The world is full of vain world improvers', says Bill Bonner. They cause global mayhem in their efforts to make the rest of us just like them. There's only one way to protect yourself and your assets from the results: buy gold.
The trouble with the big wide world is that it is never quite good enough for some people. They keep trying to improve it. Alexander the Great' must be a great hero to the world improvers - at least, that is how Oliver Stone presented him. In its most memorable (in a bad way) scene, Alexander turns his face to the sky and dreams of a better world... hardly noticing his friend dying on the bed next to him. Like all world improvers, then and now, the only better world Alexander can see is a reflection of his own! He wanted to remake Babylon into a Greek city.
Now, George and Tony want to turn Baghdad into an Anglo-American city. They want the Iraqis to reform', that is, to become more like themselves. Louis XIV thought the world would be a better place if he forced the Protestants to convert to Catholicism. Now, today's sun kings insist on forced conversion to democracy. Whether it is his religion, his politics, or his material wealth - the world improver imagines nothing better than his own. And for all his guff about making things better, what he really takes up is a vain effort to make his neighbours like himself. Anyone can make the world a little better - wink at a homely girl perhaps - but the world improvers are rarely content with private acts of kindness and philanthropy. Instead, they want vast changes - almost always brought about at the point of a gun or purchased with other people's money.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Thus it was that central banks were set up and given the power to control what doesn't belong to them - your money.
This week brought news, for example, that the Bush administration has asked for $80bn more to continue its programme of forced conversion of the ancient Mesopotamian tribes. This brings the total so far to $283bn. At the beginning of the war, estimates of $1trn were heard - and considered absurd. Now, the most senior operations officer in Iraq is quoted as saying current levels of troops would be there for another two years. Suddenly, the trillion dollar estimate still seems absurd, but much more likely. Even at the present level, the Bush team has spent about $10,000 for every citizen of Iraq and Afghanistan - or more than the combined GDP of Israel and Argentina. At that price, you'd think that direct bribery would have worked better than bullying.
But the people in charge of Bush foreign policy are vain world improvers. They don't feel they've done a good day's work unless they've killed someone. All the greatest world improvers have been mass murderers. Alexander, Caesar, Tamerlane, Ghengis Khan, Hitler, Stalin, Mao. Even the peaceable improvers, such as Mohatma Ghandi, so upset the order of thing that millions died in the mess they left behind.
The nice thing about gold is that it's so unresponsive to this. It neither laughs nor applauds. It is incorruptible. Gold goes up and down, just like other kinds of money,' say economists. Which is true. You can protect yourself from inflation in other ways,' say the speculators. True again. Gold pays no dividends or interest,' say the investors. Also true. Nor will gold cure baldness. Even as money, gold may not be perfect. But it is better money than anything else. It was around a billion years before sterling was invented. It will probably be around a billion years after its demise. Longevity is not in itself a great recommendation. Like buying a suit guaranteed to last longer than you do, you won't be able to take advantage of much of it. But the reason for gold's longevity is also the reason for its great virtue as money. It is inert; it yields neither to time, technology, nor to vanity.
Whatever fraud is popular, it can usually be bought at some price. Poor voters can be bribed with cash. The middle classes can be given free medical care and low-cost house loans. The upper classes can be bought off with contracts and favours. Enemies can be summoned up... bombed... and reconstructed.
How to get more money for these great new programmes... these fabulous new wars? Gold flatly refuses to cooperate. It doesn't even give a reason. Instead, it stays as mute and reticent as a corpse in front of a television. No matter how persuasive the advertising, the stiff is not going to go for it. Paper money, on the other hand, barely needs encouragement. Start up the presses! Lower the interest rate! Relax reserve requirements and lending standards! Sell more bonds! Create more paper!
Paper money will go along with anything. It is like a cellulose Tony Blair or George Bush; it seems never to have met a wasteful project it didn't like... and is ready to rush into the next disaster even before the dust has settled on the last one. Before you know it, there are billions and trillions of paper dollars... and more in digital form. And before you know it, you turn your head around and the things that were once so dear to you are dead. Including your money.
For more from Bill Bonner, see www.dailyreckoning.co.
RICS: homebuyers are returning after stamp duty shock
Reducing cash ISA limit will make lending difficult and expensive, warn providers
