gold, page-20151

@JFI

"its forums's like this and other arenas that give the financially and otherwise aware citizens an opportunity to express their frustration with the failure that is the governance/management/policing of the financial markets and general economy."


I don't have a particularly strong view on the price of gold.* But I do know a thing or two about "governance/management/policing of the financial markets".

As reflected on HC, most of the frustration expressed by "financial or otherwise aware citizens" is either wide of the mark or grossly overstated. Predictions of imminent financial crisis are not based on any understanding of the current state of the global financial system. It is not generally understood that there has been a global policy (implemented by national financial regulators) sacrificing economic growth for the stability of the global financial system and that this has been in place since 2009. (For evidence of this, compare the regulatory capital to risk adjusted assets ratio for any bank in the OEDC between 2007 and the present. The comparison is startling and makes me almost feel sorry for bankers...)

This is an untold story understood by a few sad individual (like myself) who know how to read regulatory disclosures. If political leaders understand it, they aren't saying, because they would have to admit to the limits of their power. The regulators themselves, just provide the data but don't comment on it.

The media should be telling the story, but it is hard to sell a newspaper with the headlines announcing that everything is alright. Also very few journalists understand the technical detail and there is no footage or sound bites. It is easier to sell news reporting instances of financial bad behaviour, that appal us at a personal level, and the large fines that make us go "Wow!".

I find that when the most outrageous fear mongering (often repeated on HC) is traced to its origins, we usually find a precious metals salesman trying to beat up business. There is an industry the ASIC/SEC could focus on!


*I avoid gold as an investment because it has no cashflows and even in good times the risk adjusted capital returns are too low.