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Going All-In On a Weak Argument
by Keith Weiner
In Poker, to go all in means to bet everything you have. I do not think it is an exaggeration to say that, at least so far as the mainstream audience is concerned, we gold advocates have gone all in. We have made one argument: we should adopt the gold standard, because inflation. By inflation, it is generally meant rising consumer prices (this is not my definition), again at least so far as the mainstream audience goes.
It’s true. Prices have been rising relentlessly since the Federal Reserve Act of 1913. We certainly have made the argument that inflation happens in paper money, but not in gold. I think most people believe that, despite the obfuscations of the diehard apologists for the Fed.
I think people care about inflation—but not that much.
People who work for wages mostly get mad at their boss for not giving them a big enough raise. People who are retired on a pension mostly get mad at the politicians for the same reason. They complain that the cost of living adjustment is not enough.
What about the rich? This graph explains why the rich are not at all unhappy.
Their stock portfolios are going up at a much faster rate than consumer prices. I have scaled the CPI curve to the same proportions as the S&P index. If consumer prices had gone up by 2.8X, as the S&P did, then the two curves would match.
Astute readers will note that I cherry picked the start of the graph at March 2009. That was quite deliberate, as I think stock investors have a pretty short memory, possibly not even that long.
If this is it, if the argument for the gold standard is merely that prices are rising, then the wealthy would prefer we stay on the dollar system. It’s making them wealthier.
A few months ago, at the Shadow Open Market Committee meeting in New York, the keynote speaker put a sharp point on this. Richard Fisher, president of the Dallas Fed, was asked a question in front of a room where 99% of the people were in the 1% (the remainder were young, still working on getting that grant or planning to transition out of government and into an investment bank). The question was about the wealth effect.
“Yes,” he said wryly, “the ealthy have been … very affected.”
We need to make other arguments about the failings of the dollar, and the virtues of gold.
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We had a gold standard. They got rid of it. The answer isn't to go backwards but to denationalise money completely. Let the market decide what money will be used just as Gold became the first global currency.
It's tied up in the same problem and that is state manipulation. It's the state which needs to go.
The best reason to buy silver and gold is that the 'Big Club' hate it when you do that.
They loooove gold, as long as it's in their hands and not yours.
Inflation is not the only reason to own gold and certainly not the strongest argument as to why one should own gold.
The thesis of your entire article is sloppy.
Gold Standard Institute needs to find stronger arguments not present weak arguments.
That is,....if you are an Institute that supports gold.
Are you?
Or are they an organization like the "World Gold Council" that's effectively a double agent, supposedly supporting the interest of gold owners and producers but actually working against their interests?
Frankly, a gold standard is just another manipulation of the price of gold. Let the price be determined by the sale of actual gold in the market, not fake futures contracts sold in the hundreds with nothing behind them from one bullion bank's left hand to its right hand but in an actual market.
I don't think that the laws of Nature and physics should be considered a "weak argument". Go ahead, see if you can find enough real assets to satisfy all those paper claims.
That's an excellent argument. I also like this one.
Once the people figure out that you've robbed them blind, they'll come for you and it's not going to end well for you.
One should remember that Madoff sent monthy statements showing increasing wealth, too.
The pitchforks of the masses might make a much stronger argument for the 1%.
The Great Pumpkin will come..., you'll see.
And then, you'll be sorry...
Hmmm...if I remember correctly, the Great Pumpkin showed up in 1776, 1789, 1917 and 1933, to name just a few notable appearances. Is there a particular reason that you think he won't show up again?
"Great Pumpkin will come"
Hilarious, and sad for the truth of it.
Sort of like Heston's "Cold, Dead Hands".
Course, if they do much more of this oppressive crap, I'll do like the inner city folks and burn my neighbor's house down - I'm pretty sure he doesn't have any guns.