Basin Glass Co Blog

I love Gold!

You must imagine our title is being read out loud by “Gold Member” from the Austin powers movie. Otherwise it just makes me sound like a greedy bastard, which I’m not – at least I don’t think so…

The main thing I wanted to mention is that I have been watching gold prices for a long time, well for about 5 or 6 years now. It was always hard to understand what was creating the volatility in the price of Gold until I ran into the Austrian school of economics, Dr. Marc Faber’s work, and other real experts – none of that phony Nobel prize Krugman and Bernanke crap.

It turns out that there is no need for a complex explanation on the price fluctuations in Gold. The main thing to consider is that for nearly a decade, helicopter Ben Bernanke has done nothing but shovel out cheap federal reserve notes, aka US Dollars, not backed by anything. In reality he has been pumping trillions of dollars in to the “fake” economy of banking and financial firms who take the cheap money and speculate. The main thing to remember is that the Federal Reserve has destroyed the economy through its artificially low interest rates. These interest rates are the rates that the Fed lends to banks and financial institutions, who are in return to lend to the economy. With super low interest rates, the big players find it more profitable to put their money in equities (stocks) or commodities and precious metals like Gold, Silver, Palladium, copper, etc. driving their prices up. This is one of the reasons for the over-inflated stock market prices that keep rising. Most people are confused because the stock market keeps going up while unemployment keeps increasing, foreclosures mount, and debt strangles more of the real economy. It is, therefore, important to understand the flow of cash from thin air at the Fed to the speculators and financial firms to assets, equities, and commodities that have yields or value, unlike the US dollar or pretty much any currency around the world.

With money printing gaining speed due to Ben Bernanke’s extraordinary capability as a printer of last resort, we can expect prices of pretty much everything, and of course Gold and other metals, as well as commodities and equities, to go through the roof. Although it may take several years to happen, it is bound to happen because for the first time in history the US and many countries around the world are at risk of defaulting on their loans as there is no real way for them to pay back their loans without inflating their money/currency. We could see gold prices go over $2000/oz or more, but if it doesn’t at least we will have something of value, unlike the dollar which has consistently lost value from day one.