All commodities will rise. This is inevitable. The idea that somehow Freegold will emerge as a solution is just absurd. Governments will
NEVER give up power until they are forced to do so. Gold will be reduced to the barter system and its value will rise largely as an alternative to ELECTRONIC money. If you had $1 billion, and you wanted to withdraw it from a bank, the best that could happen is there will be a cashier’s check. Even that is highly unlikely. The only way to withdraw that much money is by electronic transfer. So let’s get real. There is no role for gold to play in the future and the whole idea of a fixed exchange rate has been attempted many times and it has always failed. You cannot fix the value of money without fixing everything else from wages to stock values. That is why all fixed exchange rates systems have collapsed after brief periods of time.
What we do face is a rise in prices due to the
Sovereign Debt Crisis. Nothing will take place until we begin to see pressure put on the debt markets. That has not quite appears outside of Greece and Southern Europe. The politics is already starting to shift toward inflation rather than austerity. The only check against this trend is capital. It is not FREEGOLD we should be concerned about, but free capital in general. Once capital begins to shift as it did in 1925 away from debt and toward the free markets, then we will see interest rates start to rise. As that takes place, the debt structure of government will explode. 7
Indeed, when we look at wheat we have the spike high in 2008. This followed the low in 1999. The computer forecast was spot on for the last 12 years. What certainly appears to be on the horizon is a rather significant breakout to the upside. Here is a chart of wheat showing the
Breakout Line from the 1932 low. We exceeded that briefly during the 1974 rally. We exceeded that line for the first time closing above it at the end of 2006. That led to the spike rally into 2007. We exceeded that Breakout Line briefly in 2011 and then the market turned down. This was still quite critical for it indicates that this market is preparing for a blast to the upside.
Looking at wheat indicates that what we are facing is by
NO means something related ONLY to gold. When we look at the entire landscape of markets, we can see the true scope of the Sovereign Debt Crisis that we face. For the distinction between a wholesale decline in a currency value and a capital concentration that creates a bubble economy, is rather simple. The former is witnessed in all markets whereas the latter is concentrated within a single market such as the Mortgage Pools in 2007, the Internet Bubble in 2000, Russia in 1998, Japan in 1989, the dollar in 1985, gold 1980, and the agricultural markets in 1974.
Consequently, what we are looking at is a wholesale advance in the commodity sector and this implies a very broad based decline in the currency purchasing power rather than a single isolated capital concentration. Thus, this is not about just gold, it is about a systemic decline in the way Western government has functioned since World War II. The 1989 turning point was the death Nell for Communism. This is now our turn with unfunded socialism. So indeed repent for the time is near. Just not for the reason a lot of people have been saying. 8