George Gilder indicts central banking, sees gold as the money of the future


10:31p ET Wednesday, December 23, 2015

Dear Friend of GATA and Gold:

Economist, author, and fund manager George Gilder has given a fascinating interview to Forbes contributor Jerry Bowyer, arguing that "gold is the money of the future," and he sounds much like the British economist Peter Warburton.

In his 2001 essay "The Debasement of World Currency -- It Is Inflation, But Not as We Know It" --

-- Warburton argued that the main objective of modern central banking is to deprive the world of a "stable numeraire," a lasting measure of value.

Gilder picks up on this point. "The key problem of money," he tells Bowyer, "is having it serve as a metric, as a measuring stick, as a way of valuing commodities. And it cannot. A measuring stick can't be part of what it measures. It can't change with what it measures. And today the measuring stick of currencies is established in an oceanic and turbulent global currency market that is 73 times larger than all the goods and services markets in the world put together, and some 200 times larger than all the stock markets in the world put together.

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"These are rough, huge magnitudes, but they convey a situation where the measuring stick is consuming the whole global economy. This is a major source of profits for the big banks that are in league with governments and the central banks. Essentially we have turned money into a meaningless self-referential loop that is totally divorced from any physical constant or any of the properties of measurement."

Gilder adds: "Interest rates are the time value of money, so when you have zero interest rates, essentially you are nullifying the information about time that money ordinarily conveys. So when money is divorced from time, the people who manipulate money with gigahertz computers or whatever can do fine. You have this huge expansion of finance, financialization of the economy, a hypertrophy of finance.

"But meanwhile the people who are caught back in the time economy, the people who are paid by the hour or by the month, can't benefit. So you have what's depicted as egregious inequality arising. But this is really the result of financialization, the hypertrophy of finance that results from the government campaign to nullify the time factor in money."

This seems like an indictment of modern central banking as a totalitarian system serving only the plutocracy closest to the money-creation machine.

Bowyer's interview with Gilder is headlined "Gold Is the Money Of The Future: Gilder's 21st-Century Case For Gold" and it's posted at Forbes' Internet site here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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