Gold: Appended is tomorrow's editorial in the Financial Times, which, taking note of gold's sharp rise in price, begins with a factual error, goes on to sulk for six paragraphs, and concludes with the hope and expectation that gold will go back in the dumpster eventually.
The error beginning the editorial is the assertion that gold doesn't pay interest. Gold doesn't automatically pay interest like a bond because it doesn't have to, since holding gold incurs no risk. An ounce of gold today will be an ounce of gold tomorrow, whatever happens in the world, even as many borrowers have failed and even currencies have failed as the regimes issuing them have collapsed.
Gold is money in itself and no one else's liability. But gold can pay interest if its owner wants to lend it, just as fiat currency cash can pay interest and just as central banks themselves have charged interest in lending their gold to investment banks for hypothecation and price suppression.
The FT attributes gold's rise to "uncertain times" -- geopolitical tensions and the failure of the U.S. government to get the virus epidemic under control. The FT offers not a word about what is likely a bigger cause -- the implosion of the fractional-reserve gold banking system built in part on the central bank gold leasing the FT also fails to acknowledge. If the FT thinks the gold price is unpleasantly high now, what will the price be if the world ever realizes that most of the gold it thought it owned doesn't exist and never did? If the world ever finds out, it may fairly ask why the FT never reported it, though documentation of central bank gold price suppression policy has been delivered to the newspaper many times over the last 20 years without prompting the newspaper to put a single critical question to any central bank.
Chris Powell, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org |
