Friday, December 20, 2013
A little perspective please
This is a picture of the gold price going back to 1800. If you extend the chart back to 1800 BCE it would look almost identical. The only reason it pops from about 1920 onward is because of the creation of the Central Bank System of paper money creation.
Money gets created out of thin air and placed in the pockets of the Member Banks and the Government-Favored Corporations who own and control the Central Banks. Those who own and control the corporations and the member banks get most of that money. Some of it trickles down - at times - when the money MULTIPLIES by changing hands rapidly through generalized economic activity.
Right now gold is retracing some of its gains. It could go down to $1000. So what? You don't own gold to get rich. You own gold to protect yourself against a Loss of Confidence in the Global Central Banking System.
Central Bank Money Creation is still accelerating at an incredible pace. But the money is getting stuck in the Member Banks and the Corporations with huge Government Favored status (Preferential tax, trade, regulatory status). The money is NOT MULTIPLYING - except at the Luxury Level of Society.
This creates a deflationary pressure that combats the inlationary pressure of the money creation. The two enormous pressures are currently at an incredibly delicate equilibrium.
But this incredibly delicate equilibrium can be and will be upset at any time by any number of Exogenous Events. A massive bank collapse due to Fraud or Mismanagement. A massive insurance collapse. A a terror attack. A drought. A flood. A War. A sudden uprising. Make up your own. It doesn't matter what.
The point is that now that money has stopped multiplying, anything at any time can lead to a loss of confidence in the 99 percent of humanity that is getting royally screwed by the Central Bank Money Creation system.
It happened 5 years ago. The Central Banks took 18 trillion dollars from the 99 percent and gave it to the Banks. Nobody said peep. When it happens again, I doubt the will be able to engineer a similar theft without massive protest.
And when that happens Gold will help protect you from the chaos that ensues.