Liberal WashingtonPost blogger Ezra Klein who earned himself a spot in SD’s Hall of Shame in January when he bashed gold stating that the metals is worthless because not only can you not eat it, but you also cannot build your house with it or use it as ammunition, is back at it again.
Commenting on the Republican Party’s announcement last week of a Gold Commission to look into the return of a gold standard in the US, Klein states that the policy is ‘A Clown Idea, Bro‘.
Actually we happen to agree that a gold standard is ‘a clown idea, bro‘, but not for the reasons Klein has in mind. What we actually need is not a gold standard, but the return a bi-metallic gold AND SILVER standard.
As you might guess, Klein has a different reason for calling a return to a gold standard ‘a clown idea‘. He states that ‘inflation is about as low as it’s ever been‘ and that inflation is expected to remain low. Apparently Mr. Klein has absolutely zero understanding of what inflation actually is (inflation of the money supply, which this chart begs to differ with Mr. Klein that inflation is as low as it’s ever been) or personally purchases any basic goods such as food or gasoline whose resulting PRICE INFLATION have been soaring the past 10 years.
Klein goes further: ‘There’s no inflation problem. The head of the Federal Reserve was originally appointed by George W. Bush and is credited by most observers as having headed off a potential Great Depression through creative monetary policy. And so what does the Republican Party want to do? Well, according to a draft of the party’s platform, they want another Gold Commission.’
Yes Ezra, your hero (who we prefer to refer to as The Bernank or the ChairSatan) headed off a potential Great Depression in 2008 through creative monetary policy. He, with the help of Vampire Squid Alum Hank Paulson stole $700 billion from US taxpayers and gave it to JP Morgan, Goldman Sachs, AIG, Morgan Stanley, CitiGroup, and Bank of America.
You are correct that this $700 billion theft as well as QE1 and 2 temporarily headed off an imminent Great Depression…essentially kicking the can down the road for a few more years at the cost of a MUCH MORE MASSIVE AND DEVASTATING COMPLETE DEBT COLLAPSE when the end of the road is reached.
Klein also argues that were a gold standard re-instituted, ‘the Fed would have little ability to act as a lender of last resort to the banking and financial system. The kind of liquidity injections it made to prevent the financial system from collapsing in the autumn of 2008 would become impossible because it could provide additional credit only if it somehow came into possession of additional gold. Given the fragility of banks and financial markets, this would seem a recipe for disaster.‘ He concludes that ‘proponents paint the gold standard as a guarantee of financial stability; in practice, it would be precisely the opposite.‘
Actually Mr. Klein, a gold standard would provide zero guarantee of financial stability (see the roaring 20’s and the subsequent Great Depression)- a free floating monetary system of gold and silver along with regular debt jubilee’s are the only solution to provide long-term financial stability.
What a gold standard would do however is help prevent the common man’s blood, seat, and tears being lifted out of his back pocket quiet as easily through the Central bank theft of inflation.
Something tells us Stephen Sondheim had Ezra Klein in mind when he composed Send in the Clowns in 1973.
Click here for Ezra’s missive and 2nd effort worthy of enshrinement in the SD Hall of Shame