position on Gold.
it is true that non-redeemable paper money is a short position on gold, but I don't see how that is any more based on faith than a long position on gold.
Granted, faith in the high value of gold is much more entrenched in our psyche since we have attributed value to it for such a long time, but in the end gold is money and all money that is not based on intrinsic value but instead is based on the faith that its extrinsic value will always remain. Again, gold has the best track record in this regard, but it still derives its value on the same principles.
horsecrap....
all money is based upon material value and has
absolutely NOTHING to do with faith, credibility,
subjective pinings, primitive obsessions, or any
manner of wishful thinking...
to believe such is to betray an enormously grotesque
misunderstanding of money that psychological
deprogramming rather than education is solution....
i don't mean to be gratuitously nasty or insulting
but i am sick to fuck at reading all this crap
about money being based upon arbitrary subjective
belief systems....
do your homework! money, even the faux money frn,
is based upon tangible assets....gold will always
trump fiats because it can't be manipulated....
but in either case money's value is NEVER based
upon faith....gold is money for very real, tangible,
specific reasons and not one person on this whole
blessed site gets it....
when you understand the relationship between
wealth, time, and work you will have true understanding....
now go out and buy some gold!!
The Power of Gold: The History of an Obsession
"is a masterpiece of misinformation and disinformation, of conceptual and factual errors about the gold standard, cloaked in a veritable blizzard of trivia." Or is it? The research is extensive, and his knowledge of history is outstanding.
2004 Edition:
http://rapidshare.com/files/290547692/The_Power_of_Gold_-_The_History_of...
gold can be manipulated. read up on the origin of banking: the goldsmiths.
I would disagree that money is not based on faith
why do we have "In God We Trust" written on our currency?
It is the faith that others will assign your medium of exchange an amount of value that is acceptable to you.
This is why I am disenchanted with gold and goldbugs in general. It's like they missed the section in philosophy on social contract, and also at the same time dismiss something like silver. It's totally arbitrary on which they place value and then gleefully pray for collapse of that which they do not support.
The other funny thing is the idea that gold can't be manipulated as if they lay person can tell the difference beteween 99% gold and 80%.
And that's why it's hard to talk goldbugs that talk to one another down from the ledge of "The End of the World as we Know it". Their shared belief reinforces their belief because it confirms that other people will always think gold has value.
Did you not read or understand the essay I just posted? Do you even know what a fiat money system is and how it works? If something has been used as money for THOUSANDS of years, it is no longer a question of "faith" or "belief" but it has become a FACT. I know it's hard because we have not been taught these things in our government-controlled "education" system, but at least you can make an effort.
This is the most ridiculous argument yet. A thousand year paradigm doesn't ensure anything in the future nor does it make anything a fact (or are you really claiming that religion is fact). That's insulting to your intellegence and all of ours. This is the entire basis of my argument; full blown blind belief in historical paradigms is dangerous and foolish. It's even more aggrivating when this is in the face of a bubble bursting in something that conventional wisdom and historical record showed would appreciate in value in the long run.
Well said.
If you had posted this even 30 years ago you wouldn't be getting any argument about the value of gold versus fiat. There was a lot of hand-wringing even in the late 70s about the pure fiat system.
A generation later and the masses have been reprogrammed. Amazing.
You guys have still failed to answer my initial question.
I'm not arguing about fiat an gold in relative terms. it pretty obvious that over the long term gold stacks up to be the better bet.
However there is the faith question that you seem adamant about: that fiat money is based on faith and gold isn't. First off is the slight error in that statement since fiat money is based on the law since its legal tender and whatnot. But thats immaterial for my question nonetheless:
Seeing as gold and fiat paper are both money, (albeit with different qualities) which characteristics distinguish fiat from gold where you see fiat as a faith based medium of exchange while gold is an understanding based medium of exchnage?
GG mentioned time as a factor in his post above so I would just like to know if the main explanation is that you think that money that has been used for a hundred years is based on faith while money that has been in use for 6 millenia is based on understanding. Since both are based on extrinsic value (hoping that others will assign it value in an exchange) it looks like instead of faith vs understanding it is a question of faith vs entrenched faith.
Check out my response to Anon@93686 below and see if it makes sense.
Which is more irrational: accepting as valuable something which cannot easily be reproduced and which has been freely accepted as valuable for thousands of years, or accepting as valuable something which is easily reproduced, being manufactured by making marks on paper, and requires, to enforce its value, exclusive legal tender laws backed by men with guns?
GG says "faith", I say "force". We are forced to have faith that the men with guns will enforce the legal tender laws, forcing our economics partners to accept the legal tender, or else.
What if I don't want to use gold in a system that enforced gold as legal tender? What if I want to use silver? We had this debate in America before and elections were run on this.
Legal tender laws should be abolished. Consenting adults should be able to use whatever they want as a medium of exchange.
Exactly. Note my italicised use of exclusive legal tender laws above
Now there is a distinction I can get behind. Gold is the expression of monetary freedom, backed by time while the funny paper is monetary control, backed by force.
Absolutely but the faiths are different; One has faith that people will accept your dollars in exchange for goods or services now and one has faith that gold will be accepted for goods and services in the future by replacing the dollar.
Your faith in gold replacing paper dollars is your end game because from everything I've read that you've posted, you have no intention of ever converting gold back into paper dollars (unless you really think that a conversion of $10000:1oz is reasonable and not miraculous). You believe it will happen, but no way of proving it is the only eventual outcome or fated.
so gold is money fiat is a promise.
it says on our fiat representation of 'money' "In God We Trust". Lloyd Blankfein said they were doing "God's work". So it comes down to does someone trust Lloyd or do they trust hard money? How else are the globalists going to transfer wealth to India and China after moving so much our productive capability, manufacturing, over to those places? India is estimate to have 18,000 tons of gold (not in reserves but throughout the populace) and China legalized the ownership of gold and silver and are encouraging the population to buy it. Both countries central banks are buying gold from the IMF.
Yet here in the US we have people selling their 'junk' gold jewelry for cash. In one big 'event' massive transfer of wealth can occur... and US citizens are holding paper promises....yippee isn't it great?
2+2=?
Exactly. Time for a quick rant:
When I first started visiting this site earlier this year, it was filled with stock market bears who couldn't understand that their whole world was measured in fiat currency, the value of which could be manipulated at will.
A few of us "got it", GG being the most prescient.
March 18th, 2009 will be a day that will live in infamy. While the fiat currencies were doomed from the start, that was the day that kicked off the chain of events that will finally spell the end of the dollar.
Those who didn't understand the magnitude of what happened that day were doomed to lose their wealth.
As you say, GG, buying gold back then was not about faith, but about understanding what that event meant.
indeed....and to drive the point home a little
harder, kitco has begun showing the change in
price of gold due to dollar fluctuations and demand....
not sure i understand their methodology but it is
probably simplistic and perhaps not altogether
reliable....nonetheless the analytical impetus is
right minded...
now if kitco could only flush jon nadler down the
toilet they could improve the value of their
franchise...
Bingo!