America Priced in Gold

Let’s imagine that the gold standard was not abolished in 1971, and was instead maintained — or, alternatively, assume that only gold is money and that other things are merely paper intermediaries. What would be the shape of economic data under that paradigm? Here’s retail gasoline:

Priced in gold, that’s the lowest it’s been since 1995. How about food?

Priced in gold, food is pretty cheap too, not experiencing the kind of rampant inflation that it has experienced in dollars. What about those US Treasuries that Paul Krugman is worried are sinking to record lows? Here’s 1-3 Year bonds:

Here’s 20 year bonds:

And here’s the Dow Jones Industrial Average:

Priced in gold, it is cruelly obvious that we are in a gold-denominated deflationary depression. Perhaps practicing massage-the-figures pseudo-Keynesian voodoo with Professor Bernanke isn’t working? As I wrote last week:

The current DJIA:AU ratio is close to 1:8. At the peak of the NASDAQ bubble, when central banks were offloading gold, that ratio was more like 1:45. So Roubini is superficially correct that gold has risen a long way — until we note the fact that the DJIA:AU ratio throughout the last 200 years has tended to more like 1:1. In the 1800s it was as low as 5:1. One things Keynesians, and particularly Roubini do get correct is that global confidence, and therefore demand is shooting to once-in-a-century lows.

But the underlying factors causing the liquidity and confidence shocks aren’t going anywhere — military overspending, political corruption, indebtedness, withering infrastructure, oil dependence, deindustrialisation, geostrategic instability, bailout culture, the derivatives-industrial complex, food and fuel squeezes and so forth. So this gold-denominated deflationary run will continue for a while yet. If the DJIA:AU goes back to 1:1 gold might run all the way to $5-11,000 (depending on how far the DJIA falls).

57 thoughts on “America Priced in Gold

  1. Any idea where we’re all going? Because no one else seems to have one.

    Everything back on track in 2 years and then again back to buying stocks?

    Or do we go back to a gold standard backed by the Chinese? Where do you see gold prices in USD in 2 years (just read a comment from some HSBC analyst that he sees the gold bull market ending there).

    • I think we’re on the way to the moon (or priced in gold, in a massive deflationary depression). There’s the prospect of an international scramble for gold, led by China, and Germany (PIGS get bailouts for their central banks’ gold reserves). And until governments ditch the idea that a strong currency is bad (it’s not — it’s neutral at worst) we will see more and more and more debasement.

      Moreover, until economists ditch the idea that printing money and massaging the figures creates prosperity, gold is just going to go higher and higher. In the short term, a couple of weeks ago when we hit $1900 for the first time I said without QE3 we’d see a dip to $1700 (it hit $1704) and then a sharp trend up to at least $2000, if not $2200.

      In the long term, I wrote this a few weeks ago:

      Without the real and sweeping infrastructural reforms that I advocated last week — widespread solar energy, synthetic oil, carbon scrubbing, ultra-high speed internet, 3D printing, a reinvigorated transport network, improved food infrastructure, re-industrialisation and so much more – the foundations will become shakier, fiat currencies will become more debased, and people and institutions will seek solace in gold pushing the price up further.

      And — yes — if America truly rises to the challenge in the next two to five years and transforms itself back into the world’s greatest industrial behemoth, then gold is in a bubble, and will probably see a peak of around $3,000 an ounce, and a sharp fall back. But what prospect is there of that? It would require a complete about-face from government and private industry, an end to money-printing, to imperial conquest, and to the military industrial complex. It would require government to stop bailing out banks, and institute a proper firewall of separation between investment and retail banking. It would require its citizens to ditch their widespread addiction to junk food and reality TV and instead focus on engineering, science, solar energy, entrepreneurialism and building bridges. It would require Wall Street to cease operation as asset strippers and money-changers and assume their proper role as investors and job creators. Much prospect of that?

      Not really. Civilisations need to be shaken before they awaken to their problems.

    • I’m more concerned with the political ramifications of gold. Gold continuing to go parabolic probably means the gov’t will want to confiscate it and take us into WW3 in the process. Look at Libya – Italy keeps some of their gold there, so do you think Italy is happy with NATO moving in and taking the Libyan gov’ts wealth? Lines will be drawn, alliances formed, and social chaos will ensue. I just don’t know if things will tip towards global war, civil war, or revolution here in the USA.

  2. Thank you for the Post. I always felt that stock market charts rise, because of inflation. If there is inflation there is higher profits in inflated dollars, and therefore higher indices.

    Most Managed funds rely on long term charts to show the growth of equities. Sadly this is not adjusted for inflation. Showing the Gold price is a pretty good indication of real value.

    • Aziz,

      I note your Blogs are very well researched and I can’t agree with you more. I note you don’t have a massive following as yet, but this will build. What is your background? I am a CPA and reader of Economics and Geo Politics since a Teen.

      I knew the USA lost it’s chance to pull itself out of the GFC mess, when the Government spending was not targeted at massive infrastrucutre projects, R&D grants and renewable energy. Sadly, they are in big trouble now.

      If History, human nature, and self interest is a guide, I would watch China.

      I am planning to visit China to get a feel for the state of the economy. I am an Australian and we rely on exports to China.. I see on You Tube (Millitary sites), they have a huge Nationalistic populace. Quite Master race in tone. This is a precursor to a Millitaristic drive, which I feel is beeing groomed.

      • Buddy,

        Thanks for your encouragement. I am very pleased with the way this site is growing. I have had over 70,000 uniques since I started the site at the end of July, and I hope that this will grow to perhaps 5-7,000 a day by the end of the year as my PageRank increases on google, and I gain more regular visitors.

        Why not write up your impressions of China when you visit, and email it to me at azizonomics at aol dot co dot uk. It’d be interesting to hear your impressions, and I am always interested in writing about China. I have never visited China, although I have dealt with Chinese business people.

        My background is that I am a young man trying to contribute something productive (my economic thoughts) to the world, instead of going into the corporate world. My biggest intellectual influence is Nassim Nicholas Taleb, both his books, and my own discussions on his website. He convinced me that being an independent artisan is more dignified, more industrious and more robust than, say, working for Goldman Sachs or UBS, or Reuters or the BBC. Having my own editorial freedom is worth more than any amount of money.

  3. Aziz,

    You are a genius! I did not realise you were so young.

    I would suggest moving to China to save the money living in the UK, and see first hand how Russia, Ukraine, Kazakstan, China and all of Eurasia will be the next superpower. It is scary as it is almost like in 1984 the book.

    China needs to maintain employment and prosperity for a massive influx of workers from the rural areas to the cities. Some will return to the country if work dries up, but others could protest. This is not what the Communists need.
    As a result, they will spend on infrastructure. This means commodities. Russia, Canada, Brazil, India, Australia will all benefit from a commodity boom. (Food commodities especially boutique protein sources such as fish and meat will skyrocket)

    Or the Communist party can engineer a collapse, and spark a millitaristic policy of expansionism (Much like Japan did when commodity prices skyrocketed in the 30’s) I would say with Russia having nuclear weapons, the expansion will be South East.

    Time will tell. I will keep in touch.

  4. azizonomics,

    Here are some insights for you and your readers.. When people shout “gold bubble” (or silver bubble). All one has to do is compare the price to international currencies and not just the USD. If gold is up against every major currency.. then it’s illogical to argue it’s a bubble.

    If the fundamentals are still intact, we will see Gold north of $10,000 and it still may be a long way from being in a bubble. You’ll know when a real bubble is forming when CNN and CNBC start telling people to buy gold and silver and when John Doe becomes a net buyer instead of a seller.

    You are young at 24, Don’t make the mistake that many people do in believing that what we are seeing in today’s world is a result of mistakes and incompetent leadership. Ben Bernanke is not a stupid man. Greenspan was a genius. None of this is by accident. There is no such thing as natural economic cycles.

    In order to fully grasp what’s going on, you need an understanding of what the end game is. The real reason for the purposeful destruction of America.

  5. @Buddy. It sounds all good but I wouldn’t count on too much expansion without being checked by the US and company. I am hopeful that we can come to an agreement that will benefit all parties and we avoid any potential conflict. But IF, as you mention that the Chinese are so Nationalistic, well, then all bets are off. Considering that there is a 3/2 ratio of Men to Women, they just might have nothing better to do (and what better way to get that back in line). Of course, such a conflict would be many years from now since they have no chance of matching the US in a full-spectrum contest. Just sayin…

    • I used to have confidence in the might of the USA millitary, but the experience in Afghanistan and Iraq, has proven that military technology is no match for boots on the ground. China knows this and is being diplomatic. But watch out if the men without wives, a job, and hope get nasty. My ancestry has traces of Ghengis Khan’s men. The Asiatics have mobilised before and will do again. Last time (Golden Horde), they did not like European women, too “foreign” for their liking. But with the spread of Western porn, these young Asiatic men have a new taste for western women.

      Unless the USA drops the Geneva convention and pulls nothing short of a Sino Genocide, they are no match for the Chinese. If the Vietnamese beat them, the Chinese will pummel them.

      Australia, like America, can inflict serious casualties, with their massive arsenal, but will lose their Christian imperative if they do so.

      I have a Ukrainian background, and what I learned from family in total war is “KILL OR BE KILLED”

      I read that the Chinese educate their news audience every time the price of Iron Ore rises, the nation loses. This is grooming nationalism. They try to buy Australian mines, but our government only allows token mines to be bought. High Australian labour costs are making the token mines unprofitable. This does not bode well for the future with scarcity.

      The young men who are 10-15 now, are quite gullible. Take away their luxury and they will cry like babies. Angry young men make excellent soldiers. Tell them lies, and they are like robots.

      That is why I am off to China. I want to feel the “vibe” on the ground, whilst exploring business interests.

      I hope my openness on this forum will garner some trust in my findings. I have no interest other than knowing the truth. Geopolitics and Economics is my passion. I am no Hedge fund manager trying to manipulate forums.

      • I used to have confidence in the might of the USA millitary, but the experience in Afghanistan and Iraq, has proven that military technology is no match for boots on the ground. China knows this and is being diplomatic. But watch out if the men without wives, a job, and hope get nasty. My ancestry has traces of Ghengis Khan’s men. The Asiatics have mobilised before and will do again. Last time (Golden Horde), they did not like European women, too “foreign” for their liking. But with the spread of Western porn, these young Asiatic men have a new taste for western women.

        — Amen to that, sir.

      • I have no doubt the US would not be able to invade and conquer China. Our high technology military would take time to ramp up just to make the ammo for a large scale war of attrition. Factories for smart bombs can’t be thrown up overnight. Kind of like Germany having 100s of the much better Tiger Tanks vs thousands of the lesser Shermans. Also, we literaly do not have enough boots.

        However, a large scale war of conquest (continents vs say just a little Taiwan war) on the part of China (and allies) is a different matter. It is my belief, China would fare no better then Germany in such an endeavor.

        We still have one advantage that is all but insurmountable in the near term. Basically, we are sorounded by oceans with only friendly and weak countries within spitting distance. The Chinese would appear to be at least a decade away from fielding a formidable navy, if they started building aggressively now, which they don’t appear to be doing.

        So in a hypothetical World War III starting within the next ten years. I imagine the US would play the manufacturing arsenal once again (although ramped more slowly this time) with others providing the bulk of the fighting troops (India perhaps?) resulting ultimately in the defeat of China.

        • The China-Russia-Venezuela-Iran-Pakistan axis can massively damage America’s economy by harming the oil and supply chain infrastructure. America today would have a hard time mobilising a war economy, because it is too reliant on foreign oil, and doesn’t control enough of its supply chain (steel, components, etc). I personally believe World War 3 is only moderately likely to happen. More likely, in my view, is that China will buy up many of America’s productive assets, instead, and we will move to even greater Sino-American economic integration — just with China as the top dog.

  6. Guest: I have been through this multiple times before. Specifically, if there is a conspiracy to destroy the American economy then the people who will lose the most are the super-elites, because — as every wealth study shows — the super-elite’s wealth is predominantly in real estate, securities, debt, and dollar-denominated assets. Those living on the breadline only have their labour and a few cursory possessions to sell, and that will stay the same. I have spent a lot of time around Keynesians, and — frankly — among the power elite. And I have never seen them as disingenuous. They are too trusting of mathematics, statistics and simulations. I am fairly certain, for example, that both Greenspan and Bernanke are borderline Asperger’s. The real manipulators — Blankfein, etc — perhaps are complicit in crashing the economy, because they can profit on the way down. But I think it would be a net loss even for Goldman Sachs — destroying your own infrastructure is almost always a net loss.

    As for gold, the actual price is irrelevant. I believe the metric that matters most is DJIA:AU. We’re currently at 1:8, down from 1:48 at the peak of the NASDAQ bubble. These long-term trends tend to overshoot. I think we are returning to the long term mean, which is 1:1, but we will probably get to 2:1 at some stage, where I will sell my gold and put it into industrials, real estate, and agriculture. 2:1 today would put gold at $22,000/oz.

    You’ll know when a real bubble is forming when CNN and CNBC start telling people to buy gold and silver and when John Doe becomes a net buyer instead of a seller.

    — Amen to that.

    • azizonomics,

      The top 1 or 2% of earners are not the elite I speak of. They may be elite in relative terms compared to the mere rabble but the people who really control things are the same families who have ruled humanity since the beginning. These families own countries not software companies.

      Fortunes will certainly be lost by the elite who meet your definition. The elite of my definition will gain in wealth. Real wealth is never lost or destroyed. It simply changes hands.

      It is through this understanding that I have been able to make exceptional financial gains over the last decade. My bank account is directly proportionate to my understanding of the real world. Once you clearly see the game.. It becomes like a child’s game and it only works if you understand that everything we’re experiencing now has happened over and over again throughout history and it’s all by design.

      Good luck with your blog!

      • Ofcourse this system is “Evil by design” and yes wealth changes hands. And companies the ones with lasting success are acquired by the true “elite” wich is a handful in each country. In The Netherlands i have done some research with some incrowd in that world. And it’s about 15 Entities that control the entire Dutch society, This is were power and money spring from. Now you might wonder how i know this for my country well i strated a venture with a few people and we were up for raising some cash 🙂 and thats were my 1,5 ~ 2 Year lasting journey of pain frustration, and ultimatly relief started.

        When one has all the “Wealth” in the world one can consume in a lifetime the only thing that remains is staying in that position by force “power”

        Life is pretty transparant if you educate yourself in proper concepts and learn useful skills.

      • guest:

        If we look above Goldman Sachs, above the Fortune 500, above Gates and Buffett yes — there is still a class of old money above them — old European money. I have long heard legends and rumours about the Rothschild vault containing a similar amount of (non-tungsten) bullion to Fort Knox. For the sake of argument, let’s assume that the rumours are completely true, and that other old European families also own large amounts of gold. At August 2011 rates of $1890 an ounce Fort Knox (which is quite illiquid anyway) is worth $278.3 billion. If gold goes to $10,000/oz then it’s worth over $1 trillion. So quite a big gain. But other assets held by the super-elite, especially the more liquid ones — wines, art, real estate, treasuries, etc — would have also fallen by a large amount. And quite simply, if you’re dealing in excess of hundreds of billions of dollars, there just isn’t enough liquidity in any market other than sovereign debt.

        Now the founder of the Rothschild dynasty said that the time to buy was when there is blood on the streets — and he was right. And I don’t doubt that the holders of the old European money have advisers who look at the century-long macroeconomic trends and have worked out ways to profit from them — liquidate some gold at the top of the market, buy up productive assets, farm land and real estate — and buy the gold back with paper when the economy recovers and gold is much cheaper (relatively). That’s essentially my plan, too.

        But I don’t think the long-scale (Kondratieff) boom and bust cycle is a conspiracy. It’s a natural feature of the market. The super-elite just have a method for profiting from it — just like you and I. But going beyond that and deliberately destroying the economy will always be a net loss, because to profit from Rothschild’s aphorism, there has to be a recovery and boom time in order to cash out in paper and back into hard money (the idea that gold is a barbarous relic is a very useful one at this time).

  7. Offtopic: Found your blog rather recently so I don’t know if you’ve ever written about this topic. You seem like a smart man (meaning one of the rare people with whom you can have a meaningful conversation), so I wanted to know what do you think of the European Monetary Union. Is it a flawed concept from the start? Can it be fixed (great emphasis on *can* meaning not only theoretically, but practically – I mean whether or not it will break up)? Some say that a single currency used by various countries having very different cultures is a stupid idea. On the other hand, the gold standard that has been in use for hundreds (more?) of years meant pretty much that everyone was using the same currency. Did you already write something on this topic?

    PS: I myself am a great admirer of N. Taleb (or rather of his philosophical theories and outlook on life & economy).

    • The feel good reason for the development of the Euro was the thinking that a single currency would help nations come together and stop all of the wars.

      The Euro attempted to facilitate easier trade. If you can get more nations trading with each other they are less likely to fight one another. This is was the “feel good” propaganda peddled 10 years ago.

      Now, If you believe that stopping wars was the real motivation behind the Euro, well I have some US Bonds to sell you. The Euro was a test run at a world currency. It was forced on nations who did’nt want it.

      The Euro will likely crash, followed by the dollar a few weeks later and then we will here screams from the idiot box of the need for a single world currency backed by gold but it won’t be a real gold backed system. We’ve never really had a real gold back system.

    • I personally feel that it will never work, because Europe is a nation of Tribes. I don’t want to espouse racial/cultural stereotyping but it is a fact.

      Therefore German voters will kick out the politicians that share their wealth propping up the laggard nations.

      If they impose “Austerity” on the PIIGS, the PIIGS will hate the Germans. Either way I see political polarisation. Clouds are brewing. However the Anarchists and Communists of the 30’s are non existent now, too many apathetic youth. So maybe we will be spared. A common currency world wide, with capital and migration controls abandoned, may be in order. However it did not work in the EU, and it won’t work globally, unless fiscal independence is quashed. Politically this won’t happen. People are too proud of their identities.

      You either wipe out the entire suburb and replace it with your family (Pun on WW2 Nazi Germany), or you maintain independent family finances. You can’t have a common currency with independent fiscal responses. Would you trust your neighbor to do the right thing. I don’t think so.

      For this reason I fear the likelihood is nations going to war.

  8. I have a hard time believing that the Chinese, or anyone else for that matter, will be amassing invasion armies and rolling across borders to conquer other countries. The Chinese actually didn’t do too well last time they invaded another country, when they moved into Vietnam after the Americans left. Granted, they weren’t really out to take over the whole country – I think “giving them a bloody nose” was the stated objective. The Chinese got a bloody nose of their own.

    Nuclear weapons and other military changes have mostly put an end to the old invade and conquer dreams. Can anyone really imaging Chinese amphibious forces crossing seas and landing on foreign shores? They haven’t even attempted to take Taiwan.

    China is hemmed in by oceans, deserts and mountains. It actually is not a very big country in terms of productive land, and much of the good land is being rapidly destroyed. About the only place I see in danger of falling to the Chinese is Siberia. But it won’t be to massed tank formations and infantry brigades, it will be to a trader here, an immigrant there, a gradual process of people moving in, while the white Russian population slowly dwindles. Which is too bad for Siberia, it is one of least overrun places left on Earth, for now anyway.

    • This isn’t a conventional war — but it is war, and America is gradually falling to China. The weapons are not tanks and guns, but credit, debt, and international trade. China could do damage to America by shutting off the flow of goods, components, and by joining with Arabia, Russia, Venezuela and Iran in creating a new global oil cartel that only accepts payment in gold/ gold-backed yuan. That would do more damage to America than tanks ever could. And that is when the tanks, aircraft, carriers, submarines and nukes come into play.

  9. I love America — it has consistently been the freest, most prosperous and most democratic nation on Earth. My personal heroes are Jefferson and Franklin. It provided a home, shelter and opportunity to the world’s outcasts — people like myself, rugged individualists who wanted freedom and the chance to live their lives free of European patronage, religious interference by government, excessive taxation and war, etc.

    And now it is falling. As someone who loves America, and loves the constitution, that makes me very sad.

    • azizonomics,

      With all due respect, you can’t love the constitution AND embrace democracy. They are contrary forms of government. America was founded on the principles of a Republic not a Democracy. What America has turned into is might be called a plutocracy.

      • Guest: It was founded as a democratic republic. By democracy I don’t mean two wolves and a sheep. I mean a republican system where the form of government is based on popular consensus (with respect for individual rights), not on backdoor machinations.

  10. The this that charts like this tell me is 2 things:

    1. Gold has a very long way to go to catch up with current prices
    2. The USD has a long way down to get to where it naturally should be

    I personally think we will have true price realization as the dollar implodes with the world economy. It might just be a pipe dream as there are powers and forces(of the supernatural nature IMHO) that want to crush humanity and the best way to do that en masse is economically control their buying power. No matter, I am a recently converted Libertarian (once a repub) and I will continue to buy silver on principle no matter the cost.

    Once upon a time I believed in the game, I served in the military, fought in Iraq, then came home and finished college (no loans though go go GI Bill). Now I have to fight again, against the masters I once served. I hope we all wake up, and take not only America back but the world. To do that, we need true price realization of all commodities and goods to include currency. Thank you Nixon, you and Kissinger have done a doozy on the world.

    I tell people about Nixon and his cronies taking the USD off of the gold standard allowing the power of the USD to increase exponentially over the last 30 years. All you need to do is look in other countries that are developing. I know a chemical engineer who works for my company in Vietnam who makes $900.00/month. I have the same degree in America and I make 7-8 times more than he does.

    My advice, buy physical, buy guns, fight for your human sovereignty. Like a wise man said once “If you are called to fight for good and do not hoist the banner and fight the darkness, who will?”. The time is now, the goal is survival. Godspeed

  11. @Aziz:

    Regarding the thin stratum above the Goldman, Gates, Buffet, etc….

    Your point about the rising price of gold is well taken, but let me layout some other points:

    This stratum is not interested in money, they already literally own the printing presses. Trying to quantify their wealth is nonsensical since it is technically “infinite” (using their paper creations).

    This very exclusive cabal is interested in power: Specifically in how to consolidate it. The simultaneous collapse of both EUR and USD is not by accident, but part of the grand plan to start the herd moving, rushing for the exits. Helpfully, right on cue, a new currency will appear — one even supposedly backed by gold — the thunderous herd will flock to it.

    When the dust settles everyone will notice that this new currency is controlled by a pan-national corporation whose ownership, control, and motives are deeply shrouded in mystery. In this way the owners of our monetary system will finally escape the sovereign constraints that being incorporated inside of a “nation” has placed on them.

    They will finally be free to rule without need for the political process, since nations themselves will exist only as a kind of sharecropper inhabitant in this new feudal system.

    Their one technical problem is how to create the funding mechanism…at the nation-state level of course they have income taxes as a way to keep the debt-slaves chained to the grindstone. For lots of logistical reasons, it will be too difficult to translate this system to their new pan-national monetary regime. Hence why they need to institute carbon taxes (i.e. life taxes) or something similar as a way to ensure that a significant portion of human labor keeps flowing up the pyramid.

    • It’s an interesting set of predictions, and this is certainly not the first time I have heard them.

      One thing I do not believe, though, is that the thin stratum of old European money enjoys truly global hegemony. In China, they have little or no support or base. In the middle east, they rely on dictators, colour revolutions, and so forth. In Russia, they are sneered and laughed at, and Putin will wheel out the old Lenin line about hanging them with the rope they will sell them.

      The joint-crash of the dollar and euro are deliberate, but I think are probably more to do with poor short-termist Keynesian planning in the name of “exports” than any far-reaching conspiracy.

      There is a new axis of authoritarian Eurasian states emerging, together forming an antidote to Western hegemony. They dislike the Anglo-American establishment, and will do everything they can to stave off the emergence of a “global democracy” (yes — I am being somewhat ironic) or any other world order dominated by the Western powers.

      China did not forget the way the British empire treated them during the opium wars. Those scars are real, and the Anglo-American establishment has a great deal to lose from a rising vindictive China — especially seeing as China is becoming the spider at the centre of the web of global trade, and the flow of global energy.

      And look at the scorn and contempt with which China treats carbon taxation, or any of these initiatives. They see it as a new imperialism, and a desperate attempt to maintain Western hegemony. Which, in many ways, it is.

      • Completely agree that China is functioning as antidote of sorts – much like America originally did to the old European system.

        Moreover, I should add that I don’t think that their plans for “world government” are a forlorn conclusion. The best possible outcome, in my mind, would be if the engineered collapse sours the public on the very idea of government itself….and we collectively decide to replace the failed system with nothing.

        The next quantum leap in human consciousness will occur when we realize we don’t need government at all – markets can solve all problems which are actually solvable – but we may still be a couple of hundred years early for that realization among the rank and file.

    • The intent was republican democracy, which is why Jefferson’s party — (and mine, if I could so resurrect it) were known as the democratic-republicans. It wasn’t less democratic than Rome, or Athens, for instance, although it was certainly quite disenfranchised by today’s standard.

  12. See Aziz, Gold, brings everybody out of the woodwork. Your Blog is about to go Viral, as these guys like to share good sites. Best wishes. See my comment on German Court approval of bailout.

  13. You mentioned the “long-scale (Kondratieff) boom and bust cycle” above.


    Have you done any research on the effect of Moon and Solar cycles on the planet’s long term weather patterns and agricultural output. If Good agricultural output is a precursor to lower prices, and therefore lower inflation and higher real economic output, then the long-scale (Kondratieff) boom and bust cycle could be caused by natural events. Therefore I agree you may have a point that the “Elites” have this advanced knowledge and plan for it.

    I mentioned this to a student many years ago, and they disputed the “Hypothesis”, but further research suggests the Moon and indeed solar cycles influences weather. I do not believe in man made climate change, and do feel it is a tax in a low Consumer consumption (GST/VAT), Income earning (Income Tax) environment.

    Has anybody else on this forum, investigated it? I believe there is Russian literature on it, but I don’t read Russian.

    • In my view the Kondratieff wave is an economic-technological phenomenon to do with the creation, spread and penetration of technology and infrastructure, and the effect that has on societies as they grow, change, adapt, and finally stagnate. I’m not sure it has anything at all to do with lunar/solar cycles, although I certainly believe that that is an association that deserves some investigation. For example, there is some fairly strong evidence that civil disorder increases during coronal mass ejections. But in terms of a longer scale cycle, well, I just don’t know.

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  15. It appears that the Gold price in real terms is hitting it’s historical peak.

    However, interest rates were much higher then, and Government Debt, much less.

    I can’t wait to revisit this site in a few years and see what happened. I can’t imagine what will happen. Unchartered territory now.

    I do predict deflation, as the world has immense productive capacity and little wage growth prospects, so I have bought arable land, and have cash in the worlds most secure bank, Rabobank. I hope that they have their balance sheet in order!

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  17. For every 100 points the S&P drops in October, about 18.4 billion dollars will change hands. If the S&P loses 1,000 points, 184 billion dollars will change hands

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  20. I feel that since corporations got personhood we have not had a republic.
    I feel everyone must be equal to have a republic and if corporations have personhood we lose as humans in this republic. If each state changed their constitution to define a person to mean only flesh we would regain the republic.

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  27. Pingback: I Didn’t Build This « azizonomics

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