So you’d think that with everyone acting like the gold rush is over and economic normalcy is returning in the world, that you could waltz into your local gold dealer (hereabouts JH Mint) and walk out with a bag full of the yellow stuff on the cheap. Not a chance, the shelves are bare and the prices quoted for uncertain future delivery are marked up by 14% or more. In other words, the retail dealers have effectively not lowered their prices at all, just increased their margins. JH Mint, along with other dealers across the land, were literally cleaned out last Friday when their establishements looked like the land office in 1893 Oklahoma.
Then why can’t I buy gold on the cheap today? The simple reason is that Big Money is manipulating the price drop. Ben and his ilk need to depress prices so that after a little time has passed (days, weeks?), all the big players can buy back in on the cheap. In the meantime, none of the big guys want to let the physical stuff get into the retail buyers’ hands and boost the price prematurely. Retail buyers are the people who look at the world and where they live, and ask (as 321gold.com reports) –
“Did gold fall off the cliff because the dollar index ripped higher? NO! Did Uncle Ben Bernanke say they were stopping the $85 billion + QE immediately? NO! Has physical gold become more abundant than any time in the recent past? NO! Are the world's central banks stopping their counterfeiting operations by devaluing their currency by stopping the printing presses? NO! It's quite the opposite, Japan, U.S., and the EU are increasing the money supply.”
The big secret is that no one can allow interest rates to increase on sovereign debts across the globe. That interest rates will have to increase in any case at some future time makes no nevermind to today’s big players, they already have their portfolios appropriately stuffed with what the little guy cannot buy on the cheap today. And all of them are betting that they individually will be out of the public eye and ire before the crapola hits the fan when interest rates skyrocket after no one believes in the brand new funny money being used today to buy sovereign treasuries in the industrialized world. And when interest rates do rise, then the dominoes will start crashing as every country’s debt service to GDP ratio sky rockets. And gold will again be in short supply as its price goes to the moon.
In the interval, please fasten your seatbelts.
Pay Gaps and System D
George Rebane
Frankly, it’s a bit eerie how the events long predicted on RR are ticking off as recently having happened, or about to happen. Here I want to focus on the infamous pay gap of the American worker, and an economic activity that is hard to track, but globally significant.
Income comes in two forms – wages and profits/interest. As has long been argued here, the pre-Singularity years are illuminated by worker productivity abetted by screaming technology advances. Using new gizmos and software, today a worker can make more and/or service more per unit time than yesterday, and even more tomorrow. Given that the size of the markets requiring new stuff and services is not growing as fast as productivity, the result should be predictable for people who think.
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