An Annotated Paul Brodsky Responds To Bernanke's Latest Attempt To Discredit Gold

http://www.zerohedge.com/news/annotated-paul-brodsky-responds-bernankes-latest-attempt-discredit-gold

“First they ignore you, then they laugh at you, then they fight you, then you win.”
- Mohandas Karamchand Gandhi

"Our business, as fiduciaries, is allocating capital based on relative value within the macroeconomic environment we see as likely. In our opinion Mr. Bernanke’s lecture last Monday perpetuated bad or unimportant data, implied impossible outcomes, and was quite self-serving in its conclusions. His description of history was incomplete, his extrapolations were baseless, and his arguments were quite weak. (Ultimately we believe Fed policy will migrate -- or be suddenly reversed -- to meet the consequences of its current policies.)

As we pointed out only a few weeks ago following Warren Buffett’s unsolicited gold comments, (“Golden Boy”), and in December 2009 following Nouriel Roubini’s assertion that a gold bubble was about to pop (“Roubini Rebuttal”), gold is simply money - a savings (not investment) vehicle, a means of storing purchasing power in a time of paper money dilution. That’s it. Central banks compete directly with gold ownership because they manufacture competing savings vehicles in the form of baseless paper money. For the past twelve years global wealth holders have been converting their savings in increasing amounts from paper media of exchange (or financial assets denominated in them) to gold and natural resources. Why? Because central banks must dilute the purchasing power of their currencies to de-leverage the global banking system. 

They can’t dilute gold. Has anyone asked why so many powerful people are going out of their way to discredit an inert rock? We think it comes down to maintaining power and control over commercial economies. After professionally watching Fed chairmen cajole, threaten, persuade and manage sentiment in the markets since 1982, we argue this latest permutation is understandable, predictable and, for those willing to bet on the Fed’s ultimate success in saving the banking system (as we are), quite exciting. Gandhi’s quote above rings true. Gold is no longer being ignored and gold holders are no longer being laughed at. “The Powers That Be” seem to have begun a campaign to discredit gold."