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View Full Version : Critique my article submission to my school's newspaper "The Case for Gold"




krott5333
01-30-2008, 03:12 AM
The Case for Gold
by Patrick Krott

I’m not much of an economist. I probably failed Economics class, I don’t remember. I’d rather not. So I try to keep things simple, without letting all the technical jargon skew what I like to call “common sense.”

Here’s the way I see it. The government continues to spend money it doesn’t actually have, or money it hasn’t raised. It does this by borrowing billions of dollars from China. However, they can only borrow so much, so with the help of a private bank called the Federal Reserve, money is created out of thin air. This is where rate-cuts come into play. The Federal Reserve lowered interest rates three times in 2007, and by the time you read this, probably twice in 2008. Cutting interest rates allows for more lending and more borrowing. When interest rates are cut, the Fed must increase the money supply. Because currency is no longer backed by tangible assets like gold, an increase in the money supply lowers the value of the currency. The dollar in your pocket is worth less than it was yesterday. This is known as inflation. Inflation means that you have to spend more money than you did before for the same product.

When the interest rates are lowered, credit is given to people who aren’t really credit worthy. So these people buy a new house because they get an appealing low interest rate. However, because of inflation and the increase in the cost of living, they soon realize they can no longer pay off their credit. Hence the onslaught of home foreclosures.

Anyways, money used to be backed by gold. Gold holds its value, as a universally desirable precious metal with a limited supply. The price of oil and gasoline, in US Dollars, has risen nearly 350% in the last seven years. In Euros, it has risen 200%. And in gold, it has stayed nearly the same. The 350% difference is mainly due to inflation. So with the currency only backed by the faith and trust of the government, they are able to create money without limit. In fact, the overall supply of US currency, known as M3, is no longer published by the Federal Reserve. Perhaps if people knew just how much money was being pumped into the system, they would be outraged. Or perhaps we can believe the Fed when they claim the reason to no longer publish M3 is to “save money.” (Since when has the government stopped doing something to save money?)

To make a long story short, the economy is about to take a dump. Recently, the temporary economic boost that followed each rate cut was never as strong as the prior. We are quickly heading toward our economic demise, and Ben Bernanke probably needs a change of underwear. The value of gold is inversely related to the value of the dollar. Gold started off in 2007 at about $650 an ounce, and is currently at about $930 an ounce and rising, as the dollar continues to drop. So unless you’re paying 40% APR on your credit cards, I would suggest investing any extra money that you have in gold. But then again, I might have failed Economics class, so buyer beware. Maybe next week I’ll discuss the “Economic Stimulus Package.” (LOL!)

theseus51
01-30-2008, 03:18 AM
For us it's pretty easy to follow that train of thought. Try take a step back and put yourself in the shoes of your average reader at your school. Would they have any idea what you are trying to explain? Maybe just focus on one thing for now, instead of money supply, inflation, interest, and the federal reserve . . . don't want to confuse people.

krott5333
01-30-2008, 03:22 AM
For us it's pretty easy to follow that train of thought. Try take a step back and put yourself in the shoes of your average reader at your school. Would they have any idea what you are trying to explain? Maybe just focus on one thing for now, instead of money supply, inflation, interest, and the federal reserve . . . don't want to confuse people.

blah :(

ralucelom
01-30-2008, 03:26 AM
Caveat Emptor indeed.

-"The id rather not" sentence is fragmented. Try "In fact, i'd rather not remember."
-Be more specific as to the money borrowed from china. mabye including a set number USD borrowed over a period of time.
-"so much, so with the help" change to "so much, and with the help"

u used the word "so" seven times, mabye change that up a bit.
be a bit more detailed in adressing some concepts, and try to tie the entire thing
around the dollar and monetary policy to make more contiguous points.

As it is, the article is fine. grreat article, i enjoyed it.

btw "To make a long story short, the economy is about to take a dump." is just cold cut wisdom.