Comments on: Lack of Value in US Dollar Means Gold Price Should Be Higher http://www.dailyreckoning.com.au/gold-price-should-be-higher/2007/07/20/ An independent perspective on the Australian and global investment markets Thu, 18 Mar 2010 14:20:38 +0000 http://wordpress.org/?v=2.8 hourly 1 By: Chris. Fulker http://www.dailyreckoning.com.au/gold-price-should-be-higher/2007/07/20/comment-page-1/#comment-2736 Chris. Fulker Sun, 22 Jul 2007 15:09:26 +0000 http://www.dailyreckoning.com.au/gold-price-should-be-higher/2007/07/20/#comment-2736 Well, at $683.50/oz. it looks like gold is now finally on its way up or, rather, the US$ is moving down. But we shall all have to exhibit much more patience soon, I'm afraid. Gold could be de-railed by a number of happenings: 1)The US could suddenly announce a withdrawal from Iraq, sending the $ soaring, 2)Bernanke could "pull a Volcker" and damn the torpedoes raise rates sky-high, or 3)Congress could make a real, or at least convincing, attempt to control expenditures and cut programs. Only #1, and maybe #2, are slightly possible, but empires never have much hindsight so I think the buck is toast... Well, at $683.50/oz. it looks like gold is now finally on its way up or, rather, the US$ is moving down. But we shall all have to exhibit much more patience soon, I'm afraid. Gold could be de-railed by a number of happenings: 1)The US could suddenly announce a withdrawal from Iraq, sending the $ soaring, 2)Bernanke could "pull a Volcker" and damn the torpedoes raise rates sky-high, or 3)Congress could make a real, or at least convincing, attempt to control expenditures and cut programs. Only #1, and maybe #2, are slightly possible, but empires never have much hindsight so I think the buck is toast...

]]> By: Deron Kawamoto http://www.dailyreckoning.com.au/gold-price-should-be-higher/2007/07/20/comment-page-1/#comment-2735 Deron Kawamoto Sun, 22 Jul 2007 15:06:03 +0000 http://www.dailyreckoning.com.au/gold-price-should-be-higher/2007/07/20/#comment-2735 Though I despise his economic perscriptions, John Kenneth Galbraith was very effective at observing and describing economic phenomena. His description of embezzlement's impact: "Alone among the various forms of larceny it has a time parameter. Weeks, months, or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.)" In other words, until discovered, this crime makes a society feel and act wealthier. Galbraith has precisely described the basis of the Crack Up Boom. The larceny of credit inflation (and its various derivative offspring) is still not understood by its victims. Those folks feel wealthier and continue to spend. Discovery has begun to spread and the results could be earth shaking. Though I despise his economic perscriptions, John Kenneth Galbraith was very effective at observing and describing economic phenomena. His description of embezzlement's impact:

"Alone among the various forms of larceny it has a time parameter. Weeks, months, or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.)"

In other words, until discovered, this crime makes a society feel and act wealthier. Galbraith has precisely described the basis of the Crack Up Boom. The larceny of credit inflation (and its various derivative offspring) is still not understood by its victims. Those folks feel wealthier and continue to spend. Discovery has begun to spread and the results could be earth shaking.

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