Of all the decisions which have come out of the U.S. government since the September 11 atrocity, the most transparently ridiculous one has been an FAA (Federal Aviation Authority) decision NOT to allow commercial airline pilots to arm themselves. Pilots will NOT be allowed to defend either themselves, their passengers, or their aircraft. Federally-employed "Sky Marshals" will have that job.
Consider this carefully. No private citizen or private company (airline passenger, airline pilot or airline owner) is permitted to protect either life or property. Only GOVERNMENT is allowed to do that.
Now, if you move this "principle" over to the financial realm, you will readily understand the reason why all governments want to control Gold.
There may have been some excuse for people who did not recognize the fact that they had been stripped of their ability to protect their financial future before September 11. There is no excuse for not recognising it now. What are the "investment classes" which almost any investment advisor in any nation will recommend to you? Stocks, debt paper of all descriptions, real estate. For the more adventurous, there are financial derivatives of all descriptions and levels of complexity. And what is it that everyone is supposed to flee into to "protect" their wealth in times of trouble? Government debt paper.
What is the single financial action which has been most actively discouraged by governments all over the world in the past decade? SAVING - of any description. What was the only thing being relied on to "save" the world economy before September 11 - SPENDING BORROWED MONEY.
Now, what is the SINGLE most important difference between a financial system which rewards thrift and the creation of REAL wealth and one which "rewards" profligacy and the juggling of paper claims to the real wealth of others? The first uses GOLD as money. The second BARS Gold from any financial function whatsoever.
It is astonishing that anyone who has paid any attention to the financial and market mania of the past decade would harbour any shadow of a doubt that Gold and Gold prices denominated in the various fiat currencies of the world is being manipulated. Physical Gold demand has outstripped newly-mined Gold supply since the late 1980s. The history of rules and regulations designed to hamper or make impossible the private ownership of Gold in the U.S. goes back to the 1930s.
We have lost track of the number of times we have seen statements to this effect in the media: "Gold has once again confirmed its loss of stature as a financial medium by failing to rise in price despite the current crisis." This has been an almost constant refrain ever since the $US Gold price "topped out" in early 1980.
By now it should have dawned on most people that the people in charge of the modern ("gold free") financial system have a vested interest in keeping Gold down and that they have evolved ever more "sophisticated" means to do just that.
Fundamentally, if you want to protect yourself from ANY depth of crisis or collapse in the present system of fiat currencies and debt based claims to your wealth, there is only one way to do it. OWN PHYSICAL GOLD.
This is the modern financial "protection racket". Governments are making it as hard as they possibly can for anyone to protect THEMSELVES against a collapse of the financial system which governments control. The racket is clear. "We will protect you" - says the government - "but we will only do it if you stay INSIDE OUR SYSTEM".
To coin a variation on an old theme: "I'm from the government. I'm here to protect you.". If you, dear reader, are content to rely on that promise, then you won't see any need to own Gold. If you are NOT content to rely on it, and you have not yet acquired any physical Gold, you had better hurry up.
As you know, spot future Gold has been quiet this week. The weekly spot future gain was a princely $US 0.70. $US Gold remains tantalisingly close to, but still BELOW, $US 300.
For Gold, the signal feature of the last half of the 1990s, the era when stock markets went to heaven, was a descent to and then below the $US 300 level. That was the "Gold floor", the level that had only been breached on the downside twice - briefly, since 1979.
Now, when the entire financial edifice built on the stock market boom of the late 1990s is collapsing in a fashion which is as spectacular as it is obvious, Gold remains below that floor. GIGANTIC amounts of fiat currency, notably U.S. Dollars and Japanese Yen, are being created out of thin air to prop up the edifice. The world waits for the "war" to begin. Unemployment surges. Consumer confidence plummets. Economic activity grinds to a halt. Predictions of long and drawn-out global recession flood the airwaves. Gold does nothing.
Technically, the situation is as perfect for a Gold price boom as it has been since Gold and the U.S. Dollar were decoupled in 1971. Politically, the necessity to contain the $US gold price is more pressing than it has been since Gold and the U.S. Dollar were decoupled in 1971. Something is going to give - soon.
If you think that government, any government, even the U.S. government, is omnipotent, consider the events of the past three weeks. The financial powers that be do not want you to own Gold. Ask yourself why.
Yes, $US Gold has breached the $US 300 barrier several times in the past two years only to fall back again. Since March 1999, the Dow fell below the 10000 level several times, only to rebound again. Do you think that the Dow will rebound this time. Do you think that Gold will "fail" at $US 300 again.
Don't bet your financial future on it. Make SURE you have some Gold. Anyone who has bought Gold in ANY currency over the past six months is already WAY ahead of the game. But Gold is still cheap in U.S. Dollars. At any price OVER $US 300, it is highly likely to get more expensive very quickly.