Has the Dow Really Recovered?
On July 13, 2011, in his testimony before the House Financial Services Committee, Federal Reserve Chairman Ben Bernanke told Texas Congressman Ron Paul that he does not think gold is money, only an asset. Mr. Paul pressed further and asked, “Why, then, do central banks hold gold as reserves?” Mr. Bernanke, looking a bit like a grade school student in a spelling bee contest that was just presented the word “incongruity,” could only muster a one-word answer, “Tradition.” Apparently, these central bankers’ monetary strategy is analogous to why Americans serve turkey on Thanksgiving. Brilliant! To be fair, given that Mr. Bernanke is the chief guardian and servant to the altar of fiat paper currency, a position of disregarding gold as money is to be expected, even if it ignores 6,000 years of history.
If you concur with Mr. Bernanke that, in fact, gold is not money and only an asset, you may want to stop reading here and move on to other things. The perspective I will present is not good news, and conflicts with most of what conventional financial media tells you. If, on the other hand, you disagree with Mr. Bernanke, or are at least open to another perspective on the markets, by all means, read on.