The gold market once again has proven its resiliency. Posted by James Randolph on October 12, 2011
Central banks fail to deliver the knockout blow to the gold market.
October 12, 2011 – The gold market once again has proven its resiliency. Despite what surely smells of a concerted effort by Wall Street and western central banks to drive them down, gold market prices have resumed their upward trajectory.
Twenty or thirty years ago it may have worked. In fact, it did work. Only recently has the gold market been able to overcome the downward pressure government interference. Gold’s recent extraordinary growth, which the bears point to a sure sign of a bubble, is nothing more than catching up to where it should be.
Something had to change to let that happen, and what did is fiat money. When currencies were strong, or at least perceived to be strong, governments had the power manipulate the gold market. But over the past three decades the global money supply has increased seven-fold, severely diluting the worth of currencies and the influence they once could exert.
Fiat money dies hard, especially the greenback. People find the concept of the once almighty dollar deteriorating to third world status hard to swallow. But wishful thinking cannot stand up to harsh reality forever. Humans instinctively value gold, and they will inevitably go back to it when currencies fail.
I doubt anybody can explain why that is, but not understanding the worth we have always put on gold is no reason not to accept it. It is a basic fact of human existence that we value gold and there is absolutely no cause to think that will change.
Perhaps past lessons have left an indelible impression. Humankind has witnessed the failure of every previous attempt to institute fiat money, yet wealth has endured in the form of gold. In the end the money printers will always go down for the count while those with gold investments raise their hands in victory.
Senior Staff Writer – Certified Gold Exchange