Gold and Swine Flu Economics

The irony of the emergence of a Swine Flu pandemic amidst an economic contraction brought on by glutinous gorging on credit and real estate in the United Casinos of America is surely not lost on barbed minds. The insistence by the World Health Organization that it be termed the far less ominous sounding "H1N1" is evidence of our collective predisposition to avoid calling a spade a spade if it has negative implications. That predisposition will be viewed by posterity, should there be any, as a terminal flaw in the human character of our era.

The manifestation of a Swine Flu pandemic in the midst of a global economic meltdown does not bode well for the ‘recovery’, which, depending on who you listen to, is either well under way or years away. Our insistence on ignoring the simple solutions to both problems may yet herald the biggest historic instance of mass delusion and subsequent extinction of our kind.

Close the airports and unwind the global entanglement of trade temporarily pending a recalibration of its mechanisms, and enjoy the inevitable return to mental and physical health, albeit amidst diminished financial circumstances.

Such simplistic yet idealistic pontificating sounds feasible superficially, but we’ve devised and installed such a pervasive metaphysical infrastructure of misinformation, that its only on our death beds that we catch a brief glimpse of the reality behind our fabulous global amusement park.

Economists, (the academic variety, I mean – not the “one who acts economically” of archaic definition) are the copywriters for the tanned and coiffed anchormen who translate economic data from mathematical complexity into street form.

“Stocks Rise on Renewed Optimism.”

“Gold Down as U.S. dollar rallies.”

“Green Shoots of Economic Growth Seen”.

Its as if the real driving forces of economic fluctuation are too menacing to identify plainly. Instead they must broadcast in the language of kindergarten students.

More realistic headlines are conceivable.

“Swine Flu Pandemic Caused by Too Many Pigs”

“Stocks and Gold’s Daily Price Fluctuation Irrelevant to Bigger Picture”

“Economy Won’t Recover Until Transparency Across Derivatives, Commodities and Credit Implemented”.

It's not so hard.

The Swine Flu outbreak is being compared in the press to the Spanish Influenza outbreak of 1918-19. That outbreak was caused by “an unusually virulent and deadly Influenza A virus strain of subtype H1N1”, according to Wikipedia.

The Swine Flu outbreak of 2009 has been described as a virus “that was produced by reassortment from one strain of human influenza virus, one strain of avian influenza virus, and two separate strains of swine influenza virus.

The Spanish Flu outbreak was not Swine Flu. At least, that’s what the Center for Disease Control in Atlanta says. The question is, then “why are they being labeled identically?” The same question could be asked of currency and gold. Gold is money, and currency is merely paper printed with a value that fluctuates according to its perceived value. Gold takes gargantuan effort to produce from mines, which explains its cost and value, whereas paper money is fabricated with a minute fraction of the effort.

Why, then, is paper currency accorded the same utility as gold?

Historically, paper money evolved from the fact that you stored your gold with a banker, and he issued you pieces of paper acknowledging the fact that there was gold that you owned stored in the banker’s vault. That evolved into governments issuing currency backed by gold in the government’s vault. Through various manifestations the Gold Standard determined the value of the world’s currencies, until Richard Nixon terminated the relationship with the end of the Bretton Woods Agreement, that governed the last albeit bastardized version of the original gold standard.

The motivation for the United States government in adopting a floating currency backed by nothing but the willingness of a counterparty to accept its face value is obvious enough. Gold takes enormous effort to produce and is limited in quantity.

Confidence is manufactured comparatively easily, and is limitless under the right conditions. The inherent value of gold undermined the confidence game required to perpetuate the U.S. dollar into the global reserve currency, and so it evolved that it was against the government’s interest to have a global gold standard, and very much within its interest to have a global U.S. dollar standard, which is what we have now.

Unfortunately, the same inability of humanity to temper its responsible stewardship of currencies throughout history has once again manifested itself in the virulent fabrication of U.S. dollars, facilitated by the media. No currency has lasted more than a hundred years in history, and it appears that the inflation of the U.S. dollar supply should soon enough lead to a Weimar-esque price hyper-inflation, where the price of a loaf of bread doubled every 15 seconds that will spell its doom.

Unfortunately, or fortunately, depending on your position in the food chain, the information distribution apparatus that has been hijacked by the richest of the rich and the power hungry mob in three piece suits is now so powerful, that even in the face of irrefutable tangible plain-as-the-nose-on-your-face evidence to the contrary, the U.S. dollar continues to appear strong, and gold performs weakly.

For those of you entranced by the information apparatus so described, here are a few basic facts that should help you prepare for the worst.

1. Gold is money (so is silver). Currency, especially the U.S. dollar, is not.
2. There is no recovery underway, and won’t be for at least another 2 years, if even then.
3. Swine Flu, despite its emerging ‘preferred’ name H1N1, is still Swine Flu.

Disclosure: The author owns some gold and some U.S. dollars but no pigs.

Comments

[yellowhoard:]

The irrationality of leaders around the world is astounding.

Egypt: Kill all of the pigs!
Russia: No more pigs from the US!
Joe Biden: Hide from all pigs!

Wash your hands everybody.

May 03 09:36 AM

[YoYoMama:]

There is no "swine flu pandemic". There is an outbreak of swine flu. Nothing more.

There are 160 cases currently of swine flu, more or less, in the U.S. WOW. Over 36,000 people die of the common flu each year. Shouldn't we be more worried about that?

I'm here in Houston, where we've had one death from swine flu, and every doctor and nurse I've talked to said the threat is way overblown. If the reaction to this was left to health officials, we'd have a more sensible approach. Isolate and contain. But it's left to government, which always does way too much of the wrong thing. Which is OMG shut everything down.

I will be SO glad when the media moves on to the next catastrophe.

May 03 10:06 AM

[B12B:]

The REAL concern is not how many cases we see right now, rather that no natural or acquired immunity against this strain exists and therefore creates the potential for lightning fast spread into massive numbers of individuals.
b

May 03 10:33 AM

[OldFordTruck:]

It is amazing how expensive gold is! Or…how little your dollar buys. My being laid-off in this depression has helped me see the light! ….I mean the glow of gold. I hope the establishment is able to re-inflate the bubble. It will give me time, and hopefully a new job, to implement my new financial plan to purchase and take possession of my new retirement plan. There is enough room in my gun safe for several ounces of gold and silver. I predict lead one day will also become a precious metal if we stay on this highway to hell. I must too, wash my hands now.....thanks for reminding me!

May 03 11:46 AM

[@TexasER:]

I hold gold. But to say the dollar is not money is crazy. It amazes me how religious people get about the gold thing on both sides.

Your point about euphemisms is well taken. Makes me think of the late George Carlin. The funniest jokes are true.

May 03 12:22 PM

[auto44:]

Excellant article on the flu ,gold and the press. You could have included the colleges and their liberal proffessor's contribution to mis-information. It seems things are pretty simple until obuscation is purposely included.

May 03 12:24 PM

[billyboy54:]

Maybe we could send all those Wall St pigs to Egypt ?


On May 03 09:36 AM yellowhoard wrote:

> The irrationality of leaders around the world is astounding.
>
> Egypt: Kill all of the pigs!
> Russia: No more pigs from the US!
> Joe Biden: Hide from all pigs!
>
> Wash your hands everybody.
>

May 03 12:55 PM

[Doc 224899:]

There have been no vaccine manufacturers with corporate bases in the US for several years because the liability risks are too great. All the ones that were here left, or outsourced, or in some other way located the vaccine operation beyond the reach of American trial attorneys. That doesn't mean you won't find a vaccine manufacturer's stock symbol to trade on that has a US address listed in the corporate profile, it just means that the vaccine development and manufacturing is done outside our country to protect it from our country's lawyers. As a result we must rely on vaccines manufactured in other countries, which is a terrible strategic vulnerability, and which will never be addressed by the likes of Obama because he cares more about pleasing trial attorneys than about the health and safety of Americans.

May 03 02:12 PM

[Tim Singleton:]

The government's concern over the flu is driven by its concern over how much attention the American people are paying to Obama's total overturning of contract law in Chrysler's case.

It is misdirection for either events now in motion or events to come.

May 03 08:14 PM

[DrZero:]

Swine Flu is a media disinformation campaign. Were a Republican administration in power right now we would have 7x24 reports on "the Bush Depression" "Homelessness, Poverty and Hunger in the Age of Bush" "Government give money to Banks, not to Homeless Children" "Our Failing Economy" and more.

The media has it's head up Zero's butt and will have to engineer a continuing series of stories about anything except our exploding economy. Didn't see Michelle's $600 sneakers on the news - but if it had been Laura Bush it would have been the top story.

Different rules for different rulers I guess.

Meanwhile, we sheeple are not that stupid. Witness over 1 billion rounds of ammunition bought last month. The crappy USD might not be worth a damn, but lead is.

May 03 10:00 PM