Why Do Gold Bashers Have a Stage?

By Jon Forrest Little

It’s often a clash of worldviews.

Back in 2011, Ron Paul, a Republican U.S. Representative from Texas, questioned Ben Bernanke, then chairman of the Federal Reserve, about gold during a U.S. House Committee on Financial Services hearing.

Paul argued that gold is an indispensable store of value and a hedge against inflation and default. Paul also pointed out that gold has been money for 6,000 years.

Bernanke, on the other hand, argued that gold is not money. When pressed, he stated that central banks merely hold gold (instead of diamonds, for example) because of “tradition.”

After a subtly smirking Bernanke denied that gold was money, Paul knew there was no need to continue the questioning. Ron Paul closed just like he began. He was confident, concise, and victorious, whereas Bernanke used double-speak and deflection.

Bernanke could be called a gold basher or a “paper bug”. But he is not alone.

Christopher wrote some wonderfully insightful articles on this topic that are worth your time – such as The Ugly Truth Why Your Stockbroker Doesn’t Want You to Buy Gold or Silver and The Seven Biggest Lies Told (and Believed) about Gold.

Another notable gold basher is radio personality Dave Ramsey. This financial “guru” rears his head to bash gold from his TV and radio show platform a handful of times each year.

Ramsey’s talking points against gold are based on false assumptions, and he tends to bully and ridicule his callers asking about gold.

1. Too volatile. To the upside? Remember, gold was $35 per ounce when Nixon closed the gold window in 1971.
2. Does not produce income. Putting aside that income on gold is possible, explosive capital gains beat earning interest in depreciating currency.
3. Is not useful. Tell that to central banks that have recently been stocking up at record rates. Gold became recognized as money precisely because of its utility. It’s fungible, divisible, a store of value, and a medium of exchange.
4. Is not liquid. Ha! Gold is traded in huge volumes all day and night. Read “Sell your Gold & Silver in 3 easy steps.

For more examples of Ramsey’s ongoing misinformation campaign about gold, go here and here.

Another inglorious gold basher is Harry Dent. Like Ramsey, he makes many preposterous and unsubstantiated statements.

Dent’s misinformation is regularly trotted out there under headlines like “Gold is going to $500 per ounce.”

Barrick recently reported that its cost of production for gold has reached $1,700 per ounce. That puts something of a floor under the price of gold.

Where is gold today? Nearly $2,000 per ounce.