It’s hard to say which lie about gold is the biggest whopper.
Many widely held beliefs about gold are lies – propaganda hammered home to have us believe the only true measure of wealth is government-issued debt.
Big Lie #1: Gold is a barbarous relic.
Repeated for decades, this misquote of 20th century socialist economist John Maynard Keynes perpetuates a lie exploited as an almost biblical prophesy of gold’s demise.
What Keynes actually wrote in 1923 was “the gold standard is already a barbarous relic.” Big-spender Keynes was advocating legislation to demolish gold’s restrictive power over government spending.
While the classic gold standard (gold backing paper money) no longer officially exists, governments buy and sell gold around the clock.
Their economic prestige is still measured by the tonnage of gold they claim to possess.
What’s true is every individual holding gold has adopted his own personal gold standard. They disagree that gold – and the gold standard – are “barbarous relics.”
Big Lie #2: Gold pays no interest.
This silliest lie of all is meant to portray gold as lower class. But no wealth instrument pays interest until transferred to a counterparty. Gold handed to a counterparty does pay, but it’s not called “interest.” Central bankers know that calculation as the Gold Lease Rate (GLR), where gold serves as collateral to lower interest costs when borrowing dollars in “gold swaps.”
Swaps and leases are often code for selling.
What’s true is your dollars don’t pay interest at all, until you give away your controlling possession to a counterparty – like putting your cash in a bank or loaning it to a relative. And the interest you’re paid for taking such risk is heading to zero or negative.
Big Lie #3: Gold will be confiscated, just as in 1933.
This is the lie most useful to government because it has frightened so many away from gold. The “confiscation” was actually a paid-for expropriation, which outlawed “hoarding,” not owning, gold. Franklin Roosevelt left millions in gold legally in Americans’ hands. His order was largely ignored anyway.
