Monday, March 9, 2009

Gold: The Once and Always Money

As the economy continues to flounder helplessly, the spot price of gold continues to be manipulated. Even though the Congress has authorized the Fed to pump trillions more U.S. dollars into the system, gold and silver prices remain ridiculously low. The charade will be allowed to continue as long as the dollar remains viable. As economic scholar Ron Paul has already noted, the death knell of the dollar system has already sounded. The system is already dead. The Congressional attempts to revive the economy through stimulus are useless. As even the venerable old wisest-man-in-the-world, Warren Buffett noted, the fear of inflation will be impossible to shake.

Gold's value is in its rarity. There is only so much gold in the world. On a gold standard, politicians are unable to inflate the money supply. Purchasing power is protected and entrepeneurs can plan for the future confidently knowing that prices will not fluctuate. The gold standard benefits the saver not the in-debt spender.

The Obama Administration knows it must confront the "gold problem" sooner or later. When faced with massive inflation, people will trade media that retains value. For 3,000 years of trading, gold has retained its value. The paper money that supposedly represents gold has inflated incredibly.

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