"Pilate saith unto him, What is truth? And when he had said this, he went out again..."

Location: Tampa, FL, United States

Saturday, July 09, 2005

If Diamonds Were Jade

Well, not really Jade. But, let's say the bloated central government comandeered the market prices for diamonds and jade, to "protect the rights of the American people." An oval green jade 14kt bracelet must now be priced in the $1000+ price range. A comparable diamond bracelet, of the same weight, cannot sell for more than $89.95.

It's quite elementary to see how this would play out. Brick-and-mortar jewelry stores would no longer sell diamonds. They would no longer sell jade. Both items would continue to trade heavily on the black market though. Their price tags would return to typical current and historic market values.

And such is the foolishness of allowing the Federal Reserve Board to control the money supply. By its extraction from market forces (i.e. the little people) and a gold standard it's worth is now highly manipulable. Therefore, much of our property is at the mercy of the whims of the bloated central government.

Another analogy. The wisdom of the system in place is tantamount to having the value of the dollar pegged to the value of green grass. Instead of trading grass though we will trade with American dollars. But you may not grow your own grass, nor use it for business transactions. Only government grown grass may be used to back the value of the American dollar. If you use your own grass to convert to dollars you're subject to arrest and banishment to Gitmo.

Government price-controlled diamonds and jade. American dollars and grass. There's not much difference. What the wise investor needs to determine is when enough people will wake up and see that the American dollar is only valuable until Toto exposes the impotent wizard cowering behind the curtain with his cool sound system.

But don't take my word for it. Ask any high school student about this. I'm sure this monetary axiom is taught in federally-controlled high schools.


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