Saturday, April 13, 2013

The Gold "Crash" That Wasn't

By, Chris Rossini

The talking heads are putting on quite a show.

Here are the the headlines:

There are many more using the same hyperbolic wording.

Yet here's the price chart for gold:

Does that look like a "Crash" to you?

Do you see a "Collapse"?

The paper peddlers are trying to shake public resolve. A lot of people have been woken up to the fact that the dollar is on its death march; so any decline is used by the peddlers to pump propaganda full-force.

Devout fiat money worshipper, Joe Weisenthal, is even using this small pullback to say that the tyrants and their "elite" economists have been right all along:
So the collapse in gold is not about gold, but about vindication for a large corpus of belief and economic research, which has largely panned out. It's great that our economic elites know what they're talking about, and have the tools at their disposal to address crises without creating some new catastrophe.
In another piece, Fiat Joe, explains that fiat money has "inherent value" because (get this):
[...]the world's strongest entity, with the full force of the U.S. army, the FBI, the CIA, the NSA, and various local authorities with guns demands that you pay them in U.S. dollars. That's not faith. That's the law. Sorry.
Actually, we should all feel sorry for Joe because he doesn't understand the nature of values. Nothing has "inherent value". And on top of that, not even the biggest empire in the world can break the economic laws of supply and demand.

Here's the bottom line: The system created by the self-proclaimed "elites" is dying. Ron Paul let the genie out of the bottle by bringing it to the public's attention. No matter how hard the Weisenthals and Krugmans try, the genie is not going back in.

Ron Paul may have been beaten politically. But his ideas are ravaging the opposition even to this day. Hence, every drop in the gold price is being pounced on as a propaganda opportunity.

It won't work.

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  1. Personally plowing into junior miners. Will be loading up on physical when bonuses hit.

  2. which junior miners look good to you?

  3. Precious metals are on sale. Back up the truck, folks.

  4. Sorry but that chart looks like a classic top to me. Now "Crash" depends on what you mean by it. Gold is never going to be 300$/oz ever again. But can it fall to 1200 or even a 1000? It sure can. After that it could easily go back up, to who knows how high.

    Ultimately, the fiat money crowd will be proven dead wrong. But it may take longer than you think.


    1. Whether or not it's a top is yet to be seen.

      My point is that a "Crash" or "Collapse" has not occurred even though the media is portraying otherwise.

      Can a crash happen in the future? Of course....but it has not happened yet.

    2. Point well taken. It seems to me that hot money is leaving gold for stocks. I have no idea how long that will continue. My entirely random guess is till gold is about 1000-1200 and then it will go back up. If so the the financial media will be insufferable for a while longer before they are forced to shut up.

      Thanks for the response.


  5. Actually, some things do have inherent value - food, water, air, shelter - but no, you can't eat money. Gold does have some practical and non-practical uses - electronics, jewellery, etc - but its function as a store of value is as meta-rational as using cowrie shells for currency. And what's driving its function as a store of value? Markets, which are after all decisions by people. Care to predict their behaviour? As for the graph, it is clearly showing a divergence from trend, similar to around 2009. The question may be: have the factors which were acting around 2006 which caused (?) the upward trend to begin changed significantly? Any ideas?

  6. AR...I have to disagree with you about inherent value.

    There's also no such thing as a "store of value".

    I won't go into that further here in the comments, but I do point you to Mises and Rothbard as they covered values very thoroughly.

    As to gold future, it may continue to go lower for awhile.

    The point of the post was to show that a "Crash" or "Collapse" has not occurred on the date that it was written, even though the media is playing it off as if it has.