A Cynical Look On Gold and the United States Dollar

First, I would like to apologize for the lack of activity. Finals week is time consuming.

Second, I would like to draw your attention to this article, written by Antal E. Fekete. Antal E. Fekete is a renound professor of Mathematics and Statistics at the Memorial University of Newfoundland. He is a sought after expert in monetary science and gold. He currently resides in Romania.
Basically, this article spells out the collapse of our currency.

As we speak, you may still be able to trade gold for dollars. However, when gold goes into backwardation, as it has, this will become much more difficult.

This rampant deflation that is speculatively resulting from the housing crash is a bad "omen" This type of deflation often occurs right before hyperinflation- where a loaf of bread costs $600 and single dollar bills are best used as fuel for a fire.

Oil is below $50 a barrel. I remember that not long ago we were breaking $150 a barrel. Has demand for oil really gone down that much? Did "speculation" really have that much of an affect on the price? Well, no. And today, when the feds set the reserve rate at a mere .25% and prices are still low. When that happens, you know there is a problem.

1 comment:

godelleb said...

That is an interesting article, however its basis is in economics. Almost all of economic theory has over time proven to be flawed. This fellow has yet another flawed premise.

A more likely theory may be that gold(the metal standard for near eternity) is a faulty measure of worth. The collapse of the gold market is at hand. Here is some proof.

Inflation adjusted, gold may be purchased for less US dollars today than years ago. This is quite astonishing if it has a higher demand. The very fact that a spot buy of gold costs less now than it did then dismisses his credibility. Based upon the basic economic laws of supply and demand it should cost much more.

For those that supply the gold, they apparently don'y have enough to satisfy demand. This also violates the laws of supply and demand. Why aren't they producing it like crazy? As the author stated, gold is very abundant.

Perhaps they are afraid to make it more available because they know when to get out. Maybe they don't want to be stuck with it when the bottom drops out. Perhaps those that still want it are fools.