Ben Davies, CEO of Hinde Capital in London, has put intellect, data, and graphs to work in the same vein in a presentation made last month at the Value Intelligence Conference in Munich, a presentation titled "Seeking Value in a World of Financial Repression."
Davies concludes:
"Unfortunately the criticisms leveled at capitalism's supposed failings are not a function of failed free markets but of state intervention in the supply of money. The failing of the banking system is the product of meddling in the true or real rate of interest which has distorted all pricing mechanisms in the production of credit, resource availability, manufactured goods, and services. This has been a global phenomenon. ...
"The repressive nature of finance today deters us from observing true prices that signal to us the true time preference of individuals to make purchases or sales and hence their assignation of value for assets.
"I may sound more like a philosopher or even a political reformer than an investment manager, but I make no apology. For me to achieve my fiduciary duty of protecting my clients' money I must protect its value first and foremost. Until such time as the monetary system resets or a new monetary order appears that fosters price and hence stability in the value of our numeraire, then I will have to fight what I see as infringement in free markets to perform their basic and fiduciary responsibility, which is price discovery. A true price discovery will enable value to be representative of buyers and sellers, where one can chose of one's own volition to reject or not the value offered."
Thus Davies echoes the British economist Peter Warburton, whose 2001 essay, "The Debasement of World Currency -- It Is Inflation, But Not as We Know It" --
-- perceived that the primary purpose of Western central banking had become to deprive the world of what he called "a stable numeraire," a constant measure of things financial. Of course that's what the gold price manipulation scheme is all about.
Davies' presentation is posted in PDF format at the Hinde Capital Internet site here:
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