Posts Tagged ‘Ron Paul’

Ben Bernanke: Consumers don’t want to buy gold.

March 5, 2011 Leave a comment


When asked by Ron Paul what is his definition of the Dollar,  Bernanke answered:

The Dollar is what it can buy….food, gasoline & clothes - Consumers don’t want to buy gold”.


The market, despite being suppressed, has proved him wrong! Gold was at it’s all-time high around the time he spoke. Gold’s cousin, silver, made another 31-year high today.

To a separate question from Sen. Jim DeMint about returning to a gold-backed economy, Bernanke said returning to a gold standard won’t work, one of the reason being there is not enough gold in the world to support the US money supply. WSJ reported:

Bernanke, appearing before the Senate Banking Committee, was pressed by Sen. Jim DeMint (R., S.C.) on the viability of a return to a gold-backed economy or the idea of the Treasury Department issuing bonds payable in gold. Bernanke, who has studied the issue, said a return to the gold standard wouldn’t work.

“It did deliver price stability over very long periods of time, but over shorter periods of time it caused wide swings in prices related to changes in demand or supply of gold. So I don’t think it’s a panacea,” Bernanke told DeMint.

Additionally, Bernanke said there were a number of practical issues that would prevent the return of gold as the world standard. Namely, there’s not enough gold in the world to effectively support the U.S. money supply.

Let’s do some arithmetic.

  1. According to the most recent FED Money Stock Measure Report Mar 3, 2011, the narrowest measure of money supply (M1) stands at $1.8538 trillion.
  2. According to the most recent Status Report of US Treasury-Owned Gold Jan 31, 2011, the US Treasury owned 261,498,899 oz of gold, with a book value of $11,041,058,82. That works out to be $42.22 per oz (set since 1973).
  3. If all the gold held by the Treasury were allowed to be valued at current market price of about $1,400 per oz, every US$ would be backed by about 0.2 oz of gold.
  4. If today, the Treasury revalued its gold to $7,089 per oz, the USD will be fully backed by gold… and that’s only gold supposedly owned by the US, let alone all the “gold in the world” Bernanke talked about!

Note: The US has revalued gold upwards (a politically correct way of saying they have devalued the USD) several times in recent history:

  • 1913:  Roosevelt confiscated gold at $20.67
  • 1934: Roosevelt re pegged gold (devalued the dollar by 69%) at $35.00
  • 1971:  Nixon closed the gold window and re-pegged gold at $38.00
  • 1973: Nixon re-pegged gold (devalued the the dollar by 11%) at $42.22

Herein lies the politics of gold (and silver). We’ve seen how the dollar has lost more than 98% of its purchasing power since the creation of the FED in 1913 (see Precious Metals or Political Metals?). Like a frog in a pot of rising water temperature, the general populace do not feel the heat of this devaluation. But if Obama were to suddenly re-peg gold at the above calculated price to return the US to a gold-backed economy, the glaring failure and fraud behind the FED system is out for everyone to see. The elites cannot let this happen (yet), hence they continue to hold the ball under water.

Or does Bernanke know something that we don’t when he insisted that there is not enough gold to back the US money supply? Is the gold at Fort Knox really there? Is the gold held by the NY FED swapped or encumbered? Why is the FED guarding so tightly records sought by GATA?


Thus far, Ron Paul has not fired his silver bullet yet - to question Bernanke about gold and about auditing the FED. Let’s wait. He will.

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning … Henry Ford



Russian Central Bank’s Gold Reserves to rise further

January 25, 2011 2 comments

Congressman Ron Paul was appointed to head the Domestic Monetary Policy Subcommittee of the House Financial Services Committee in December last year. This subcommittee overseas the Federal Reserve.  Paul is well known as the author of comprehensive legislation to audit the Federal Reserve Bank, with the goal of providing both taxpayers and world financial markets with full transparency of U.S. central bank actions.

This is where one of the key battles over the role & fate of the Political Metals will be fought - the battle to end the Fed’s relentless effort to suppress the price of PMs in cohort with other central banks and Wall Street bankers.

Today, Ron Paul writes on  ”Real Respect for the Constitution

I wonder: will this welcomed renewed interest in the Constitution lead to a healthy reassessment of all of our policies?  Will there be no more wars without an actual congressional declaration?  Will the Federal Reserve Act be repealed?  Will only gold and silver be deemed legal tender?

I’ll will keep an eye on the progress of the  112th Congress currently in session and share with you any pertinent developments with the “Audit the Fed” initiative.

Now, on to an interesting (but little known) role played by one of the key members of the banking cartel involved in the manipulation of the PM markets.  In the interview below, JP Morgan executive Christopher Paton amits that this is “a very important business to JP Morgan” and that it is doing very well. So what’s that “important business”?

As unemployment rises as a result of the crash of 2008 caused primarily by the banking cartel, JP Morgan’s role is to process the rising food stamp benefits.  JP Morgan has contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia.  JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan make. Considering the fact that the number of Americans on food stamps has exploded from 26 million in 2007 to 43 million today, one can only imagine how much JP Morgan’s profits in this area have soared.  More unemployment, more business, more profits!

While JP Morgan et al are pushing down the price of paper gold & silver, the Russian Central Bank, and many others, are piling up on the real stuff - physical gold in their reserves. Today, the WSJ reports that the Central Bank of Russia plans to buy from domestic banks 100 metric tons of gold a year in order to replenish the country’s gold reserves. In 2010 Russia’s gold reserve increased 23.9% to 790 tons, or 25.4 million Troy ounces.

One more reason to convert your fiat money into Political Metals.

[Updated: 21 Apr 2011 - Central Bank of the Russian Federation reported they bought 600,000 ounces in March, which brings their 'official' holdings up to 26.1 million ounces] Click image to enlarge.


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