Federal Reserve Board Chairman Ben Bernanke and Rep. Ron Paul, R-Texas, agree on few things, if any.
Another of their dust-ups appears to be over the market's view of precious materials that people use to hedge against tail risk, or severe market fluctuations.
Paul, a 2012 presidential candidate who will not defend his House seat, was concerned at a House Financial Services Committee hearing Wednesday that although Bernanke does track gold prices, the central banker does not view gold as money.
"When you wake up in the morning, do you care about the price of gold?" said Paul, an ardent Fed critic and chairman of the panel's subcommittee on domestic monetary policy.
Bernanke said yes. "The reason people hold gold is a protection against what we call tail risk — really, really bad outcomes," he said. But that did not satisfy Paul. "Do you think gold is money?" the lawmaker said.
Bernanke replied, "No," telling the committee that gold was an asset like Treasury bills.
Paul then asked why, if gold is not money, is it so popular a hedge against risk. "Why don't they hold diamonds?" he said.
"Well, it's tradition. It's long-term tradition," said Bernanke.
The exchange between the two men did not go unnoticed by other lawmakers. "I think the chairman may have broken Chairman Paul's heart when he said that gold was not money," said Rep. David Schweikert, R-Ariz.
"I think he'll survive," Bernanke said jokingly.
Perhaps the bigger question is whether the two men will miss their frequent disagreements after Paul leaves Congress.
"Somebody had told me that announcement" of Paul's departure "would put a smile on Chairman Bernanke's face," the Texas lawmaker said, prompting laughter in the hearing room.
As Bernanke was caught smiling over that remark, Rep. Spencer Bachus, R-Ala., chairman of the full committee, pointed out the Fed's staff may also not be crushed by Paul's future absence.
"They're all smiling," Bachus said.
