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Oh the Tangled Web We Weave...When
We Set Out to Deceive
by Professor von Braun
October 29th, 2000
Perhaps it's the fact that Halloween is just around the corner or maybe it's just the smell coming from Wall Street these days, all that burning rubber as stock markets spin their wheels and can't quite decide upon an actual direction. Who knows? Perhaps it's a sign of the coming election with it's untold lies about prosperity, budget surpluses, computers in every home, education for all (that one always gets me, as in what have American schools and universities been doing for the last 200 years?) and a burning desire on the part of some candidates to take care of "you" -- the same "you" who are apparently very prosperous after these 8 years of great prosperity and don't need to be taken care of anyway. Figure that one out! If everybody is so prosperous, why do they need to be taken care of?
Or perhaps it's the continual blows in US $ terms to the gold market that appear as falling prices on a daily basis, along with the slow death of the XAU index. Or maybe it's the demolition derby being played out in the world currency markets as we see some currencies making new lows, yet again that give me the sinking feeling every time I watch either CNBC or CNN. I don't know, but what my instinct is telling me is very, very different from what I see and hear in the popular world of bubble-vision.
Somebody in authority is ignoring all the usual yardsticks of economic determination and has developed an apparent suicidal tendency, which can only at best have a very negative impact on the savings and retirement plans of millions of people. At worst it -- the suicidal tendency -- could throw the world into a major depression, which would see a major shift in how we respect currencies.
With all due respect Mr. Greenspan, but given some of your mind-boggling statements over the past several years, the question has to be asked, "Have you gone mad?" Are you addicted to the same disease as befell young Nick Leeson at Barings Bank, the trader who made a bad bet and then continued to a) hide the error, and b) increase the bet, convinced that he would win eventually, only to bring down the bank itself?
Are your actions contributing to my feeling of uneasiness when it comes to the true state of the much-touted American prosperity? You making such statements as "Central Banks stand ready to lease large quantities of gold should the price rise" and further, in response to a question from Congressmen Paul re the management of the money supply, you said "It is not possible to manage something you can't define." Now pardon my confusion but as I understand it, what that means is that the $100 bill in my pocket may have a value or it may not, but you as the Chairman of The Federal Reserve, who issued this Federal Reserve Note, have no clear definition of the value of my $100 bill, since you can not clearly define what it is. Is this true? Is this what you meant to say? If it is then pray tell, how should I measure what I am worth? How can I arrive at a clear definition of my net worth? If you as Chairman of the Federal Reserve have no idea of how to measure the value of my $100 bill, who does?
Should I ask my two year old son for an accurate definition? Should I explain to my wife that I believe that our retirement plan is sound, except for one little snag, which is perhaps best described as, "The unit of money (whatever that is) we are using as a measurement of our wealth, can not be accurately measured, or defined by the chairman of the authority that's issuing it."
Well I know what her response will be and I do not intend to deal with it. No sir! She can call you and you, or one of your many associates can explain to her what you actually mean when you say you need to find a more stable proxy for what you believe is the underlying money in the economy. Be careful though because "she who must be obeyed" already believes you have a stable proxy and we are the proud owners of it. She is tough to argue with if she thinks you are wrong so be prepared for the worst.
Regardless of your response, I personally am prepared to take your statements at face value and convert my US $100 bills into something that does have a much clearer definition. Having reviewed your statements in public forums, including Congress and the Senate over the years, (I did not know that you enjoyed WC Fields so much)- I have decided against: Mexican Pesos, British pounds, Swiss francs, Japanese yen, Brazilian reals, sharing in the new economy that you have referred to on the odd occasion and my local bank, whom I know has ignored your warnings about risk and lent to all sorts of funny ventures.
No Sir! I am going to take my grand daddy's advice and trade my $100 bills that have, according to your good self, no definable measure of value and buy gold, from a very reputable dealer of course. One who can clearly define at the very least the purity of what I am buying. No disrespect intended, but if you can't clearly define what is money, who, pray tell can? And good luck with the phone call from the wife, she is Romanian by the way and has had experience with funny money before today.
In addition and all joking aside, could you please explain the distinct feeling of uneasiness I experienced during my recent visit to New York City this past week? Some of the people I spoke to (including a couple of investment bankers, the odd economist and a lawyer or two)) where quite convinced of the idea that the un-measurable (your definition per your response to Congressman Paul) unit of currency in this country that is referred to as money may be heading for a major devaluation, due to the fact that you have increased to an unheard of level the supply of these un-definable "ratio's of goods for money". Have they recently heard about your problem of recognizing that money is NOT unimportant, but how you define it is. Why does it need to be defined? I thought it already was. Silly me. Do you mean it's not defined and we, the gullible public, are constructing 401k plans based on a unit that has no clear definition? Tell me this is not true.
Or are you playing some other game in which we, the unsuspecting public, are not other than a disposable pawn? If so, I strongly recommend that you call Al Gore, whom sees a tad naîve when it comes to spending these un-definable units of exchange and explain the story of the birds and the bees to him. You know, the one about reproduction, nature, over abundance and the tricky part, sex, that un-definable activity that gets everybody in trouble. Especially when you appear to be acting in an over zealous fashion and want to inseminate anything that comes your way, with of course the help of your un-definable substance and turn it into something that you can't manage because you can't define it.
Where were you when I needed you? Think of the fun I could have had as a teenager with my un-definable, un-manageable, un-measurable substance.
However having grown older and perhaps a tad wiser I shall adhere to my grandfather's advice and regardless of how loose your fellow central bankers shall get with their store of available yellow metal, I shall be only to happy to exchange my $100 bills for something that is at the very least definable and tangible while I still can.
We suspect that the October effect will spin over into November this year. Anybody that assumes a bottom is in for the various stock markets around the world and that new highs are only weeks away may inadvertently join the growing list of the new poor. That's the not-so-nice thing about paper assets; when they lose value they tend to be very good at it...here today and down 90% tomorrow.
The Prof can be contacted by email at firstname.lastname@example.org
Copyright by Professor von Braun. All Rights Reserved. Reprinted at USAGOLD by permission.
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