How much better than to fearfully go long or short the previous metal?

Your thoughts are invited!

A little humor with your pilot analogy.

The pilot feverishly works the controls to stabilize the aircraft. Yet one look at the instrument panel indicates the plane has damaged engines ( from using JMK brand jet fuel) on it’s long descent into the ocean.

Pilot talks to the passenger and says ” ladies and gentlemen please remain calm. Our new TARP jet fuel will give us the lift we need, so fasten seat belts , close all windows and focus on my voice!”

Your model for production and jobs can only be achieved with added national debt, added taxes or inflation.

And efficient production processes in the market does not rely on debt, taxes or inflation. That is a silly assertion.

Production With Savings is a better way.

The period 1866 — 1897 a time of secular deflation was perhaps the greatest ever experienced by the US economy during a period of comparable length. Real GDP grew more more than 4 percent per year, on average, not withstanding the persistent deflation.

Mainstream economists believe constant debasement of money, deficit financing and taxation is the only way to prosperity.

R. Higgs wrote about the bogeyman deflation 37 years ago
The Transformation Of The American Economy, 1865-1914

Robert Higgs is a Senior Fellow of Political Economy for the Independent Institute. He is the 2007 recipient of the Gary G. Schlarbaum Prize for Lifetime Achievement in the cause of Liberty.

Enjoy,

Ray

Gold, as a speculative hedge against perceived perversity, rises and falls with the normal behavior of supply and demand.

The previous high of $850 in 1980 resulted from speculation as much as the new record nearing $1,000 an ounce did this year. This followed more than two decades of trading of gold within a reasonable trading range.

The Middle Eastern conflicts, natural disasters, perceived economic disarray – not to mention a declining, easily available supply of gold, naturally heightened speculation, driving up the price.

Just like the stock market – gold rises because there are more buyers than sellers!

Price stability means prices of goods and resources are stable year to year.

Stable does not mean constant- ask any airline pilot.

While the price of some goods has increased greatly- women’s bras, buggy whips, bottle of coke- you also realize that many goods weren’t around in 1913- AIDs meds, cell phones, PCs, video players. As the economy has grown, these new goods and services have required monetization to come into existence. The bottom line is that the cost in hours worked to get these goods is WAY WAY less than in 1913.

I define net worth as do you, but there are accounting issues- what is Yellowstone Park valued at on the balance sheet? Not to mention US government deficit of $10.6T vs. (per Fed in June) appx. $55T citizen net worth.

But the ultimate source of wealth for our country, like most people, is our earning power. The ability to convert raw materials (sunlight, rain, metals, etc.) into goods and services. And it just seems obvious to me that if you want new laborors, entrepreneurs, and investors to do this, they have to be incented to produce- not watch wealth hoarded and passively increase in value as not enough money is created to support the creative ability of our economy.

And gold can’t increase fast enough, nor does it correlate all that well with economic activity.

That plus the inflation outlook based the Fed’s monetary policy actions lead many to believe that skyrocketing gold prices are in our future.