Professor Von Braun solves the mystery


11p EDT Monday, June 28, 1999

Dear Friend of GATA and Gold:

There's been a lot of favorable response to Professor
Von Braun's essay on the mystery of the gold market.

There also has been some response to Martin Armstrong's
essay, "Gold: Manipulation or Exaggeration. It follows

Gold Anti-Trust Action Committee Inc.

* * *

Mark Warnes writes:

"Nice essay. So let's sum up. We don't have a problem
with any of the hedge funds' practices in the gold
carry market. We don't have a problem with gold being
borrowed and then liquidated and then invested in, say,
bonds, etc.

"OK, now pull the other one."

* * *

Chris Diethelm writes:

"Martin Armstrong does not understand that in order
transfer the capital of the raw materials into an ever-
expanding perpetual debt system, the raw materials --
wheather oil, minerals, grains, etc. -- must be
squeezed downward until the very capital of the raw
materials is transfered to lenders.

"Gold companies have lost a considerable amount of
shareholders' money and are now forced to borrow or
change occupation to dot-com. The central banks have
won, for whole economies are placed on an ever-
expanding perpetual debt system. Gold is no longer
money but a commodity that has a not so good record as
a store of wealth.

"Land is taking gold's place. You cannot manipulate
land like gold.

"For me gold is a store of wealth for I have been using
it as collateral for a loan on land with as much as 4
percent under the prevailing rate. For me it has helped
a lot because; over the years I saved a lot of
interest, was able to get the loan from a private
source; and was able to buy land that increased in
value many times over.

"I wish GATA would educate people just how to do this
and save a bundle of money in interest paid to the
money printers while making money productive in
increasing the value of property many times over.

"This is the only way I know of to get around the very
credit expansion that is built on the sand of
banknotes. Look at history and you will find that all
wars were financed by these very bankers with credit
expansion built on banknotes. In the war in Kosovo both
sides were financed by the very same bankers; now they
own it. A very rich mineral source now has been

* * *

Perry Taka writes:

"Martin Armstrong recently emailed me a response
regarding my claim and that of other gold followers
that currency does not possess intrinsic value. That
is, currency cannot be a measure or store of value.

"He wrote: 'Your definitions are absurd.'"

"I maintain, as Adam Smith did, that labor is at the
heart of value, and because gold requires a goodly
amount of labor to get it out of the ground, there are
limits to any decline in the price of goldbut and no
limits to the devaluation of currencies.

"Armstrong writes, 'I suppose by your definition money
does not exist since 1934, and hence how could an
economy function? You must pay your bill with dollars
and you must work and your labor is paid in dollars.'

"But with each passing day currencies devalue and
thereby debase one's labor. While currencies devalue,
including the dollar -- it was once trading at 240 yen
to the dollar -- wages have remained stagnant, at the
level of around 1973.

"I believe what annoys Armstrong and other economists
like him who have severed all links between currencies
and the physical world is that GATA's position is
inherently on the side of labor, which that desires
sound money that does not debase labor, which is the
source of value as outlined by Smith."


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