Are You Ready to Rock?

By: Alex Wallenwein | Sat, Apr 1, 2006
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Gold just shot past its previous high of just below $575/oz. Silver hasn't even felt the recent slouch that has prevailed against gold for a while. Platinum has hit an all-time high in its fiat-pricing history - and all of that happened against the backdrop of Fed indications that it will keep on hiking the federal funds rate for a while, and bogus official inflation figures looking rather tame.

What's the secret driving factor?

There isn't one.

Don't get me wrong. There is a driving factor, to be sure, but it is no secret. It's been on the Gold Monitor's home page for quite a while now, with all the demonstrative charts and all, but the whole thing was summed up most beautifully in one tiny paragraph coming out of Thursday's London Telegraph. The paragraph said:

"Analysts said funds were diversifying into commodities as they saw stronger returns than other asset classes such as bonds and equities."

Finally somebody figured this out.

I hope it wasn't all that hard for the author of that piece. The writing's been on the wall for a long, long time.

And, what is better suited to underscore an elegantly simple paragraph with an equally simple chart, one that simply says it all, in one picture?

Realize, also, that the flat-line performance of the Dow and 10-Year T-Note came off of historic highs (which are therefore unlikely to be improved upon) while gold came off a twenty-year low (to which it is unlikely to return - ever).

What is no longer "just around the bend but staring us straight in the face as you read this is the rapidly spreading realization among investors and savers that fiats are indeed fair weather currencies, and nothing else. They work fine while everything stays under the control of the incorrigible manipulators - those who are marked by an emotional need to believe that the world would certainly be doomed if it wasn't for their selfless "help."

Indeed, real things (things that don't pay "interest" since they are not cooked up from debt in one form or another) truly are drawing stronger returns than fictional fiat-things (printed matter or electronic signals imbued with so-called "value" by official decree).

Well, actually, that's an illusion in and of itself, for what they call "returns" in that tiny paragraph above is nothing but the fiat cash-out value of these investments. The point is that fiat and all things dependent on it and its issuers are losing ground while the things that are not so dependent are just sitting there, waiting. When you pull the plug in your filled-up bathtub at home, the walls of the tub aren't really rising. It's the water level that's falling - until you hear that familiar gurgling sound that tells you it's all over.

Will it ever be "over" with the manipulators? I prefer to call them meddlers, by the way

It sure doesn't seem that way, right now - nor has it ever. As long as there are people who'd rather live their lives in peace than constantly look over the meddlers' shoulders, there will be those who take advantage of their lack of attentiveness. It's just human nature.

However, it is now not just quite 'possible,' but becoming ever more likely that the meddlers will finally lose control. It may very well be that this loss of control will be such that the usual political claptrap and economic mumbo-jumbo the press dishes up will no longer suffice to keep the masses calm.

Certainly, there are always the more draconian measures that some so-called leaders may think necessary in order to keep their power. Their fingers are always twitching on the trigger, but it is nothing short of fear that keeps them from pulling it.

It's the fear that, once they "fire", the game will be on! That fear is the most effective restraint on excessive use of government power that history has ever revealed to man. Despite our well publicized complacency and laziness, there are lots and lots of feisty Americans around who just won't stand for such crap. And those with the twitchy fingers know this very well.

So, what can you look forward to?

Incredible volatility in the markets.

The markets have lost all direction - because the signals they run on are inherently misleading. Gone are the days when central bankers really knew what "money" is. A "dollar" in turn is far more - and far less - than the physical greenbacks we all have learned as identifying as such. It is a name for something that completely defies any description - just because it can take so many different forms these days. In essence, dollars are shape-shifting, ephemeral concepts. Nothing more.

They are not measures of value. They are measures of debt.

And so are yuan, yen, francs, euros, and what have you.

The recognition that real things are, well, more real than spooky concepts is surely earth shattering for some people. It always takes time to come down from their beloved flights of fancy, especially those of the monetary kind.

We may be witnessing the decomposition of the new world order for, unlike what most people believe, the so-called "NWO" is not s future thing. At's a fait accomplis - an established fact.

This NWO was built on its architects' collective ability to issue debt instruments and have them masquerade as "value." That ability is now coming into question, in the most severe way. And the most entertaining aspect of all this is that there appears to be precious little they can do about it.

They've had their time - and soon it'll be over.

Something will come to fill the void, and that something will be value. True value, not their cooked-up debt concoction.

No matter their intentions, no matter their contingency plans and all that nonsense. How does a liar provide for the contingency of truth piercing his veil of deception? All he has available to him are more lies.

The funny thing is: It doesn't even matter how many fools out there are ready to believe the lies. Truth burns right through all of that mess, just like the sun burns its way through the morning fog, eventually. All it takes is patience, and the patience of those who have been waiting is about to start paying off - in a really big way.

Expect gold to go through $600 in the next few weeks, maybe even days. Expect it to continue on after that. Expect the dollar to do whatever it wants. It won't matter. Up or down, gold will keep moving. And silver will keep leading the charge.

Where will it all end?

It won't. It will continue until fiat has found some semblance of a balance relative to the precious metals. For, worthless as it is intrinsically, it is still useful because it enjoys a certain level of convenience. And people value convenience, often more than value itself - which is sort of obvious since we are just coming out of a period that was marked by such messed up priorities.

Nobody could guess at what dollar-to-gold ratio such equilibrium will establish itself. How do you assign a value to a concept as relative and fleeting as convenience? There's only one point that's absolutely clear: The equilibrium will lie far, far below current fiat gold prices.

So, what about other prices? Will the fiat meltdown make the stuff we buy every day go up in fiat- prices? You bet.

That's why it's good to own some real metal, for that's the only real store of real wealth.

Got gold?



Author: Alex Wallenwein

Alex Wallenwein
Editor, Publisher
The Euro vs Dollar Monitor

Just like driving your car, investing only makes sense if you can see where you are going. The Euro vs Dollar Monitor is your golden windshield wiper that removes the media's greasy film of financial misinformation from your investment outlook. Don't drive your investment vehicle without it!

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