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Saturday, September 29, 2012

This is a direct result of that

One of the most moronic infuriating comments you can hear over and over from the brain dead political and economic punditocracy is: "This is a direct result of that."

In sports maybe.  And in arithmetic.

But in the world of global economy this statement is always and everywhere a substitute for thought.

I don't care what this and that are.  If you ever believe this is a direct result of that you are constructing an oversimplified and largely irrelevant view of the world.

In the realm of economy and political economy there are correlations that are more or less statistically relevant.

Examine the correlations.  Try to understand how they can be influenced under a specific set of circumstances.

We are in a period where the elements of economy and political economy are the single most determinative factors affecting the stability of world government.

Things are exceedingly fragile.

And yet we hear arguments from politicians and political hacks that state over and over "This is a direct result of that."

Until this toxic, brain-dead from of argumentation changes the global economy will continue to collapse.

And gold will continue to soar.

Why will gold soar as the economy collapses?  Isn't that a "this is the direct result of that?"

Nicely observed. 

Well, the answer in this case, is that gold is a currency that cannot be printed into existence in an effort to affect This and That.  It can be mined and bought, but the supply is finite and limiting.  Therefor the more This and That fluctuates the more value is accorded to the stability of the finite supply of gold.  This is indeed a correlation not a cause.  But as far as correlations go it is one that has held pretty constant over the last 5000 years.

In other words, it's a correlation you can bank on.

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