Hallelujah!
It is about time, and interestingly, the thrust to curb production is coming from foreign producers. This coincides with the 15 cb's who pledged to limit gold sales to 400 tonnes per year. Awhile back, I wrote about the intangible debts that the US was incurring as a result of their handling of the currency crisis of the past several years. Part of that US strategy was the controlling of the gold market. The asians, Europeans, and now the foreign gold producers are standing up to the US. Unfortunately, this should have been done a lot earlier before the assets bubble got as large as it has and gold sunk to as low as it did with the enormous short position creating a component for a financial time bomb. With the dollar under pressure, the situation is going to deterioate as higher price imports continue to flood into the us. As our trade deficit grows, the pressure on the dollar, interest rates, and ultimately equities is going to increase. If the bubble pops, it is not going to be fun. A little prudence could have smoothed out the highs and the lows.
As we have seen in gold, rising prices have not traslated to higher prices for the equities. Jim McMannis has succintly stated many times, gold equities will perform better in a good market and go down the tubes in a bear market. A soft landing is better than a crash landing.
Be careful what you hope for. This board generates a lot of excitement and enthusiasim for impending calamaties and crashes. They are not fun, but I guess many people on this board have not been having much fun waiting a good portion of their lives for the sky to fall. A crash may be important to their sense of self.
Ken |
