The New Wedge
Issue: Gold
By DICK MORRIS
Published on
DickMorris.com on April 9, 2013
As public concern mounts over Fed Reserve Chairman Ben Bernanke's policy
of unlimited and unrestrained printing of currency, the political focus
on gold is increasing. Each month now, our currency expands by over $80
billion. Each year, the amount that comes into circulation equals the
total money supply that was in circulation in 2007 before Bernanke went
crazy with the printing press.
By excluding food and fuel from the calculations, he has managed to
bring in the Consumer Price Index at less than his 2 percent annual
inflationary target, but few doubt that the dollar is fading fast.
From abroad, the BRIC nations (Brazil, Russia, India, and China) have
committed to using gold -- not dollars -- in their trade with one
another and Australia has agreed with China to base its trade on the
value of the Yuan, the Chinese currency.
Domestically, Arizona and Utah are passing laws allowing gold to
circulate as legal tender in their states. The University of Texas
Investment Management Company has has bought $1 billion of gold as part
of its investment portfolio and a bill backed by Governor Rick Perry
would store it in a newly created Texas Bullion Depository. The facility
would also accept deposits from individuals and could become the basis
for an emergency currency should the need arise. The very fact
that people are thinking in these terms is indicative enough of the
uncertainty Bernanke is catalyzing.
The saving grace of the dollar in today's markets has always been
that every other currency is worse. The Euro is dissolving before
our eyes. The Yen and the Pound are too limited a basis for global
transactions and China deliberately keeps the Yuan weak so as to procure
trading advantages.
This situation has led the International Monetary Fund (IMF) to issue
Special Drawing Rights (SDRs) as a global currency based on a market
basket of the world's currencies. Over a trillion dollars of SDRs
are now in circulation largely in poorer countries where the IMF has
sent foreign aid in the form of SDRs.
Other nations cannot print money as we do since theirs' is not the
universally recognized global currency. But the Fed is abusing our
prerogative to print so blatantly that one wonders how long the world
will accept the dollar at face value.
The Fed is trying to hold down the price of gold so as not to stoke
fears of inflation and to reassure us that all is fine despite its
profligacy. But the potential for a banking collapse and a dollar
crash are looming ever larger.
The world has an economy worth about $80 trillion. But banks have
wagered $1.6 quadrillion in derivative trades. If, or rather
when, those bets come crashing down, banks will not be able to make good
their losses. And governments will be hard pressed to do so either.
Enter Cyprus where we are all seeing what happens when measures like
even the massive TARP lending prove inadequate to protect banks.
There, the European Central Bank (ECB) -- the Euro equivalent of the
Federal Reserve -- is invading private bank accounts and seizing up to
one-third of the amounts on deposit (a practice usually limited to asset
forfeiture in drug cases) to shore up the banking system. This
step is sending chills down all of our spines. FDIC insurance
would be worthless in the face of a global policy to seize accounts.
Let's face it. Politicians have abused the right to print money.
We cannot trust them to limit their power and to face fiscal facts.
The abuses of Obama and Bernanke illustrate this grim fact for all to
see.
Gold is coming!
Has FEMA gone mad? New executive order
can steal all your food!
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