There’s an analyst out there — in fact, a few — who somehow believe gold is headed to at least $10,000 soon, if not $50,000.
They claim that the U.S., Europe and Japan are getting ready to monetize their gargantuan debts by raising the price of gold to whatever price it takes to back the world’s debt.
Let me be perfectly clear: Backing the globe’s debts with gold is never going to happen and if it somehow were to, it would be the most foolish thing that could be done.
Suppose, for instance, the price is officially pegged at $50,000 an ounce. Who wouldn’t sell their gold at that price? Crashing the (new) system.
Further, what good would it do to have the globe’s debts backed by an artificial, fixed price for gold?
Price fixing anything does nothing but make matters worse. It creates stagflation and depression. Followed by chaos and inflation once the price fix is busted by the free markets, which it always is.
Price fixing money with a gold standard, a silver standard, or bronze back in the bronze ages or even today in Africa with cows and seashells ….
Does not fix a monetary system … does not prevent booms and busts … and it certainly does not prevent leaders and politicians from making the same mistakes — over and over and over again, throughout the history of the world.
Look, I love gold just as much as any gold bug out there. But the big governments of the world could care less about gold. They want it out of the monetary system, once and for all, just like they got rid of silver back in 1965.
They want to get rid of cash too. And want instead a digital monetary system, for a variety of reasons.
They don’t want gold. Yes, Russia is rumored to be buying and so is China and a few other countries.
But is that proof they want a gold standard? Hardly.
It’s merely justification to diversify reserves and perhaps invest in gold for the longer term. China has never had a gold standard in its 5,000-year history and actually invented paper money during the Tang Dynasty in 740 B.C.
Why would Beijing want a gold standard now — a set of golden handcuffs that would merely drag its economy down into the swamp, eliminating any flexibility whatsoever?
Don’t get me wrong. I love gold just as much as you do. So, while the governments of the world are stomping on it …
We all should be buying, but not until I’m certain it’s bottomed.
And when will that come? Soon, probably in the first quarter of 2017.
Oh, and by the way: There’s an analyst out there who claims that since Germany is pulling its gold back from the U.S. Federal Reserve’s underground storage in New York — way ahead of time — that Germany must be getting ready to buy more.
That’s hogwash. Actually, it’s the opposite. Germany is getting ready to start selling its gold.
Germany is starting to go into debt and an economic slide. If it can’t stay liquid — bye, bye Germany, the European Union … and the euro.
In other words, Berlin is pulling its gold home to sell it, locally. Washington doesn’t want it sold in the U.S.
All of this is handwriting on the wall. Handwriting, you can see if you study history and cycles, as I do.
That’s what the Edelson Wave is all about. There is really nothing new under the sun, and the more things change, the more they remain the same.
Just the actors change, like in a great Shakespearean play.
Best wishes and a Happy New Year …