James >> 1. Anything and everything at an unlimited amount will be done in terms of creating more paper money in order to keep the financial system liquid to hopefully prevent a meltdown in Over the Counter Derivatives on debt.
2. That puts the last nail in the dollar coffin, most certainly when you know earnings are not going to keep up and less taxes will be paid, the Federal budget will balloon and we will have a negative TIC report.
3. Since it is axiomatic that the dollar rules gold and logical that the Formula rules the dollar, gold will go to and through all the angels.
4. The US dollar, for starters, is headed to .7200.
5. The equity markets are anyone’s guess as liquidity historically is the grease of the wheels of stocks. Give the perma-bulls liquidity and guess where it goes. In the Weimar Republic as there currency went to zero their stock market went to infinity.<<
While I agree with all of this, I reiterate that the valuation of gold is not straightforward. In fact, the second article on Sinclair's page discusses the gold price manipulation that is taking place.
It stands to reason, in my mind anyway, that the game cannot continue if the fraud is exposed -- and that fraud is the actual value of money in terms of gold and only gold. No other commodity or asset is regarded as a currency or quasi-currency, like gold is. Therefore, as a prerequisite to the expansion of the amount currency in circulation, the monetary authorities will do whatever they can to prevent gold from having its proper value. As I see it, if gold was, for example, $1000, $2000, $5000 an ounce, then paper money would, contrariwise, be that much more worthless and people would not wish to hold it. Increasingly, this will precipitate the breakdown of all commercial transactions and will signal the end of the world as we know it. It is thus my argument that gold is not the best hedge, and certainly not the only hedge, against the devaluation/debasement of the paper money. |
