GoldMoney: "In gold we trust?"

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  1. rbaggio

    rbaggio Active Member Silver Stacker

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    Matthew Bishop and Michael Green discuss their new book 'In Gold We Trust?' with the GoldMoney Foundation's Dominic Frisby. The three discuss what factors are driving the bull market in gold, and whether or not a return to some form of gold standard is desirable. Matthew Bishop is New York bureau chief at The Economist, while Michael Green is an economist and writer who used to work as a senior civil servant in the British government.

    Bishop and Green are of the opinion that governments and central banks around the world will continue to try to inflate their way out of the debt crisis. This will continue to lift gold prices, though the authors are uncertain as to when quantitative easing will translate into a sustained rise in consumer prices. Both journalists think that politicians do not have the will to pursue the alternative --deflationary austerity -- and that in any event, such a solution would be incredibly unpopular with voters. So inflation is the only way out -- barring some kind of miraculous economic recovery, which they deem extremely unlikely.

    The three conclude by discussing whether or not gold will return to some sort of formal role within the financial system. Bishop and Green think it unlikely that we will return to a system where governments are obliged to redeem currency for gold. However, given the growing dissatisfaction with the fiat US dollar's status as world reserve currency, they think it possible that gold may become increasingly important as a reserve asset -- a form of money between governments. The authors think that the gold price could accelerate beyond $5,000 per ounce once serious inflation kicks in, as ordinary people will look to gold as a means of preserving their purchasing power and wealth.

    [youtube]http://www.youtube.com/watch?v=6GrI8rywa9s[/youtube]
     

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