Wednesday, August 25, 2010

Gold and Ethical Standards

By Ron Robins, Founder & Analyst - Investing for the Soul

The rising price of gold stands as the ethical barometer of the mismanagement of our fiscal, monetary, and currency systems. Gold is in the early stages of re-asserting its historic role of helping to bring order to monetary and currency chaos. Its price has risen more than fourfold over the past ten years as a result of investors anticipating the predictable financial and currency chaos we have today—and what is likely yet to come.

The central banks and government treasuries, particularly those of the US, Europe, and Japan, have been weakened and our trust in them eroded. For decades they assured us that only they and their paper currencies and fractional reserve banking systems can keep our economies growing forever. They are now failing for all to see. And before the ships of state sink and economies further submerge they bail out their banking friends.

The monetary and currency systems and organisations responsible for them are deteriorating because they essentially lack an ethical standard. That is not to say that most individuals in these organisations are unethical. It is that as organizations they implemented policies over the past several decades that knowingly—or they should have known—would eventually lead to great financial and economic hardship.

One such policy was the encouragement of debt creation way beyond income or economic growth. When this policy failed, it led to tens of millions of people losing their jobs globally, millions losing their homes, and retirees in developed countries losing their savings as interest rates were reduced to near zero. It is in this sense that these organizations were, and are, without an ethical standard.

To rise to the top among many of these banking and financial organizations, requires not only brilliance, but usually subservience to base instinctual values of status and greed.

According to Dr Paul Ray’s research on Americans’ values, close to half the American population’s primary values include those of status and greed. It could be argued that even Timothy Geithner, the US Secretary of the Treasury, exhibited these values. Before his appointment it was divulged that he owed taxes that went back several years. He then hurriedly paid them to smooth his appointment to head the US treasury, the most powerful treasury on earth. About those taxes—he says he just ‘forgot’ to pay them.

Read it all here.

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