On Krugman's Sophomoric Analysis of the Gold Price

Throughout the economic crisis, Paul Krugman has been touted by many as an astute economist with practical suggestions and penetrating analysis.

But, in order to break this misconception, I would like to point your attention to a July 19, 2011 article by Krugman.  In the article, Krugman asserts that the price of gold does not reflect any natural market movements. Instead, he argues that a good advertising campaign by gold producers is, in fact, responsible for the recent bull in gold.

He points out how Glenn beck was financially aligned with Goldline. For that reason, Beck had financial reasons to push hyperinflation fears. Krugman also submits that Beck has many, many viewers, while conveniently overlooking the fact that mainstream media ratings falling quite considerably.

Moreover, anybody who has followed the gold market and popular culture, at least loosely, has observed how the gold price has risen on strong fundamentals since long before Beck was making any sort of considerable impact. Below is included a direct quote from Krugman. I want to assert here how silly his argument is. It is really quite embarrassing for him:

Surprisingly, though, Kash doesn’t say explicitly that this parallel is not at all hypothetical. Glenn Beck was financially intertwined with Goldline and therefore had a financial stake in pushing fears of hyperinflation. And he had many, many viewers. So there was a direct channel through which conservative Americans were being pushed into buying gold.


In closing, Krugman states: "Market prices almost always tell you something useful. But sometimes what they tell you is that there’s a marketing scam in progress."

On the contrary, I think the reality of the situation points to the truth that the most important disinformation campaign in terms of prices and money revolves around Federal Reserve Notes.

Clearly there is a overarching scam in place so as to promote confidence in the Dollar and therefore undermine confidence in gold and silver. The logic is baseless, and results in utterances like that made by Bernanke when he answered Ron Paul by saying that gold is not money. Ron Paul pointed out how, in reality, gold has been considered money for 6,000 years. Paul found it odd and suspicious that sometime recently this economic law had been reversed and the Federal Reserve governors had adopted this amendment. 

As Dr. Edwin Vieria (whose numerous accolades are included below) has stated: "Thus, the fight over gold and silver as media of exchange is about more than mere money, let alone making money. For it is a fight with only two possible outcomes: either control of their own lives by the people themselves, or control of the people and their lives by political and economic elitists."
 


Read Krugman's article here: http://krugman.blogs.nytimes.com/2011/07/19/the-glenn-beck-debeers-connection/


Dr. Vieira holds four degrees from Harvard: A.B. (Harvard College), A.M. and Ph.D. (Harvard Graduate School of Arts and Sciences), and J.D. (Harvard Law School). For over thirty-six years he has been a practicing attorney, specializing in cases that raise issues of constitutional law. He has presented numerous cases of import before the Supreme Court and written numerous monographs and articles in scholarly journals. His latest scholarly works are Constitutional "Homeland Security" (2007), a proposal to begin the revitalization of the constitutional Militia of the several states; Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution (2d rev. ed. 2002), a comprehensive study of American monetary law and history viewed from a constitutional perspective; and How to Dethrone the Imperial Judiciary (2004), an analysis of the problems of irresponsible "judicial supremacy," and how to deal with them. With well known libertarian trader Victor Sperandeo, he is also the co-author (under a nom de plume) of the political novel CRA$HMAKER: A Federal Affaire (2000), a not-so-fictional story of an engineered "crash" of the Federal Reserve System, and the political revolution it causes. He is now working on an extensive project concerned with the constitutional "Militia of the Several States" and "the right of the people to keep and bear Arms." LRC