In an inflationary economic environment, gold bullion and gold coins are proven winners. But presently we face a global recession. And aren't recession and its granddaddy depression synonymous with deflation? Then what gives with the relatively recent all time highs in gold in nearly every currency? The demand for gold is so high that there have been interruptions in supply from the Mint and a great reduction in the number and types of offerings they make available. Yes, in a true deflation gold can hold its value better than just about any asset class, but these kind of gold prices are telling us something more.
In this "information age," there is plenty of information to be had. A very small percentage of it is practical and useful. Most of it just takes up space, and even more of it is false. As so often happens in the "information age," we actually trade our common sense and intuition for the more complex and oft-repeated, so-called "facts." We belittle ourselves by crediting too much to the more sophisticated gurus and experts.
In all of recorded history there is no fiat currency that has ever not been so plentiful that it eventually became worthless. This has been the fate of each and every one; no exceptions. Our debt load is beyond comprehension. We give it a term to define it, but we don't have sufficient means to explain it. The term is "trillions." And it grows by the day. An individual understands it just about as well as he or she understands the amount of space in the universe. Because most of these trillions are not real, but just "representations" conveniently hidden away as digits in a computer, we think the experts and gurus must have a handle on it.
The phrase "not worth the paper it's printed on" comes screaming to the forefront of your mind. And you realize that maybe that's the reason why most of it isn't printed anymore. It has become much, much too plentiful. Then you remember the "crossover."
The crossover happened just a couple of years ago when a penny became worth more than one cent, and a nickel was more expensive to coin than its face value. Were you sleeping, Brother John? What does all of this say for gold and gold stocks ?
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