Eric Janszen at iTulip on how the masses never connect an excess of past circuses with a deficit of current bread:

“Ten years from now, when the full impact of the U.S. asset bubbles of 1998 to 2008 are fully felt, the dot com era, when money flowed like oil from a geyser, before the wars and financial crisis, will be remembered as the good old days, the high water mark for American power and influence. Not one in a million Americans will connect the antecedents to financial crisis and excessive government borrowing to the inflation that we will experience in the future. Not our readers, of course.

As American living standards decline for broad swaths of the population, first by underemployment and unemployment, then by inflation, the thread of cause and effect will be lost by a media that’s forced by its consumers to report daily events without context, as if the latest stage in the ongoing crisis fell out of the sky, from the clouds.”

AND

“Since 2001 I have not lost a minute’s sleep worrying about gold prices plunging. Instead, I worry about the disastrous financial condition of U.S. households and the U.S. government, and the lack of political will to address them, that threaten the very foundation of the global money system. This is the reason for gold’s relentless rise.

The problems are structural. They are endemic. Current course and speed perhaps only war will dislodge the special interests that perpetuate them.

Gold prices do not float on a sea of liquidity, as Ruchir Sharma claims. They float on a sea of dangerous fallacies — that asset bubbles don’t cause lasting damage to economies, the Keynesian multiplier, that the U.S. can continue to borrow to finance its fiscal deficit, and the invulnerability of the dollar as a reserve currency.”

We are not willing to bet against global central banks. They’re betting on gold. We don’t blame them, and everyone is catching on. “