Stefan in Japan

The Manipulation of Gold Prices

The conclusions that matter most for me from James Conrad’s article are not the ensuing blogs & discussions, dealing with these arcane arguments about how things went so wrong or who was to blame. What matters most is the effect on the real economy with regards to the man in the street, because invariably, each of us can become that man. At this point there is no question that the “fit has hit the shan” and the system of recycling the worlds money has gone haywire. Likewise the systems of distribution that feed the world along with any normal cycle of deflation/hyper-inflat... or whatever are getting sucked into the black hole of “financial oblivion” that our exciting newly developed “virtual financial world” with its nebulous “electronic money” has wrought us.
The Humpty Dumpty analogy brings to bear the current dilemma. No one can question at this point that he has fallen, but in pre-emptive haste, whatever remaining capital we haven’t managed to piss away, our “fearless leaders” have managed to “double down” & re-leverage the financial mess in screwy ways that seem to be more disconnected and insane with each new round of failures. The government’s efforts to keep Humpty Dumpty from falling further, may have delayed his decent, but postponing the inevitable (by transferring massive debt onto taxpayers) we have increased his inertia. To paraphrase what Marc Faber has said, “No one in these governments have considered the option of doing nothing, thus letting the overleveraged institutions fail and by allowing bankruptcy to ensue, affording the natural course of events to take place.”
The reality check is that heavily populated cities will have hungry desperate people in need and in fear. Looking on the news today at Athens, Greece, it is reasonable to conclude that this spells a “powder keg” for every country in the world as all will ultimately be dealing with similar fall-out when all hope is lost. My uncle has recently lost many millions of dollars by going down with the blue chips like GM, this after I pleaded with him to move at least 10% of his holdings into physical gold. He and at this point, many like him, have gone from wealth to despair and the prospect of poverty in their old age. This is a global crisis and many millions that only had a job & no savings from China & Russia to Europe, Japan and everywhere else are waking up unemployed with families to feed and no hope of their screwed up governments assistance.
So to those of you who do not have your head in the sand (or elsewhere), open your eyes to this “brave new world.” Develop a plan for yourself & for your loved ones. Many are not so privileged to be able to purchase gold; others seem to indicate that other mediums will retain their wealth better. As I’ve heard it said in California, “It’s all good!” At any rate, beware of the “financial tsunami,” because it’s coming to your neighborhood too.