-- Posted Monday, 28 March 2011 | | Source: GoldSeek.com
Dear Friend of GATA and Gold:
There's revolution and war in the Middle East and Africa, devastation and nuclear contamination in Japan, and turmoil throughout the world financial system, but the Financial Times always has time to try to make fun of gold and those who see any virtue in it.
In its Friday editorial, "In Gold They Trust," the FT finds humor in Utah's potential experiment with accepting gold and silver as currency, as allowed to states by the national Constitution. The FT writes:
"Utah is no stranger to eccentric laws. This is, after all, the state whose citizens have, at various points, felt the need to outlaw both fishing from horseback and dispensing gunpowder as a headache cure. Now it has another legislative feat to match these illustrious forebears. The state's legislature has passed a bill that paves the way for gold and silver to become legal tender. All that remains is for Governor Gary Herbert to sign on the dotted line.", yes, the quaint American West, where more people earn their livelihoods by creating things than by shifting money around, and where the newspapers don't exploit their opportunities to reciprocate the fun with foreigners, as well they might do with a paper from enlightened London, capital of a country where the courts lately have taken to issuing injunctions keeping everything secret and prohibiting citizens from raising grievances with their elected representatives (http://www.telegraph.co.uk/news/uknews/law-and-order/8394566/Hyper-injun...), where the monarch is prohibited not only from marrying a Catholic but also from becoming one himself, (http://en.wikipedia.org/wiki/Act_of_Settlement_1701), and where every square yard ("This royal throne of kings, this sceptred isle, / This earth of majesty, this seat of Mars, / This other Eden, demi-paradise, / This fortress built by Nature for herself") now comes fully equipped with a tax collector and a closed-circuit television camera.
The FT somehow thinks that gold's ever-higher price is more of a problem for the metal's monetization than the constant devaluation of government currencies is for their continuing to serve as money.
Here's something even funnier than Utah's quaintness, a pretty good joke that seems lost on the FT -- a chart of gold priced in British pounds over the last decade:
The whole of the FT's oblivious mockery of Utah is below. Let's come back in a year or two and see who's still laughing. Let's hope that Britain itself, if not the FT, is even still there to laugh.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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In Gold They Trust
Financial Times, London
Friday, March 25, 2011
Utah is no stranger to eccentric laws. This is, after all, the state whose citizens have, at various points, felt the need to outlaw both fishing from horseback and dispensing gunpowder as a headache cure. Now it has another legislative feat to match these illustrious forebears. The state's legislature has passed a bill that paves the way for gold and silver to become legal tender. All that remains is for Governor Gary Herbert to sign on the dotted line.
By the standards of the most fanatical hard-money purists, the plan is quite modest. Ron Paul, the Republican congressman who is the high priest of currency privatisation, has just reintroduced a bill that would allow everyone to mint their own coins. Both this and Utah's law are meant as rebukes to the US Federal Reserve, whose boundless enthusiasm for printing dollars has not exactly boosted confidence in the greenback. But Utah's unilateral gold standard has problems of its own.
For one, it would mean very small coins. Under Utah's law, the value of the coins would reflect the gold (or silver) price. A troy ounce (roughly 31 grams) of gold is currently changing hands for more than $1,400. At that price a gold coin worth a dollar would weigh all of 22 milligrams. That may be great news for microscope makers but it will be pretty fiddly for anyone hoping to buy a coffee in Salt Lake City. Of course, bigger coins could be used. But then even the change for a gunpowder-free headache pill would run to several suitcases of the worthless greenbacks Utah's goldbugs so despise.
If the gold price surged, those coins would have to become smaller still. A fall would not be much more helpful. Shopkeepers would presumably stop accepting coins worth less than their face value, bringing the economy to a juddering halt -- unless, that is, Utah's state government stepped in and guaranteed the coin's nominal value. Which sounds rather similar to the arrangement critics of the Fed are so upset about.
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-- Posted Monday, 28 March 2011 | Digg This Article | Source: GoldSeek.com