Friday, October 07, 2011

And That's the Political Truth

Let's face it. The real reason that I left my web sites off line for so long is that I've despaired about the ability of being able to communicate with other people.

I watched a video on NaturalNews.TV. In this video Bridget Brown argues that dollars are a better investment than gold because the dollar is backed by the might of the Federal Reserve while gold is backed by nothing.

I believe the reverse to be true. It is true that the value of a fiat currency comes from a political force. You need something really big and powerful like the Federal Reserve to make a fiat currency work. But politics is fickle. A fiat currency devalues if either the political force loses influence or becomes internally corrupt.

There is a long history of fiat currencies devaluing.

The value of gold lies in natural limitations. It is a scarce metal.

Now, I am pretty sure that a currency based on physical limits would outlast one based on political might.

People who already invest in gold would understand my argument.

Unfortunately, I cannot imagine any circumstance in which I communicate this idea to a person unfamiliar with monetary policy.

The US has a big impressive army and the Federal Reserve has a scary building with armed guards in the middle of town. There is a lot of political power behind the Federal Reserve.

People would have immediate sympathy for Ms. Brown along with awe of the might and power of the Federal Government.

Were I to try and argue with Ms. Brown, people would simply project false images and false motives in my direction until I shut up.

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