18-9-2010 Gold & Guns


Dear Friends,

Dinner is finished and the coffee has been served. I am not eating with a few friends, but rather with all of you. What I have been trying to say during dinner was that the time for the consideration of gold as a market entity is over.

Anglo Ashanti has just closed out their $1.58 billion losing hedge book as gold reaches for a new high. They have slaughtered their cash position and increased their debt. That is a milestone in the time sense because it is here and now that gold has moved from a currency to a performing insurance against what is no longer coming down the pike but is now here. Anglo thinks it threw in the towel due to some mathematical decision, a new high, but even the dense ones can feel the change yet they cannot articulate it.

Milestone developments and their implications are rarely recognized except in hindsight. What it means to me along with gold establishing new highs amidst the storm of top calling is that what has for years been a forward looking mainstay of the gold price is no longer mental speculation, but rather reality hiding in plain sight.

It is no longer necessary to go through the logic of why we have done what we have done. Those events are right in front of your nose.

Confidence in fiat currency is a memory of a bull market from the 1950s to 2008.

The Western World banking system is broken and will stay that way.

The mountain of financial WMDs (OTC derivatives) grows daily, protected by lobbyists in the employ of finance.

The rule of law is a dark comedy. It is nothing more than legislation containing thousands of pages but no common sense proliferates.

Western World budget deficits are now totally uncontrolled.

Debt is destroying the Western World now.

Gold today is the difference between being swallowed up by events or being the cause of your own survival tomorrow .



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