tag:blogger.com,1999:blog-53246864840716464.post117918761918762821..comments2024-02-29T00:46:38.800-08:00Comments on Washingtons Blog: Greenspan: “Fiat Money has No Place to Go But Gold ... All Currencies are Moving Up or Down Together ... Gold is the Canary In the Coal Mine"Unknownnoreply@blogger.comBlogger1125tag:blogger.com,1999:blog-53246864840716464.post-11751718256426642772010-09-23T15:36:17.536-07:002010-09-23T15:36:17.536-07:00On a quick thought, Bernanke is somewhat wrong (ag...On a quick thought, Bernanke is somewhat wrong (again): the references are fundamental commodities such as grain and oil (housing too but this one has been extremely manipulated and inflated already and is much overpriced in most developed countries - artificially by market manipulation schemes supported by governments). <br /><br />Gold is just a refuge value, like Picassos, but not something that has a (large) market outside the financial one. In the end gold is also a fiat currency. In fact in an emergency situation gold may be totally worthless (valuable only as long as others trust and want it) while grain is a sure inversion (because we all, even the "Midas" of today) have to eat. <br /><br />However grain and such are, like gold itself, being propped in prices by the lack of trust on what? Markets? Maybe. But what makes markets possible and safe? The states! (Or equivalent mafioso organization, like in Somalia and other 'no-go zones'). And the states and other similar institutions like EU, and the WB-FMI-WTO conglomerate, are what are losing credibility as we speak. This is not only but largely centered in the loss of credibility in the USA as organizing and stabilizing superpower and its tactic of devaluating its own debt by devaluating its currency, which has been the real monetary reference for long. Investors looked briefly to the euro but it was sabotaged and/or exposed, they would buy yuans maybe but there is no real market (so far) for this artificially low currency: you can't trade in short only in long term (expecting the Chinese currency to be re-valuated and allowed to fluctuate freely many years from now - maybe). <br /><br />In the end it's that governments are not pulling their weight in the responsibility of guaranteeing a global market and there is no real international institution that can (it used to be the USA but now is justly perceived as weak and decadent). There are moves to create a convertible reserve super-currency but it does not look too promising. <br /><br />So what is valuable? What people (and investors and speculators demand). People need homes and food, little more if you push it (there are some other things maybe but are complicated to marketize, specially at global scale). Homes may be squatted or even improvised (slums) but grain (food) is and has been since Neolithic used in that way, with variants. <br /><br />The emphasis in biofuels has of course driven the prices higher, what would bring me to another key product: oil (or more in general fuels that can feed machines and hence production and consumption, and hence the productivist/consumerist market economy as such) but this is more complicated and I have already said a lot.Majuhttps://www.blogger.com/profile/12369840391933337204noreply@blogger.com