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Why Bankers love Gold

December 27, 2011

One of the more persistent memes circulating the internet is the idea that Bankers, or the Powers that Be, hate Gold.

The idea is much plugged, but it is a strange notion.

After all, we lived under a Gold Standard (true, a very strange one) up to 1971, when Nixon ended Bretton Woods.

Surely, TPTB are in charge much longer than that? The Money Power has ruled through Gold for a very long time. So why would they hate it?

Just like with today’s paper, they ruled through interest and boom/bust cycles.

No, the Bankers love Gold and in fact, there is every reason to believe they are working hard to reinstate it as the monopoly currency of their choice. In fact, this is probably the real fundamental driving Gold prices up. It’s not just a hedge against inflation: if Gold becomes the standard again, it will become very, very expensive. And more and more of the smart money is betting on this.

Here are a few more of the reasons why Bankers want their Gold Standard back:

1. Gold is de facto World Currency.
Of course, every nation, or even private entities, could coin their own. But an ounce is an ounce is an ounce. If Gold as currency is used everywhere, they basically have what they want. It would be much easier to control for a Global Central Bank than all sorts of paper currencies with wildly varying exchange rates.

2. With Gold, Interest is more difficult to explain away.
When you lend Gold you can say: I need interest, I can’t use the Gold myself while you use it.
When you just print the money when you lend it out at interest this doesn’t add up. The money didn’t exist when it was lent out, will cease to exist after it has been repaid.

3. They own it all.
And the little they sold us they will regain quickly when compound interest mops up the rest, after which their monopoly will be completely restored.
The fact is, nobody knows where most of the Gold is, and that in itself is a clear sign we shouldn’t use it as money: we can’t control it’s supply.
In the mean time, while Gold appreciates, so do their reserves.

4. They prefer deflation over inflation
Interestingly, under Gold deflation is the norm and under paper inflation.
Both see the boom/bust cycle, but each with it’s own ‘natural’ condition.
Paper sees continuous ‘mild’ inflation alternated by deflationary busts.
Gold sees structural deflation, alternated by asset bubbles.
Bankers prefer deflation. It makes their Gold and the interest they rake in with it worth more. It hinders economic growth, keeping the middle classes small. This is so because deflation invites hoarding currency (the currency is appreciating against other assets)  instead of investing it.
Under inflation, everybody is getting rid of their paper because it is losing value, promoting both consumption and investment.

5. But surely, they suppress Gold, don’t they?
Of course they do. They have their mouthpieces explaining it’s just ‘a barbarous relic’. They have their banks suppress it’s price.
By doing so, over the years they have convinced many to surrender whatever stash they had, greatly enhancing their grip on it. To them it is just another dialectic: paper versus gold.
When the time comes to release the valves, Gold will appreciate further and further. Greatly enhancing the value of their own Gold holdings, probably more than enough to compensate them for any paper losses.

That’s basically more or less their style, isn’t it?
Whether they will succeed this time is another matter, though.

So there are plenty of reasons to assume the Banking Fraternity would be quite pleased with a new Gold Standard.
A Gold Monopoly Standard, that is. In a free currency market Gold would play no role.

The basic thing to keep in mind is that they control Gold and are capable of creating the boom/bust cycle with it. History shows this without a shadow of a doubt. Worse still: we’d be paying interest over the money supply and this is the most important way the plutocracy drains our wealth from us.

Do you know of more reasons why the Banking Fraternity loves Gold? Feel free to comment!

This article was written for Henry Makow.

More:
the Daily Bell: wrapping up
Discussing Gold and Interest with the Daily Bell
the Daily Bell: Response to Anthony Migchels regarding Gold at Henry Makow’s website
What Gary North is not telling you about Interest
On Interest

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