Charlie Munger thinks that gentlemen should buy profitable companies, not gold. But he fails to realize that the economy is being managed at the top by people who are not reliable. It is being run by Congress, the executive bureaucracy, and the Federal Reserve System. It is being run by men who share the views of Keynes, namely, that the gold standard is a barbarous relic and that politicians and bureaucrats and central bankers are the people who should set policies under which companies become profitable.
Men who shared these economic views – deficits, regulation, and fiat money – ran Austria in 1939. They had been running Germany since 1933. Some of us see that the present economic system cannot be trusted. So, we get out our sewing gear and start to work.
Civilized people should buy gold when uncivilized people are in charge. They should also buy it when civilized people in power adopt the economic policies of uncivilized people.
Wednesday, May 9, 2012
Why Civilized People Buy Gold by Gary North