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Gold revaluation really isn't a silly idea at all, Mr. Cashin
9a PT Thursday, January 17, 2013
Dear Friend of GATA and Gold:
Business Insider today quotes UBS market director Art Cashin, a frequent analyst on CNBC, as ridiculing the idea of gold revaluation to improve the financial position of the U.S. government:
http://www.businessinsider.com/art-cashin-reprice-gold-to-address-debt-c...
Cashin is quoted as writing in his daily market note: "The Platinum Coin Meets Goldfinger: The thesis that the Treasury could mint a trillion-dollar coin to avoid the debt ceiling may have collided with the conspiracy theories around the German repatriating of gold bullion reserves. Out in the Lewis Carroll land of the blogosphere, the alchemists are at again -- well, sort of. A new theory says that if the Treasury marked up its gold reserve to current market value (circa $1,600), it would create enough of a windfall to allow the Treasury to keep spending despite the ceiling. Some folks clearly have too much time on their hands."
... Dispatch continues below ...
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Certainly $1,600 per ounce wouldn't be enough. Maybe $20,000 would -- if Western central banks really have even that much gold left.
But far from being a silly idea, gold revaluation has been a mechanism of restoring solvency to government since central banking was invented and is very much a serious topic now as central banks race to devalue against each other in the worldwide currency war:
Mr. Cashin, if, in contemplating gold revaluation, "some folks clearly have too much time of their hands," allow us to introduce former Federal Reserve Board of Governors member Lyle Gramley. Questioned four years ago on Business News Network in Canada about the increasingly stinky balance sheet of the Fed, which was making the central bank look like "a government-owned hedge fund, leveraged at 50 to 1," Gramley volunteered:
"I think you have to reckon with the fact that one of the Fed's assets is gold certificates, which are priced, as I remember, at $42 an ounce, and if we were to price them at market prices, the Fed's leverage would look a lot less than it is now."
(See http://www.gata.org/node/6989.)
Central banks are so secretive and mysterious about gold precisely because of its potentially infinite power over their currencies and economies. The proof of this power is easily demonstrated. All one has to do is what GATA has made a career of doing and what most financial journalists and television commentators will never do: Ask central banks specific questions about what they are doing with their gold and what they are doing in the gold market with sales, swaps, leases, futures, options, and such. No answers will be provided, for the essential answer is: They are desperately rigging markets.
It is all laid out in GATA's documentation archive here:
http://www.gata.org/taxonomy/term/21
Of course it's hard to blame financial journalists and TV commentators like Cashin for not pressing central banks with such questions. For if markets are rigged, who needs market analysts? Still, they have no right to ridicule what they know nothing about.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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Opinion Around the World Is Changing
in Favor of Gold -- Find Out Why
When Deutschebank calls gold "good money" and paper "bad money". ...
http://www.gata.org/node/11765
When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ...
http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan...
When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ...
http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan...
When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ...
http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold...
When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ...
World opinion is changing in favor of gold.
How can you learn why and what it will mean to you?
Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard."
Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him."
To buy a copy of "The True Gold Standard," please visit:
http://www.thegoldstandardnow.com/publications/the-true-gold-standard
