Bloomfield/Embry's commentsYou stated;
And there is another issue as well. Why should the government control the price of any commodity? Shouldn’t the market decide how much gold is worth?
This is exactly what Embry and Gata have stated is happening; that the government is indeed controlling the price of gold.
You also stated
In an ironic twist, Alan Greenspan, the ex-Fed Chairman, is sympathic to the idea of a hard currency. He had this to say in 1998:If you are on a gold standard or other mechanism in which the central banks do not have discretion, then the system works automatically. The reason there is very little support for the gold standard is the consequences of those types of market adjustments are not considered to be appropriate in the twentieth and twenty first century. I am one of the rare people who have still some nostalgic view about the old gold standard, as you know, but I must tell you, I am in a very small minority among my colleagues on that issue.
I want you to know that Greenspan also stated that the fed stands ready to lease increasing amounts gold to control the price if the price should rise too much.
You also state;
Of this, the US government currently holds 8133.5 tonnes, or 5.16% of all the gold ever recovered in the history of human civilization.
Tell me why the US government very rarely or never sells it's gold? The question is do they really have the gold? How about an audit? It's not going to happen.
You also stated;
According to St. Louis Fed, as of Jan 29th, 2007 the M2 measure for money supply was $7.093 trillion dollars. I know that they recently dropped M3, but let’s stick with M2 for purposes of this discussion.
The question is why did they drop M3. The cost of creating this report was minimal. It's hidden because the amount of dollars to be released is going to be staggering.
Again you state;
And what does the Fed do? They set certain interest rates, decide bank reserve requirements, as well as trade government treasuries in open market operations, as tools to exert limited control over the available money supply. In short, they set monetary policy with the objective of maintaining an efficient banking system and to keep a tight rein on inflation.
If anyone believes the government posted inflation numbers than I suggest you do some further research. They use hedonics, substitutions etc. As an example with the interest rates so low that anyone or his dog can purchase a car or house; and we know where the price of houses have gone; they have substituted new cars and houses with used cars and rental units. Of course rents have not risen much, it's too easy to buy your own home. The actual inflation rate is much higher.
I also would not want to return to the restrictiveness of a total gold standard, nor do I think it will ever happen.
Dave