Is Bernanke Being Kept Awake By Gold?

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Monty Pelerin / EconomicNoise.com

Readers of this site know that I believe gold is a likely safe haven in the trek toward economic Armageddon. Zerohedge thinks the chart below keeps Ben Bernanke up at night. Whether that is so or not is moot. Mr. Bernanke has other things that may affect his sleep even more.

Mr. Bernanke is less sophisticated than most believe. He is an academic, suffering from the usual hubris that most academics acquire while spending too much time around unmotivated and under-educated youngsters. Academics quite naturally inflate their own importance under these circumstances. Most have a circle of friends whose self-importance arises from like circumstances. Few have exposure to meaningful real world activities. In Mr. Bernanke’s case, most of his like-minded friends were Keynesians who believed that central planning could make for an improved economy.

Mr. Bernanke made his bones with his mathematical and modelling skills. His experience beyond the ivory tower was limited. In that sense, he reminds me of a rather pathetic pawn caught up in a world of power that he doesn’t comprehend. His lectures and misguided theory are of little use to him in this environment. He is beyond his depth, not intellectually but certainly morally. He is akin to an innocent sheep among a gang of criminal wolves. He likely is (was?) a decent man who allowed his ambition to outpace his judgment. Pursuing the job as Greenspan’s replacement suggests either naivety almost indistinguishable from stupidity or a lust for power and fame that overcame better judgment. Both were likely and responsible for his taking the worst job in the land.

Now, Bernanke stands in the middle of the Road to Armageddon, He is trying to avoid traffic from both directions. The inflationary holocaust speeds by him in one direction. A sovereign bankruptcy with another Great Depression speeds by in the other. He stands helpless in the middle of this metaphorical, undivided superhighway being buzzed by high-speed vehicles going in opposite directions. He will eventually be hit by one of them, ending his career. His name will ultimately go down in history next to that of Herbert Hoover. The country may not fair as well.Mr. Bernanke worries about the traffic in both directions. The price of gold is one of his worries, but I suspect sovereign bankruptcy is a bigger one at this stage of the game. Perhaps gold should be the bigger concern, but Bernanke has always been behind the curve of developing events since the assumption of Fed Chief. Here is Zerohedge’s take with respect to gold: