Sunday, August 28

Gold Bugs...

I am suddenly reminted about bugs and how they live it out.  They live on the carcass, and they live on the dying.  Bugs even attack the healthy and kill them to complete the life cycle that is so evident in nature.  Environmentalist says that bugs are signs of a healthy environment and that they should only be controlled and contained, not eliminated!

Then, someone equated ‘gold lovers’ to ‘gold bugs’. Yesterday I read a very interesting article by Bill Bonner (‘No place for a Gold Bug’) which was thought provoking.  

Have you seen this bug? 

When the price of gold fell last week, Bill Bonner had this to says,

“Because this is no place for a gold bug. Not really. We are fastened to a whole herd of dying animals — the credit expansion…the housing decline…Keynesian economic theory…the dollar-based monetary system…the social welfare political model…the bankrupt empire…the declining marginal utility of military force, debt and oil…and all those dying generations themselves. And we could probably think of more! All of them, in their dotage, will drag down prices…including, perhaps, even the price of gold. We will have to wait for these wretched things to die. Then, when they are out of their misery and out of the way…or brushed aside by a desperate Fed…the next stage of gold’s bull market can begin.”
This interesting and powerful allegory has to add one more item that today’s gold bugs feed : the Quantitate Easing’ or the QEs,  as they are famous now!

The cruel mechanism of the universe is that one failing force will strengthen another, one dying energy will kindle another, when someone make a profit, someone else make a loss.  This is a mystery of the universe... and we will never be able to fathom it. Yet, when this law breaks down and when the whole universe swings all together one-way, the normal systems collapses, markets crash, telephone lines jammed, traffic signals frozen, computer servers crash, electrical circuits trip and the world ends for a moment. Seldom have they happened. Because, there are always bugs that eat on the dead and the dying! 


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