We here at MYTWOCENT$ have always had a fascination with the parsing of words. Normally, you can take peoples words at face value - but when dealing with politicians and/or bankers (species both known to bend a word or two) close scrutiny is advised as nuance is always part of the equation. It is a crying shame they only give Paul 5 minutes every few months to grill this guy. In an ongoing effort to retire debt, we here at mytwocent$ would gladly pitch in 10 grand for a 90 minute pay per view between these two. In any event, what follows here is a blow by blow translation of the conversation from Thursday between perhaps the wisest elder statesman in congress and Benny the blasphemer on a subject near and dear to our heart - GOLD.
Ron Paul: “When you wake up in the morning, do you care about the price of gold?”
Like any good tactician, Paul only asks questions to which he knows the answer. Of course Ben cares about the price of gold - as gold is the proverbial canary in the coal mine. The higher it rips, the more Benny & the bankers are exposed for the frauds they are. Asked a point blank yes or no question, Benny does what any experienced politico would do. He evades. He knows Paul is looking for a yes, and he knows the truth is yes, but like most bankers his first instinct is to deny others, so he stops short of saying yes with:
Ben Bernanke: “Well, I pay attention to the price of gold. But I think it reflects a lot of things. It reflects global uncertainties. I think the reason people hold gold is as protection against of what we call tail risks, really, really bad outcomes. And to the extent that the last few years have made people more worried about the potential of a major crisis then they have gold as a protection.”
On a psychological level, Benny is working overtime. First he stops short of admitting he cares, then he openly tries to associate Gold (probably the surest thing on the planet) with uncertainty. He then proceeds to paint people who hold gold as extreme, sure he doesn't use the exact words, but look at his choice of nouns & adjectives - and what they imply. For example, "protection" implies defense (not offense), so those looking to make a buck should look elsewhere.. "Tail" implies, no matter what comes - gold won't be needed until maybe the end of it - so we certainly don't need it today. "Risk" implies danger, bankers always like to associate gold with risk whenever possible - its no coincidence they appear in the same sentence here. "Really really bad outcomes" implies extreme and unforeseen. "worried about the potential" implies unlikely and extremely remote - hardly worth worrying about.
Ron Paul: "Do you think gold is money?"
Ben Bernanke: "No. It's a precious metal."
Of course gold is money and much more, Gold is the preeminent universal form of money. Always has been, always will be. So of course Benny does what bankers do, denies. He subtly coats the denial "no" with a known truth "its a precious metal". This has the effect of making his no seem more like a fact than an opinion - old debaters trick. What is really funny about this exchange is Paul knows Gold is money and then some, while Benny denies because he doesn't want to publicly acknowledge gold as a viable alternative to his BernankeBucks.
Ron Paul: "Even if it's been money for 6,000 years? Somebody reversed that and eliminated that economic law?"
Ben Bernanke: "Well, you know, it's an asset. Would you say treasury bills are money? I don't think they're money either, but they're a financial asset."
Benny just won't give it up. Instead he takes the opportunity to slander gold by associating it with t-bills. First rate con job, Lumping Gold in with a losing proposition like T-bills - what fckin balls on this guy. He is trying to insinuate both T-bills & Gold are assets; when In fact, one is an asset (gold), while the other is a paper liability (promise to pay).
Ron Paul: "Why do central banks hold it if it's not money?"
Ben Bernanke: "Well, it's a form of reserves."
What a nice nuance by Benny,"Its a form of reserves". Thats all, just a backup plan - nothing more. Another obvious attempt at manipulating the appeal of gold downward by minimizing its importance. The longer bankers continue to bad mouth gold (thus helping to cap its price), the longer they will have to trade their Bernankebucks for something of value. While Gold is a form of reserves it is also much more. Gold is a bet against paper currency. Gold is a bet on the continued debauchery, corruption, and parasitic behavior of our elected leaders - a sure bet if there ever was one. Gold is the only chance you have of being a player after the inevitable collapse of the almighty dollar.
Ron Paul: "Why don't they hold diamonds?"
Ben Bernanke: "Well, it's tradition. Long-term tradition."
Ron Paul: "Some people still think it's money."
"Tradition" …….. People do a lot of stupid, carefree, expensive things in the name of tradition. Bankers on the other hand, do not behave out of tradition, ever. They are motivated by getting more. Always more. They hold gold (and are buying more) because they know they are on the right side of the trade. They bad mouth Gold because bankers are more shrewd (and greedy) than most, and want the trade to themselves. Do not be fooled by their words - look at their deeds. Central banks are buying - are you?
****************************
As of this writing, Gold is plumbing new highs at $1600 the ounce. While the herd (the masses) all think thats high, those of us ahead of the pack are long and still getting longer. The obscene rates at which Benny is printing up new dollars guarantees $1600 will look like a steal in a few years. It was only 3 years ago gold was trading in the $800's. Everyone thought it was high then too. Just like today. Even though $800 seemed high then, it seems cheap today. And so while $1600 may seem high today, history shows our perspective may be completely different in a few years time.
No comments:
Post a Comment