But the truly interesting thing about the 1980 plunge was that it precipitated a 36% rally in the S&P 500 through the end of the year. Posted by James Randolph on August 15, 2011
Take it on yourself to return to sound money with gold investments.
August 15, 2011 – Last week Reuters pegged consumer sentiment at the lowest level in 31 years and now the preliminary Michigan Consumer Sentiment index has also fallen to its lowest level since 1980. That is hardly a coincidence. But the truly interesting thing about the 1980 plunge was that it precipitated a 36% rally in the S&P 500 through the end of the year.
That’s the sort of thing that makes me reach for the Excedrin, especially if it were to repeat in this economic climate. Absolutely nothing real could turn things around so easily today. But reality, of course, is immaterial. We are way to accustomed to hearing only what we want to hear.
For months now Tim Pawlenty has beaten the drum to get rid of the Fed – an absolutely essential first step towards any lasting recovery – but his message fell on deaf ears. Pawlenty had to throw in the towel while the entire government has abandoned their posts and hit the campaign trail to pacify us voters with grandiose rhetoric about how they can put everything to right with their simplistic schemes.
They have done an admirable job of convincing us that problems abroad have no relevance here. But it is at our own peril that we do not learn from the recent riots in London. Those are but the first signs of societal regression brought about by the very sickness that pervades America today.
It all began with fiat money and the creation of central banks. “Fiat money helps to remove the link between production and consumption, contributing to the delusion that the ineradicable scarcity of capital has been abolished,” says Jordi Franch in the Daily Mises. “Through fiat money, the richest and most powerful countries have also become the most indebted.”
Another, more sinister effect of fiat money is “to constantly drain the wealth of the nation and to pour this stolen wealth into the corrupt, selfish hands of rotten, short-sighted politicians,” says Andy Duncan. “It appears as absolutely no coincidence to me that in the middle of this carnage, the chief instrument of this inflation policy — the hapless Bank of England — once again intertwined its own abysmal record of incompetence, predictive failure, and dismal Keynesianism in the same news programs as the hooded menace from the welfare estates of socialism.”
Riots can and will happen here. “The alternative,” says Franch, “ is a return to sound money, a restoration of the true currency, spontaneous creation of the social order, and a rejection of the meddling of governments and central banks.”
Sadly, the population here is still unwilling to hear that message. But as individuals we can choose to “return to sound money” with gold investments.
Senior Staff Writer – Certified Gold Exchange