Ron Paul : Why do central banks hold Gold? Bernanke : Tradition

This is exactly why the USDollar is doomed (see Youtube video below).  Our Fed Chairman doesn't even understand what money is.  You want to know why gas at the pump has almost tripled in two years?  Or why commodities and food prices are soaring?  Or why people in poor countries are rioting in the streets?  Here's a hint:  It's not about evil dictatorships or oppressive governments.  Many have lived under totalitarian government regimes for centuries and decades.  The reason why they're taking to the streets is because they cannot feed themselves due to soaring food prices.

Food may represent 5% - 15% of typical American household incomes.  When food prices rise, we complain to our neighbors.  But food makes up 80% of Libyan or Egyptian household income.  When food prices rise, they literally starve.  That's why they are rioting.  Otherwise, why would they risk life and limb?

The sources of worldwide rising inflation are the easy money policies of central banks from the European Community, the UK, Japan, the Fed, and even China.  They are all turning on the printing presses in order to paper over their own economic and fiscal problems.  They're also bailing out bankrupt institutions and sovereign nations.  In doing so, they debase paper currencies, causing prices to rise all across the spectrum globally.

During previous testimony, Fed Chairman admitted he was "puzzled" by surging gold prices.  <click here> Today, he tries to explain why.  He still doesn't get it.  Or maybe he does, but can't say.  And he doesn't understand his unintended primary role in causing currency-induced, cost-push inflation.  The end result is hyperinflation and a loss of confidence in a currency.

"Gold is money, and nothing else." - JPMorgan, 1913
 

http://youtu.be/2Dj9v9s9buk