Post by unlawflcombatnt on Dec 21, 2008 17:17:40 GMT -6
from EuroPacific Capital
December 19, 2008
2009—LIKELY VINTAGE YEAR FOR GOLD
"The Federal Reserve estimates that in the past year losses in real estate, stocks and mortgages have sucked out some $7.2 trillion of wealth from the U.S. economy. Some are now putting the figure at $20 trillion. A massive recession is starting and will likely spread throughout much of the world. These forces have exerted their classic strong downward pressure on the price of gold.
In addition, the $700 billion TARP fund to salvage the American financial system, and large amounts spent by other governments to protect their own banks, has greatly reduced the fear of a financial breakdown. As a result, the financial panic insurance value of gold was largely eroded, adding further downward price pressure.
2008 was a volatile year for gold. Prices have gyrated...by some 25 to 30%. This volatility alone acts as a depressing influence on gold prices as it discourages the belief that gold is a credible investment.
The world’s major governments long have sought to eradicate gold as a monetary measure in order to remove the last vestiges of monetary discipline and to clear the field for massive government over-spending and inflation....
In 1978, America forced a further move, via the IMF, to write gold out of the international money supply. In August 1971, President Nixon broke the U.S. dollar-gold exchange link.
In September 1999, the United States, while being careful to keep its own gold stocks intact, led other major nations, in the first of two so-called ‘Central Bank Gold Agreements’ to flood the gold market with sales of gold....
The effect of government gold sales was potentially very bearish for gold....
More recently, there are allegations that the Government has allowed certain institutions to engage in massive naked short selling of gold and silver. This has caused distortions in the gold price....In short, they amount to market manipulation.
A fair conclusion is that gold is cheap and that its present price does not truly reflect market conditions....
The amount of debt and new money injected into the economy should progressively raise inflation alarm bells. The fire of future inflation is being stoked alarmingly, but the recessive forces of deleveraging are concealing it temporarily.
The Fed looks desperate. This could lead to feelings of panic and upward pressure on the gold price.....
In 1934, facing a depression President Roosevelt first confiscated gold from every American. Then, he unilaterally devalued the U.S. dollar by 75% against gold.
At a stroke, FDR wiped out 75% of the dollar denominated debt of the U.S. Treasury.
As both President-Elect Obama and Fed chairman Bernanke are students of FDR, we face the real possibility of a massive devaluation of the U.S. dollar against gold in 2009."
www.europac.net/newspop.asp?id=14965&from=home
December 19, 2008
2009—LIKELY VINTAGE YEAR FOR GOLD
"The Federal Reserve estimates that in the past year losses in real estate, stocks and mortgages have sucked out some $7.2 trillion of wealth from the U.S. economy. Some are now putting the figure at $20 trillion. A massive recession is starting and will likely spread throughout much of the world. These forces have exerted their classic strong downward pressure on the price of gold.
In addition, the $700 billion TARP fund to salvage the American financial system, and large amounts spent by other governments to protect their own banks, has greatly reduced the fear of a financial breakdown. As a result, the financial panic insurance value of gold was largely eroded, adding further downward price pressure.
2008 was a volatile year for gold. Prices have gyrated...by some 25 to 30%. This volatility alone acts as a depressing influence on gold prices as it discourages the belief that gold is a credible investment.
The world’s major governments long have sought to eradicate gold as a monetary measure in order to remove the last vestiges of monetary discipline and to clear the field for massive government over-spending and inflation....
In 1978, America forced a further move, via the IMF, to write gold out of the international money supply. In August 1971, President Nixon broke the U.S. dollar-gold exchange link.
In September 1999, the United States, while being careful to keep its own gold stocks intact, led other major nations, in the first of two so-called ‘Central Bank Gold Agreements’ to flood the gold market with sales of gold....
The effect of government gold sales was potentially very bearish for gold....
More recently, there are allegations that the Government has allowed certain institutions to engage in massive naked short selling of gold and silver. This has caused distortions in the gold price....In short, they amount to market manipulation.
A fair conclusion is that gold is cheap and that its present price does not truly reflect market conditions....
The amount of debt and new money injected into the economy should progressively raise inflation alarm bells. The fire of future inflation is being stoked alarmingly, but the recessive forces of deleveraging are concealing it temporarily.
The Fed looks desperate. This could lead to feelings of panic and upward pressure on the gold price.....
In 1934, facing a depression President Roosevelt first confiscated gold from every American. Then, he unilaterally devalued the U.S. dollar by 75% against gold.
At a stroke, FDR wiped out 75% of the dollar denominated debt of the U.S. Treasury.
As both President-Elect Obama and Fed chairman Bernanke are students of FDR, we face the real possibility of a massive devaluation of the U.S. dollar against gold in 2009."
www.europac.net/newspop.asp?id=14965&from=home