by John Galt
March 2, 2012 05:30 ET
The world is on fire and guess what? Gold is under $2000 per ounce. Thus the banksters, powers that be, political elites, and so-called capitalists have been able to suppress the one real store of value to the point where ‘they’ can do guess what?
The question arises if gold must be kept under its inflation adjusted levels from the 1970 to 1981 explosion and bull run, why? Why not let it trade freely? Why create paper commodity markets to allow banksters and governments to manipulate the price and prevent the natural rules of supply and demand from allowing the acquisition of real money by the masses? For this understanding, one must open up a Bible.
Is this a story about religions, Jesus, and salvation? Uh, no.
It is about a radical who dared to challenge conventional wisdom. If Gutenberg dared to challenge the supreme authority of God and the Church of his era, how long will it be until American and European citizens wake up to force the political elites back into their bottle and to submit to the rule of law as defined by the U.S. Constitution and Magna Carta. Unfortunately it is way too late and most citizens in these regions are too stupid to understand the dangers of the central banking systems they have adopted to manage their respective economies.
During the 1970′s post U.S. gold standard economy, illegally usurped by President Richard Millhouse Nixon, gold meandered around the mid to high thirty dollar range initially to explode some twenty fold to a major top in the early 1980′s. This massive move was fueled by incompetent Federal Reserve policy under Arthur Burns who refused to uphold the original intent and legal obligations of the Federal Reserve Act of 1913. The result was an explosive expansion of the money supply and inflation in the late 1970′s under President Jimmy Carter. Fast forward to 2007 and the same type of incompetent leadership in the post-Greenspan era.
While Alan Greenspan was regarded as a hero by the financial elites, in reality this man is a war criminal who has destroyed the U.S. financial system and should be tried for his crimes. His actions not only encouraged the bubble which burst in 2007, but the lack of regulatory enforcement under such regional banking geniuses like Timothy “Turbo Tax” Geithner have all but assured that those who committed the fraud shall escape unscathed in the history books. Yet gold started to warn people in 2002 that the Greenspan “genius” had a shiny tarnish to it, the kind that said “DANGER WILL ROBINSON, DANGER, HYPERINFLATION ON THE WAY.”
Of course the “media” and watchdogs in the business journalism portion of our economy warned us, right? Uh, no.
In fact they said “buy, buy, buy” like a Jim Cramer bobble head doll while inflation adjusted returns deteriorated at an accelerated pace. Now as the world sits on the precipice of a major Middle East if not World War, the same idiots are saying “buy AAPL” because it is like ‘real’ money.
That works until a building in your town goes “KABOOM.”
This begs the question, how does gold skyrocket to $5000 per ounce then? Review the chart below for a hint:
As this chart only demonstrates gold’s move through 2010 (thanks to USA Gold), the price levels are pretty much consistent with today’s closing price levels. In the 1970′s gold made a twenty to one move from the mid-thirty dollar range to over $850 per ounce. As of this week, the markets have barely moved seven or eight to one from the mid-$200 area. What does this mean? It means to complete the current bull supercycle as it has throughout history, gold needs to rise to around a non-inflation adjusted level of about $5300 per ounce.
Will it ever reach that and be worth that much?
Yes and no.
Gold in current United States Federal Reserve Note dollars will top $5000 per ounce.
But one must take a moment and review what I have covered over the years as a warning:
1. Capital controls are in effect for the United States effective January 1, 2013.
2. Restrictions on maximum cash purchases and usage are now in effect for a large portion of Southern European nations, a trend which is being endorsed and promoted inside the United States government.
3. Gold and Silver are being promoted as the monetary unit and investment of “radicals” by the financial mainstream and world governments.
4. Supplies of the metals are becoming constricted as other world government’s not bound by by the conventions of the banksters elect to preserve a base of monetary value.
In the end, should things proceed as they are currently, the United States will default and eventually implement a 10:1 exchange ratio (if not greater). This leaves the holders of the paper currency at the mercy of those holding the “new” world currency. It also instantly creates hyperinflation for those not blessed with the savings rate or storage of precious metals. In the end the rumored exchange rate will force those willing to participate in the new system into a new currency regime where their assets are worth 1/10th of the previous value unless the owner of said assets elects decides to violate the government’s regulations and trade outside the system; something which will be quite difficult for those who wish to be part of the new order of society as defined by the current central planners.
This means one’s $5000 worth of gold would be worth 500 of whatever the new global currency valuation is declared to be. The next move is coming rapidly as worldwide central banks get more desperate so do not act shocked when gold doubles in less than a two year period, if not in less than six months. Just remember it is worth what the owner of the precious metal determines unless that foolish soul elects to submit to the whims of the new system and financial order.