The entire global economic system works on the foundation of something concrete- liquidity - and something equally important but entirely ephemeral: Trust.
The last post dealt with how the trend in liquidity is entirely supportive of higher gold prices.
But the trend in trust - or mistrust is equally supportive.
There can be no transaction - even the smallest, simplest transaction - without trust.
Nobody would ever lend a cent to anybody if they had no trust they would ever get it back. Every loan would take a tremendous amount of liquid collateral. Derivatives which are a quadrillion dollar business would stop. (that might be a good thing - but then hedging would die which would also gum up the global economy.) No more options. No more futures. Farmers couldn't hedge their crops. No more drilling. No more mining. No more banking. No more shipping. No more insurance (how can you trust you'd ever get paid?) No more mortgages. No more - you get the idea...
Obviously we're talking about a complete absence of trust which could never happen, right?
Actually it has happened before, and it could happen again.
We're not there yet but we're heading in that direction. Less and less trust in all our institutions. Especially the legal institutions that enforce all contracts.
Trust in Congress which makes our laws: stands at 13 percent.
Trust in the US judicial system stands at 25 percent!
Trust in the Supreme Court: 40 percent.
Trust in the banking system stands at 10 percent!!!!!
40 percent of Americans believe in a "Deep State" that seceretly controls everything.
40 percent of Americans believe we are living in a Biblical End of Times.
40 percent of Americans believe in a New World Order in which a shady class of Elites led by Jews is trying to take control of everything.
40 percent of Americans believe the last election was rigged.
And one of our two political parties is running on the platform that all of these institutions are rotten to the core and deserve even less trust.
The truth behind all this mistrust is irrelevant. It is the mistrust itself that leads investors to protect themselves with the one great hedge against mistrust: Gold.
Gold is the only investment with no counterparty risk.
Gold is the only form of money with no counterparty risk.
As trust dies gold soars.
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