In 1971, the dollar was officially relieved of its false promise of gold convertibility by creditors to the United States. In an attempt to spare the world’s economies from the effects of creative destruction, free markets and the invisible hand were traded in for centrally planned economies. Instead of market participants determining who succeeded and failed, that task increasingly became the domain of academicians, central bankers and politicians.
Paul Craig Roberts is the former Assistant Treasury Secretary under Reagan. He is also a man who is not very popular in Washington. The following interview is as good a reason as any why that is.
It’s almost cognitive dissonance the way the financial markets go about their business. Everyone knows that the United States is bankrupt. Everyone knows that US Treasuries are a bubble. Yet, it’s the first place everyone runs to when things start to get messy.
In addition to the classic reverse head and shoulders pattern forming in silver, there is another very interesting bullish indicator currently. But first, credit to where credit is due. This is not my observation, but that of poster SRSrocco over on the TFMetals boards.
A while back I caught a Peter Schiff interview on one of the mainstream financial channels where he was recommending gold. The interviewer commented that for every investment thesis there existed a scenario in which the thesis would fail. He asked, what was that scenario for gold? Mr. Schiff replied that it would require massive spending cuts out of Washington DC and a balanced budget.
Well, we’ve heard from Warren Buffet and Charlie Munger on the subject of gold. Looks like it’s time for their young protégé Bill Gates to jump in the ring and throw a few wild punches. Next time though, guys, how about a few dry runs off camera first?
A friend of mine, who was struggling with the idea of buying gold, lamented that gold only had any value if someone else perceived it to. Yes that’s true. As it is for everything, whether you’re talking about a share of Apple stock or a 1977 Chevy Malibu.
Let me start by saying that I am not a technical analyst. Consider the following to be for learning or entertainment purposes only. If you take a look at the silver chart from last October there appears to be a classic reverse head and shoulders pattern forming with a neckline in the $36-37 area. This is considered to be a very bullish formation.
There’s so much confusion in the short term markets regarding QE and its ilk, that it’s easy to get whipsawed into oblivion – or at least complete frustration. You must maintain a steady fix on the big picture. Regardless of what the mainstream media experts would have you believe, none of the problems of the last four or forty years have been solved. In fact all of them are now worse.
I highly encourage you to read the latest interview with Hugo Salinas Price. Mr Price is a retired billionaire who made his fortune via a chain of appliance stores in Mexico. He is also a tireless advocate of sound money. His plan to reintroduce silver as a competing currency in Mexico would make it the most sought after money in the world bar none. It is well worth your time to understand the details of how he proposes to do this.