Remember What You Did Last Summer?

BY ADRIAN ASH

May 17, 2012 • Reprints

So the price of gold keeps falling, and it keeps falling despite the imminent failure of Greece's euro membership, the looming collapse of Europe's banking system, and the fast-looming debt-ceiling repeat and fiscal cliff in the US. 

Hey-ho. Some €700m per day is being pulled from Greek banks. Global stock markets have fallen over 7% already this month, the broad commodity markets have fallen for 10 out of 11 days, and crude oil is trading at a six-month low, down 15% from February. 

Yet the distinct attributes of gold – un-inflatable, economically useless (relatively speaking) incorruptible gold, with its zero credit risk and 5,000 years of monetary use – count for nothing. In dollar and sterling terms, it's now back where it started last summer's big move. 

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What Do You Trust, the Paper or the Gold?

It all boils down to this: What do you trust? The paper money system, that since 1913 has dragged the dollar down from $20.6718 to the gold ounce to $1,583.60 today? The system that picks your pocket every day, and worse, is now run by thieves, incompetents and tapeworms? Or gold and silver, which mankind has valued since the sun came up on Eden? When I talk about this some folks laugh at me and point out that the system has been chugging away since 1913. This differs nothing from telling me that a 1913 Stanley Steamer is a great car because it still runs. The world can no longer afford parasite capitalism, crony central banks, crooked banks, and prosperity-through-government-borrowing. It's breaking up, and I'd rather belong to the new world building than the old world dying.

source: http://silver-and-gold-prices.goldprice.org/

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Fickle gold and silver prices - a pragmatist's viewpoint

Fickle gold and silver prices - a pragmatist's viewpoint

For whatever reason gold and silver prices have been falling recently, but this may be irrelevant in the long term scheme of things

Author: Lawrence Williams

Posted:  Wednesday , 09 May 2012 

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LONDON (MINEWEB) - 

Despite the gloom being felt by gold and silver investors as the price continues to be pushed downwards, the more level headed will realise that the price is still above that prevailing at the beginning of the current year and over $100 higher than at this time a year ago, which might not be considered a particularly poor performance overall.  Nevertheless the big fallbacks in gold in September last year from the probably then-overdone peak of around $1900 down to below $1550 in late December, followed by another sharp fall from the $1790 level achieved at the end of February followed immediately by a $100 crash down in price after which the gold price has struggled ever since, will certainly have tested the staying power of precious metals investors.

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The Tragedy of the Euro - TTE

Unseen economic effects from the single Euro currency...

FROM WHERE did Europe’s recession come? asks David Howden, assistant professor of Economics at St. Louis University in Madrid, Spain for the Cobden Centre.

To listen to some commentators one would think that it came from nowhere. Indeed, the idea that a contagion is engulfing Europe – that one insolvent member state could cause innocent bystanders to fall – is so pervasive that its mere mention seems redundant. It is unfortunate that such a belief is prevalent as it ignores not only common usage of the English language, but also some very simple and relevant economic facts.

Like many economic phenomena, the important aspect is not what is seen and readily apparent. As Frédéric Bastiat was able to so cogently stress over 160 years ago, the crucial role for the economist is to discern the unseen economic effects.

*While it is all too easy to focus on European member states’ burgeoning public debts, widening credit default spreads, dwindling tax bases and climbing ranks of dissatisfied unemployed citizens, the hidden causes are what are needed to be assessed to correctly foresee a prosperous future. While it is increasingly becoming accepted that European governments spent more money than they had, and that the ECB held interest rates too low for far too long, the specific reasons why these events manifested remain largely shrouded in mystery.

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