Transcripts

"Two Ways to Play"-Kevin Depew of Minyanville

SUSIE GHARIB: To buy or not to buy gold. That is the question. Tonight, we get some answers about investing in the precious metal. In our "Two Ways to Play" segment, here's Minyanville's Kevin Depew and Kevin Depew of Minyanville.

KEVIN DEPEW, MINYANVILLE: Have you seen the price of gold lately? It's telling a story, but not the one most people think. All around the world, paper money is being printed by central banks. But nothing backs up this money other than a promise. Over the past 20 years, fractional reserve lending has extended credit on top of this inherently worthless paper at ratios of 30 to one or more. That leverage, built on nothing, is why this economic crisis is so difficult to manage. But gold is urgently trying to tell us something -- that the market is forcing us back to a sound-money foundation backed by gold. It's about time. Wow, that's a lot of gibberish. Look, there are only two reasons to own gold: to wear it or to sit around and look at it. Hey, gold! For decades, gold bugs have demanded a return to the gold standard. But history conclusively shows that the world's economic problems didn't magically disappear with the gold standard. The reality is, gold then was just one more tool governments used to wage economic war against each another, just like currencies today. No monetary system is perfect, but anyone who says we're going back to a gold standard is trying to sell you something -- namely, a bar of gold.