Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Savers Will Get the Last Laugh

Commodities / Gold and Silver 2010 May 23, 2010 - 07:38 PM GMT

By: Adam_Brochert

Commodities

Best Financial Markets Analysis ArticleFor that's what this cycle is all about. Cleansing the system of debt is a process fought tooth and nail by the the banks, which have encouraged profligacy among the masses and their governments to an extent not seen in the last few generations. Due to social mood (or whatever you think drives a phenomenon that recurs as regularly as the tides), the people and their governments were more than happy to oblige the bankers and take on enormous debt.


Those who tried to save money using conservative means were ridiculed. They were considered quirky and quaint. Who were those losers that saved up in order to pay cash for an item? Who were those wimps that thought home and stock prices were too high last decade and kept waiting for lower prices?

The reckless mood of endless debt has come to a close. There are many participants feeling the sting of the turn. Many of those who we all thought were rich are now poorer than before the boom started. Leverage cuts both ways. Savers are set to reap the rewards of their forethought and prudence.

This is why it is so maddening that many savers will soon be wiped out. Why is this? Because they insist on believing that a debt-based paper monetary system backed by nothing but too much debt is a good vehicle in which to hold one's savings. Cash in the bank and government debt will work as investment vehicles until the day they don't. And how can I be so sure that they will eventually fail when savers need them both?

Because government is the ultimate debtor and the majority of the population that votes has no savings whatsoever. How will we get out of this mess? Well, time is the main way. But we are an impatient herd, especially those with their greasy hands on the levers of power trying to control that which cannot be controlled. When global stock markets get back to the March 2009 lows and make a complete mockery of the paperbugs and their ridiculous beliefs in apparatchiks and bankstaz, will that be the trigger?

Or will it take a sound and scary break below the March, 2009 lows to initiate the trigger? Do you know what trigger I am talking about? I am talking about the trigger that causes the apparatchiks and their bankers to reach for the nuclear option.

That nuclear option is to change the rules of the monetary system. This rule change will wipe out the traditional prudent savers who used paper debt tickets as a store of wealth. Do you doubt it will happen?

Do you deny that it happened in the 1930s and then again in the 1970s? Do you deny that a 40 year cycle of monetary destruction is set to recur in the 2010s? The traditional prudent saver has fallen for the paperbug promise and will be pulled into the black hole of insolvency right along with the squalid debtors!

Now is the time for Gold. Gold, the hated asset that all of a sudden has become a bubble. Gold is money, has been for thousands of years, and will continue to be whether you think it's appropriate or not. It is older and more reliable than every sovereign currency ever created. Most of these man-made currencies have already fallen by the wayside. The sheeple accept the Euro as an important currency even though it's only been around for a decade or so! How quickly we forget the lessons of history.

The real prudent folks are those despicable Gold bulls who accumulate physical metal held outside the system controlled by those that will turn against and plunder savers. If the markets won't do it for them, the U.S. government will intentionally decree a devaluation of the U.S. Dollar before this cycle is over. That's actionable information. And in case you're wondering, no, you won't be notified in advance.

In fact, a devaluation will be favored by those who hold the reigns for the Yen and Euro as well. A coordinated "shock and awe" campaign may well help reset the debt morass in a surprising way. Those who hold real money will be rewarded.

Jealous paperbugs have drunk the official Kool-Aid and believe the apparatchiks will not let Gold bulls profit from their wise decision to buy physical metal held outside the financial system. This is sour grapes at its finest, but they concoct stories of confiscation, excessive taxation and Gold price collapses that will wipe out the Gold bulls.

I have news for this crowd (Prechter, Roubini and Denninger: WAKE UP!): no one with any form of money is safe when things get bad. How about property taxes and stock market taxes? How about a VAT tax? How about 401k confiscation? How about the score board after the first two big deflationary waves? Why does it take so many more paper debt tickets to buy Gold if King Dollar is getting set to win the clash of the titans contest? When will you all admit defeat and stop giving people bad advice on Gold?

Gold savers will have the last laugh as the asset price deflation in Gold terms continues essentially unabated other than the needed corrections that characterize every healthy and sustainable trend. The Dow to Gold ratio will hit 2 and we may well go below one this cycle. As a parting thought, never forget that the people and organizations who hold the most Gold in the world are the same ones who will get to decide how much to devalue paper against it!

"You have a choice between the natural stability of [G]old and the honesty and intelligence of the members of government. And with all due respect for those gentlemen, I advise you, as long as the capitalist system lasts, vote for [G]old."
George Bernard Shaw (1856-1950)

Visit Adam Brochert’s blog: http://goldversuspaper.blogspot.com/

Adam Brochert
abrochert@yahoo.com
http://goldversuspaper.blogspot.com

BIO: Markets and cycles are my new hobby. I've seen the writing on the wall for the U.S. and the global economy and I am seeking financial salvation for myself (and anyone else who cares to listen) while Rome burns around us.

© 2010 Copyright Adam Brochert - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules