From Grant Williams, author of Things that Make You Go Hmmm [4]
[5]The list of governments that are, essentially, bankrupt is a veritable who’s who and yet, in a conditioned world where people flee to traditional safe havens on instinct alone, they are able to borrow money at ridiculously low rates - seemingly in spite of their policies.
Mark my words; like Japanese real estate in the 1980s, technology stocks in the 1990s, and US housing in the 2000s—hell, like tulips in the 1630s and every bubble in-between—this one will burst, only when it DOES, it will be unlike any bubble we have ever seen before because it will simultaneously remove all the backstops to the world financial system upon whose largesse the recent ‘recovery’ has been built. When that happens, where are the herd going to run to?
There is, of course, one monetary asset which cannot be printed at will by feckless governments and which has performed its role as a ‘safe’ store of wealth in troubled times throughout the centuries stoically and without fanfareand that, of course, is gold. But currently, as Pavlovian conditioning trumps intellectual reasoning and investors stampede into the burning building of government debt, gold has become somewhat unloved—a ‘trading vehicle’ tossed around by an investment community looking for an anchor in today’s stormy seas. Consequently, gold has been a victim of the Pavlovian rush and has acted rather strangely on ‘panic’ days.
At some point—and I suspect that point will arrive sooner rather than later—intellectual reasoning will overcome Pavlovian conditioning and the same people who poured trillions into the debt of bankrupt and irresponsible governments will realise the folly of their instincts and they will go looking for a real safehaven asset. When they do, they will find that, unlike government debt which, like a gas, can expand to meet any demand, trying to hide trillions of dollars in a real asset such as gold (or farmland) will prove to be singularly difficult.
Those overcoming their Pavlovian conditioning and allowing intellectual reasoning to win out first, will find themselves at a tremendous advantage once reality is forced upon the masses.
That day is rapidly approaching.
Full report: