According to Adolf Hitler:
"Gold in the hands of the public is an enemy of the state."
I wonder what he meant by this? Was Hitler retarded? Did he have a childhood marred by parental beatings with Gold plated items? Why would he say such a thing?
Here's another Hitler quote on Gold:
Gold is not necessary. I have no interest in [G]old. We will build a solid state, without an ounce of [G]old behind it. Anyone who sells above the set prices, let him be marched off to a concentration camp. That's the bastion of money.
Such a hatred of a shiny metal seems irrational, doesn't it? Is a piece of metal that harms no one really an enemy of any government? Perhaps Gold represents something more important than bling bling. Perhaps Gold allows people to opt out of a system when that system no longer functions as advertised. The extreme lies and misinformation coming out of the highest levels of our government have become Orwellian in scope and character.
The United States now advocates "Wars" against military tactics instead of real enemies (i.e. The War on Terror) and against certain chemicals while profiting enormously from other chemicals (i.e. The War on Drugs). We are now told that our country must go further into debt to support Wall Street and banks or our economy will collapse. Our private, non-federal, for profit corporate central bank (i.e. the federal reserve) has now purchased over $1 trillion in distressed mortgage debt paper and placed it on the balance sheet that backs the U.S. Dollar because it is "needed" to prop up home prices even though 59% of Americans do not have mortgage debt.
In a situation that I consider along the same lines, we are told that the U.S. Mint cannot keep up with demand for Gold and silver coins. In 1999, due to the fear surrounding the so-called Y2K crisis that was going to cause a systemic meltdown, the U.S. Mint produced over 2 million 1 oz. Gold coins to meet demand. In 2008, the Mint produced less than 1 million 1 oz. coins and reported inability to keep up with demand. The same official story is being repeated this year with multiple shortages occurring due to "demand."
But is it inability or unwillingness to keep up with demand on the part of the U.S. Mint? Can't the U.S. Mint buy more Gold on the free market? Can't they find another manufacturer to get around their problems? Can't they extend a little effort to meet the public demand, since that is their mandate? Don't they actually make a profit by selling these coins? If they don't, can't they just raise premiums and keep up with demand and thus generate a little revenue for the public coffers (we all know the government could use the money...)?
Why is it that China is encouraging its citizens to buy Gold and silver and the corporately controlled U.S. media laughs at/ridicules Gold at every turn? Are we devolving into the same fascist state that Hitler sought to create? Isn't the definition of fascism the union of big business and government (i.e. Mussolini's "corporate state")?
Would anyone performing an honest assessment of what's wrong with America truly deny that corporate interests are now the main force driving government policy? Corporations seek to control government (i.e. Goldmun Sucks and JP Whore-gan) and government seeks to control corporations (i.e. Degenerated Motors [GM], AIG, Fannie, etc.). Does anyone deny that Goldman Sachs and JP Morgan have completely infiltrated the highest levels of the government to create policies benefiting Wall Street? Does anyone deny that the insurance companies and pharmaceutical companies are the main drafters of the health care bills floating through Congress? Does anyone deny that there are more private "gun for hire" (e.g., Blackwater) soldiers in Afghanistan than actual official U.S. military soldiers? Does anyone deny that pompous windbags like Barney Frank and Christopher Dodd are beholden to housing bubble interests due to heavy financial support from this industry including the Fannie and Freddie fascist frankensteins? Does anyone who reads history doubt, knowing that we already have an FBI and a CIA, that "Homeland Security" is a new government program taken directly from the Hitler playbook?
So, yes, I do believe that Gold is the enemy of the United States. When debt becomes unmanageable, it is destroyed through default and/or paid back in worthless dollars (i.e. deflation versus heavy inflation/hyperinflation). Capital flows in the fiat era, as Martin Armstrong has pointed out, may have a bigger say than in Gold standard monetary situations. This makes the inflation-deflation debate more nuanced than at first glance, as we are not in a closed, academic system consisting of rational behavior. The current regime of U.S. "czars" seeks to maintain a fiat grip on the world to maintain and aggrandize their power, reality and the best interests of the sheeple be damned. If U.S. citizens turn to Gold en masse, ain't the gig up at that point for the Dollar?
Thus, I believe "official" sources of Gold and silver will remain scarce. I also believe the futures markets based in the U.S. will continue to ignore market manipulation and heavily concentrated short positions that are the definition of manipulated markets when it comes to Gold and silver. In fact, I would argue that such a situation is ignored because it is government policy and is sanctioned by the highest levels of government. Keep in mind that Madoff could not have had his scam last as long as it did without the express blessing of the highest ranking members of the SEC, since "rank and file" SEC employees like Harry Markopolos saw Madoff's Ponzi scheme years in advance and rang the alarm bells repeatedly but were intentionally ignored.
The last job of a central banksta is to tell the truth. Thus Bernanke sees the recession as being over, denied the housing bubble when others with an understanding of markets saw it as inevitable, and thinks it is appropriate to purchase private assets with counterfeited money (illegal, by the way) and put them on the balance sheet backing the U.S. Dollar. Widdle Timmy Geithner didn't pay his taxes even though he was elected as the Secretary of the U.S. Treasury. These and other examples while "extend and pretend" (to steal from Jim Sinclair) requires a willful suspension of traditional and rational accounting practices for every banking institution in the United States, so that we can all pretend banks are solvent when the truth is the opposite.
Now, I am not trying to pick on the U.S. government. We are the worst country except for all the others. I understand that in an anchorless global paper currency system that the least ugly currency wins and I understand that for brief periods this may be the U.S. Dollar. But Gold is the currency that will ultimately win. People who think Gold is no longer money also think Bernanke is going to get us out of this mess. I consider such thoughts to be religious in character, not rational. Gold is the antithesis of paper. A slick Wall Street brochure and "can't lose" sales pitch versus an immutable member of the periodic table of elements that doesn't try to sell anything. The pendulum swings both ways.
Investing in Gold is not a vote of confidence in the near-term future, for sure. However, investing in hype when the Wall Street promoters are broke and desperate ain't such a grand long-term plan. And, no, it is not the end of the world. If I thought it was, I would advise taking your Dollars and converting them into bullets and cigarettes. Gold and Gold stocks can thrive without a total collapse of the system, just like in the 1930s and 1970s (perhaps we are a dealing with a 40 year cycle, suggesting the 2010s are a time to be all Gold buggy and what not). Every asset class has its turn in the sun and the torch is being passed from U.S. government debt to Gold (stocks peaked in 2000 and haven't been the "choice" asset class for a decade).
Gold is a protector of wealth during periods of government insanity and instability. Our current regime in the U.S. has passed the point of no return. Bush was our Hitler and Obama is our Chavez. Democrat versus Republican is about as meaningful as blue versus red or purple versus green. The highest levels of our government are composed of corporate whores, so the only difference between candidates is which corporations own them. Obama the war president is the Nobel Peace prize winner. Orwell is doing cartwheels somewhere in the universe.
Our debt cannot be sustained so it won't be. Debt repudiation will occur via any combination of frank default and/or currency devaluation. Gold will protect one's savings during this situation, while the U.S. Dollar is unlikely to do so. I can't side with Prechter on this one. Commodities, government bonds, stocks and corporate bonds, in aggregate, require one to guess correctly on the inflation-deflation debate while Gold doesn't.
The Dow to Gold ratio will reach 2 (and may well go below 1) before this cycle is over. I get caught up in the short-term swings too often as someone interested in trading to augment long-term returns, but my physical Gold is not for sale at current prices. Gold is the best vote I can cast against a government out of control, since votes at the local booth, faxes, phone calls and letters to officials accomplish nothing. I have a feeling that my understanding of Gold and my zealous intention to spread its word will prove to be the most valuable civic duty I am able to provide in the midst of a now seemingly perpetually corrupt regime no longer interested in the ideals of a free people or the country's Constitution.