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By Henry Makow
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Is Gold a Hedge Against Bad Times?

Friday, November 8, 2019 14:32

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Good news is bad news for gold.

Ultimately gold is just a shiny stone. The $US is just paper.

All markets depend on a buyer and a seller.

They all depend on psychology.

In a crisis, it’s hard to predict what gold will do, but most likely

it will fall as people sell to cover their other losses.

by Henry Makow PhD

The price of gold is a measure of the psychological state of society.

It moves up whenever there is a whiff of trade war, financial or political instability or any other war. It usually goes in the opposite direction of the market as a whole.

It spiked in August when Trump and China engaged in a tariff tit-for-tat. It has faded recently on “trade optimism.” Lately, it has been fixated on this deal. In fact, there is no trade deal but the market has not realized that.

The gold market is like a baby in a crib. Just jingle some keys and its mood will change immediately. Of course, the Illuminati business media decides what baby will see. They have been juicing the stock market to record highs on trade “optimism.” Today, Trump implied that this optimism is totally manufactured. There is no trade deal but the market is grasping at straws.

All other reasons to own gold have been ignored. It doesn’t matter that the fiat monetary system is showing signs of strain. The IMF recently warned that global debt has hit $188 trillion, double world GDP. The Fed has been printing money 24/7 for the last five years. The US national debt has passed 23 trillion. Iran has enough uranium to make an atomic bomb. Trump is being impeached. The market doesn’t seem to care about anything but trade with China.

All markets are just psychology. Gold is just another medium of exchange like coupons (fiat currency.) It’s a game of scissors, paper, and stone.

If gold is better than coupons, gold miners should just stockpile it and only sell enough to meet expenses.

Gold is considered a hedge against financial collapse, war and chaos. But it has not really performed all that well in these cases. Gold should have gone to the moon during the credit crisis of 2007-2008 but only eeked out a gain of 5%.

Kitco writes: “In October 2008 all markets – gold included – fell sharply as the credit markets seized up. At the time gold was being sold as investors sought funding to shore up losses in other markets… Looking at a futures continuation chart, gold fell as low as $681 an ounce on Oct. 24, 2008, but settled at $729.10. It rebounded into the end of 2008, settling at $884.30, up about 5% on the year, being one of the few markets to settle the year with a gain.”

While the threat of war does boost gold, it doesn’t do all that well unless we are losing. For example, once it became clear that Iraq would be vanquished in 2003, gold sold off.

Gold is really a sap’s game. As soon as it goes up, sellers pour in and exchange their bullion or shares for more currency coupons that they deemed worthless in the first place. It has performed miserably compared to bitcoin. With all the money printing, gold should be valued at $3000 an ounce, at a minimum. But it seems to be kept down in order to maintain confidence in the monetary system.

Russia and China are taking a long view. They have been stockpiling gold for years. Central banks are also adding.

CONCLUSION

Ultimately gold is just a shiny stone. The $US is just paper. All markets depend on a buyer and a seller. They all depend on psychology.

In a crisis, it’s hard to predict what gold will do, but most likely it will fall as people sell to cover their other losses.

Gold is just part of the material matrix that keeps us mesmerized. We can’t save the world, but we can save our souls by realizing that beyond meeting reasonable material needs, “money” is just an illusion that enslaves us.

Source: https://www.henrymakow.com/2019/11/is-gold-a-hedge-against-bad-times.html

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