Yesterday Like Biblical Times

Overall a good interview with Barton Biggs that stresses we could be in for a considerable market correction.

It is unusual to hear someone of his position speak of the need for reform being similar to the waywardness of the Israelites centuries ago. Yet as human beings, it appears we rarely learn much from history despite it being there for study and reflection.

Unfortunately, Mr. Biggs speaks disparagingly about gold as most investors and Wall Street traders do.

What most people fail to understand is the special role gold has in the monetary system. Over the course of 5000 years, civilized man has found it to contain the unique properties necessary to meet the three criteria that are required for something to be called money.

 Yes, it pays no interest or dividend.

 But that is not a defect as most TV commentators assert.

 Gold does not pay interest because it does not need to.

 It is a store of value inherently, unlike paper money.

 This is why fiat currencies always pay some kind of return - they must to attract investment.

Consider this.

 Central Banks always hold gold reserves.


 Why don't they exclusively hold US dollars or Euros or diamonds or televisions?

 Because these items are ultimately not stores of value over the long term.

 Central Banks know what is real, and so they hold it - gold, the ultimate extinguisher of debt.