|
The
straight-faced dissemination of transparently amateurish "official
analysis" these days loudly proclaiming that an economic rebound is
underway is so blatantly short on truth that it reveals a disturbing level of
desperation to raise confidence.
Furthermore, it
clearly shows that the damage to the national economic infrastructure is so
great that the practices deployed by the Federal Reserve and the Obama
Administration to goose the economy to revival were futile at best and most
likely counterproductive.
No healthy and sustainable growth seen on the horizon
Only the
generation of millions of private sector jobs producing a legitimately
saleable product or service is a reliable indicator to herald real recovery.
Unfortunately, the country foolishly embraced an economic model based on
consumption over production. As such, there will be no healthy and
sustainable growth until the populace somehow improves its personal cash
flow, pays down previous consumption, builds some savings, and re-establishes
a manageable line of credit. That said, parsing through all the official
gibberish about the "V" shaped recovery, however, I can find no
irrefutable data to confirm that such confidence-building job generation is,
in fact, developing.
We have a heavy price to pay on the long journey down
The economy may
appear to have stabilized but this is a brief respite on a long journey down.
The trillions of stimulus, nationalization of GM, etc. should have halted the
slide and jump-started the economy but, instead, such action has just
provided a short intermission - with a heavy price to be paid down the road.
All that has really been accomplished is the official establishment of
trillion plus dollar deficits going forward, with no end in sight. This
recurring annual budget shortfall is actually modest in comparison to the
multi-trillions needed for unfunded entitlements, Obama-care, debt servicing,
and the legions of upcoming bailouts for state governments and union
pensions.
Potential remedies are being politicized (and weakened) to our detriment
Of course, a
crisis demands governmental action. True to form, those that thirst for power
seized on the perverse opportunity they helped create and are grinding out
legislation that does nothing to honestly curtail future abuses. Instead, it
burdens the innocent and productive sectors of society with oppressive,
intrusive and damaging regulation. Unfortunately, there has not been one iota
of legislation by government - or dollar spent - in response to this crisis
that has not been politicized. Consequently, the economic, regulatory and
judicial distortions associated with heavy and far-reaching governmental
intervention guarantees an ever diminishing standard of living.
One dim bulb and one bright spot for financial refuge
In a speech
earlier this month Ben Bernanke treated us to a demonstration of his
understanding of money as one beholden to the fiat monetary system. A couple
of his pearls of 'wisdom' were as follows:
"Other
commodity prices have fallen recently quite severely, including oil prices
and food prices ... So gold is out there doing something different from the
rest of the commodity group."
"I
don't fully understand the movements in the gold price, but I do think that
there's a great deal of uncertainty and anxiety in financial markets right
now."
No Ben, gold is
NOT so much a consumable commodity as it is a monetary metal and, yes Ben,
there IS a lot of anxiety in the financial markets. Net, net, there is too
much limitless paper and not enough finite gold, ergo the falling value of
paper currency to gold.
That simple
exercise in cause and effect could have saved the Pride of Princeton the
embarrassment of appearing visibly perplexed about the basic tenets of money.
What do they teach in Ivy League economics?
However, contrary
to Ben's befuddlement, there is clear and unambiguous precedent for coping
with the demise of a paper-based, and thoroughly abused, monetary system.
While the options for financial refuge in such an imploding economic and
monetary environment are few, historically, gold has served in this role and
appears to be asserting itself once again. This can be witnessed playing out
across the globe in all major currencies.
Gold to ascend to much greater heights
Talk of a gold
bubble is coming again from clueless conformists who made the same kind of
assertions when gold broke $400 an ounce but it is just talk. Except for its
justifiable 4X price rise over the previous decade, there is no evidence of
any typical bubble characteristics being attached to gold as yet.
Unlike the
behavior of "investors" in the dot.com and real estate manias, the
masses are not running out to buy gold at any price. Indeed, if you talk
about investing in physical gold bullion at a cocktail party, you can still
count on being subject to ridicule. For contrarians, such an environment is
ideal.
The stage is
slowly being set, aside from the occasional periodic normal price pullback,
for gold to ascend to much greater heights.
Got gold!
Chris Blasi
Neptune
Global
Chris Blasi is
President of Neptune Global Holdings LLC (www.NeptuneGlobal.com) and a guest
contributor to both www.FinancialArticleSummariesToday.com and www.munKNEE.com
.
|