Gold Price
Jude Wanniski
December 18, 2002


Subject: Re: Blaming BernankeTo: Jude Wanniski <>
From: Ben S. Bernanke, 3:25 pm 12/18/2002

Jude:  I got similar treatment from that leading journal, the New York
Post.  Goes with the terrritory, I guess.    Ben

From: Jude Wanniski   <
To:     Ben.Bernanke@****.gov                                   
Subject:     Blaming Bernanke  12/14/2002 12:25  PM                                                                                             


Dear Ben:

I see you are getting blamed for the pop in the gold price. The piece from Baltimore outfit I keep an eye on is a hotbed of Austrians. I have assured them that as long as the Fed must maintain the funds rate at 1.25%, gold cannot climb on the say-so of a Fed governor or anyone else, as talking about liquidity is not sufficient to keep gold elevated. If the Fed announced that it would put aside the funds rate and let it float while it added liquidity, that would of course shoot up the gold price. More likely, gold is up because the administration is jumping up and down about Iraq again, threatening war, with or without UN support, and that increased risk of investment is sinking the DJIA and reducing the demand for liquidity.