Laws forbidding the movement of money, gold, and silver across interna- tional boundaries are and will be no more effective than were the laws forbidding the manufacture and importation of alcoholic beverages during the Prohibition era of the United States. Good coin still exists in the Western world, but seldom anymore as legal tender. It is firmly in the hands of collectors, numismatists, investors, speculators, hoarders, and dealers. These diverse peoples possess diverse motives, but they have one thing in common: they recognize something of value when they see it.
Despite the patently obvious evidence of recent years that Gresham's Law is still irresistibly in operation, the student of mone- tary history and crowd psychology may yet have some reservations about gold investing. Before deciding on gold coins as a safe and profitable investment, with the obvious advantages already men- tioned, one may properly question the extent to which man's historic faith in the reliability of gold as a standard of value has been or will be affected by the thirty-four-year campaign of the Keynesian economists to escape from the restrictions and disci- plines of gold-based money. (The question is especially pertinent because of the defection of so many so-called conservative econo- mists and bankers to the viewpoints of the New Economics.)
After all, we in what the French like to call the "Anglo—Saxon camp" have been told for a considerable time now, through our press and by the pronouncements of even some of our highest Treasury and banking officials, that gold, like the Deity in the eyes of some modern theologians, is dead; that the use of gold for monetary purposes or as a store of value is, in that already well worn cliche, a "barbarous relic." Furthermore, it is said that the sooner we are able to abandon it completely, the better it will be for us. But perhaps the demise of gold as the center of the monetary universe has been reported, as was the death of Mark Twain, somewhat prematurely.
Although the obituaries continue to be published, the world remains unconvinced. If gold is indeed dead, it has proven to be a rather lively ghost. The author's clipping files concerning monetary subjects indicate that more press copy on the subject of gold has been published during the last two years than at any time since the crisis years of 1933-34. Countless re- ports on the future of gold and the attendant opportunities for speculation it offers have also been prepared by private financial advisers and services ( and sold at high prices) since the dying relic, the "echo of the past,"' has suddenly become a full-blown crisis. Some went so far as to declare that gold was America's number-one problem. But there is still little public agreement on whether the ancient idol will be finally and forever toppled from his throne or restored once more to past glory. In the author's opinion, the decisive vote was given in 1967 and 1968, when repeated waves of gold speculation swept the gold markets of the world, shaking its very monetary foundations, breaking up the London gold pool and its fixed $35 per ounce gold price and forcing the devaluation of the British pound sterling.
The most revealing part of these episodes was that they imposed an ignominious retreat on the neo—Keynesian money managers of the West. In being forced into a tightfisted defense of their stock- piles of monetary gold, the position of the money managers would have been ludicrous but for the tragic effects of the inflation that had already eroded the wealth and vitality of countless peoples. Ironically, it was these practitioners of the New Economics who had insisted all along that gold was only a superstition, a vestige of a barbarous past, and that we would have been better off to dump it all into the sea."
But now that it has apparently been found necessary, for the moment at least, for the United States and its partners in financial experiment to defend at all costs ( that is, with whatever further sacrifices may be required of their citizens) what is left of their monetary gold stocks, it may be suggested (with tongue in cheek) that we dump our money managers into the sea instead.
