Tuesday, July 26, 2011

Don't Think That Obama Hasn't Considered The Bernank's Gold Revaluation Option

Stewart Thomson is back, and he believes that with the ongoing debt limit negotiation farce, The Bernank's final deflation fighting tool of GOLD REVALUATION is closer than ever.
For those needing a refresher on The Bernank's complete plan to fight deflation (of which QE is merely 1 tool), his famous Monetary Policy speech given at Princeton in 1999 can be found here.

Did you notice the expression on President Obama’s face in his address to the nation? The situation is clearly grim, and he’s prepared to take powerful action. I told you about the possibility of a certain man wearing a gold mask a long time ago. Do you remember his name?

Don’t think that your President hasn’t considered closing all markets and banks, banning the public from buying gold bullion, and then revaluing gold dramatically higher. If that occurred, when he re-opened the markets, what would you feel like, what would be your financial gain or loss? Would you be in golden party mode? I hope so.

I told you that QE was a water gun against a forest fire and destined for the backburner, and that’s what has occurred. Gold revaluation, not grandstanding tax increases or QE squirt guns, is the kind of drastic action needed to make the epic debt manageable.

The way a modern revaluation would likely work is that gold dealers could be limited in what gold, if any, could be sold to the public, and the most powerful central banks would announce they are prepared to buy any amount of gold from anyone at a certain minimum “floor price”.

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