The Morality of Gold
The 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 and elsewhere.
Since 2008, 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.
This global 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:
You know, 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.
Any hard-money 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.)
Ben Bernanke 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.
Bernanke will 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.
The article 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?.
Things have 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 and pensions.
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.
That's not 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:
The Metastasis 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.
An ethic 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.
Here's how we responded once he had our attention:
Even though 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.)
You know, 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 darn pages.
Bernanke is 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 Orwell's Animal Farm.)
But, perhaps 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 it.
"When do I get mine?"
The Fabian-socialist 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 was pre-Internet.
The giveaway 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 not answer.
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.
Societies that 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.
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Posted by John Danforth on 07/16/11 12:26 PM
The edifice crumbles by the definition of capitalism as money-as-debt. Toss that in there and it shows the respect for truth behind the message. Zero.
Posted by John Danforth on 07/16/11 12:16 PM
One more thing along this line of thought. Nobody that I have personal relations with can read what I write. I can't write in ways that interest them or that they can understand, and they mostly wouldn't agree with me if they could understand or were interested.
But I write, and only for the benefit of those who might enjoy it. Nothing I write will ever convince anyone else. It would be useless to try.
And that is why I am so grateful to The Bell. The value of the kinship of communication with intelligent people of character is all out of proportion to the cost. I show my gratitude by kicking a little money into the pot to help pay expenses whenever I am able. As a selfish person, I am delighted to do so!
Posted by John Danforth on 07/16/11 12:11 PM
What seems perfectly obvious and inescapable to one of us, seems equally implausible and incomprehensible to another.
The answers given by the Bernank were wholly aimed at the Masses. Despite his words being completely illogical and farcical, he knows something about society that he can rely upon with utter confidence. He knows full well what the score is, he knows that he is completely discredited in the minds of the Remnant, he knows that his actions speak louder than words, he knows that the Remnant were perfectly aware of the charade and afforded him zero respect before he ever showed up to answer those questions.
He knows that he can rely completely on the impenetrability of the mind of the mass-man. In fact, the entire charade of governance and money-manipulation relies upon it, is built upon it, and has endured for generations upon it. It is the most reliable aspect of human societal organization that has ever been recognized. It is the Big Secret upon which society has been organized since prehistoric times.
Yes, the Bernank is finished, to the Remnant. The impact of this is a great big in-your-face "So what?". "What are you gonna do about it?"
We have a tendency to presume that others are like us, in that when presented with irrefutable evidence, the light will come on, a revelation will illuminate the mind, and all the contradictory pieces will come tumbling into place to form a new awareness. Unfortunately, it just ain't so. For millions of reasons. And the evidence is not only before us, it stretches back into primitive antiquity.
The bare fact is that some people will see the truth and other people will avoid it at any price. 'Any price' literally means, any price. Loss of a job, eviction from their homes, breakup of family, no amount of horrible consequences will shake them any more than a carefully reasoned argument. Any attempt to convince those who are otherwise inclined will only harden their opposition.
The internet has changed something. It has given the Remnant an easy way to find each other and communicate. It has blown away the utter social isolation of the few who have the intelligence and strength of character to see through the charade with which the primitive-minded Masses are herded about.
This does not mean that the masses will accept the truth. It only means that the Remnant can be better prepared to deal with the consequences of Mass delusion. It is likely that the only way the Masses are going to be convinced of anything will be via the same kinds of motivation that guide them already. Perhaps shame and fear or the promise of some freebie or some fantastic magical story will affect some temporary change. But these are not legitimate means to teach truth, the message will be sullied and negated by the attempt to put it across through falsehood or with hidden motives. The attempt will be soundly rejected by the Remnant and will not make a dent in the intellectual armor of the ignorant. And no real truth-teller would ever dirty himself with the attempt anyway.
The main point is that the truth is out there for those so inclined to learn it, no longer must they lose half a lifetime casting about for the truth. This is worth rejoicing. With some unity, some community of those who are inclined to learn the truth, the charlatans who live by stampeding the masses might sense that their lies might be eventually subject to ridicule by the Masses, and this would mean that the game is all but over for their ruse. That is the only thing they ever need fear.
It is quite evident that they do not fear this happening. They depend quite reliably on the avarice, viciousness, and atavism of the primitive intellect. Their confidence is shown in the Bernank testimony, the arrogant threat by Obama to cut off social security checks, and thousands of other examples daily. Of course, they must never even show a crack in that confidence or again, their respectability might turn to ridicule in an instant.
How does this relate to Anthony's excellent article above? There seems to be a premise that morality can be created or destroyed in the masses. And it is not my authority to say whether this is so or not so, we have argued about this before when discussing the impact of religion on society (perhaps with me on the wrong side of it). Perhaps any confidence in the morality of the common person is misplaced. My observation is that perhaps, it is the basic immorality and intransigent denial of reality of the common man's mindset that virtually ALL societal control schemes rely upon. Perhaps that is the only stable way to control the primitive mind-set into behaving within certain boundaries that allow any kind of societal structure to endure. It certainly seems that way from history and from the way people cling to the delusions spewed forth daily from the propaganda mill.
And perhaps it is I that am deluded. I will always welcome any arguments that might enlighten me.
If my reference to the Remnant and the Masses seems obscure, any who might be interested will find the context for these terms in the must-read article by Nock at the following link:
Click to view link
We talk often of the Elite here. This view is as elitist as it gets. Are we simply deluding ourselves about certain qualities of those who disagree with us? Are not our biggest mistakes in life often the result of granting too much benefit of the doubt to people who later prove themselves unworthy of the favor?
Posted by Don on 07/16/11 12:08 PM
"DB: say we agree that everything problem in the world is related somehow to 'Jews.'"
I vehemently disagree - I never said that. I actually said that until recently worldwide Jewry enjoyed an observational advantage - due to the global nature of Israel's tribe. A member of Israel's tribe observes the use of paper money in the East and ultimately shares that knowledge with his global tribe.
Some well-to-do Anglo-Saxons and Greek associates of mine may shun Jews, but to me Jews are just another tribe, no better or no worse than the Anglo-Saxon tribe or the Greek tribe.
Posted by memehunter on 07/16/11 11:53 AM
Nice editorial. The moral angle is interesting and refreshing. I actually remember reading the August 2009 article on that topic (I was just beginning to visit DB at the time)...
"It's not tradition that makes gold valuable. It's history and a recognition of the inherent value in its discovering, mining, refining, etc."
I'm no economist, but I do not find that explanation convincing. Others have suggested that the attractiveness of gold as a store of value lies mostly in its stock to flow ratio. According to this view, of all commodities, gold is probably the one with the highest stock to flow ratio, which makes it a particularly good store of value over the long term.
Here are some relevant links:
A classic, perhaps the best explanation I have found as to why gold is the best long-term store of value:
Why the global financial system is about to collapse
Click to view link
FOFOA's blog - I would recommend reading his entire collection of posts, but otherwise these two posts are particularly relevant:
Gold, the ultimate un-bubble:
Click to view link
The Shoeshine Boy (quotes a very long excerpt from "Why the global financial is about to collapse", mentioned above):
Click to view link
FOFOA also provides very convincing arguments justifying why he considers gold to be a better long-term store of value than silver (incidentally, he is not using the usual "gold and silver" phrase that I am accustomed to see on many libertarian websites, including DB).
Posted by newyorkerinlondon/rocknrollcook on 07/16/11 11:51 AM
"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 Orwell's Animal Farm.)"
How about Rupert Murdoch as Squealer? He sells the Elite's version of the truth to the masses.
Gave article a 5. But you Anthony are a perfect 10.
Posted by Don on 07/16/11 11:16 AM
"DB: 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."
As mentioned by another poster a few days ago, Armstrong believes it best for gold to remain a private matter, given the inevitability of banksters bribing politicians to ensure that sovereign debt remains payable in any new system.
Click to view link
"DB: The great, grasping mechanism of mercantilist central banking has been exposed for all to see."
Perhaps the Inet is also the Greater Equalizer - giving common people SIGINT capabilities arguably equivalent to those of a small nation. Among other things, Schoon's most recent article illustrates the competitive observational advantage held by world wide Jewry, at least until the advent of the Inet.
"Although it was two Scots, William Patterson and John Law, who introduced paper money to the West, paper money as debt, i.e. capitalism, can be traced to the Jews who had observed the earlier use of paper money and paper financial instruments in the East
Ralph Foster notes: Jews doing business in China observed and studied the use of promissory notes, vouchers, draft notes, and negotiable certificates of deposit. They saw how this paper circulated freely among the general population rather than only among merchants. Eventually, they adapted these financial instruments to their own use-long before the first Christian travelers had even heard of them.
Europe was thus an indirect beneficiary of eastern financial knowledge."
Click to view link
Reply from The Daily Bell
OK, Don, say we agree that every problem in the world is related somehow to "Jews." Can you define who these problematic jews are? We are anxious to hear. A simple definition of Jewishness will suffice. You are welcome to include long noses and lobe-less ears.
Posted by dotti on 07/16/11 11:10 AM
Okay. I have to admit that your posts are often a bit too complex for me. I read until I feel like my head is rotating like Linda Blair in Exorcist.
this one, I "got" all the way to the end.
Regarding: "with more and more of all that has been in the past told, and generally accepted as true by the great unwashed and uneducated and undereducated, being increasingly outed and highlighted as being just a Great Game sub-prime fabrication to keep a crooked system and its major beneficiaries at the top of the dung heap, and shovelling,..."
I would add one more thing to your list: to "...uneducated and undereducated..." I would add "diseducated" in the sense of "disinformation"--being information that is meant to misinform, rather than to inform.
Thanks for all your posts. This one I "get".
Posted by amanfromMars on 07/16/11 10:52 AM
Oops, that should of course read ... "..for in cyberspace they are outed as there is no place to hide anything."
Posted by amanfromMars on 07/16/11 10:42 AM
What value has gold whenever it is bought practically for nothing with currency? Or can one buy a standard gold bar with the presentation of a car or a watch or a house or whatever with an assayed value to match. That should surely highlight the absurdity of the whole crazy system which isn't anything to do with money and/or wealth per se, but everything to do with the exercise of artificial power.
Whether it be $10 or £10,000 an ounce, whenever it traded and exchanged for paper, is its worth just an artificial bubble and a temporary patch on a capitalist system which is failed .... and now failing very publicly now that the world is realising the Ponzi nature of the scam, which, while it was working its magic, transferred power to money controllers rather than to intelligence agencies sharing truths about all that media reports as news and reality, with more and more of all that has been in the past told, and generally accepted as true by the great unwashed and uneducated and undereducated, being increasingly outed and highlighted as being just a Great Game sub-prime fabrication to keep a crooked system and its major beneficiaries at the top of the dung heap, and shovelling, deluding themselves that they had everything under control.
Rupert Murdoch thought his little empire could shape the world and news with made-up tales in support of pet causes and dodgy wars, or others played him for an old fool and fed him information to print and broadbandcast for their private and/or personal agendas, and now everything his rags and television programs spout is suspect and subject to deep packet inspection and invasive analysis of core source lode to discover the reason for the point of view which is always trying to program one to accept the situation is as is being described. That is what media and IT is for ...... brainwashing. And surely you would not deny that yourself, Anthony, whenever the Daily Bell is no different from any other voice shouting out its messages and opinions into cyberspace, which is the new front-line battleground for hearts and minds control and global power.
It is though a powerful control space which does require one to have no destructive secrets or crazy desires to hide, for in cyberspace they are outed as there is place to hide anything. The Virtual Realm which now Controls Power is that kind of place, and requires a whole novel way of thinking that leaves the past behind.
Posted by dotti on 07/16/11 10:28 AM
Many thanks to you for this wonderful piece.
To use Oprah's (sycophantic) phrase: This is "the One" that I can send to friends and relatives that are otherwise unapproachable on topics that we routinely examine here at the DB.
I gave a 5, but wished that I had never given a 5 before so that it would convey the significance that I give to this writing.
Just plain wonderful. Or as the late, great Lawrence Welk would have said: Wunnerful, wunnerful, wunnerful.
Many thanks for the clarity expressed here in this article and throughout the articles, editorials and feedbacks on this site.
Posted by Dave Jr on 07/16/11 08:59 AM
Thankyou Anthony. I gave this one a 5.
Posted by zliker on 07/16/11 07:55 AM
DB stop having right all the time, its just too much for those liars to handle :-) great article, greetings!
Reply from The Daily Bell
Thanks for a kind, "left-handed" compliment.
Posted by Hognutz on 07/16/11 05:04 AM
Excellent article Mr. Wile! I do believe the "jig" is just about up for central bankers. When the SHTF , I would not want to be in their shoes. Millions of downtrodden, exasperated souls, scream out for justice.