- James Turk highlighted recently that we are entering the 2nd phase of the gold bull market. There will be a more manic 3rd phase when everyone and their dog will be buying gold. The current rally does not have all the signs of a mania. Yes, more analysts are talking about gold. But most people are still not invested in gold. In fact, the majority are still largely unaware and uninterested in gold.
- The majority still view gold as an investment asset and not money. Some, talk of a bubble forming in gold. The perspective is incorrect! The reality is: a bubble in fiat currencies has been forming for the past decade. People are fully invested in it, not realizing it is just a piece of paper. The 3rd phase will begin when people awaken to this fact and run to real money: gold! We should also look at silver which has even better fundamentals than gold.
- Doug Casey writes:
Governments everywhere – prominently including the U.S., China, Britain, and Japan — are creating hundreds of billions, even trillions, of new currency units. The backing, or “reserves,” for their various units are other currencies, mainly the U.S. dollar. The problem is that every one of the world’s currencies lacks an anchor in anything tangible; they’re all just floating abstractions.
Central bankers talk, idiotically, about replacing the U.S. dollar with the IMF’s Special Drawing Rights (SDR) for use as an international reserve. The IMF isn’t even a government with police to prevent people from using alternatives to its SDRs. The idea is a complete non-starter. Entirely apart from that, the IMF will eventually be dissolved as a bankrupt shell. But that’s a story for another time.
I’ve said for some years that the world inevitably will resume using gold as money in day-to-day transactions. Unfortunately, it won’t happen because it’s practical or honest (which it is). It’s going to happen because all the world’s major currencies are heading for a once-in-a-lifetime inflationary crisis. I don’t expect a major player, like the U.S., to be the first to switch to gold. But I wouldn’t be surprised if Russia, Singapore, Hong Kong, or the UAE (to throw out some examples) comes out with a 100% gold-backed currency.
The question is: If gold is going to become everyday money, what will it be worth in terms of today’s dollars? I have to admit that the higher anything goes, the more prone I am to be a seller. I’m a gold bug (someone who believes the metal makes the best money), but I’m not always a gold bull. What is the most intelligent posture to adopt at the moment? Let’s look at a few data points to get our bearings.
Counterintuitively, even though the price has been rising, production isn’t rising. Just the opposite is happening. Production peaked in 2001 at 83.7 million ounces and has been falling since then.
Some of the production decline might come from miners turning to the lower-grade ore that higher prices have made profitable. But there may be something else going on. The case can be made that most of the large, rich deposits in the world have already been found: that currently minable deposits are depleting at the rate of 80 million ounces per year and that new deposits are being found at only a fraction of that rate; that Greens and other anti-growth types make it very risky, costly, and sometimes impossible to produce; and that most of the unmined deposits we know about are in politically problematic areas. That argument, termed Peak Gold, is analogous to Peak Oil. I’m philosophically disinclined toward both for reasons spelled out elsewhere. Ultimately, the price of all commodities is headed toward zero — but ultimately is not at all the same thing as imminently.
In any event, although all prices are determined at the margin — so 80 million ounces of new supply every year have an effect – the gold market is not at all like the market for copper, aluminum, uranium, or other metals (including even silver). All the others are consumed, with the price tending toward the point where production and consumption balance. But gold, being money, is different. Almost all the gold that’s ever been mined is above ground somewhere, presumably waiting to be traded for something else. No one knows for sure, since gold has been mined since prehistoric times, but there are perhaps as many as 6 billion ounces above ground. With production near 80 million ounces, the supply is expanding at about 1.3% per year.
The supply of dollars, of course, is rising much faster.
Alan Greenspan was quite candid when he admitted he didn’t know what the U.S. money supply really is. Is M-1, or the now censored M-3, or perhaps something else, the true measure of how many dollars actually exist? M-1 is currently reported at about $1.75 trillion. M-3 is estimated at about $17 trillion. U.S. government gold holdings come to 263 million ounces. Simple division gives us $6,650 per ounce as the number required to back each dollar in M-1 with a fixed amount of the metal. M-3 seems a bit outré at ten times that figure.
The projections become astronomical if you consider that after the coming inflationary crisis, most governments may find that the only practical course is to make their own currencies convertible into gold. It won’t just be dollars that will be linked to gold.
I’m not sure any of these numbers, bullish or bearish, any longer has the meaning it once did, before the crisis. It seems so quaint now, the statement by Sen. Everett Dirksen in 1966, “A billion here, a billion there, and pretty soon you’re talking real money.” It’s even quaint to think that the supposed “peace dividend” of $50 billion from the end of the Cold War in 1991 was supposed to be real money. Today it’s just a rounding error. The U.S. government, which is directly responsible for the number of dollars in existence, is now what gamblers call “on tilt” — in way over its head, desperate, and acting irrationally.
I wish gold were still under $300, so I could still say (which I did, constantly) you were looking at a ten-to-one shot with little risk. It still seems to me that $3,000 is a reasonable objective in terms of today’s dollars. One reason is that, in real terms, gold would have to trade at over $2,500 to match its peak in 1980. And the world’s, and the dollar’s, situation is much more serious now than it was then. Another is that I simply can’t see a better alternative for holding wealth at the moment, and don’t expect that’s going to change until I can trade my gold for stocks. Although I can’t be sure if they’ll be stocks traded in New York, Hong Kong, Mumbai, Dubai, or someplace not even on my radar screen at the moment. In the meantime, there’s likely to be a panic into gold. A gold mania.
The world is full of fiat dollars that have no fixed value. It’s apparently dawned on some of the world’s central bankers that the dollars are going to start losing value rapidly. They want to get rid of them, but they understand that if someone starts running for the exit, there will be a panic. The Indians were smart to have bought 200 tonnes of gold (about 6,430,149 ounces) from the IMF, for about US$6.8 billion. It’s a small amount of money in today’s world and only about 2% of India’s foreign exchange reserves. But it appears to have let the cat out of the bag and started the run for the exits.
Here’s the bottom line, and something I will discuss more in the future. There are very few, if any, “screaming bargains” in the world today. We’re still early into this crisis, and the financial world (not to mention the world at large) is full of dangers. Even holding cash in the form of dollars is risky. So I remain very bullish on gold, despite the caveats listed above.
It is nowhere near a bubble; it’s only in the second (Wall of Worry) stage of a classic bull market. The Stealth stage is behind us, and the Mania stage is ahead of us. I think it would be very, very foolish to sell gold now. The time will come, but that will be when you can see some unbelievable bargains in stocks and real estate — but you’ll be afraid to buy them. And your emotions will plead with you not to sell your gold. That will be the top. I suspect we’re at least a few years away from that point. Gold remains the best place I can think of to preserve capital.
Disclaimer – I am not a financial advisor. This is not an advice to buy, sell or hold any stocks or bonds or any precious metals. I am long gold and silver.
- Henry Makow in his usual perspicuous writing style makes clear the many issues that plague the world today. Yes, it is true, modern Jews are largely not descended from the 12 tribes of the bible. This is stated pretty clearly:
The Jewish Encyclopedia:
“Khazars, a non-Semitic, Asiatic, Mongolian tribal nation who emigrated into Eastern Europe about the first century, who were converted as an entire nation to Judaism in the seventh century by the expanding Russian nation which absorbed the entire Khazar population, and who account for the presence in Eastern Europe of the great numbers of Yiddish-speaking Jews in Russia, Poland, Lithuania, Galatia, Besserabia and Rumania.”
1980 Jewish Almanac
“Strictly speaking it is incorrect to call an ancient Israelite a ‘Jew’ or to call a contemporary Jew an Israelite or a Hebrew.”
(1980 Jewish Almanac, p. 3).
The American Peoples Encyclopedia
… for 1954 at 15-292 records the following in reference to the Khazars: “In the year 740 A.D. the Khazars were officially converted to Judaism. A century later they were crushed by the incoming Slavic-speaking people and were scattered over central Europe where they were known as Jews.
- How is it that atheistic Zionists can claim ownership of ‘God given’ promised land of Palestine? This is all: One big Satanic hoax/deception! Meanwhile, semitic Palestinians, who in all likelihood are the brethren of Jesus Christ are being massacred and cleansed ethnically.
- I am not a fan of Professor Shlomo Sand. He is incorrect in implying that there isn’t a biblical Israel ie. descendents of the 12 tribes of Israel and that biblical accounts are mythology (see Rev. 7:1-8). God is protecting the true biological descendents of Jacob. However, Professor Sand is courageous in voicing the need for the modern state of Israel to abandon its racists roots. I applaud him in this effort.
- The Satanic elements/leaders in the Zionist movement are about to turn on their next deception. As they have done during the 1920s to 1940s, they will sell out ordinary Jews to the slaughter. The agenda is still the same: create Anti-Semitism outside of Israel, particularly in the West, to drive Jews to Palestine. The ultimate objective: to get the chosen people to worship Satan and thereafter dispose of the useless ones! It is the battle between God of Israel and Satan. (see Rev. 12: 13-17).
- The sad fact is: the sheeple will be deceived once again and blame Jews for everything, much like they are being deceived now and blame Muslims for most of the world’s terrorism. Henry Makow writes:
I had an “Eureka” moment when I read an interview with Shlomo Sand, the author of “The Invention of the Jewish People.” He shows that the Jews today are not the descendants of Biblical Hebrews but are people of different races who converted to Judaism down through the centuries.
According to Sand, the description of Jews as a wandering and self-isolating nation of exiles, “who wandered across seas and continents, reached the ends of the earth and finally, with the advent of Zionism, made a U-turn and returned en masse to their orphaned homeland,” is nothing but “national mythology.”
“I asked myself how such large Jewish communities appeared in Spain. And then I saw that Tariq ibn Ziyad, the supreme commander of the Muslims who conquered Spain, was a Berber, and most of his soldiers were Berbers…who converted to Judaism.” Elizabeth Dilling said the same thing in 1964 in “The Jewish Religion: It’s Influence Today” (Chapter IX) Somehow I missed it.
“Present day Jews are a pot pourri of every race of man,” she writes, “and they do not have any genealogical or racial derivation from the ancient peoples of the Holy Land.”
MY NEW PARADIGM
I had the misconception that Jews were a race because of their traditional antipathy to intermarriage. This was enforced by Hitler’s racially-based treatment of Jews. But I couldn’t explain why Jews differed racially and discriminated against each other on this basis.
Moreover, I couldn’t reconcile race with the fact that the Illuminati, the secret inner core of Judaism, actively sought intermarriage with non-Jews and were happy to sacrifice other Jews to slaughter.
My paradigm has now changed. My latest thinking is that, like its proxy Freemasonry, the defining element in Judaism is the “ideology.” Race doesn’t matter. Anybody can join the club: Marilyn Monroe, Sammy Davis, Elizabeth Taylor, Madonna, Britney. As with American Express, “membership has its rewards.”
And like Freemasonry, Judaism is characterized by the fact that the membership is ignorant of the true agenda. Only the “Illuminated” are in on the secret. The rest are manipulated and disposable.
As with Freemasonry, the hidden agenda is Pagan and Satanic. Judaism uses the Old Testament to draw people into the fold. But it is actually defined by the Talmud and Cabala which spurn the Old Testament. Talmudic Judaism used “the Old Testament to cover its negation of every moral law of the Old Testament as its promotes practice of all the occult demonistic abominations excoriated by the Old Testament,” writes Elizabeth Dilling.
Dilling shows how Moses’ injunctions against bestiality, sodomy, adultery, incest, necrophilia etc. in the Old Testament are overturned in the Talmud. (Chapter V)
The picture of Jews as a nation-race is another way of controlling and manipulating them. It’s essential for Jews (and Freemasons) to understand that the best parts of the ideology are for public consumption and to attract the innocents. From this pool, only the corruptible are informed of the true agenda and allowed to rise. They become part of the Illuminati.
But if there is trouble, the Illuminati will plant the blame on the innocent Jews and Masons, the outer layer of dupes who run interference and serve as their human shield.
The hidden (Talmudic/Cabalistic) agenda of Judaism and Freemasonry is to supplant the natural and spiritual laws of the universe (God) with the tyranny of the Illuminati bankers. They will define reality. For example, homosexuality, bestiality, incest etc. are being normalized. What is healthy (i.e. marriage, family) is deemed sick; what is false (i.e. climate change) is deemed true; what is obscene and ugly (modern art, entertainment) is deemed beautiful. This is the New World Order.
The Cabalist bankers have been waging war on humanity for centuries. Ordinary Jews and Masons are in jeopardy by virtue of their association with this scourge.
According to the Old Testament, Jews must wait for the Messiah before reestablishing Israel. But the Talmud says, the Messiah is already here and it is the “Jewish people” themselves. By “Jewish people” they mean the Illuminati bankers who sponsor and run organized Jewry.
For example, the Talmud Kethuboth 111a, states: “The Messiah is without metaphor the Jewish people.” (Dilling, Chapter VI) The Cabala teaches that God (“En Sof”) is not moral, and has no characteristics. God is composed of nature. Since the highest expression of nature is man, he is God. And since only Jews are human, and above the level of beast, Jews (i.e. Illuminati bankers) are Divine.
According to the the Jewish Encyclopedia, the Cabala teaches that the relation between man and God is erotic, “religion being identical with love, sensual pleasure, and especially intoxication.” (Ch 6)
The Passover song “Only the Kid” heralds the day when all the world’s great nations destroy each other in war, and only Israel is left. (Chapter XIV)
Have no illusion, mankind has been inducted into a Satanic cult based on the Talmud and Cabala. Gradually we are being sedated and offered up as a tribute to Lucifer by his disciples, the Illuminati bankers. Mankind is doomed to an ersatz life, a perpetual rerun of the past. Anti-Semites are protecting the Illuminati by blaming the “racial” Jew. The true villain is the Illuminati banker and his lackeys of every ethnicity and “religion,” who embrace the Satanic ideology of the New World Order.