He likes it. We do, too, but possibly not for the same reasons.
Although it has been getting almost no attention in the United States, Switzerland, home of one of the solidest currencies in the world, is going to vote in a month on whether to add more gold to its money.
In an interview with Kitco News, the retired gold bug and congressman Paul says he thinks the move should pass but won’t. If it did pass, the Swiss central bank would have to buy about 1,500 tons more gold to get its gold reserves up to 20% of paper francs.
That’s about 60% of annual production, though something less than 1% of all the gold humans have accumulated over the millenia. That much additional demand would, presumably, push the world price of gold up, although gold has been gyrating so much this month that it might be hard to tell.
(In round terms, gold dipped under $1200, rose to above $1250 when stocks went down, then fell below $1230 when stocks went up. Stocks didn’t go much of anyplace today, so it will be interesting to see whether gold, also, noodles around Tuesday.
Paul, of course, is the most prominent political voice for the idea that “fiat money” (money backed only by the prospects of the economy of the nation issuing it) is inherently unstable and likely to go “Poof!”
“When our crisis hit there was panic and people were scared to death. Even conservatives who didn’t believe in bailing out the banks were frightened into it,” he said. “But if you had a clean vote and just simply ask the question: ‘should Switzerland hold its own gold … should the central bank hold a certain amount of gold in reserves.’ I think you would get an overwhelming ‘yes.’”
Switzerland keeps 30% of its gold (some of which really should belong to murdered Jews, whose gold the Nazis let Switzerland keep for them in the ’40s) in England and Canada. (More gold is in New York City than Ft. Knox, and much of it belongs to other countries who do not trust their neighbors to keep their hands off their gold. That is, unless, you subscribe to the belief that all the gold has been taken out of Ft. Knox and put somewhere else. Where else? Who knows?)
You know who worries that the gold is not in Ft; Knox?
So now you know why he thinks the Swiss should worry about where their gold is.
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