"Gold bugs” are a remarkably consistent group – regularly extolling the same set of economic fundamentals which are certain to drive the price of gold to many multiples of its current value. On the other hand, “gold bears” and the anti-gold propagandists of the banking-cabal tend to “re-invent” themselves every few months.
For the last quarter of 2008 and the first quarter of 2009, the refrain from these doomed zealots was the same: gold was no longer a “safe haven”, and with inflation (temporarily) driven back by the bursting of asset bubbles, combined with a “credit crisis”, there was “no reason to own gold.” Inflation was the “only” market environment where gold would perform well, they lectured.
History showed they were wrong, of course. Gold held up better than any other asset class – and would have soared much higher, if not for some of the most extreme price-suppression tactics the Manipulators have used in all their decades of price-fixing. “Lease rates” for bullion were driven into negative numbers at a time when demand was unprecedented – which should have pushed lease-rates toward record highs.
Then, all the tons of gold which the bullion banks were paying traders to “borrow” was dumped onto the market. Short positions (for gold and silver) were ratcheted-up to concentrations many multiples higher than the legendary silver-holdings of the “Hunt Brothers” - at the time they were accused of illegally manipulating the silver market (on the “long” side).
Simultaneous with this, the massive forced-liquidation, triggered by the Wall Street banksters and their servants in the U.S. government coerced many people into selling their precious metals holdings – simply because they were the only assets which didn't have to be liquidated at huge discounts.
Today, the U.S. propaganda-machine is playing a loud chorus of “Happy Days are Here Again” - with the Plunge Protection Team doing its part by “pumping” U.S. equity markets to absurd levels. Surprise, surprise...the anti-gold propagandists have a new version of “reality”!
In the new world which they created...today, once again there is “no reason to own gold.” “The worst is over,” they crow, so people no longer need gold as a “safe haven”, forgetting that they had already said gold no longer fulfilled that function.
The U.S. economy is now reported as having “bottomed”, with the U.S. financial sector “healthy”, and with the U.S. jobs market and housing market both (supposedly) showing signs of “stabilization&r... Deflation has been conquered and the economy will resume growing in the 2nd half of this year (just ask Ben Bernanke!).
Let's assume for the moment that the propagandists are half-right (which would be 50% better than their recent performance). If deflation is beaten, then by mathematical necessity, that means that inflation is back.
As many astute, economic commentators have reminded people, “inflation” is the growth of the money-supply. “Price inflation”, which is typically simplified as being a proxy for (real) “inflation”, is merely a symptom of “inflation”. This phenomenon is very simple, and would be easily understood by the vast majority of citizens if governments didn't actively HIDE this truth.
We start with an existing supply of “goods” in the world, and then we increase the supply of money (i.e. “inflate” the money supply). We now have more money in peoples' pockets, but still the same amount of goods. At this point, it should be clear that with people having more money to “bid” on the same quantity of goods, prices must always rise (i.e. “price inflation”).
The supposedly enlightened leaders of Western governments are in the process of the largest, fastest increase in the global money-supply in history (with the possible exception of brief periods in times of war). Given what we all now know about “inflation”, what sort of “price inflation” should we expect – once all that newly-printed money floods the global economy?
Before you answer that question, let's not forget that these same “leaders” (who are all following the same example) have also “juiced” the global economy with the lowest, collective interest rates in world history.
Thus, what we can read in assorted propaganda outlets today is that the same propagandists who only six months ago stated that gold was the best asset in times of high inflation are urging people to sell their gold TODAY – just ahead of what could easily be an era of the most rampant inflation in history.
Precious metals should be the LAST asset which anyone sells under current economic conditions. End of story.