unwired

Enlightening the Gold Bugs

LOL. Love it. So the dollar was 'devalued' in the 30's by fixing it to gold at $35? Good thing we did that....otherwise gold may have gone to zero!

The author seems adept at spotting bubbles. I wonder if he would recognize a dollar bubble if he saw one? Is that even possible? Or maybe dollars are one thing we can create in any quantity we want and without consequences. I would suggest a field trip to Zimbabwe. First thing to do would be to look up the price of gold in Zimbabwe Dollars.

James Grant Wants to Know: Who Will Buy Our Greenbacks?

"I may be wrong, but I can’t come down on Grant’s side of the gold argument. For all of the elegance and simplicity inherent in a hard currency, it is also a straight jacket. There is much to be said for the modern method. If the people who we choose to administer that system showed more wisdom and harked back to the Roots and others who spoke a great deal of truth then, we might not find ourselves in the sort of predicament we now face."

As others have also said... this is the crux of the matter. Human beings are in fact incapable administering any monetary system over time. The gold standard is the only self-regulating system that will obey natural economic laws in the long run. Of course human beings can't even understand this simple truth and will....over time corrupt it as well. Then...after corrupting the gold standard with intervention...blame it as the problem. Give me the discipline of a gold standard any day. Sure it would mean a simplier life without nearly as much 'stuff'...but we'd be living in a self sustaining economy and our years of accumulated weath would have far less chance of being wiped out. Many think this is deflation we are going through.... because true deflation would in fact have similar symptoms. What we are witnessing is in fact the economic destruction and loss of confidence brought about by years of monetary inflation, gross mismanagement and malinvestment on scales never before seen.

MBIA: Credit Where Credit Is Due

I don't think this is a bargain at all. As with Bear Stearns, there are plenty of unknowns that could pop up at any time. With financial companies in general these days, the accounting and the numbers are basically worthless...and their true value becomes apparent in times of stress. With the amazing inflation in the dollar by the fed, I think its much wiser to put your money where the increased money is bidding up prices...like resources etc.