now, the reason why the gold standard or a currency convertible to gold, a dollar convertible to gold, checks the ability of the federal government to spend money, is that you'll remember that by law the banks are required, including the federal reserve system, to redeem in gold all that currency, which individuals in the market hold which they no longer desire to hold. so, under conditions where the treasury is in deficit and is spending money and the federal reserve system is financing it, creating an upward move of in a price level of inflation, people are not fools, they know that inflation is going on today and they would of course see that. they would take their paper dollars or their bank checking accounts and they would turn them in for gold. but, you see, the banking system and the federal reserve system are now pledged by law to redeem in gold all the undesired cash balances held by individuals and firms which they no longer desire to hold given the tendency toward inflation. as a result, the federal reserve is then required to reduce the quantity of credit money in the mark

in a gold standard checking accounts, as lew mentioned, are payable immediately in gold, gold is the balance, the anchor. and among other things, what gold anchors is the feet of the bankers. in the gold standard and in the political ethos prevailing during the gold standard years, there was a sense that a banker ought to be personally responsible for his or her undertaking. many banks during the gold standard era were partnerships and, of course, a partner in a general partnership is liable for the debts of his or her firm up until his or her entire net worth. lew also mentioned there is no perfect system. in the high noon of the gold standard in britain in 1890, a firm called baring brothers brought out an issue of ordinary shares in the -- britain scowled at the treasury, the treasury scowled back. they got up a fund and presently the city and the uk financial reputation was saved through the intervention of the bank implicitly by the government and overtly by the bankers themselves. it was not a laissez faire system exactly, but it was close to one. lord revelstoke, senior partne

but for people here, gold is a necessity. >> mitra: gold is a part of life.ly which doesn't own gold. it is an incomplete family. in india, gold is considered honorable. ddd the more you possess, the higher you are up on the social ladder. >> pitts: reverence for gold touches everyone, from the very old to the very young; from the high-end stores in major cities to the gold-plated jewelry shops in the poorest villages. gold's value comes from its rarity, and it's the most malleable metal on earth, making it ideal for jewelry and coins. everywhere we went, people told us indians love buying gold and hate selling it. wedding planners divya chauhan and vithika agarwal say it's especially true for a bride and her jewelry. >> chauhan: they would never touch gold, because that's like... it's go... i mean, it's... >> agarwal: it... it's giving a piece of you away. >> chauhan: ...piece of you, away. >> agarwal: how do you give away something...? >> chauhan: give up something... >> agarwal: ...or sell something that was passed on by your grandmother? >> chauhan: and f

to bring up something that he mentioned he was talking about gold and gold mining stocks and gold has far outperform gold mining stocks with returns of four hundred seventy one percent to two hundred thirty three percent as you can see in that chart on your screen so let's talk a little bit more about why this is i want to bring back in doug casey our guest today to get his opinion on this because he is an expert in this area now mr casey i know this is an often asked question a common question but i do want to ask it why do you feel that gold miners have so underperformed the physical metal during this bull market because mining is basically a crappy business. i mean really i've been going around mining since for most of my wife's and up the price of the commodity is. fluctuates radically. or reserves you have in the rhondda are unpredictable when you're looking for more resources it's a stream way hard to find them and unpredictable if you find them you have no idea if they're going to be economic this is why you. benjamin graham for that matter warren buffet wouldn't dream of inves

to reclassify gold as a tier one asset which would then effectively monetize gold allow these banks that are you know a question with questionable collateral to have something of value can you talk on that you know it's a little bit of confusion there max between the categorization of assets on the one hand and tear one tear to capital on the other they're not saying it's capital but but you're right by qualifying it as a high quality asset the haircut on that is zero in those you can hold gold in your balance sheet and not have to provide any capital against it whereas if you hold certain kinds of mortgages you might have to provide fifty percent capital certain kinds of loans you might have to take basically treat them as one hundred percent weight for purposes of capital capitals or come between eight and twelve percent but the question is what's. the weighting of the assets and basically they'll say gold will have no capital requirements so she added with so it's the ideal said you can hold it with a minimal amount of capital so it will make it more attractive for banks to buy i

gold and that we should be using real gold and then quit and close up shop quit close up shop go home nothing to look at here folks why is this the solution in your view. they should stop messing around with the economy and stealing it one direction or another creating all these bubbles create a wealth transfer creating a disparity between the middle class and the rich that is and norman this. under i believe that if we had used gold like we used to before world war one not hocus pocus gold standards with reserve ratios and national currencies but just gold we never would have had any of the pullbacks yes growth would be slower but it would be continuous and with all of the technological advances in advances in efficiency that we had over the last hundred years i believe that our quality our standard of living would be far beyond what it is right now if they would just let the free markets work and get out of trying to keep on they keep on trying to control the markets all they do is skew the economy pump something up into a bubble which causes a wealth transfer the bubble pops and th

pepper, which won a medal at the fair, a gold medal. so we have a number of those historic -- those industrial objects including a corset that we have here that was done especially for the fair. you wouldn't think that that was important, but it was awarded a prize at the st. louis fair. companies tended to use their awards as advertising after the fact. so on their boxes they would say, gold medal or in here it says highest award st. louis 1904. they would have replicas of the medals so that people could know that this is a wonderful product because it won an award at a fair. and during the late 19, early 20th century, having that award was a key part of promoting items that they were selling. we have a couple things from the jefferson guard. it was essentially a police force that was done, particularly for the state fair, for the st. louis world's fair. we have a badge there. we also have -- it was 1904, so they didn't just have a weapons we would think of today, they did actually have swords. and we're lucky enough to have the scabba

he takes a gold medal.that that's the way this meet got under way after all the pressure on his shoulders. >> well, i think we take it -- events with events. the 400 i.m., it was great. he dropped two seconds. then we went on to the next event and the next event we didn't realize he was on it, on the relay, so that was fantastic. and he actually did have a good time, so, you know, even though the outcome wasn't, but the person that he went against went second fastest ever. >> were you surprised that he was overtaking on that final leg? you're not used to seeingi that. >> i thought that he might have that extra push, but still that time was there and it was great. >> do you think that shook his confidence a little bit going into the next event after that, the 200, which is basically one of his signature events? >> that's a new event for him for the olympics, so we dn't know how to handle that one. we knew who was out there in competition for him so, i think it might have been a little bit of everything. but

welcome back before the break we were talking about gold and gold as money and cash the u.s. dollar the euro so i want to touch on something that is going on coming up ron paul the lawmaker has been in the news because his audit the fed bill passed the house which is a big deal because years ago people would have said audit the fed bill was that crazy and now it passed the house with a large amount of overwhelming support but also coming up here ron paul is holding a hearing dealing with this very issue of gold as a monetary metal so i want to bring back our co-host jim record senior managing director at tencent capital partners and also author of currency wars to ask what you think the significance is of this hearing in this debate of gold as money right well you know ron paul has been a member of congress for decades this is his last term and he's getting some major accomplishments on his way out including as you mentioned there in the house passed by a very large majority of this bill to audit the fed but in a couple weeks he's a member of the house financial services comm

famous cross of gold speech. but that's history for another day. so government borrowing practices during the civil war had a far more substantial effect on public finance. and both of the time, and consequently, the tax policy. the revenue effect was large. jay cook's efforts pioneered the way for direct sale of treasury bonds in notes to the public rather than using commercial banks. deficit financie ining became t norm during wartime. and we got our first real try at fiat money. now, when chase was diterring about whether fiat money was constitutional or not, abraham lincoln said i have that sacred instrument here at the white house. and i am guarding it with great care. so chase enthusiastically embraced the issuance of green backs, with his face on them, of course. he flip-flopped writing for chase decided the griswald that congress lacked the power to make paper money legal tender. despite the fact that he, himself had authorized the issuance of greenbacks as legal tender. despite salmon's flip-flopping, na

the london olympics years ago that i quote russians are too much used to counting the number of gold medals won some reasons we don't take stock of silver and bronze. and a fourth place here guarded as a failure there's one quote at the start we see you mean to bring down these dictations over russian supporters you know to avoid disappointment in the end. and yes that is the no i don't want to downplay our possibility of minsan london but i just think that any success at the olympics must be appreciated its true value when we was reputed started it seems that fans no longer reprise the value of winning say a national championship these days kiera paean trough fees are often considered an important and these results are just shrugged off watching a coach into it when we talk about the olympic games with eleven thousand airth leads from two hundred five countries with cutthroat competition expect them all the results up to the eighth place should be appreciated. what do you think of this medal count at all these an official totals it's clear that it's too politicized but what's your o

show the price of farmland in ounces of gold and today if you're gold bug and you like where gold is valued and you think it's going a lot higher well farmland is it represents very good historical value per ounce of gold today and farmland would be a great place to park your money for the long term and and remember and i'm sure you talk to equity investors and equity investors most of their return over the last decades has really come from the dividend yield form and has a dividend yield that gold just doesn't and that's an important piece of the overall picture that investors need to keep in mind that's interesting and you're talking about the different ways that you can invest you can own the farm and farm it you can hire somebody to farm on your land is there a way that that minimizes risk into your investment in farmland or where there are more rescues for example to use the gold comparison there are different ways to invest in gold and maybe investing in an e.t.f. your gold isn't as safe as if you own physical gold you know an e.t.f. you still have a claim what if that gold isn

china has a significant lead in gold. back to you. >> forget doping, social media seems to be the thing sending athletes home. swiss soccer play your was kicked off his team for what they call reyes and threatening tweets. he said south korean could, quote, go burn after they beat the swiss team. the second athlete to be banned from the games because of a tweet. three triple jumper wasn't even allowed to fly to london after she posted a tweet that contained racist remarks. >>> "news4 today" is your home for the 2012 olympic games. follow the games any time on nbcwashington.com including the local field hockey players competing today. >>> 6:21 is our time right now. and not a lot of action to keep track of in the weather department. and, tom, i got to say, we like that it way. >> things are fairly settled but humid. the sun has been up ten minutes but we don't see it because of a lot of cloudiness around. nearby suburb, low 70s. 60s, some of the rural areas for virginia, maryland, and west virginia. and as we look at what'

zero means that the currency itself is appreciating against gold. so if you look at this -- i know there's a lot to absorb here -- for the union, not too surprising, tinhings were prett bad for their currency after fredericksburg, pretty good after gettysburg and pretty good after petersburg. for the convifederateconfederat chancellorvil chancellorville, bad after gettysburg. so monetary markets i think clearly reflect what was going on on the battlefield as well. in fact, i'm going back to this one here. what happened with confederate currency looks a lot like what happened with german currency after world war i. hyperinflation in part due to an inability to convince people that either the government or the government finance was stable. the probability that the confederate government could actually redeem its currency shrank more and more as april ahmad ox approached. let me leave you with one of the most enduring changes wrought by the financing of the union army and the civil war. it's actually something that doesn't happen. if you look at any b

gold corp, eldorado cold, and new gold. ng. what's the unifying theme here? >> there's several things. first of all, each of these companies provide growth in the near sterm and the long term, and that's something getting hard tore find in the gold industry these days. >> gold stocks haven't performed well, and we find the evaluations are very attractedive, and financially they're in great shape generating a lot of cash and paying dividends. balance sheets are healthy. very interesting forecast. do you own any of these stocks? any disclosures to make. >> i own the international investors gold fund. through the fund i own the stocks >> susie: joe foster of global. >> susie: it was a battle for control between the bulls and the bears, as investors seemed unwilling to make big commitments either way. earnings concerns again were the focus, but so was the u.s. economy, and those much improved jobless claims. a look at an intraday chart of the s&p 500 reflects investor ambivalence. stocks stumbled this morning, but the index clawed back to almost even by the end o

but it's tough. >> you've won a gold in the relay. you've won all the world titles and won everything else. but in the end, the 200 meters is your thing. and you've got this incredible rival who keeps beating you when it really matters. this is it, isn't it? london olympics, you're at the peak of your power. you've got to win this. >> i've got to win. that's what it's all about. like you said, i've done this other stuff. this is the one missing thing pit's what i really want. i need everything to come together at the right type. >> tell me about the drive and the hunger that it takes to be a real olympic champion. >> it's something i feel like i was born with. i'm just competitive. it doesn't matter what it is. that carries over to the track. i'm determined. so having these silver medals, i'm thinking about it and it drives many e. i want that gold. >> what are the sacrifices? what are you not allowed to do? >> you have to cut down on all your social activities. even family things. everything is so structured. you're training, you're

he won eight gold medals in the last olympics. london seen him lose out in all medals of the individual medley. he lost his title to that in ryan lochte and then had to settle for silver in the four by 100-meter relay. that medal took his career total to 17, leaving him one short of the all-time biggest career hall of 18 that was won by a russian gymnast. princes william and harry have been cheering in the olympics. this is where it starts getting quite interesting the hunt for medals. the best three scores from each country counts for their overall total. mary king and tina cook complete the team and second behind germany, ahead of sweden. so there's plenty to look forward to on day four in london. in all, there are 15 gold medals up for grabs. in fencing the men's individual event also takes place. and china's arena will hope to emulate the men's team event. there are two more potential medals to be snatched in the weight lifting and we will bring you every medal from every nation here on "bbc world news." >> all right, andrew,

they just won another gold. they have a total of 7. then it's italy, followed by the u.s., with one gold, two silver and two bronze. we want to keep piling up those golds. >> much more with bill weir in london in our next half-hour. >>> we'll switch gears now and turn to your voice, your vote. mitt romney is in israel, the second stop of his international tour and the presidential candidate has already made news, outlining how he would have handled the escalating tension with iran. david muir is traveling with romney and has more this morning from jerusalem. >> bianna, good morning from jerusalem. where mitt met with israeli prime minister benjamin net ya hue this morning. the two are longtime friends. emerging from israel here this morning, tough talk on iran. in fact, the foreign policy adviser with the romney campaign saying that romney would respect and back a military strike against tehran. romney is expected to elaborate on this later on in his speech. in an excerpt released, make no mistake, they're testing our moral defenses. t

when the whole world assumes you're going to win gold quite easily? assumptions. you go with reality. the reality is 20% of the nba is international. the reality is we did lose in athens, we did lose in indianapolis in the world championships. we did lose in japan we've lost. it's not like we haven't lost. we expect to win, we want to win, but we have to prepare like we expect to win, not like we assume we expect to win. >> you have all these disparate great players and the greatest squad imaginable. kobe and i guess lebron would be among the top five basketball players in history. so you're in a great position. i'm interested in how you deal with ego. when these guys are top dogs in their teams, absolutely fearless. i've seen lebron. he's unbelievable. i've seen kobe at the lakers. the same there. but they are number one. how do you deal with them coming together? how do you get it to gel and come together and have to share that status. >> you're honest with them. you set standards how you're going to live with one another. you look each other in the

. >>> and a legendary legacy of olympic gold. we'll go do cuba to see tiny boxers fighting for glory at age 6. >>> good evening, i'm bill weir. there was nothing ordinary about michael jackson, not his talents or lifestyle, or his family. both those who share his upbringing and the children he sheltered from their glare. three years his death, public rifts are forming in the jackson family. after a weekend in which michael's mother was erroneously reported missing, abc's nick watt sorts out the latest details. >> reporter: the jackson kids were coming home from summer school. following them home, uncles randy and jermaine and janet. cordial at first, but not for long. >> it was an ambush of sorts. they wanted the children to come with them. turned into yelling, aggression. >> janet jackson slapped paris jackson in the face. after the slap, janet told her, you're a spoiled little bitch. paris jackson retaliated slapped janet jackson back, get the f out of here. >> can you can see janet trying to grab her cellphone. >> i believe it

of gold started to tick up and to cover that short gordon brown sold half of britain's gold into the open market in such a way as to guarantee the worst possible price to get to the front running by every dealer and hedge fund in the world to guarantee that this bank this unnamed american bank could pocket enough profit to offset the loss that they would have incurred have the market simply been allowed to function ordinarily now this is coming on top of the one nine hundred eighty seven mass government intervention on wall street by reagan after the crash of eighty seven when the government started buying s. and p. futures in my mind this isn't the most outrageous case of a government gordon brown setting in motion massive government intervention in the market gold to bail out a bank we also had alan greenspan yelling out long term capital management after that fund went bankrupt causing interest rates to drop in may be able to talk about libel are being manipulated down member greenspan crashed interest rates just to long term capital management this is this has been a pattern now

gold and starts also and girl stay on claims russia's gold medal at the london olympics as he wins the men's judo sixty kilogram category. top of the pile of reigning russian football champions and they need to maintain that one hundred percent start to the season with victory over already struggling denominate. on the pedal to the floor it was hamilton is in dominant form as he qualifies on pole for sunday's hungary and grand prix lights is a roman grows on his alongside him in the front of the green. however there is only one place to start in russia claim their first gold medal of the twenty twelve olympic games on the opening day of competition reports from london. so i want a night when dying for russia and coming from no way it's a kind gold in the men's he beat all the favorites on route to the sixty kilogram final day in spectacular fashion he defeated your plans to achieving any poem in the first minutes through his opponent flat on his back now these days equivalent of a strike. the end came into these olympics right number four but after that performance he's on top of the w

muhammed ali won boxing gold. over the past few weeks, we have been looking back at previous games and in today's post card, allen johnson remembers the ethiopian who went for his greatest achievement at the 1960 olympics. >> when the modern olympics came here, they played themselves out in an ancient setting. in those games, the best for members was the marathon which finished in the shadow of the coliseum. among those lining up at the start was a small, unknown ethiopian. the remarkable thing about him was the fact that he had no shoes on. he was going to run the olympic marathon and bare feet. this was -- and he was about to show the world what he could do shoes or no shoes. there was some symbolic edge with with was going to happen. back in the days of the dictator, the italian troops had occupied ethiopia. here in rome in a new postwar italy, -- would feel the olympic show. the race was run at night and in some places soldiers lined the route lighting the way with burning tortures and the ethiopian destroyed