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
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

World According to Gold: Here Comes Tokyo Rose

Commodities / Gold and Silver 2010 Sep 29, 2010 - 12:10 PM GMT

By: Midas_Letter

Commodities

Now that gold is muscling its way towards $2,000 an ounce, the forces of ignorance embodied by post-secondary-accredited yet nonetheless clueless commentators are being given voice by government sponsored media outlets such as CNN. Tokyo Rose was the generic handle accorded to any of a dozen women who, during World War 2 broadcast programming designed to undermine the morale of American troops over the radio.


Coverage such as stories like today’s “The Case Against Gold” on CNN Money are designed to undermine the determination of gold accumulators who are genuinely frightened about the purchasing power of their dollars as their government ‘quantitatively eases’ the economy back onto its feet. By continuously counterfeiting fiat currencies and flooding the markets with such ersatz lucre, the final rush towards economic collapse is momentarily cushioned.

But make no mistake. The acceleration of the rate at which gold increases – the average has been $87 per year since 2000, and in the last 365 days from today, that number is $317 – is an analogous signal that the rate of deterioration of the global economic system as a whole is itself accelerating proportionately. Contrary to the misguided tone in the CNN article suggesting now is not the time to get into gold, the correct sentiment should be that now is the time to put ALL of your liquid, dollar –denominated wealth into gold. All of it.

Here’s what is going to happen next:

1. We’ve reached the brink where the next phase is hyper-inflation. This is where money can’t be printed fast enough to keep up with its devaluation. Governments will stop accepting, first and foremost, U.S. dollars for the settlement of international trade, and will look to its own currencies. This will have the effect of paralyzing the global flow of commodities and commodity derived industry, which will further paralyze national economies, which will respond by printing yet more money, which will cause another devaluation in purchasing power, in this end-game spiral to the bottom of this hole we’ve dug.

2. The first casualty of the collapse of the economic system will be civil order. Crimes against property will skyrocket roughly proportionate to the rate of currency devaluation as families find themselves cornered by lack of goods on the shelves in markets, and there is no choice but to steal from whomsoever is weaker.

3. Finally governments desperate to restore order and re-establish a new global economy to facilitate the flow of goods again will sit down and negotiate the establishment of a new form of global currency that will essentially tie the amount of money one can print to the value of a country’s GDP, which at the end of the day, is the only realistic way to mark a currency’s value accurately. Gold at this point, will be re-embraced as the defacto standard by which currencies are valued, and should be able to hang onto that role as long as history is accurately recorded and taught.

4. This will bring about an end to the meteoric rise of gold, and should see its price flatten out, if this scenario unfolds.

As to the exact dates of this scenario, it is impossible to predict, because the variables that will force the final capitulation economically are unknown, such as how much money will be issued before the diminishment in purchasing power surpasses the rate at which money is created, and when exactly any given food producing country will stop accepting currency from its trading partners.

In this scenario, less developed and less populated countries that are agriculturally self-sufficient will fare much better than over-populated, over-industrialized agriculturally import-dependent nations.

Countries like Peru, Argentina, Vietnam will continue to eat. Europe, China and most fittingly, the United States, will suffer most.

The current war of words between China and the United States over currency, and Japan’s present requirement to sell its own currency to push down the yen’s value, are also indicators of a broadening monetary crisis. Here’s Tiny Tim Geithner and Barack Obama, neither of whom have a native macro-economic brain cell that functions properly, issuing threats to China about unfairly propping up the value of its currency while apparently ignorant about Japan’s violation of the free trade mantra supporting free-floating currency exchange rates.

Its truly astonishing that the hypocrisy of such policy remains under-reported in the mainstream financially media – clear evidence of the Tokyo Rose type of role that top tier financial programming has been roped into.

China holds all the cards here. If they decide the United States needs to be taught a lesson, it will just sell of some of its vast holding of treasuries and force the United States into hyperinflation. The final days of the U.S. hegemonic empire are at last coming to a close, and the world, including clear-minded Americans, should sigh in relief when that day finally comes. Then we can get to work, as a unified world, to build a more realistic and equitable global economy.

Want to subscribe to Jame's West's Midas Letter Premium Edition? Learn about the emerging resource sector stocks he's buying and selling each month for only US$39.00 per month. Click here to learn more..

By James West

www.MidasLetter.com

James West writes the MidasLetter at MidasLetter.com where subscribers learn about emerging companies in the junior resource sector.

© 2010 Copyright Midas Letter - 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.

Midas Letter Archive

© 2005-2022 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