While Ben Bernanke may think gold is not money nearly every other country says otherwise by either their words or actions. This week Turkey was one of those countries. Right now Turkey is in a huge financial scrape. They are currently running a 10% deficit as a country and now they are trying to persuade Turkish nationals to transfer their vast personal holdings of gold and other wealth back into the country’s banking system
For those who don’t know, Turkey has a history of economic volatility. As a result of this history many Turks choose to store their wealth in banks outside the country. The new initiative by domestic banks will try to create large incentives for natives to bring their gold back home. One idea that was discussed was a new interest-yielding gold-deposit accounts that would allow savers to withdraw gold bars from specially designed automated teller machines.
While Turkey is not on the gold standard, some economists believe that because of the vast gold ownership by individuals it has effectively created a defacto gold standard. As a result of this these same economists also believe the Turkey could be setting the stage for a gold confiscation order similar to what FDR executed in 1933.
In any event, it is obvious that Turkey recognizes gold to be money and it is important that Americans do as well if they are going to protect their wealth.