by Chris Powell, GATA:
Dear Friend of GATA and Gold:
Economist, author, and fund manager George Gilder has given a fascinating interview to Forbes contributor Jerry Bowyer, arguing that “gold is the money of the future,” and he sounds much like the British economist Peter Warburton.
In his 2001 essay “The Debasement of World Currency — It Is Inflation, But Not as We Know It” —
— Warburton argued that the main objective of modern central banking is to deprive the world of a “stable numeraire,” a lasting measure of value.
“These are rough, huge magnitudes, but they convey a situation where the measuring stick is consuming the whole global economy. This is a major source of profits for the big banks that are in league with governments and the central banks. Essentially we have turned money into a meaningless self-referential loop that is totally divorced from any physical constant or any of the properties of measurement.”
Gilder adds: “Interest rates are the time value of money, so when you have zero interest rates, essentially you are nullifying the information about time that money ordinarily conveys. So when money is divorced from time, the people who manipulate money with gigahertz computers or whatever can do fine. You have this huge expansion of finance, financialization of the economy, a hypertrophy of finance.
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