Gold and Economic Freedom

Published in Ayn Rand’s “Objectivist” newsletter in 1966, and reprinted in her book, Capitalism: The Unknown Ideal, in 1967.

By Alan Greenspan

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense — perhaps more clearly and subtly than many consistent defenders of laissez-faire — that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.

In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society.

Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.

The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization. If men had no means to store value, i.e., to save, neither long-range planning nor exchange would be possible.

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Double Bottom in Gold as Federal Reserve Wimps out on Raising Interest Rates

By Mario Innecco

With the Federal Reserve looking like it is wimping out on raising rates in June 2015 and the dollar index crashing back below 100 it looks like gold has bottomed and formed a double bottom. At the latest FOMC meeting on the 18th of March, 2015 the Federal Reserve downgraded its view on the U.S. economy.

Jan Hatzius of Goldman Sachs now sees the first rate hike in September and last year GS was talking about a March or June hike. The strength we have seen in the dollar these last few months was based on expectations of rate hikes by the Fed so I think the FX/Gold market could get pretty wild as expectations of these rate hikes by the Fed dissipate.

Don’t forget that we have seen major market disruption in the September/October period in 2001 and 2008 so it looks like we could see some kind of financial market turmoil later on this year during the same September/October period. It could be that we have a seven-year cycle coming up then. Shemitah comes to mind! The FOMC meets on the 16/17th of September so it will be interesting to see if the Fed restrains from raising rates because of market turmoils or whether market turmoils results as a consequence of the Fed raising rates.

The price objective for the double bottom would be around $1460. Time wise I would say it could happen within the next three months.

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