Since gold is not money (aka Bernanke at 5:01 https://www.youtube.com/watch?v=2NJnL10vZ1Y ), but merely tradition, central banks have been habitually engaging in rituals at an alarming pace. This is the big lie. Gold is the power money of central banks yet American financial interests don’t want citizens understanding this fact. Meanwhile, the truthful messenger must be shot, not to reveal a deflated dollar, but unfortunately allowing countries that promote gold ownership an excellent price. Can you say gold backed Yuan? By Germany pulling their money out of the fiduciary custody of the Fed, many questions are raised about tradition.
How I see it.
Why Gold is valuable
Gold holdings “just sit there and don’t do anything”.
“Gold is a great thing to sew into your garments if you’re a Jewish family in Vienna in 1939, but I think civilized people don’t buy gold, they invest in productive businesses.”
Why all of recent do we hear from two of the wealthiest men in America that holding Gold is merely “psychological and uncivilized”?
Although most ordinary citizens could care less about metals, the reality is that gold has a lot to do with the value of our currency. Historically, gold has been treated as money, contraband, illegal tender (1933) and as a silly non-interest earning investment. Funny how gold has been the best performing asset class in the last 12 years!
The precious metal remains the “currency of last resort,” according to analysts led by Jeffrey Currie
Why all of recent do we hear from some of the wealthiest men in America that holding Gold is merely “psychological and uncivilized”? Could it be because gold is a Basel III Tier 1 regulatory capital asset with supreme collateral status over foreign currencies?
Plug in the numbers:
Oz’s of Gold Held by US
x $ Price of Gold
= External Debt
“In the absence of a 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 decline to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as claims on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to be able 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, ‘Gold and Economic Freedom’ in 1966.
Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.”
–Norm Franz, Money and Wealth in the New Millenium
, it might appear from the Federal Code of Regulations that Gold and Silver really is money! Who would have thought!
Readily marketable collateral means insured deposits, financial instruments, and bullion in which the lender has a perfected interest. Financial instruments and bullion must be salable under ordinary circumstances with reasonable promptness at a fair market value determined by quotations based on actual transactions, on an auction or similarly available daily bid and ask price market. Readily marketable collateral should be appropriately discounted by the lender consistent with the lender’s usual practices for making loans secured by such collateral.
The world is now waking up to the fact that gold is not a commodity, but currency with many functions such as performing insurance, liquidity, store of value.
Gold is not only currency, but it takes on a higher status as MONEY.
Contrary to Wall Street Journal editors, Gold is not merely a Pet Rock.