There is no fever like gold fever - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 28 February 2014
There is no fever like gold fever A  A  A

Aiken, South Carolina

Where is Dillon, South Carolina? Surely, they have put up a monument to their hometown boy, Ben Shalom Bernanke. Or maybe it is in nearby Augusta, GA, where he was born?

Mr. Bernanke is jobless now. So he'll have time on his hands. We should wander over to Dillon...perhaps we'll run into him at a local strip club. We have a few questions we'd like to put to him.

But wait. Does he have body guards? He probably doesn't need them. No sparrow can fall anywhere in the world without setting off alarms at the NSA. Any plan to harm the former Fed chief would surely be foiled by the ever alert spooks.

Most empires were financed on the loot captured from their conquered opponents. But the US Empire depends not on generals, but on bankers. Ben Bernanke, the "Hero of '08," kept the credit flowing at a crucial moment...

He kept the empire on schedule...and on target...for its rendezvous with disaster.

FAQs on our First "Dynamic Portfolio" (Read This Now... Last 48 Hours)

The two more important questions which we are being asked about the Dynamic Portfolio, and our response to them...

What if I don't like the service after I join in?
This invitation is covered under our 30 days, no questions asked, 100% Moneyback Policy. So, you have absolutely nothing to worry about and a Lot to gain!

Can I join this service later?
Now, you can always join this service but there are 2 important points you should consider right now. Firstly, we cannot guarantee when we'll reopen this service for subscription. And secondly, next time the number of seats will be extremely limited and the new price to join it will be Minimum Rs 25,000 per year! So personally, I believe you should not miss this Founder Member Offer to at least try the service...

We know you may have more questions on the Dynamic Portfolio. We have addressed the most frequent questions here...

Yesterday, the Dow registered a 74 point gain. Gold was up too.

No one asked us. But we gave our reply anyway. 'Are we in a new bull market in gold' was the question. Our answer: we don't know. But our reply suggested that it didn't make any difference. Gold has survived hundreds of paper currencies and hundreds of empires. Though the dollar may have gained ground last year, gold will survive it too.

Colleague Braden Copeland thinks gold stocks may have entered an explosive bull market too. He notes that not only are prices rising...more importantly, so is volume.

"There's no fever like gold fever," says old timer, Richard Russell. And when gold fever takes hold...the results can be spectacular.

Here at the diary, however, we are not speculators. We are observers. And what we notice is that gold is real money...ultimate money...the kind of money people turn to when the other kinds seem unreliable. It is also what great empires tend to accumulate. Like trophy wives, gold goes to winners.

In the 16th century, Spain collected the world's gold.

In the 17th century, Holland was where the gold coins rolled.

In the 18th century, France was the world's richest nation.

In the 19th century, Britain brought home the world's gold.

And in the 20th century, the USA was number one...with the largest gold hoard on the planet.

So, who are the biggest buyers of gold today? The Chinese. They are preparing to take their place on the world's largest stage.

Recently, we were asked to update our book, Empire of Debt, written with Addison Wiggin. Most observers, we pointed out, have concentrated their attention on the growing pile of debt, scheduled to reach 200% of GDP by 2020.

We preferred to focus on the empire itself. Debt has its lifecycle. So do empires. Both expand. Then, both...without exception...contract.

An empire funded by debt is an especially ungainly, grotesque thing. It lurches from one disaster to another ...going deeper and deeper into debt each time. The Vietnam War pushed Richard Nixon to abandon the gold standard. Now, wars Iraq and Afghanistan wars further weaken the empire's finances...with costs approaching $5 trillion and up.

But it is not the debt that kills it. Debt is just a razor...conveniently left on the side of the tub.

In the meantime, Mr. Market can do whatever he pleases. And it may please him to push the price of gold stocks considerably higher.

We will see...

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Get The Daily Reckoning directly
in your mail box.
Just enter your e-mail address » 

Read our Privacy Policy and Terms Of Use.

Equitymaster requests your view! Post a comment on "There is no fever like gold fever". Click here!


Recent Articles:
Trump Takes a Beating
August 18, 2017
Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.
Which Gods Will Bring Down the US Empire?
August 17, 2017
Mr Trump is in the White House and the gods are in their heavens; what's not to like?
Will They Haul Off Trump's Statue, Too?
August 16, 2017
All across the country, the old gods become devils. New, gluten-free gods take their places...
Farm Loan Waivers: Why Bad Economics Makes for Good Politics
August 14, 2017
It is because the negative effects of the waivers aren't clearly visible.