Honest Ben’s Cash for Gold
12:18 pm in Uncategorized by Arthur Fullerton
Honest Ben’s Cash for Gold
Is the Federal Reserve buying gold? Speculation is mounting that the Fed is quietly buying gold and gold swaps (See the Izabella Kaminska Financial Times alphaville blog http://ftalphaville.ft.com/blog/2012/08/07/1109781/gold-qe/ ).
The last time this country was in a Depression the Fed did exactly that. Oh, and before you rush out and buy gold remember that the Federal government has an app for that too. Namely the authority to ban private gold holdings and their use in financial transactions. The Federal government also did that in 1933 by Executive Order of the President.
Folks who think they can opt out of the financial system and have their own private gold stockpile to see them through any financial crisis haven’t read their history. Private preparations against disasters, financial or otherwise, are not bad, but they miss the point. Salvation is a collective endeavor, not an individual one.
Now the uber-wealthy have a solution for this which you can see on display in Mr. Romney’s accounts in Swiss banks and the Cayman Islands. Their money knows no national allegiance, it flows around the globe seeking efficiencies (workers) to exploit and tax arbitrage (avoidance) opportunities. It’s the logical risk averse way to proceed. To diversify your holdings so that no matter what happens you and your family can be financially protected is no more than good stewardship. But, of course, as the German Jews with Swiss bank accounts discovered, it is easier to protect your money than your life. Which brings me back to salvation being a collective endeavor.
How can I prosper when my neighbor is in distress? I can’t. None of us can. Donne’s admonition to “ask not for whom the bell tolls, it tolls for thee” is as true today as it was centuries ago. There is no magic wand, no pile of golden coins, no weapon stockpile which can protect the individual or the family when the society as a whole is threatened. The Romney Ryan vision is an Ayn Rand dystopia that peddles the illusion of private salvation.
You want security? Romney Ryan say buy a gun.
You want prosperity? Romney Ryan say own a successful business.
You want a better world? Romney Ryan say increase military spending.
You worried about the US economy? Romney Ryan say move your assets overseas.
Their BIG IDEA? Cut Federal benefits for the poor and cut taxes for the rich.
This is the policy prescription that is going to return us to economic growth? This is a public version of the same insanity that believes salvation lies in a survivalist bunker. The illusion that the wealthy and middle class can somehow jettison the poor and create a new Lake Woebegone utopia where all incomes are above average is madness.
Romney and Ryan equate the fact of their individual success with the opportunities available to the least fortunate in our society – the homeless, poor, sick, disabled, and elderly. Meanwhile Ben Bernanke buys gold preparing for his own private financial Armageddon.
