Erick Tippett

Why Gold Is Losing Its Shine

No economy can ever be "stimulated" by consumption and increased debt to pay down previously incurred debt, it's not
only lacking in common sense it's madnesss! If this country
had a decent educational system, the average person on the
street would have no problem comprehending that fact!

The "big bailout packages" you speak of will gorge the markets
with a continued superficial rally which could well extend past this summer into late fall, but will offer nothing of substance to an economy fundamentally weak!

It should be obvious that only production and savings produce an
economy inclined to wealth formation. I agree that the extra
liquidity injected into the economy has not yet reached the vast
majority of consumers and small business people, those on the
bottom of the "pecking" order economically. As the result, we will
continue no doubt to experience severe deflation for quite some
time to come. This cycle will be helped along with the banking
system's credit lending hesitancy and continued deleveraging in
all areas of financial investment and debt obligations.

Gold even in a raging bull market is bound to have periods of sharp
if not mild corrections and is no doubt due for such a period after
today's strong uptrend over $902.00 or so. An upswing in this area
of the markets will surely follow. Of course only time will tell as
nothing in life's cycles is written in stone; but some things do seem
to repeat, especially the very things we don't seem to learn!

The reason this country was taken off the gold standard was the
result of Mr. Nixon's decision to do so in response to the French
government under De Gaulle's insisting upon our physical gold
for their American Dollars! To have executed those requests
would have exhausted our physical gold reserves! It had nothing
to do with the "economy's then booming growth", though a gold
standard does put necessary restraints in place and maintains discipline that prevents excess inflation and devaluation of the
dollar.

Such a shame it is that in what claims to be a modern democracy
there is such an ignorance of the truth of all its history by such a
large segment of even the "educated" population!

In your spare time you might consider reading some of the works
of Jerome Smith, Ludwig Van Mises, and Lazlo Hazlitt for starters.

Enjoy!

EDT
Chicago, Illinois