The case for owning gold...

Monetary inflationists from the Austrian School of Economics are in direct opposition to Keynesian economics largely accepted by our Administration, Congress, bankers, central bankers, academics, and mainstream economists.

Hence, the vast majority believe the only escape out of a financial meltdown is to flood the markets with liquidity. Essentially, they mistakenly believe solving a debt crisis with even more debt is the corrective action. It's analogous to offering greater amounts of booze to an alcoholic, and hoping that somehow cures him of his alcoholism. Our current and previous Fed Chairmen, Secretaries of Treasury, Presidents and Congressmen have all espoused these fiscal and monetary policies--some more than others.

So guess who wrote this in their essay back in the day--before he climbed several pay levels within our government:

But the opposition to the gold standard in any form – from a growing number of welfare-state advocates – was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale… Thus, government deficit spending under a gold standard is severely limited.
The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which – through a complex series of steps – the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold…
The law of supply and demand is not to be conned. As the supply of money increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy’s books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold… The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists’ tirade against gold. Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

Ready for the answer? It was former Fed Chairman Alan Greenspan, who is commonly roasted today for causing the real estate bubble by implementing easy-money policies earlier this decade. With hindsight, his critics point out that Greenspan caused the mortgage crisis by artificially creating a bubble in real assets, while our country amassed billions in deficit. What those same critics don't mention is that Bernanke, Geithner, Obama, and Congress are all colluding to construct those same deficits--only on a much larger scale. After all, deficits of a few trillion here or there are minor inconveniences, right?

Age and power seem to have corrupted the former Fed Chairman. Although his critics are quick to denounce his policies of the past, they are advocating the same strategy which they are criticizing. The difference this time is that the numbers are horrifically astronomical.