Update:
At Economic Policy Journal Robert Wenzel notes how gold is now being pushed by the establishment.
ORIGINAL POST:
I’m hearing analysis from every side about the dollar and gold. But it’s all in fundamental or technical terms.
Yet to my way of thinking, neither of these is running the show. It’s politics and political machinations that are calling the shots. In technical terms, gold is overbought. In fundamental terms, many respected gold analysts have suggested it’s risen beyond it’s fundamental value by some 25%.
Inflationists, of course, are triumphant. Gold is looking forward to currency depreciation. The dollar is toast.
Well, the dollar IS toast, the way things are shaping up.
But it’s a great mistake in my opinion to think that’s what’s moved gold prices up so strongly this fall.
That’s taken concerted intervention, in the form of a media blitz from the MSM touting gold. As for the alternative media, you can hardly sit through a talk radio show without having it interrupted by a coin dealer of some kind. Any morning, your fax machine is sure to be cluttered up with promos from a new mining company in Nevada.
In my opinion, Bernanke’s pronouncement that the Fed would be willing to intervene with more QE isn’t so much an economic action, as a political action. What kind of politics?
Rewind to September 17, when Tim Geithner went before Congress and said:
“It is the judgement of the IMF that in view of the very limited movement in the Chinese currency, the rapid pace of productivity and income growth in China relative to its trading partners, the size of its current accounts surplus and the substantial level of ongoing intervention in exchange markets, that the Chinese currency is significantly undervalued.
We share that assessment and we are concerned as are many of China’s trading partners that the pace of appreciation has been too slow and the extent of appreciation too limited. It is a simple principle of fairness that American firms competing in China’s market should have the same rights enjoyed by Chinese firms in the American market. We should be able to compete on a level playing field in China just as Chinese firms compete on a level playing field in the United States.”
Geithner was firing a warning shot in the ongoing currency wars, a subject we’ve blogged about before. The gold price is ammunition in that war.
At least, that’s the way we see it here….
Good observation and one that I had been musing on this last weekend, trying once again to get a handle on what I should do with my retirement assets. This is in my opinion a dangerous and ultimately fruitless endevor. This was done with Japan during the 1980s and 1990s. Did it “level” the so-called playing field?
As you are quite cleaver as to the use of language in the promotion of themes, think of why these folks would employ the idea of the economy as a playing field. Economics as an adversarial activity. It well could be for those who see the ends of economic success as the accumulation of power at the expense of their competitors. But for those of us who look to the economy for the satisfaction of our more pacifistic needs, this promotion is counterproductive to not only to our success in doing so, but antipodal to maintaining just those cordial relationship with our partners and potential partners, which would be most beneficial to each.
This to seems to fit in with their constant implementation of the divide and conquer. This old tool has been wildly successful for them in the past. It plays off those more primitive instincts embedded in our psyche that relate to what the Socio-Biologists call Mutual Inclusive Fitness. Its success is highly correlated to the notion of scarcity, and the elevation of this category to one of constant fixation, until it has been reified.
If it were not for the development of nuclear weapons, I would think that the government was laying down the foundations for another war. Taking that off the table, it is difficult to see where they are going with this. If they are just grinding one of their axes to distract, they I would see this as providing a confuser to give the voters a sense that they know what they are doing and are acting forcefully on the publics behalf.
Let’s hope its the later.
Clayton, you’re right on, as usual.
The model is war, the language is war, because the media works for the warmakers.
Dig hard enough and you always end up with the DOD and intel.
The propaganda was all that the pentagon would adopt the business model (the “reinvention of government”) in the 1990s.
It’s as true to say that the economy has adopted the war model.
It’s all the same.
Police have turned into military, military into police, peace-keeping is war, war is nation-building…
I wrote about this in Language of Empire.
The idea is to create gray zones that encompass ALL ZONES..
So that nothing is private, set apart from the military-state complex.
When there are no conventions, then arbitrariness reins
When there is no discretion or privacy, then tell-all reins – which is ultimately pornographic and violent..
There is no moral or artistic or individual life without privacy.
The state is fundamentally the opposite of privacy – it is the realm of the public, the panopticon.
Thus the state is fundamentally amoral, if not immoral..
@mb4:
That you for your reply. Right after 9/11, I noticed that my local police started wearing military style shoes around town, while on their normal duties. Mind you, I live in a nearly crime free upper middle/ upper class town. It seemed very strange indeed, not that I wanted to ask them about it. They also upgraded their sidearms from 13 rounds clipped 38 calibers, to 40 caliber 20 plus round clip automatics. They also added tasers to the mix. You have to wonder if one of them is just waiting for the opportunity to unleash this on someone. Even the meter maids have stiffened up. For an older white guy to walk up to one of these galls to ask a simple question and be treated with a high degree of suspicion and distance surprised me. But it is indicative of the alienation afflicting the establishment at all levels. Even, here in my little burg.
Clayton-
mb4=lila
I sometimes forget to set the tab to my name
Are you in the US in the south?
Curious about where the militarization is penetrating
@mb4:
No, I am in Northern California, the SF Bay Area.
Good Post. Did anyone see the news today? Looks like Ron Paul may want to enter the frey.
That being said. I don’t usually pay too much attention to the fundamentals (news and what not). The reason is because I think that it’s what the markets do that makes me money and the less I pay attention to the news the less I have to consider when I am looking at a price chart. The price chart is the only was that I believe that i can really tell when is going on in the markets.
It really took me some time to understand this. But, I think that a solid argument for learning technical analysis can be found at the web page below.
http://technicalanalysistips.com/3-reasons-you-should-get-technical-analysis-training/
Thanks Clarissa.
Will take a look.