On Oct 19, 2011, at 5:00 AM, Jordan wrote:
> Ok, slightly longer preface to the Rogue Fed link than I wanted. Here it is:
>
> http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/19_Michael_Pento_-_Own_Gold,_The_Fed_%26_ECB_Have_Gone_Rogue.html
>
> If nothing else, people here may enjoy the photoshopped Bernanke photo...
> So, question: There are many facts in here, but is this mostly bullshit? For example, tying the unemployment rate to inflation makes sense in a way, but doesn't he have a causation/correlation problem on his hands with statements like this? (Not that he would care if he did.) I like the central-banks-counterfeiting-their-own-currency line. Do you agree? And what about this whole dual mandate thing..? Anyway, I could ask questions about every statement this guy makes, but I will leave it there.
These guys always have the authenticity problem: fiat money is "fake." Gold is "real." Gold is "real" because it's scarce and the supply of it increases less than 2% a year. Either they have a psychological problem - severe anal retentiveness, aka sadomonetarism - or a material interest in deflationary collapse, or both.
Some of the hedge fund folks believe this line and they've poured into commodity funds and gold. Some of the air has come out of the commodity bubble - gold, now around $1,650/oz is down almost $300 from its peak of $1,920.
Bernanke is doing his best to revive the U.S. economy and keep the financial system together. There's a lot critical you could say about him, but better this than deflationary collapse.
Doug