Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24
Bitcoin Trend Forecast, Crypto's Exit Strategy - 31st May 24
Zimbabwe Officials Already Looking to Inflate New Gold-Backed Currency - 31st May 24
India Silver Imports Have Already Topped 2023 Total - 31st May 24
Gold Has Done Its Job – Isn’t That Enough? - 31st May 24
Gold Stocks Catching Up - 31st May 24
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Savers Will Get the Last Laugh

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

By: Adam_Brochert


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:

Adam Brochert

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.

© 2005-2022 - 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