If you are a frequent visitor to The Privateer website, you will have noticed that we have moved to a brand new location this week. Hectic? You could say that. Supervising the move while keeping the website updated and preparing and writing the next issue of The Privateer (published on October 14) has not left time for much of anything else. And yet, when one is relaxing after the long day on the verandah with a small glass of something smooth, time can be found.
Having moved from a situation of houses, cars and people all around us to a situation where the only thing around is is trees and sky, quiet contemplation is both easier and more rewarding. And if one wants to keep world events in general and the events of the past month in particular in perspective, time to think is essential. Sadly, that is something that too few people take the time to do. And if one takes the public pronouncements of our political "leaders", especially the ones in the English-speaking nations, literally - it is not something that would benefit them much even if they did it.
The epicentre of the present maelstrom is, of course, the U.S.. It doesn't matter whether the U.S. political authorities are doing it on purpose or simply speaking without thinking, what they have whipped up amongst Americans is an atmosphere of latent hysteria. Somebody finds a "white substance" (which turns out to be bird droppings) on a window ledge, reports it, and the "authorities" descend en masse, cordon off the area, and evacuate the building. Over the past week, the State Department offices have been evacuated - TWICE - on potential terrorist threats which came to nothing. And through it all, President Bush has a single refrain. Carry on with your life as usual. WE will protect you.
HOW? How does one negate a terrorist threat which was always latently there by carrying on with precisely the same policies and actions that gave rise to it in the first place? How does one re-assure the American people by creating a situation in which everyone is jumping at shadows - real or imagined? HOW DOES ONE SOLVE A PROBLEM BY DOING EVERYTHING IN ONE'S POWER TO MAKE IT DIFFICULT OR IMPOSSIBLE FOR THE PEOPLE AFFECTED TO LOOK AT THE BASIC CAUSES OF THE PROBLEM CLEARLY?
What the U.S. political establishment is absolutely refusing to allow is ANY discussion or debate about their own long-standing policies. Any student of history worthy of the name knows that a nation which embarks on empire building, a nation that habituates itself to interfering forcefully outside its own borders, a nation which takes the phrase "The National Interest" and translates it into an armed presence almost everywhere on earth, is putting its own people at risk.
The history of empires embraces millenia. But it is only in the last 40 years when anyone could go anywhere else on earth and get there within 24 hours. And it is only in the last ten years when instant communication between any two points on earth has been easily and cheaply available.
This is something that both the U.S. political establishment and the American people should consider carefully. The extent of the exercise of political and military power over other nations by the establishment is directly proportional to the risk of retaliation borne by the citizens of the nation whose establishment weilds that power. With empires, this has always been so. But the people of previous empires were comparatively safe, simply because the physical means to retaliate and the ability to get to the seat of empire were severely limited.
If an Afghan tribesman objected to the invasion of his country by Britain in the 1880s, he had no way of retaliating against the British people. An Afghan tribesman of 2001 can, if he so chooses, retaliate against those whom he sees as his oppressors. Properly understood, "empire building", or for that matter the maintenance of an empire, has no future. Not if such concepts as individual rights and political liberty are destined to be any more than words in a dictionary.
If the U.S. political establishment was concerned about the lives of its fighting men, it would make sure that they defend THE UNITED STATES. If it was concerned about the lives of its civilian population, it would make sure that their freedom and liberty was protected against threats from without, it would not be stripping it away from within.
Not having these concerns, the U.S. political establishment has once again embarked upon the same road taken by all empires. They have declared WAR - and they have set about the task of convincing the American people that it is better to be "safe" than to be free.
The world has changed since "9/11"? Not a bit of it. So far, the actions of the U.S. government are as galling as they are predicable. As yet, there is not much of a reaction from the American people, who are being traumatized systematically. But the world COULD change. The British stood up for their liberty and freedom in 1215 and in 1688. The Americans stood up for theirs in 1776.
The first week of the WAR. And Gold obligingly retreats from the lofty heights it scaled in the aftermath of 9/11. So far, though, the retreat hasn't been very big.
On January 17, 1991, the first day of President Bush Senior's air war in the Gulf, Gold had a $US 40 intraday swing and closed down $US 26 on the day. This time, spot future Gold has lost about $US 10 in four days and then regained just under 30% of that on Friday, October 12.
Markets are always politically managed during wars. That is, there is always an attempt to politically manage them. It doesn't always work. But so far, it is working. The Dow is still rising. The U.S. Dollar is (comparatively) stable. Economic statistics that would have hammered the market at any other time (September U.S. retail sales were DOWN 2.4%) cause scarcely a ripple.
The recession was always going to be bad. The actions of the U.S. government and the Fed since September 11 have GUARANTEED that it will now be much worse.
Gold This Week - October 5
Nothing which has happened over the last week has changed that analysis one iota. As long as the U.S. political establishment continues on down their presently-chosen road, nothing will change it. And as long as the American people are given neither space nor opportunity to consider and debate the situation, the markets will continue to be successfully politically managed.
There is no way of knowing how long this will last, but it is a safe bet that it won't last long. It is an even safer bet that once the "intellectual anaesthetic" has worn off, there will be a LOT (there are already many honorable cases) of Americans who are going to want some hard answers from their putative masters.
But as it now stands, American lives are at stake because of the past and present actions of their political leaders. And American prosperity is at stake for precisely the same reasons. Because PHYSICAL Gold cannot be "dis-invented", it always has been, is now, and will be for the foreseeable future the premier means of protecting individually-owned wealth from the depredations of the State.
The uptrend in $US Gold which began in April is still perfectly intact. The reasons to own Gold are as perfectly intact too. And because the political leadership of the U.S. has chosen to learn nothing from 9/11, the urgency of protecting ones own financial future has never been higher.