Dan Walker

Gold Strikes Record Levels in Most Currencies

Every time I see these type comments, the dow bounces back. No, I do not think this time it is anything more than a retrace, and I most certainly do not disagree with any of the gold fans; in fact, I have a bit more than a troy pound stashed. I simply think you guys are early to the party. This will be a long hard charge down the hill, and we are just coming up the second crest. You will be handsomely rewarded next year. If you do get rewarded before then we are much further up the big muddy than anyone wants to think. The central banks have the supply and the moneyed interests to insure that it does not happen this year. When the moneyed interests run out of cash next year is when you will see the fireworks as well as the attendant rewards.

Why Gold Is the New Currency

The Fitzman: Bush was not elected or re-elected because he was the superior leader. He was elected in both cases because he was the lesser evil. Until our current party system can provide choices better than 'dumb and dumber' or 'bad and worse', nothing will change and that also applies to JM, BO, Pelosi, Reid, and the rest of the village idiots. You are part of the problem for blaming one person for what required the entire village. For my opinion on the chances of better choices under the current system, see the disclaimer.

There is a point most people seem to miss on this subject and that harkens back to basic finance class. When banks lend money, the proceeds are deposited in some bank and it is loaned again subject to the prevailing reserve requirement. Repeat as needed. This is money creation under the fractional reserve system. Money is destroyed when the loans are repaid and the money supply contracts. What you never hear in finance class is that loan default has the same effect on the money supply as repayment. By the time subprime, prime, HELOC, and credit card bubbles are all fully deflated, we are possibly looking at 2 trillion dollars missing from the money supply. Old Ben may seize the bearings on the presses trying to keep up with that kind of money destruction. Clearly (I hope) we will not bail out the foreign holders of these assets. That portion of the money supply will be destroyed for good. If Ben 'n Hank can hold their bailouts under the amount of dollar destruction caused by the default of dollar based mortgage assets owned by foreign holders, gold looks overpriced. I'm betting that they have already budgeted their estimates of that amount as the dollar amount they can spend on bailouts. For my guess on the accuracy of their estimates; Disclaimer: I am buying gold, already loaded on silver and seriously pondering these points. There will be spikes and dips as we discover the truth. Proceed at your own risk.