November 24, 2017 
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Topic:
Gold Enters Major Bull Market

       

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 By bluejay

03/12/2010  10:04AM

Gold is below $1100.00 at $1099.30. What does today's weakness mean? According to John Williams at shadowstats.com in Oakland and close believers of him around the world, it means nothing.

John in February of this year said, it doesn't make any difference - in where gold is headed - if you are paying $700 or $2000 an ounce for it today.

The following is from Mike Maloney's Gold and Silver Report on March 9, 2010:

This money(speaking of extremely high inflation rates in Argentina, Bolivia and Brazil during the 80's) creation is unprecedented in the United States and shows no sign of slowing down. It may be new to us, but people from other countries can tell you from first-hand experience how it will turn out.

How many times do governments have to reprove that the formula of:

Slowing economy + increased currency creation does not equal long term prosperity for the country?

When this has happened in other countries there have been many losers, but the positive part of this equation is that there are also some individuals and families that win big with life changing wealth. Those who understand what is happening and take action, not only protect themselves but massively prosper in the final equation.

Mike Maloney - Rich Dad's Guide to Investing in Gold and Silver:

Gold and silver have revalued themselves throughout the centuries and called on fiat paper to account for itself. In doing so, gold and silver bring fraudulent money to justice. They've always done this, and they always will.

Once again, the accounting has begun, and it will not stop until the full accounting is completed.


The resounding answer we have come up with for ourselves and our families is holding physical precious metals either directly or in storage.

Examples in these other countries show that when this debasement of the currency happens there is a massive wealth transfer from those that hold the depreciating paper assets to those holding items of intrinsic value.

Are you ready?
 By bluejay

03/03/2010  3:44PM

Last on gold is $1139.60.

One very good reason for holding gold is the mistrust of the hired-hands, supposedly, who are safeguarding our welfare.

For a real eye-opener on what has been done to us and what continues, check out the attached article.

http://www.martinarmstrong.org/files/Behind-the-Curtain-Part-II.pdf
 By bluejay

03/02/2010  2:19PM

Last on gold is $1134.50. From a chart interpretation, gold has completed its recent weak spell that began soon after it passed $1200 in the beginning of December.

The $1300 to $1350 area seems reasonable to expect for an upcoming intermediate high point. If this range is bettered in the next three months or so, gold could well enter a ran-away phase like it did in 1979.

Don't forget silver, it will join in with gold's strength, possibly, to a much greater degree. Although gold continues to outperform it, this can all abruptly change if the precious metal's market gets hot.

Pre-1965 US coinage of dimes, quarters and halves is a sector of investment that continues to look quite attractive. Accomplished folks that I know who began their purchase program of these coins when silver was above $6, still continue to add to their hoard.

eBay continues to be the most competitive market for prospective buyers with an interest in these items. If payment is made through Pay-Pal your purchase is guaranteed.
 By bluejay

02/19/2010  1:05PM

Gold rallied today to a last of $1115.50 from just below $1100 following the increase in the discount rate that intially took it lower. Demand for gold in the $1080 to $1100 area appears preparing the metal for another thrust higher in the weeks ahead.

Dr. Jeffrey Lewis reported in kitco.com, http://www.kitco.com/ind/Lewis/feb172010.html that "COMEX has systematically created an even bigger problem for investors. The exchange allows investors to make good on their future positions with gold and silver ETF's rather than real assets, thus opening up the door for hugely distorted market prices."

First, the COMEX isn't referring to investors, they are referring to the likes of the big bullion banks like J.P. Morgan and Golden Sachs. When have you ever heard of an investor defined as someone who naked shorts gold and silver contracts? What a joke!

Physical gold and silver are disappearing from the market place, clear and simple. Basically the COMEX is saying, you can still bet on silver and gold prices but you can't take delivery and walk away with the specie.

Jim Willie has repeatedly warned that there is a growing physical gold delivery problem in London with some large Chinese interests boiling mad enough to employ an army of lawyers and auditors to retrieve their gold.

The fiat currency managers by the actions of COMEX are saying, we'll control the metal prices and prevent you from taking physical delivery but you can still play the game in our unbacked fiats.

The handwriting is on the wall for those willing to see it, the physical supply of gold and silver is running out. You better get your share before the supply channels start drying up.

COMEX's message is quite clear, the big gold and silver shorts are close to default. The bending of the delivery rules is just another bail out for these sociopaths. The CFTC should close this crooked exchange.
 By Dave I.

02/18/2010  6:00PM

The derivative market was the high lighted on "Front Line" of P.B.S. and the high flying free market. This is still a mysterious market, that was using the housing bubble to back their debt. the whole house of cards imploded just like the fall of the stock market in 1929, except bigger.
It was a time bomb that could have happened 10 to 20 years ago. The federal reserve was basically responsible for it. The Commodities market director was aware of it, but ham strung by the banking industry and the federal Reserve to stop the regulating of it.
Do not fear, time will heal all. Yes we will all have to pay for it. Life will go on. We will all figure out how to make a living or die trying.
Our nation is the bread basket of the world, so food should get cheaper. Housing will get cheaper. Retirement may become a lost cause, because the investment of that security went broke. We are a strong people,we will survive.
With out regulation of this derivative market, fraud and corruption ran out of control. We pay for it now.
 By bluejay

02/18/2010  1:55PM

Last on gold is $1121.50(now $1110.40) after trading under $1100 twice last night. Weakness developed soon after the close of the market in NY yesterday when the IMF, in an e-mail announcement, said that it would be selling the last of the 403.3 tons of gold, 191.3 tons, on the open market. This will never happen in the open market as it is against the IMF charter, conducting auctions would be more like it.

Releasing this information after NY hours would indicate an attempt to use black magic in order to get gold as low as possible in an illiquid market.

Unfortunately for the cabal, it was a dud. Just like when George Soros stated that gold was in a bubble in January. It turns out that since the Soros' statement he actually has been buying gold for his own hedge fund.

http://www.theglobeandmail.com/blogs/markets/market-view-video/soros-disses-then-buys-gold/article1471113/

We are in the age of manipulation and extreme greed. Getting the Federal Reserve Act of 1913 passed bordered on another form of manipulation, this time by the bankers and not a hedge fund.

The Act was approved during the Christmas Holiday. The crucial vote came in the Senate on December 23, 1913, 68 members were in attendance while 27 were no-shows. The final vote for passage was 43 yeas to 25 nays. One wonders, how many of the yeas were bought and paid for by the big New York bankers?

The bankers had long planned for this privately owned central bank to subsidize them beginning with their infamous secret Jeckyll Island meeting that begun in November of 1910.

http://www.youtube.com/watch?v=xISSTVF_KgM&NR=1

A quote from Robert Kiyosaki would seem appropriate here:

"This(Jeckyll Island get-together) is a murder mystery about the financial murder of the middle class."

Anyone who has ever read Ferdinand Lips' book, Gold Wars, is not surprised at what length the masters of fiat run currencies will do to support the continuing acceptance of those unbacked paper promises assisting the bankers in keeping us indebted to them as they both debase our wealth.

Gold is our only ally now as the real estate market has topped out for the long term, according to Martin Armstrong.

Armstrong also states, "the bottom comes in 13 years." This continuing real estate collapse is far more serious than we are being told. Las Vegas and Reno continue to be hard hit with little hope in sight. My son predicts that in the future a person will be able to purchase an average sized home in Nevada or Florida for one ounce of gold.

The only home values that I am aware of that have bottomed out are in Detroit. About 1/10th of a ounce will buy you a handful of homes. Check it out, go to realtor.com.
 By bluejay

02/16/2010  12:43PM

Gold is higher today at $1119.40.

The following linked interview between Eric King and Jim Sinclair is about 45 minutes of the most priceless listening time you may ever spend.

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/2/15_Jim_Sinclair.html

The financial sociopaths and serial bullies are just beginning to feel the wrath of the people they are attempting to destroy as the following news release suggests:

HurriyetDailyNews.com

Tuesday, February 16, 2010
Wires
Greece-Bomb

ATHENS, Greece (AP) - Police in the Greek capital say a bomb has exploded at the offices of American financial services firm JPMorgan Chase & Co., causing no injuries.
The blast occurred early evening Tuesday in an upscale area of central Athens, following a warning telephone call to an Athens newspaper.
The extent of the damage was not immediately clear. 161811 feb 10GMT
 By bluejay

02/13/2010  11:23PM

China's Pressing Need To Buy More Gold.

This is an excellent article from December 29, 2009.

http://www.gold-eagle.com/gold_digest_08/vronsky122909.html
 By bluejay

02/07/2010  1:41PM

In speaking of buying gold coins on reactions in the past it was thought that folks knew where to go and get them. This may or not not be the case.

In past dealings of mine, and friends and relatives I have become aware of some outstanding sources for gold and silver coins:

http://www.golddealer.com

http://www.moderncoinmart.com/cart1/home.php

http://www.ebay.com

In regards to ebay.com purchases have always been made from the top rated sellers using paypal. When using paypal all purchases are insured.

Numismatic coins can be purchased either professionally graded or not. I prefer some part of my coin's position to be in these graded coins as there is never a doubt to the condition of them and in the future can be sold sight unseen. The coins are slabbed in hard plastic with the grader's identification on it as well as the grade. The highest grade is MS 70 which is basically a flawless coin and carries the highest value in the series of MS ratings.

If anyone has an interest concerning the process of grading coins at PCGS which is my favorite there is a five minute video available from http://www.golddealer.com. When you get to the site go to "U.S. gold and silver PCGS certified." Next select either high bandwidth(Cable/DSL) or low bandwidth(Dial Up).

For simplicity purposes within the current bull market in gold I prefer to scale down coin purchases from the lower half of the ascending up trendline channel. To make purchases easy and methodical in the days and weeks ahead for those with an interest, lets just take the current range in round numbers in the channel from 900 to 1200 as a starting point to arrive at the median level, 1050.

At $20 lower intervals or so from 1050 you would purchase your selected coin varieties from the above mentioned sources or your own sources. Of the people I speak to, they hold 70% in gold and silver bullion coins and the balance in certified coins of their allotted percentage in their portfolio for coins.

For folks who do not like to store the bullion coins an excellent alternative is in buying and having certificates delivered to you of Central Fund of Canada(CEF-ASE). Of all the Exchange traded funds, IMO, this is the most secure. CEF holds 50% gold and 50% silver bullion in secure Canadian vaults.

I am not at all convinced that the current short term move lower in both gold and silver is over quite yet. As the earlier supplied article from Jim Willie states the current market weakness is being driven by paper gold sellers who don't necessarily have the physical metal but who are, anyway, affecting the physical price.

Mr. Willie states that this current weakness is an opportunity for physical buyers with the total collapse of the world's paper gold markets pending as he convincingly made his case for.
 By bluejay

02/05/2010  3:04PM

Gold closed on a strong daily note at $1065.00 rallying from an earlier low at $1042.50.

The following linked article by Jim Willie goes into the structural breakdown of the gold market in detail which may shock you:

http://www.kitco.com/ind/willie/feb052010.html
 By bluejay

02/05/2010  10:30AM

Gold has become weaker faster than expected as it is now off $14.10 for the day at $1049.10, breaking short term support at $1060.

There is no question that the cartel wants the metal under $1000. They have succeeded in freightening the market which is one of their onerous trademarks. Manipulating the dollar higher makes the weakness more justified in the minds of market followers but it's the gold they want lower, not the dollar higher. Just because Euroland has their troubles the dollar is now the currency of choice? The fact of the matter is that all fiat currencies will erode in value against gold and this present playing off one currency against the other is just child's play when weighing in some serious consideration for real wealth preservation with gold.

The following linked video clearly states the case why the dollar will fall in value against gold when some day over the next five years it will take 15,000 dollars to buy one ounce of gold.

Continue buying and holding gold, it is your family's insurance policy against planned government mistakes that are more than likely being orchestrated by the owner of half the world's wealth from across the Atlantic.

http://www.thestreet.com/video/index.html?bcpid=1815813252&bctid=64473713001#64372897001
 By bluejay

02/03/2010  11:35AM

The following is an addendum to the previous comments:

It wouldn't be a surprise if the cartel has a plan to jerk our chains with further paper selling in gold and silver along with the related shares in the weeks ahead. Over the short term if the $1060 level on gold gives way they will be successful in stirring up our nerves again like they did back in the later part of 2008 when a few U.S. banks tore into the precious metal's prices with a flood of paper product sell orders.

Recent bullish chart patterns of the Gold/XAU and the Gold/Silver ratios indicate that not only will gold be weak in the short term ahead but that suspected down leverage will be extended more to the related shares along with silver. When these ratios are bullish they actually represent bearishness. It's almost like when a bond is advancing it actually relates to a bearish trend of a lower expected interest rate return for current buyers.

It's the opinion here that plans should be in place to take advantage of weakness in gold if the $1000 level gets cracked. Any forced sell-off in gold only goes to show how desperate the fumbling fools in Washington have become as is supported by the growing numbers of folks who have become anti-government.
 By bluejay

02/03/2010  10:39AM

Last on gold is $1110.50 after hitting a high of $1125.80 in Hong Kong last night as the metal continues to gyrate around its median price within its bull market channel formation at about $1112. Gold's last sale is neither over-bought nor over-sold within this major ascending trend.

Currently, the top of the channel is at $1250 and the bottom of it at $975 are well entrenched and continue to direct the metal higher into the future as it continues to recover from a recent speed bump at $1225 in December.
 By bluejay

02/01/2010  12:59PM

The last on gold is $1105.50.

The following link provides perspective from Rick Ackerman concerning gold's weakness encouraged by the fiat currency lovers:

http://www.kitco.com/ind/akerman/jan282010.html
 By bluejay

01/30/2010  1:46PM

Gold closed out the week at $1080.20.

The battle against gold by the cartel is starting to intensify. Since CNNMoney.com early last week put out an article that predicted $500 gold, Nouriel Roubini is stating that $1500 and $2000 gold projections by experts are non-sense.

One just has to look into Mr. Roubini's past to see who he's been rubbing elbows with to get an idea what side of the fence he is on.

The following is an excerpt from Wikipedia concerning Mr. Roubini:

After receiving BA in political economics at Bocconi University and doctorate in international economics at Harvard University, he began academic research and policy making by teaching at Yale while also spending time at the International Monetary Fund (IMF), the Federal Reserve, World Bank, and Bank of Israel. Much of his early studies focused on emerging markets. During the administration of President Bill Clinton, he was a senior economist for the Council of Economic Advisers, later moving to the United States Treasury Department as a senior adviser to Timothy Geithner, who is now Treasury Secretary.

We live in a cruel world of thievery, injustice and moral decay and now the ones with political connections tell us gold is not for us.

Is there any wonder why the government put one of the most brilliant minds in the world, Martin Armstrong, in jail? Believe what you must, I prefer to be educated by the prodigies and not the white shoed boys from Harvard and Yale.
 By bluejay

01/29/2010  1:43AM

Last on gold tonight is $1083.60 following a low of $1073 earlier in the day in NY.

It's quite apparent that pressure is being exerted on gold's price at and around the $1100 area. As this selling continues the media whores along with a big investor are talking this market lower by pointing out that gold's recent strength represents a bubble ready to pop.

Isn't it interesting that the press reports bad mouthing gold is never balanced with positive comments? Now George Soros says, in so many words, that gold is coming down. Soros trades the US dollar and one can easily speculate with these negative comments on gold that he is long the dollar. Soros has had a keen interest in holding gold shares in the past. Is Soros short gold and worried at current levels or is he looking to buy the bullion lower along with the related shares????

Since his comments were made today at Davos 2010, expect some follow through in gold selling from folks who find themselves in a state of confusion or not being dynamic in their understanding of monetary science.

Another linked article below from CNNMoney.com from the 25th of the month is a real laugher: Some non-gold-expert who writes for Fortune Magazine predicts that the price of gold is headed to $500 in two years. This forecast may turn out to be the worst of all-time, beating the Boston Globe's stated position that buying the metal back in the early 90's at just above $300 was, basically, risky and a bad idea.






http://www.telegraph.co.uk/finance/financetopics/davos/7085504/Davos-2010-George-Soros-warns-gold-is-now-the-ultimate-bubble.html

http://www.foxnews.com/story/0,2933,297483,00.html

http://money.cnn.com/2010/01/25/news/economy/assets_bubbles.fortune/index.htm
 By bluejay

01/18/2010  11:29AM

Last on gold is $1132.70 with American markets closed today in observance of Martin Luther King day.

Jim Sinclair at jsmineset.com makes positive comments today on Africa's economic future aided by Chinese investments.

It's all about developing new markets and locking up natural resources along with guaranteeing China an exclusive source of gold in the years ahead.

Martin Armstrong sees China as the new Rome.
 By bluejay

01/17/2010  11:45PM

Gold is higher at $1136.10 in Asian trading tonight. It's the same old story IMO, China continues to buy in bona fide markets while avoiding NY markets that are bound by edicts from the Treasury and the Fed to Wall Street bullion banks to continue the phony sales causing general metal weakness when their doors are open.

The dye to our possible financial demise has been cast with our continuing out of control debt expansion. The world's eighth largest economy, California, is bankrupt as are so many other states. Our personal debt bubble of our holdings in real estate has burst and continues to suck our blood. The temporarly lows will be recorded in the second half of 2012 according to Martin Armstrong, only to continue lower starting in 2015 for another 33 years. There are reports floating around that home prices will sink further for the next two years by a minimum of 30%.

In Reno and Las Vegas, home prices are off 50% and more since 2007. Since they have been especially hard hit, it's conceivable to think that sometime in 2012 they could touch an inviting low point from which to rally up from until 2015.

Got your gold?
 By bluejay

01/06/2010  10:01PM

In The News Today
Posted: Jan 06 2010 By: Jim Sinclair Post Edited: January 6, 2010 at 8:56 pm

Filed under: In The News

Dear CIGAs,

The Angels are moving targets that are refined with each market reaction. Their change is miniscule but we account for it. That fact that $1224.10 was the cash high and the fact that the $1080 area worked reasonably well has lit up $1764 even brighter than $1650.

I therefore conclude that gold is definitively going to $1650 with an overrun to $1764 prior to a reaction before it moves to higher prices on or before January 14th, 2011.
 By bluejay

01/06/2010  9:35PM

The following are comments made by Doug Casey today of the Casey Dispatch that are profound:



Doug Casey on Currency Regime Change

(Interviewed by Louis James, Editor, International Speculator)

L: Happy New Year, Doug! Whats on your mind these days have any new thoughts for the new year?

Doug: Well, the new currencies discussed in the news have caught my attention.

L: Ah, yes. Hugo Chavez is launching a new virtual currency among some Latin American and Caribbean countries called the sucre. It looks like its going to be little more than an accounting fiction among trading partners. But the new currency the Persian Gulf states are talking about launching, the so-called gulfo, that looks more like a serious contender. What do you make of this?

Doug: My first reaction is to say, Monkey see, monkey do. In imitation of the European Union, these people are monkeying around with what should be money. Thats gold, of course. But you know, Ive been surprised that the first of these Esperanto currencies, the euro, has lasted as long as it has. It was officially adopted in 1999, though not put into actual circulation as bank notes and coins until 2002. It started out with a theft, in that the old currencies that people had were only good for another three years. After that, your deutschmarks, guilders, francs, and what-have-you were good only for wallpaper. If you had any stuffed under your mattress, you found out what their intrinsic value was.

But the euro thats replaced them, too, is backed by nothing. Nothing but the good faith and credit of the participating governments which are all going bankrupt. The problems in the EU arent just with Greece, Italy, and Spain; Britain and France are being downgraded, and its going to get much worse.

L: But wait a minute, is the euro really backed by even that? Well, maybe good faith, whatever that is, but not the credit of the participating countries. What would that mean? Credit in what? You cant take euros to the German government and say, I want deutschmark for these. Certainly not gold. If the dollar is a floating abstraction, the euro is all the more so, trying to stay afloat on a void.

Doug: I agree. If the dollar is an IOU nothing, the euro is a who owes you nothing. When it collapses, a lot of people are going to suffer a big wealth haircut. Bernie Madoff swindled thousands of people out of billions. The euro will swindle millions of people out of trillions.

L: Right but then is it accurate to say that its backed by the good faith and credit of these governments? I dont think it is.

Doug: Thats a good point. The average urban peasant in Europe thinks his government is somehow watching out for him. I suppose thats true, at least the way a dairyman watches his cows, or a swineherd watches his pigs. But the euro really is backed by nothing. Though, at the moment, you could say its backed by Mercedes cars and Gucci bags anything you can trade euros for. But thats for a limited time. Im absolutely convinced the euro is going to fall apart it makes no sense at all. It might be convenient for the national governments to then blame the European Central Bank. There will be recriminations and bad feelings all around.

And yet, its had a period of relative success against the dollar, and since phony economics reigns everywhere in the world, its not surprising to see other countries wonder if they can pull off the same scam.

L: Sure: If it worked for them, why not for us?

Doug: Exactly. The thing is that in the case of the Gulf countries, nobody uses those currencies outside of the issuing countries. They are really non-entities and everyone would like to secure the advantages the U.S. dollar has for their own countries. When other countries use your currency as a reserve, or even as their own currency, you can print the things up by the truckload and ship them overseas in exchange for valuable goods. You can essentially export inflation.

Its a subtle fraud thats worked for the dollar and, to some degree, its started to work for the euro. People see that its backed by big countries that are perceived to still be wealthy, so they accept euros with some confidence. Its a colorful, arty, well-printed currency, which comes in denominations up to 500. Arabs would like to see their currency accepted with equal confidence.

L: Sure, why not?

Doug: Hell, Id like to have a government and print up my own currency too. And Chavez and his cronies in these nothing-nowhere countries like Honduras and Cuba would love to have a central bank that gets that kind of respect. The Cuban peso has zero value outside of Cuba, and almost zero value inside Cuba. Cubans dont use it if they can possibly avoid it, and never hold it. Its like the Old Maid card. And thats within a police state, where everyone has been indoctrinated over three generations about how their governments paper was actually better than gold. Lenin quipped that its best used for constructing urinals in an ideal socialist world. And of course if youre very wealthy, or a fool, you can certainly use it that way.

But its not going to work. I guarantee that where these things dont turn into total disasters, they will come to nothing. Anyone who is holding assets in sucres or gulfos, just like euros and dollars, is going to be left with nothing when the game of musical chairs stops.

Look at the sucre. Its supposed to be for trade between the participating countries. They wont actually issue paper money or coins. If they are just going to use it to settle trade between themselves, its just an accounting gimmick. The whole thing is ridiculous. The first trade in the sucre is supposed to happen between Venezuela and Cuba for a shipment of rice, any day now. What of real value could the Cubans possibly use to pay for this? They produce absolutely nothing but sugar and cigars.

L: So Instead of paying with sugar and cigars, theyll pay with sucres, which they got like imaginary monopoly money at the beginning of a game? And the Venezuelans will take these and use them to buy something really exciting from Bolivia?

Doug: [Laughs] Yes, perhaps a boatload of alpaca wool sweaters. The whole thing is ridiculous. Its really nothing more than a bunch of bankrupts passing IOUs around to each other. They make each other feel as though theyve been paid, when in fact they all have nothing.

We have to start by asking: What is a currency?

The answer is that a currency is a government substitute for money.

This originated in the practice of private banks to issue bank notes. Youd take your gold to a bank, and the bank would issue you a paper note attesting to the gold you had on deposit. Why would they do this? Because its more convenient to carry a paper in your pocket than a large amount of gold. Thats how this started, with bank notes that represented real money in storage.

And then, as governments took over the function of banking with their central banks every country has a central bank now they, too, printed up bank notes (currencies) that represented gold on deposit. After a while, people seemed to forget that the currency only represented value and had no intrinsic value of its own, and governments were able to stop backing their currencies with anything at all.

Thats how the modern financial world works; its entirely based on nothing masquerading as something of value.

L: I guess its a cultural thing, like a witch doctor whose spells are backed by the full faith and credit given him, which is indeed powerful in a society that believes in them. Because everyone believes, when he says certain things will happen, they do, and people accept his powers as real. But he does not, in fact, command any magical forces, and the paper currencies people accept all around the world do not, in fact, represent any real value. At some point, reality asserts itself, as when the witch doctors powers fail in some vital task. That may be whats happening to paper currencies in the world today; if the U.S. dollar follows the Zimbabwe dollar, the whole paper faade may be torn apart, beyond any repair.

Doug: That could be. Although, while inconvenient in the process, it would be a good thing in many ways. These governments labor under the conceit that printing up more paper will create more wealth. The truth is that it does just the opposite, because the inflated money supply sends false signals to the market, and people build things, buy things, invest in things, etc. that they would not do without that false information. Thats how governments distort economic decision-making and create massive misallocations of capital.

L: Have you seen that YouTube video on Chinas empty city?

[Ed. Note: http://www.youtube.com/watch?v=0h7V3Twb-Qk]

Doug: Thats a perfect example.

L: Well, monkey see, monkey do is a pretty negative assessment of these new currency ideas, but isnt there a positive side? Not that theyll actually work, but that they might hasten the collapse of the paper charade?

Doug: It certainly is a sign of the times. It shows that all these other governments, at least, can see the writing on the wall and want to get away from the U.S. dollar. They know that if they keep using dollars and storing them, theyre going to end up holding the Old Maid card, or getting burned by the hot potato, if you prefer. Thats the economic reason. In the case of people like Chavez and Morales, they want to get away from it for political reasons as well. Theres no reason to want to help the enemy by using his currency.

But the Russians are playing it much smarter. Theyve been consistently and significantly building their gold reserves over the last several years. They seem to add substantially to those reserves every month.

For a long time, Ive thought that what will happen is that someone will come out of left field and offer the world a gold-backed version of their currency. It could easily be the Russians, or the Chinese. And if they did it right, making the currency fully redeemable in gold, that currency would become the strongest in the world. As a result, capital would pour into their banking system. And, assuming they made some other reforms, namely cutting taxes and regulation, their economies would become real powerhouses producing sustainable growth.

--------------------------------------

China has been buying up gold and copper in the ground now for many many months. Expect them to continue this trend until they announce a new gold backed currency that will sink the dollar and propel gold to unknown heights.

Got your gold?

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