Gold bugs can be forgiven for conjuring up the Hunt Bros. pump that drove silver to 50 for a bright and shining moment decades ago; for thinking about how Paul Volcker rose up and battled the inflation beast with a policy of 'damned the torpedoes, gold must not be allowed to expose the inflationary fabric of things'.
Now there are no Hunts, but there is a lot of apparently verified chicanery in the silver market and there is no Volcker; but there is a managed Treasury bond market and associated US dollar that continue to wait for some help, some relief, from the 'free' markets.
In Wonderland, the rules are different and things get out of control in a colorful and interesting way. We are on the cusp of a loss of control here. We live in interesting times, but I do not think this is similar to 1980, when the US had many more resources (as a creditor nation) with which to work.
Now, Ben Bernanke tries to work his magic with nothing but an empty bag, from which Alan Greenspan ate all the nation's seed corn. Debt is being used to patch over systemic problems created by too much debt. So I'll repeat the same thing over and over again... let's enjoy this as speculators, but remain rational even if we are entering Wonderland.
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