The bear trap

The bear trap

David Hirst

For years a few of us yelled “go to gold” and were laughed at even while gold went on it momentous drive to $1000. At about $900 the pundits jumped on the ship and gold’s prospects where going to the moon. Gold mania was catching as gold swept past $1,000 and I, in Planet Wall Street, almost alone warned of a bear trap.

Sure enough the next day gold damn near collapsed. I warned it would be a hard road back but, for a moment gold shrugged of the set back and started to climb again. It started to look like gold having tried $1,000 would try it again and eventually take it out permanently. Then came Paulson’s move to socialise the market through the establishment of a fiscal police state and, under the cover of greater freedoms, further extending the national security state to the markets. For those who understand the working of the Fed this was a most unfriendly act for gold.

But gold is big enough to stand on its own two feet and if gold has another foot it is silver, which to the alarm of the Fed, has not crumpled under this attack. As a columnists put it the other day Yo Ho Silver..and away! Gold has suffered perpetual attacks from the cartel that wants it relegated it to the dustbin of history for over a decade and is still a damn sight stronger that the Fed’s flagship, the US dollar. If you want evidence ask yourself this. If, in a year I am going to give you $US1,000 or its equivalent in gold what would you take? I rest my case.