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If Americans don't trust the government, how can they trust the money it prints?

by Lear Capital EditorialNovember 12, 2013
money in envelope

It’s official… mistrust of government is at its highest level ever. First there was Fast & Furious, then there was Benghazi, then there was IRS targeting, then there was NSA spying, and now there is “if you like it, you can keep it,” the new anthem of a government that most Americans now feel cannot be trusted.

Recent surveys reveal that the average American’s faith in government has been rattled to its core. Most of us no longer believe that Washington has the willingness or the desire to do the right thing. Terms like loss of faith, skepticism, uncertainty, and even anger have been cropping up in “Washington Pulse” Polls across the country. Some reference the recent government debt conflicts, others highlight reckless spending, others allude to obsessive surveillance, and still others cite a government that has simply gotten too big and is trying to do too much.

While Watergate ushered in the original era of federal cynicism ... the hidden microphones, secret wire taps and muddled audio tapes have nothing on the massive database sorts and key word searches at the finger-tips of the NSA. Today’s communication intercepts, reconnaissance targeting, and real-time mobile scanning make Watergate look like “Belt Way” child’s play.

With Washington lingering in a deep “winter of discontent,” it’s perhaps a good time to go back and reexamine the role of our money. The same government that we no longer trust on most any level has been manhandling the value of the dollar for over 40 years. Since abandoning the gold standard back in 1971, the Fed has been engaged in an unprecedented period of currency manipulation, interest rate tampering, fiscal rescue mandates, tireless bond buying and unchecked money creation.

And yet investors continue to jump head long into overblown markets with undervalued bucks in the hopes of a hedge, a derivative, a value curve, or fast earnings. But monetary meddling by Washington has not produced any measurable or lasting economic growth and has only succeeded in launching one of the largest asset bubbles in history.

As we consider the dozens of fiscal disasters, wild market fluctuations, staggering unemployment crises, and dire safe haven emergencies over the past few decades, it begs the question …how can we trust what we cannot control? Almost $4 trillion in easy money has saturated the financial markets and the central banking system and produced little more than a blind faith in paper assets.

So what’s the Smoking Gun? Unemployment is still high, businesses are still struggling, banks are not lending, and the dollar has lost 95% of its value since 1913 when the Fed was entrusted with the care of our money.

While there may or may not be a Deep Throat, a Bradley Manning or an Edward Snowden waiting in the wings to sound the alarm on the Feds … investors are beginning to equate trust in government with the value of currency and are making the critical move to diversify their retirement and savings accounts with the intrinsic value and economic freedom of gold, silver and other precious metals.

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