Gold in the Art of Bread Consumption

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Adrian Ash of bullionvault.com explains that the way it all works is very simple, once you understand that “Amid the Great Depression of the late 1920s and ’30s, Keynes called for Great Britain and then the rest of the world to stop redeeming its paper notes for gold coins or bullion” which would allow for the creation of more paper money, and thus, “the supply of money and credit could then start flowing freely once more, boosting demand for goods and services and sparking an inflation in prices that would make the value of outstanding debts evaporate.” Wow! What a scam huh?

Well, this is supposed to be the reason for all of this massive, new, unprecedented, astonishing, astounding economic stimulus spending; it supposedly bails out debtors through the brain-dead expediency of inflation in prices, thus aiding debtors at the expense of everybody else!

Whether or not this theory is true, I don’t know, but I don’t think so, as I have never read anything like, “From the moment that the government started creating and spending large amounts of money, everything got better and better, and the more money that was created for the government to spend, the better things got, until they reached Utopia and everybody lived happily ever after.”

And by the term “at the expense of everybody else” I do not mean “me” and I do not mean “you”, as all we need do is take the simple precaution to convert everything into gold, silver, oil, weapons, ammo, maybe a large-screen TV and a comfy recliner-chair for your Mogambo Bunker Of Cowardly Retreat (MBOCR), plus some yummy treats of various highly-processed salty and/or chocolate varieties full of sugar and chemicals to keep that crucial sharp “edge”!

Mr. Ash notes that Stephen Harmston, erstwhile economist at Bannock Consulting, wrote that “across 2,500 years, gold has retained its purchasing power, relative to bread at least” which is seemingly proved when one considers that “It is said that an ounce of gold bought 350 loaves of bread in the time of Nebuchadnezzar, king of Babylon, who died in 562 BC” which is roughly what it buys today, a stretch of 2,500 years, while the dollar, on the other hand, has lost 97% of its buying power since 1913, less than 100 years ago, when the detestable Federal Reserve was given its diabolical unholy control of the nation’s banks and money by a corrupt Congress and allowed by a corrupt Supreme Court.

Mr. Harmston is not interested in hearing my “The Federal Reserve is evil and so is the Supreme Court” rant again, especially since it is all I ever rant about, but goes on to reveal that, “The same ounce of gold still buys approximately 350 loaves of bread today.”

Drawing myself up, I let a victorious sneer cross my face as I say, “This proves to me that gold holds its value when nothing else does, and especially against a fiat currency, which never does, either, only a lot faster! Hahaha!”

Nobody laughed at my little joke, and I decided that perhaps they wanted something more data-oriented instead of my stupid little jokes that never really make complete sense when you stop and look at them.

So I look, and with gold at $993 and cheap bread at about $3 a loaf, it looks to me like gold is just about where it was for the last 2,500 years! Amazing!

And the better news is that it will get better than this, as Patrick A. Heller at numismaster.com writes, “The money supply of all of the world’s major currencies is now increasing by 10-30 percent annually. With the gold supply increasing by less than 2 percent annually, it is a virtual certainty that all currencies will fall in value against gold” and as bread crosses that $5 per loaf mark, and that $7 per loaf mark, and that $10 per loaf mark, then gold will go up right along with it!

And with universal participation, because all currencies will fall due to over-issuance, everybody in the whole world is going to jealously watch their neighbors and relatives making profits by buying gold and holding it against the guaranteed loss of buying power of their money! Wow! Everybody in the world!

And how many people does it take, with universal participation, to make a boom in gold like you’ve never seen before?

Whee! This investing stuff is easy!

The Mogambo Guru
for The Daily Reckoning Australia

Mogambo Guru
Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.
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Mogambo : 1oz. of gold may well bubble then pop back down to your nominal value of 350 loaves of bread. Whether those loaves are generic supermarket ones for $1.79 or nicer stuff at $4.00 per loaf my crystal ball won’t say. The long term “gold/bread” average should, however, lie between $625 and $1400 on these calculations. If gold doesn’t bubble (out of the range $625 and $1400) my shares will do just fine. If a bubble does emerge, I will have to sell my small portfolio of gold shares in stages to buy cheap energy stocks with the proceeds.… Read more »
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