Thursday, July 14, 2011
Bernanke once again proving to the world that he knows nothing about money let alone economics
To the Bernank: An open lesson on Gold
1) Gold is always a commodity and in times of economic uncertainty is also money.
2) Up until the 1970's Gold did in fact back the US dollar. To prevent a default in the 70's the US stopped gold backing to its currency. Since then we have had Fiat money
3) Gold was the first thing most societies used as money and has been used along with Silver to act as money for thousands of years
4) In countries where people do not trust their governments to manage funny money or fiat money, they store gold, as opposed to paper to protect their wealth. Up until a few years ago, most people in third world banana republics did just that, but people in developed countries like the US and Europe generally trusted their leaders, not to print money like madmen. That all changed a few years ago, when people like you decided to print more money than Mugabe to pay off bankers bad debts, which has now escalated to pay off the countries bad debts, hence is it any wonder that people are losing trust in currencies world wide? You have chosen to act like a central bank in charge of a Banana republic, but its worse as the US is not that warm and has few bananas. Certainly the UK and most of Europe do not either.
5) Gold will act like money until you stop printing.