the "recovery" & gold

  1. 9,081 Posts.
    "It is a marvelous economic recovery; at least that is the
    picture described by nearly every financial medium. But
    with our sharp new eyes, we see the image is only paper-

    "Consumers hike debt," says one headline in the Arizona
    Republican. "Higher property taxes on the way," says

    "Record spike in health care costs," adds the Baltimore

    The poor consumer, already deeper in debt than ever, is
    having a rough time of it. His income is falling... his
    debts are increasing. And his living costs are going up.

    If the economy really were expanding the way we are told -
    at better than 3% GDP growth per year - it should be
    creating 200,000 to 300,000 new jobs per month, points out
    John Crudele in the NY Post. Instead, for 7 months in a
    row, jobs have been cut... with 93,000 hacked off in August.

    What kind of a recovery is this?

    It is a fraud... the latest in a whole chain of fraud that
    stretches back to the Nixon administration... and even

    GDP growth is calculated by taking nominal growth figures
    and subtracting inflation. If the economy were flat, for
    example, and inflation were running at 3% per year, the
    government would tell us that GDP was shrinking at 3% per
    year. The secret of the latest 'growth' figures lies in the
    inflation rate, which the government calculates at 0.8% in
    the last quarter, rather than the 2.4% figure in used in
    the first quarter. Result: GDP growth came in above 3%
    rather than the 1.5% it would have otherwise reported.

    Of course, were military spending increases and phony
    'hedonic' enhancements removed, the GDP growth figure would
    probably be negative.

    Inflation begets deflation... deflation begets inflation.
    The Fed inflates... the Chinese beget new factories and cut
    prices... the resulting deflation begets subtracted from the
    government's GDP tally - resulting in inflated growth

    A friend from Poland wrote to tell us that the Chinese
    expression for 'bubble' is something like 'shui pao' -
    which works for us; we don't know any better. So, Shui Pao
    it is... coming to China, now!

    "Factory output soars in booming China," says a Reuters
    headline. The assembly lines are putting out 17% more this
    year than last. (Where does it all end up? More on that
    below... )

    But oh no! Gold rose $6.60 yesterday. The bull market in
    gold, which we keep predicting but keep forgetting to buy
    into, is getting underway without us.

    Open your new eyes, dear reader, and look on in awe: we
    have what appears to be a major, major bull market in gold
    developing. At first, people hardly notice. The price of
    gold is reported as a curiosity. 'Must be central bank
    buying,' they tell themselves. Or, 'I wonder when those
    nutty gold bugs will finally give up.' The average person
    has no idea. He listens to CNBC and is blind to what is
    actually going on. Gold... the dollar standard... deflation -
    they are all occult mysteries to him... strange, forbidding,
    and vaguely menacing.

    But as a bull market develops, more and more people see
    what is happening. Gradually, one by one at first... and
    then in droves... they discover the rising market and want
    to get in before it is too late. Already, the Tocqueville
    Gold Fund reports that assets are up more than 50% in the
    last 12 months... but only to $293 million. A prediction:
    the fund will have billions in it before the bull market in
    gold has run its course.

    The rising price of gold means something. Below, Eric
    wonders what. We don't know. But when we look upon the
    phony mess erected on the sands of the Dollar Standard
    system, it seems to be leaning. Is it us? Or is the proud
    tower itself actually tilting more and more... ? If so, gold
    will not hold it up, but it will be a good thing to have
    buried in your yard when the average investor finally opens
    his eyes... and sees the Dollar Standard fall."

    "The Daily Reckoning
    Paris, France
    Wednesday, 10 September 2003"
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.