Some folks think that buying gold coins is only for the paranoid.

April 04, 2011 – Some folks think that buying gold coins is only for the paranoid. Maybe so, but there is a great deal to be paranoid about these days.

The Fed has successfully discouraged Americans from prudent savings — returns on traditional safe cash investment sits at 0.24% compared to the latest annualized quarterly inflation of 5.6%, according to the Wall Street Journal. For retirees that is especially problematic because the loss of income has forced many to draw out principle to pay the bills, and that can quickly spiral out of control.

Everybody is affected by the low interest policy, which the Fed unapologetically states is intended to make Americans take their prudent reserves of cash out of the banks and gamble it away on Wall Street. With the exception of 2009, Americans are saving less today that an any time since the Fed started collecting that data in 1959. Besides threatening retirement, the Fed has succeeded in tearing down the last vestiges of personal financial responsibility — saving for a rainy day.

Another factor in lower savings is that Americans have less disposable income, thanks to stagnant wages and inflation. Even using the gimmicked CPI, inflation still outstripped last year’s wage increase of 1.7% by 0.4%, and in terms of real inflation that is more like 3.9%. And Gluskin Sheff Chief Economist David Rosenberg told the Wall Street Journal that over the past five months the annualized wage growth was just 1% — the lowest in 25 years.

That’s not for lack of money to pay for increased wages however. It’s just the typical fallout from high unemployment brought on by Bernanke’s recession. Employers don’t have any incentive to increase wages when so many are out of work. That helped the S & P 500 report a 12% rise in earnings for Q1 2011 over the previous year. Increased earnings, of course, means higher returns on equities.

The Fed’s policies are systematically bleeding retirees dry while forcing the working class to abandon fiscal responsibility and gamble away what little is left of their declining wages in the Wall Street casino.

Paranoia is delusional. Buying gold coins is just a rational response in defense of a clear and concerted effort to channel wealth from Main Street to Wall Street.

Kevin Johnson

Senior Staff Writer –

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