The golden waste land

Gold Investment - 22 August 2011

It has been eighty years on from the crash of CreditAnstalt which affected the sterling gold status of Britain and resulted in a depression. Coincidentally it is forty years on from when Nixon deserted the dollar from the gold exchange. The next decade saw inflation hit America in a way that many people were unable to cope with.

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Invest in precious metals today! Contact us for details.

It is now very close to four years since the Federal Reserve responded to the CDO/Wholesale funding tragedy. Americans faced a bubble and reckless borrowers in particular would be in trouble. Lenders globally, privately and publicly were affected as they lost lots of money during this time. The Federal Reserve has more than $2 trillion in reserves it is still difficult to obtain funding and the demand for loans is as great as ever. This all translates to the fact that right now the money market is in pieces. Money around the globe is behaving in strange ways and most of the behavior is quite volatile. Nasdaq traders are reporting that in a mere four days the VIX has doubled. The only time that this was beaten was in the HFT-led flash crash of last May.

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Invest in precious metals today! Contact us for details.

It is clear as to why Asian and European authorities made the decision to intervene by outlawing short selling and propping up prices and this resulted in one result only and that was that the equity market had been broken. The ECB had to take illegitimate and drastic action. At the same time, US Treasury Bonds were plunging to record lows to the point that negative real yields became the reality.

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