LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Will the Historic Imbalance in Gold Stocks to Gold Price Resolve?
By: Rambus

The Staggering Amount Of Gold & Silver Investment Since The 2008 Financial Crisis
By: SRSrocco

What If 'Everyone' Correctly Smells a Top Here?
By: Rick Ackerman, Rick's Picks

Precious Metals Update Video: Gold up as people ran into safe havens
By: Ira Epstein

COT Gold, Silver and US Dollar Index Report - March-22-2019
By: GoldSeek.com

Gold Mid-Tiers’ Q4’18 Fundamentals
By: Adam Hamilton, Zeal Research

Self-Destruction: Cheerleading the Process
By: Gary Christenson, Deviant Investor

The U.S. Economy Is In Big Trouble
By: Dave Kranzler

Gold Resource Corporation Mirador Mine Development Crosscuts 6 Meters of 992 Grams Per Tonne Silver
By: Gold Resource Corp.

Central Banks Are Messing With Your Head
By: Thorsten Polleit

 
Search

GoldSeek Web

 
Going All-In On a Weak Argument


 -- Published: Wednesday, 31 December 2014 | Print  | Disqus 

In Poker, to go all in means to bet everything you have. I do not think it is an exaggeration to say that, at least so far as the mainstream audience is concerned, we gold advocates have gone all in. We have made one argument: we should adopt the gold standard, because inflation. By inflation, it is generally meant rising consumer prices (this is not my definition), again at least so far as the mainstream audience goes.

It’s true. Prices have been rising relentlessly since the Federal Reserve Act of 1913. We certainly have made the argument that inflation happens in paper money, but not in gold. I think most people believe that, despite the obfuscations of the diehard apologists for the Fed.

I think people care about inflation—but not that much.

People who work for wages mostly get mad at their boss for not giving them a big enough raise. People who are retired on a pension mostly get mad at the politicians for the same reason. They complain that the cost of living adjustment is not enough.

What about the rich? This graph explains why the rich are not at all unhappy.

Their stock portfolios are going up at a much faster rate than consumer prices. I have scaled the CPI curve to the same proportions as the S&P index. If consumer prices had gone up by 2.8X, as the S&P did, then the two curves would match.

Astute readers will note that I cherry picked the start of the graph at March 2009. That was quite deliberate, as I think stock investors have a pretty short memory, possibly not even that long.

If this is it, if the argument for the gold standard is merely that prices are rising, then the wealthy would prefer we stay on the dollar system. It’s making them wealthier.

A few months ago, at the Shadow Open Market Committee meeting in New York, the keynote speaker put a sharp point on this. Richard Fisher, president of the Dallas Fed, was asked a question in front of a room where 99% of the people were in the 1% (the remainder were young, still working on getting that grant or planning to transition out of government and into an investment bank). The question was about the wealth effect.

“Yes,” he said wryly, “the wealthy have been … very affected.”

We need to make other arguments about the failings of the dollar, and the virtues of gold.

© 2014 Monetary Metals.


| Digg This Article
 -- Published: Wednesday, 31 December 2014 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.