April 08, 2011 – Is it just coincidence that the price of gold bullion has risen in lockstep with the expansion of liquidity created by monetization? Or the price of oil for that matter? So goes Bernanke’s fairy tale, and the growth in the stock market and even currencies is what he offers as proof.

But there is only one way for everything to keep going up – the illusion of growth created by the rapid withering of the dollar. And the only way to keep the illusion alive is to continue pumping more money into the system. That’s like putting nitro fuel in funny cars – it gives you short-term boost but can blow the engine to smithereens at any moment.

The problem is that monetization has failed miserably in its prime objectives – to grow equities through greater investor participation. Instead it has made investors even more leery and deprived them of the disposable income they need to invest. The only growth the stock market has seen is through inflated prices, not the hoped for infusion of new equity.

In the 1990s there were an average of 503 initial public offerings (IPO) but over the last decade that dropped to just 130 says research firm Dealogic in the Wall Street Journal. What Wall Street needs, obviously, is another of our governments gimmicky quick fixes that worked so well in the past. Enter the SEC.

New rules have been proposed for the entry of private equity into the market that would strip away retail investor safeguards that have been in place for decades. The whole idea behind the IPO process was to require full disclosure of a company’s operations to put individual investors on equal footing with insiders and to give individuals equal opportunity to participate in the offering.

Under the new rules, however, “at a time when investors are seeking more market transparency, it would lessen the amount of publicly available data about those companies,” says the Wall Street Journal, while shutting out “ordinary investors from one of the fastest-growing market sectors.”

Wall Street knows it desperately needs new blood more than it needs new money, but that won’t happen as more individuals every day are getting wise to the game and investing in real money – gold bullion.

Daily Updates Archive

Jonathan Monroe

Senior Staff Writer - Gold-Bullion.org