<<Yeah, but have you noticed that he hasn't publicvly spoken out in gold's defense since that article?>>
Again, you are quite wrong.
After the President & VP spoke about the selling of IMF gold reserves AG spoke out in a press conference(under question& answer) saying the gold reserves of the US should be kept that he suspected in the future fashion & opinion would swing back. (question & answer are not documented at the FRB web site).
Then April this year:
"I am obviously referring to far more adverse outcomes than I was alluding to in my earlier remarks on the need for private risk-management systems to adjust for crises in their estimates of risk distributions. However, where that dividing line rests is an issue that has not yet been addressed by the international banking community. Clearly, to choose the distribution of risk-bearing between private finance and government is to choose the degree of moral hazard. I believe we recognize and accept it. Indeed, making that choice may be the essence of central banking.
In summary, then, although information technology by its very nature has lowered risk, it has also engendered a far more complex international financial system that will doubtless bedevil central bankers and other financial regulators for decades to come. I am sure that nostalgia for the relative automaticity of the gold standard will rise among those of us engaged to replace it. "
federalreserve.gov
Then here:
"No matter how regulated and supervised, throughout our history many of the benefits banks provide modern societies derive from their willingness to take risks and from their use of a relatively high degree of financial leverage. Through leverage, in the form principally of taking deposits, banks perform a critical role in the financial intermediation process; they provide savers with additional investment choices and borrowers with a greater range of sources of credit, thereby facilitating a more efficient allocation of resources and contributing importantly to greater economic growth. Indeed, it has been the evident value of intermediation and leverage that has shaped the development of our financial systems from the earliest times--certainly since Renaissance goldsmiths discovered that lending out deposited gold was feasible and profitable. But it is also that very same leverage that makes banks so sensitive to the risk they take and aligns the stability of the economy with the critical role of supervision, both by supervisors and by the market."
federalreserve.gov
& here
"Indeed, the average consumer is exceptionally conservative and traditional when it comes to money, which has a profoundly important role in day-to-day living. To the vast majority of people, it represents the stored value of one?s previous efforts. To many, it is the embodiment of their life?s work. Tampering with money has always had profoundly political implications. Much of American politics of the late nineteenth century, for example, was about the gold standard and the free silver movement. William Jennings Bryan?s famous ?Cross of Gold? speech during the presidential campaign of 1896 reflected the deep-seated views of money?s role in society and, even today, one can hear echoes of that debate in the public discourse about money.
Our history vividly affirms that the average person is far more sensitive to what form our money--our store of value and medium of exchange--takes than we payments system specialists have readily understood. It took many generations for people to feel comfortable accepting paper in lieu of gold or silver. It is taking almost as long to convince them that holding money and making payments in ephemeral electronic form is as secure as using paper.
There is, of course, more to the tenacity of paper than a deep psychological connection between money and tangible wealth. Paper instruments also are perceived to have a greater degree of privacy than electronic payments, although there have been experiments with electronic money and other instruments that would provide relatively high levels of privacy. But confidence in such arrangements may take quite awhile to emerge. Currency, and to a large degree checks, are currently perceived to offer significant advantages in privacy over electronic payment systems that entail centrally maintained databases with elaborate records of individual transactions.
Perhaps an even more important dimension influencing our behavior regarding money and payments is convenience. Currency and checks do not require the users to travel to special locations, dial the number of a special machine, or maintain special equipment to originate payments. This is not to deny that automation has played an important role in reducing risks and increasing efficiency in handling currency and checks. Rather, the issue is that traditional paper instruments allow the users themselves, within a structured format, to have significant control over when, where, and how to make payments.
Turning to the suppliers of payment instruments and services, we see that many are straddling two different worlds. The world of paper is well known and a major part of the business of traditional financial institutions. The world of electronic commerce is a new and growing part of business that is changing daily and operating on a different time scale.
The phrase ?Internet time? has now been added to our vocabulary. Behind this phrase is a serious observation that advances in information technology allow new ideas to be transformed into products and services much more rapidly than a few years ago, thus greatly speeding up product cycles. At the same time, new information technologies have broken down barriers between firms and stimulated very creative and competitive processes across the economy.
Some traditional financial institutions have tended to view this process with concern. As many firms have driven to find new ways to supply financial and other kinds of information, along with transactions and accounting services, some have expressed concern that their traditional payment franchise is being eroded. This concern is another manifestation of the insecurity brought on by innovation and change.
Many firms, including financial firms, have now opened channels of data communication with existing and potential customers and business partners through the Internet. In this world, particularly in retail commerce, payments by paper have been the exception, not the rule. Despite ongoing discussions about privacy and security in electronic commerce, credit cards have rapidly become the payment instrument of choice for consumers. Interestingly, there have been experiments with new payment systems analogous to private currency. To date, these products have not been widely successful, despite the fact that some have offered significant degrees of privacy and security. Instead, familiarity with and confidence in the credit card built up over more than half a century of use seem for now to have shaped behavior. Some suppliers have sought to deepen confidence by voluntarily expanding consumer protections. In a twist of history, even gold coins can now be purchased on line with a credit card. "
federalreserve.gov |
