Blog - Goldco


insurance deposit

Deposit Insurance Leads to Moral Hazard

The fractional reserve banking system is a system that is doomed to fail, it’s just a matter of when, not if. Governments throughout history have taken steps to prop up that system, but in the long run nothing has ever worked. You just can’t loan out deposits while telling depositors they can retrieve their money at any time without eventually running into problems. The introduction of deposit insurance has helped to prevent bank runs that periodically plagued the banking [...]

tariff tax

More Tariffs Means the Economy Is in for a Rough Spell

With his recent decision to place tariffs on imported steel and aluminum, President Trump could cause some serious disruption to the economy. In an attempt to rectify what he sees as an uneven trade deficit, he could harm American industries and consumers. But with so much discussion of the trade deficit, it is surprising that no one seems to understand why the trade deficit is as large as it is. And as long as the trade deficit’s underlying cause [...]


New Fed Chief Doesn’t Inspire Confidence

Last week saw the first Congressional testimony of new Federal Reserve Chairman Jerome “Jay” Powell. Anyone who expected anything groundbreaking from his testimony was, of course, disappointed. But Powell’s appearance did show signs of his thinking and of what we might expect from the Fed going forward. For investors, both Powell’s testimony and his answers to questions didn’t inspire confidence that the Fed will get its act together anytime soon. For one thing, Powell seemed to downplay indications that inflation [...]

inflation rising

Rising Inflation and the Importance of Gold

The government’s official inflation figures surged in January, with the producer price index (PPI) rising by 0.4% and the consumer price index (CPI) rising by 0.5%. If those trends continue throughout the year, that could be dangerous for consumers and investors. Combined with newfound uncertainty in stock markets, it makes it all the more important for investors to keep an eye on financial markets and protect their investments. The members of the Federal Open Market Committee (FOMC) have complained for [...]

home retirement asset

Is A House Really A Retirement Asset?

Many American households have their wealth tied up in their houses. For many Americans across all different income levels, the value of their houses exceeds the value of all their other financial assets. There is also a history in the United States of home ownership being recommended as a sure way of becoming wealthy, or at least financially comfortable. But in this day and age, should you really rely on a house as a retirement asset? Gains Are Not Guaranteed The [...]

stock market correction

Stock Market Correction Is A Warning

The stock market correction of the past couple of weeks is a warning to investors that equities are fundamentally overvalued. The euphoria that had infested markets in recent months was reminiscent of the dotcom bubble, especially since the major stocks pushing indexes higher are tech stocks such as Amazon, Facebook, Apple, etc. While stock markets are rebounding to begin the week, investors need to take the correction as a warning that an even larger correction is on the way. The [...]


Don’t Ignore Alan Greenspan

One of my foils while I served in Congress was Federal Reserve Chairman Alan Greenspan. For many years while I served on the House Financial Services Committee I had the opportunity to question him during his semiannual testimony before Congress, and I never could get a straight answer from him. Greenspan was notorious for speaking in such a vague manner that he could technically satisfy the requirements of informing Congress while never really actually saying anything of substance that [...]


Only Sound Money Can Put a Brake on Government Spending

We’re not too far away from another government shutdown drama, as Congress continues kicking the can down the road. Neither side in the budget debate is willing to admit that government spending is out of control, just as neither side is willing to accept budget cuts to their sacred cows. Both welfare and warfare spending will continue to rise, further burdening American taxpayers. Also lost in the debate is the reality that there is only one solution that can [...]

Closed for Business logo sign

No Reason to Fear a Government Shutdown

Much of the recent news has focused on the government shutdown, the first since 2013. Not surprisingly, there has been a lot of hand-wringing about how awful it would be when the government shuts down. Those who understand exactly what the federal government does, however, realize that it’s not the end of the world. From some of the press coverage, you would think that the federal government shutting down would be disastrous. Air and water will suddenly overflow with pollutants, [...]

bank sign

Bank “Reform” Proposals Fail to Understand the Problem

Proposals to reform the US banking system pop up every now and then but often never go anywhere. It’s only in the aftermath of a crisis that legislation gets passed, and at those times it’s almost universally awful, such as the Dodd-Frank Act that was passed after the last financial crisis. What most banking “reformers” fail to understand is that the banking system that exists worldwide is fundamentally flawed and no amount of patchwork laws or regulations will work [...]