You are here
GoldMoney founder, in Barron''s, predicts panic in U.S. dollar
By Kevin Kerr
CBSMarketWatch.com
Friday, May 26, 2006
http://www.marketwatch.com/News/Story/Story.aspx?
dist=newsfinder&siteid=google&guid=%7B251C66C5-7BB3-4936-AD82-
C56CE8160690%7D&keyword=
NEW YORK -- In the currency world, the dollar is often referred to
as "invincible" or a "flight to quality" instrument. Don't bet on it.
A country saddled with debt, ongoing problems with global diplomacy,
and an economy almost solely based on credit -- and the dependence
on the ability to print more money at any time -- hardly exhibits
the traits of a "flight to quality" instrument.
In his eye-opening book "Demise of the Dollar," Addison Wiggin
writes: "The Great Dollar Standard Era is a direct result of the
removal of gold as the underpinning of the world's currencies. ...
The vast overprinting of currency will inevitably debase the value
of the U.S. dollar, and because so many foreign currencies are
pegged to the dollar, the currency of those nations as well."
Throughout the 1970s and early '80s, U.S. investors were filled with
fear that the greenback would continue to lose purchasing power. Few
had confidence in the government's ability to limit the expansion of
the money supply, culminating in a rush to buy precious metals from
1979 to 1980. I remember my father buying gold ingots and Indian
Head gold coins. Everyone had them.
At the time the Federal Reserve did what it could and put the brakes
on money supply growth by putting extremely high interest rates in
place. The Fed's goal seemed to have been reached by 1982 and the
rate of increase in the money supply was on a downtrend as interest
rates fell from their highs, and the specter of inflation
evaporated.
This was the end of the commodities boom cycle and investment
capital began moving from commodities into other financial assets.
The great bull market in equities was underway while commodities
more or less languished for the next two decades.
Chris Mayer, editor of newsletter Capital and Crisis, writes
that, "Since the end of the Bretton Woods agreement in 1971, the
dollar has been an irredeemable currency, no longer defined or
measured in terms of gold. Nonetheless, in an ironic twist, it has
become the world's dominant currency and the core reserve asset of
central banks all over the world. It has replaced gold as an
international currency. The transformation has not happened without
consequences. One of these is that the discipline imposed by the
gold standard is no longer operative. Another consequence, related
to the first, is the profound effect this has had on international
trade."
Recent exploding interest in gold is no coincidence. "Gold is the
best money, because for centuries, as a result of countless
individual choices, it has evolved as such," Mayer reasons.
Gold may seem antiquated and a relic of days gone by; an impractical
alternative -- but it's far from that. Central banks are adding to
their reserves -- and so are individuals. Remember, gold has been
around for millennia while the mighty U.S. dollar has only managed
to survive a couple of hundred years -- a rough couple of hundred
years at that.
Mayer puts it best when he quotes Murray N. Rothbard. "Though the
old classical gold standard was not perfect, it was, in Rothbard's
words, 'by far the best monetary order the world has ever known, an
order which worked, which kept business cycles from getting out of
hand, and which enabled the development of free international trade,
exchange and investment.'"
Gold may not be on a perfectly straight road to higher prices as
evidenced by the volatility of late, but one thing is clear: Gold is
the best alternative to the current fiat fiasco of fiscal policy.
The U.S. dollar is on trial in the world financial markets and I for
one am not waiting for the verdict. I am hedging the outcome with
gold now while it's still very cheap.
--------
Kevin Kerr is editor of MarketWatch Global Resources Trader.
----------------------------------------------------
To subscribe to GATA's dispatches, send an e-mail to:
gata-subscribe@yahoogroups.com
To unsubscribe, send an e-mail to:
gata-unsubscribe@yahoogroups.com
Caution: America Online prohibits delivery of GATA
dispatches to AOL e-mailboxes.
----------------------------------------------------
RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS
Free sites:
http://www.cbs.marketwatch.com
http://www.usagold.com/amk/usagoldmarketupdate.html
http://www.capitalupdates.com/
http://www.silver-investor.com
http://www.thebulliondesk.com/
http://www.goldismoney.info/index.html
http://www.minersmanual.com/minernews.html
http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
http://www.investmentrarities.com
http://www.kereport.com
(Korelin Business Report -- audio)
http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)
http://www.resourceinvestor.com
http://www.goldpennystocks.com/
Subscription sites:
http://www.lemetropolecafe.com/
http://www.interventionalanalysis.com
http://www.investmentindicators.com/
Eagle Ranch discussion site:
http://os2eagle.net/checksum.htm
Ted Butler silver commentary archive:
http://www.investmentrarities.com/
----------------------------------------------------
COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS
Blanchard & Co. Inc.
909 Poydras St., Suite 1900
New Orleans, Louisiana 70112
888-413-4653
http://www.blanchardonline.com
Centennial Precious Metals
Box 460009
Denver, Colorado 80246-0009
1-800-869-5115
http://www.USAGOLD.com
Michael Kosares, Proprietor
cpm@usagold.com
Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
http://www.ColoradoGold.com
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net
El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
http://www.eldoradogold.net
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net
Gold & Silver Investments Ltd.
Mespil House
37 Adelaide Rd
Dublin 2
Ireland
+353 1 2315260/6
Fax: +353 1 2315202
http://www.goldinvestments.org
info@gold.ie
Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
http://www.gloomdoom.com
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com
Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
http://www.kitco.com
Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
http://www.certifiedcoins.com
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com
Lone Star Silver Exchange
1702 S. Highway 121
Suite 607-111
Lewisville, Texas 75067
214-632-8869
http://www.discountsilverclub.com
MRCS Canada
12303-118 Ave. NW
Edmonton, Alberta T5L 2K2
Canada
http://www.mrcscanada.com
Michael Riedel, Proprietor
1-877-TRY-MRCS
1-877-879-6727
mrcscanada@shaw.ca
Miles Franklin Ltd.
3015 Ottawa Ave. South
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
fax: 952-925-0143
http://www.milesfranklin.com
Contacts: David Schectman,
Andy Schectman, and Bob Sichel
Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
314-965-9797
1-800-280-9797
http://www.mocoin.com
Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com
http://www.buysilvernow.com
Richard Nachbar Rare Coins
5820 Main St., Suite 601
Williamsville, N.Y. 14221-8232
877-622-4227
http://www.CoinExpert.com
nachbar@coinexpert.com
Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com
The Moneychanger
Box 178
Westpoint, Tennessee 38486
http://www.the-moneychanger.com
Franklin Sanders
1-888-218-9226, 931-766-6066
----------------------------------------------------
HOW TO HELP GATA
If you benefit from GATA's dispatches, please
consider making a financial contribution to
GATA. We welcome contributions as follows.
By check:
Gold Anti-Trust Action Committee Inc.
c/o Chris Powell, Secretary/Treasurer
7 Villa Louisa Road
Manchester, CT 06043-7541
USA
By credit card (MasterCard, Visa, and
Discover) over the Internet:
http://www.gata.org/creditcard.html
By GoldMoney:
http://www.GoldMoney.com
Gold Anti-Trust Action Committee Inc.
Holding number 50-08-58-L
Donors of $200 or more will receive copies
of "The ABCs of Gold Investing" by Michael
Kosares, proprietor of Centennial Precious
Metals in Denver, Colorado, and "The Coming
Collapse of the Dollar" by James Turk and
John Rubino.
GATA is a civil rights and educational
organization under the U.S. Internal Revenue
Code and contributions to it are tax-deductible
in the United States.
