Gold Has and Likely Forever Shall Be True Money!

Some of you may have heard of the great Austrian School of Economic Theory and its prime writer and spokesman, Ludwig von Mises. He has gone now, but has left a legacy of great writings. Here is an excerpt of one of those on the "new" (It was relatively new at that time, since Nixon had closed the gold door severing the tie of the dollar to gold in 1971.) FIAT money policy. "The most remarkable thing about this allegedly new monetary policy, however, is its complete failure. True, it substituted fiat money in the domestic markets for sound money and favored the material interests of some individuals and groups at the expense of others. It furthermore contributed considerably to the disintegration of the international division of labor. But it did not succeed in eliminating gold from its position as the international or world standard. If you glance at the financial page of any newspaper you discover at once that gold is still the world's money, and not the variegated products of the divers government printing offices. These scraps of paper are the more appreciated the more stable their price is in terms of an ounce of gold. Whoever today dares to hint at the possibility that nations may return to a domestic gold standard is cried down as a lunatic. This terrorism may still go on for some time. But the position of gold as the world's standard is impregnable." (L. von Mises, The Theory of Money and Credit (Liberty Classics, 1980), p. 461)

It is interesting that central banks and governments always profess that gold has not the slightest relationship to money. They say it is a barbaric relic of days gone by. However, both entities retain a reserve of gold in their respective vaults. I am reminded that their actions speak much more loudly than do their words. What do you think?

When one understands the significance of this fact, he must favor gold as a preserver of purchasing power. There was a time when the $20 Gold Eagle would purchase a handsome $20 man's suit. Today, that same Gold Eagle is worth a handsome man's suit, but one can not buy the suit with a $20 Federal Reserve Note. Of course, the Gold Eagle is worth about $700 in Federal Reserve Notes. Not a bad preserver of purchasing power is it?

Gold continues to languish at levels I thought we would not see for a very long time.
For the last 24 hours the high has been $644.90 this morning and the low $618.30 very early this morning. It is currently $634.80. Almost all of the mining stocks are marginally up today. DROOY 1.59; IAG 9.72; NEM 53.30; SSRI 18.91, for a few.

This is Friday and the U.S. markets will be closed for the weekend. It is also time that each of us should prepare ourselves for corporate worship with other members of Christ's Household of Faith: Our churches gathering together on the first day of the week. This is important and I pray that each of you will take this as encouragement and will participate in worship of and praise to the Sovereign Lord of all.

Best to each, Doug