One week ago, major headlines were suggesting that "Gold Rush Gets Cut Short" as gold temporarily fell back from the $1310 price point. As I record this one week later, gold is knocking on $1350 and silver is flirting with $23. All of this is happening as the economic backdrop continues to worsen by the day.
Japan just announced their own version of a zero interest and quantitative easing policy in a last ditch attempt to stimulate their economy. They are hoping to drive the yen lower relative to the dollar to possibly stimulate exports. While that was happening, Chicago Fed President Charles Evans was telling the media that the Fed should be doing "much more" monetary easing to spur a sluggish economic recovery. When he talked about unemployment numbers not coming down he said: "This is a far grimmer forecast than we ought to have".
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Fare grimmer forecasts seem to spreading throughout the economy this week. Perception management seems to be at an all time low and falling. Major banks have temporarily halted foreclosures due to "irregularities" in loan documents and foreclosure filings. A YouTube video with Congressman Alan Grayson from Florida discusses fraudulent foreclosures and the shearing of the American people. One example in particular cited a man in Florida who was foreclosed upon. The only fly in the ointment of that foreclosure was the fact this man had paid cash for his home and had no mortgage to begin with. This is reaching a fever pitch.
A New York Times article reports that many in congress and a number attorneys general across the country are calling for freezes on all foreclosures. Curious though it is happening just 30 days prior to an election. That aside, this is serious. It, and dozens of other problems are lining up to hit the proverbial fan all within a very short period of time.
A New York Times article reports that many in congress and a number attorneys general across the country are calling for freezes on all foreclosures. Curious though it is happening just 30 days prior to an election. That aside, this is serious. It, and dozens of other problems are lining up to hit the proverbial fan all within a very short period of time.
The financial DNA of the United States and the entire world is about to rewritten in dramatic fashion. I think many people are waiting for a galvanizing 911 type financial event to push the economy over the edge. That may well happen. But the fact is, the economy has been going over the edge in slow motion for quite some time. The speed is now picking up. Instead of juggling 8 balls or spinning 8 plates, we're juggling and spinning 25. Everything is going round and round faster and faster and it isn't going to stop. That is, until gold either explodes in price or is revalued considerably higher.
Predictions of higher and higher gold prices seem to be more commonplace and generally accepted as a likely possibility. A higher gold price means a lower valuation of the dollar. The currency wars that have openly erupted below Japan and the United States, and soon to be many other countries, with rapid quantitative easing and zero interest rates, will increase in potency as countries and currencies play their final hand in a global game of fiat money musical chairs and hot potato. There will be only one winner in this violent financial game. Because at the end of the day, all roads will lead to gold.
