Submitted by Tyler Durden: This morning, a vastly expansive essay by Lew Spellman of the University of Texas in Austin titled "Warren Buffett and the New Calculus of Gold" is making the rounds, and while the narrative is largely defensive of gold, and its role as the only true safe collateral in a world rapidly depleted of the latter (as we have been arguing for the past 2 years) as proven over and over by the fact that the entire modern system now relies more on re-re-re-rehypothection of existing collateral than on spending money for CapEx purposes and to replace an aging asset base, we wonder: is this realization really just now being grasped by the world? Are the forward thinkers of the world only now understanding that in a world with hundreds of trillions of imaginary collateral whose ultimate owner will never be tracked down, and a daisy-chained bankrupt domino collapse will come before anyone finds out who owns what (much in the same was as MF Global is a symptom of the entire modern financial system), only that which is tangible, undilutible and real will have value? 
Finally, is the avant-garde of Keynesian thought only now (re)discovering the Exter inverted pyramid? Because one can spend 30 minutes reading the Spellman essay, or... cast a quick glance at the picture above (click on graphic to enlarge) to understand the true value of everything in a world in which the monetary fabulation of the past 99 years is finally unwinding.
One picture in this case is absolutely worth well over a thousand words.
Heres another thousand for you, 'The Bearded Crank.'
Max Keiser Adds: At the height of the bubble in 2007, central banks were net sellers of gold and the bull market that started in 2000 had still not been noticed by anyone except readers of this site and a few others. In 2012, central banks are buyers and the bull market in gold is understood by a few folks who are accumulating. But going back hundreds of years, even thousands of years gold has always been the cornerstone of the economy. The only thing that changes is perception. When Wall St. delusions reign there is a belief that paper can trump gold. Then the house of cards tumbles and we’re back to gold. This gold bull market will be clearly understood by all when gold and the Dow are 1:1 somewhere in the $7,000 – $8,000 range.
Heres another thousand for you, 'The Bearded Crank.'
Max Keiser Adds: At the height of the bubble in 2007, central banks were net sellers of gold and the bull market that started in 2000 had still not been noticed by anyone except readers of this site and a few others. In 2012, central banks are buyers and the bull market in gold is understood by a few folks who are accumulating. But going back hundreds of years, even thousands of years gold has always been the cornerstone of the economy. The only thing that changes is perception. When Wall St. delusions reign there is a belief that paper can trump gold. Then the house of cards tumbles and we’re back to gold. This gold bull market will be clearly understood by all when gold and the Dow are 1:1 somewhere in the $7,000 – $8,000 range.
No comments:
Post a Comment