The Downward Spiral of Hysterical Dumbness
by Jesse, Jesse’s Cafe Americain Gold and silver took their usual price hits this morning in NY, afternoon in London. Gold managed to climb all the way back to a slight gain while silver remained slightly lower. It is all about the Federal Reserve and China this week. The Fed is considering finally getting off the ‘zero bound’ of interest rates, largely to reload their policy options for the next financial paper asset panic. China has a real economy that is definitely slowing, and reaping the results of some bad policy decisions of their own. I hope there is no doubt in your mind that the physical gold market is tight globally, with bullion available for immediate delivery commanding a premium. We keep hearing different plans being proposed by the Anglo-Americanized government of India to monetize the gold held in their temples, and now, a program to stimulate domestic gold mining. China, Russia and the Mideast are not relenting in their strong demand for physical gold at these prices, and the Indian officials are doing what they can to please the Western financiers who are struggling to sustain their gold pool. Even though all the figures I am seeing suggest that this tightness will resolve with a higher market clearing price to increase supply, as you might expect, I would not rule out something incredibly reckless on the part of the Western central bankers, to try and pretend and extend their pointless ‘perception management’. I still have a gut feeling that they have been co-opted and confounded by the bullion banks, that same crews that have been at the center of so many other serial financial criminal actions for the past ten years. I am studiously avoiding hysterical commentary both pro and con the metals these days. While it is fun stuff and makes for great headlines, it is not the sort of thing that is constructive to the real objective of protecting our wealth during a time of profound but difficult to predict changes. I think we will have to watch and see what the facts are, and allow them to lead and modify any of our decisions as best we can, calmly and with a basis in the situation as it is. Let’s see what happens. Have a pleasant evening.