Thursday, October 6, 2011

Buy A Home With 10 Oz Of Gold

Everyone see the trend here? What is slowly creeping back into the mainstream business world is this idea of gold as a currency. It took about 40 years from the time Keynes declared gold to be irrelevant until the world went fully fiat in 1971. It's taking even longer for gold to be reinstated as the ultimate currency, but the truly sophisticated global market engineers are now moving in that direction (notwithstanding Donald Trump, who is not sophisticated but who recently announced that he would take gold as collateral in business deals - we all know he has plenty of worthless, bankrupt casino chips that no one will take). Surely everyone understands by now that Keynes' economic theories are a complete failure...

Myself and a colleague back in 2002 predicted that one of these days we would be able to buy a dream house for less than 10 ounces of gold. Based on what I'm seeing in the housing market and the developing markets in gold, I am still standing by that view. The question in my mind is not "if," but "how many ounces less than 10 it will take?"

At some point, I don't know when, there is going to be a global rush into gold - when the majority of businesses and the masses begin to understand why these wealthy, sophisticated financial operators are now using gold in their mix of business - that will make everyone understand why some very bright people are forecasting eventual prices for gold that are unimaginable to most people who refuse to believe or accept what is going on in the global financial system.

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