I can’t remember the last time I watched the local news. It’s probably been at least two decades – and for good reason. It tends to consist of people repeating information on topics that they have little inherent knowledge of. Take a look at the clip below in which the reporter attempts to explain the recent drop in the price of gold. She claims that people are starting to see the dollar as a safer investment than gold, as it is backed by the US Government and the Federal Reserve. She notes that gold, on the other hand, is backed by nothing. Is it any wonder that Americans are completely ignorant as to the true nature of money and our monetary system?
So, is this the same US Government whose debt is so large that even a moderate increase in interest rates would render that debt unserviceable? Or a Federal Reserve whose chairman has promised to dilute the purchasing power of the dollar to stave off a recession? A recession that is desperately needed, by the way, as it represents a healthy, corrective process. How would this reporter back up her comments when presented with a chart showing a 98% decline in the purchasing power of the dollar since the Federal Reserve’s inception in 1913? Or the fact that gold has actually increased in purchasing power over that same period?
Here’s a concept that is completely alien to Americans: How about being able to successfully save for retirement without any investment risk, or even the need to earn interest? This is how it once worked before the government forbade gold’s use as money. What a pleasure it would be to know that your savings would actually purchase more in the future. How unthinkable is it that you didn’t even have to earn a return on your gold money as it wasn’t constantly losing its value each year? How nice would it be to avoid the casino-like atmosphere of the stock market and your 401k?
And when gold was money, you didn’t have to pay taxes on its retention of purchasing power. Whereas with the dollar, when you are successful enough in your investments to cancel out the loss of purchasing power that occurs as a result of inflation, you are required to give some back anyway in the form of taxes. Don’t expect to find any of this on your local news, however.