Tesoro Del Alma News...
Friday, July 11, 2008
Another Interesting Article
Gold can help to keep bankers (somewhat) honest
Published: July 11 2008 03:00 | Last updated: July 11 2008 03:00
From Mr Chris Kniel.
Sir, Comparisons today with the Fed's monetary policy of 1929 (Letters, July 9) are clearly invalid. In the 1929 Depression, "money" was backed by and redeemable in gold. In the likely 2009 Depression, money is backed by nothing; it is fiat and created out of thin air by governments and central bankers. It is subject to rampant inflation.
Some argue that gold as money or as backing for paper money is out of date and that there is nothing special about gold, other than it is hard to mine and it is scarce. But that is exactly the point; because it is hard to mine and because it is scarce, governments and central bankers are constrained and forced into fiscal discipline.
Having something physical in the equation keeps politicians and central bankers (somewhat) honest; it makes for a sustainable system. Over thousands of years, civilisations have found physical gold and silver necessary to maintain a level playing field. That need is just as important today.
Chris Kniel,
Orinda, CA 94563, US
Copyright The Financial Times Limited 2008
Published: July 11 2008 03:00 | Last updated: July 11 2008 03:00
From Mr Chris Kniel.
Sir, Comparisons today with the Fed's monetary policy of 1929 (Letters, July 9) are clearly invalid. In the 1929 Depression, "money" was backed by and redeemable in gold. In the likely 2009 Depression, money is backed by nothing; it is fiat and created out of thin air by governments and central bankers. It is subject to rampant inflation.
Some argue that gold as money or as backing for paper money is out of date and that there is nothing special about gold, other than it is hard to mine and it is scarce. But that is exactly the point; because it is hard to mine and because it is scarce, governments and central bankers are constrained and forced into fiscal discipline.
Having something physical in the equation keeps politicians and central bankers (somewhat) honest; it makes for a sustainable system. Over thousands of years, civilisations have found physical gold and silver necessary to maintain a level playing field. That need is just as important today.
Chris Kniel,
Orinda, CA 94563, US
Copyright The Financial Times Limited 2008
Labels: gold, nick fleming, nvf-investments.com, tda-6, tesoro del alma
posted by nfleming at
10:00 AM
