By John Galt
July 13, 2011
A very interesting thing happened on the way to gold $1600, which I said on Monday we would probably witness this week:
The very thing all of us so-called “goldbugs” were deeply concerned about turned out to be the trigger event for a stampede into the safety of the world’s only universal currency.
As the Eurozone collapsed into outright panic over the very idea of shattering the illusion of their unity and fiat currency, world powers had the revelation that as hollow as the dollar is, the Euro is already rotten and ripe for collapse. The Chinese do not wish for or desire a rapid collapse. The Russians would prefer the Euro retain some modest reflection of value so their oil revenues and reserves do not have to be shifted back into dollar denominated investment. The GCC and oil producers of Africa and the Middle East were becoming comfortable with the idea that the Euro would supplant the U.S. dollar as part of a new world reserve currency regime.
Yet in the end, every central bank, every nation, markets in emerging economic powers as well as traditional established ones, and the powers of the new quasi-Communist bloc all ran, not walked, not trotted, not hesitating or pausing, but running as quietly and quickly into purchasing physical gold for delivery to their vaults.
There are those idiots on the various bubblevision advising people to purchase the GLD ETF because that is the “safe” way to invest in gold. For proof that this is insanity at its finest, remember the gold supposedly stored in the bank for this ETF is not accessible, an individual can not demand physical delivery to their home, and the bank which stores it is part of the cabal that have created the fiat currency circus throughout history. Paper gold does nothing to preserve or protect one’s wealth and at this point in history and the very strong possible risk of an episode of hyperinflation engulfing the Western economies it is only logical if one can to obtain the physical. Paper gold is irrelevant as the Weimar Republic of Germany demonstrated and worse, could be confiscated in lieu of the government engaging in an identical program to Franklin Delano Roosevelt’s unconstitutional attack on personal gold ownership in the 1930′s.
After this break out above $1600 per ounce, if there is no correction by the end of this year, the beginning phases of a great disaster where America and Europe are devoured by inflation then hyperinflation will begin then accelerate. Preparing for the inevitable at that point in time will be too late.