The Morality of Gold
by Anthony Wile
The Daily Bell
by Anthony Wile: Banker
X on Gold, Real Estate and Residency Diversification in Troubled Times
Telegraph's Ambrose Evans-Pritchard is out with a notable
article predicting the return of a gold standard "as the
world order unravels." We notice he's careful not to write
"new world order," though it's likely the Anglosphere
power elites aim at creating one. It was featured at Drudge, LewRockwell.com
we've been suggesting that the dollar reserve system is probably
finished and in this article, Evans-Pritchard not only predicts
its doom but also suggests that the new monetary order will include
gold. We've been predicting this for years. We think that what the
elites want to set up is a currency basket that includes gold and
that will be utilized worldwide, a global currency in other words.
currency will accompany what the Anglosphere powers-that-be are
building in terms of a global regulatory infrastructure one
world government or as it has also been called, a new world
order. Not that I'm in favor of that. What we've suggested is free
banking, the availability of competitive currencies and the ability
for people to make up their own minds about what currencies they
want to use. Let the best money win.
It's good to
see that libertarian-conservative Congressman Ron Paul has suggested
the same strategy (competing currencies/money). He's taken the lead
on these all-important issues. In fact, Ron Paul was in the news
just the other day for questioning Federal Reserve Chairman Ben
Bernanke about fiat money and why the Fed's various stimuli hadn't
worked. Here's some of what he said:
we hear that in the future, we are going to have a better economy
and everybody hopes so. But it is hard for me to believe because
I look back on the past three years and what Congress has done
and what the Fed has done, we have literally injected about $5.3
trillion and I don't think we got very much for it. The national
debt went up $5.1 trillion. Real GDP grew less than 1%. So I don't
think we've gotten a whole lot.
Ron Paul also
asked Bernanke about whether gold was money and Bernanke replied
that it was not; though it was an asset. Why do people value gold?
Tradition, he averred. Not so, Ben Bernanke! Actually, money metals
are valuable because they are seen as fungible, rare, transportable
and attractive among other characteristics.
economist knows. Baby Austrians know this. As Murray Rothbard wrote
famously, gold (and silver) won the money-competition long ago.
After thousands of years, salt, beads, rocks and copper wheels gave
way to gold.
It's not tradition
that makes gold valuable. It's history and a recognition of the
inherent value in its discovering, mining, refining, etc. (And yes,
value is NOT intrinsic but is merely what humans assign to goods
and services at any given time, but history shows us that humans
usually value gold as they do not value lesser stores of value.)
may not believe this, but his answer gave the impression that he
did NOT KNOW IT. Once again, free-market economics clashes with
Keynesian sophistry thanks to Ron Paul. It's the reason the mainstream
media carefully keeps Austrian economists off the airwaves. Whenever
they get on, they destroy the opposition. Truth, like a knife, cuts
to the point and reveals the darkness beneath.
surely not live this down (among so many other things). He sounded
foolish. This is nothing new. For several years, Fed officials have
been sounding and acting foolishly. We even wrote
an article about it two years ago entitled Beginning
of the End Fed Cannot Account for $9 Trillion.
was sparked by a confrontation between Rep. Alan Grayson (D-Orlando)
and Fed Inspector General Elizabeth Coleman at a hearing having
to do with some very basic questions about trillions of dollars
on the Fed's expanded balance sheet; Coleman simply didn't know.
She couldn't answer his questions. She writhed, grimaced, stumbled
and several times asked Grayson to repeat what he'd asked. It was
must have been horrible for the Fed's handlers to watch. We wrote
the following then:
Just as the
removal of Dan Rather was a watershed moment for the rising power
of the Internet from a media standpoint, the confrontation between
Grayson and Coleman will come to be seen (in our humble opinion)
as a watershed moment ... By putting Coleman up in front of Congress
in such an unprepared manner, the behind-the-scenes leaders of
the Federal Reserve have provided an unimpeachable metaphor. Coleman's
testimony punctured the veil of secrecy and her lack of preparedness
lance whatever aura of competence Ben Bernanke and others have
been able to conjure. Metaphors can NEVER be undone.
You can see
the video here: Is
Anyone Minding the Store at the Federal Reserve?
only grown worse for the Fed and Bernanke. Here's an even more important
question that Ron Paul asked Bernanke the other day: Why the so-called
stimulus money that went to banks around the world (trillions and
trillions), when the crisis hit in 2008, could not have been offered
to private individuals as well.
This is a crux
point. Though it has not been made much of, this issue looms even
larger than the incompetence the Fed has been exhibiting when grilled
about fundamental free-market economics, or its own balance sheet.
The issue is that this is the first crisis that has unfolded under
the scrutiny of the Internet Reformation crowd.
In the 21st
century Bernanke is no longer afforded the warm comfort of mainstream
media protection, given that there are so many other sources of
information. Thus, what has gotten through to many is that the Fed,
unaccountably, lent perhaps tens of trillions to domestic and overseas
financial institutions while Americans lose their homes, businesses
This was the
subtext of Ron Paul's question. It's one that has been rattling
around deep in the nation's psyche for at least two years now, even
before Congressman Paul voiced it. Bernanke, predictably, had no
answer. He ducked the query by explaining that the Fed hadn't given
the money away; it had loaned it out and received a good return
on its lending.
the point, as we suggested in an August 2009 article entitled, Have
the Immoral Actions of Central Bankers Precipitated the Decline
of the West? The story was sparked by an email from one Stewart
Dougherty who writes for Market Oracle. We believed he grasped the
heart of the matter then, most brilliantly.
The Fed, he
wrote to us, and perhaps central banking in general, had seemingly
signed its own death certificate when it allowed common knowledge
of its disbursement of trillions around the world. Fed bankers have
put a brave face on it, saying the money was necessary and that
central banking had saved the day, but the damage was done. Here's
how Dougherty analyzed it:
of Moral Hazard and its Effect on Gold ... There is accumulating
evidence that the Washington Wall Street moral hazard experiment
has gone disastrously wrong, and that just like any other accidental
discharge of a deadly virus, the moral hazard virus is now loose
and swiftly propagating throughout society. By so blatantly colluding
with Wall Street, Washington has lost all moral authority, and
the people now have only one place to turn: themselves.
of, "If they can do it, so can I," is spreading, as
people realize that fabric of American society has been shredded
and replaced by a free-for-all mentality whereby everyone must
fend for oneself in order to survive ... Homeowners evicted by
foreclosure trash their homes in rage on the way out the door,
with an estimated 50% of such dwellings damaged. Looters and squatters
destroy many of the rest, stealing copper pipes, wiring, granite
counter tops and anything else of value.
we responded once he had our attention:
we have often commented on the faux spirituality that seems to
surround central banking, we likely never hit on the point of
raw IMMORALITY. (Didn't we? How could we have missed it?) The
spectacle of central bankers reaching into their back pockets
and pulling out trillions would surely fragment the world as we
knew it yes, we pointed out that plenty of times
but we likely never came out and presented the argument that these
actions would inevitably destroy the MORAL fiber of society.
Oh, it likely
seemed an obvious point, and somehow, somewhere we must have stated
it in our own way, but Dougherty has hit the point hard. It is
an intense intellectual endeavor. It is an award winning observation.
Gold star to Dougherty and all that. (It is the highest endeavor
in fact, in our humble opinion, this sort of commentary.)
way back after the bad, old USSR fell, there were archly fashionable
observations about the end of history. But Dougherty has written
a REAL article of REAL observations about the end of Western civilization.
Sheesh, we do this all day (and night) for a living and here comes
Dougherty and he's written Spengler's Decline of the West in three
no Alan Greenspan when it comes to playing the omniscient wise man.
His voice tends to tremble when he is asked a hard question and,
despite his beard, he comes off as kind of abashed. Greenspan was
all angles and obfuscation; Bernanke is the not the right public
face for the Fed at this juncture. (Thus we have decided not to
offer him the part of Squealer in our upcoming adaptation of George
there is nothing the Fed can do. Ron Paul expressed it well. More
than the Fed's various inabilities to account for the TRILLIONS
it prints and lends (or gives away), more than the lack of audits
and reasonable book-keeping, more than the questions about how much
gold there is or isn't in Fort Knox, the question that Ron Paul
asked is the one that yet resonates in the public ear.
It's one Dougherty
understood and that we comprehended when he drew our attention to
do I get mine?"
economist John Maynard Keynes famously said not one man in a million
could comprehend the workings of the central bank so large
is the lie that the money system is based upon. But Keynes's statement
of the Fed's trillions and trillions has played out under the merciless
spotlight of digital coverage. Thousands of bloggers and perhaps
millions of articles have commented on these impossible figures.
And gradually, around the world and certainly in America
it has occurred to the jobless, homeless and hopeless that
SOMETHING IS NOT RIGHT. This is the question that Ben Bernanke could
Two years ago
Dougherty understood this. What he didn't quite grasp (maybe he
did) was that that the Internet itself was the ultimate complicating
factor. Without the exposure of the 'Net, the professional obfuscators
would have gone to work once again and Bernanke and the rest would
have been lauded not grilled.
But this is
the era of the Internet Reformation. Bankers are being nailed to
the wall like Martin Luther's theses. The great, grasping mechanism
of mercantilist central banking has been exposed for all to see.
The bottom line issue is one of fairness. Comity and civil society
are at risk when people feel they are being taken advantage of at
a fundamental level.
use some form of gold-as-money are apt to be fairer and healthier
than fiat-money societies. The Chinese who have experienced eight
ruinous bouts with fiat currency call it "flying money."
Gold doesn't fly. In this sense, it has a morality as well as a
utility. It is the antidote to Dougherty's moral hazard.
with permission from The
Wile is an author, columnist, media commentator and entrepreneur
focused on developing projects that promote the general advancement
of free-market thinking concepts. He is the chief editor of the
popular free-market oriented news site, TheDailyBell.com.
Mr. Wile is the Executive Director of The Foundation for the Advancement
of Free-Market Thinking – a non-profit Liechtenstein-based foundation.
His most popular book, High
Alert, is now in its third edition and available in several
languages. Other notable books written by Mr. Wile include The
Liberation of Flockhead (2002) and The Value of Gold (2002).
© 2011 The
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