The Debt Deal Doesn’t Even Glitter

When Bernanke said a few weeks ago that “Gold is not money,” the only useful information he conveyed with this statement wasn’t anything about the nature of gold, but only about his own mental state. For a banker to say “Gold is not money” when banks all over the world – and even in the US – hold gold as money reserves only reveals that either that banker never really knew what banking and money is all about, or that he is oppressed by a heavy form of schizophrenia.

Anyway, enough with Bernanke; no need to beat a dead horse. Hardly anyone anymore has any high expectations of him.

The problem is, gold is money. And it is real money, money that never lies. It tells us the real value of things. It even tells us the real value of that counterfeit money, the U.S. Dollar, that Bernanke keeps producing more and more. And, through the U.S. Dollar, it tells us the real value of the U.S. Economy. And – something Bernanke and his bosses are utterly afraid of – gold tells us the real value of the political decisions our “representatives” in Washington DC make. At the end of the day, everything is compared to gold; and gold tells us what everything is worth.

When the debt deal was struck, it wasn’t a “victory of the Tea Party,” no matter what the mainstream media tell us. It was a good ol’ boys’ deal with a lot of double-speak and deceptive verbiage. Immediate savings . . . over the next decade. Spending cuts . . . by decreasing the increase in spending. And so on.

And the best one: The markets will be disturbed by the uncertainty. As if there is any uncertainty about the fact that the U.S. Government will never be able again to pay its debts; and as if the markets don’t really care about it.

May be the propaganda deceived many, I don’t know. I know though that if I want to understand what’s going on, I need to ask the gold market. Dow Jones is not reliable anymore; it only registers the exchange ratios between one form of counterfeit money – stocks – and another form of counterfeit money – U.S. Dollars. No one can counterfeit gold.

Within a day – on that same August 2 of the “historic” debt ceiling deal between one group of socialist politicians and another group of socialist politicians – the price of gold went from $1620/oz to $1660/oz. On August 3 gold was traded above $1670. That’s a loss of value for the U.S. Dollar of 3% for less than 24 hours, in response to the debt ceiling deal. Given the fact that the U.S. Dollar represents the U.S. economy, and given the fact that the U.S. GDP is about $14 trillion, this means that gold looked at the debt ceiling deal and decided that it devalues the American economy by $420 billion (3% of $14 trillion). That means that more people with money – scrap this – people with fake money, that is, U.S. Dollars, are willing to exchange it for real money, that is, gold. In terms of unchangeable value, gold, America just lost equity to the value of $420 billion, in one day. Which wouldn’t be of a great concern, if there wasn’t debt to pay. The USA is now in the position of a homeowner who can’t make the mortgage payments, and neither can he sell the house to cover the mortgage because the market value of the house is rapidly decreasing.

And as if gold price wasn’t enough, oh my, even Wall Street today is showing signs of panic. Nothing is improving, apparently, in result of the debt ceiling deal.

The propaganda of those who struck the deal, both Republicans and Democrats, made it seem as if the deal was as good as gold. But it doesn’t even glitter, two days after it was made. Even on the same day investors rushed to buy even more gold, in order, to use the words of Bernanke himself, to deal with the greater uncertainties the politicians have created in the world. No matter how Boehner explains it, it was a betrayal of those who elected him and the other Republicans to rein in the spending appetite of Monster DC. And this time no amount of media polishing will create any glitter: The truth is, the deal was immoral, anti-American, and it played to the interests of the current criminal administration in the White House.

And the American people are beginning to feel it with their pocketbooks. Propaganda has never been a successful substitute for reality; not in the long run, anyway.