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Have You Caught Gold Fever? The Value of That Shiny Metal Is as Artificial as Paper Money

The economic doomsters and investment advisers are engaged in a collective hallucination when they see growing value in gold.

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It should be a well-attended affair, given the inevitable flight to gold after the housing bubble imploded under the bloated weight of other notional value instruments like CDOs, SIVs, MBSs and other alphabet-soup investment stratagems. Before everything went to holy hell in 2007, gold was trading around a lavish $600 an ounce and holding steady. After the meltdown, it has nearly doubled. And if GATA is to be believed, the value of physical gold could be many times more than that, which would put its price of security somewhere near $4,000-$5,000 an ounce. That's security out of the range of normal world citizens, but well within the reach of those either rich or hip enough to gold's so-called real value.

Which, in a sense, is GATA's main point: Rigging the gold or any other market for the purposes of making oneself rich at the public's expense is a dishonest affair. And it should be stopped. GATA believes that process begins with transparency in gold.

"The gold price manipulation scheme is the fraud that makes all other frauds possible, the scheme that enables the rigging of all markets and the very wealth transfer you complain of," GATA treasurer Chris Powell told AlterNet. "Ending this fraud will make it a lot harder for the others. GATA advocates free markets. But even more than free markets, GATA advocates our right to know what our government is doing, especially when it attempts to set the value of all capital and labor."

Labor of Luck

In this sense, GATA's mission is a positive one. Those who truly fear and openly oppose transparency are usually the ones with something to hide. But what's out in the open is that gold's real presence on this Earth is annually declining: Global gold output has steadily declined, as has the global economy's reliance upon its fractional standard. These are no accidents. As a natural resource, like the much more valuable oil and water, its real-world power is finite. But as a notional signifier, GATA and other goldbugs seem to believe that gold's value is being unfairly restricted. Which on its face seems illogical: If anything, the world needs much more water and oil than it does gold, silver, copper, diamonds or other precious metals and minerals. And just because, like oil, all of the easily obtainable sources of gold have already been found and plundered doesn't mean gold's price, like oil, should go up. It should go down, as its inherent inadequacy to our 21st century, an age of quickly decreasing natural resources, becomes more apparent. And it is apparent.

So it's a delicate balance. Exposing the obvious gold suppression of the last century -- one in which the global economy was trying to unhitch itself from the gold standard, to the anger of those elites who owned it and saw their bank accounts plummet -- is a tightrope worth walking. But not because the world needs to turn back the clock on the gold standard at the expense of fiat currency. In fact, exposing gold as just another fiat currency, a pretty notional nugget you can wear on your finger much like dollars line your wallet, is overdue. Which is why the mark in the first paragraph didn't fall for the conspiracy theory. Everyone already knows gold is fake money disguised as real value.

But the incessant pounding on fiat systems like the dollar, euro and even the guinea-pig currencies of the emerging market -- which are merely playthings for hedge funds, economic superpowers and worse -- is counterproductive. Especially if the opposition comes at the expense of the dollar's purchasing power, which it inevitably will, for the benefit of gold's notional value. If that happens, those who have the gold will make the rules more than ever, not less. If the dollar dies, so does the United States as we know it. Of course, taking the veil off gold won't be the only Cesarean knife plunged into the republic's back.

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