Time to Buy Gold Bars?

By Charles R. Morris
04/07/2008

If Federal Reserve Chairman Ben S. Bernanke was hoping that the rescue of Bear Stearns would calm financial markets, he is likely to be disappointed. Last week’s Senate hearings on the details of the rescue brought more of the gory details into the light. Investors might be tempted to phone their neighborhood dealer in gold bars.

Bear Stearns, readers will recall, notified the Federal Reserve on Thursday, March 13, that it was on the point of declaring bankruptcy. The Fed provided a short-term loan, funneled through JP Morgan Chase, and over the following weekend engineered a shotgun marriage with Morgan. The Fed had to put up a $30 billion credit line, later changed to $29 billion, to induce Morgan to do the deal.