I don't fully understand what the author was saying, to be quite honest. But I do feel that Cyprus, and the secondary indicator you mention is not the defining factor in the drop in gold prices. We may have reverted to a long term trend line, but with dollars of a very different kind than those at the beginning of the trend. I feel this will ultimately be recognized as an orchestrated flush, which before Oz (or the coming of Gotham) would have been considered illegal. (This is not meant to take anything away from John's very astute recognition of a pending massive movement.)
Secondly, Cyprus gold would never hit the market as it will be scooped by another central bank from a non western nation. That has been the case in all central bank gold sales over the last ten years.
I don't believe in the deflationary view, unless you are referring to the need to force the world to eat its derivatives. The stock market is booming in a period of economic decline and uncertainty. Food prices are moving up at a very rapid rate. These are not deflationary indicators. On the other hand, massive housing price decline is not deflation, as the entire housing economy was in a super bubble and is simply moving back toward its more normal trend lines.
Supply may create its own demand, but that theory assumes that consumers/manufacturers exist to step into the market when prices are attractive. If it's government's intent to force commodity prices down for this purpose then that intent is illegal, it's corrupt, and it's a waste of tax dollars. We are propping up a house of cards, not because it is the economy, but because it is necessary to spread exposure to derivatives now that they are worthless.
The money that the Central banks are printing, or creating via worthless bonds, is NOT going into the real economy in any massive way, it is being sucked up and used for what will ultimately be judged as corrupt purposes--assuming that any of us is alive to remember what a free(er) market was like.
|
