It’s Monday again (thank you Garfield). Looks like a flattish open in the gold markets. While we continue our waiting game, let’s think broadly about gold’s role in the money system. If we can call it a system at all… Gold persists as a store of value because people place value on it. And because the supply of gold is limited to what gets dug out of the ground, governments can’t really toy with the value of it like they can with local currencies, like dollars, euros, yen or pesos. It’s because of the jiggering with currencies – done in an attempt to fund political overspending – that people keep putting faith in “real things” like gold (and silver, and platinum…).
Last week Arizona sent a warning shot across the Fed’s bow by introducing a bill that would make gold legal tender, at least in Arizona. While it sounds like “local whining” it’s actually important, because if it passes it will force the Federal government to respond to the action in some way. It’s another warning shot by the states rights believers who trust local people more than far away people. Among other things. Here’s a column on the topic by Dr Ron Paul. Dr Paul, an actual MD who’s delivered literally thousands of babies in his practice, is as far from the weirdo the mass media tried to depict as you can get. In fact he’s one of the most decent, thoughtful human beings you could ever hope to meet.