“Since the gold standard determines the money supply, there is not much scope for the central bank to use monetary policy to stabilize the economy,” Bernanke said. “Under a gold standard, typically the money supply goes up and interest rates go down in a period of strong economic activity – so that’s the reverse of what a central bank would normally do today.”1

The speech is part of a larger publicity campaign by the Federal Reserve to push back against the growing public dissatisfaction with the corporation’s failure to satisfy their stated objectives “…to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” 2,3

This first lecture can be viewed in its entirety here:

Chairman Bernanke’s College lecture Series: The Federal Reserve and the Financial Crisis 4

Update

Ludwig von Mises Institute president, Douglas French, provided an effective rebuttal of Bernanke’s comments in the following article today:

Bernanke’s Deep Understanding 5

Sources:

1. http://www.reuters.com/article/2012/03/20/us-usa-fed-gold-idUSBRE82J17A20120320

2. http://www.federalreserve.gov/aboutthefed/section2a.htm

3. http://uscode.house.gov/download/pls/12C3.txt

4. http://bcove.me/ixbreqs2

5. http://bastiat.mises.org/2012/03/bernankes-deep-understanding/

After the Fed Chairman gave his opening testimony at the House Financial Services Committee on Wednesday, Feb. 29, Paul began by asking, “Mr. Bernanke, if you don’t mind, could you tell me whether or not you do your own shopping at the grocery store?”

In Paul’s view, the current inflation rate estimate is far too low.

“People on fixed incomes, they’re really hurting, the middle class really hurting because their inflation rate is very much higher than the government tries to tell them and that’s why they lose trust in government.”

According to Paul, this kind of inflation is “theft”. “If I don’t give you your full hundred dollars back if you loaned me a hundred dollars, I’m stealing ten dollars from you. So somebody’s stealing wealth and this is very upsetting.”

In case Bernanke had forgotten what real money looked like, Paul took a moment to politely remind him.

“I have a silver ounce here. This ounce of silver back in 2006 would buy over 4 gallons of gasoline. Today, it will buy almost 11 gallons of gasoline.  That’s preservation of value. That’s what the market has always said should be money. Money comes into effect in a natural way; not in an edict, not by fiat, by governments declaring it is money,” said Paul.

“The record of what you’ve done in the past six years is destroy the value of paper money at the same time real money is preserved,” he added.

Watch how Paul continued to lay the case for silver and Bernanke’s response, below.

Here is your chance to own an iconic design that represents everything from freedom and liberty to sound, honest, REAL money.

Against a field of stars and stripes, Ron Paul’s contemplative image adorns the obverse of this inspirational medallion.  It is reported that when the modest Ron Paul was first presented with the medallion, he asked who the “old and ugly gentleman on the medallion” was while also commenting on the design’s outstanding artistry and beauty.

On the reverse, the medallion’s weight and investment-grade purity of .9999 fine gold are etched neatly above the gold’s “Series C” face-value of 500 trade units.  The “AOCS Approved” stamped mark of excellence guarantees not only the weight and purity of the medallion, but also its acceptance as REAL money in the AOCS Marketplace.

This is a stunning addition to any collection as this commemorative medallion will surely become a representation of a vital time (and struggle) in our nation’s history.

Proudly and confidently purchase this medallion from any AOCS-Approved dealer including Provident Metals, who hold the utmost respect in the precious metals industry.  Get yours today!

2012-02.08 – What’s a Penny Worth – Complete

The statement of purpose for HB 578 is as follows:

This legislation provides for the voluntary use of gold and silver coin as legal tender in the State of Idaho as an alternative to the Federal Reserve Notes that currently circulate as our only currency.

The full Statement of Purpose can be read here.

The other notable part about HB 578 is the exemption of state tax on transactions completed with gold or silver:

PROHIBITION OF CERTAIN FORMS OF TAXATION. (1) A transaction

38 entered into by any person subject to this act which involves the exchange of

39 (a) any gold or silver coin, which shall be legal tender under the provisions

40 of this act for (b) some medium of exchange, other than gold or silver coin,

41 which has been designated legal tender under the laws of the United States

42 shall not be subject to any sales, excise, gross receipts, income, capital

43 gains, or other form of tax or public charge whatsoever under color of the

44 laws of the state of Idaho. (emphasis added)

The full text of the bill can be read here.

Idaho is among many other states, such as Colorado, Missouri and Washington, that have recently been working on legislation that declares gold and silver coin as legal tender.

Related news story.

Article I, Section 10 of the U.S. Constitution:

“No State shall…make anything Thing but gold and silver Coin a Tender in Payment of Debts.”

Colorado SB 12-137

“(2) The gold and silver coin issued by the government of the United States or authorized by law is a currency that is  legal tender for the payment of all debts between the citizens of this state and may be received in payment of all debts due to the citizens of this state and in satisfaction of all taxes levied by the authority of the laws of this state.”

The bill cleared the Senate Committee on Finance on Tuesday, February 14, by a 5-2 vote.

After consideration on the merits, the Committee recommends the following:  SB 12-137 be referred to the Committee of the Whole with favorable recommendation.

After SB 12-137 receives its second reading, it will be passed, amended, defeated, laid over until another day, or referred back to committee.  If it passes, it will move to a third reading for final passage.

The full bill can be read here.

The full schedule for today can be read here.

The Senate Committee of Reference Report can be viewed here.

The news story can be read here.

According to the story, Kath Bishop, of Seiad, CA, was placing stakes in her garden where she wanted to plant seven fruit trees.  She then decided to move the spot where she was going to place the stake for the seventh tree.  As she dug the hole, that’s when she discovered the gold coins.

The gold coins weigh 1 ounce each. Although their face value is $20.00, at today’s price of gold of $1,722.00, the 41 coins are worth about $70,000.00.  However, this is just the intrinsic metal value alone.  These coins may be worth much more due to the collectible value of the coins based on when they were minted, which range from 1875 to 1896, and where.  For example, here is an 1875 Liberty Head Double Eagle $20 coin on ebay that was minted in Carson City (CC), currently priced at $9,400.00 (far exceeding the metal value!).  Other coins minted in other locations are going for around the $2,000 range.  Whatever the collectible value, these 41 gold coins were certainly quite the find.

The full story can be read here.

Workers renovating a vineyard facility in France hit the jackpot, literally. As one worker began tearing at the ceiling with a crowbar, gold coins began to fall. Then, sacks of gold coins began to fall.

In total, 497 U.S. gold coins were found in the rafters of the old building. The story states that at 17 kilograms of gold, the value of the coins is estimated around $980,000.

The full story, with additional photos, can be read here.