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Gold is NOT the Ultimate Asset Bubble
Perhaps if the Bank of England, the US Treasury and the
US Federal Reserve had not been surreptitiously suppressing the price of gold
futures through their puppet bullion banks on Wall Street for decades, I would
agree with George Soros that gold was the ultimate asset bubble. Had this been
the case, gold’s price would be multiples of its current price given the low
interest rate environment that exists worldwide. But since this is not the case, there currently is no greater asset
bubble than the US dollar and US Treasury bonds.
In considering Soros’s statement, perhaps it’s an apropos time to
revisit a couple of articles I penned. One titled "Gold and Economic Freedom, Reinterpreted
for the 21st Century" that I wrote six months ago; the other titled "JS Kim Uncovers Four Parallel Markets for Gold" that I wrote sixteen months ago. In the first article, I essentially reviewed and updated Alan Greenspan’s seminal 1966
essay “Gold and Economic Freedom” for today's world economic environment. In that article, I
wrote, “Greenspan’s failure to uphold the ideals he once championed does not
invalidate their keen insight and validity”. I further explained why a true gold
standard (versus pseudo gold standards implemented in the past) is not only linked
to "economic freedom" but why “it is also inseparable from the much broader
concept of freedom itself.”
In my older article, “Four Parallel Markets for Gold”, I
discussed the massive fraud that existed in gold futures markets at that time that
created four distinct and differently priced markets for gold: (1) Paper
futures markets in Asia that consistently established prices $20 to $60 an
ounce higher than the futures markets in London and New York; (2) Paper futures
markets in London and New York; (3) Physical bullion markets; and (4) Physical
coin markets. Over the past couple of weeks, the same pattern of clear and
distinct fraud in gold futures markets that I discussed in this article again
manifested itself several times when gold prices rose significantly in Asian
futures markets only to waterfall decline and instantly give up nearly all of
the day’s gains in the New York markets.
Artificial bubbles that Central Banks deliberately engineer are
never indicative of robust economic times nor are they representative of natural and free economic cycles. Quite to the
contrary, they are indicative of massive malinvestment and huge distortions in
price. The price of gold today remains suppressed from reaching its natural
free market price and it remains distorted only to the downside whereas the prices of stocks and real
estate markets in the majority of the world’s economic centers are currently distorted to the upside. Since gold and
economic freedom are inseparable, no one should ever want a gold rally to pop
before it reaches potential bubble status. The day we hear the gold rally
popping before it reaches bubble status, this is the day we can say goodbye to
any chance we have at economic freedom as well.
About the author: JS Kim is the Chief Investment Strategist for
SmartKnowledgeU™, a niche, independent wealth consultancy company that provides strategies to prosper during the coming second phase of this economic crisis.
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As a person who is very much concern about my gold investments, it is always important to seek updates about world's economic and gold conditions. So, thank you for letting us know about this.
Regards,
Gold Bullion
Wunnerful, ah wunnerful. Somebody turn off the bubble machinum.