Jubilee Prosperity

The popular argument is that gold is a hedge against both inflation and deflation.

How can that be?

In fact, the historical record of over five centuries shows when we had a gold currency standard, gold stocks sold off with other stocks and economic contractions. Government gold did not repeal supply and demand, as Ancient Emperors learned to their dismay.

When we were taken off the gold standard, and the dollar devalued 69%, gold stocks anticipated this. They peaked the year the devaluation happened and tested the peaks with modest highs later, like 2008 and 2009. They paid large dividends when others could not precisely because there was a gold standard. There is no gold standard now. We have had our 84% dollar devaluation and possible twin peaks in gold.

http://www.kitco.com/ind/Patterson/jun102009.html

More to the point, people who expect inflation or even hyperinflation may not comprehend $14 Trillion in government debts, $104 Trillion in unfunded government agency IOUs and $556 Trillion in derivatives are so many usurious Pak Men gobbling up all other assets as they default and deflate.

Usury compounds faster than economies grow and eventually collapses, as Rothschild Brother Trusts demonstrated over the generations.

Bright friends working for central banks consider the recent highs in gold as significant opportunities to raise cash from trade surplus nations to finance their function to loan to economies imploded by debt and deficits at a price of austerity and repossession.

The borrower is slave to the lender.

Proverbs 22:7

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This entry was posted on Thursday, November 19th, 2009 at 7:46 pm and is filed under Capital Preservation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.