Wednesday, January 11, 2012
Gold and Economic Freedom - From Ribawi Curse
A young Mr. Greenspan wrote in his 1966 essay Gold and Economic Freedom, "Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statist' antagonism toward the gold standard."
All money managers must define some sort of investment philosophy. But today, to ignore the issue of money is putting the cart before the horse. The nature of money must be an integral part of that philosophy. Normally, this should not be necessary, but we do not have free markets or free banking. Money has been politicized.
True diversification must include real assets along with the fiduciary assets. They have always been linked, as we are about to learn. Today investors must understand fully the nature of wealth. For the survival of wealth goes well beyond the field of conventional money management.
Economics and investing divorced from political ethics and the theory of money are vacuous and irrelevant. That is the message coming from these monetary firestorms, like Argentina.The progressive breakdown of world currencies has throttled economies and devastated global wealth. We need only look to the wealth destruction in Asia, Japan, Korea, Russia and Latin America to understand our future. In the absence of sound money fiduciary assets denominated by that fiat currency are eventually devastated. Paper money and government bonds are not wealth.
Our enemy is ignorance. The Federal Reserve Note is an instrument of debt, not of value. Fiduciary assets are only indirect forms of wealth. Honest money is the necessary foundation for financial assets and their performance. With our monetary system in collapse, financial assets will be the "killing fields" for wealth. In order to preserve wealth today, you must be financially independent of our current monetary system. And that means gold, which is the most liquid of all real assets. Gold is immune to default or devaluation.