321gold: The Power of Gold: Book review by Bob Moriarty

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The Power of Gold:

The History of an Obsession
Book review by Bob Moriarty
321gold

Peter Bernstein could have better called his book, Everything You Wanted to Know About Gold and Were Afraid to ask. He fills his book with more facts and figures on gold than you could find anywhere in a month of Sundays. If you love gold, buy the book, it makes good reading. If you hate gold, buy the book, it keeps hinting at why we don't need gold.

For all the details on gold, a niggling feeling kept creeping over me that he was trying to tell me something. Then I realized there were two parts to the title. I was thinking it was called "The Power of Gold" since that stood out in bold type. But the second half of the title reveals what might be Bernstein's hidden agenda.

Is gold an obsession? It's a good question:certainly during history much of the search for gold was an obsession. Think about the Spanish conquest of the Americas, all based on an obsession with gold. And at the end, Spain found itself impoverished as a result of the absurd level of spending by Spanish rulers. True, they found a lot of gold. It all ended elsewhere. But is gold always an obsession? If you think of gold in a traditional role as a store of value, should Bernstein consider sound money as an obsession?

I wrote a book once. In my mind. The best books always get written in the mind long before the ink hits paper. Someday if my brain can ever kick my butt into gear, the book will make it to paper.

In the beginning of the book, an iron-wheeled Ford tractor grinds down a rough airstrip at Gander, Newfoundland in the summer of 1939.Suddenly the blade strikes a metal object cemented into the rock and a magnesium flare fires off. Suspecting an act of sabotage on the part of the Germans, the FBI sends up a field agent. Newfoundland was still a British possession and the English had entered an agreement with the FBI that Hoover would assume responsibility in this hemisphere for investigation of anything smacking of sabotage.

The agent finds another cylinder. But the cylinder is cemented into the rock in what appears to have taken centuries of action on the part of mother nature. Once the stainless steel container is opened, the FBI agent discovers a diary, a Mont-Blanc pen,some US coins and a Seiko watch. The coins consist of two US quarters dated in the 1990s, a dime of the same era and a few US cents dating from 1985 up to 1999.

Once in contact with Hoover directly, the agent is ordered to return to Washington immediately so the FBI lab can examine the contents of the cylinder. Only Hoover himself will read the diary.

As events unfurl, the diary is a handwritten story done by a ferry-pilot delivering a plane to Europe in late December of 1999. As the young pilot approaches Narsarsuaq on the southwest side of Greenland on a routine crossing of the Atlantic, he finds himself trapped in an unusual electrical storm unlike any he has ever seen. An electrical charge forms around the airplane just as he is about to touch down. It discharges suddenly and the plane crashes.

The pilot survives. But when he comes to, there is no sign of the airport and town, just a few stone dwellings in the distance. A beautiful blond maiden dressed in ancient era clothing comes across the aircraft with the pilot wandering around in a daze. (gotta have a beautiful blond maiden and a little sex action or the book will never sell)

The blond maiden attacks the pilot with a pole she was carrying for protection. (did I fail to mention she also is armed with a pair of matched .38s?)

I don't want to give away the whole story, after all this is a review of someone else's book. But the pilot has time traveled back to the year 999. It's the Y2K thing but over 1000 years, the calendar is in error by a few days and he doesn't know it but there is something magical about exactly 1000 years.

In any case, he finds himself in Greenland with Lief Erickson and his father, Eric the Red. Remember Eric the Red is the guy who discovered or at least settled Greenland. But as our young pilot remembers, Lief Erickson discovers Vineland.

The pilot and Lief Erickson get along well. One of the other Vikings has this thing for the blond with the big boobs but every story needs conflict. So one night all the Vikings and their new buddy, the pilot, get together for a wild night of drinking and debauchery. They drink so much they run out of wine. In a drunken stupor the pilot suggests they head to Newfoundland in their boats for some more grapes. This suggestion does put a damper on the party as it's rather a startling idea even to a bunch of drunken Vikings. When the pilot wakes up, still in a state of intoxication, he finds himself on a Viking yacht headed southwest for the New World.

The pilot eventually realizes he has no way of returning to his time. He has taken everything from the plane which could be of any practical use, including the two stainless steel landing struts and the magnesium wheels. He keeps a diary and tells the story of all the adventures of the Viking discovery of North America, his blond bed partner and all of what goes on.

But he cannot return to present day. And how does he communicate? He remembers back to when the airfield at Gander was built in 1939. He also realizes that he could be able to find Lake Gander on the ground from his maps. Once he determines where he is on the ground, he knows where the bulldozers will be working 939 years in the future. So when he is old and gray he fills one canister with ground magnesium and sand, and puts his important document containing the story in the other strut along with the contents of his pockets. That's how the tractor operator sets off the flare and the document falls into the hands of J Edgar Hoover.

Now, you might be asking yourself, if this was really a true story, why isn't it something J Edgar said anything about in 1939? The answer, my friends is in the contents of the stainless container sent to Hoover.

You have never heard the story of how an American pilot, brave, handsome and true participated in the discovery of North America by Europeans in the year 1000 because Hoover destroyed the diary. He didn't want anyone knowing what was discovered in the summer of 1939 in Newfoundland. Because it meant the US lost to war to Japan and Germany which everyone knew was just over the horizon.

Remember the other objects in the strut, the coins, pen and watch? Hoover's scientists couldn't even figure out how the watch worked, in 1939 terms, an electronic watch was light years in the future. They knew it was a watch. They just couldn't figure out how it worked. And the pen, while it was an interesting leap forward in operation, the quality was superb in comparison to the only American produced objects, the coins.

In 1939, cents were copper. In 1982, we went to zinc cents coated with copper. In 1939, silver coins were 90% silver. In 1965 we went to those silly clad coins which no one even knows what they are made of. If you were J Edgar Hoover in 1939 and compared the remarkable quality of the Japanese and German goods with the crap quality of American coins, you too, might believe we lost the war.

Can anyone be obsessed with sound money? Is that the right term? If gold is money, and it does have all the attributes any economics books or dictionary give to a definition of money, is it something you can be obsessed with? I am, I suppose. I think a solid argument could be made that when we went off the gold standard, our values in general made a quantum shift. And again in 1965 when we didn't even have any silver in our coinage, our values shifted. We don't even have to think about after 1982, would anyone describe our leadership since then as being sound and of real value?

Peter Bernstein writes as a retired investment banker. He thinks just like the rest of them because he grew up with them, went to school with them and lives next door to them. They often have daughters named Buffy, yachts named "Intrepid" and wear green pants when they play golf. Peter Bernstein doesn't think much of gold as money. He looks at it the way a Martian might look at a collection of humans his mother lets him keep as pets. Quaint but of little value.

Actually I can understand a little of how Bernstein and crew feel. Flash forward to 2001 and pretend, instead of being J Edgar Hoover, you are Alan Greenspan or the chairman of any central bank. If you had the choice of a pile of dusty bars of gold or could use the space to install a new printing press, which would you choose? Would you rather have a pile of gold, or a printing press with the right to print an unlimited supply of "money?"

The banks, central and not, have chosen the printing press. To them, the paper is real. But when banks choose paper over gold, you should be choosing gold over paper. Even Bernstein believes gold has some value, if only as a relic. But what happens when even the bankers realize paper isn't worth much at all, not even as a relic?

The Power of Gold: The History of an Obsession
by Peter L. Bernstein
1st Edition Aug 30, 2000
Hardback
ISBN: 0471252107

Available at Amazon.com