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Tuesday, June 26, 2012

Gold and The Politics of Hatred and Mistrust

As the presidential election looms there are two powerful narrative dominating the US domestic ariwaves:

Republican Narrative: Barrack Obama is an Evil Black Socialist who secretly hates white people, hates capitalism, hates successful people, hates business.

Democratic Narrative: Mitt Romney is an Evil White Plutocrat who secretly hates poor people, hates people of color, hates all social institutions that help anyone but very rich white people.

The fact that the policies of Democrats like Barrack Obama and Republicans like Ronald Reagan have been virtually identical for over half a century doesn't seem to occur to any of these world class hate mongers. 

Facts be damned. All the political class cares about is winning.  And hatred has become the exclusive weapon of political choice.

The only thing that the politics of hatred can accomplish is the destruction of the paper economy.

Why?  Because the paper economy is completely dependent on trust. And never before in the history of the world has the global economy been 100 percent dependent on paper which means 100 percent dependent on trust.

All paper economic instruments are completely dependent on Trust.  If someone hands a piece of paper that promises something you'll only accept this paper if you trust that the promise will be honored.

And trust in the instruments of power is nearly non existent.  Once it is completely destroyed, the paper economy will cease to function.

And then the economy based on precious metal, commodity and barter will reassert itself.

If someone hands you a piece of gold, you don't need trust.  You know exactly what that lump of gold is worth.
We all know - or should know - at this point that the central banks of the world are designating gold as an official tier one capital asset.  We all know - or should know - that the central banks of China, India, Russia, Brazil, Indonesia, Vietnam, Turkey are accumulating gold.

Over time, this will put tremendous upward pressure on the gold price.

But gold will fully assert itself as trust in the institutions that control the paper economy collapses.

And the Political Class in the United States is currently doing everything in its power to destroy trust.

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