Tuesday, August 16, 2011

Gold Revaluation is NOT A CURE to the Quadrillion Dollar OTC Derivative Crisis

We have been discussing gold revaluation (Bernanke's last play in the deflation fighting playbook) frequently here recently on SilverDoctors.
Stewart Thomson made some excellent points regarding the topic this morning that our readers can learn from.
The main point that we would like to emphasize is that gold revaluation is NOT A CURE to the Quadrillion dollar OTC derivative problem created by Blythe that is THE CAUSE of the entire crisis.
Gold revaluation is not anymore of a cure than never-ending quantitative easing is.
Gold revaluation is a wealth transfer policy to further impoverish the working man to the benefit of the banksters (and as a side effect the small group of investors who do hold gold).
Gold revaluation is US dollar DEVALUATION by definitionTHIS IS CURRENCY DEVALUATION.
Read Living Through a Currency Devaluation to see what happens to the common man when the currency is devalued by a mere 50% overnight.

I’m glad to see some more gold analysts speaking about gold revaluation. Unfortunately, most of them speak of revaluation as a solution to the crisis. That idea qualifies as… error of the century.

There is no solution to the crisis, because of the size of the OTC derivative debt bomb. There is only a coming end to the crisis, and that end involves the impoverishment of creditors and the public, via gold revaluation and/or all-out money printing.

Most gold investors need to understand the difference between a personal desire to get richer (greed) and “helping people”. You don’t help people by revaluing gold thousands of dollars an ounce higher in the throngs of a quadrillion dollar OTC derivatives debt crisis. Drastic revaluation of gold when the dollar is weak impoverishes those without gold.

I’ve told investors since the late 1990’s that gold revaluation is a bankster scheme to transfer wealth from the public to themselves, and it would deployed at staggeringly high prices. If employed when debt is low and the economy is booming, a gold standard locks in prosperity. If you want a real gold standard, fight for it when gold is low against the dollar, not high.

Simply put, any coming gold revaluation is a poverty-lock. I want gold’s price higher, so I get richer, and my subscribers get richer. End of story.

I know full well what the consequences of an astronomically high gold price are for the average person; poverty, and probably the breadline. Know your greed, and manage it professionally.
Some readers thought that because I speak of the “gold punisher” lording over everything in this crisis, that I am knocking silver or gold stocks. Wrong. It’s critical to understand the magnitude of the crisis and to “know your place” within it. All commodities will eventually super-inflate or even hyper-inflate, if the central banks accelerate gold buy programs and money printing.

Unfortunately, a lot of investors didn’t understand the size of the OTC derivatives debt bomb, so they thought gold stocks and silver would skyrocket soon after the crisis started. That was a mistake. There has been no global reflation of the world’s economy, but I think now it is very near. There have only been sporadic “fixes” of individual debt bombs, like Lehman. The rising gold price is what will reflate everything, but that takes time, and institutional money managers are not going to load up on silver and gold stocks until that happens.
Click here for more from Stewart Thomson: