key quote within Puplava's review:
Gold in The Forecast
The rise in the price of gold may be signaling this seminal event reflecting, above all else, the loss of confidence in the financial system.
Moreover, contrary to recent reports that show there will be no fall-off in production of gold, the precious metals markets are in the same condition
as the energy markets. The industry is not expanding its reserve base while future production is heading towards decline. I read almost nowhere in
any demand forecast the impact that a rise in investment demand will have on the gold and silver markets. Most demand forecasts for gold and
silver treat them as commodities and not as real money. It is this transition from a commodity to its role as real money which will have its greatest
impact in the price of the metals. This additional demand coming from the investment side is what is going to launch the metals into outer
space.
At the moment, the price of metals is being determined like most commodity markets by derivatives. It is a market that is being manipulated by
government for the benefit of government, which wants to keep confidence in paper strong with its voter constituency. The government more than
anyone else knows that once confidence evaporates, it will be hard to bring back. That is why every effort is being made to keep confidence in
paper high. All the tools at its disposal from monetary policy, fiscal policy to moral persuasion is being used to keep the public in paper, be that
the dollar, or financial assets such as bonds or stocks.
This battle of confidence being waged between the forces of paper and gold is nearing its end. There are just too many extraneous events
domestically and internationally for the forces of paper to contend with, much less overcome. In summary, there are too many holes in the dike to
plug to keep the forces of gold contained. There is simply too much debt, too much paper, and too much fraud in the financial world to keep
gold from transitioning back to its historical role as real money. |
