Thursday, August 28, 2008

First Silver, Now Gold Is Being Rationed

I noted an article about a shortage of silver at this previous post.

Today, we have this article at Bloomberg about a shortage of gold coins.

kruggerand
[Thanks to Newworldeconomics.com for the photo.]

This is getting tiresome, but I have to repeat:

You can take gold out of the standard, but you can't take the standard out of gold.

And the world knows it, even if much of the West has forgotten this axiom.

Who placed that huge order from a Swiss bank for Krugerrands? Wouldn't you like to know. Probably some Russian with lots of $100 bills to unload. Or maybe Iran. Or maybe an American! Why not.

Reminds me of the old days, back in the 1960s when my father Edward C. Harwood was investigating ways for investment advisers to suggest to Americans how to hold an interest in gold, when American law forbid direct possession. Yes, my friends, it used to be illegal to hold gold.

He found a way or two, and those investment advisers whose customers took advantage of them were able to preserve the value of their hard-earned savings.

Governments may some day again try to outlaw the holding of gold, under some pretence like "It constitutes hoarding and it's doing harm to our monetary system." The truth is that a panic that causes people to hoard gold is a sign that the monetary authorities (with the complicity of the bankers who should know better, I might add) have mismanaged the monetary system.

Unfortunately, any such immoral effort to outlaw gold would, of course, appease the envy and wrath of those voters who don't understand what their legislators have done to deprive them of their standard of living. (For a better understanding of how this works, please go back to my first posts and read forward.)

My father was a most interesting fellow. I knew this already; but I am presently archiving his papers with a view to doing some kind of book on him. (You'll find information about him in my earlier posts as well.) He was an economist and founder of the American Institute for Economic Research; but he was also one of an endangered species: A true patriot, i.e. someone who is willing to put his life and livelihood on the line for his fellow countrymen and women.

More on him as time progresses. Meantime, don't sell your gold yet. The dollar may be seeming to make a comeback; but it's only relative to other currencies. The reality is that those currencies are doing even less well than the dollar. What's left? You guessed it.

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