QUESTION: If the dollar rises, does that not mandate a gold decline or can they rally together?
ANSWER: Although everything is cast in this world as some sort of direct cause and effect, that is our problem associated with linear thinking since it just does not work that way.The world is really dynamic and that means that everything is not truly a cause and effect. Yes I just posted that Obama is setting the stage for the next recession. I am not suggesting that if he lost the election that would not take place. Whoever is there cares only about maintaining the system. They respond in a predictable manner and thus do not create the cycle or the event, they merely react to it. Like there are discussions about selling gold reserves behind the curtain. If they did, that would be GREAT for they would no longer be able to do so if they tried to manipulate the economy under their Marxist theory.
The hate mail came in on that one. Some people are so sold on gold is the center of the universe, they cannot see the other side nor the forest because of the tree. If politicians no longer BELIEVE they would EVER return to a gold standard that would force them to stop spending in theory, then why do you think they really care about gold? They see it as a barbaric relic from the past for they see the world ONLY through their lenses of power – not yours.The sooner gold dies the better for these people! It never matters what YOU believe – ONLY what the other party believes. It is like someone has a gun and is going to shoot you and you say under Christianity you will rot in hell! He responds, what’s that and pulls the trigger. Not everyone believes the same thing. Politicians in Europe have a federal government and that government opened its own embassy in Washington. DC, yet it not “formally” a federalization of Europe. Europe has been federalized in power terms. These people would not just sell gold if it was down to that choice or surrender their jobs, they would sell their mother. This is about THEM retaining power. Put NOTHING beyond these people – get REAL! They could care less about what you believe or not.
The dollar rose between 1980 and 1985 on the fears that the USA would default creating a two-tier monetary system with red dollars externally and green dollars internally. The US national debt hit $907.7 billion in 1980, $2.125 trillion by 1986 and $3.2 trillion by 1990. The correlation sold by the gold promoters is you buy gold because the national debt is rising, OK. Between 1980 and 1985 gold fell from $875 to $292 with the debt more than doubling. The dollar soared forcing the British pound to collapse from $2.40 to $1.03 yet the interest rates fell by 50%. One-to-One correlations do not exist. It is multidimensional and never just plain and simple. It takes a computer to calculate all these relationships. It much more complicated than that. Consequently, opinion will get you nowhere close to consistency.
So can gold and the dollar rise together? The answer is YES! It depends entirely upon the dynamics of the mix. Gold declined with higher interest rates at first between 1980 and 1981, then continued its collapse as the dollar then rallied into 1985. But capital was fleeing Europe moving from Eurodollar deposits to domestic dollar deposits during 1980-1985. Gold was collapsing from an overbought position hyped-up on the whole inflation debt nonsense. Yet there was an exploding national debt with DEFLATION! Amazing.
The potential rally in the dollar is simply due this time to the political instability in Europe and Japan. The rising dollar will create the global economic recession, fueling further Draconian laws, higher taxes and further DEFLATION caused by an economic implosion that the gold promoters cannot see because they do not want to see. The further GDP declines globally, then less tax revenue garnered making governments more aggressive in search of money resulting in attacking the citizenry. Go too far, we end up with the Mad Max scenario.
This is how Rome fell. The rule of law collapsed. The citizens lost all rights. Taxes soared and it got to the point people began to just walk away from their property setting the stage for serfdom and the Dark Ages..Hopefully we will run out of time cyclically and still have something left at the end of the day.
If you keep listening to the gold promoters, you will be playing with your coins, fantasizing how rich you will be, when either the soldiers come searching door to door as they did with this Boston event without search warrants on the premise it is a national emergency to gather all the wealth, or you open your door and there is no place to spend your coins. Is Rome repeating again?