Thursday, September 18, 2008

Of Course There's a Gold Standard

Whether or not a reserve currency, or any currency, is officially backed by Gold, Gold always remains the standard. Either a fixed amount of paper currency is attached to each ounce of Gold as in a real Gold standard, or there is a variable amount of paper currency attached to each ounce of Gold. The standard still exists.

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When a paper currency lets its hair down and goes out on the town chasing excessive and seedy ideas and values, it will find Gold standing by in judgement, like the condemnatory parent of a 14 year old schoolgirl who has stayed out overnight. The currency graveyard is full of the bones of government paper currencies that were found guilty of bad behaviour leading to worthlessness under gold's inscrutable and stern gaze.

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Today Gold sits in judgment on the US$ (amongst other currencies) and has a black hood placed over its head. Gold also sits in judgment on the foolish politicians and central bankers who, without the burden of any self doubt, have led America to bankruptcy. In the words of the worthy Bill Bonner: the day of reckoning has arrived.

Read all of Sam Mathid's excellent essay here.

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