Accidentally Conceived in 1971, Gold Money Baby Now Due

by Arthur M.M. Krolman

Recently by Arthur M.M. Krolman: A Shark Tale (AST)

"My name is Dr. Bernanke. I'm afraid the tail risk of your wife's pregnancy coming to an end actually came to pass. And it's a really, really bad outcome: you're the new father of a healthy baby human."

Sounds like this doc has lost his marbles.

The United States economy is pregnant with child. Accidentally conceived on August 15, 1971, this wonderful blessing has been gestating for 40 years and it is now due: the replacement of the Fed's IOU-nothings with real, human-friendly money: gold.

Signs of mom being "in a family way" are all over: Utah making gold and silver legal tender, New Hampshire merchants accepting gold and silver wire laminated cards, gold-backed Visa debit cards, World Bank President proposing gold as an international reference point and Swiss Parliament to discuss the creation of a gold franc. And just like that lovely huge beach ball under her blouse for all to see, the number of greenbacks you now need to buy just one ounce of gold has swelled to a proud bountiful size of around 1,600.

In his book Human Action, Ludwig von Mises wrote, “Continued inflation must finally end in the crack-up boom, the complete breakdown of the currency system." Similarly, we have Voltaire's wisdom, “Paper money eventually returns to its intrinsic value – zero.” So, Dr. Bernanke, we're not talking about a "tail risk" of this baby coming to term. It's coming. And, when the dust settles, it will be the very opposite of a really, really bad outcome.

The coming arrival will be happy news for believers in private property everywhere. But Bernanke wrings his hands like a squeamish yellow-belly. How horrible for something new to arrive! What if it's noisy? What if it's painful? What if there's blood? This is really, really bad! Hey Ben, cheer up. At the end of all the discomfort, a golden age baby is coming to the land – it will lower unemployment and price inflation too. Isn't that great? Yes. It'll be great when the money you save still buys something in your retirement years. It’ll be great to see more capital investment by entrepreneurs as monetary uncertainty is reduced. It'll be great when you see how those investments increase the productivity of back-to-work Americans so that competitive firms can lower prices each year and still be profitable. And it'll be great for interfering government to stop growing out-of-control by stealth taxation. Remember, Ben? Your boss, Alan Greenspan, said, "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."

There's not a "tail risk" that this pregnancy is coming to an end. It's certain. And the resulting re-birth of gold as a tried-and-true, human-friendly money, will not be "a really, really bad outcome." It will be the most beautiful bundle of joy you can imagine.

July 22, 2011

Arthur Martin McCannell Krolman [send him mail] is the founder and president of a medical device company based in Boston, MA. Visit his website. He is also the author of The Scary Story of the Three Little Pigs and the Big Bad Box of Free Money.

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