Do You Think Gold is Money?
This is a wonderful exchange between Ron Paul and Bernanke from Wednesday's hearing [the full exchange can be viewed in the video below.] I don't know if this is an accurate interpretation, but I think Bernanke displays a look of incredulity when Paul asks him if gold is money. In fact, he appears stunned by the question and has to pause for a moment before giving his answer.
Personally, I think Bernanke comes out looking better in this exchange, but I'm sure many people here will think the opposite. Obviously, it depends on your notion of gold.
Paul: Do you think gold is money?
Bernanke: [Pause] No.
Paul: Even if it has been money for 6,000 years? Somebody reversed that, eliminated that economic law.
Bernanke: Well, it’s an asset. Would you say treasury bills are money? I don’t think they’re money, either.
Paul: Why do central banks hold it?
Bernanke: Well, it's a form of reserves.
Paul: Why don’t they hold diamonds?
Bernanke: Well, it’s tradition. Long term tradition.
Paul: Well, some people still think it’s money.