{"id":42552,"date":"2013-09-30T22:34:48","date_gmt":"2013-10-01T02:34:48","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=42552"},"modified":"2013-10-01T02:32:04","modified_gmt":"2013-10-01T06:32:04","slug":"really-theres-no-gold-in-fort-knox","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/09\/30\/really-theres-no-gold-in-fort-knox\/","title":{"rendered":"\u2018Really? There\u2019s No Gold in Fort Knox?\u2019"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a> <\/p>\n

Prices for gold and silver<\/a> are down on the year – gold <\/strong>off 20% and silver down 28%. One sage banker explains – in the Wall Street Journal<\/em>, no less – that the economy is improving. Thus people are less inclined to ‘keep their money idle<\/em>‘ by buying gold<\/strong>, he says. Better to ‘put your funds to good use,<\/em>‘ he says, by channeling it into other investments. Really? <\/p>\n

Evidently, this banker-guy missed the class in which the instructor taught that ‘gold is money’. Because there’s nothing ‘idle’ about holding gold. Ask the rest of the world, especially the East. They’re buying gold<\/a>. <\/p>\n

Indeed, my tally of national central banks that have been buying gold, in recent months, includes Russia, Turkey, India, Brazil, Canada, Mexico, Saudi Arabia and Vietnam. What do they know? <\/p>\n

Of course, China is also building a gold stash, but not bragging about it. They’re building nuclear weapons, too, and not bragging about it. To paraphrase that oft-noted Las Vegas line, what happens in China stays in China. <\/p>\n

Back at Harvard, I learned that gold is money. Then again, I learned that in the Geology Department, from the mining geology guy, Prof. Ulrich Petersen, and not in the Economics Department. <\/p>\n

Still, every now and then – back in the 1970s – one could overhear a Harvard economics professor say something like ‘a dollar is as good as gold’. Yes, it was a reminiscence of the days of the Bretton Woods Agreement, which established the dollar as a currency ‘backed’ by gold<\/a>. <\/p>\n

Old monetary habits die hard. Hey, maybe old monetary habits were the right thing to do, in their day. They deserve to die hard. <\/p>\n

At any rate, I’ve never thought that US currency was real ‘money’. Those green pieces of zombie paper are merely a medium of exchange, and ‘legal tender for all debts, public and private<\/em>‘. Where did I get that offbeat, countercultural idea? Well, start with the text that’s printed on every Federal Reserve note, that’s where. It says exactly that. <\/p>\n

There’s a difference between currency and money. Modern America has been able to get away with blurring the currency-money distinction for a couple of generations. But with federal spending out of control, each day brings us closer to our own, contemporary version of economic apocalypse. <\/p>\n

Really, who needs a zombie apocalypse, when you’ve got a federal government that spends astronomical sums of ‘money’ that, apparently, comes from nowhere? Well, okay, it comes from the Federal Reserve. But when you get down to the essence of things, Fed-money is equivalent to a ‘Big Bang money machine’ – from nothing, comes something. <\/p>\n

The Gold in Fort Knox?<\/h2>\n<\/p>\n

This reminds me of a story – a true story, no less. I was in the Pentagon, some years ago, in the days of the Bush II-administration. It was E-Ring stuff. I was in the very spacious office of a very senior guy in the US Air Force. We were discussing energy issues, particularly Air Force programs to spur a US ‘synthetic fuel’ industry. <\/p>\n

Our discussion touched issues of government funding of private industrial development, and questions about who owns the intellectual property (IP). New energy-development technology has national security implications. Should the IP go into the public domain? Or do we keep parts of it classified? <\/p>\n

One of the military staffers at the table spoke up, and said, with a downbeat voice, ‘I don’t know if we can keep this kind of tech classified. We’re terrible at keeping these things under wraps for long.<\/em>‘ <\/p>\n

As everyone around the table nodded in agreement, I decided to test their hearing. I said, ‘That’s true. Really, the only two national secrets we’ve ever been able to keep are about those space aliens, and the captured flying saucer in Area 51, and that there’s no gold in Fort Knox.<\/em>‘ <\/p>\n

The room went quiet. You could hear a pin drop. The senior Air Force guy leaned over the table, and looked right at me. He said, ‘Really? There’s no gold in Fort Knox?<\/em>‘ <\/p>\n

That’s all for now. Thanks for reading. <\/p>\n

Byron King<\/strong>
\n Contributing Editor, Money Morning<\/em> <\/strong><\/strong><\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au Prices for gold and silver are down on the year – gold off 20% and silver down 28%. One sage banker explains – in the Wall Street Journal, no less – that the economy is improving. Thus people are less inclined to ‘keep their money idle‘ by buying gold, he says. Better to … <\/p>\n

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