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The wise and wary are taking shelter in gold bullion.

August 31, 2011 – Gold bullion prices are resisting Wall Street’s feel good downward pressure, a sure sign that fewer and fewer people are buying into the propaganda every day. But that is just sour grapes; the citizenry thinks the government should be taking care of them and not the fat cats on Wall Street.

In the first place, stop blaming the government – they are just following orders from the Fed. You can’t lay it on the Fed either, because they are a fully dependent subsidiary of the banking industry. And we all know that the mega banks are there for our protection.

Now that we can accept the Fed’s benevolence, let’s take a peek at the August minutes. “Most members thought that it could contribute importantly to better outcomes in terms of the Committee’s dual mandate of maximum employment and price stability.” You have to feel good about that.

Just how a central bank can do anything to maximize unemployment may seem mysterious, but that is only because we are too ignorant to understand the Fed’s complex machinations. Fortunately they had the foresight to know that we little people would be frightened out of our wits if they were forced to explain what they are doing, so most of what they do goes on under a burqa of secrecy.

Just as long as the Fed can “contribute importantly to better outcomes” we should all be comforted. They have done such a good job of it lately. And we should be greatly encouraged that “a few members felt that recent economic developments justified a more substantial move.” Of course they agree that calling it QE3 could prove unsettling to the growing number of rabble rousers out there.

So the problem becomes one of sneaking it past us, for our own good, of course. They could, for instance sell off bills that are about to mature and then buy up more with long maturities. Abra cadabra – free money! A bunch of new debt has been monetized with just a few ticks on the balance sheet.

Who needs gold when money is free? Well, the problem with free money is that it is worth what was paid. That reality is settling in. Whispers of negative interest should make even the most gullible shake their heads in disbelief. The Fed, locked in a losing battle, is bound to run amok as it struggles to justify its existence.

The Wall Street Band will keep playing as the ship goes down, but the wise and wary will long since have taken shelter in gold bullion.

Daily Updates Archive

Jonathan Monroe

Senior Staff Writer -

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